**Exhibit10.2**

**OFFICELEASE**

***LANDLORD: ****CROWN CARNEGIE ASSOCIATES, LLC, a Delaware limited liability company*

***TENANT:****  ITERIS, INC., a Delawarecorporation*

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**TABLE OF CONTENTS**
|                                                                  | ** ** | **Page** |
|------------------------------------------------------------------|------------|----------|
| Article 1 - Term 1                                               |       |     |
|                                                             |       |     |
| Article 2 – Premises Article 2 – Premises              |       | 5        |
|                                                             |       |     |
| Article 3 – Base Rent                                       |       | 7        |
|                                                             |       |     |
| Article 4 – Payment of Operating Expenses and Tax  Expenses |       | 8        |
|                                                             |       |     |
| Article 5 – Security Deposit                                |       | 22       |
|                                                             |       |     |
| Article 6 – Repairs and Maintenance                         |       | 23       |
|                                                             |       |     |
| Article 7 – Utilities; Services                             |       | 25       |
|                                                             |       |     |
| Article 8 – Use                                             |       | 32       |
|                                                             |       |     |
| Article 9 – Insurance; Indemnity                            |       | 39       |
|                                                             |       |     |
| Article 10 – Assignment and Subletting                      |       | 45       |
|                                                             |       |     |
| Article 11- Alterations; Liens                                   |       | 53       |
|                                                             |       |     |
| Article 12 – Personal Property Taxes                        |       | 56       |
|                                                             |       |     |
| Article 13 – Parking                                        |       | 57       |
|                                                             |       |     |
| Article 14 – Hazardous Waste                                |       | 59       |
|                                                             |       |     |
| Article 15 – Estoppel; Subordination; Attornment            |       | 62       |
|                                                             |       |     |
| Article 16 – Certain Landlord Rights                        |       | 65       |
|                                                             |       |     |
| Article 17 – Default                                        |       | 67       |
|                                                             |       |     |
| Article 18 – Remedies                                       |       | 72       |
|                                                             |       |     |
| Article 19 – Interest; Late Charge                          |       | 76       |
|                                                             |       |     |
| Article 20 – Damage and Destruction                         |       | 76       |
|                                                             |       |     |
| Article 21 – Eminent Domain                                 |       | 80       |
|                                                             |       |     |
| Article 22 – Surrender; Removal of Property                 |       | 81       |
|                                                             |       |     |
| Article 23 – Holding Over                                   |       | 82       |
|                                                             |       |     |
| Article 24 – Intentionally Omitted                          |       | 84       |
|                                                             |       |     |
| Article 25 – Force Majeure                                  |       | 84       |
|                                                             |       |     |
| Article 26 – Signage                                        |       | 84       |
|                                                             |       |     |
| Article 27 – Waiver                                         |       | 87       |
|                                                             |       |     |
| Article 28 – Notices                                        |       | 88       |
|                                                             |       |     |
| Article 29 – Rules and Regulations                          |       | 88       |
|                                                             |       |     |
| Article 30 – Relocation: Intentionally Omitted              |       | 89       |
|                                                             |       |     |
| Article 31: Miscellaneous                                        |       | 89       |

 

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| Article 32: Satellite Dishes     |   | 96     |
|----------------------------------|--------|--------|
|                             |   |   |
| Article 33: Right of First Offer |   | 100    |

 
| **EXHIBITS:** |                                         |
|---------------|----------------------------------------------|
| ** **    |                                         |
| EXHIBIT A     | PREMISES                                     |
| EXHIBIT A-1   | FIRST OFFER SPACE                            |
| EXHIBIT A-2   | PATIO AREA                                   |
| EXHIBIT B     | RULES AND REGULATIONS                        |
| EXHIBIT C     | NOTICE OF LEASE TERM DATES AND TENANT’S |
|          | PROPORTIONATE SHARE                          |
| EXHIBIT D     | TENANT WORK LETTER’                     |
| EXHIBIT E     | INTENTIONALLY OMITTED                        |
| EXHIBIT F     | TEST LANE & PARKING                      |
| EXHIBIT G     | JANITORIAL SPECIFICATIONS                    |
| EXHIBIT H     | ESTOPPEL                                     |
| EXHIBIT I     | SNDA                                         |

 

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**OFFICE LEASE**

Basic Lease Provisions

The followingBasic Lease Provisions are incorporated in and made a part of the Lease towhich it is attached.  If there is anyconflict between the Basic Lease Provisions and the Lease, the Basic LeaseProvisions shall control.
| Date (for reference                      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| purposes only):                          |   | May 24, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Landlord:                                |   | CROWN CARNEGIE ASSOCIATES, LLC, a Delaware limited  liability company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Tenant:                                  |   | ITERIS, INC., a Delaware corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Premises (Article 2):                    |   | The space on the first and second floors of the  Project, outlined in Exhibit A, containing approximately 52,116 rentable  square feet in the aggregate, and 47,252 usable square feet in the aggregate (as  measured using Building Owners and Managers Association (“BOMA”) American  National Standard Z65.1-1996 as a guideline) (of which approximately 39,482  rentable square feet and 35,482 usable square feet are located on the first  floor of the Project and commonly referred to as Suite 100 (“Suite 100”), and  of which approximately 12,634 rentable square feet and 11,770 usable square  feet are located on the second floor of the Project and commonly referred to  as Suite 200 (“Suite 200”)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Project:                                 |   | That certain office  building whose address is  1700 East Carnegie Avenue, Santa Ana, California 92705, consisting of  approximately 76,516 rentable square feet.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Development:                             |   | The multi-building project commonly known as Freeway  Corporate Park, with an aggregate of approximately 128,266 rentable  square feet, as the same may be adjusted by Landlord from time to time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Lease Term (sometimes referred           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| to in the Lease as the “Term”) |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (Article 1):                             |   | Eighty-eight months (see below).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Commencement Date:                       |   | Subject to the following provisions of this  paragraph, the earliest of (i) the date Tenant first commences to  conduct business in any portion of the Premises, (ii) the date of Substantial  Completion of the Tenant Improvements (as each such term is defined in the  Work Letter Agreement attached hereto as Exhibit ”D”), or (iii)  September 17, 2007 (the “9/17 Date”) (regardless of the degree of  construction of the Tenant Improvements). It is understood, however, that the  above Commencement Date assumes a delivery of Suite 200 to Tenant on or  before July 1, 2007. If Suite 200 is delivered to Tenant after July 1, 2007,  then (a) there shall be two (2) Commencement Dates under this Lease (which  could, however, still occur on the same day), as follows: (1) the  Commencement Date for Suite 100 shall be the earliest of (i) the date Tenant  first commences to conduct business in any portion of Suite 100, (ii) the  date of Substantial Completion of the portion of the Tenant Improvements to  be constructed in Suite 100, or (iii) the 9/17 Date (regardless of the degree  of construction of the Tenant Improvements); and (2) the Commencement Date  for Suite 200 shall be the earliest of (i) the date Tenant first  commences to conduct business in any portion of Suite 200, (ii) the date of  Substantial Completion of the portion of the Tenant Improvements to be  constructed in Suite 200 pursuant to Exhibit “D”, or (iii) the Suite 200 Hard  Date (as defined below) (regardless of the degree of construction of the  Tenant Improvements); the “Suite 200 Hard Date” is defined as the 9/17 Date,  plus the number of days during the period (if any) between July 1, 2007 and  the date of the delivery of Suite 200 to Tenant (or any earlier date delivery  would have occurred absent delays in delivery caused by Tenant or any of the  Tenant Parties, as defined in Section 9.5 below); for example, if Suite 200  was |

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|                  |   | delivered to Tenant on July 5, 2007, then the Suite  200 Hard Date would be September 20, 2007 (i.e., 9/17, plus the 3 days  attributable to 7/2, 7/3 and 7/4).  In  the event the two (2) Commencement Dates occur on different dates, then  during the period in which only one (1) Commencement Date has occurred, Base  Rent, parking rights and Tenant’s Share shall be equitably adjusted by  Landlord during such period based on the portion of the Premises for which  the Commencement Date has occurred, provided that the full amount of the  Monthly Amortized Additional Allowance and the Monthly Amortized HVAC Costs  (as each such term is defined in Section 2.1 of Exhibit “D” attached hereto)  shall be fully payable, without reduction, commencing on the initial  Commencement Date. |
|------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Expiration Date: |   | The date immediately  preceding the eighty-eight (88) month anniversary of the initial Commencement  Date; provided, however, that if the initial Commencement Date is a date  other than the first day of a month, the Expiration Date shall be the last  day of the month which is eighty-eight (88) months after the month in which  the initial Commencement Date falls, unless extended or earlier terminated  pursuant to this Lease.                                                                                                                                                                                                                                                                                                                                                                                       |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

 

BaseRent

(Article 3) (subject toincrease under Section 2.1 of Exhibit “D” attached hereto):
|                     | ** ** | ** **                      | ** ** | **Monthly Base Rent per** | ** ** |
|---------------------|------------|---------------------------------|------------|------------------------------------------|------------|
| **Lease Year** | ** ** | **Monthly Base Rent** | ** ** | **Rentable Square Foot**       | ** ** |
| 1                   |       | $                               | 101,626.20 |                                     | $          | 1.95 |   |
| 2                   |       | $                               | 104,232.00 |                                     | $          | 2.00 |   |
| 3                   |       | $                               | 106,837.80 |                                     | $          | 2.05 |   |
| 4                   |       | $                               | 109,443.60 |                                     | $          | 2.10 |   |
| 5                   |       | $                               | 112,049.40 |                                     | $          | 2.15 |   |
| 6                   |       | $                               | 114,655.20 |                                     | $          | 2.20 |   |
| 7                   |       | $                               | 117,261.00 |                                     | $          | 2.25 |   |
| 8                   |       | $                               | 119,866.80 |                                     | $          | 2.30 |   |

 
| Tenant’s Share:              |   | 68.111% with respect to the Project (and 40.631%  with respect to the Development)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|-----------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Base Year:                        |   | Calendar Year 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Parking (Article 13):             |   | One hundred seventy (170) unreserved parking spaces,  in accordance with the provisions set forth in Article 13 below, and other  uses of the Parking Lot in accordance with the provisions set forth in  Section 8.3 of this Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Security Deposit (Article 5):     |   | $131,853.48.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Permitted Use:                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (Article 8):                      |   | Subject to the terms of this Lease (including,  without limitation, Article 8 of this Lease), and all zoning and other laws,  rules, regulations, codes and ordinances, and matters of record, general  business office use, and use for light manufacturing and distribution of  automotive sensors and roadway sensors/ancillary equipment, all consistent  with the character of a first-class office building, and no other use. For  the purposes of this Lease, (i) automotive sensors are electronic devices  mounted in or on a car or truck that acquire images of the environment in or  around a vehicle and process the images to acquire information to provide  driver alerts, operate automotive equipment, or perform similar functions;  and (ii) roadway sensors/ancillary equipment are electronic devices mounted  at intersections or along roadways that acquire images of the roadway and process  the images to acquire information for operating traffic signals or for  traffic information, management and control purposes. |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Rent Payment Address (Article 3): |   | c/o Crown Realty & Development, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                              |   | 18201 Von Karman Avenue, Suite 950                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                              |   | Irvine, California 92612                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

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|                                        |   | Attn: Property Management                     |
|----------------------------------------|--------|-----------------------------------------------|
|                                   |   |                                          |
| Landlord’s Address (Article 28):  |   | c/o Crown Realty & Development, Inc. |
|                                   |   | 18201 Von Karman Avenue, Suite 950            |
|                                   |   | Irvine, California 92612                      |
|                                   |   | Attn: Property Management                     |
|                                   |   |                                          |
| Landlord’s Broker (Section 31.1): |   | Grubb & Ellis                             |
|                                   |   |                                          |
| Tenant’s Broker (Section 31.1):   |   | Cushman & Wakefield                       |

 

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LEASE

This Lease (together withthe Basic Lease Provisions and Exhibits “A” through “I” which areincorporated into the Lease by this reference, collectively the “Lease”) ismade as of the date specified in the Basic Lease Provisions, by and between CROWN CARNEGIE ASSOCIATES, LLC, a Delawarelimited liability company (“Landlord”), and ITERIS, INC., a Delawarecorporation (“Tenant”).  Landlord herebyleases to Tenant and Tenant hereby leases from Landlord the Premises for theTerm, upon the terms and conditions set forth in this Lease.

Article 1 - Term.

1.1                                 TheTerm of this Lease shall commence on the initial Commencement Date as set forthin the Basic Lease Provisions and shall end on the Expiration Date set forth inthe Basic Lease Provisions.  If Landlord doesnot deliver possession of the Premises to Tenant on or before any estimatedCommencement Date (or any other date), Landlord shall not be subject to anyliability for its failure to do so, and such failure shall not affect thevalidity of this Lease nor the obligations of Tenant hereunder.  For purposes of this Lease, the term “LeaseYear” shall mean each consecutive twelve (12) month period during the LeaseTerm, with the first Lease Year commencing on the initial Commencement Date;however, (a) if the initial Commencement Date falls on a day other thanthe first day of a calendar month, the first Lease Year shall end on the lastday of the eleventh (11th) month after the initial Commencement Date and thesecond (2nd) and each succeeding Lease Year shall commence on the first day ofthe next calendar month, and (b) the last Lease Year shall end on theExpiration Date.

Notwithstanding theforegoing, if Suite 200 has not been delivered to Tenant on or prior to August31, 2007 (the “Deadline Date”) (as such date may be extended, as set forth inthe last sentence of this paragraph), then, as Tenant’s sole and exclusiveremedy, Tenant shall receive one (1) day’s credit of Monthly Base Rent forSuite 200 only against Monthly Base Rent next due under this Lease for Suite200 for each day, if any, that occurs during the period, if any, falling afterthe Deadline Date and prior to the delivery of Suite 200 to Tenant.  Notwithstanding the foregoing or anything tothe contrary set forth in this Lease, the Deadline Date shall be extended one(1) day for each day on which there is any delay in the delivery of Suite 200to Tenant caused by the acts or omission of Tenant or any of the Tenant Partiesor Force Majeure (as defined in Article 25 below).

1.2                                 Landlordhereby grants the original Tenant named in this Lease (“Original Tenant”) one(1) option (the “Option”) to extend the Lease Term for a period of five (5)years (the “Option Term”), which Option shall be exercisable only by writtennotice delivered by Tenant to Landlord as set forth below.  The rights contained in this Section 1.2shall be personal to the Original Tenant and may only be exercised by theOriginal Tenant (and not any assignee, sublessee or transferee of the OriginalTenant’s interest in this Lease) if the Original Tenant occupies the entirePremises as of the date of Tenant’s Acceptance (as defined below).

1.2.1                        The rentpayable by Tenant during the Option Term (“Option Rent”) shall be equal to the “MarketRent” (defined below).  “Market Rent”shall mean the applicable Monthly Base Rent, including all escalations, DirectExpenses, additional rent and other charges at which tenants, as of thecommencement of the Option Term, are leasing non-renewal, non-sublease,non-equity space comparable in size, location and quality to the Premises for aterm comparable to the Option Term, which comparable space is located in theProject and in office buildings comparable to the Project in the “Airport Area”sub-market in the Orange County, California office market taking intoconsideration the value of the existing improvements in the Premises to Tenant,as compared to the value of the existing improvements in such comparable space,with such value to be based upon the age, quality and layout of theimprovements and the extent to which the same could be utilized by Tenant.

1.2.2                        The Optionshall be exercised by Tenant only in the following manner:  (i) Tenant shall not be in default, and shallnot have been in default under this Lease more than twice beyond any applicablenotice and cure periods, on the delivery date of the Interest Notice and Tenant’sAcceptance; (ii) Tenant shall deliver written notice (“Interest Notice”) toLandlord not more than twelve (12) months nor less than nine (9) months priorto the expiration of the Lease Term, stating that Tenant is interested inexercising the Option, (iii) within fifteen (15) business days of Landlord’sreceipt of Tenant’s written notice, Landlord shall deliver notice (“Option RentNotice”) to Tenant setting forth the Option Rent; and (iv) if Tenant desires toexercise such Option, Tenant shall provide Landlord written notice within ten(10) business days after receipt of the Option Rent Notice (“Tenant’sAcceptance”), and upon, and concurrent with such exercise, Tenant may, at itsoption, object to the Option Rent contained in the Option Rent Notice.  Tenant’s failure to deliver the InterestNotice or Tenant’s Acceptance on or before the dates specified above shall bedeemed to constitute Tenant’s election not to exercise the Option.  If Tenant timely and properly exercises itsOption, the Lease Term shall be extended for the Option Term upon all of theterms and conditions set forth in this Lease, except that the rent for theOption Term shall be as indicated in the Option Rent Notice, unless Tenant,concurrently with Tenant’s acceptance, objects

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to the Option Rentcontained in the Option Rent Notice, in which case the parties shall follow theprocedure and the Option Rent shall be determined, as set forth in Section1.2.3 below.

1.2.3                        If Tenanttimely and appropriately objects to the Market Rent in Tenant’s Acceptance,Landlord and Tenant shall attempt to agree upon the Market Rent using theirbest good-faith efforts.  If Landlord andTenant fail to reach agreement within twenty-one (21) days following Tenant’sAcceptance (“Outside Agreement Date”), then each party shall make a separatedetermination of the Market Rent which shall be submitted to each other and toarbitration in accordance with the following items (a) through (d).  The cost of arbitration shall be paid byLandlord and Tenant equally.

(a)                                  Landlordand Tenant shall each appoint, within ten (10) days of the Outside AgreementDate, one arbitrator who shall by profession be a current real estate broker orappraiser of commercial office properties in the immediate vicinity of theProject, and who has been active in such field over the last five (5)years.  The determination of thearbitrators shall be limited solely to the issue of whether Landlord’s orTenant’s submitted Market Rent is the closest to the actual Market Rent asdetermined by the arbitrators, taking into account the requirements set forthabove.

(b)                                 Thetwo (2) arbitrators so appointed shall within five (5) business days of thedate of the appointment of the last appointed arbitrator agree upon and appointa third arbitrator who shall be qualified under the same criteria set forthhereinabove for qualification of the initial two (2) arbitrators.

(c)                                  Thethree (3) arbitrators shall within fifteen (15) days of the appointment of thethird arbitrator reach a decision as to whether the parties shall use Landlord’sor Tenant’s submitted Market Rent, and shall notify Landlord and Tenantthereof.  The decision of the majority ofthe three (3) arbitrators shall be binding upon Landlord and Tenant.

(d)                                 Ifeither Landlord or Tenant fails to appoint an arbitrator within ten (10) daysafter the applicable Outside Agreement Date, the arbitrator appointed by one ofthem shall reach a decision, notify Landlord and Tenant thereof, and sucharbitrator’s decision shall be binding upon Landlord and Tenant.  If the two arbitrators fail to agree upon andappoint a third arbitrator, or both parties fail to appoint an arbitrator, thenthe appointment of the third arbitrator or any arbitrator shall be dismissedand the matter to be decided shall be forthwith submitted to arbitration underthe provisions of the American Arbitration Association, but subject to theinstructions set forth herein.

1.3                                 Subjectto the timely vacation and surrender of the exiting tenant in Suite 200, andsubject to the acts or omissions of Tenant (or any Tenant Parties) and ForceMajeure (as defined in Article 25), Landlord shall use commercially reasonableefforts to deliver Suite 200 to Tenant on or before July 1, 2007.

Article 2 –Premises: Landlord and Tenant hereby stipulate that thePremises contains the number of square feet specified in the Basic LeaseProvisions.  Upon the request of theother party, Tenant and Landlord shall deliver to each other a CommencementLetter in a form substantially similar to that attached hereto as Exhibit “C”,within ten (10) business days of receipt thereof; provided that failure toexecute and deliver the Commencement Letter shall not in any way affect thevalidity of this Lease, or any of the terms of this Lease.  Tenant hereby agrees that, except for latentdefects in the structure of the Premises, and subject to Landlord’s obligationsunder Section 6.1 below, the Premises shall be taken “as is”, “with all faults”,“without any representations or warranties”, and Tenant hereby agrees andwarrants that it has investigated and inspected the condition of the Premisesand the suitability of same for Tenant’s purposes, and Tenant does hereby waiveand disclaim any objection to, cause of action based upon, or claim that itsobligations hereunder should be reduced or limited because of the condition ofthe Premises or the Project or the suitability of same for Tenant’spurposes.  Landlord hereby representsthat, to Landlord’s actual knowledge, as of the date of this Lease, Landlordhas not received written notice from a governmental entity stating that thePremises are in violation of applicable laws relating to the Premises.  Except as expressly set forth in thepreceding sentence, Tenant acknowledges that neither Landlord nor any agent norany employee of Landlord has made any representations or warranty with respectto the Premises or the Project or with respect to the suitability of either forthe conduct of Tenant’s business and Tenant expressly warrants and representsthat Tenant has relied solely on its own investigation and inspection of thePremises and the Project in its decision to enter into this Lease and let thePremises in the above-described condition. The Premises shall be initiallyimproved as provided in, and subject to, the Tenant Work Letter attached heretoas Exhibit “D” and made a part hereof. The existing leasehold improvements in the Premises as of the date ofthis Lease, together with the Tenant Improvements (as defined in the TenantWork Letter) may be collectively referred to herein as the “Tenant Improvements”.  The taking of possession of the Premises byTenant shall conclusively establish that the Premises and the Project were atsuch time in satisfactory condition, except for latent defects in the structureof the Premises, and Landlord’s obligations under Section 6 below.  Tenant hereby waives subsection 1 of Section1932 and Sections 1941 and 1942 of the Civil Code of California or anysuccessor provision of law.

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Article 3 – Base Rent:

3.1                                 Tenantagrees to pay to Landlord during the Term hereof, at Landlord’s rent paymentaddress set forth in the Basic Lease Provisions or to such other person or atsuch other place as directed from time to time by written notice to Tenant fromLandlord, the monthly sums set forth the Basic Lease Provisions (together withthe Monthly Amortized Additional Allowance, if any, and the Monthly AmortizedHVAC Costs), payable in advance on the first day of each calendar month,without demand, setoff or deduction, and in the event this Lease commences orthe date of expiration of this Lease occurs other than on the first day or lastday of a calendar month, the rent for such month shall be prorated.  Notwithstanding the foregoing, the first fullmonth’s Base Rent shall be paid by Tenant to Landlord concurrently with Tenant’sexecution of this Lease.

3.2                                 Providedthat Tenant is not then in material default under this Lease beyond anyapplicable notice and cure periods, and has not been in material default underthis Lease beyond any applicable notice and cure periods, Tenant shall becredited with the payment of monthly Base Rent with respect to the Premises forthe second (2nd) through fifth (5th) full calendar months immediately followingthe final Commencement Date (for a total Base Rent credit under this paragraphof $406,504.80, subject to the terms hereof). No such Base Rent credit shall reduce the amount of Additional Rent (orthe Monthly Amortized Additional Allowance, if any, or the Monthly AmortizedHVAC Costs) or other amounts which are otherwise payable by Tenant under thisLease.  Tenant understands and agreesthat the foregoing Base Rent credit is conditioned upon Tenant’s not being inmaterial default under this Lease beyond any applicable notice and cureperiods.

Article 4 – Payment ofOperating Expenses and Tax Expenses:

4.1                                 Theterm “Base Year” means thecalendar year set forth in the Basic Lease Provisions.  If, in any calendar year during the LeaseTerm, the “Direct Expenses” (as hereinafter defined) paid or incurred byLandlord shall be higher than the Direct Expenses for the Base Year, Tenantshall pay an additional sum for  eachsuch subsequent calendar year equal to the product of Tenant’s Share (set forthin the Basic Lease Provisions) multiplied by such increased amount of DirectExpenses.  In the event either thePremises and/or the Project is expanded or reduced, then Tenant’s Share shallbe appropriately adjusted, and as to the calendar year in which such changeoccurs, Tenant’s Share for such calendar year shall be determined on the basisof the number of days during that particular calendar year that such Tenant’sShare was in effect.  In the event thisLease shall terminate on any date other than the last day of a calendar year,the additional sum of Direct Expenses payable hereunder by Tenant during thecalendar year in which this Lease terminates shall be prorated on the basis ofthe relationship which the number of days which have elapsed from the commencementof said calendar year to and including said date on which this Lease terminatesbears to three hundred sixty five (365). Any and all amounts due and payable byTenant pursuant to this Lease (other than Base Rent) shall be deemed “Additional Rent” and Landlord shall beentitled to exercise the same rights and remedies upon default in thesepayments as Landlord is entitled to exercise with respect to defaults inmonthly Base Rent payments.

4.2                                 Asused herein the term “Direct Expenses”shall mean the sum of Tax Expenses and Operating Expenses, as each such term isdefined below.

4.2.1                        “Operating Expenses” means all costsand expenses incurred by Landlord in connection with the maintenance,operation, replacement, ownership and repair of the Project, the equipment, theintrabuilding cabling and wiring, adjacent walks, malls and landscaped andcommon areas and the parking structure, areas and facilities of the Project,including, but not limited to, salaries, wages, medical, surgical and generalwelfare benefits and pension payments, payroll taxes, fringe benefits,employment taxes, workers’ compensation, uniforms and dry cleaning thereof forall persons who perform duties connected with the operation, maintenance andrepair of the Project, its equipment, the intrabuilding cabling and wiring andthe adjacent walks and landscaped areas, including janitorial, gardening,security, parking, operating engineer, elevator, painting, plumbing, heating,ventilating, air conditioning, carpentry, window washing, hired services, areasonable allowance for depreciation of the cost of acquiring or the rentalexpense of personal property used in the maintenance, operation and repair ofthe Project, accountant’s fees incurred in the preparation of rent adjustmentstatements, legal fees, real estate tax consulting fees, personal propertytaxes on property used in the maintenance and operation of the Project, fees,costs, expenses or dues payable pursuant to the terms of any covenants,conditions or restrictions or owners’ association pertaining to the Project,capital expenditures incurred to effect economies of operation of, or stabilityof services to, the Project and capital expenditures required by governmentregulations, laws, or ordinances including, but not limited to the Americanswith Disabilities Act; the cost of all charges for electricity, gas, water,heating, ventilation and air conditioning and other utilities furnished to theProject; the cost of all charges for fire and extended coverage, liability andall other insurance in connection with the Project carried by Landlord; thecost of all building and cleaning supplies and materials; the cost of allcharges for cleaning, maintenance and service contracts and other services withindependent contractors and administration fees; a commercially reasonableproperty management fee (which fee may be imputed if Landlord has internalizedmanagement or otherwise acts

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as its own propertymanager) and license, permit and inspection fees relating to the Project.  In the event, during any calendar year, theProject is less than one hundred percent (100%) occupied at all times,Operating Expenses shall be adjusted to reflect the Operating Expenses of theProject as though one hundred percent (100%) were occupied at all times, andthe increase or decrease in the sums owed hereunder shall be based upon suchOperating Expenses as so adjusted.

OperatingExpenses shall not include:

(A)                              Anyground lease rental;

(B)                                Costsincurred by Landlord for the repair of damage to the Project, to the extentthat Landlord is reimbursed by insurance proceeds;

(C)                                Costs,including permit, license and inspection costs, incurred with respect to theinstallation of tenant or other occupants’ improvements in the Project orincurred in renovating or otherwise improving, decorating, painting orredecorating vacant space for tenants or other occupants of the Project;

(D)                               Depreciation,amortization and interest payments, except as provided herein and except onmaterials, tools, supplies and vendor-type equipment purchased by Landlord toenable Landlord to supply services Landlord might otherwise contract for with athird party where such depreciation, amortization and interest payments wouldotherwise have been included in the charge for such third party’s services, andwhen depreciation or amortization is permitted or required, the item shall beamortized over its reasonably anticipated useful life;

(E)                                 Marketingcosts, including leasing commissions, attorneys’ fees in connection with thenegotiation and preparation of letters of intent, leases, subleases and/orassignments and space planning costs;

(F)                                 Reservesfor bad debts;

(G)                                Overheadand profit increment paid to Landlord or to subsidiaries or affiliates ofLandlord for goods and/or services in or to the Project to the extent the sameunreasonably exceeds a competitive cost given the quality of such goods and/orservices;

(H)                               Interest,principal, points and fees on debts or amortization on any mortgage ormortgages or any other debt instrument encumbering the Project (except aspermitted above);

(I)                                    Landlord’sgeneral corporate overhead expenses;

(J)                                   Advertisingand promotional expenditures;

(K)                               Thecost of any electric power for which any tenant directly contracts with thelocal public service company or of which any tenant is separately metered orsubmetered and pays Landlord directly; provided, however, that if any tenant inthe Project contracts directly for electric power service or is separatelymetered or submetered during any portion of the relevant period, the totalelectric power costs for the Project shall be “grossed up” to reflect whatthose costs would have been had each tenant in the Project used theProject-standard amount of electric power;

(L)                                 Managementfees substantially in excess of those management fees which are normally andcustomarily charged by landlords of comparable buildings in the vicinity of theProject;

(M)                            Costsarising from Landlord’s charitable or political contributions;

(N)                               Costsfor the acquisition of (as contrasted with the maintenance of) sculptures,paintings or other objects of art;

(O)                               Costsassociated with the operation of the business of the partnership or entitywhich constitutes Landlord as the same are distinguished from the costs ofoperation of the Project, including partnership accounting and legal matters,costs of defending any lawsuits with or claims by any mortgagee, costs ofselling, syndicating, financing, mortgaging or hypothecating any of Landlord’sinterest in the Project, costs of any disputes between Landlord and itsemployees (if any) not engaged in Project operation, disputes of Landlord withProject management, or outside fees paid in connection with disputes with othertenants;

(P)                                 Capital improvements, except for those (i) acquired in Landlord’s reasonablejudgment to reduce Operating Expenses (amortized at an annual rate which whenadded to interest costs is reasonably calculated to equal the amount ofOperating Expenses saved in each calendar

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yearthroughout the Lease Term), together with interest at 9% per annum, compounded,and/or (ii) incurred after the date of this Lease in order to comply with anygovernmental law, rule, code, ordinance or regulation, provided that suchcapital costs shall be amortized over their useful lives, as determined bygenerally accepted accounting principles, together with interest at 9% perannum, compounded;

(Q)                               Anytravel expenses;

(R)                                Anyflowers, gifts, balloons, etc. provided to any entity whatsoever, including,but not limited to, Tenant, other tenants, employees, vendors, contractors,prospective tenants and agents;

(S)                                 Any“finders fees”, brokerage commissions, job placement costs or job advertisingcost;

(T)                                Costsof earthquake insurance (unless earthquake insurance is maintained in the BaseYear or unless Operating Expenses during the Base Year are grossed up toreflect the amount of Operating Expenses which would have been incurred byLandlord during the Base Year had Landlord carried earthquake insurance);

(U)                               Costsof terrorism insurance (unless terrorism insurance is maintained in the BaseYear or unless Operating Expenses during the Base Year are grossed up toreflect the amount of Operating Expenses which would have been incurred byLandlord during the Base Year had Landlord carried terrorism insurance);

(V)                                Costsincurred to (i) comply with laws relating to the removal of any HazardousMaterial, as that term is defined in Article 14 of this Lease, which wasin existence on the Project prior to the initial Commencement Date, and was ofsuch a nature that a federal, state or municipal governmental authority, if ithad then had knowledge of the presence of such Hazardous Material, in thestate, and under the conditions that it then existed on the Project, would havethen required the removal of such Hazardous Material or other remedial orcontainment action with respect thereto, and (ii) to remove, remedy,contain, or treat any Hazardous Material, which Hazardous Material is broughtonto the Project after the date hereof by Landlord or any other tenant of theProject, and is of such a nature, at that time, that a federal, state ormunicipal governmental authority, if it had then had knowledge of the presenceof such Hazardous Material, in the state, and under the conditions, that itthen exists on the Project, would have then required the removal of suchHazardous Material or other remedial or containment action with respectthereto;

(W)                           The cost of repairs or other work occasionedby fire, windstorm or other casualty reimbursed to Landlord, other than as partof Operating Expenses;

(Y)                                Costs resulting from the correction of anylatent construction defects in the initial construction of all or any portionof the Project or Development, or any condition of the Project that is, as ofthe date of this Lease, not in compliance with applicable laws, codes, rules orregulations existing as of the date of this Lease;

(Z)                                Monetary rental concessions or lease buyouts;

(AA)                    The costs of tenant improvements for, ordecorating, painting or redecorating space (exclusive of common areas) for, theinterior of premises of any other tenants or other occupants of the Project orDevelopment;

(BB)                        Overhead or profit paid to Landlord,subsidiaries or affiliates of Landlord, for services on or to the Project orDevelopment if and to the extent the cost therefor materially and unreasonablyexceeds competitive costs for such services in comparable buildings locatedwithin five (5) miles of the Project;

(CC)                        All items, services and/or goods for whichTenant or any other tenant, occupant, person or other party reimburses Landlorddirectly, other than as part of Operating Expenses or similar pass-throughamounts;

(DD)                      Legal fees expended by Landlord in connectionwith negotiating and entering into any leases and any related instruments (including,without limitation, guaranties, surrender agreements, leasing amendments andconsents to assignment or subletting) with any tenant or other occupant of anyportion of the Project or Development, and the enforcement of any suchinstruments; or which are expended or incurred by Landlord in connection withthe negotiation and entering of sale, ground lease, financing, partnership orsimilar transactions pertaining to the Project or Development;

(EE)                          Wages, salaries and other compensation paidto executives of Landlord, in their capacities as executives;

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(FF)                          The cost of defending against claims inregard to the existence or release of Hazardous Materials by Landlord at theProject or Development; and

(GG)                        Interest, penalties or damages incurred byLandlord for late payment of taxes or assessments or under any agreement towhich Landlord is a party by reason of the breach or default of Landlord.

