EXHIBIT 10.1

 


LINE OF CREDIT INSTRUMENT

LEASE AGREEMENT,
CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS LEASE AGREEMENT, CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT 
OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Agreement" 
herein), dated as of December 5, 1997 is entered into by and among:
(1)     ETEC SYSTEMS, INC., a Nevada corporation ("Lessee");
(2)     LEASE PLAN NORTH AMERICA, INC., an Illinois 
corporation ("Lessor"); and
(3)     FIRST AMERICAN TITLE INSURANCE COMPANY OF OREGON, as 
trustee under the deed of trust contained herein (in such 
capacity, "Trustee").
RECITALS
        A.      Lessee has requested Lessor and the financial institutions 
which are "Participants" under the Participation Agreement referred to 
in Recital B below (such financial institutions to be referred to 
collectively as the "Participants") to provide to Lessee a lease 
facility pursuant to which:
(1)     Lessor would (a) lease from Lessee certain land owned 
by Lessee, (b) sublease to Lessee such land and lease to Lessee 
certain improvements to be constructed on such land, (c) appoint 
Lessee as Lessor's agent to make such improvements (which 
improvements will be owned by Lessor), (d) make advances to 
finance such improvements and to pay certain related expenses and 
(e) grant to Lessee the right to purchase such improvements; and
(2)     The Participants would participate in such lease 
facility by (a) funding the advances to be made by Lessor and (b) 
acquiring participation interests in the rental and certain other 
payments to be made by Lessee.
B.      Pursuant to a Participation Agreement dated of even date 
herewith (the "Participation Agreement") among Lessee, Lessor, the 
Participants and ABN AMRO Bank N.V., as agent for the Participants (in 
such capacity, "Agent"), Lessor and the Participants have agreed to 
provide such lease facility upon the terms and subject to the conditions 
set forth therein, including without limitation the execution and 
delivery of this Agreement setting forth the terms of the lease by 
Lessor to Lessee of the property.

AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the 
mutual covenants herein contained, the parties hereto hereby agree as 
follows:
SECTION 1.      INTERPRETATION.
1.01.   Definitions.  Unless otherwise indicated in this Agreement 
or any other Operative Document, each term set forth in Schedule 1.01 to 
the Participation Agreement, when used in this Agreement or any other 
Operative Document, shall have the respective meaning given to that term 
in such Schedule 1.01 or in the provision of this Agreement or other 
document, instrument or agreement referenced in such Schedule 1.01.
1.02.   Rules of Construction.  Unless otherwise indicated in this 
Agreement or any other Operative Document, the rules of construction set 
forth in Schedule 1.02 to the Participation Agreement shall apply to 
this Agreement and the other Operative Documents.
SECTION 2.      BASIC PROVISIONS.
2.01.   Lease of the Property.  Subject to the acquisition thereof 
by Lessor pursuant to the Participation Agreement and the Ground Lease 
either as of the date hereof or during the term hereof, Lessor agrees to 
lease to Lessee and Lessee agrees to lease from Lessor the following 
property (the "Property") to the extent of Lessor's estate, right, title 