Landlord furtheragrees that since one of the purposes of Operating Expenses and the gross-upprovision is to allow Landlord to require Tenant to pay for the costattributable to its Premises, Landlord agrees that (i) Landlord will notcollect or be entitled to collect Operating Expenses from all of its tenants inan amount which is in excess of 100% of the Operating Expenses actuallypaid/incurred by Landlord, and (ii) Landlord shall make no profit from Landlord’scollection of Operating Expenses.  Theforegoing does not limit any management fees that may be charged by Landlordunder this Lease.

4.2.2                        “Tax Expenses means any and all real estate taxes and othersimilar charges on real property or improvements, assessments, water and sewercharges, and all other charges assessed, reassessed or levied upon the Projectand appurtenances thereto and the parking or other facilities thereof, or thereal property thereunder (collectively the “Real Property”) or attributable thereto or on the rents, issues,profits or income received or derived therefrom which are assessed, reassessedor levied by the United States, the State of California or any local governmentauthority or agency or any political subdivision thereof, and shall includeLandlord’s reasonable legal fees, costs and disbursements incurred inconnection with proceedings for reduction of Tax Expenses or any part thereof;provided, however, if at any time after the date of this Lease the methods oftaxation now prevailing shall be altered so that in lieu of or as a supplementto or a substitute for the whole or any part of any Tax Expenses, there shallbe assessed, reassessed or levied (a) a tax, assessment, reassessment, levy,imposition or charge wholly or partially as a net income, capital or franchiselevy or otherwise on the rents, issues, profits or income derived therefrom(but not for federal and state income taxes to the extent applicable toLandlord’s general or net income), or (b) a tax, assessment, reassessment, levy(including but not limited to any municipal, state or federal levy), impositionor charge measured by or based in whole or in part upon the Real Property andimposed upon Landlord, or (c) a license fee measured by the rent payable underthis Lease, then all such taxes, assessments, reassessments or levies or thepart thereof so measured or based, shall be deemed to be included in the term “DirectExpenses.”  In no event shall TaxExpenses included in Direct Expenses for any year subsequent to the Base Yearbe less than the amount of Tax Expenses included in Direct Expenses for theBase Year.  In addition, when calculatingTax Expenses for the Base Year, special assessments shall only be deemedincluded in Tax Expenses for the Base Year to the extent that such specialassessments are included in Tax Expenses for the applicable subsequent calendaryear during the Lease Term. Notwithstanding the foregoing, there shall be excluded from Tax Expensesall excess profits taxes, franchise taxes, gift taxes, capital stock taxes,inheritance and succession taxes, estate taxes, and federal and state incometaxes to the extent applicable to Landlord’s general or net income (unless asubstitute for any of the foregoing).

4.2.3                        If for anycalendar year ending or commencing within the Term, Tenant’s Share of DirectExpenses for such calendar year exceeds Tenant’s Share of Direct Expenses forthe Base Year, then Tenant shall pay to Landlord, in the manner set forthbelow, and as Additional Rent, an amount equal to the excess (the “Excess”).

4.2.4                        Landlordshall give Tenant a yearly expense estimate statement (the “Estimate Statement”) which shall set forthLandlord’s reasonable estimate (the “Estimate”) of what the total amountof Direct Expenses for the then-current calendar year shall be and theestimated Excess (the “Estimated Excess”)as calculated by comparing Tenant’s Share of Direct Expenses for such calendaryear, which shall be based upon the Estimate, to Tenant’s Share of DirectExpenses for the Base Year.  The failureof Landlord to timely furnish the Estimate Statement for any calendar yearshall not preclude Landlord from subsequently enforcing its rights to collectany Estimated Excess under this Section 4.2, once such Estimated Excess hasbeen determined by Landlord.  If pursuantto the Estimate Statement an Estimated Excess is calculated for thethen-current calendar year, Tenant shall pay, with its next installment ofmonthly Base Rent due, a fraction of the Estimated Excess for the then-currentcalendar year (reduced by any amounts paid pursuant to the last sentence ofthis Section 4.2.4).  Such fraction shallhave as its numerator the number of months which have elapsed in such currentcalendar year to the month of such payment, both months inclusive, and shallhave twelve (12) as its denominator. Until a new Estimate Statement is furnished, Tenant shall pay monthly,with the monthly Base Rent installments, an amount equal to one-twelfth (1/12)of the total Estimated Excess set forth in the previous Estimate Statementdelivered by Landlord to Tenant.

4.2.5                        Inaddition, Landlord shall use commercially reasonable efforts to give to Tenantas soon as reasonably practicable following the end of each calendar year (andLandlord shall use commercially reasonable efforts to do so by April 1 of eachcalendar year), a statement (the “Statement”) which shall state the DirectExpenses incurred or accrued for such preceding calendar year, and which shallindicate the amount, if any, of the Excess. Upon receipt of the Statement for each calendar year

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during the Term, ifamounts paid by Tenant as Estimated Excess are less than the actual Excess asspecified on the Statement, Tenant shall pay, with its next installment ofmonthly Base Rent due, the full amount of the Excess for such calendar year,less the amounts, if any, paid during such calendar year as EstimatedExcess.  If, however, the Statementindicates that amounts paid by Tenant as Estimated Excess are greater than theactual Excess as specified on the Statement, such overpayment shall be creditedagainst Tenant’s next installments of Estimated Excess.  Subject to the last sentence of this Section4.2.5, the failure of Landlord to timely furnish the Statement for any calendaryear shall not prejudice Landlord from enforcing its rights under this Section4.2, once such Statement has been delivered. Even though the Term has expired and Tenant has vacated the Premises,when the final determination is made of Tenant’s Share of the Direct Expensesfor the calendar year in which this Lease terminates, if an Excess is present,Tenant shall immediately pay to Landlord an amount as calculated pursuant tothe provisions of this Section 4.2.  Theprovisions of this Section 4.2 shall survive the expiration or earliertermination of the Lease Term.  Notwith­standingthe immediately preceding sentence, (A) Tenant shall not be responsible forTenant’s Share of any Direct Expenses attributable to any calendar year whichare first billed to Tenant more than two (2) years after the expiration of theapplicable calendar year, provided that in any event Tenant shall beresponsible for Tenant’s Share of Direct Expenses levied by any governmentalauthority or by any public utility companies at any time (provided thatLandlord delivers Tenant a bill for such amounts within two (2) years followingLandlord’s receipt of the bill therefor), and (B) Tenant shall not beresponsible for Tenant’s Share of any Direct Expenses attributable to anycalendar year which are first billed to Tenant more than eighteen (18) monthsafter the expiration of the Term (as the same may be extended), provided thatin any event Tenant shall be responsible for Tenant’s Share of Direct Expenseslevied by any governmental authority or by any public utility companies at anytime (provided that Landlord delivers Tenant a bill for such amounts withineighteen (18) months following Landlord’s receipt of the bill therefor).

4.2.6                        ThoseDirect Expenses attributable to the Development as a whole (and notattributable solely to any individual building therein) may, in Landlord’sdiscretion, be allocated by Landlord, in good faith, to the Project and to theother buildings within the Development on an equitable basis.

4.2.7                        Within six(6) months after receipt of a Statement by Tenant (“Review Period”), if Tenantdisputes the amount set forth in the Statement, a certified public accountantthat is a partner in Tenant or an independent certified public accountant(which accountant is a member of a nationally, regionally or locally recognizedaccounting firm and is hired on a non-contingency fee basis) designated byTenant, may, after reasonable notice to Landlord and at reasonable times,inspect Landlord’s records at Landlord’s offices, provided that Tenant is notthen in default after expiration of all applicable cure periods  of any obligation under this Lease(including, but not limited to, the payment of the amount in dispute) andprovided further that Tenant and such accountant or representative shall, andeach of them shall use their commercially reasonable efforts to cause theirrespective agents and employees to, maintain all information contained inLandlord’s records in strict confidence. Notwithstanding the foregoing, Tenant shall only have the right toreview Landlord’s records one (1) time during any twelve (12) monthperiod.  Tenant’s failure to dispute theamounts set forth in any Statement within the Review Period shall be deemed tobe Tenant’s approval of such Statement and Tenant, thereafter, waives the rightor ability to dispute the amounts set forth in such Statement.  If after such inspection, but within thirty(30) days after the Review Period, Tenant notifies Landlord in writing thatTenant still disputes such amounts, a certification as to the proper amountshall be made in accordance with Landlord’s standard accounting practices, atTenant’s expense, by an independent certified public accountant selected byLandlord and who is a member of a nationally or regionally recognizedaccounting firm, which certification shall be binding upon Landlord andTenant.  Landlord shall cooperate in goodfaith with Tenant and the accountant to show Tenant and the accountant theinformation upon which the certification is to be based.  However, if such certification by theaccountant proves that the Direct Costs set forth in the Statement wereoverstated by more than five percent (5%), then the cost of the accountant andthe cost of such certification shall be paid for by Landlord, up to the amountof the overstatement in question. Promptly following the parties receipt of such certification, theparties shall make such appropriate payments or reimbursements, as the case maybe, to each other, as are determined to be owing pursuant to suchcertification.  Tenant agrees that thisparagraph shall be the sole method to be used by Tenant to dispute the amountof any Direct Costs payable by Tenant pursuant to the terms of this Lease, andTenant hereby waives any other rights at law or in equity relating thereto.

Article 5 – SecurityDeposit:  Tenant shalldeposit with Landlord the sum set forth in the Basic Lease Provisions assecurity for the full and faithful performance of every provision of this Leaseto be performed by Tenant.  If Tenantdefaults under any provision of this Lease beyond any applicable notice andcure periods, including but not limited to the payment of rent, Landlord mayuse all or any part of this security deposit for the payment of any rent or anyother sums in default, or to compensate Landlord for any other loss or damagewhich Landlord may suffer by reason of Tenant’s default.  If any portion of said deposit is so used orapplied, Tenant shall, within ten (10) days after written demand therefor,deposit cash with Landlord in an amount sufficient to restore the securitydeposit to its full amount.  Tenantagrees that Landlord shall not be required to keep the security deposit intrust, segregate it or keep it separate from Landlord’s general funds, butLandlord may commingle the security deposit with its general

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funds and Tenant shallnot be entitled to interest on such deposit. Within thirty (30) days after the expiration or earlier termination ofthe Lease Term, and provided there exists no default by Tenant hereunder thathas not been cured within any applicable cure period, the security deposit orany balance thereof shall be returned to Tenant (or, at Landlord’s option, toTenant’s “Transferee”, as such term is defined in Article 10 below).  Tenant hereby waives the provisions ofSection 1950.7 of the California Civil Code and all other provisions oflaw, now or hereafter in effect, which provide, among other things, thatLandlord may claim from a security deposit only those sums reasonably necessaryto remedy defaults in the payment of rent, to repair damage caused by Tenant orto clean the Premises, it being agreed that Landlord may, in addition, claimthose sums specified in this Article 4 above, all of Landlord’s damagesunder this Lease and California law including, but not limited to, any damagesaccruing upon termination of this Lease under Section 1951.2 of theCalifornia Civil Code and/or those sums reasonably necessary to compensateLandlord for any other loss or damage, foreseeable or unforeseeable, caused bythe acts or omissions of Tenant or any of the Tenant Parties.

Article 6 – Repairs andMaintenance:

6.1                                 Subjectto Tenant’s obligations under Section 2.1.3 of Exhibit “D”, Landlord shall maintain,as part of Operating Expenses, the structural portions of the Project,including the foundation, floor/ceiling slabs, roof, roof membrane, curtainwall, exterior glass, columns, beams, shafts, stairs, stairwells, elevator cabsand common areas (including common area restrooms), and shall also maintain andrepair the base building mechanical, electrical, life safety, plumbing,sprinkler systems and heating, ventilating and air-conditioning systems, all ina manner consistent of that at comparable first-class office buildings inOrange County, California (“Comparable Buildings”).  Exceptas may be set forth to the contrary in this Lease (including, withoutlimitation, in Section 6.2 below), Tenant shall not be required to make anyrepair to, modification of, or addition to any such Project structure and/orsystems, except and to the extent required because of Tenant’s Alterations orimprovements, Tenant’s breach of this Lease or Tenant’s occupancy or use of allor a portion of the Premises for other than normal and customary businessoffice operations.  The management of theBuilding shall be conducted by Landlord, an affiliate of Landlord or athird-party management company and shall be consistent with that at ComparableBuildings.

6.2                                 Exceptas expressly provided as Landlord’s obligation in Section 6.1 above, Tenantshall keep the Premises in good condition and repair, normal wear and tearexcepted.  All damage or injury to thePremises or the Project or Development resulting from the act or negligence ofTenant, any of the Tenant Parties, or by the use of the Premises, shall bepromptly repaired by Tenant at its sole cost and expense, to the satisfactionof Landlord; provided, however, that for damage to the Project or Developmentas a result of casualty or for any repairs that may impact the mechanical,electrical, plumbing, heating, ventilation or air-conditioning systems of theProject, Landlord shall have the right (but not the obligation) to select thecontractor and oversee all such repairs. Landlord may make any repairs which are not promptly made by Tenantafter Tenant’s receipt of written notice and the reasonable opportunity ofTenant to make said repair within thirty (30) days (or such shorter time as maybe reasonably necessary in the event of emergency) from receipt of said writtennotice, and charge Tenant for the cost thereof, which cost shall be paid byTenant within five (5) business days from invoice from Landlord.  Tenant shall be responsible for the designand function of all non-standard improvements of the Premises, whether or notinstalled by Landlord at Tenant’s request. Except as may be set forth to the contrary in this Lease, Tenant waivesall rights to make repairs at the expense of Landlord, or to deduct the costthereof from the rent.

Article 7 – Utilities;Services:

7.1                                 Subjectto Tenant’s obligations under Section 2.1.3 of Exhibit “D”, Landlord agrees tofurnish to the Premises, at a cost to be included in Operating Expenses, from8:00 a.m. to 6:00 p.m. Mondays through Fridays and 9:00 a.m. to 1:00 p.m. onSaturdays, excepting holidays (i.e., New Years Day, Memorial Day, IndependenceDay, Labor Day, Thanksgiving, the day following Thanksgiving and ChristmasDay), air conditioning and heat all in such reasonable quantities as reasonablynecessary for the comfortable occupancy of the Premises.  In addition, Landlord shall, as part ofOperating Expenses, provide electric current for normal lighting and normaloffice machines, elevator service and water on the same floor as the Premisesfor lavatory and drinking purposes in such reasonable quantities as reasonablynecessary for general office use and in compliance with applicable codes.  Subject to the last paragraph of this Section7.1 below, janitorial services shall be furnished as part of Operating Expensesfive (5) days per week, excepting local and national holidays, substantially inaccordance with Exhibit “G” attached hereto (with reasonable modifications fromtime to time by Landlord).  Suchjanitorial services shall be consistent with those provided at comparablebuildings in the general market area. Tenant shall comply with all reasonable, non-discriminatory rules andregulations which Landlord may establish for the proper functioning andprotection of the common area air conditioning, heating, elevator, electrical,intrabuilding cabling and wiring and plumbing systems.  Landlord shall not be liable for, and, exceptto the extent set forth in Section 7.7 below, there shall be no rent abatementas a result of, any stoppage, reduction or interruption of any such servicescaused by governmental rules, regulations or ordinances, riot, strike,

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labor disputes,breakdowns, accidents, necessary repairs or other cause.  Except as specifically provided in thisArticle 7, Tenant agrees to pay for all utilities and other servicesutilized by Tenant and any additional building services furnished to Tenantwhich are not uniformly furnished to all tenants of the Project, at the rategenerally charged by Landlord to tenants of the Project for such utilities orservices.  If Tenant shall requireelectric current in excess of that which Landlord is obligated to furnish underthis Section 7.1, Tenant shall first obtain the written consent of Landlord,which Landlord may refuse in its reasonable discretion.  Additionally, Landlord may cause an electriccurrent meter or submeter to be installed in or about the Premises to measurethe amount of any such excess electric current consumed by Tenant in thePremises.  The cost of any such meter andof installation, maintenance and repair thereof shall be paid for by Tenant andTenant agrees to pay to Landlord, promptly upon demand therefor by Landlord,for all such excess electric current consumed by any such use as shown by saidmeter at the rates charged for such service by the city in which the Project islocated or the local public utility, as the case may be, furnishing the same,plus any additional expense incurred by Landlord in keeping account of theelectric current so consumed.  Withoutlimiting the foregoing, in connection with any computer server room(s) in thePremises, and/or any environment chamber room(s) under Section 7.2 below, inthe Premises, Landlord may cause an electric current meter or submeter to beinstalled in or about the Premises to measure the amount of any such excesselectric current consumed by Tenant in connection therewith.  The cost of any such meter and ofinstallation, maintenance and repair thereof shall be paid for by Tenant and Tenantagrees to pay to Landlord, promptly upon demand therefor by Landlord, for allsuch electric current consumed by any such use as shown by said meter at therates charged for such service by the city in which the Project is located orthe local public utility, as the case may be, furnishing the same, plus anyadditional actual expense (without a Landlord administrative fee) incurred byLandlord in keeping account of the electric current so consumed.  Additionally, with respect to any metered orsubmetered power under this Lease, Landlord may, in its sole and absolutediscretion, require that Tenant contract directly for and timely pay (prior todelinquency) all such power charges, together with any taxes, penalties,surcharges or similar charges relating to the same.

If Tenant requiresheating, ventilation and/or air conditioning during times other than the timesprovided in this Section 7.1, Tenant shall give Landlord such advance notice asLandlord shall reasonably require, and Tenant shall pay Landlord’s standardcharge for such after-hours use (currently $50.00 per hour, subject to increasefrom time to time, provided that such charge shall not be subject to increaseduring the initial Term).

Notwithstanding anything to the contrary set forthin the Lease, but subject to the terms of this paragraph, during theTerm, Tenant may, upon not less than thirty (30) days’ prior written notice toLandlord elect  to have janitorialservices not be furnished by Landlord to the Premises, and in such event(a) Landlord shall have no obligation whatsoever with respect to janitorialservices to the Premises; (b) Tenant shall, at Tenant’s sole cost and expense,contract directly with a janitorial service provider reasonably approved inadvance by Landlord (“Tenant’s Janitorial Provider”) to provide janitorialservices to the Premises (and Tenant shall, at its sole cost and expense, keepthe Premises in a neat and clean condition at all times), and Landlord shallhave no obligation to provide any janitorial services to the Premises; and (c)subject to the last two (2) sentences of this paragraph, Operating Expensesshall not include Tenant’s Janitorial Costs (defined below) and OperatingExpenses for the Base Year  shall notinclude Tenant’s Janitorial Costs; the term “Tenant’s Janitorial Costs” shallmean the amount of cost savings Landlord determines it has achieved as a resultof Landlord’s janitorial service provider not performing janitorial services inthe Premises.

7.2                                 Tenantwill not, without the prior written consent of Landlord, such consent not to beunreasonably withheld, conditioned or delayed, use any apparatus or device inthe Premises which will in any way increase the amount of electricity or waterusually furnished or supplied for use of the Premises as general office space;nor connect any apparatus, machine or device with water pipes or electriccurrent (except through existing electrical outlets in the Premises), for thepurpose of using electric current or water. Notwithstanding the foregoing, provided Tenant does not disturb othertenants of the Project or Development or interfere with Landlord or othertenants of the Project or Development, subject to the terms of this Lease, alllaws, rules, regulations, codes and ordinances, matters of record, insurancerequirements, and Landlord’s safety requirements (without any representation orwarranty by Landlord as to safety), Tenant may, at Tenant’s sole cost andexpense, use in the Premises a room(s) in the Premises for “environmentchambers” (together with a related drain pipe and source of filtered waterinstalled by Tenant, at its sole cost and expense), meaning  ovens, that do not use Hazardous Materials,used to simulate certain physical environments in connection with vehiclesafety and performance testing.

7.3                                 Ifany lights, machines or equipment (including but not limited to computers andcomputer systems and appurtenances) are used by Tenant in the Premises whichmaterially affect the temperature otherwise maintained by the air conditioningsystem, or generate substantially more heat in the Premises than would begenerated by the building standard lights and usual office equipment, asreasonably documented by Landlord, Landlord shall have the right to install anymachinery and equipment which Landlord reasonably deems necessary to restore temperaturebalance, including but not limited to modifications to the standard airconditioning equipment, and the cost thereof, including the

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cost of installation andany additional cost of operation and maintenance occasioned thereby, shall bepaid by Tenant to Landlord within thirty (30) days after demand by Landlord.

7.4                                 Uponrequest from Tenant from time to time, Landlord will provide Tenant with alisting of telecommunications and media service providers serving the Project,and Tenant shall have the right to contract directly with the providers of itschoice.  If Tenant wishes to contractwith  or obtain service from any providerwhich does not currently serve the Project or wishes to obtain from an existingcarrier services which will require the installation of additional equipment,such provider must, prior to providing service, enter into a written agreementwith Landlord setting forth the terms and conditions of the access to begranted to such provider.  In consideringthe installation of any new or additional telecommunications cabling orequipment at the Project, Landlord will consider all relevant factors in areasonable and non-discriminatory manner, including, without limitation, theexisting availability of services at the Project, the impact of the proposedinstallations upon the Project and its operations and the available space andcapacity for the proposed installations. Landlord may also consider whether the proposed service may result ininterference with or interruption of other services at the Project or thebusiness operations of other tenants or occupants of the Project.  In no event shall Landlord be obligated toincur any costs or liabilities in connection with the installation or deliveryof telecommunication services or facilities at the Project.  All such installations shall be subject toLandlord’s prior approval and shall be performed in accordance with the termsof Article 11 below.  If Landlordapproves the proposed installations in accordance with the foregoing, Landlordwill deliver its standard form agreement upon request and will use commerciallyreasonable efforts to promptly enter into an agreement on reasonable andnon-discriminatory terms with a qualified, licensed and reputable carrierconfirming the terms of installation and operation of telecommunicationsequipment consistent with the foregoing.

7.5                                 Subjectto Section 7.1 above, Tenant shall not have the right to contract directly withany provider of electrical power. Landlord shall, at no cost to Landlord, reasonably cooperate with Tenant(including by communicating with Southern California Edison) in connection withany of Tenant’s additional power or transformer upgrade requirements for thePremises; provided, however, notwithstanding anything to the contrary in thisLease (including, without limitation, under Exhibit “D”), all costs andexpenses in connection with the same, including, without limitation, inconnection with any upgrade, improvement or increase in electrical/poweravailability, capacity, transformers or systems shall be at Tenant’s sole costand expense.

7.6                                 Tenantacknowledges that Landlord’s election whether or not to provide any type ofmechanical surveillance or security personnel whatsoever in the Project issolely within Landlord’s discretion; Landlord and the Landlord Parties (definedin Article 9 below) shall have no liability in connection with the provision,or lack, of such services.  Landlord andthe Landlord Parties shall not be liable for losses due to theft, vandalism, orlike causes, except to the extent of property damage caused by the grossnegligence or willful misconduct of Landlord.

7.7                                 IfTenant is prevented from using, and does not use, the Premises or a substantialportion thereof as a result of any negligent failure by Landlord to provideservices to the Premises that Landlord is required to provide under Section 7.1above, and such failure did not result from a casualty covered byArticle 16 below and did not arise out of or result from, directly orindirectly, the breach of this Lease by Tenant or the negligence or willfulmisconduct of Tenant or any of the Tenant Parties (a “Prevention Event”), thenTenant shall give written notice of such Prevention Event to Landlord.  If the Prevention Event continues for three(3) consecutive business days (the “Prevention Period”) after Landlord’sreceipt of Tenant’s written notice, then Basic Rental shall be abated orreduced after expiration of the Prevention Period, for such time that Tenantcontinues to be so prevented from using, and does not use (as a direct resultof the Prevention Event in question), the Premises or a substantial portionthereof, in the proportion that the rentable area of the portion of thePremises that Tenant is prevented from using, and does not use (as a directresult of the Prevention Event in question), bears to the total rentable areaof the Premises, provided that, subject to the foregoing provisions of thissubsection (i), Basic Rental shall be abated completely (for such time thatTenant is prevented from using the Premises as a direct result of thePrevention Event in question) if the portion of the Premises that Tenant isprevented from using, and does not use, as a direct result of the PreventionEvent in question, is so significant as to make it impractical for Tenant toconduct its business in the Premises and Tenant does not, in fact, for thatreason, conduct its business in the Premises.

Article 8 – Use:

8.1                                 Tenantshall use and occupy the Premises only for the use set forth in the Basic LeaseProvisions and shall not use or occupy the Premises or permit the same to beused or occupied for any other purpose without the prior written consent ofLandlord, which consent may be given or withheld in Landlord’s sole andabsolute discretion, and Tenant agrees that it will use the Premises in such amanner so as not to unreasonably interfere with or infringe upon the rights ofother tenants or occupants in the Project. Tenant shall, at its sole cost and expense, promptly comply with alllaws, statutes, ordinances, governmental regulations or requirements now inforce or which may hereafter be in force relating to or

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affecting (i) thecondition, use or occupancy of the Premises or the Project (excludingstructural changes to the Project not related to Tenant’s particular use of thePremises), and (ii) improvements installed or constructed in the Premises by orfor the benefit of Tenant.  Tenant shallnot permit more than eight (8) people per one thousand (1,000) rentable squarefeet of the Premises to occupy the Premises on a regular basis.  Tenant shall not do or permit to be doneanything which would invalidate or increase the cost of any fire and extendedcoverage insurance policy covering the Project and/or the property locatedtherein and Tenant shall comply with all rules, orders, regulations andrequirements of any organization which sets out standards, requirements orrecommendations commonly referred to by major fire insurance underwriters, andTenant shall promptly upon demand reimburse Landlord for any additional premiumcharges for any such insurance policy assessed or increased by reason of Tenant’sfailure to comply with the provisions of this Article 8.  Tenant shall not commit or allow to becommitted or exist: (A) any waste, (B) any public or private nuisance, or (C)any act or condition which violates any of Landlord’s contracts of which Tenanthas notice affecting any or all of the Project, creates or contributes to anywork stoppage, strike, picketing, labor disruption or dispute, unreasonably interferesin any way with the business of Landlord or with any contractors,subcontractors, licensees, agents, concessionaires, subtenants, servants,employees, customers, guests, invitees or visitors or any other personslawfully in and upon the Project, or causes any impairment or reduction of thegood will or reputation of the Project.

8.2                                 Tenantagrees that it will not, at any time, during the Term of this Lease, carry anystock of goods or do anything in or about the Premises that will in any waytend to increase the insurance rates upon the Project.  Tenant agrees to pay Landlord, within thirty(30) days after demand, the amount of any increase in premiums for insurancethat may be carried during the Term of this Lease, or the amount of insuranceto be carried by Landlord on the Project resulting from the foregoing, or fromTenant doing any act in or about the Premises that does so increase theinsurance rates, whether or not Landlord shall have consented to such act onthe part of Tenant.  If Tenant installsupon the Premises any electrical equipment which causes an overload ofelectrical lines of the Premises, Tenant shall at its own cost and expense, inaccordance with all other Lease provisions (specifically including, but notlimited to, the provisions of Articles 7 and 11 of this Lease), make whateverchanges are necessary to comply with requirements of the insurance underwritersand any governmental authority having jurisdiction thereover, but nothingherein contained shall be deemed to constitute Landlord’s consent to suchoverloading.  Tenant shall, at its ownexpense, comply with all insurance requirements applicable to the Premisesincluding without limitation, the installation of fire extinguishers.

8.3                                 ProvidedTenant is not in default under this Lease beyond applicable notice and cureperiods, and provided Tenant does not disturb other tenants of the Project orDevelopment or interfere with Landlord or other tenants of the Project orDevelopment, subject to the terms of this Lease, all laws, rules, regulations,codes and ordinances, matters of record, insurance requirements, and Landlord’ssafety requirements (without any representation or warranty by Landlord as tosafety), during the Lease Term, (1) Tenant shall be permitted to use one (1)forklift in the Premises for the purpose transporting goods from the loadingarea at the Premises into the Premises (provided that Tenant may not use suchforklift in the front of the Premises or in any common areas of the Project orDevelopment other than the parking lot depicted on Exhibit “F” attachedhereto), and (2) Tenant shall have the right to (a) use up to five (5) ofTenant’s unreserved parking spaces allocated to Tenant under this Lease, whichspaces shall be as designated by Landlord in good faith (the “Test Target Area”),on a periodic basis so that Tenant may set up test targets to test and operateroadway sensor and ancillary equipment from time to time reasonably approved byLandlord, (b) use up to eighteen (18) of Tenant’s unreserved parking spacesallocated to Tenant under this Lease, which spaces shall be as designated byLandlord in good faith, on a periodic basis so that Tenant may install (subjectto reasonable written consent of Landlord with respect to the plans andspecifications therefor), a fenced area for overnight parking of up to eighteen(18) vehicles, including, but not limited to, a bucket truck, arrow boardtrailer and stake bed truck or trailer (the “Fenced Area”), (c) use one (1)lane in the back of the parking lot serving the Building, in a locationdesignated by Landlord in good faith within a portion of the general areadepicted on Exhibit “F” attached hereto (the “Lane Test Area”), on a periodicbasis so that Tenant may test and operate certain automotive sensors mounted invehicles temporarily parked or standing in the test lane, and (d) install roofand/or light pole mounted cameras, which locations shall be as designated byLandlord in good faith to test and operate roadway sensor and ancillaryequipment, all in a manner, and at times, from time to time reasonably approvedby Landlord.  The Test Target Area,Fenced Area, Lane Test Area and Camera Test Area are referred to collectivelyherein as the “Test Area”. Notwithstanding anything to the contrary, any parking spaces used orallocated to Tenant under this Section 8.3 shall reduce the amount of parkingspaces otherwise available to Tenant under this Lease.  Additionally, Tenant shall ensure, at itssole cost and expenses, that (1) Landlord and its agents and managers haveaccess to the Fenced Area at all times (and are given keys and all other accessdevices relating thereto), and (2) during the hours of 7:00 a.m. through 6:00p.m., the Fenced Area shall be open such that there is ready and continuouslyavailable free access for vehicles of other tenants (and other partiesdesignated by Landlord) through the Fenced Area.  Without limiting the foregoing, Tenantacknowledges and agrees that the general locations depicted on Exhibit “F”attached hereto are acceptable for the applicable depicted Test Area.  Notwithstanding the foregoing, (i) Tenant maynot use the Test Area for any purpose whatsoever, other than that set forthabove in this Section 8.3; without limiting the foregoing, Tenant may notstore, leave overnight or leave

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unattended any equipmentor other property in any of the Test Area, except the Camera Test Area andexcept for overnight parking in the Fenced Area; provided, however,notwithstanding the foregoing or anything to the contrary in this Lease,Landlord shall not be responsible in any manner to secure or protect any ofTenant’s equipment or property, and shall not be responsible for theft, damageor vandalism; (ii) Tenant may not use or store any Hazardous Materials in theTest Area; (iii) all of Tenant’s obligations, liabilities and duties (but notrights) under this Lease (including, without limitation, all insuranceobligations and indemnities) shall apply to the Test Area as if it were part ofthe Premises, but Landlord shall have no liabilities, obligations, duties orresponsibilities whatsoever in connection with the Test Area or TestActivities; (iv) Tenant shall reimburse Landlord, within ten (10) business daysafter demand (which demand may be made from time to time and at any time) forall reasonable and verifiable costs and expenses incurred by Landlord inconnection with the Test Area and/or Tenant’s activities relating to the TestArea (the “Test Activities”); (v) Tenant shall immediately, at its sole costand expense, repair and restore any damage relating to the Test Activities;(vi) Tenant shall ensure that the Test Activities do not cause any noise,vibration, dust, danger, nuisance, odor or any other disturbance; (vii) Tenantshall, at its sole cost and expense, ensure that the Test Activities do notmaterially and unreasonably interfere with the ingress or egress of othertenants or users of the Project (or other property designated by Landlord),including, without limitation, for trucks and trailers; (ix) Tenant shall carryadditional insurance reasonably designated from time to time by Landlord or itslender with respect to the Test Area and/or Test Activities; (x) the Test Areashall be used by Tenant on an “as is”, “with all faults”, without anyrepresentations or warranties, and Tenant hereby agrees and warrants that ithas investigated and inspected the condition of the Test Area and thesuitability of same for Tenant’s purposes, and Tenant does hereby waive anddisclaim any objection to, cause of action based upon, or claim that itsobligations hereunder should be reduced or limited because of the condition ofthe Test Area or the suitability of same for Tenant’s purposes; Tenantacknowledges that neither Landlord nor any agent nor any employee of Landlordhas made any representations or warranty with respect to the Test Area or withrespect to the suitability of the same for the conduct of Tenant’s business;(xi) Tenant’s use of the Test Area shall be subject to coordination andreasonable scheduling with Landlord; (xii) Landlord may use the Test Area forany purposes that do not materially and unreasonably interfere with Tenant’srights under this Section 8.3; (xiii) all equipment, placement of equipment,and testing methods and procedures, in the Test Area shall be subject to theprior written reasonable approval of Landlord; (xiv) Tenant shall, at its solecost and expense, at all times maintain all approvals, licenses and permitsrequired for the Test Activities (and Landlord shall have no obligation inconnection therewith); Tenant’s inability to obtain or maintain any suchlicense, permit or approval necessary or appropriate for its use, occupation oroperation of the Premises shall not relieve it of its obligations under thisLease; (xv) the Test Activities shall not adversely affect any building roof,place material loads on any roof or affect or invalidate any roofwarranty.  and (xv) if Tenant violatesthe terms of this Section 8.3 and does not cure the violation within three (3)days after receipt of written notice from Landlord, or if Tenant violates theterms of this Section 8.3 more than three (3) times in any twelve (12) monthperiod, then Landlord may immediately revoke Tenant’s rights under this Section8.3.  Tenant’s use of the Test Area shallbe in strict accordance and comply with the terms of this Lease, Landlord’sreasonable rules and regulations and all applicable laws, rules, regulations,codes, ordinances and statutes, insurance requirements, Landlord’s safetyrequirements (without any representation or warrant as to safety), industrystandards and matters of record. Landlord may, in its good faith discretion, from time to time relocatethe Test Area or any portion thereof, so long as the same does not materiallyand unreasonably interfere with Tenant’s rights under this Section 8.3.

8.4           Outdoor Patio Areas.  Subject to Landlord’s reasonable rules andregulations promulgated by Landlord and subject to compliance with applicablegovernmental requirements (including, without limitation, Tenant’s obtainingany necessary governmental approvals and permits, at Tenant’s sole cost),Tenant shall have the right to (a) use the area depicted on Exhibit A-2attached hereto for installation (subject to the terms of this Lease,including, without limitation, Article 11) and use of a patio area (the “1st Floor Patio Area”), as an incident toTenant’s primary permitted use, for the convenience of Tenant’s employees,subject to the provisions of this Section 8.4, and (b) use the patio area (the “2ndFloor Patio Area”), in the approximate location depicted on Exhibit A-2attached hereto, as an incident to Tenant’s primary permitted use, for theconvenience of Tenant’s employees, subject to the provisions of this Section8.4.  The 1st Floor Patio Area and 2ndFloor Patio Area are referred to collectively herein as the “Patio Area”.  All of Tenant’s obligations, duties andliabilities (but not rights) with respect to the Premises shall apply to thePatio Area (as if the Patio Area were part of the Premises), including, withoutlimitation, all of Tenant’s indemnity and insurance obligations; provided,however, Landlord shall have no obligations, liabilities or responsibilitieswhatsoever with respect to the Patio Area (including, without limitation, withrespect to lighting, cleaning and services).  Tenant, at its sole cost and expense, shall beresponsible for maintaining and repairing the Patio Area (including allfurniture and any plants located therein) in a neat, clean and orderlycondition at all times.  The location oftables, chairs, waste receptacles or any other items Tenant desires to locatein the Patio Area shall be subject to Landlord’s prior written approval, whichapproval shall not be unreasonably withheld; provided that items so maintainedin the Patio Area by Tenant shall be at Tenant’s risk and Landlord shall not beresponsible for such items.  The PatioArea shall be used by Tenant in its existing as-is condition, with all faults.Without limiting the foregoing, all items in the Patio Area shall be subject tothe prior consent of Landlord.  The PatioArea use shall not create any objectionable noise, disturbances, crowds orodors at

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the Premises,Project, as determined by Landlord. Smoking shall not be permitted on or around the Patio.  Without limiting the foregoing, Tenant shall(a) be responsible for promptly cleaning any spills or waste in the Patio Areaoccasioned by consumption of food items; (b) scrub and wash all tables, chairs,and furnishings used by it in the Patio Area to prevent build-up from foodspills, dusts, dirt and other substances; and (c) cause the trash containerslocated within the Patio Area to be emptied on a regular basis and keep andmaintain all containers and furniture and other property in a clean andattractive condition and appearance at all times.

Article 9 – Insurance;Indemnity:

9.1           Tenant, shall at alltimes during the Term of this Lease, and at its own cost and expense, procureand continue in force the following insurance coverage:  (i) Commercial General Liability Insurance,written on an occurrence basis, with a combined single limit for bodily injuryand property damages of not less than Five Million Dollars ($5,000,000.00) peroccurrence and Five Million Dollars ($5,000,000.00) in the annual aggregate,including products liability coverage if applicable, owners and contractorsprotective coverage, blanket contractual coverage including both oral andwritten contracts, and personal injury coverage, covering the insuringprovisions of this Lease and the performance of Tenant of the indemnity and exemptionof Landlord from liability agreements set forth in this Article 9; (ii) apolicy of standard fire, extended coverage and special extended coverageinsurance (all risks), including sprinkler leakage coverage and earthquakesprinkler leakage where sprinklers are provided in an amount equal to the fullreplacement value new without deduction for depreciation of all (A) TenantImprovements, Alterations, fixtures and other improvements in the Premises, and(B) trade fixtures, furniture, equipment and other personal propertyinstalled by or at the expense of Tenant; (iii) Worker’s Compensation coverageas required by law; (iv) business interruption, loss of income and extraexpense insurance covering any failure or interruption of Tenant’s businessequipment (including, without limitation, telecommunications equipment) andcovering all other perils, failures or interruptions sufficient to cover aperiod of interruption of not less than twelve (12) months; and (v) a policy ofcomprehensive automobile liability insurance, including loading and unloading,and covering owned, non-owned and hired vehicles, with limits of no lessthan Five Million Dollars ($5,000,000.00) per occurrence.  Tenant shall carry and maintain during theentire Lease Term (including any option periods, if applicable), at Tenant’ssole cost and expense, increased amounts of the insurance required to becarried by Tenant pursuant to this Article 9 and such other reasonabletypes of insurance coverage and in such reasonable amounts covering thePremises and Tenant’s operations therein, as may be reasonably required byLandlord.  Deductibles under Tenant’sinsurance policies shall not exceed $50,000.00 per occurrence.

Notwithstanding theforegoing provisions of this Section 9.1, any property insurance required to becarried by Tenant pursuant to this Section 9.1 may be carried in whole or inpart under a plan of self-insurance maintained by Tenant, which addresses therisks and liability exposures intended to be covered by the property insurancerequired by this Section 9.1, provided that (a) Tenant maintains a net worthequal to One Hundred Million Dollars ($100,000,000) or more, (b) Tenantprovides to Landlord from time to time, upon Landlord’s request therefor,evidence reasonably satisfactory to Landlord of such net worth, and (c) theself-insurance program does not violate any laws, rules, regulations, code orordinances.  In addition, whether or notTenant self-insures, all references to insurance proceeds in this Lease shallbe deemed to include any and all deductibles and proceeds of self-insurancewhich shall be payable to the same extent, in the same amounts and to the partyentitled to the same, as if actual policies of insurance set forth in thisSection 9.1 had been obtained.  Such self-insuranceshall be treated as if Tenant actually carried a policy containing the requiredinsurance.  For example, the waiver ofsubrogation provisions set forth in this Lease shall apply to suchself-insurance.  The provisions of thisparagraph shall be personal to the Original Tenant and shall not apply to anyassignee, sublessee or other transferee of Tenant’s interest in this Lease.

9.2           The aforementionedminimum limits of policies and Tenant’s procurement and maintenance thereofshall in no event limit the liability of Tenant hereunder.  The Commercial General Liability Insurancepolicy shall name Landlord, Landlord’s property manager, Landlord’s lender(s)and such other persons or firms as Landlord specifies from time to time, asadditional insureds with an appropriate endorsement to the policy(s).  All such insurance policies carried by Tenantshall be with companies having a rating of not less than A-VIII in Best’sInsurance Guide.  Tenant shall furnish toLandlord, from the insurance companies, or cause the insurance companies tofurnish, certificates of coverage.  Nosuch policy shall be cancelable or subject to reduction of coverage or othermodification or cancellation except after thirty (30) days prior written noticeto Landlord by the insurer except for the ten (10) days notice for cancellationdue to non-payment of premium.  All suchpolicies shall be endorsed to agree that Tenant’s policy is primary and thatany insurance carried by Landlord is excess and not contributing with anyTenant insurance requirement hereunder. Tenant shall, prior to the expiration of such policies, furnish Landlordwith renewals or binders.  Tenant agreesthat if Tenant does not take out and maintain such insurance or furnishLandlord with renewals or binders, Landlord may (but shall not be required to)procure said insurance on Tenant’s behalf and charge Tenant the cost thereof,which amount shall be payable by Tenant within thirty (30) days after demandwith interest (at the rate set forth in Article 19 below) from the date suchsums are extended.  Tenant shall have theright to provide such

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insurance coveragepursuant to blanket policies obtained by Tenant, provided such blanket policiesexpressly afford coverage to the Premises and to Tenant as required by thisLease.

9.3           Landlord shall, as acost to be included in Operating Expenses, procure and maintain at all timesduring the Term of this Lease, a policy or policies of insurance covering lossor damage to the Project in the amount of at least ninety percent (90%) of thefull replacement costs.  Additionally,Landlord may  carry:  (i) Bodily Injury and Property DamageLiability Insurance and/or Excess Liability Coverage Insurance; and (ii)Earthquake and/or Flood Damage Insurance; and (iii) Rental Income Insurance;and (iv) any other forms of insurance Landlord may deem appropriate or anylender may require.  The costs ofall  insurance and deductibles carried orincurred by Landlord shall be included in Operating Expenses.

9.4           Landlord waives any andall rights of recovery against Tenant for or arising out of damage to, ordestruction of the Project or the Premises to the extent that Landlord’sinsurance policies then in force insure against such damage or destruction andpermit such waiver and only to the extent of insurance proceeds actuallyreceived by Landlord for such damage or destruction.  Tenant waives any and all rights of recoveryagainst Landlord for or arising out of damage to or destruction of any propertyof Tenant to the extent that Tenant’s insurance policies then in force or thepolicies required by this Lease, whichever is broader, insure against suchdamage or destruction.

9.5           Tenant shall indemnify,defend, protect, and hold harmless Landlord and Landlord’s partners, members,affiliates, agents, managers, directors and employees (the “Landlord Parties”)from any and all losses, costs, damages, expenses and liabilities (includingwithout limitation court costs and reasonable attorneys’ fees) (“Claims”)incurred in connection with or arising from any cause in, on or about thePremises, any violation by Tenant of any of the requirements, ordinances,statutes, regulations or other laws, including, without limitation, anyenvironmental laws, any acts, omissions or negligence of Tenant or of any personclaiming by, through or under Tenant, or its affiliates, subsidiaries,contractors, agents, servants, employees, invitees, guests or licensees ofTenant and each of them (collectively, “Tenant Parties”) or any such person, inon the Premises or Project or any breach of the terms of this Lease by Tenant,either prior to or during the Lease Term, provided that the terms of theforegoing indemnity shall not apply to the negligence or willful misconduct ofLandlord or the Landlord Parties. Notwithstanding the foregoing, Tenant shall not be required toindemnify, defend and hold Landlord or the Landlord Parties harmless from anyClaims by any person, company or entity resulting from the negligence orwillful misconduct of Landlord or the Landlord Parties in connection with theLandlord Parties’ activities in the Project and Landlord hereby so indemnifies,defends and holds Tenant harmless from any such Claims and from any Claimresulting from injuries to persons caused by the negligence or willfulmisconduct of Landlord and/or Landlord Parties, or breach of this Lease byLandlord.  The provisions of this Section9.5 shall survive the expiration or sooner termination of this Lease.

 9.6          Landlord and the Landlord Parties shall notbe liable for injury to Tenant’s business, or loss of income therefrom, howeveroccurring (including, without limitation, from any failure or interruption ofservices or utilities), or, except in connection with damage or injuryresulting from the negligence or willful misconduct of Landlord or the LandlordParties or breach of this Lease by Landlord, for damage that may be sustainedby the person, goods, wares, merchandise or property of Tenant or any TenantParties, or any other person in, on or about the Premises caused by orresulting from any cause whatsoever, including, but not limited to, fire,steam, electricity, gas, water, or rain which may leak or flow from or into anypart of the Premises, or from the breakage, leakage, obstruction or otherdefects of the pipes, sprinklers, wires, appliances, plumbing, airconditioning, light fixtures, or mechanical or electrical systems, or fromintrabuilding cabling or wiring. Landlord and the Landlord Parties shall not be liable to Tenant for anydamages arising from any willful or negligent action or inaction of any othertenant of the Project.

Article 10 – Assignmentand Subletting:

10.1         If Landlord does notrespond for a consent to an assignment or sublease by Tenant under this Section10.1, within twenty (20) business days after receipt of written request byTenant (together with all information and documentation required hereunder,including, without limitation, financial statements for the proposedtransferee), then if Landlord does not respond to Tenant’s request within five(5) business days after receipt of a written reminder notice from Tenant, thenLandlord shall be deemed to have approved the proposed assignment or subleasein question.  Except as set forth inSection 10.4 below, Tenant shall have no power to, either voluntarily, involuntarily,by operation of law or otherwise, sell, assign, transfer or hypothecate thisLease, or sublet the Premises or any part thereof, or permit the Premises orany part thereof to be used or occupied by anyone other than Tenant or Tenant’semployees without the prior written consent of Landlord, which consent shallnot be unreasonably withheld, conditioned or delayed.  Subject to Section 10.4 below, if Tenant is acorporation, unincorporated association, partnership or limited liabilitycompany, the sale, assignment, transfer or hypothecation of any class of stockor other ownership interest in such corporation, association, partnership orlimited liability company in excess of seventy-five percent (75%) in theaggregate (or, 50% in the aggregate if

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there will be a change incontrol or decrease of financial condition as a result of the transactions(s)in question) of shall be deemed a “Transfer” within the meaning and provisionsof this Article 10.  Notwithstandingthe foregoing, the public trading of Tenant’s stock on a national stockexchange shall not constitute a Transfer, so long as the day-to-day managementof Tenant does not change as a result thereof. Tenant may transfer its interest pursuant to this Lease only upon thefollowing express conditions, which conditions are agreed by Landlord andTenant to be reasonable:

(a)           That the proposed “Transferee”(as hereafter defined) shall be subject to the prior written consent ofLandlord, which consent will not be unreasonably withheld, conditioned or delayedbut, without limiting the generality of the foregoing, it shall be reasonablefor Landlord to deny such consent if:

(i)            The financialresponsibility of the proposed Transferee is not reasonably satisfactory toLandlord;

(iii)          The proposed Transfereeis either a governmental agency or instrumentality thereof; or

(iv)          Either the proposedTransferee or any person or entity which directly or indirectly controls, iscontrolled by or is under common control with the proposed Transferee(A) occupies space in the Project or Development at the time of therequest for consent, or (B) is negotiating with Landlord or has negotiatedwith Landlord during the four (4) month period immediately preceding the dateof the proposed Transfer, to lease space in the Project or Development andLandlord has, or will have in the next three (3) months, space available tolease to such party in the Project or Development, comparable to the portion ofthe Premises that is the subject of the transaction in question.

(b)           Upon Tenant’ssubmission of a request for Landlord’s consent to any such Transfer, Tenantshall pay to Landlord Landlord’s then standard processing fee and reasonableattorneys’ fees and costs incurred in connection with the proposed Transfer,which shall not exceed $3,000.00 per proposed Transfer to a non-Affiliate (asdefined below) and shall not exceed $1,500.00 per proposed Transfer to anAffiliate;

(c)           That the proposedTransferee shall execute an agreement pursuant to which it shall agree toperform faithfully and be bound by all of the terms, covenants, conditions,provisions and agreements of this Lease applicable to that portion of thePremises so transferred; and

(d)           That an executedduplicate original of said assignment and assumption agreement or other transferon a form reasonably approved by Landlord, shall be delivered to Landlordwithin five (5) days after the execution thereof, and that such transfer shallnot be binding upon Landlord until the delivery thereof to Landlord and theexecution and delivery of Landlord’s consent thereto.  It shall be a condition to Landlord’s consentto any subleasing, assignment or other transfer of part or all of Tenant’sinterest in the Premises (a “Transfer”)that (i) upon Landlord’s consent to any Transfer, Tenant shall pay andcontinue to pay fifty percent (50%) of any “Transfer Payment” (defined below),received by Tenant from the transferee; (ii) any sublessee of part or all ofTenant’s interest in the Premises shall agree that in the event Landlord givessuch sublessee notice that Tenant is in default and such default remainsuncured under this Lease, such sublessee shall thereafter make all sublease orother payments directly to Landlord, which will be received by Landlord withoutany liability whether to honor the sublease or otherwise (except to credit suchpayments against sums due under this Lease), and any sublessee shall agree toattorn to Landlord or its successors and assigns at their request should thisLease be terminated for any reason, except that in no event shall Landlord orits successors or assigns be obligated to accept such attornment; (iii) anysuch Transfer and consent shall be effected on commercially reasonable formssupplied by Landlord; (iv) Landlord may require that Tenant not then be in defaultunder this Lease beyond any applicable notice and cure periods; and (v) Tenantor the proposed subtenant or assignee (collectively, “Transferee”) shall agree to pay Landlord, upon demand, asAdditional Rent, a sum equal to the additional costs, if any, incurred byLandlord for repair as a result of any change in the nature of occupancy causedby such subletting or assignment.

10.2         “Transfer Payment” means all rent, Additional Rent or otherconsideration payable by a Transferee in connection with a Transfer in excessof the Base Rent and Direct Expenses payable by Tenant under this Lease duringthe term of the Transfer and if such Transfer is for less than all of thePremises, the Transfer Payment shall be calculated on a rentable square footbasis after deducting the reasonable, out-of-pocket expenses paid for by Tenantto unaffiliated third parties for (i) any changes, alterations and improvementsto the Premises reasonably necessary to obtain the assignee or sublessee inconnection with the assignment or sublease, (ii) any monetary concessionsreasonably necessary to obtain the assignee or sublessee and provided by Tenantto the assignee or sublessee, and (iii) any market brokerage commissionsreasonably necessary to obtain the assignee or sublessee in connection with theassignment or sublease.  “TransferPayment” shall also include, but not be limited to, key money, bonus money orother cash consideration paid by a Transferee to Tenant in connection with suchTransfer, and

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any payment in excess offair market value for services rendered by Tenant to the Transferee and anypayment in excess of fair market value for assets, fixtures, inventory,equipment, or furniture transferred by Tenant to the Transferee in connectionwith such Transfer.  Any Transfer of thisLease which is not in compliance with the provisions of this Article 10shall be voidable by written notice from Landlord.  In no event shall the consent by Landlord toany Transfer be construed as relieving Tenant or any Transferee from obtainingthe express written consent of Landlord to any further Transfer, or asreleasing Tenant from any liability or obligation hereunder whether or not thenaccrued and Tenant shall continue to be fully liable therefor.  No collection or acceptance of rent by Landlordfrom any person other than Tenant shall be deemed a waiver of any provision ofthis Article 10 or the acceptance of any Transferee hereunder, or arelease of Tenant (or of any Transferee of Tenant).  Notwithstanding anything to the contrary inthis Lease, if Tenant or any proposed Transferee claims that Landlord hasunreasonably withheld or delayed its consent under this Article 10 orotherwise has breached or acted unreasonably under this Article 10, theirsole remedies shall be a declaratory judgment and an injunction for the reliefsought, and Tenant hereby waives all other remedies, including, withoutlimitation, any right at law or equity to terminate this Lease, on its ownbehalf and, to the extent permitted under all applicable laws, on behalf of theproposed Transferee; provided, however, in the event Tenant obtains a final,non-appealable judgment from a court of competent jurisdiction ruling thatLandlord has unreasonably withheld its consent to a proposed Transfer, thenTenant may, within thirty (30) days after obtaining such judgment, terminatethis Lease, which termination shall be effective as of the date that is fifteen(15) days after the date of Landlord’s receipt of Tenant’s timely writtennotice of termination hereunder.

10.3         Notwithstanding anythingto the contrary contained in this Article 10, in the event Tenantcontemplates a Transfer of all or a portion of the Premises (or in the event ofany other Transfer or Transfers entered into by Tenant as a subterfuge in orderto avoid the terms of this Article 10), Tenant shall give Landlord notice (the “Intentionto Transfer Notice”) of such contemplated Transfer (whether or not thecontemplated Transferee or the terms of such contemplated Transfer have beendetermined).  The Intention to TransferNotice shall specify the portion of and amount of rentable square feet of thePremises which Tenant intends to Transfer (the “Contemplated Transfer Space”),the demising walls to be constructed, to the extent applicable, thecontemplated date of commencement of the contemplated Transfer (the “ContemplatedEffective Date”), and the contemplated length of the term of such contemplatedTransfer, and shall specify that such Intention to Transfer Notice is deliveredto Landlord pursuant to this Article 10 in order to allow Landlord to elect torecapture the Contemplated Transfer Space for the term set forth in theIntention to Transfer Notice. Thereafter, Landlord shall have the option, by giving written notice toTenant within twenty (20) days after receipt of any Intention to TransferNotice, to recapture the Contemplated Transfer Space upon the basic terms andconditions specified in the Intention to Transfer Notice.  In the event such option is exercised byLandlord, this Lease shall be suspended (or when appropriate, canceled andterminated if the last day of the term of the Contemplated Transfer is the lastday of the Term) with respect to the Contemplated Transfer Space commencing asof the date stated in the Intention to Transfer Notice as the ContemplatedEffective Date for a period ending upon the last day of the term of theContemplated Transfer, at which time the Lease shall be reinstated and revivedas to the Contemplated Transfer Space. In the event of a recapture by Landlord, if this Lease shall besuspended without liability to Tenant, or, when appropriate, canceled withrespect to less than the entire Premises, the Base Rent and Direct Expensesreserved herein shall be prorated on the basis of the number of rentable squarefeet retained by Tenant in proportion to the number of rentable square feetcontained in the Premises times the rental rate or rates under this Leaseapplicable to such Contemplated Transfer Space, and this Lease as so amendedshall continue thereafter in full force and effect, and upon the request ofeither party, the parties shall execute written confirmation of the same, (ii)Landlord shall install, on a commercially reasonable basis, any corridor and/ordemising wall, at Landlord’s sole cost and expense, which is required as aresult of the suspension or cancellation of this Lease with respect to lessthan a full floor of the Premises, and (iii) Landlord shall restore theContemplated Transfer Space to its condition prior to such recapture upon thereinstatement of this Lease as to the Contemplated Transfer Space.  If Landlord declines, or fails to elect in atimely manner to recapture the Contemplated Transfer Space under this Article10, then, subject to the other terms of this Article 10, for a period ofnine (9) months (the “Nine Month Period”) commencing on the last day ofsuch twenty (20) day period, Landlord shall not have any right torecapture the Contemplated Transfer Space with respect to any Transfer madeduring the Nine Month Period, provided that any such Transfer is upon terms notmaterially inconsistent with the terms set forth in the Intention to TransferNotice, and provided further that any such Transfer shall be subject to theremaining terms of this Article 10. If such a Transfer is not so consummated within the Nine Month Period(or if a Transfer is so consummated, then upon the expiration of the term ofany Transfer of such Contemplated Transfer Space consummated within such NineMonth Period), Tenant shall again be required to submit a new Intention toTransfer Notice to Landlord with respect to any contemplated Transfer, asprovided above in this Article 10.

10.4         Notwithstanding theforegoing, an assignment or subletting of all or a portion of the Premises toan “Affiliate” of Tenant shall deemed permitted hereunder (and shall not besubject to a Transfer Premium or Landlord’s right of recapture hereunder),provided that (a) such Transfer shall not be deemed effective until Tenantsupplies Landlord with a fully executed copy of the document evidencing theTransfer (i.e., the sublease or assignment and assumption agreement), (b) thenet worth of Tenant’s

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Affiliate immediatelyafter the date of Transfer shall be reasonably acceptable to Landlord, takinginto account the remaining obligations then existing under this Lease, andtaking into account that Tenant will remain liable under this Lease, (c) suchassignment or sublease is not a subterfuge by Tenant to avoid its obligationsunder this Lease, (d) if the Transfer is an assignment, the assignee assumes,in full, the obligations of Tenant under this Lease (to the extent accruingfrom and after the date of the Transfer), and if the Transfer is a sublease,the Transferee executes such documentation reasonably required by Landlord inconnection with the subordination of such sublease to this Lease, and (e)Tenant remains fully liable under this Lease. The term “Affiliate” of Tenant shall mean an entity which is (i)controlled by, controls, or is under common control with Tenant; (ii) anyentity with which Tenant has merged or consolidated, or (iii) any entity whichacquires all or substantially all of the assets and/or shares of stock orassets of Tenant.  The term “control,” or“controlled” as used in this Section 10.4 shall mean the ownership, directly orindirectly, of at least fifty percent (50%) of the voting securities of, orpossession of the right to vote, in the ordinary direction of its affairs, ofat least fifty percent (50%) of the voting interest in, an entity.  Additionally, the public trading of Tenant’sstock on a national stock exchange shall not require Landlord’s consent underthis Article 10, provided the same does not result in a change in theday-to-day management of Tenant.

Article 11- Alterations;Liens:

11.1         Tenant shall make noalterations, installations, changes or additions in or to the Premises or theProject (collectively, “Alterations”)without Landlord’s prior written consent, not to be unreasonably withheld ordelayed, except that Landlord may withhold its approval in its sole andabsolute discretion if the Tenant Alterations will (a) affect, as reasonablydetermined by Landlord, the structure or exterior of the Premises or Project,or (b) adversely affect, as reasonably determined by Landlord, the Project orPremises systems or equipment, or (c) violate any laws, rules, regulations,codes, ordinances or matters of record. Notwithstanding the foregoing, Tenant may make Alterations to thePremises, not including any Alterations affecting the Project or Premisesstructure, appearance, or systems or equipment and not including any substantial modifications to the Premises, withoutLandlord’s consent, provided that the aggregate cost of any such Alterationsdoes not exceed Seventy-Five Thousand Dollars ($75,000.00) in any twelve (12)month period; Tenant shall give Landlord at least ten (10) business days priornotice of such Tenant Alterations, which notice shall be accompanied byreasonably adequate evidence that such changes meet the criteria contained inthis Article 11.  Any Alterations must beperformed in accordance with the terms hereof, using only  contractors or mechanics approved by Landlordin writing and upon the approval by Landlord in writing of fully detailed anddimensioned plans and specifications pertaining to the Alterations in question,to be prepared and submitted by Tenant at its sole cost and expense.  Tenant shall at its sole cost and expenseobtain all necessary approvals and permits pertaining to any Alterations.  Tenant shall cause all Alterations to beperformed in a good and workmanlike manner, in conformance with all applicablefederal, state, county and municipal laws, rules and regulations, pursuant to avalid building permit, and in conformance with Landlord’s construction rulesand regulations.  Tenant hereby agrees toindemnify, defend, and  hold Landlordfree and harmless from all liens and claims of lien, and all other liability,claims and demands arising out of any work done or material supplied to thePremises by or at the request of Tenant in connection with any Alterations.

11.2         Prior to the commencementof any Alterations, Tenant shall provide Landlord with evidence that Tenant orTenant’s general contractor carries “Builder’s All Risk” insurance in an amountapproved by Landlord covering the construction of such Alterations, and suchother insurance as Landlord may reasonably require, it being understood thatall such Alterations shall be insured by Tenant pursuant to Article 9 of thisLease immediately upon completion thereof. In addition, Landlord may, in its discretion, with respect to anyAlterations costing in excess of Two Hundred Thousand Dollars ($200,000.00),require Tenant to obtain a lien and completion bond or some alternate form ofsecurity reasonably satisfactory to Landlord in an amount sufficient to ensurethe lien free completion of such Alterations and naming Landlord as aco-obligee.  If permitted Alterations aremade, they shall be made at Tenant’s sole cost and expense and shall be andbecome the property of Landlord, except that Landlord may, by written notice toTenant given prior to the end of the Term, require Tenant at Tenant’s expenseto remove all partitions, counters, railings, cabling and other Alterationsinstalled by Tenant, and to repair any damage to the Premises and the Projectcaused by such removal.  Tenant shallhave the right, at the time it requests Landlord’s consent and delivers allplans and specifications to any Alterations (or, with respect to cosmeticAlterations described above as not requiring Landlord’s consent, at the timeTenant gives Landlord notice of the same pursuant to the provisions above) tomake a written request that Landlord notify Tenant whether Tenant shall beobligated to remove the applicable Alterations at the end of the Lease Term, inwhich event, with respect to permitted Alterations under this Article 11,Tenant shall only be obligated to remove (i) those Alterations thatLandlord notified Tenant it must remove at the end of the Lease Term around thetime of and in connection with Tenant’s requested approval of the Alterations(or, with respect to cosmetic Alterations described above as not requiringLandlord’s consent, around the time of and in connection with Tenant’s noticeof the same pursuant to the provisions above), and (ii) those Alterationsthat Tenant did not timely seek or did not obtain Landlord’s written consent toleave in place at the end of the Lease Term, and that Landlord requires Tenantto remove (and shall repair any damage resulting from such removal and returnthe Premises to the same condition existing prior to

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the undertaking upon theexpiration or earlier termination of this Lease).  Any and all costs attributable to or relatedto the applicable building codes of the city in which the Project is located(or any other authority having jurisdiction over the Project) arising fromTenant’s plans, specifications, improvements, Alterations or otherwise shall bepaid by Tenant at its sole cost and expense. With regard to repairs, Alterations or any other work arising from orrelated to this Article 11 (other than cosmetic Alterations costing lessthan a total of $25,000.00), Landlord shall be entitled to receive anadministrative/coordination fee (which fee shall vary depending upon whether ornot Tenant orders the work directly from Landlord, but which fee shall notexceed 5% of all costs and expenses, whether hard costs or soft costs, inconnection with the applicable Alterations) sufficient to compensate Landlordfor all overhead, general conditions, fees and other costs and expenses arisingfrom Landlord’s involvement with such work. The construction of initialimprovements to the Premises shall be governed by the terms of the Tenant WorkLetter and not the terms of this Article 11.

11.3         Tenant shallkeep the Premises and the Project free from any mechanics’ liens, vendors liensor any other liens arising out of any work performed, materials furnished orobligations incurred by Tenant, and Tenant agrees to defend, indemnify and holdLandlord harmless from and against any such lien or claim or action thereon,together with costs of suit and reasonable attorneys’ fees and costs incurredby Landlord in connection with any such claim or action.  Before commencing any work of alteration,addition or improvement to the Premises, Tenant shall give Landlord at leastten (10) business days’ written notice of the proposed commencement of suchwork (to afford Landlord an opportunity to post appropriate notices ofnon-responsibility).  In the event thatthere shall be recorded against the Premises or the Project or the property ofwhich the Premises is a part any claim or lien arising out of any such workperformed, materials furnished or obligations incurred by Tenant and such claimor lien shall not be removed or discharged within ten (10) days of filing,without limiting any other remedies, Landlord shall have the right but not theobligation to pay and discharge said lien without regard to whether such lienshall be lawful or correct, and Tenant shall reimburse to Landlord, within ten(10) days after demand, the amount of such payment and discharge and all costsand expenses, including, without limitation, attorneys’ fees and costs incurredby Landlord.

Article 12 – PersonalProperty Taxes:  Tenantshall pay, prior to delinquency, all taxes assessed against or levied upontrade fixtures, furnishings, equipment and all other personal property ofTenant located in the Premises.  In theevent any or all of Tenant’s trade fixtures, furnishings, equipment and otherpersonal property shall be assessed and taxed with property of Landlord (asreasonably determined by Landlord), or if the cost or value of any leaseholdimprovements in the Premises exceeds the cost or value of a Project-standardbuildout as reasonably determined by Landlord and, as a result, real propertytaxes for the Project are increased, Tenant shall pay to Landlord, withinthirty (30) days after delivery to Tenant by Landlord of a written statementsetting forth such amount, the amount of such taxes applicable to Tenant’sproperty or above-standard improvements. Tenant shall assume and pay to Landlord at the time Base Rent nextbecomes due (or if assessed after the expiration of the Lease Term, then withinthirty (30) days), any excise, sales, use, rent, occupancy, garage, parking,gross receipts or other taxes (other than net income taxes) which may beimposed on or on account of the letting of the Premises or the payment of BaseRent or any other sums due or payable hereunder, and which Landlord may berequired to pay or collect under any law now in effect or hereafterenacted.  Tenant shall pay directly tothe party or entity entitled thereto all business license fees, gross receiptstaxes and similar taxes and impositions which may from time to time be assessedagainst or levied upon Tenant, as and when the same become due and beforedelinquency.  Notwithstanding anything tothe contrary contained herein, any sums payable by Tenant under thisArticle 12 shall not be included in the computation of “Tax Expenses.”

Article 13 – Parking:  Tenant shall have the right, commencing onthe initial Commencement Date and continuing through the expiration or earliertermination of the Term, to use the number of unreserved parking spaces setforth in the Basic Lease Provisions (of which five (5) such spaces may bedesignated by Tenant as “Iteris Visitor”), which parking spaces shall pertainto the Project parking facility (subject to adjustment by Landlord in the eventof 2 Commencement Dates under this Lease). Tenant shall be responsible for the full amount of any taxes imposed byany governmental authority in connection with the use of such parking spaces orthe use of the parking facility by Tenant. Tenant shall abide by all reasonable, non-discriminatory rules andregulations which are prescribed from time to time for the orderly operationand use of the parking facility where the parking spaces are located, includingany sticker or other identification system reasonably established byLandlord.  Tenant shall cooperate inseeing that Tenant’s employees and visitors also comply with such reasonable,non-discriminatory rules and regulations. Landlord specifically reserves the right to change the size,configuration, design, layout and all other aspects of the Project parkingfacility at any time and Tenant acknowledges and agrees that Landlord may,without incurring any liability to Tenant and without any abatement of rentunder this Lease, from time to time, close-off or restrict access to theProject parking facility for purposes of permitting or facilitating any suchconstruction, alteration or improvements. Landlord may delegate its responsibilities hereunder to a parkingoperator or a lessee of the parking facility in which case such parkingoperator or lessee shall have all the rights of control attributed hereby tothe Landlord.  The parking spaces rentedby Tenant pursuant to this Article 13 are provided to Tenant solely foruse by Tenant’s own personnel and such spaces may not be transferred, assigned,subleased or otherwise

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alienated by Tenantwithout Landlord’s prior approval, except to a Transferee in connection with apermitted Transfer under this Lease. Provided Tenant is not in default under this Lease beyond applicablenotice and cure periods, and provided Tenant does not disturb other tenants ofthe Project or Development or interfere with Landlord or other tenants of theProject or Development, subject to the terms of this Lease and the consent ofany other relevant property owner (if required), all laws, rules, regulations,codes and ordinances, matters of record, insurance requirements, and Landlord’ssafety requirements (without any representation or warranty by Landlord as tosafety), Tenant shall be permitted to install in the area depicted on Exhibit “F”(subject to Landlord’s reasonable consent as to the plans and specificationstherefor), one (1) small ramp over a curb for the travel of the forkliftpermitted under this Lease; such ramp shall belong to Landlord at expiration orearlier termination of the Term, provided that Landlord may require Tenant toremove such ramp, and restore the area and repair all damage, at Tenant’s solecost and expense, upon expiration or earlier termination of the Term.

Article 14 – HazardousWaste:

14.1         Tenant shall not cause orpermit any Hazardous Material (as defined below) to be brought, kept or used inor about the Project by Tenant or any of the Tenant Parties, other thanordinary and reasonable quantities of general office supplies (such as ink andliquid paper), and adhesives and alcohol used in light manufacturing inconnection with the Permitted Use (collectively, the “Permitted Substances”),provided that (a) the Permitted Substances are stored in packaged and sealedcontainers (b) the storage, handling and use of the Permitted Substances mustat all times conform to all laws, rules, regulations, codes and ordinances andto applicable fire, safety and insurance requirements; (b) the types andquantities of Permitted Substances must be reasonable and appropriate to the natureand size of Tenant’s operation in the Premises and reasonable and appropriatefor a first-class office building of the same or similar use and in thesame market area as the Project; (c) no Hazardous Material shall be spilled ordisposed of on, in, under or around the Project or Development or otherwisedischarged from the Premises or any area adjacent to the Project orDevelopment; and (d) in no event will Tenant be permitted to store, handle oruse on, in, under or around the Premises any Hazardous Material which willincrease the rate of fire or extended coverage insurance on the Premises orProject or Development.  Tenantindemnifies Landlord and the Landlord Parties from and against any breach byTenant of the obligations stated in this Article 14, and agrees to defend andhold Landlord and the Landlord Parties harmless from and against any and allclaims, judgments, damages, penalties, fines, costs, liabilities, or losseswhich arise during or after the Term of this Lease as a result of such breach.  This indemnification of Landlord and theLandlord Parties by Tenant includes, without limitation, costs incurred inconnection with any investigation of site conditions or any cleanup, remedial,removal, or restoration work required by any federal, state, or localgovernmental agency or political subdivision because of Hazardous Materialpresent in the soil or ground water on or under the Project.  Without limiting the foregoing, if thepresence of any Hazardous Material on the Project caused or permitted by Tenantresults in any contamination of the Project, then subject to the provisions ofArticles 7 and 11 of this Lease, Tenant shall promptly take all actions at itssole expense as are necessary to return the Project to the condition existingprior to the introduction of any such Hazardous Material and the contractors tobe used by Tenant for such work must be approved by Landlord, which approvalshall not be unreasonably withheld so long as such actions would notpotentially have any material adverse long-term or short-term effect on theProject and so long as such actions do not materially interfere with the useand enjoyment of the Project by the other tenants thereof; provided however,Landlord shall also have the right, by written notice to Tenant, to directlyundertake any such mitigation efforts with regard to Hazardous Materials in orabout the Project due to Tenant’s breach of its obligations pursuant to thisSection 14.1, and to charge Tenant, as Additional Rent, for the costs thereof.

14.2         As used herein, the term “Hazardous Material” means anyhazardous or toxic substance, material, or waste which is or becomes regulatedby any local governmental authority, the State of California or the UnitedStates Government.  The term “HazardousMaterial” includes, without limitation, any material or substance which is (i)defined as “Hazardous Waste,” “Extremely Hazardous Waste,” or “RestrictedHazardous Waste” under Sections 25115, 25117 or 25122.7, or listed pursuant toSection 25140, of the California Health and Safety Code, Division 20, Chapter6.5 (Hazardous Waste Control Law), (ii) defined as a “Hazardous Substance”under Section 25316 of the California Health and Safety Code, Division 20,Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii)defined as a “Hazardous Material,” “Hazardous Substance,” or “Hazardous Waste”under Section 25501 of the California Health and Safety Code, Division 20,Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv)defined as a “Hazardous Substance” under Section 25281 of the California Healthand Safety Code, Division 20, Chapter 6.7 (Underground Storage of HazardousSubstances), (v) petroleum, (vi) asbestos, (vii) listed under Article 9 ordefined as Hazardous or extremely hazardous pursuant to Article 11 ofTitle 22 of the California Administrative Code, Division 4, Chapter 20, (viii)designated as a “Hazardous Substance” pursuant to Section 311 of the FederalWater Pollution Control Act (33 U.S.C. § 1317), (ix) defined as a “HazardousWaste” pursuant to Section 1004 of the Federal Resource Conservation andRecovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903), or (x)defined as a “Hazardous Substance” pursuant to Section 101 of the ComprehensiveEnvironmental Response, Compensation and Liability Act, 42 U.S.C. § 9601et seq. (42 U.S.C. § 9601).  As usedherein,

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the term “Laws” means any applicable federal,state or local law, ordinance, or regulation relating to any Hazardous Materialaffecting the Project, including, without limitation, the laws, ordinances, andregulations referred to in this Section 14.3 above.

Article 15 – Estoppel;Subordination; Attornment:

15.1         Tenant shall, at any timeand from time to time, upon not less than fifteen (15) days’ prior written noticefrom Landlord, execute, acknowledge and deliver to Landlord a statement inwriting certifying the following information, (but not limited to the followinginformation in the event further information is reasonably requested byLandlord): (i) that this Lease is unmodified and in full force and effect (or,if modified, stating the nature of such modification and certifying that thisLease, as modified, is in full force and effect); (ii) the dates to which therental and other charges are paid in advance, if any; (iii) the amount ofTenant’s security deposit, if any; and (iv) acknowledging that there are not,to Tenant’s knowledge, any uncured defaults on the part of Landlord hereunder,and no events or conditions then in existence which, with the passage of timeor notice or both, would constitute a default on the part of Landlordhereunder, or specifying such defaults, events or conditions, if any areclaimed.  It is expressly understood andagreed that any such statement may be relied upon by any prospective purchaseror encumbrancer of all or any portion of the Real Property.  Without limiting the foregoing, Tenant agreesthat the document in Exhibit “H” attached hereto is acceptable and may (withoutlimitation) be used by Landlord as the statement required under this Section15.1.

15.2         This Lease is subject andsubordinate to all ground or underlying leases, mortgages and deeds of trustwhich affect the property or the Project, including all renewals,modifications, consolidations, replacements and extensions thereof; provided,however, if the Landlord under any such lease or the holder or holders of anysuch mortgage or deed of trust shall advise Landlord that they desire orrequire this Lease to be prior and superior thereto, upon written request of Landlordto Tenant, Tenant agrees to promptly execute, acknowledge and deliver any andall documents or instruments which Landlord or such Landlord, holder or holdersdeem necessary or desirable for purposes thereof.  Landlord shall have the right to cause thisLease to be and become and remain subject and subordinate to any and all groundor underlying leases, mortgages or deeds of trust which may hereafter beexecuted covering the Premises, the Project or the property or any renewals,modifications, consolidations, replacements or extensions thereof, for the fullamount of all advances made or to be made thereunder and without regard to thetime or character of such advances, together with interest thereon and subjectto all the terms and provisions thereof; provided, however, that Landlordobtains from the lender or other party in question a written undertaking infavor of Tenant to the effect that such lender or other party will not disturbTenant’s right of possession under this Lease if Tenant is not then orthereafter in breach of any covenant or provision of this Lease beyond anyapplicable notice and cure periods. Tenant agrees, within fifteen (15) days after Landlord’s written requesttherefor, to execute, acknowledge and deliver upon request any and alldocuments or instruments requested by Landlord or necessary or proper to assurethe subordination of this Lease to any such mortgages, deed of trust, orleasehold estates; without limiting the foregoing, Tenant agrees that thedocument in Exhibit “I” attached hereto is acceptable and may (withoutlimitation) be used by Landlord as a document required under this Section15.2.  Tenant agrees that in the eventany proceedings are brought for the foreclosure of any mortgage or deed oftrust or any deed in lieu thereof, to attorn to the purchaser or any successorsthereto upon any such foreclosure sale or deed in lieu thereof as so requestedto do so by such purchaser and to recognize such purchaser as the Landlordunder this Lease; Tenant shall, within fifteen (15) days after request executesuch further instruments or assurances as such purchaser may reasonably deemnecessary to evidence or confirm such attornment.  Tenant agrees to provide copies of anynotices of Landlord’s default under this Lease to any mortgagee or deed oftrust beneficiary whose address has been provided to Tenant and Tenant shallprovide such mortgagee or deed of trust beneficiary a commercially reasonabletime after receipt of such notice within which to cure any such default.  Tenant waives the provisions of any currentor future statute, rule or law which may give or purport to give Tenant anyright or election to terminate or otherwise adversely affect this Lease and theobligations of the Tenant hereunder in the event of any foreclosure proceedingor sale.

15.3         In the event of anytransfer or termination of Landlord’s interest in the Premises or the Projectby sale, assignment, transfer, foreclosure, deed-in-lieu of foreclosure orotherwise whether voluntary or involuntary, Landlord shall be automaticallyrelieved of any and all obligations and liabilities on the part of Landlordfrom and after the date of such transfer or termination, including furthermorewithout limitation, the obligation of Landlord under this Lease and California CivilCode 1950.7 above to return the security deposit, provided said securitydeposit is transferred to said transferee and the transferee assumes Landlord’sobligations accruing thereafter with respect thereto.  Tenant agrees to attorn to the transferee uponany such transfer and to recognize such transferee as the Landlord under thisLease and Tenant shall, within fifteen (15) days after request, execute suchfurther instruments or assurances as such transferee may reasonably deemnecessary to evidence or confirm such attornment.

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Article 16 – CertainLandlord Rights:

16.1         Landlord and its agentsshall have the right, to enter the Premises at all reasonable times for thepurpose of cleaning the Premises, and, upon reasonable prior notice (except inthe event of emergency, in which case no notice will be required), for thepurpose of examining or inspecting the same, serving or posting and keepingposted thereon notices as provided by law, or which Landlord deems necessaryfor the protection of Landlord or the Project, showing the same to prospectivetenants (during the last 12 months of the Term or when Tenant is in defaultunder this Lease beyond any applicable cure period), lenders or purchasers ofthe Project, in the case of an emergency, and for making such alterations,repairs, improvements or additions to the Premises or to the Project asLandlord may deem necessary or desirable. If Tenant shall not be personally present to open and permit an entryinto the Premises at any time when such an entry by Landlord is necessary orpermitted hereunder, Landlord may enter by means of a master key, or mayforcibly enter in the case of an emergency, in each event without liability toTenant and without affecting this Lease Landlord reserves the right from time to time, but subject to payment byand/or reimbursement from Tenant as otherwise provided herein: (i) to install,use, maintain, repair, replace, relocate and control for service to thePremises and/or other parts of the Project pipes, ducts, conduits, wires,cabling, appurtenant fixtures, equipment spaces and mechanical systems,wherever located in the Premises or the Project, (ii) to alter, close orrelocate any facility in the Premises or the common areas or otherwise conductany of the above activities for the purpose of complying with a general planfor fire/life safety for the Project or otherwise, and (iii) to comply with anyfederal, state or local law, rule or order. Landlord shall attempt to perform any such work with the leastinconvenience to Tenant as is reasonably practicable, but in no event shallTenant be permitted to withhold or reduce Base Rent or other charges duehereunder as a result of same, make any claim for constructive eviction orotherwise make any claim against Landlord for interruption or interference withTenant’s business and/or operations.

16.2         Every part of the Projectexcept the inside surfaces of all walls, windows and doors bounding thePremises (including exterior building walls, the rooftop, core corridor wallsand doors and any core corridor entrance), and any space in or adjacent to thePremises or within the Project used for shafts, stacks, pipes, conduits, fanrooms, ducts, electric or other utilities, sinks or other building facilities,and the use thereof, as well as access thereto through the Premises for thepurposes of operation, maintenance, decoration and repair, are reserved toLandlord.  Tenant shall permit Landlordto install, use and maintain pipes, ducts and conduits within the walls,columns and ceilings of the Premises and throughout the Project.

16.3         Landlord reserves theright, without incurring any liability to Tenant therefor, to make such changesin or to the Project and the fixtures and equipment thereof, as well as in orto the street entrances, halls, passages, elevators, stairways and otherimprovements thereof, as it may deem necessary or desirable.  Landlord may adopt any name for the Projectand Landlord reserves the right, from time to time, to change the name and/oraddress of the Project.

16.4         Tenant herebyacknowledges and agrees that the exterior walls of the Premises and the areabetween the finished ceiling of the Premises and the slab of the floor of theProject thereabove have not been demised hereby and the use thereof togetherwith the right to install, maintain, use, repair and replace pipes, ducts,conduits, wiring and cabling leading through, under or above the Premises orthroughout the Project in locations which will not materially interfere withTenant’s use of the Premises and serving other parts of the Project are herebyexcepted and reserved unto Landlord.

16.5         Except as may be setforth to the contrary in this Lease, all covenants and agreements to beperformed by Tenant under any of the terms of this Lease shall be performed byTenant at Tenant’s sole cost and expense and without any abatement of rent.

16.6         The inclusion of certainof Landlord’s rights in this Article 16 shall in no way limit or impair anyrights or remedies of Landlord set forth in this Lease or otherwise availableto Landlord.

Article 17 – Default:

17.1         Each of the followingacts or omissions of Tenant or of any guarantor of Tenant’s performancehereunder, or occurrences, shall constitute an “Event of Default”:

(a)           Failure or refusal topay Base Rent, Additional Rent or any other amount to be paid by Tenant toLandlord hereunder within seven (7) business days after written notice that thesame is due or payable hereunder; said seven (7) business day period shall bein lieu of, and not in addition to, the notice requirements ofSection 1161 of the California Code of Civil Procedure or any similar orsuccessor law;

(b)           Except where a specifictime period is otherwise set forth for Tenant’s performance in this Lease, inwhich event the failure to perform by Tenant within such time period shall be adefault under this Article 17(b), and except as set forth in items (a)above and (c) through and including (f) below, failure to perform or observeany other covenant or condition of this Lease to be performed or observed withinthirty (30) days following written notice to Tenant of such failure (the “DefaultNotice”);

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provided, however, thatif the nature of Tenant’s obligation is such that more than thirty (30) daysare required for performance, then Tenant shall not be in default under thissubsection (b) if Tenant commences performance within a reasonable period oftime (but no later than thirty (30) days after receipt of the Default Notice)and thereafter diligently and in good faith prosecutes the same to completion withina reasonable period of time after receipt of the Default Notice.  Such thirty (30) day notice shall be in lieuof, and not in addition to, any required under Section 1161 of the CaliforniaCode of Civil Procedure or any similar or successor law;

(c)           Abandonment of thePremises or any significant portion thereof when accompanied by the non-paymentof rent as specified above;

(d)           The filing by Tenant orany guarantor hereunder in any court pursuant to any statute of a petition inbankruptcy or insolvency or for reorganization or arrangement for theappointment of a receiver of all or a portion of Tenant’s property; the filingagainst Tenant or any guarantor hereunder of any such petition, or thecommencement of a proceeding for the appointment of a trustee, receiver orliquidator for Tenant, or for any guarantor hereunder, or of any of theproperty of either, or a proceeding by any governmental authority for thedissolution or liquidation of Tenant or any guarantor hereunder, if suchproceeding shall not be dismissed or trusteeship discontinued within ninety(90) days after commencement of such proceeding or the appointment of suchtrustee or receiver; or the making by Tenant or any guarantor hereunder of anassignment for the benefit of creditors;

(f)            Tenant’s failure tocause to be released any mechanics liens filed against the Premises or theProject within twenty (20) days after the date the same shall have been filedor recorded; or

(g)           Tenant’s failure toobserve or perform according to the provisions of Articles 8 or 15 within five(5) business days after notice from Landlord.

17.2         Landlord shall not be indefault under this Lease unless Landlord fails to perform obligations requiredof Landlord within thirty (30) days after written notice is delivered by Tenantto Landlord and to the holder of any mortgages or deeds of trust (collectively,“Lender”) covering the Premises whose name and address shall have theretoforebeen furnished to Tenant in writing, specifying the obligation which Landlordhas failed to perform; provided, however, that if the nature of Landlord’sobligation is such that more than thirty (30) days are required forperformance, then Landlord shall not be in default if Landlord or Lendercommences performance within such thirty (30) day period and thereafterdiligently prosecutes the same to completion. In the event of any default, breach or violation of Tenant’s rightsunder this Lease by Landlord, Tenant’s exclusive remedies shall be an actionfor specific performance or action for actual damages.  Tenant hereby waives the benefit of any lawsgranting it the right to perform Landlord’s obligation, or the right toterminate this Lease on account of any Landlord default.

Notwithstanding theforegoing, if Tenant provides written notice to Landlord of an event orcircumstance which requires the action of Landlord with respect to repairand/or maintenance which Landlord is required to provide pursuant to theexpress terms of Section 6.1 of this Lease, and Landlord fails to provide suchrequired action within thirty (30) days after receipt of such notice, unlesssuch repair would normally take longer and Landlord has commenced said repairwork within said thirty (30) day period, then Tenant may deliver to Landlord anadditional ten (10) business days’ written notice to Landlord specifying thatTenant will take such required action. If such action was required under the terms of Section 6.1 of this Leaseto be taken by Landlord and was not taken by Landlord within such additionalten (10) business day period (or such additional longer period as is reasonablynecessary if such action would normally take longer than 10 business days andLandlord has commenced said action within said ten (10) business day period),then Tenant may take the action that was required of Landlord under this Leaseand shall be entitled to prompt reimbursement by Landlord of Tenant’s actualreasonable out-of-pocket costs paid to unaffiliated third parties in takingsuch action. Subject to the last sentence of this paragraph, in the eventTenant takes such action, and such work may affect the Project systems or thestructural integrity of the Project, Tenant shall use only those contractorsused by Landlord in the Project for work on such Project systems or structureunless such contractors are unwilling or unable to perform, or timely perform,such work, in which event Tenant may utilize the services of any otherqualified contractor which normally and regularly performs similar work inComparable Buildings (subject to the last sentence of this paragraph) and whoare reasonably approved by Landlord in writing.   Further, if Landlord does not deliver awritten objection to Tenant within thirty (30) days after receipt of a detailedwritten invoice by Tenant of its costs of taking action which Tenant claimsshould have been taken by Landlord under Section 6.1 above, and if such invoicefrom Tenant sets forth a reasonably detailed particularized breakdown of itscosts and expenses in connection with taking such action on behalf of Landlord,then Tenant may deliver a second written invoice of its costs of taking action which Tenant claims should havebeen taken by Landlord (with a reasonably detailed particularized breakdown ofits costs and expenses in connection with taking such action on behalf ofLandlord); if Landlord does not deliver a written objection to Tenant withinten (10) business days after receipt of such second written invoice, thenTenant shall be entitled to deduct from rent payable by Tenant under thisLease, the amount

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set forth in such invoice.  If,however, Landlord delivers to Tenant a written objection to the payment of suchinvoice, setting Landlord’s reasons for its claim that such action did not haveto be taken by Landlord pursuant to the terms of this Lease or that the chargesare excessive (in which case Landlord shall pay the amount it contends wouldnot have been excessive), then Tenant shall not be entitled to such deductionfrom rent, but as Tenant’s sole and exclusive remedy, Tenant may proceed toclaim a default by Landlord under this Lease (if any), provided that under nocircumstances shall Tenant be allowed to terminate this Lease based upon anysuch default by Landlord.  If, inconnection with any such claimed default under the immediately preceding sentence,Tenant obtains a non-appealable final judgment from a court of competentjurisdiction, awarding damages to Tenant in connection therewith, then Tenantmay deduct such final judgment against Base Rent next becoming due.Notwithstanding anything to the contrary set forth in this paragraph, any workperformed by or on behalf of Tenant under this paragraph shall be subject toArticle 11 of this Lease

Article 18 – Remedies:

18.1         Upon the occurrence of anEvent of Default under this Lease as provided in Article 17 above, Landlord mayexercise all of its remedies as may be permitted by law, including but notlimited to the remedy provided by Section 1951.4 of the California Civil Code,and including without limitation, terminating this Lease, reentering the Premisesand removing all persons and property therefrom, which property may be storedby Landlord at a warehouse or elsewhere at the risk, expense and for theaccount of Tenant.  If Landlord elects toterminate this Lease, Landlord shall be entitled to recover from Tenant theaggregate of all amounts permitted by law, including but not limited to (i) theworth at the time of award of the amount of any unpaid rent which had beenearned at the time of such termination; plus (ii) the worth at the time of awardof the amount by which the unpaid rent which would have been earned aftertermination until the time of award exceeds the amount of such rental loss thatTenant proves could have been reasonably avoided; plus (iii) the worth at thetime of award of the amount by which the unpaid rent for the balance of theLease Term after the time of award exceeds the amount of such rental loss thatTenant proves could have been reasonably avoided; plus (iv) any other amountnecessary to compensate Landlord for all the detriment proximately caused byTenant’s failure to perform its obligations under this Lease or which in theordinary course of things would be likely to result therefrom, specificallyincluding but not limited to, tenant improvement expenses, brokerage commissionsand advertising expenses incurred, expenses of remodeling the Premises or anyportion thereof for a new tenant, whether for the same or a different use, andany special concessions made to obtain a new tenant; and (v) at Landlord’selection, such other amounts in addition to or in lieu of the foregoing as maybe permitted from time to time by applicable law.  The term “rent” as used in thisArticle 18 shall be deemed to be and to mean all sums of every naturerequired to be paid by Tenant pursuant to the terms of this Lease, whether toLandlord or to others.  As used in items(i) and (ii), above, the “worth at the time of award” shall be computed byallowing interest at the rate set forth in item (e), below, but in no casegreater than the maximum amount of such interest permitted by law.  As used in item (iii), above, the “worth atthe time of award” shall be computed by discounting such amount at the discountrate of the Federal Reserve Bank of San Francisco at the time of award plus onepercent (1%).  Nothing in thisArticle 18 shall be deemed to affect Landlord’s right to indemnificationfor liability or liabilities arising prior to the termination of this Lease forpersonal injuries or property damage under the indemnification clause orclauses contained in this Lease. Landlord shall mitigate its damages in accordance with applicable law,but shall not be required to give preference to the Premises over any otherspace.

18.2         Notwithstanding anythingto the contrary set forth herein, Landlord’s re-entry to perform acts ofmaintenance or preservation of or in connection with efforts to relet thePremises or any portion thereof, or the appointment of a receiver upon Landlord’sinitiative to protect Landlord’s interest under this Lease shall not terminateTenant’s right to possession of the Premises or any portion thereof and, untilLandlord does elect to terminate this Lease, this Lease shall continue in fullforce and effect and Landlord may enforce all of Landlord’s rights and remedieshereunder including, without limitation, the remedy described in CaliforniaCivil Code Section 1951.4 (Landlord may continue lease in effect after lessee’sbreach and abandonment and recover rent as it becomes due, if Lessee has theright to sublet or assign, subject only to reasonable limitations).  Accordingly, if Landlord does not elect toterminate this Lease on account of any default by Tenant, Landlord may, fromtime to time, without terminating this Lease, enforce all of its rights andremedies under this Lease, including the right to recover all rent as itbecomes due.  All rights, powers andremedies of Landlord hereunder and under any other agreement now or hereafterin force between Landlord and Tenant shall be cumulative and not alternativeand shall be in addition to all rights, powers and remedies given to Landlordby law, and the exercise of one or more rights or remedies shall not impairLandlord’s right to exercise any other right or remedy.

18.3          Whether or not Landlord elects to terminate this Lease on accountof any default by Tenant, as set forth in this Article 18, Landlord shallhave the right to terminate any and all subleases, licenses, concessions orother consensual arrangements for possession entered into by Tenant andaffecting the Premises or may, in Landlord’s sole discretion, succeed to Tenant’sinterest in such subleases, licenses, concessions or arrangements.  In the event of Landlord’s election tosucceed to Tenant’s interest in any such subleases, licenses, concessions orarrangements, Tenant shall, as of the date

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ofnotice by Landlord of such election, have no further right to or interest inthe rent or other consideration receivable thereunder.

18.4         Notwithstanding anythingin this Lease to the contrary, any remedy of Tenant for the collection of ajudgment (or other judicial process) requiring the payment of money by Landlordin the event of any default by Landlord hereunder or any claim, cause of actionor obligation, contractual, statutory or otherwise by Tenant against Landlordor the Landlord Parties concerning, arising out of or relating to any matterrelating to this Lease and all of the covenants and conditions or anyobligations, contractual, statutory, or otherwise set forth herein, shall belimited solely and exclusively to an amount which is equal to the equityinterest of Landlord in and to the Project. No other property or assets of Landlord or any Landlord Party shall besubject to levy, execution or other enforcement procedure for the satisfactionof Tenant’s remedies under or with respect to this Lease, Landlord’sobligations to Tenant, whether contractual, statutory or otherwise, therelationship of Landlord and Tenant hereunder, or Tenant’s use or occupancy ofthe Premises.  Without limiting theforegoing, no personal liability is assumed by any officer, director, owner,member, shareholder, employee, agent, and/or representative of Crown Realty& Development, Inc. and its affiliates, including but not limited to RobertA. Flaxman and/or Jaime Sohacheski (and their family members) (collectively,the “Released Parties”) in connection with this Lease.   The parties acknowledge and agree that noclaim, cause of action, liability, demand, damage, debt, expense, and/or lien,including but not limited to any involving this Lease, shall be assertedagainst any of the Released Parties, whether known or unknown at the time ofthis Lease or at any time in the future, including after expiration or earliertermination of this Lease.

Article 19 – Interest;Late Charge:  Anyamount due from Tenant to Landlord under this Lease which is not paid when dueshall bear interest at the lower of twelve percent (12%) per annum or themaximum lawful rate of interest from the due date until paid, unless otherwisespecifically provided herein, but the payment of such interest shall not excuseor cure any default by Tenant under this Lease. In addition to such interest: (i) if Base Rent is not paid on or before the fifth (5th) day ofthe calendar month for which the same is due, a late charge equal to fivepercent (5%) of the amount overdue shall be immediately due and owing and shallaccrue for each calendar month or part thereof until such rental, including thelate charge, is paid in full, which late charge Tenant hereby agrees is areasonable estimate of the damages Landlord shall suffer as a result of Tenant’slate payment; provided, however, with respect to the very first late payment inany 12-month period, such late charge shall not be due unless the applicablepast-due payment is not received by Landlord within five (5) business daysafter written demand.  Such damagesinclude Landlord’s additional administrative and other costs associated withsuch late payment and the parties agree that it would be impracticable orextremely difficult to fix Landlord’s actual damage in such event.  Such charges for interest and late paymentsare separate and cumulative and are in addition to and shall not diminish orrepresent a substitute for any or all of Landlord’s rights or remedies underany other provision of this Lease.

Article 20 – Damage andDestruction:  If theProject is damaged by fire or other insured casualty and the insurance proceedshave been made available therefor by the holder or holders of any mortgages ordeeds of trust covering the Premises or the Project, the damage shall berepaired by Landlord to the extent such insurance proceeds are availabletherefor and provided such repairs can, in the opinion of Landlord’scontractor, be completed within two hundred ten (210) days after the necessityfor repairs as a result of such damage becomes known to Landlord, without thepayment of overtime or other premiums, and until such repairs are completedrent shall be abated in proportion to the part of the Premises which isunusable by Tenant in the conduct of its business.  However, if the damage is due to the fault orneglect of Tenant, or any of the Tenant Parties and the like, there shall be noabatement of rent, unless and to the extent Landlord receives rental incomeinsurance proceeds.  If repairs cannot,in Landlord’s opinion, be completed within two hundred ten (210) days after thenecessity for repairs as a result of such damage becomes known to Landlordwithout the payment of overtime or other premiums, Landlord may, at its option,either (i) make such repairs in a reasonable time and in such event thisLease shall continue in effect and the rent shall be abated, if at all, in themanner provided in this Article 20, or (ii) elect not to effect suchrepairs and instead terminate this Lease, by notifying Tenant in writing ofsuch termination within thirty (30) days after Landlord learns of the necessityfor repairs as a result of damage, such notice to include a termination dategiving Tenant thirty (30) days to vacate the Premises.  In addition, Landlord may elect to terminatethis Lease if the Project shall be damaged by fire or other casualty or cause,whether or not the Premises are affected, if the damage is not fully covered,except for deductible amounts, by Landlord’s insurance policies.  Finally, if the Premises or the Project isdamaged to any substantial extent by fire or other casualty during the lastnine (9) months of the Term, then notwithstanding anything contained in thisArticle 20 to the contrary, Landlord or Tenant shall have the option toterminate this Lease by giving written notice to the other of the exercise ofsuch option within thirty (30) days after Landlord learns of the necessity forrepairs as the result of such damage, provided that Landlord reasonablyestimates that the repair will take longer than ninety (90) days.  A total destruction of the Project shallautomatically terminate this Lease. Except as provided in this Article 20, there shall be no abatementof rent and no liability of Landlord by reason of any injury to or interferencewith Tenant’s business or property arising from such damage or destruction orthe making of any repairs, alterations or improvements in or to any portion ofthe Project or the Premises or in or to fixtures,

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appurtenances andequipment therein.  Tenant understandsthat Landlord will not carry insurance of any kind on Tenant’s furniture,furnishings, trade fixtures or equipment, and that Landlord shall not beobligated to repair any damage thereto or replace the same.  Tenant acknowledges that Tenant shall have noright to any proceeds of insurance carried by Landlord relating to propertydamage.  With respect to any damage whichLandlord is obligated to repair or elects to repair, Landlord and Tenant waiveand release their rights under the provisions of Sections 1932 and 1933 of theCalifornia Civil Code.

This paragraph shallapply only in the event of casualty damage or destruction to the Premises notarising out of the negligence or willful misconduct of Tenant or any of theTenant Parties, where the Premises are rendered untenantable as a result of thecasualty damage or destruction in question and Landlord does not elect toterminate this Lease pursuant to the provisions above.  If the estimated completion date of therepairs to the damage or destruction is greater than two hundred ten (210) daysafter the date Landlord learns of the damage, Tenant may elect, no later thanthirty (30) days after Tenant’s receipt of a certificate from Landlorddescribing the scope of the restoration and repair obligations and estimatingthe date said obligations are expected to be substantially completed so Tenantcan resume normal business operations, to terminate this Lease by writtennotice to Landlord effective as of the date specified in Tenant’s notice, whichdate shall be not greater than sixty (60) days after the date of delivery ofTenant’s notice.  Furthermore, if neitherLandlord nor Tenant have terminated this Lease and the repairs are not actuallycompleted within two hundred ten (210) days after the date Landlord learns ofthe damage (which two hundred ten (210) day period shall be extended only bydelays resulting from the negligence or willful misconduct of Tenant and/or anyof the Tenant Parties), Tenant shall have the right to terminate this Leasewithin five (5) business days after the end of such period, by written noticeto Landlord (the “Damage Termination Notice”), effective as of the date setforth in the Damage Termination Notice (the “Damage Termination Date”), whichDamage Termination Date shall not be less than five (5) business days followingthe end of such period.  Notwithstandingthe foregoing, if Tenant delivers a Damage Termination Notice to Landlord, thenLandlord shall have the right to suspend the occurrence of the DamageTermination Date for a period ending thirty (30) days after the DamageTermination Date set forth in the Damage Termination Notice by delivering toTenant, within five (5) business days of Landlord’s receipt of the DamageTermination Notice, a certificate of Landlord’s contractor responsible for therepair of the damage certifying that it is such contractor’s good faithjudgment that the repairs shall be substantially completed within thirty (30)days after the Damage Termination Date. If repairs shall be substantially completed prior to the expiration ofsuch thirty (30) day period, then the Damage Termination Notice shall be of noforce or effect but if the repairs shall not be substantially completed withinsuch thirty (30) day period, then this Lease shall terminate upon theexpiration of such thirty (30) day period. If Landlord undertakes repair and/or restoration pursuant to theprovisions above and thereafter determines that it will not be able to completethe same within the two hundred ten (210) day period set forth herein, thenLandlord shall promptly notify Tenant thereof and shall provide Tenant withLandlord’s revised estimate of the date upon which Landlord will complete thesame (“Revised Completion Date”).  Withinfifteen (15) business days after Tenant’s receipt of such notice, Tenant shallhave the right, but not the obligation, to elect to terminate this Lease or toagree to extend the two hundred ten (210) day period to the Revised CompletionDate.  Tenant’s failure to elect toterminate or to extend such time period to the Revised Completion Date bywritten notice to Landlord within such fifteen (15) business day period shallbe conclusively deemed to be Tenant’s election to extend the time to theRevised Completion Date.  Upon any such terminationof this Lease pursuant to this paragraph, Tenant shall pay the rent and allother amounts due under this Lease, properly apportioned up to such date oftermination, and both parties hereto shall thereafter be freed and dischargedof all further obligations accruing after such termination, except as providedfor in provisions of this Lease which by their terms survive the expiration orearlier termination of the Lease Term.

Article 21 – EminentDomain:  If the wholeof the Premises or the Project or so much thereof as to render the balanceunusable by Tenant shall be taken under power of eminent domain, or is sold,transferred or conveyed in lieu thereof, this Lease shall automaticallyterminate as of the date of such condemnation, or as of the date possession istaken by the condemning authority, at Landlord’s option.  No award for any partial or entire takingshall be apportioned, and Tenant hereby assigns to Landlord any award which maybe made in such taking or condemnation, together with any and all rights ofTenant now or hereafter arising in or to the same or any part thereof;provided, however, that nothing contained herein shall be deemed to giveLandlord any interest in or to require Tenant to assign to Landlord any awardmade to Tenant for moving costs, the taking of personal property and tradefixtures belonging to Tenant and removable by Tenant at the expiration of theTerm hereof as provided hereunder or for the interruption of, or damage to,Tenant’s business.  In the event of apartial taking described in this Article 21, or a sale, transfer orconveyance in lieu thereof, which does not result in a termination of thisLease, the rent shall be apportioned according to the ratio that the part ofthe Premises remaining useable by Tenant bears to the total area of thePremises.

Article 22 – Surrender;Removal of Property:

22.1         The voluntary or othersurrender of this Lease by Tenant to Landlord, or a mutual termination hereof,shall not work a merger, and shall at the option of Landlord, operate as anassignment

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to it of any or allsubleases or subtenancies affecting the Premises.  Upon the expiration of the Term of thisLease, or upon any earlier termination of this Lease, Tenant shall quit andsurrender possession of the Premises to Landlord in good order and condition,reasonable wear and tear and repairs which are Landlord’s obligation excepted,and shall, without expense to Landlord, remove or cause to be removed from thePremises all debris and rubbish, all furniture, equipment, business and tradefixtures, free-standing cabinet work, moveable partitioning, telephone and datacabling and other articles of personal property owned by Tenant or installed orplaced by Tenant at its own expense in the Premises, and all similar articlesof any other persons claiming under Tenant (unless Landlord exercises itsoption to have any subleases or subtenancies assigned to it), and Tenant shallrepair all damage to the Premises resulting from the  removal of such items from the Premises.

22.2         All fixtures, equipment,leasehold improvements, Alterations and/or appurtenances attached to or builtinto the Premises prior to or during the Term, whether by Landlord or Tenantand whether at the expense of Landlord or Tenant, or of both, shall be andremain part of the Premises and shall not be removed by Tenant at the end ofthe Term unless otherwise expressly provided for in this Lease or unless suchremoval is required by Landlord under Article 11 above.  Such fixtures, equipment, leaseholdimprovements, Alterations, additions, improvements and/or appurtenances shallinclude but not be limited to:  all floorcoverings, drapes, paneling, built-in cabinetry, molding, doors, vaults(including vault doors), plumbing systems, security systems, electricalsystems, lighting systems, silencing equipment, communication systems, allfixtures and outlets for the systems mentioned above and for all telephone,radio, telegraph and television purposes, and any special flooring or ceilinginstallations.  Notwithstanding the foregoing,with respect to the Improvements under Exhibit “D” attached hereto, Landlordmay only require restoration of any special-purpose improvements (i.e., notgeneral office improvements) under this Section 22.3 to the extent Landlordnotified Tenant in writing of the same at the time of Landlord’s approval ofthe same under such Exhibit “D.”

Article 23 – Holding Over:

23.1         Should Tenant, withoutLandlord’s written consent, hold over after termination of this Lease, Tenantshall become a tenant at sufferance upon each and all of the terms hereinprovided as may be applicable to such a tenancy and any such holding over shallnot constitute an extension of this Lease. During such holding over, Tenant shall pay in advance, monthly, BaseRent at a rate equal to one hundred fifty percent (150%) of the rate in effectfor the last month of the Term of this Lease, in addition to, and not in lieuof, all other payments required to be made by Tenant hereunder including butnot limited to Tenant’s Proportionate Share of any increase in DirectExpenses.  Subject to Section 23.2 below,nothing contained in this Article 23 shall be construed as consent byLandlord to any holding over of the Premises by Tenant, and Landlord expresslyreserves the right to require Tenant to surrender possession of the Premises toLandlord as provided in this Lease upon the expiration or earlier terminationof the Term.  If Tenant fails tosurrender the Premises upon the expiration or termination of this Lease withoutthe prior written consent of Landlord, Tenant agrees to indemnify, defend andhold Landlord harmless from all costs, loss, expense or liability, includingwithout limitation, claims made by any succeeding tenant of which tenant isinformed and real estate brokers claims and reasonable attorney’s fees andcosts.

23.2         Notwithstanding theforegoing, Tenant may hold over after the expiration of the term of this Lease,for a period not to exceed three (3) months, by delivering written notice toLandlord (“Holdover Notice”) not less than nine (9) months, and not more thantwelve (12) months, prior to the expiration of the Lease Term.  Such Holdover Notice must state the durationfollowing the expiration of the Lease Term (not to exceed 3 months) for whichTenant will hold over in the Premises (the “Permitted Holdover Period”).  If Landlord timely receives a Holdover Noticefrom Tenant, then the term of this Lease shall be extended through andincluding the final day of the Permitted Holdover Period and Tenant shall berequired to pay Base Rent and all other payments required to be made by Tenanthereunder through and including the final day of the Permitted Holdover Period(i.e., Tenant shall be obligated to pay such amounts for the entire PermittedHoldover Period, whether or not Tenant actually occupies all or any portion ofthe Premises during the entire Permitted Holdover Period).  Any hold over by Tenant after the expirationof any Permitted Holdover Period shall be subject to Section 23.1 above.

Article 24 –Intentionally Omitted.

Article 25 – ForceMajeure:  This Leaseand the obligations of Tenant hereunder shall not be affected or impairedbecause Landlord is unable to fulfill any of its obligations hereunder or isdelayed in doing so, if such inability or delay is caused by reason of anyprevention, delay, stoppage due to strikes, lockouts, acts of God, or any othercause previously, or at such time, beyond the reasonable control oranticipation of Landlord (collectively, a “Force Majeure”) and Landlord’s obligations under this Lease shallbe forgiven and suspended by any such Force Majeure.

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Article 26 – Signage:

26.1         ProvidedTenant is not in default under this Lease beyond applicable notice and cureperiods, Tenant, at Landlord’s cost, shall have the right to Project standard suiteentrance signage at the Premises, and five (5) Project standard lines in theProject lobby directory during the Lease Term.

26.2         ProvidedTenant is not in default under this Lease beyond applicable notice and cureperiods, and subject to any rights of tenants at the Project or Development asof the date of this Lease (including, without limitation, the tenant commonlyknown as OCTFCU (“**OCTFCU**”),Tenant, at Tenant’s sole cost and expense, shall have the right to thefollowing signage at the Project during the Term (collectively, “**Tenant’s Rooftop Signage**”), provided theOriginal Tenant or any permitted Affiliate assignee of this Lease is leasingfrom Landlord the entire ground floor of the Project at all times:  subject to the proviso in this sentence, upto two (2) Project building-top identification signs; provided, however, solong OCTFCU (or its affiliates, successors, assigns, or subtenants) has theright to a building-top sign at the Project, Tenant shall only be allowed one(1) Project building-top identification sign hereunder (it being acknowledgedand agreed by Tenant that Landlord has the right to restrict the aggregatebuilding-top signs at the Project to a maximum of two (2)).  Notwithstanding the foregoing, if, at anytime on or after the initial Commencement Date, Original Tenant or anypermitted Affiliate assignee of this Lease does not lease the entire groundfloor of the Project, then Tenant shall immediately and automatically lose itsrights to Tenant’s Rooftop Signage and Tenant shall remove Tenant’s RooftopSignage, at Tenant’s sole cost and expense, within ten (10) days after Landlordprovides Tenant with written notice that Tenant has lost its rights to the samehereunder.  Tenant’s Rooftop Signageshall be used only for the identification of the Original Tenant, and shall besubject to Landlord’s reasonable approval as to size, design, location (whichmay include the area currently utilized for rooftop identification signage byOCTFCU on the roof of the Project, should such space become available, asreasonably determined by Landlord), graphics, materials, colors and otherspecifications and shall be consistent with the exterior design, materials andappearance of the Project and the Project’s signage program and shall befurther subject to all applicable governmental laws, rules, regulations, codes,ordinances and other approvals and matters of record.  Tenant’s Rooftop Signage shall be personal tothe Original Tenant and any permitted Affiliate assignee of this Lease(provided that the identification of any such Affiliate to be placed on anysignage is not objectionable to Landlord, in its reasonable discretion) and maynot be used, assigned to any assignee or sublessee, or any other person orentity.  Tenant shall be obligated tomaintain Tenant’s Rooftop Signage in a first-class condition, at Tenant’s solecost and expense.   Landlord has theright, but not the obligation, to oversee the installation of Tenant’s RooftopSignage (the cost of which shall be solely borne by Tenant).  The cost to operate, if any, Tenant’s RooftopSignage shall be paid for by Tenant, and Tenant shall be responsible to pay allelectricity and other costs and expenses relating to Tenant’s Rooftop Signage(the cost of separately metering any utility usage shall also be paid for byTenant).  Upon the expiration of theLease Term, or earlier termination of the Lease, or other termination of Tenant’ssignage rights under this paragraph, Tenant shall be responsible for any andall costs associated with the removal of Tenant’s Rooftop Signage, including,but not limited to, the cost to repair and restore the Project to its originalcondition, normal wear and tear excepted.

26.3         ProvidedTenant is not in default under this Lease beyond applicable notice and cureperiods, Tenant, at Tenant’s sole cost and expense, shall have the right to thefollowing signage at the Project during the Term (collectively, “**Tenant’s Monument Signage**”):  one (1) non-exclusive strip on the monumentsign serving the Project on Carnegie Avenue. Tenant’s Monument Signage shall be used only for the identification ofthe Original Tenant, and shall be subject to Landlord’s reasonable approval asto size, design, location, graphics, materials, colors and other specificationsand shall be consistent with the exterior design, materials and appearance ofthe Project and the Project’s signage program and shall be further subject toall applicable governmental laws, rules, regulations, codes, ordinances andother approvals and matters of record. Tenant’s Monument Signage shall be personal to the Original Tenant andmay not be used or assigned to any assignee or sublessee, or any other personor entity.  Tenant shall be obligated tomaintain Tenant’s Monument Signage in a first-class condition, at Tenant’s solecost and expense.   Landlord has theright, but not the obligation, to oversee the installation of Tenant’s MonumentSignage (the cost of which shall be solely borne by Tenant).  The cost to operate, if any, Tenant’sMonument Signage shall be paid for by Tenant, and Tenant shall be responsibleto pay all electricity and other costs and expenses relating to Tenant’sMonument Signage (the cost of separately metering any utility usage shall alsobe paid for by Tenant).  Upon theexpiration of the Lease Term, or earlier termination of the Lease, Tenant shallbe responsible for any and all costs associated with the removal of Tenant’sMonument Signage, including, but not limited to, the cost to repair and restorethe Project to its original condition, normal wear and tear excepted.

Article 27 – Waiver.  No waiver by Landlord or Tenant of anyprovision of this Lease shall be deemed to be a waiver of any other provisionhereof or of any subsequent breach by such party of the same or any otherprovision.  No provision of this Leasemay be waived by Landlord or Tenant, except by an instrument in writingexecuted by the waiving party.  Landlord’sconsent to or approval of any act by Tenant requiring Landlord’s consent orapproval shall not be deemed to render unnecessary the obtaining of Landlord’sconsent to or approval of any subsequent act of Tenant, whether or not similarto the act so consented to or approved. No act or thing done by Landlord or Landlord’s agents during the Term ofthis Lease shall be deemed an acceptance of a surrender of the Premises, and noagreement to accept such

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surrender shall be validunless in writing and signed by Landlord. The subsequent acceptance of rent hereunder by Landlord shall not bedeemed to be a waiver of any preceding breach by Tenant of any term, covenantor condition of this Lease, other than the failure of Tenant to pay theparticular rent so accepted, regardless of Landlord’s knowledge of suchpreceding breach at the time of acceptance of such rent.  Any payment by Tenant or receipt by Landlordof an amount less than the total amount then due hereunder shall be deemed tobe in partial payment only thereof and not a waiver of the balance due or anaccord and satisfaction, notwithstanding any statement or endorsement to thecontrary on any check or any other instrument delivered concurrently therewithor in reference thereto.  Accordingly,Landlord may accept any such amount and negotiate any such check withoutprejudice to Landlord’s right to recover all balances due and owing and topursue its other rights against Tenant under this Lease, regardless of whetherLandlord makes any notation on such instrument of payment or otherwise notifiesTenant that such acceptance or negotiation is without prejudice to Landlord’srights.

Article 28 – Notices:  Any notice required or permitted to be givenhereunder shall be in writing and may be given by personal service evidenced bya signed receipt or sent by registered or certified mail, return receiptrequested, or via overnight courier, and shall be effective upon proof ofdelivery, addressed to Tenant at the Premises or to Landlord at the address setforth in the Basic Lease Provisions. Either party may by notice to the other specify a different address fornotice purposes.  A copy of all noticesto be given to Landlord hereunder shall be concurrently transmitted by Tenantto such party hereafter designated by notice from Landlord to Tenant.

Article 29 – Rules andRegulations:  Tenantshall observe faithfully and comply strictly with the Rules and Regulationsattached to this Lease as Exhibit “B” and made a part hereof, and such otherreasonable, non-discriminatory Rules and Regulations as Landlord may from timeto time reasonably adopt for the safety, care and cleanliness of the Project,the facilities thereof, or the preservation of good order therein.  Landlord shall not be liable to Tenant forviolation of any such Rules and Regulations, or for the breach of any covenantor condition in any lease by any other tenant in the Project.  A waiver by Landlord of any Rule orRegulation for any other tenant shall not constitute nor be deemed a waiver ofthe Rule or Regulation for this Tenant. Landlord agrees not to discriminate against Tenant in Landlord’senforcement of the Rules and Regulations against Tenant and other tenants ofthe Project or Development.  In the eventof a conflict between the Rules and Regulations and the terms of this Lease,the terms of this Lease shall control.

Article 30 –Relocation:  Intentionally Omitted.

Article 31: Miscellaneous:

31.1         Brokers.  In connection with this Lease, Landlord warrants and representsthat it has had dealings only with firms set forth in the Basic LeaseProvisions and that it knows of no other person or entity who is or might beentitled to a commission, finder’s fee or other like payment in connectionherewith and does hereby indemnify and agree to hold Tenant harmless from and againstany and all loss, liability and expenses that Tenant may incur should suchwarranty and representation prove incorrect, inaccurate or false.  In connection with this Lease, Tenantwarrants and represents that it has had dealings only with firms set forth inthe Basic Lease Provisions and that it knows of no other person or entity whois or might be entitled to a commission, finder’s fee or other like payment inconnection herewith and does hereby indemnify and agree to hold Landlord andLandlord’s agents, employees, affiliates and managers harmless from and againstany and all loss, liability and expenses that Landlord may incur should suchwarranty and representation prove incorrect, inaccurate or false.  No Broker shall be a third-party beneficiaryunder this Lease.

31.2         Severability; Entire agreement.  Anyprovision of this Lease which shall prove to be invalid, void, or illegal shallin no way affect, impair or invalidate any other provision hereof and suchother provisions shall remain in full force and effect.  This Lease and the exhibits and any addendumattached hereto constitute the entire agreement between the parties hereto withregard to Tenant’s occupancy or use of all or any portion of the project, andno prior agreement or understanding pertaining to any such matter shall beeffective for any purpose.  No provisionof this Lease may be amended or supplemented except by an agreement in writingsigned by the parties hereto or their successor in interest.  The parties agree that any deletion oflanguage from this Lease prior to its mutual execution by Landlord and Tenantshall not be construed to have any particular meaning or to raise anypresumption, canon of construction or implication including, withoutlimitation, any implication that the parties intended thereby to state theconverse, obverse or opposite of the deleted language.

31.3         Attorneys’ Fees.  In any action to enforce the terms of thisLease, including any suit by Landlord for the recovery of rent or possession ofthe Premises, the losing party shall pay the successful party a reasonable sumfor attorneys’ fees and costs in such suit and such attorneys’ fees and costsshall be deemed to have accrued prior to the commencement of such action andshall be paid whether or not such action is prosecuted to judgment.  When legal services are rendered by anattorney at law who is an employee of a party, attorneys’ fees and costsincurred by that party shall be deemed to include an amount

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based upon the number ofhours spent by such employee on such matters multiplied by an appropriatebilling rate determined by taking into consideration the same factors,including but not limited by, the importance of the matter, time applied,difficulty and results, as are considered when an attorney not in the employ ofa party is engaged to render such service.

31.4**        **Intentionally Omitted.

31.5         Time of Essence.  Time is of the essence with respect to everyprovision of this Lease.

31.6         Joint and Several.  The terms “Landlord” and “Tenant” as usedherein shall include the plural as well as the singular, the neuter shallinclude the masculine and feminine genders and the obligations herein imposedupon Tenant shall be joint and several as to each of the persons, firms orcorporations of which Tenant may be composed.

31.7         No Option.  The submission of this Lease by landlord, itsagent or representative for examination or execution by tenant does notconstitute an option or offer to lease the Premises upon the terms andconditions contained herein or a reservation of the Premises in favor ofTenant, it being intended hereby that this Lease shall only become effectiveupon the execution hereof by Landlord and Tenant and delivery of a fullyexecuted Lease to Tenant.

31.8         Use of Project Name;Improvements.  Tenant shall not beallowed to use the name, picture or representation of the Project, or words tothat effect, in connection with any business carried on in the Premises orotherwise (except as Tenant’s address) without the prior written consent ofLandlord.  In the event that Landlordundertakes any additional improvements on the Real Property including but notlimited to new construction or renovation or additions to the existingimprovements, Landlord shall not be liable to Tenant for any noise, dust,vibration or interference with access to the Premises or disruption in Tenant’sbusiness caused thereby.

31.9         Quiet Possession.  Upon Tenant’s paying the Base Rent,Additional Rent and other sums provided hereunder and observing and performingall of the covenants, conditions and provisions on Tenant’s part to be observedand performed hereunder, Tenant shall have quiet possession of the Premises forthe entire Term hereof, subject to all of the provisions of this Lease.

31.10       Rent.  All payments required to be made under thisLease to Landlord shall be deemed to be rent, whether or not described as such.

31.11       Successors and Assigns.  Subject to the provisions of Article 10of this Lease, all of the covenants, conditions and provisions of this Leaseshall be binding upon and shall inure to the benefit of the parties hereto andtheir respective heirs, personal representatives, successors and assigns.

31.12       Delinquent Payments.  In the event that Tenant shall be delinquentin the payment of rent on two (2) separate occasions in any twelve (12) monthperiod, Landlord shall have the right, without limiting any rights or remedies,to require that Tenant make all payments under this Lease by cashier’s check,from a bank reasonably acceptable to Landlord.

31.13       Signing Authority.  Tenant represents and warrants that eachindividual executing this Lease on behalf of Tenant is duly authorized toexecute and deliver this Lease on behalf of Tenant in accordance with: (i) ifTenant is a corporation, a duly adopted resolution of the Board of Directors ofsaid corporation or in accordance with the By-laws of said corporation, (ii) ifTenant is a partnership, the terms of the partnership agreement, and (iii) ifTenant is a limited liability company, the terms of its operating agreement,and that this Lease is binding upon said entity in accordance with its terms.  Concurrently with Tenant’s execution of thisLease, Tenant shall provide to Landlord a copy of: (i) if Tenant is acorporation, such resolution of the Board of Directors authorizing theexecution of this Lease on behalf of such corporation, which copy of resolutionshall be duly certified by the secretary or an assistant secretary of thecorporation to be a true copy of a resolution duly adopted by the Board ofDirectors of said corporation and shall be in a form reasonably acceptable toLandlord, (ii) if Tenant is a partnership, a copy of the provisions of thepartnership agreement granting the requisite authority to each individualexecuting this Lease on behalf of said partnership, and (iii) if Tenant is alimited liability company, a copy of the provisions of its operating agreementgranting the requisite authority to each individual executing this Lease onbehalf of said limited liability company.

31.14       Survival of Obligations.  Any obligations of Tenant occurring prior tothe expiration or earlier termination of this Lease shall survive suchexpiration or earlier termination.

31.15       Confidentiality.  Tenant acknowledges that the content of thisLease and any related documents are confidential information.  Tenant shall keep such confidentialinformation strictly confidential and shall not disclose such confidentialinformation to any person or entity other than Tenant’s financial, legal andspace planning consultants and any proposed Transferees.

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31.16       Governing Law.  This Lease shall be governed by and construedin accordance with the laws of the State of California.  No conflicts of law rules of any state orcountry (including, without limitation, California conflicts of law rules)shall be applied to result in the application of any substantive or procedurallaws of any state or country other than California.  All controversies, claims, actions or causesof action arising between the parties hereto and/or their respective successorsand assigns, shall be brought, heard and adjudicated by the courts of the Stateof California, with venue in the County of Los Angeles.  Each of the parties hereto hereby consents topersonal jurisdiction by the courts of the State of California in connectionwith any such controversy, claim, action or cause of action, and each of theparties hereto consents to service of process by any means authorized byCalifornia law and consent to the enforcement of any judgment so obtained inthe courts of the State of California on the same terms and conditions as ifsuch controversy, claim, action or cause of action had been originally heardand adjudicated to a final judgment in such courts.  Each of the parties hereto furtheracknowledges that the laws and courts of California were freely and voluntarilychosen to govern this Lease and to adjudicate any claims or disputes hereunder.

31.17       Headings; Exhibits.  The article headings contained in this Leaseare for convenience only and do not in any way limit or amplify any term orprovision hereof.  The Exhibits attachedhereto are incorporated herein by this reference as if fully set forth herein.

31.18       Covenants.  This Lease shall be construed asthough the covenants herein between Landlord and Tenant are independent (andnot dependent) and Tenant hereby expressly waives the benefit of any statute tothe contrary and agrees that if Landlord fails to perform its obligations setforth herein, Tenant shall not be entitled to make any repairs or perform anyacts hereunder at Landlord’s expense or to set off of any of the rent or otheramounts owing hereunder against Landlord.

31.19       Counterparts.  This Lease may be executed in counterparts,each of which shall be deemed an original, but such counterparts, when takentogether, shall constitute one agreement.

31.20       Financial Statements.  Tenant shall, when requested by Landlord fromtime to time, furnish a true and correct certified financial statement of itsfinancial condition prepared in conformity with generally accepted accountingprinciples and in a form reasonably satisfactory to Landlord.

31.21       Good Faith and Reasonableness.  Except (a) for matters for which there is a standardof consent or discretion specifically set forth in this Lease; (b) matterswhich could have an adverse effect on the Project structure or Project Systems,or which could affect the exterior appearance of the Project, (iii) matterscovered by Article 4 (Additional Rent), Article 9 (Insurance), orArticles 17 or 18 (Defaults; Remedies) of this Lease (collectively, the “ExceptedMatters”), any time the consent of Landlord or Tenant is required under thisLease, such consent shall not be unreasonably withheld, conditioned, ordelayed.

Article 32: Satellite Dishes: Landlord hereby grants to Tenant the right to occupy a portion of theroof of the Project, as designated by Landlord in Landlord’s sole and absolutediscretion (hereinafter called the “Roof Premises”) so that Tenant may install,use, operate and maintain up to two (2) satellite dishes (each, a “Dish”), andtwo (2) antennas (each, an “Antenna”) during the Lease Term in accordance withthe specifications reasonably approved in advance by Landlord.  Notwithstanding anything to the contrary setforth in this Article 32, no Dish or Antenna, nor any work or act in connectionwith any Dish or Antenna, by or on behalf of Tenant may invalidate or otherwiseaffect the warranty relating to the roof, unless otherwise specified byLandlord in writing in its sole and absolute discretion.  No Dish or Antenna shall exceed sixteen (16)inches in height or diameter, and each Dish and Antenna shall have commerciallyreasonable specifications commonly found in satellite dishes and antennas oftenants at comparable buildings in the general vicinity of the Project andshall be in accordance with the additional following conditions.

Each Dish andAntenna shall be installed, used, operated and maintained solely on the RooftopPremises and solely at the expense of Tenant. Tenant shall perform the erection and installation of each Dish andAntenna in accordance with an installation program reasonably approved and supervisedby Landlord or Landlord’s contractor, and Tenant shall neither bring any Dishor Antenna nor any associated equipment to the Premises or Rooftop Premiseswithout first giving Landlord fifteen (15) business days’ prior written noticeof the date and time of the planned installation.  Each Dish and Antenna shall in all cases beinstalled, used, operated, maintained and removed in compliance with thefollowing requirements (all as determined by Landlord in its sole and absolutediscretion): (i) no Dish or Antenna shall interfere in any way with the Project’sexisting engineering, window washing or other maintenance functions or duties;(ii) each Dish and Antenna must be properly secured and installed so as not tobe affected by high winds or other weather elements; (iii) each Dish andAntenna must be properly grounded; (iv) the weight of each Dish and Antennashall not exceed the load limits of the Project; and (v) in no event shall anyDish or Antenna or any appurtenant wiring or cable interfere with or otherwiseaffect the roof, structure, electrical, mechanical, structural, life safety orother building systems of the Project. Tenant shall bear all costs and expenses in connection with theinstallation, use, operation,

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maintenance andremoval of each Dish and Antenna, including all costs relating to the repair ofany damage to the roof or other parts of the Project caused directly orindirectly by any such installation, use, operation, maintenance or removal,including, without limitation, water damage or other damage resulting fromweather elements.

The installationof the each Dish and Antenna, excluding any necessary penetration of the roofof the Project, shall be performed by Tenant’s contractor, as approved byLandlord, and at Tenant’s expense (or, at Landlord’s option, by Landlord’scontractor, at Tenant’s expense), provided such installation is of anonpenetrating surface mount only. Tenant may not install any Dish or Antenna in a manner which penetratesthe roof membrane of the Project, without Landlord’s prior written consent,which consent may be withheld in Landlord’s sole and absolute discretion.  Without limiting Tenant’s other obligations,Tenant shall reimburse Landlord for all reasonable costs associated withobtaining confirmation that Landlord’s roof warranty will not be affected byany penetration.  All work done inconnection with any permitted roof penetration shall be performed by Landlordor Landlord’s agent at Tenant’s sole cost and expense.  The installation of each Dish and Antennashall not damage the Project or existing structures thereon or detract from theaesthetics or physical attractiveness of Project, as determined by Landlord inits sole and absolute discretion. Landlord may obtain the services of a structural engineer to design anyadditional supports required to support any Dish, or Antenna, and to monitorthe installation thereof, and Tenant shall reimburse Landlord, within thirty(30) days after receipt by Tenant of an invoice, and Tenant’s receipt ofreasonable supporting documentation, for Landlord’s actual and reasonable thecost of such services and such supports. If required by Landlord, Tenant shall install all screening required byLandlord such that no Dish or Antenna shall be visible from any portion of theground constituting the common areas of the Project. Or Development  Each Dish and Antenna shall remain thepersonal property of Tenant and shall be removed by Tenant prior to theexpiration or earlier termination of the Lease, and Tenant shall repair anydamage caused by the removal of each Dish and Antenna and its associatedwiring, cables and other components.

Tenant may, atTenant’s own cost and expense, upon reasonable prior written notice toLandlord, and only when accompanied by a representative of Landlord, access theRooftop Premises to repair or remove a Dish or Antenna or any portion thereof,provided that all plans and designs of Tenant relating to the same be subjectto the prior written approval of Landlord, not to be unreasonably withheld.

Tenant herebyagrees that the Rooftop Premises shall be taken “as is”, “with all faults”,without any representations and warranties, and Tenant hereby agrees andwarrants that it has investigated and inspected the condition of the RooftopPremises and the suitability of same for Tenant’s purposes.  Tenant, at Tenant’s sole cost and expense,will, at all times in connection with the installation, use, operation andmaintenance of each Dish and Antenna, comply with all governmental laws, rulesand regulations affecting the installation, use, operation and maintenance ofeach Dish and Antenna, including, without limitation, applicable building andfire codes, and will comply with all requirements of the Federal AviationAdministration and Federal Communications Commission and matters of record inrespect thereof.  Tenant, at Tenant’ssole cost and expense, shall be obligated to secure and obtain and provideLandlord with copies of all required permits, approvals and licenses for orwith respect to the installation or operation of each Dish and Antenna prior tothe commencement of any installation activities hereunder, and Tenant shall beobligated to keep in full force and effect and renew, as applicable, allrequired permits, approvals and licenses required hereunder.  The use of each Dish and Antenna by Tenantwill be such as to not cause any interference (as defined by the engineeringstandards of the Federal Communications Commission) with communicationreceptions presently or hereafter located at or about the Project and belongingto or operated by any parties to whom Landlord has granted rights, and Tenantwill cooperate with Landlord with respect to any rights that Landlord hereaftermay grant, similar to those granted by this Article 32.

During the entireperiod that any Dish or Antenna is situated in the Rooftop Premises, Tenantagrees to maintain comprehensive general public liability insurance against allclaims for bodily injury, death and property damage occurring in the areasurrounding or in any way related to each Dish and Antenna in the amounts andin accordance with the terms set forth in this Lease and as otherwisereasonably designated by Landlord; Tenant shall ensure that all insurancepolicies shall name Landlord and any other party designated by Landlord as anadditional insureds.  Tenant shall payfor the cost of any additional insurance incurred by Landlord or the increasein any premiums on insurance maintained by Landlord  arising by reason of the erection orinstallation and maintenance of any Dish or Antenna.

Tenant expresslyagrees that the terms and conditions of Section 11.3 of this Lease shall alsoapply to the Rooftop Premises. Additionally, Tenant agrees that, in addition to the terms andconditions of this Article 32, all of Tenant’s obligations and restrictions(but not rights) contained in the Lease shall also apply to each Dish andAntenna and the Rooftop Premises.  Thecost to operate, if any, Tenant’s Signage shall be paid for by Tenant, andTenant shall be separately metered for such expense (the cost of separatelymetering any utility usage shall also be paid for by Tenant).  All damage to the Project relating to anyDish or Antenna or Rooftop Premises shall be paid for by Tenant to Landlordwithin thirty (30) days after demand.

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Article 33:  Right of First Offer:  Landlord hereby grants to Tenant a continuingright of first offer with respect to that space on the second floor of theProject outlined on Exhibit “A-1” attached hereto and made a part hereof (“FirstOffer Space”).  Notwithstanding theforegoing, (i) such first offer right of Tenant shall commence only followingthe expiration or earlier termination of (A) any existing lease pertaining tothe First Offer Space, and (B) as to any First Offer Space which is vacant asof the date of this Lease, the first lease pertaining to any portion of suchFirst Offer Space entered into by Landlord after the date of this Lease(collectively, the “Superior Leases”), including any renewal of such existingor future lease, whether or not such renewal is pursuant to an express writtenprovision in such lease, and regardless of whether any such renewal isconsummated pursuant to a lease amendment or a new lease, (ii) such first offerright shall be subordinate and secondary to all rights of expansion, firstrefusal, first offer or similar rights granted to (A) the tenants of theSuperior Leases, and (B) any other tenant of the Project or Development as ofthe date hereof (the rights described in items (i) and (ii), above to be knowncollectively as “Superior Rights”). Tenant’s right of first offer shall be on the terms and conditions setforth in this Article 33.

33.1         Procedure for Offer.  Landlord shall notify Tenant (“First OfferNotice”) from time to time when Landlord determines that Landlord shallcommence the marketing of any First Offer Space because such space shall becomeavailable for  lease to third parties,where no holder of a Superior Right desires to lease such space.  The First Offer Notice shall describe thespace so offered to Tenant and shall set forth Landlord’s proposed materialeconomic terms and conditions applicable to Tenant’s lease of such space(collectively, the “Economic Terms”). Notwithstanding the foregoing, Landlord’s obligation to deliver theFirst Offer Notice shall not apply during the last nine (9) months of the thenLease Term.

33.2         Procedure forAcceptance.  If Tenant wishes toexercise Tenant’s right of first offer with respect to the space described inthe First Offer Notice, then within fifteen (15) business days after deliveryof the First Offer Notice to Tenant, Tenant shall deliver an unconditionalirrevocable written notice to Landlord of Tenant’s exercise of its right offirst offer with respect to the entire space described in the First Offer Notice,and the Economic Terms shall be as set forth in the First Offer Notice.  If Tenant does not unconditionally exerciseits right of first offer within the fifteen (15) business day period, thenLandlord shall be free to lease the space described in the First Offer Noticeto anyone to whom Landlord desires on any terms Landlord desires and Tenant’sright of first offer shall terminate as to the First Offer Space described inthe First Offer Notice.  Notwithstandinganything to the contrary contained herein, Tenant must elect to exercise itsright of first offer, if at all, with respect to all of the space offered byLandlord to Tenant at any particular time, and Tenant may not elect to leaseonly a portion thereof.

33.3         Construction of FirstOffer Space.  Except to the extentotherwise set forth in Landlord’s Economic Terms, Tenant shall take the FirstOffer Space in its “as-is” condition, and Tenant shall be entitled to constructimprovements in the First Offer Space in accordance with the provisions of Article11 of this Lease.

33.4         Lease of First OfferSpace.  If Tenant timely and properlyexercises Tenant’s right to lease the First Offer Space as set forth herein,Landlord and Tenant shall execute an amendment adding such First Offer Space tothis Lease upon the same non-economic terms and conditions as applicable to theinitial Premises, and upon Landlord’s Economic Terms.  Unless otherwise specified in Landlord’sEconomic Terms, Tenant shall commence payment of rent for the First Offer Spaceand the Lease Term of the First Offer Space shall commence upon the date ofdelivery of such space to Tenant.  TheLease Term for the First Offer Space shall expire co terminously with Tenant’slease of the initial Premises, unless otherwise specified in Landlord’s EconomicTerms.

33.5         No Defaults.  The rights contained in this Article 33 shallbe personal to the Original Tenant, and may only be exercised by the OriginalTenant (and not any assignee, sublessee or other transferee of the OriginalTenant’s interest in this Lease) if Original Tenant occupies the entirePremises as of the date of the First Offer Notice.  Tenant shall not have the right to leaseFirst Offer Space as provided in this Article 33 if, as of the date of theFirst Offer Notice, or, at Landlord’s option, as of the scheduled date ofdelivery of such First Offer Space to Tenant, Tenant is in default under thisLease beyond any applicable notice and cure periods.

[SIGNATURE PAGEFOLLOWS]

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IN WITNESS WHEREOF, theparties have executed this Lease, consisting of the foregoing provisions andArticles, including all exhibits and other attachments referenced therein, asof the date first above written.

“LANDLORD”

**CROWN CARNEGIE ASSOCIATES, LLC,**

a Delaware limited liability company
| By:    |   | Crown CCA, LLC, a California limited liability  company |
|--------|--------|---------------------------------------------------------|
|   |   | Its: Managing Member                                    |
|   |   |                                                    |
|   |   | By:                                                     |   |   |
|   |   |                                                    | Robert A Flaxman |
|   |   |                                                    | Its: Member |
|   |   |                                                    |   |

 

“TENANT”
| **ITERIS, INC.,**       | ** ** |   |
|-------------------------|------------|--------|
| a Delaware  corporation |       |   |
|                    |       |   |   |
|                    |       |   |   |
|                    |       |   |   |
| By:                     |       |   |   |   |
|                    |       |   |   |
| Name:                   |       |   |   |   |
|                    |       |   |   |
| Its: CEO                |       |   |   |
|                    |       |   |   |
|                    |       |   |   |
|                    |       |   |   |
| By:                     |       |   |   |   |
|                    |       |   |   |   |
| Name:                   |       |   |   |   |
|                    |       |   |   |
| Its: CFO                |       |   |   |
|                         |            |        |  |  |  |  |  |  |  |

 

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**EXHIBIT“A”**

**PREMISES**

Suite 100

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**EXHIBIT“A”**

**PREMISES**

Suite 200

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**EXHIBIT“A-1”**

**FIRSTOFFER SPACE**

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**EXHIBIT“A-2”**

**PATIO AREA**

## 

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**EXHIBIT“A-2”**

**PATIOAREA**

****

 

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**EXHIBIT“B”**

**RULES ANDREGULATIONS**

1.             No sign,advertisement or notice shall be displayed, printed or affixed on or to thePremises or to the outside or inside of the Project or so as to be visible fromoutside the Premises or Project without Landlord’s prior written consent.  Landlord shall have the right to remove anynon-approved sign, advertisement or notice, without notice to and at theexpense of Tenant, and Landlord shall not be liable in damages for such removal.  All approved signs or lettering on doors andwalls shall be printed, painted, affixed or inscribed at the expense of Tenantby Landlord or by a person selected by Landlord and in a manner and styleacceptable to Landlord.

2.             Tenant shall notobtain for use on the Premises ice, waxing, cleaning, interior glass polishing,rubbish removal, towel or other similar services, or accept barbering orbootblackening, or coffee cart services, milk, soft drinks or other likeservices on the Premises, except from persons authorized by Landlord and at thehours and under regulations fixed by Landlord. No vending machines or machines of any description shall be installed,maintained or operated upon the Premises without Landlord’s prior writtenconsent.

3.             The sidewalks, halls,passages, exits, entrances, elevators and stairways shall not be obstructed byTenant or used for any purpose other than for ingress and egress from Tenant’sPremises.  Under no circumstances istrash to be stored in the corridors. Furniture, freight and other large or heavy articles, and all otherdeliveries may be brought into the Project at reasonable times, and always atTenant’s sole responsibility and risk. All damage done to the Project by moving or maintaining such furniture,freight or articles shall be repaired by Landlord at Tenant’s expense.  Tenant shall not take or permit to be takenin or out of entrances or passenger elevators of the Project, any item normallytaken, or which Landlord otherwise reasonably requires to be taken, in or outthrough service doors or on freight elevators. Tenant shall move all supplies, furniture and equipment as soon asreceived directly to the Premises, and shall move all waste that is at any timebeing taken from the Premises directly to the areas designated for disposal.

4.             Toilet rooms,toilets, urinals, wash bowls and other apparatus shall not be used for anypurpose other than for which they were constructed and no foreign substance ofany kind whatsoever shall be thrown therein.

5.             Tenant shall notoverload the floor of the Premises or mark, drive nails, screw or drill intothe partitions, ceilings or floor or in any way deface the Premises with theexception of commercially reasonable and customary cosmetic actions (such ashanging pictures) taken by other tenants in the general market area.  Tenant shall not place typed, handwritten orcomputer generated signs in the corridors or any other common areas.  Should there be a need for signage additionalto the Project standard tenant placard, a written request shall be made toLandlord to obtain approval prior to any installation.  All costs for said signage shall be Tenant’sresponsibility.

6.             In no event shallTenant place a load upon any floor of the Premises or portion of any suchflooring exceeding the floor load per square foot of area for which such flooris designed to carry and which is allowed by law, or any machinery or equipmentwhich shall cause excessive vibration to the Premises or noticeable vibrationto any other part of the Project.  Priorto bringing any heavy safes, vaults, large computers or similarly heavyequipment into the Project, Tenant shall inform Landlord in writing of thedimensions and weights thereof and shall obtain Landlord’s consentthereto.  Such consent shall notconstitute a representation or warranty by Landlord that the safe, vault orother equipment complies, with regard to distribution of weight and/orvibration, with the provisions of this Rule 6 nor relieve Tenant fromresponsibility for the consequences of such noncompliance, and any such safe,vault or other equipment which Landlord determines to constitute a danger ofdamage to the Project or a nuisance to other tenants, either alone or incombination with other heavy and/or vibrating objects and equipment, shall bepromptly removed by Tenant, at Tenant’s cost, upon Landlord’s written notice ofsuch determination and demand for removal thereof.

7.             Tenant shall not,with the exception of small amounts of alcohol and adhesives under Section 14.1of the Lease, use or keep in the Premises or Project any kerosene, gasoline orinflammable, explosive or combustible fluid or material, or use any method ofheating or air-conditioning other than that supplied by Landlord.

8.             Tenant shall not laylinoleum, tile, carpet or other similar floor covering so that the same shallbe affixed to the floor of the Premises in any manner except as approved byLandlord.

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9.             Tenant shall notinstall or use any blinds, shades, awnings or screens in connection with anywindow or door of the Premises and shall not use any drape or window coveringfacing any exterior glass surface other than the standard drapes, blinds orother window covering established by Landlord.

10.           Tenant shall cooperatewith Landlord in obtaining maximum effectiveness of the cooling system byclosing window coverings when the sun’s rays fall directly on windows of thePremises.  Tenant shall not obstruct,alter, or in any way impair the efficient operation of Landlord’s heating,ventilating and air-conditioning system. Tenant shall not tamper with or change the setting of any thermostats orcontrol valves.

11.           The Premises shall notbe used for manufacturing or for the storage of merchandise except as suchstorage may be incidental to the permitted use of the Premises.  Tenant shall not, without Landlord’s priorwritten consent, occupy or permit any portion of the Premises to be occupied orused for the manufacture or sale of liquor or tobacco in any form, or a barberor manicure shop, or as an employment bureau. The Premises shall not be used for lodging or sleeping or for anyimproper, objectionable or immoral purpose. No auction shall be conducted on the Premises.

12.           Tenant shall not make,or permit to be made, any unseemly or disturbing noises, or disturb orinterfere with occupants of Project or neighboring buildings or premises orthose having business with it by the use of any musical instrument, radio,phonographs or unusual noise, or in any other way.

13.           No bicycles, vehiclesor animals of any kind shall be brought into or kept in or about the Premises,and no cooking shall be done or permitted by any tenant in the Premises, exceptthat the preparation of coffee, tea, hot chocolate and similar items fortenants, their employees and visitors shall be permitted.  No tenant shall cause or permit any unusualor objectionable odors to be produced in or permeate from or throughout thePremises.  The foregoing notwithstanding,Tenant shall have the right to use a microwave and to heat microwavable itemstypically heated in an office.  No hotplates, toasters, toaster ovens or similar open element cooking apparatus shallbe permitted in the Premises.

14.           The sashes, sash doors,skylights, windows and doors that reflect or admit light and air into thehalls, passageways or other public places in the Project shall not be coveredor obstructed by any tenant, nor shall any bottles, parcels or other articlesbe placed on the window sills.

15.           No additional locks orbolts of any kind shall be placed upon any of the doors or windows by anytenant, nor shall any changes be made in existing locks or the mechanismsthereof unless Landlord is first notified thereof, gives written approval, andis furnished a key therefor.  Each tenantmust, upon the termination of his tenancy, give to Landlord all keys and keycards of stores, offices, or toilets or toilet rooms, either furnished to, orotherwise procured by, such tenant, and in the event of the loss of any keys sofurnished, such tenant shall pay Landlord the cost of replacing the same or ofchanging the lock or locks opened by such lost key if Landlord shall deem itnecessary to make such change.  If morethan two keys for one lock are desired, Landlord will provide them upon paymenttherefor by Tenant.  Tenant shall not keyor re-key any locks.  All locks shall bekeyed by Landlord’s locksmith only.

16.           Landlord shall have theright to prohibit any advertising by any tenant which, in Landlord’s opinion,tends to impair the reputation of the Project or its desirability as an officebuilding and upon written notice from Landlord any tenant shall refrain fromand discontinue such advertising.

17.           Landlord reserves theright to control access to the Project by all persons after reasonable hours ofgenerally recognized business days and at all hours on Sundays and legal holidaysand may at all times control access to the equipment areas of the Projectoutside the Premises.  Each tenant shallbe responsible for all persons for whom it requests after hours access andshall be liable to Landlord for all acts of such persons.  Landlord shall have the right from time totime to establish reasonable rules and charges pertaining to freight elevatorusage, including the allocation and reservation of such usage for tenants’initial move-in to their premises, and final departure therefrom.  Landlord may also establish from time to timereasonable rules and charges for accessing the equipment areas of the Project,including the risers, rooftops and telephone closets.

18.           Any person employed byany tenant to do janitorial work shall, while in the Project and outside of thePremises, be subject to and under the control and direction of the Office ofthe Project or its designated representative such as security personnel (butnot as an agent or servant of Landlord, and the Tenant shall be responsible forall acts of such persons).

19.           All doors opening on topublic corridors shall be kept closed, except when being used for ingress andegress.  Tenant shall cooperate andcomply with any reasonable safety or security programs, including fire drillsand air raid drills, and the appointment of “fire wardens” developed byLandlord for

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the Project, or requiredby law.  Before leaving the Premisesunattended, Tenant shall close and securely lock all doors or other means ofentry to the Premises and shut off all lights and water faucets in thePremises.

20.           The requirements oftenants will be attended to only upon application to the Office of the Project.

21.           Canvassing, solicitingand peddling in the Project are prohibited and each tenant shall cooperate toprevent the same.

22.           All office equipment ofany electrical or mechanical nature shall be placed by tenants in the Premisesin settings approved by Landlord, to absorb or prevent any vibration, noise orannoyance.

23.           No air-conditioningunit or other similar apparatus shall be installed or used by any tenantwithout the prior written consent of Landlord. Tenant shall pay the cost of all electricity used for air-conditioningin the Premises if such electrical consumption exceeds normal office requirements,regardless of whether additional apparatus is installed pursuant to thepreceding sentence.

24.           There shall not be usedin any space, or in the public halls of the Project, either by any tenant orothers, any hand trucks except those equipped with rubber tires and sideguards.

25.           Parking.

(a)           Project parkingfacility hours shall be as determined from time to time by Landlord.

(b)           Automobiles must beparked entirely within the stall lines on the floor.

(c)           All directional signsand arrows must be observed.

(d)           The speed limit shallbe 5 miles per hour.

(e)           Parking is prohibitedin areas not striped for parking.

(f)            Landlord (and itsoperator) may refuse to permit any person who violates the within rules to parkin the Project parking facility, and any violation of the rules shall subjectthe automobile to removal from the Project parking facility at the parker’sexpense.  In either of said events,Landlord (or its operator) shall refund a prorata portion of the currentmonthly parking rate and the sticker or any other form of identificationsupplied by Landlord (or its operator) will be returned to Landlord (or itsoperator).

(g)           Project parkingfacility managers or attendants are not authorized to make or allow anyexceptions to these Rules and Regulations.

(h)           All responsibility forany loss or damage to automobiles or any personal property therein is assumedby the parker.

(i)            Loss or theft ofparking identification devices from automobiles must be reported to the Projectparking facility manager immediately, and a lost or stolen report must be filedby the parker at that time.

(j)            The parking facilitiesare for the sole purpose of parking one automobile per space.  Washing, waxing, cleaning or servicing of anyvehicles by the parker or his agents is prohibited.

(k)           Landlord (and itsoperator) reserves the right to refuse the issuance of monthly stickers orother parking identification devices to any Tenant and/or its employees whorefuse to comply with the above Rules and Regulations and all City, State orFederal ordinances, laws or agreements.

(l)            Tenant agrees toacquaint all employees with these Rules and Regulations.

(m)          No vehicle shall bestored in the Project parking facility for a period of more than one (1) week.

27.           The Project is anon-smoking Project.  Smoking or carryinglighted cigars or cigarettes in the Premises or the Project, including theelevators in the Project, is prohibited.

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**EXHIBIT“C”**

**NOTICE OF LEASE TERM DATESAND TENANT’S PROPORTIONATE SHARE**
| TO:    | DATE:  |   |
|--------|--------|--------|
|   |   |   |

 

RE:                              Leasedated              ,200   , between                                        (“**Landlord**”), and                           (“**Tenant**”), concerning Suite              ,located at                          .

Ladies and Gentlemen:

In accordance with theLease, Landlord wishes to advise and/or confirm the following:

1.             That the Premises have been accepted herewith by theTenant as being substantially complete in accordance with the Lease and thatthere is no deficiency in construction.

2.             That the Tenant has taken possession of the Premises andacknowledges that under the provisions of the Lease the Term of said Leaseshall commence as of              for a term of              ending on              .

3.             That in accordance with the Lease, Base Rent commencedto accrue on              .

4.             If the Commencement Date of the Lease is other than thefirst day of the month, the first billing will contain a prorataadjustment.  Each billing thereaftershall be for the full amount of the monthly installment as provided for in saidLease.

5.             Rent is due and payable in advance on the first day ofeach and every month during the Term of said Lease.  Your rent checks should be made payable to              at              .

6.             The exact number of rentable square feet within thePremises is              square feet.

7.             Tenant’s Proportionate Share, as adjusted based upon theexact number of rentable square feet within the Premises is              %.

8.             The Monthly Amortized Additional Allowance, if any, andthe Monthly Amortized HVAC Costs, are as follows:             .

AGREED AND ACCEPTED:

TENANT:
|              , |
|---------------------------------------------------------------------------------|
| a                                                                               |
| By:                                                                             |   |   |
|                                                                            | Its: |   |   |
|                                                                                 |  |  |  |  |  |

 

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**EXHIBIT“D”**

**TENANTWORK LETTER**

**ITERIS,INC.**

This Tenant Work Lettershall set forth the terms and conditions relating to the construction of thePremises.  This Tenant Work Letter isessentially organized chronologically and addresses the issues of the constructionof the tenant improvements in the Premises, in sequence, as such issues willarise during the actual construction of the Premises.

SECTION 1

BASE BUILDING

Landlord has constructed,at its sole cost and expense, the base, shell and core (i) of thePremises, and (ii) of the floor of the Project on which the Premises islocated (collectively, the “**Base, Shell andCore**”).  Tenant herebyapproves (subject to Landlord’s obligations expressly set forth in the Lease)the condition of the Base, Shell and Core, and agrees that the Base, Shell andCore shall be delivered to Tenant in its current “as-is” condition.  The improvements to be initially installed inthe Premises shall be designed and constructed by Tenant pursuant to thisTenant Work Letter.  Any costs of initialdesign and construction of any improvements to the Premises shall be an “ImprovementAllowance Item”, as that term is defined in Section 2.2 of this TenantWork Letter.  In connection with Tenant’sconstruction of the Tenant Improvements hereunder, Tenant shall not beobligated to remedy any ADA violations existing as of the date of this Lease inthe common areas of the Base, Shell and Core on the 2nd floor of the Projectunder this Tenant Work Letter.

SECTION 2

TENANTIMPROVEMENTS

2.1           Tenant ImprovementAllowance.

2.1.1        Allowance.  Tenant shall be entitled to a one-timeimprovement allowance (the “**TenantImprovement Allowance**”) in the amount of One Million Seven HundredSeventy-One Thousand Nine Hundred Fifty Dollars ($1,771,950.00) (based on$37.50 per usable square foot of the Premises) for the costs relating to theinitial design and construction of Tenant’s improvements which are permanentlyaffixed to the Premises (the “**TenantImprovements**”).  At Tenant’srequest, and subject to the terms of this Tenant Work Letter (including,without limitation, Tenant’s obligation to pay to Landlord the MonthlyAmortized Additional Allowance), Tenant shall be entitled to an additionalone-time tenant improvement allowance (“**AdditionalAllowance**”) of up to Two Hundred Thirty-Six Thousand Two HundredSixty Dollars ($236,260.00) (based on $5.00 per usable square foot of thePremises) over and above the above stated Tenant Improvement Allowance to payfor that portion of the costs relating to the initial design and constructionof the Tenant Improvements, if any, that exceeds the above-stated initialTenant Improvement Allowance.  Subject toTenant’s payment obligations herein, the Additional Allowance shall be part ofthe Tenant Improvement Allowance under this Exhibit “D”.  In no event shall Landlord be obligated tomake disbursements (or otherwise be obligated) pursuant to this Tenant WorkLetter in a total amount which exceeds the Tenant Improvement Allowance and inno event shall Tenant be entitled to any credit for any unused portion of theTenant Improvement Allowance not used by Tenant by the date that is twelve (12)months after the date of this Lease.

2.1.2        Additional Allowance.  Notwithstanding anything to the contrary setforth in this Lease, Tenant agrees to reimburse Landlord for the AdditionalAllowance as follows: concurrently with its payments to Landlord of monthlyBase Rent (but without regard to any abatement or credit of Base Rent), and, atLandlord’s option, as additional Base Rent, Tenant shall pay to Landlord anamount equal to the Monthly Amortized Additional Allowance (definedbelow).  The term “Monthly AmortizedAdditional Allowance” shall mean the Additional Allowance, amortized over theinitial Lease Term on a monthly basis (as reasonably determined by Landlord),with interest accruing on such Additional Allowance at nine percent (9%) perannum.  If the Lease shall be cancelledor terminated for any reason prior to the expiration of the initial Lease Term(other than any permitted termination of the Lease by Tenant as a result ofLandlord default), the unamortized Additional Allowance shall becomeimmediately due and payable by Tenant to Landlord.

2.1.3        HVAC Work.  Additionally, during the construction of theTenant Improvements, using the same Engineer(s) designated by Landlord underSection 3.1 below, Tenant shall cause the existing HVAC units in and/orotherwise serving the Premises to be replaced with new comparable HVAC units(collectively, the “HVAC Units”).  Thedefinition of HVAC Units shall include purchase, design, engineering andinstallation of  package units, heatpumps and compressors, but shall

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not include returns, ductwork or looping, which shallbe at Tenant’s sole cost.  The TenantImprovement Allowance shall not be used for the HVAC Units or Approved HVACCosts (as defined below); provided, however, with respect to any Approved HVACCosts, Landlord shall pay for the same (subject to reimbursement by Tenanthereunder) in the same manner as that for disbursement of the TenantImprovement Allowance hereunder.  Thecontractor for the HVAC Units (and work under this paragraph), shall be subjectto the prior written approval of Landlord, which approval shall not beunreasonably withheld.  All plans andspecifications for the HVAC Units (and/or any other matters under thisparagraph), the scope of work relating to the HVAC Units (and/or otherwiseunder this paragraph), and all costs and expenses relating to the HVAC Units(and/or otherwise under this paragraph), shall be subject to the prior writtenconsent of Landlord.  The term “ApprovedHVAC Costs” is defined as the costs of the HVAC Units approved by Landlord inwriting in accordance with the terms hereof. Notwithstanding anything to the contrary, the Approved HVAC Costs (orportion thereof, if applicable) shall be reimbursed by Tenant to Landlord asfollows: during the entire Lease Term (including any extensions/renewalsthereof under the Lease), concurrently with its payments to Landlord of monthlyBase Rent (but without regard to any abatement or credit of Base Rent), and, atLandlord’s option, as additional Base Rent, Tenant shall pay to Landlord anamount equal to the Monthly Amortized HVAC Costs (as defined below).  The term “Monthly Amortized HVAC Costs” shallmean the Approved HVAC Costs, amortized over a twenty (20) year period(commencing on the Commencement Date), with zero interest accruing on suchApproved HVAC Costs.  If the Lease shallbe cancelled or terminated for any reason (other than any permitted terminationof the Lease by Tenant as a result of Landlord default) prior to the expirationof the Lease Term, the unamortized HVAC Costs that would have been payable byTenant hereunder shall become immediately due and payable by Tenant toLandlord.  If the then known amount ofApproved HVAC Costs changes after Tenant’s payment of any Monthly AmortizedHVAC Costs hereunder, then Landlord shall make the appropriate equitableadjustments under this paragraph, and the parties shall make the appropriatepayments to one another as a result thereof within thirty (30) days after anysuch adjustment by Landlord.  The degreeof completion of the HVAC Units (and/or work under this paragraph) shall not beconsidered in determining whether Substantial Completion has occurred.

2.2           Disbursement of theTenant Improvement Allowance

2.2.1        Tenant ImprovementAllowance Items.  Except as otherwiseset forth in this Tenant Work Letter, the Tenant Improvement Allowance shall bedisbursed by Landlord (each of which disbursements shall be made pursuant toLandlord’s disbursement process) for costs related to the construction of theTenant Improvements and for the following items and costs (collectively, the “**Improvement Allowance Items** ”): (i) payment of the fees ofthe “Architect” and the “Engineers,” as those terms are defined inSection 3.1 of this Tenant Work Letter, and payment of the fees incurredby, and the cost of documents and materials supplied by, Landlord and Landlord’sconsultants in connection with the preparation and review of the “ConstructionDrawings,” as that term is defined in Section 3.1 of this Tenant WorkLetter; (ii) the cost of permits; (iii) the cost of any changes inthe Base, Shell and Core required by the Construction Drawings; (iv) thecost of any changes to the Construction Drawings or Tenant Improvementsrequired by applicable building codes (the “**Code**”);(v) payment to Landlord of a construction coordination fee in an amountequal to the product of (A) one percent (1%), and (B) an amount equalto the Tenant Improvement Allowance (including, without limitation, theAdditional Allowance), plus the Over-Allowance Amount (as such Over-AllowanceAmount may increase pursuant to the terms of this Tenant Work Letter), otherthan the portion of the Tenant Improvement Allowance, if any, which is used(not to exceed the caps set forth below) for the Personal Items (as defined inthis paragraph below) pursuant to the provisions below; (vi) space planning,project management, programming, pricing drawings, construction drawings,electrical/mechanical/plumbing/engineering drawings, City permits, approvalfees, construction administration, construction; (vii) the cost of purchasingand installing Tenant’s intrabuilding cabling and wiring; (viii) Tenant’sfurniture fixtures and equipment (subject to Landlord’s receipt of itemizedinvoices for the same); and (ix) to the extent not exhausted in connection withthe foregoing items (but subject to the final sentence of this paragraph), as aone-time credit against monthly Base Rent first due under the Lease after thefinal Commencement Date, as applicable. However, in no event shall more than Four and 00/100 Dollars ($4.00) perusable square foot of the Premises be used for the aggregate cost of itemsdescribed in (i) and (ii) above; any additional amount incurred as a result of(i) and (ii) above shall be deemed to constitute an Over-Allowance Amount.  In addition, in no event shall more than Tenand 00/100 Dollars ($10.00) per usable square foot of the Premises be used forthe aggregate cost of the items (collectively, the “**Personal Items**”) described in (vii), (viii) and (ix) above.

2.2.2        Disbursement of TenantImprovement Allowance.  During theconstruction of the Tenant Improvements, Landlord shall make monthlydisbursements of the Tenant Improvement Allowance for Tenant ImprovementAllowance Items for the benefit of Tenant and shall authorize the release ofmonies for the benefit of Tenant as follows:

2.2.2.1     Monthly Disbursements.  On or before the twenty-fifth (25th) day ofeach calendar month, during the construction of the Tenant Improvements, Tenantshall deliver to

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Landlord: (i) a request for payment of the “Contractor,”as that term is defined below in this Tenant Work Letter, approved by Tenant,in a form to be provided by Landlord, showing the schedule, by trade, ofpercentage of completion of the Tenant Improvements in the Premises, detailingthe portion of the work completed and the portion not completed;(ii) invoices from all of “Tenant’s Agents,” as that term is defined in Section4.1.2 of this Tenant Work Letter, for labor rendered and materialsdelivered to the Premises; (iii) executed mechanic’s lien releases fromall of Tenant’s Agents which shall comply with the appropriate provisions, asreasonably determined by  Landlord, ofCalifornia Civil Code Section 3262(d); and (iv) all other informationreasonably requested by Landlord.  Tenant’srequest for payment shall be deemed Tenant’s acceptance and approval of thework furnished and/or the materials supplied as set forth in Tenant’s paymentrequest.  On or before the last day ofthe following month, Landlord shall deliver a check to Tenant made jointlypayable to Contractor and Tenant in payment of the lesser of: (A) theamounts so requested by Tenant, as set forth in this Section 2.2.2.1,above, less a ten percent (10%) retention (the aggregate amount of suchretentions to be known as the “Final Retention”) (provided that such 10%retention shall not apply to the extent of the disbursement of the ImprovementAllowance under this Tenant Work Letter for the Personal Items alone), and(B) the balance of any remaining available portion of the TenantImprovement Allowance (not including the Final Retention), provided thatLandlord does not dispute any request for payment based on a non-compliance ofany work with the “Approved Working Drawings,” as that term is defined in Section3.4 below, or due to any substandard work. Landlord’s payment of such amounts shall not be deemed Landlord’sapproval or acceptance of the work furnished or materials supplied as set forthin Tenant’s payment request.

2.2.2.2     Final Retention.  Subject to the provisions of this Tenant WorkLetter, a check for the Final Retention payable jointly to Tenant andContractor shall be delivered by Landlord to Tenant following the completion ofconstruction of the Premises, provided that (i) Tenant delivers toLandlord a waiver and release in accordance with the terms of California CivilCode Section 3262(d)(2) and a waiver and release in accordance with eitherCalifornia Civil Code Section 3262(d)(3) or Section 3262(d)(4),(ii) Landlord has determined that no substandard work exists whichadversely affects the mechanical, electrical, plumbing, heating, ventilatingand air conditioning, life-safety or other systems of the Project, the curtainwall of the Project, the structure or exterior appearance of the Project, orany other tenant’s use of such other tenant’s leased premises in the Projectand (iii) Architect delivers to Landlord a certificate, in a form reasonablyacceptable to Landlord, certifying that the construction of the TenantImprovements in the Premises has been substantially completed.

2.2.2.3     Other Terms.  Landlord shall only be obligated to makedisbursements from the Tenant Improvement Allowance to the extent costs areincurred by Tenant for Tenant Improvement Allowance Items.  All Tenant Improvement Allowance Items forwhich the Tenant Improvement Allowance has been made available shall be deemedLandlord’s property under the terms of this Lease (other than Tenant’sfurniture, trade fixtures not attached to the Premises and equipment).

SECTION 3

CONSTRUCTIONDRAWINGS

3.1           Selection ofArchitect/Construction Drawings. Tenant has retained H. Hendy & Associates as the approved architect(the “Architect”) to prepare the Construction Drawings.  Tenant shall also retain the engineeringconsultants designated by Landlord (the “Engineers”) to prepare all plans andengineering working drawings relating to the structural, mechanical,electrical, plumbing, HVAC, life-safety, and sprinkler work in thePremises.  The plans and drawings to beprepared by Architect and the Engineers hereunder shall be known collectivelyas the “Construction Drawings”.  Theplans attached hereto as Schedule “1” are approved by Landlord and Tenant.  All Construction Drawings shall comply withthe drawing format and specifications reasonably acceptable to and approved byLandlord.  Tenant and Architect shallverify, in the field, the dimensions and conditions as shown on the relevant portionsof the base building plans, and Tenant and Architect shall be solelyresponsible for the same, and Landlord shall have no responsibility inconnection therewith.  Landlord’s reviewof the Construction Drawings as set forth in this Section 3, shall befor its sole purpose and shall not imply Landlord’s review of the same, orobligate Landlord to review the same, for quality, design, Code compliance orother like matters.  Accordingly,notwithstanding that any Construction Drawings are reviewed by Landlord or itsspace planner, architect, engineers and consultants, and notwithstanding anyadvice or assistance which may be rendered to Tenant by Landlord or Landlord’sspace planner, architect, engineers, and consultants, Landlord shall have noliability whatsoever in connection therewith and shall not be responsible forany omissions or errors contained in the Construction Drawings, and Tenant’swaiver and indemnity set forth in this Lease shall specifically apply to theConstruction Drawings.

3.2           Approved WorkingDrawings.  Landlord shall approve (ordisapprove) working drawings prepared by Architect within five (5) businessdays after Landlord receives the final Working Drawings (the “Approved WorkingDrawings”).  Tenant shall submit the sameto the City in which the Project is located and diligently pursue its receiptof all applicable building permits. Tenant hereby agrees that neither Landlord nor Landlord’s consultantsshall be responsible for obtaining any building permit or

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certificate of occupancy for the Premises and thatobtaining the same shall be Tenant’s responsibility; provided, however, thatLandlord shall cooperate with Tenant in executing permit applications andperforming other ministerial acts reasonably necessary to enable Tenant to obtainany such permit or certificate of occupancy. No changes, modifications or alterations in the Approved WorkingDrawings may be made without the prior written consent of Landlord, whichconsent shall not be unreasonably withheld. Tenant shall use its best efforts and all due diligence to cooperatewith the Architect, the Engineers, and the Contractor to complete all phases ofthe Tenant Improvements, as soon as possible after the execution of the Lease.

SECTION 4

CONSTRUCTION OFTHE TENANT IMPROVEMENTS

4.1           Tenant’s Selectionof Contractors.

4.1.1        The Contractor.  A general contractor shall be retained byTenant to construct the Tenant Improvements and Tenant shall contract directlywith such “Contractor”.  Landlord shallfile a Notice of Non-Responsibility regarding payments under Tenant’s contractwith the Contractor.  Such generalcontractor (“Contractor”) shall be selected by Tenant from a list of generalcontractors supplied by Tenant and approved by Landlord.  In connection with the performance by Tenantof the Tenant Improvements pursuant to this Tenant Work Letter, the followinggeneral contractors are deemed acceptable to Tenant and Landlord:  (1) JLC; (2) Casco; and (3) Turelk.

4.1.2        Tenant’s Agents.  All subcontractors, laborers, materialmen, andsuppliers used by Tenant (such subcontractors, laborers, materialmen, andsuppliers, and the Contractor to be known collectively as “Tenant’s Agents”)must be approved in writing by Landlord, which approval shall not beunreasonably withheld or delayed.  IfLandlord does not approve any of Tenant’s proposed subcontractors, laborers,materialmen or suppliers, Tenant shall submit other proposed subcontractors,laborers, materialmen or suppliers for Landlord’s written reasonable approval.

4.2           Construction ofTenant Improvements by Tenant’s Agency.

4.2.1        Construction Contract;Cost Budget.  Prior to Tenant’sexecution of the construction contract and general conditions with Contractor(the “Contract”), Tenant shall submit the Contract to Landlord for its approvalwith regard to proper insurance and licensing requirements and any other areaswhich may adversely affect Landlord’s interest in the Project,  and which approval shall not be unreasonablywithheld or delayed by more than five (5) business days after Landlord’sreceipt of the Contract.  Prior to thecommencement of the construction of the Tenant Improvements, and after Tenanthas accepted all bids for the Tenant Improvements, Tenant shall provideLandlord with a detailed breakdown, by trade, of the final costs to be incurredor which have been incurred in connection with the design and construction ofthe Tenant Improvements to be performed by or at the direction of Tenant or theContractor, which costs form a basis for the amount of the Contract (the “FinalCosts”).  Prior to the commencement ofconstruction of the Tenant Improvements, Tenant shall supply Landlord with cashin an amount (the “Over-Allowance Amount”) equal to the difference between theamount of the Final Costs and the amount of the Tenant Improvement Allowance(less any portion thereof already disbursed by Landlord, or in the process ofbeing disbursed by Landlord, on or before the commencement of construction ofthe Tenant Improvements).  At Landlord’soption, the Over-Allowance Amount shall be disbursed by Landlord prior to thedisbursement of any of the then remaining portion of the Tenant ImprovementAllowance, and such disbursement shall be pursuant to the same procedure as theTenant Improvement Allowance.  In theevent that, after the Final Costs have been delivered by Tenant to Landlord,the costs relating to the design and construction of the Tenant Improvementsshall change, any additional costs necessary to such design and construction inexcess of the Final Costs, shall be paid by Tenant to Landlord immediately asan addition to the Over-Allowance Amount or at Landlord’s option, Tenant shallmake payments for such additional costs out of its own funds, but Tenant shallcontinue to provide Landlord with the documents described in this Tenant WorkLetter, above, for Landlord’s approval, prior to Tenant paying such costs.

4.2.2        Tenant’s Agents.

4.2.2.1     Landlord’s GeneralConditions for Tenant’s Agents and Tenant Improvement Work.  Tenant’s and Tenant’s Agent’s construction ofthe Tenant Improvements shall comply with the following: (i) the TenantImprovements shall be constructed in strict accordance with the ApprovedWorking Drawings; (ii) Tenant’s Agents shall submit schedules of all workrelating to the Tenant’s Improvements to Contractor and Contractor shall,within five (5) business days of receipt thereof, inform Tenant’s Agents of anychanges which are necessary thereto, and Tenant’s Agents shall adhere to suchcorrected schedule; and (iii) Tenant shall abide by all rules made byLandlord’s Project manager with respect to the use of freight, loading dock andservice elevators, storage of materials,

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coordination of work with the contractors of othertenants, and any other matter in connection with this Tenant Work Letter,including, without limitation, the construction of the Tenant Improvements.

4.2.2.2     Indemnity.  Tenant’s indemnity of Landlord as set forthin this Lease shall also apply with respect to any and all costs, losses,damages, injuries and liabilities related in any way to any act or omission ofTenant or Tenant’s Agents, or anyone directly or indirectly employed by any ofthem, or in connection with Tenant’s non-payment of any amount arising out ofthe Tenant Improvements and/or Tenant’s disapproval of all or any portion ofany request for payment.  Such indemnityby Tenant, as set forth in this Lease, shall also apply with respect to any andall costs, losses, damages, injuries and liabilities related in any way toLandlord’s performance of any ministerial acts reasonably necessary (i) topermit Tenant to complete the Tenant Improvements, and (ii) to enableTenant to obtain any Project permit or certificate of occupancy for thePremises.

4.2.2.3     Requirements of Tenant’sAgents.  Each of Tenant’s Agentsshall guarantee to Tenant and for the benefit of Landlord that the portion ofthe Tenant Improvements for which it is responsible shall be free from anydefects in workmanship and materials for a period of not less than one (1) yearfrom the date of completion thereof.  Eachof Tenant’s Agents shall be responsible for the replacement or repair, withoutadditional charge, of all work done or furnished in accordance with itscontract that shall become defective within one (1) year after the later tooccur of (i) completion of the work performed by such contractor orsubcontractors and (ii) the applicable Commencement Date.  The correction of such work shall include,without additional charge, all additional expenses and damages incurred inconnection with such removal or replacement of all or any part of the TenantImprovements, and/or the Project and/or common areas that may be damaged ordisturbed thereby.  All such warrantiesor guarantees as to materials or workmanship of or with respect to the TenantImprovements shall be contained in the Contract or subcontract and shall bewritten such that such guarantees or warranties shall inure to the benefit ofboth Landlord and Tenant, as their respective interests may appear, and can bedirectly enforced by either.  Tenantcovenants to give to Landlord any assignment or other assurances which maybenecessary to effect such right of direct enforcement.

4.2.2.3.1   Lien-FreeBasis.  Tenant’s Contractor andagents shall perform all work on a lien-free basis (subject to Landlord’s obligationto make timely payments under this Exhibit “D”).  If a lien is filed or recorded against theProject due to, or in any way associated with, the construction of the TenantImprovements, Tenant agrees to have such lien released of record (in a mannerand form approved by Landlord) within five (5) days of Landlord’s notice toTenant regarding same.  If Tenant failsto cause the release of such lien within such five (5) day period to Landlord’ssatisfaction, Landlord may cause the removal of such lien, and Tenant agrees torepay Landlord for all costs and expenses incurred by Landlord to release thelien (including, but not limited to, the payment of the amount stated in thelien, any filing, processing, recording and attorneys’ fees) within ten (10)days of Landlord’s request therefor, and such amount shall be consideredAdditional Rent due under the Lease.  IfTenant fails to pay Landlord as aforesaid, such failure shall be deemed anuncured noticed material default under the Lease, and Landlord may pursue anyremedy provided for under the Lease, at law or in equity.

4.2.2.4     Insurance Requirements

4.2.2.4.1   GeneralCoverages.  All of Tenant’s Agentsshall carry worker’s compensation insurance covering all of their respectiveemployees, and shall also carry public liability insurance, including propertydamage, all with limits, in form and with companies as are required to becarried by Tenant as set forth in this Lease.

4.2.2.4.2   SpecialCoverages.  Tenant shall carry “Builder’sAll Risk” insurance in an amount approved by Landlord covering the constructionof the Tenant Improvements, and such other insurance as Landlord may require,it being understood and agreed that the Tenant Improvements shall be insured byTenant pursuant to this Lease immediately upon completion thereof.  Such insurance shall be in amounts and shallinclude such  extended coverageendorsements as may be reasonably required by Landlord including, but notlimited to, the requirement that all of Tenant’s Agents shall carry excess liabilityand Products and Completed Operating Coverage insurance, each in amounts notless than $500,000 for each incident, $1,000,000 in aggregate, and in form andwith companies as are required to be carried by Tenant as set forth in thisLease.

4.2.2.4.3   GeneralTerms.  Certificates for allinsurance carried pursuant to this Section 4.2.2.4 shall be delivered toLandlord before the commencement of construction of the Tenant Improvements andbefore the Contractor’s equipment is moved onto the site.  All such policies of insurance must contain aprovision that the company writing said policy will give Landlord thirty (30)days prior written notice of any cancellation or lapse of the effective date orany reduction in the amounts of such insurance. In the event that the Tenant Improvements are damaged by any causeduring the course of the construction thereof, Tenant shall immediately repairthe same at Tenant’s sole cost and expense. Tenant’s Agents shall maintain all of the foregoing insurance coverage inforce until

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the Tenant Improvements are fully completed andaccepted by Landlord, except for any Products and Completed Operation Coverageinsurance required by Landlord, which is to be maintained for ten (10) yearsfollowing completion of the work and acceptance by Landlord and Tenant.  All policies carried under this Section4.2.2.4 shall insure Landlord and Tenant, as their interests may appear, aswell as Contractor and Tenant’s Agents. All insurance, except Workers’ Compensation, maintained by Tenant’sAgents shall preclude subrogation claims by the insurer against anyone insuredthereunder.  Such insurance shall providethat it is primary insurance as respects the owner and that any other insurancemaintained by owner is excess and noncontributing with the insurance requiredhereunder.  The requirements for theforegoing insurance shall not derogate from the provisions for indemnificationof Landlord by Tenant under Section 4.2.2.2 of this Tenant Work Letter.

4.2.3        Governmental Compliance.  The Tenant Improvements shall comply in allrespects with the following: (i) the Code and other state, federal, cityor quasi-governmental laws, codes, ordinances and regulations, as each mayapply according to the rulings of the controlling public official, agent orother person; (ii) applicable standards of the American InsuranceAssociation (formerly, the National Board of Fire Underwriters) and theNational Electrical Code; and (iii) Project material manufacturer’sspecifications.

4.2.4        Inspection by Landlord. Landlord shall have the right to inspectthe Tenant Improvements at all times, provided however, that Landlord’s failureto inspect the Tenant Improvements shall in no event constitute a waiver of anyof Landlord’s rights hereunder nor shall Landlord’s inspection of the TenantImprovements constitute Landlord’s approval of the same.  Should Landlord disapprove any portion of theTenant Improvements, Landlord shall notify Tenant in writing of suchdisapproval and shall specify the items disapproved.  Any defects or deviations in, and/ordisapproval by Landlord of, the Tenant Improvements shall be rectified byTenant at no expense to Landlord, provided however, that in the event Landlorddetermines that a defect or deviation exists or disapproves of any matter inconnection with any portion of the Tenant Improvements and such defect,deviation or matter might adversely affect the mechanical, electrical,plumbing, heating, ventilating and air conditioning or life-safety systems ofthe Project, the structure or exterior appearance of the Project or any othertenant’s use of such other tenant’s leased premises, Landlord may, take suchaction as Landlord deems necessary, at Tenant’s expense and without incurringany liability on Landlord’s part, to correct any such defect, deviation and/ormatter, including, without limitation, causing the cessation of performance ofthe construction of the Tenant Improvements until such time as the defect,deviation and/or matter is corrected to Landlord’s satisfaction.

4.2.5        Meetings.  Commencing upon the execution of this Lease,Tenant and Landlord shall hold meetings as required at a reasonable time, withthe Architect and the Contractor regarding the progress of the preparation ofConstruction Drawings and the construction of the Tenant Improvements, whichmeetings shall be held at the Premises or locations reasonably designated byLandlord, and Landlord and/or its agents shall receive prior notice of, andshall have the right to attend, all such meetings, and, upon Landlord’s request,certain of Tenant’s Agents shall attend such meetings.  One such meeting each month shall include thereview of Contractor’s current request for payment.

4.3         Notice of Completion;Copy of “As Built” Plans.  Within ten(10) days after completion of construction of the Tenant Improvements, Tenantshall cause a Notice of Completion to be recorded in the office of the Recorderof the County in which the Project is located in accordance with Section 3093of the Civil Code of the State of California or any successor statute, andshall furnish a copy thereof to Landlord upon such recordation.  If Tenant fails to do so, Landlord mayexecute and file the same on behalf of Tenant as Tenant’s agent for suchpurpose, at Tenant’s sole cost and expense. At the conclusion of construction, (i) Tenant shall cause theArchitect and Contractor (A) to update the Approved Working Drawings asnecessary to reflect all changes made to the Approved Working Drawings duringthe course of construction, (B) to certify to the best of their knowledgethat the “record-set” of as-built drawings are true and correct, whichcertification shall survive the expiration or termination of this Lease, and(C) to deliver to Landlord two (2) sets of copies of such as-builtdrawings within ninety (90) days following issuance of a certificate ofoccupancy for the Premises, and (ii) Tenant shall deliver to Landlord acopy of all warranties, guaranties, and operating manuals and informationrelating to the improvements, equipment, and systems in the Premises.

SECTION 5

MISCELLANEOUS

5.1           Tenant’sRepresentative.  Tenant hasdesignated Dan Gilliam (telephone:  714-780-7259)  as its solerepresentative with respect to the matters set forth in this Tenant WorkLetter, who shall have full authority and responsibility to act on behalf ofthe Tenant as required in this Tenant Work Letter.

5.2           Landlord’sRepresentative.  Landlord shalldesignate an individual as its sole representative with respect to the mattersset forth in this Tenant Work Letter, who, until further notice to

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Tenant, shall havefull authority and responsibility to act on behalf of the Landlord as requiredin this Tenant Work Letter.

5.3           Time of the Essencein This Tenant Work Letter.  Time isof the essence with respect to the provisions of this Tenant Work Letter.  Unless otherwise indicated, all referencesherein to a “number of days” shall mean and refer to calendar days.  If any item requiring approval is timelydisapproved by Landlord, the procedure for preparation of the document andapproval thereof shall be repeated until the document is approved by Landlord.

5.4           Tenant’s LeaseDefault.  Notwithstanding anyprovision to the contrary contained in this Lease, if an event of default asdescribed in the Lease or this Tenant Work Letter has occurred at any time,then (i) in addition to all other rights and remedies granted to Landlordpursuant to this Lease, Landlord shall have the right to withhold payment ofall or any portion of the Tenant Improvement Allowance and/or Landlord may causeContractor to cease the construction of the Premises (in which case, Tenantshall be responsible for any delay in the substantial completion of thePremises caused by such work stoppage), and (ii) all other obligations ofLandlord under the terms of this Tenant Work Letter shall be forgiven untilsuch time as such default is cured pursuant to the terms of this Lease (inwhich case, Tenant shall be responsible for any delay in the substantialcompletion of the Premises caused by such inaction by Landlord).

5.5           Additional Services.  If the construction of the TenantImprovements shall require that additional services or facilities (including,but not limited to, hoisting, cleanup or other cleaning services, trashremoval, field supervision, or ordering of materials) be provided by Landlord,then Tenant shall pay Landlord for such items at Landlord’s cost or at areasonable charge if the item involves time of Landlord’s personnel only.

5.6           Construction Defects.  Landlord shall have no responsibility for theTenant Improvements and Tenant will remedy, at Tenant’s own expense, and beresponsible for any and all defects in the Tenant Improvements that may appearduring or after the completion thereof whether the same shall affect the TenantImprovements in particular or any parts of the Premises in general.  Tenant shall indemnify, hold harmless andreimburse Landlord for any costs or expenses incurred by Landlord by reason ofany defect in any portion of the Tenant Improvements constructed by Tenant orTenant’s contractor or subcontractors, or by reason of inadequate cleanupfollowing completion of the Tenant Improvements.

5.7           Coordination ofLabor.  All of Tenant’s contractors,subcontractors, employees, servants and agents must work in harmony with andshall not interfere with any labor employed by Landlord, or Landlord’scontractors or by any other tenant or its contractors with respect to anyportion of the Project or Development.

5.8           HVAC Systems.  Tenant agrees to be entirely responsible forthe balancing of any heating, ventilating or air conditioning system installedby Tenant and/or maintenance of the electrical or plumbing work installed byTenant, partitions, doors, hardware or any other installations made by Tenant.

5.9           Approval of Plans.  Landlord will not check Tenant drawings forbuilding code compliance.  Approval ofthe Construction Drawings by Landlord is not a representation that the drawingsare in compliance with the requirements of governing authorities, and it shallbe Tenant’s responsibility to meet and comply with all federal, state, andlocal code requirements.  Approval of theConstruction Drawings does not constitute assumption of responsibility byLandlord or its architect for their accuracy, sufficiency or efficiency, andTenant shall be solely responsible for such matters.

5.10         SubstantialCompletion.  For purposes of theLease and this Tenant Work Letter,  “SubstantialCompletion” shall occur upon the substantial completion of construction of theTenant Improvements in the applicable portions of the Premises pursuant to theApproved Working Drawings, with the exception of any punch list work and anytenant fixtures, work-stations, built-in furniture, or equipment to beinstalled by Tenant; provided, however, in the event such substantial completionis delayed as a result of the acts or omissions of Tenant or any of the TenantParties (as defined in the Lease), or a breach of this Lease by Tenant, thenSubstantial Completion shall be deemed to have occurred on the date it wouldhave otherwise occurred, absent such acts and omissions and breaches.

5.11         LandlordDelay.

5.11.1      If there are not two (2) different CommencementDates (i.e., occurring on 2 different dates) under the Basic Lease Provisionsabove, then this Section 5.11.1 (as opposed to Section 5.11.2 below) shallapply.  If Substantial Completion occursafter the 9/17 Date, then the 9/17 Date setforth in the definition of Commencement Date in the Lease shall be extended (upto a maximum of the number of days, if any, during the period between the 9/17Date and the date of Substantial Completion)

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one (1) day for each day (if any) that SubstantialCompletion of the Tenant Improvements in the Premises has been delayed as aresult of a “Landlord Delay”.  The term “LandlordDelay” shall mean only an actual delay in the Substantial Completion of theTenant Improvements in the Premises which is caused by the failure of Landlordto comply with Landlord’s obligations expressly set forth in this Tenant WorkLetter.  Notwithstanding anything to thecontrary contained herein, any delays to the extent caused by or attributableto the acts, omissions or misconduct of Tenant or any of the Tenant Partiesshall not be deemed to constitute a Landlord Delay.  In addition, no Landlord Delay shall bedeemed to have occurred unless and until (i) Tenant has given Landlord writtennotice that an act or omission on the part of Landlord is about to occur or hasoccurred which will cause a delay in the Substantial Completion of the TenantImprovements in the Premises, and (ii) Landlord has failed to cure such delaywithin one (1) business day after Landlord’s receipt of such notice fromTenant, in which case the number of days of delay after such notice shall, tothe extent such delay is attributable to the circumstances described in thedefinition of Landlord Delay, be deemed to be a Landlord Delay.

5.11.2      If there are two(2) different Commencement Dates (i.e., occurring on 2 different dates) underthe Basic Lease Provisions above, then this Section 5.11.2 (as opposed to5.11.1 above) shall apply.  With respectto Suite 100, if Substantial Completion occurs after the 9/17 Date, then the 9/17 Date set forth in the definition ofCommencement Date (for Suite 100) in the Lease shall be extended (up to amaximum of the number of days, if any, during the period between the 9/17 Dateand the date of Substantial Completion) one (1) day for each day (if any) thatSubstantial Completion of the Tenant Improvements in Suite 100 has been delayedas a result of a “Landlord Delay”. Additionally, with respect to Suite 200, if SubstantialCompletion occurs after the Suite 200 Hard Date, then the Suite 200 Hard Date set forth in the definition of Commencement Date(for Suite 200) in the Lease shall be extended (up to a maximum of the numberof days, if any, during the period between the Suite 200 Hard Date and the dateof Substantial Completion) one (1) day for each day (if any) that SubstantialCompletion of the Tenant Improvements in Suite 200 has been delayed as a resultof a “Landlord Delay”.  The term “LandlordDelay” shall mean only an actual delay in the Substantial Completion of theTenant Improvements in the applicable portion of the Premises which is causedby the failure of Landlord to comply with Landlord’s obligations expressly setforth in this Tenant Work Letter. Notwithstanding anything to the contrary contained herein, any delays tothe extent caused by or attributable to the acts, omissions or misconduct ofTenant or any of the Tenant Parties shall not be deemed to constitute aLandlord Delay.  In addition, no LandlordDelay shall be deemed to have occurred unless and until (i) Tenant has givenLandlord written notice that an act or omission on the part of Landlord isabout to occur or has occurred which will cause a delay in the SubstantialCompletion of the Tenant Improvements in the applicable portion of thePremises, and (ii) Landlord has failed to cure such delay within one (1)business day after Landlord’s receipt of such notice from Tenant, in which casethe number of days of delay after such notice shall, to the extent such delayis attributable to the circumstances described in the definition of LandlordDelay, be deemed to be a Landlord Delay.

5.12         Force Majeure.

5.12.1      If there are nottwo (2) different Commencement Dates (i.e., occurring on 2 different dates)under the Basic Lease Provisions above, then this Section 5.12.1 (as opposed toSection 5.12.2 below) shall apply.  IfSubstantial Completion occurs after the 9/17 Date, then the 9/17 Date set forth in the definition ofCommencement Date in the Lease shall be extended (up to a maximum of the numberof days, if any, during the period between the 9/17 Date and the date ofSubstantial Completion, and not to exceed an aggregate 60-day extension underthis Section 5.12) one (1) day for each day (if any) that SubstantialCompletion of the Tenant Improvements in the Premises has been delayed as aresult of a “Tenant Force Majeure Delay”. The term “ Tenant Force Majeure Delay” shall mean only an actual delayin the Substantial Completion of the Tenant Improvements in the Premises whichis caused by any of the following to the extent they actually occur at thePremises or Project, and actually prevent Tenant from gaining access to thePremises or Project for the purpose of performing the Tenant Improvements inthe Premises: (a) failure ofpower or utilities, (b) earthquakes, fire or other casualty, or (c) acts ofterrorism, riot, war, insurrection, civil commotion, sabotage and/or nationalor local emergency.  Without limitation, financialinability shall not be considered Tenant Force Majeure Delay. Notwithstanding anything to the contrary contained herein, any delays tothe extent caused by or attributable to the acts, omissions or misconduct ofTenant or any of the Tenant Parties shall not be deemed to constitute a TenantForce Majeure Delay.  In addition, noTenant Force Majeure Delay  shall bedeemed to have occurred unless and until (i) Tenant has given Landlord writtennotice that a circumstance has occurred constituting a Tenant Force MajeureDelay which will cause a delay in the Substantial Completion of the TenantImprovements in the Premises, and (ii) Landlord has failed to cure such delaywithin one (1) business day after Landlord’s receipt of such notice fromTenant, in which case the number of days of delay after such notice shall, tothe extent such delay is attributable to the circumstances described in thedefinition of Tenant Force Majeure Delay, be deemed to be a Tenant ForceMajeure Delay.

5.12.2      If there are two(2) different Commencement Dates (i.e., occurring on 2 different dates) underthe Basic Lease Provisions above, then this Section 5.12.2 (as opposed to5.12.1 above) shall apply.  With respectto Suite 100, if Substantial Completion occurs after the 9/17 Date, then the 9/17 Date

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set forth in the definition of Commencement Date (forSuite 100) in the Lease shall be extended (up to a maximum of the number ofdays, if any, during the period between the 9/17 Date and the date ofSubstantial Completion, and not to exceed an aggregate 60-day extension for anyportion of the Premises under this Section 5.12) one (1) day for each day (ifany) that Substantial Completion of the Tenant Improvements in Suite 100 hasbeen delayed as a result of a “Tenant Force Majeure Delay”.  Additionally, with respect to Suite200, if Substantial Completion occurs after the Suite 200 Hard Date, then the Suite 200 Hard Date set forth in thedefinition of Commencement Date (for Suite 200) in the Lease shall be extended(up to a maximum of the number of days, if any, during the period between theSuite 200 Hard Date and the date of Substantial Completion, and not to exceedan aggregate 60-day extension for any portion of the Premises under thisSection 5.12) one (1) day for each day (if any) that Substantial Completion ofthe Tenant Improvements in Suite 200 has been delayed as a result of a “TenantForce Majeure Delay”.  The term “ TenantForce Majeure Delay” shall mean only an actual delay in the SubstantialCompletion of the Tenant Improvements in the applicable portion of the Premiseswhich is caused by any of the following to the extent they actually occur atthe applicable portion of the Premises or Project, and actually prevent Tenantfrom gaining access to the applicable portion of the Premises or Project forthe purpose of performing the Tenant Improvements in the applicable portion of thePremises: (a) failure ofpower or utilities, (b) earthquakes, fire or other casualty, or (c) acts ofterrorism, riot, war, insurrection, civil commotion, sabotage and/or nationalor local emergency.  Without limitation, financialinability shall not be considered Tenant Force Majeure Delay. Notwithstanding anything to the contrary contained herein, any delays tothe extent caused by or attributable to the acts, omissions or misconduct ofTenant or any of the Tenant Parties shall not be deemed to constitute a TenantForce Majeure Delay.  In addition, noTenant Force Majeure Delay  shall bedeemed to have occurred unless and until (i) Tenant has given Landlord writtennotice that a circumstance has occurred constituting a Tenant Force MajeureDelay which will cause a delay in the Substantial Completion of the TenantImprovements in the applicable portion of the Premises, and (ii) Landlord hasfailed to cure such delay within one (1) business day after Landlord’s receiptof such notice from Tenant, in which case the number of days of delay aftersuch notice shall, to the extent such delay is attributable to thecircumstances described in the definition of Tenant Force Majeure Delay, bedeemed to be a Tenant Force Majeure Delay.

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**SCHEDULE“1”**

**APPROVEDPLANS**

****

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**APPROVEDPLANS**

****

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**EXHIBIT “E”**

**INTENTIONALLY OMITTED**

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**EXHIBIT“F”**

**TEST LANE& PARKING**

 

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**EXHIBIT “G”**

**JANITORIAL SPECIFICATIONS**

# **CLEANING SPECIFICATIONS**

1.  Daily Services – 5 days per week

A.           Empty all waste baskets(replace liners if necessary)

B.             Dust furniture andwindow ledges

C.             Sweep or dust mop allhard floors

D.            Spot damp mop coffeestains and marks on hard floors

E.              Spot clean carpetwhere possible if shampooing is not required

F.              Spot cleanfingerprints on doors, walls (and wall switches)

G.             Spot clean partitionglass

H.            Vacuum carpets in allopen areas

I.                 Return all chairsand wastebaskets to their proper position.

2.     Weekly Services (asper Detailing Schedule)

A.           Detail vacuum edges,corners, and under furniture

B.             High dusting,including picture frames and tops of partitions (not higher than six feet)

C.             Low dusting,including chair rungs and lower ledges

D.            Thoroughly wet mop allhard floors

E.              Clean desk tops onlywhen cleared of papers and files

3.     Monthly Services - (asper Detailing Schedule)

A.           Scrub and wax hardfloors

B.             Dust windowmini-blinds.

C.             Brush or vacuumupholstered furniture

4.     Quarterly Services

A.            Dust ceiling and wallvents

# **HOURS OFSERVICE**

All work will beperformed during the normal working hours of 6:00 p.m. and 2:30 a.m., Sundaythrough Thursday, 5 days a week if not otherwise scheduled by the management.

# **EXCLUSIONS**

Not included in thiscontract are hand towels, toilet tissue, seat covers, sanitary products, handsoap and plastic trash liners will be supplied to all common areas and not toprivate restrooms.

# **HOLIDAYS OBSERVED**

The following holidaysare observed and service is not provided on these days.  An extra charge will be calculated for anyservices performed on these holidays at a rate of time and one-half.

1.  New Year’s Day

2.     Memorial Day

3.     Fourth of July

4.     Labor Day

5.     Thanksgiving Day

6.     Day After Thanksgiving

7.    Christmas Day

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**EXHIBIT “H”**

**ESTOPPEL**

**TENANT ESTOPPEL CERTIFICATE**

To:                              Bank of America, N. A.

Attention:     Relationship Administration

                     RealEstate Group

Re:

1.                                        The undersigned, as Tenant of approximately            squarefeet of space (the “Premises”) under that certain Lease dated                                               ,                        (the“Lease”) made with            ,Landlord, covering space in Landlord’s building (the “Building”) in            County,                        ,known as            ,hereby certifies as follows:

(a)                                  That attached hereto as Exhibit “A” isa true, correct and complete copy of the Lease, together with all amendmentsthereto;

(b)                                 That the Lease is in full force and effectand has not been modified, supplemented or amended in any way except as setforth in Exhibit “A.” The interest of the undersigned in the Lease hasnot been assigned or encumbered;

(c)                                  That the Lease, as amended as indicated in Exhibit“A,” represents the entire agreement between the parties as to saidleasing, and that there are no other agreements, written or oral, which affectthe occupancy of the Premises by the undersigned;

(d)                                 That all insurance required of theundersigned under the Lease has been provided by the undersigned and allpremiums have been paid;

(e)                                  That the commencement date of the term of theLease was            ,         ;

(f)                                    That the expiration date of the term of theLease is            ,            ,including any presently exercised option or renewal term, and that theundersigned has no rights to renew, extend or cancel the Lease or to leaseadditional space in the Premises or the Building, except as expressly set forthin the Lease;

(g)                                 That in addition to the Premises, theundersigned has the right to use or rent            parkingspaces in or near the Building during the term of the Lease;

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(h)                                 That the undersigned has no option orpreferential right to purchase all or any part of the Premises (or the land orBuilding of which the Premises are a part), and has no right or interest withrespect to the Premises or the Building other than as Tenant under the Lease(except as specified in            ,a copy of which is attached hereto);

(i)                                     That all conditions of the Lease to beperformed by Landlord and necessary to the enforceability of the Lease have beensatisfied. On this date there are no existing defenses, offsets, claims orcredits which the undersigned has against the enforcement of the Lease except forprepaid rent through            (notto exceed one month);

(j)                                     That all contributions required by the Leaseto be paid by Landlord to date for improvements to the Premises have been paidin full. All improvements or work required under the Lease to be made byLandlord to date, if any, have been completed to the satisfaction of theundersigned. Charges for all labor and materials used or furnished inconnection with improvements and/or alterations made for the account of theundersigned in the Building have been paid in full. The undersigned hasaccepted the Premises, subject to no conditions other than those set forth inthe Lease. The undersigned has entered into occupancy of the Premises;

(k)                                  That the annual minimum rent currentlypayable under the Lease is $            andsuch rent has been paid through            ;

*[(l)**                            **That the annual percentage rentcurrently payable under the Lease is at the rate of            andsuch rent has been paid through            ;]*

*[(m)**                       **That additional rent is payableunder the Lease for (i) operating, maintenance or repair expenses, (ii)property taxes, (iii) consumer price index cost of living adjustments, or (iv)percentage of gross sales adjustments (i.e., adjustments made based onunderpayments of percentage rent).  Thebase year amounts for additional rental items are as follows: (I) operating,maintenance or repair expenses $            ,(2) property taxes $            ,and (3) consumer price index            (indicatebase year CPI level);]*

(n)                                 That the undersigned has made no agreementwith Landlord or any agent, representative or employee of Landlord concerningfree rent, partial rent, rebate of rental payments or any other similar rentconcession (except as expressly set forth in , a copy of which is attachedhereto). No rents have been prepaid more than one (1) month in advance and fullrental, including basic minimum rent, if any, has commenced to accrue;

(o)                                 That there are no defaults by the undersignedor Landlord under the Lease, and no event has occurred or situation exists thatwould, with the passage of time, constitute a default under the Lease;

(p)                                 That the undersigned has paid to Landlord asecurity deposit in the amount of $            ;

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(q)                                 That the undersigned has all governmentalpermits, licenses and consents required for the activities and operations beingconducted or to be conducted by it in or around the Building; and

(r)                                    That as of this date there are no actions,whether voluntary or otherwise, pending against the undersigned or anyguarantor of the Lease under the bankruptcy or insolvency laws of the UnitedStates or any state thereof.

2.                                        The undersigned represents and warrants thatit has not used, generated, released, discharged, stored or disposed of anyHazardous Material on, under, in or about the Building or the land on which theBuilding is located, other than in the ordinary and commercially reasonablecourse of the business of the undersigned in compliance with all applicablelaws. Except for any such legal and commercially reasonable use by theundersigned, the undersigned has no actual knowledge that any HazardousMaterial is present or has been used, generated, released, discharged, storedor disposed of by any party, on, under, in or about such Building or land. Asused herein, “Hazardous Material” means any substance, material or waste(including petroleum and petroleum products) which is designated, classified orregulated as being “toxic” or “hazardous” or a “pollutant” or which issimilarly designated, classified or regulated under any federal, state or locallaw or ordinance.

*[If the tenant is signing an SNDA, delete any parts ofSection 3 that are already in the SNDA.]*

3.                                        The undersigned hereby agrees:

(a)                               To send a copy of any notice or demand givenor made to Landlord pursuant to the provisions of the Lease to Bank of America,N.A. (“Lender”), who is or will be the owner and holder of a mortgage ordeed of trust on the demised premises, or its assignee upon being notified inwriting of such assignee’s name and address. Lender’s copy of said notice ordemand shall be sent by certified mail at the same time the notice or demand issent to Landlord, to Bank of America, N.A.,            ,Attention: Relationship Administration, Real Estate Group;

(b)                              To give to the holder ofsaid mortgage or deed of trust a reasonable period of time, but in no eventless than thirty (30) days, to cure any default complained of in said notice ordemand;

(c)                               That no consent ofLandlord to any modification or assignment of the Lease or any termination ofthe Lease (other than in accordance with the express terms of the Lease) shallbe effective without the prior written consent of the holder of said mortgageor deed of trust; and

(d)                              That in the event thatthe holder of said mortgage or deed of trust acquires title to the propertyencumbered by the mortgage or deed of trust, such holder will not be liable forany security deposit that the undersigned may have given to any previouslandlord (including Landlord) which has not, as such, been transferred to suchholder.

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4.                                       The undersigned acknowledges the right ofLender to rely upon the certifications and agreements in this Certificate inmaking a loan to Landlord. The undersigned hereby agrees to furnish Lender withsuch other and further estoppel certificates as Lender may reasonably request.The undersigned understands that in connection with such loan, Landlord’sinterest in the rentals due under the Lease will be assigned to Lender pursuantto an assignment of leases by Landlord in favor of Lender. The undersignedagrees that if Lender shall notify the undersigned that a default has occurredunder the documents evidencing such loan and shall demand that the undersignedpay rentals and other amounts due under the Lease to Lender, the undersignedwill honor such demand notwithstanding any contrary instructions from Landlord.

EXECUTEDthis            dayof            ,            .
|        | By:    |   |
|--------|--------|--------|
|   | Name:  |   |
|   | Title: |   |
|        |        |        |  |  |

 

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**EXHIBIT“I”**

**SNDA**
| RECORDING REQUESTED BY  AND WHEN RECORDED MAIL TO:                                       |   |
|------------------------------------------------------------------------------------------|--------|
| Bank of America,  National Association  Real Estate Banking Group No.

Attn.:  Loan No.: |   |

 

THIS SPACE ABOVEFOR RECORDER’S USE

 

**SUBORDINATION,NONDISTURBANCE AND ATTORNMENT AGREEMENT**

**NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS INYOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIENOF SOME OTHER OR LATER SECURITY INSTRUMENT.**

**ThisSubordination, Nondisturbance and Attornment Agreement** (this “Agreement”)dated                  ,          , is made among                                   (“Tenant”),                                   (“Landlord”), and Bank of America, N.A., a national banking association(“Lender”).

WHEREAS, Lender is the ownerof a promissory or deed of trust note (herein, as it may have been or may befrom time to time renewed, extended, amended, supplemented or restated, calledthe “Note”) dated                  ,executed by Landlord payable to the order of Lender, in the face principalamount of $                 ,bearing interest and payable as therein provided, secured by, among otherthings, a **[Construction]** Deed ofTrust, Assignment of Rents and Leases, Security Agreement and Fixture Filing(herein, as it may have been or may be from time to time renewed, extended,amended or supplemented, called the “Deed of Trust”), recorded or to berecorded in the real property records of                  County,                  ,covering, among other property, the land (the “Land”) described in Exhibit“A” which is attached hereto and incorporated herein by reference, and theimprovements (“Improvements”) thereon (such Land and Improvements beingherein together called the “Property”);

WHEREAS, Tenant is thetenant under a lease from Landlord dated                  ,as amended on                                   ,                 (herein, as it may from time to time be renewed, extended, amended orsupplemented, called the “Lease”), covering a portion of the Property(said portion being herein referred to as the “Premises”); and

WHEREAS, the term “Landlord”as used herein means the present landlord under the Lease or, if the landlord’sinterest is transferred in any manner, the successor(s) or assign(s) occupyingthe position of landlord under the Lease at the time in question.

NOW, THEREFORE, inconsideration of the mutual agreements herein, and for other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged,the parties agree as follows:

1.             Subordination.  Tenant agrees and covenants that the Leaseand the rights of Tenant thereunder, all of Tenant’s right, title and interestin and to the property covered by the Lease, and any lease thereafter executedby Tenant covering any part of the Property, are and shall be subject,subordinate and inferior to (a) the Deed of Trust and the rights of Lenderthereunder, and all right, title and interest of Lender in the Property, and(b) all other security documents now or hereafter securing payment of anyindebtedness of Landlord (or any prior landlord) to Lender which cover oraffect the Property (the “Security Documents”).  This Agreement is not intended and shall notbe construed to subordinate the Lease to any mortgage, deed of trust or othersecurity document other than those referred to in the preceding sentence,securing the indebtedness to Lender.

2.             Nondisturbance.  Lender agrees that so long as the Lease is infull force and effect and Tenant is not in default in the payment of rent,additional rent or other payments or in the performance of any of the otherterms, covenants or conditions of the Lease on Tenant’s part to be performed(beyond the period, if any, specified in the Lease within which Tenant may curesuch default),

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(a)           Tenant’spossession of the Premises under the Lease shall not be disturbed or interferedwith by Lender in the exercise of any of its foreclosure rights under the Deedof Trust or in connection with any conveyance in lieu of foreclosure, and

(b)           Lenderwill not join Tenant as a party defendant for the purpose of terminating Tenant’sinterest and estate under the Lease in any proceeding for foreclosure of theDeed of Trust.

3.             Attornment.

(a)           Tenantcovenants and agrees that in the event of foreclosure of the Deed of Trust,whether by power of sale or by court action, or upon a transfer of the Propertyby conveyance in lieu of foreclosure (the purchaser at foreclosure or thetransferee in lieu of foreclosure, including Lender if it is such purchaser ortransferee, being herein called “New Owner”), Tenant shall attorn to NewOwner as Tenant’s new landlord, and agrees that the Lease shall continue infull force and effect as a direct lease between Tenant and New Owner upon allof the terms, covenants, conditions and agreements set forth in the Lease andthis Agreement, except for provisions which are impossible for New Owner toperform; provided, however, that in no event shall New Owner be:

(i)            liable for any act, omission, default, misrepresentationor breach of warranty of any previous landlord (including Landlord) orobligations accruing prior to New Owner’s actual ownership of the Property;

(ii)           subject to any offset, defense, claim or counterclaimwhich Tenant might be entitled to assert against any previous landlord(including Landlord);

(iii)          bound by any payment of rent, additional rent or otherpayments made by Tenant to any previous landlord (including Landlord) for morethan one (1) month in advance;

(iv)          bound by any amendment or modification of the Leasehereafter made, or consent or acquiescence by any previous landlord (includingLandlord) under the Lease to any assignment or sublease hereafter granted,without the written consent of Lender; or

(v)           liable for any deposit that Tenant may have given to anyprevious landlord (including Landlord) which has not, as such, been transferredto New Owner.

(b)           Theprovisions of this Agreement regarding attornment by Tenant shall beself-operative and effective without the necessity of execution of any newlease or other document on the part of any party hereto or the respectiveheirs, legal representatives, successors or assigns of any such party.  Tenant agrees, however, to execute anddeliver upon the request of New Owner, any instrument or certificate which inthe reasonable judgment of New Owner may be necessary or appropriate toevidence such attornment, including a new lease of the Premises on the sameterms and conditions as the Lease for the unexpired term of the Lease.

4.             EstoppelCertificate.  Tenant agrees toexecute and deliver from time to time, upon the request of Landlord or of anyholder(s) of any of the indebtedness or obligations secured by the Deed ofTrust, a certificate regarding the status of the Lease, certifying(a) that the Lease is in full force and effect, (b) the date throughwhich rentals have been paid, (c) the date of the commencement of the termof the Lease, (d) the nature of any amendments or modifications of theLease, (e) that to the best of Tenant’s knowledge no default, or state offacts which with the passage of time or notice (or both) would constitute adefault, exists under the Lease, (f) that to the best of Tenant’sknowledge, no setoffs, recoupments, estoppels, claims or counterclaims existagainst Landlord, and (g) such other matters as may be reasonablyrequested.  If any of the foregoingstatements are untrue, Tenant’s certificate shall state the reasons therefor.

5.             Acknowledgmentand Agreement by Tenant.  Tenantacknowledges and agrees as follows:

(a)           Tenantacknowledges that in connection with the financing of the Property, Landlord isexecuting and delivering to Lender the Deed of Trust which contains anassignment of leases and rents.  Tenanthereby expressly consents to such assignment and agrees that such assignmentshall, in all respects, be superior to any interest Tenant has in the Lease orthe Property, subject to the provisions of this Agreement.  Tenant will not amend, alter or waive anyprovision of, or consent to the amendment, alteration or waiver of, anyprovision of the Lease without the prior written consent of Lender.  Tenant shall not prepay any rents or othersums due under the Lease for more than one (1) month in advance of the duedate therefor.  Tenant acknowledges thatLender will rely upon this instrument in connection with such financing.

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(b)           Lender,in making any disbursements to Landlord, is under no obligation or duty tooversee or direct the application of the proceeds of such disbursements, andsuch proceeds may be used by Landlord for purposes other than improvement ofthe Property.

(c)           Fromand after the date hereof, in the event of any act or omission by Landlordwhich would give Tenant the right, either immediately or after the lapse oftime, to terminate the Lease or to claim a partial or total eviction, Tenantwill not exercise any such right (i) until it has given written notice ofsuch act or omission to Lender, and (ii) until the same period of time asis given to Landlord under the Lease to cure such act or omission shall haveelapsed following such giving of notice to Lender and following the time whenLender shall have become entitled under the Deed of Trust to remedy thesame.  In no event will Tenant exerciseany such right less than 30 days after receipt of such notice or prior tothe passage of such longer period of time as may be necessary to cure or remedysuch default, act or omission including such period of time necessary to obtainpossession of the Property and thereafter cure such default, act or omission,during which period of time Lender shall be permitted to cure or remedy suchdefault, act or omission. Notwithstanding the foregoing, Lender shall have no duty or obligationto cure or remedy any breach or default. It is specifically agreed that Tenant shall not, as to Lender, requirecure of any such default which is personal to Landlord and therefore notsusceptible to cure by Lender.

(d)           Inthe event that Lender notifies Tenant of a default under the Deed of Trust,Note or Security Documents and demands that Tenant pay its rent and all othersums due under the Lease directly to Lender, Tenant shall honor such demand andpay the full amount of its rent and all other sums due under the Lease directlyto Lender, without offset, or as otherwise required pursuant to such noticebeginning with the payment next due after such notice of default, withoutinquiry as to whether a default actually exists under the Deed of Trust,Security Documents or otherwise in connection with the Note, andnotwithstanding any contrary instructions of or demands from Landlord.

(e)           Tenantshall send a copy of any notice or statement under the Lease to Lender at thesame time such notice or statement is sent to Landlord if such notice orstatement has a material impact on the economic terms, operating covenants orduration of the Lease.

(f)            Tenanthas no right or option of any nature whatsoever, whether pursuant to the Leaseor otherwise, to purchase the Premises or the Property, or any portion thereofor any interest therein, and to the extent that Tenant has had, or hereafteracquires, any such right or option, the same is hereby acknowledged to besubject and subordinate to the Deed of Trust and is hereby waived and releasedas against Lender and New Owner.

(g)           ThisAgreement satisfies any condition or requirement in the Lease relating to thegranting of a nondisturbance agreement and Tenant waives any requirement to thecontrary in the Lease.

(h)           Lenderand any New Owner shall have no liability to Tenant or any other party for anyconflict between the provisions of the Lease and the provisions of any otherlease affecting the Property, including any provisions relating to exclusive ornon-conforming uses or rights, renewal options and options to expand, and inthe event of such a conflict, Tenant shall have no right to cancel the Lease ortake any other remedial action against Lender, New Owner or any other party.

(i)            Lenderand any New Owner shall have no obligation nor shall they incur any liabilitywith respect to the erection or completion of the improvements in which thePremises are located or for completion of the Premises or any improvements forTenant’s use and occupancy, either at the commencement of the term of theLease, upon any renewal or extension thereof, or upon the addition ofadditional space pursuant to any expansion rights contained in the Lease.

(j)            Lenderand any New Owner shall have no obligation nor shall they incur any liabilitywith respect to any warranties of any nature whatsoever, whether pursuant to theLease or otherwise, including any warranties respecting use, compliance withzoning, Landlord’s title, Landlord’s authority, habitability, fitness forpurpose or possession.

(k)           Inthe event that Lender or any New Owner shall acquire title to the Premises orthe Property, Lender or such New Owner shall have no obligation, nor shall itincur any liability, beyond Lender’s or New Owner’s then-equity interest, ifany, in the Property or the Premises, and Tenant shall look exclusively to suchequity interest of Lender or New Owner, if any, for the payment and dischargeof any obligations imposed upon Lender or New Owner hereunder or under theLease or for recovery of any judgment from Lender or New Owner, and in no eventshall Lender, New Owner, or any of their respective officers, directors,shareholders, agents, representatives, servants, employees or partners ever bepersonally liable for such judgment.

(l)            Tenanthas never permitted, and will not permit, the generation, treatment, storage ordisposal of any hazardous substance as defined under federal, state, or locallaw, on the Premises or Property except for such substances of a type and onlyin a quantity normally used in connection with the occupancy or

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operation of buildings (such as non-flammablecleaning fluids and supplies normally used in the day-to-day operation of firstclass establishments similar to the Improvements), which substances are beingheld, stored, and used in strict compliance with federal, state, and locallaws.  Tenant shall be solely responsiblefor and shall reimburse and indemnify Landlord, New Owner or Lender, asapplicable, for any loss, liability, claim or expense, including cleanup andall other expenses, including legal fees that Landlord, New Owner or Lender, asapplicable, may incur by reason of Tenant’s violation of the requirements ofthis Section 5(l).

6.             Acknowledgmentand Agreement by Landlord.  Landlord,as landlord under the Lease and trustor under the Deed of Trust, acknowledgesand agrees for itself and its heirs, representatives, successors and assigns,that:  (a) this Agreement does notconstitute a waiver by Lender of any of its rights under the Deed of Trust,Note or Security Documents, nor does this Agreement in any way release Landlordfrom its obligations to comply with the terms, provisions, conditions,covenants, agreements and clauses of the Deed of Trust, Note and SecurityDocuments; (b) the provisions of the Deed of Trust, Note and SecurityDocuments remain in full force and effect and must be complied with byLandlord; and (c) Tenant is hereby authorized to pay its rent and allother sums due under the Lease directly to Lender upon receipt of a notice asset forth in Section 5(d) above from Lender and that Tenant is notobligated to inquire as to whether a default actually exists under the Deed ofTrust or the Security Documents or otherwise in connection with the Note.  Landlord hereby releases and dischargesTenant of and from any liability to Landlord resulting from Tenant’s payment toLender in accordance with this Agreement. Landlord represents and warrants to Lender that a true and complete copyof the Lease has been delivered by Landlord to Lender.

7.             LeaseStatus.  Landlord and Tenant certifyto Lender that neither Landlord nor Tenant has knowledge of any default on thepart of the other under the Lease, that the Lease is bona fide and contains allof the agreements of the parties thereto with respect to the letting of thePremises and that all of the agreements and provisions therein contained are infull force and effect.

8.             Notices.  All notices, requests, consents, demands andother communications required or which any party desires to give hereundershall be in writing and shall be deemed sufficiently given or furnished ifdelivered by personal delivery, by telegram, telex, or facsimile, by expediteddelivery service with proof of delivery, or by registered or certified UnitedStates mail, postage prepaid, at the addresses specified at the end of thisAgreement (unless changed by similar notice in writing given by the particularparty whose address is to be changed). Any such notice or communication shall be deemed to have been giveneither at the time of personal delivery or, in the case of delivery service ormail, as of the date of first attempted delivery at the address and in themanner provided herein, or, in the case of telegram, telex or facsimile, uponreceipt.  Notwithstanding the foregoing,no notice of change of address shall be effective except upon receipt.  This Section 8 shall not beconstrued in any way to affect or impair any waiver of notice or demandprovided in this Agreement or in the Lease or in any document evidencing,securing or pertaining to the loan evidenced by the Note or to require givingof notice or demand to or upon any person in any situation or for any reason.

9.             Miscellaneous.

(a)           ThisAgreement supersedes any inconsistent provision of the Lease.

(b)           Nothingcontained in this Agreement shall be construed to derogate from or in any wayimpair or affect the lien, security interest or provisions of the Deed ofTrust, Note or Security Documents.

(c)           ThisAgreement shall inure to the benefit of the parties hereto, their respectivesuccessors and permitted assigns, and any New Owner, and its heirs, personalrepresentatives, successors and assigns; provided, however, that in the eventof the assignment or transfer of the interest of Lender, all obligations andliabilities of the assigning Lender under this Agreement shall terminate, andthereupon all such obligations and liabilities shall be the responsibility ofthe party to whom Lender’s interest is assigned or transferred; and providedfurther that the interest of Tenant under this Agreement may not be assigned ortransferred without the prior written consent of Lender.

(d)           THISAGREEMENT AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION SHALL BE GOVERNED BYTHE LAWS OF THE STATE OF CALIFORNIA AND APPLICABLE UNITED STATES FEDERAL LAWEXCEPT ONLY TO THE EXTENT, IF ANY, THAT THE LAWS OF THE STATE IN WHICH THEPROPERTY IS LOCATED NECESSARILY CONTROL.

(e)           Thewords “herein,” “hereof,” “hereunder” and other similarcompounds of the word “here” as used in this Agreement refer to thisentire Agreement and not to any particular section or provision.  The terms “include” and “including”shall be interpreted as if followed by the words “without limitation.”

(f)            ThisAgreement may not be modified orally or in any manner other than by anagreement in writing signed by the parties hereto or their respectivesuccessors in interest.

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(g)           Ifany provision of this Agreement shall be held to be invalid, illegal, orunenforceable in any respect, such invalidity, illegality or unenforceabilityshall not apply to or affect any other provision hereof, but this Agreementshall be construed as if such invalidity, illegality or unenforceability didnot exist.

(h)           **[This Agreement will be recorded in the real propertyrecords of**                 **County,**                 **.]**

**[Signatures appear on the following page]**

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**NOTICE: THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ONYOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR PURPOSESOTHER THAN IMPROVEMENT OF THE PROPERTY.**

IN WITNESS WHEREOF, theparties hereto have caused this Agreement to be duly executed and sealed as ofthe date first above written.
| ADDRESS OF LENDER:   |   | LENDER:                                                |
|----------------------|--------|--------------------------------------------------------|
|                 |   |                                                   |
|                 |   | BANK OF AMERICA, N.A., a national  banking association |
|                 |   |                                                   |
|                 |   |                                                   |
| Attention:           |   | By:                                                    |   |
|                 |   | Name:                                                  |   |
|                 |   | Title:                                                 |   |
|                 |   |                                                   |
|                 |   |                                                   |
| ADDRESS OF TENANT:   |   | TENANT:                                                |
|                 |   |                                                   |
|                 |   |                                                   |
|                 |   |                                                   |
|                 |   |                                                   |
| Attention:           |   | By:                                                    |   |
|                 |   | Name:                                                  |   |
|                 |   | Title:                                                 |   |
|                 |   |                                                   |
|                 |   |                                                   |
| ADDRESS OF LANDLORD: |   | LANDLORD:                                              |
|                 |   |                                                   |
|                 |   |                                                   |
|                 |   |                                                   |
|                 |   |                                                   |
| Attention:           |   | By:                                                    |   |
|                 |   | Name:                                                  |   |
|                 |   | Title:                                                 |   |
|                      |        |                                                        |  |  |  |

 

6

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**GUARANTOR’S CONSENT**

                                  ,guarantor of the Lease, signs below to express its consent to the foregoingAgreement and its agreement that its guaranty of the Lease is and shall remainin full force and effect.
| Dated: |   |   |   |
|--------|--------|--------|--------|
|   |   |   |
|   |   |   |
|   |   | By:    |   |
|   |   | Name:  |   |
|   |   | Title: |   |
|        |        |        |        |  |  |  |

 

***[AddAppropriate Acknowledgments]***

7

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**EXHIBIT “A”**

**LEGAL DESCRIPTION OF THELAND**

8

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ACKNOWLEDGMENT
| STATE OF CALIFORNIA | ) |   |
|---------------------|---|--------|
|                | ) | ss.    |
| COUNTY OF           | ) |   |

 

On                  ,before me,                  ,a Notary Public in and for said County and State, personally appeared                  ,personally known to me (or proved to me on the basis of satisfactory evidence)to be the person(s) whose name(s) (is/are) subscribed to the within instrument,and acknowledged to me that (he/she/they) executed the same in (his/her/their)authorized capacit(-y/-ies), and that by (his/her/their) signature(s) on theinstrument the person(s), or the entity upon behalf of which the person(s)acted, executed the instrument.
| WITNESS my hand and official seal. |
|------------------------------------|
|                               |
|                               |   |
| Signature of Notary Public         |
|                               |
| [SEAL]                             |

 

ACKNOWLEDGMENT
| STATE OF CALIFORNIA | ) |   |
|---------------------|---|--------|
|                | ) | ss.    |
| COUNTY OF           | ) |   |

 

On                  ,before me,                  ,a Notary Public in and for said County and State, personally appeared                  ,personally known to me (or proved to me on the basis of satisfactory evidence)to be the person(s) whose name(s) (is/are) subscribed to the within instrument,and acknowledged to me that (he/she/they) executed the same in (his/her/their)authorized capacit(-y/-ies), and that by (his/her/their) signature(s) on theinstrument the person(s), or the entity upon behalf of which the person(s)acted, executed the instrument.
| WITNESS my hand and official seal. |
|------------------------------------|
|                               |
|                               |
|                               |   |
| Signature of Notary Public         |
|                               |
| [SEAL]                             |

 

9

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ACKNOWLEDGMENT
| STATE OF CALIFORNIA | ) |   |
|---------------------|---|--------|
|                | ) | ss.    |
| COUNTY OF           | ) |   |

 

On                  ,before me,                  ,a Notary Public in and for said County and State, personally appeared                  ,personally known to me (or proved to me on the basis of satisfactory evidence)to be the person(s) whose name(s) (is/are) subscribed to the within instrument,and acknowledged to me that (he/she/they) executed the same in (his/her/their)authorized capacit(-y/-ies), and that by (his/her/their) signature(s) on theinstrument the person(s), or the entity upon behalf of which the person(s)acted, executed the instrument.
| WITNESS my hand and official seal. |
|------------------------------------|
|                               |
|                               |
|                               |   |
| Signature of Notary Public         |
|                               |
| [SEAL]                             |

 

10

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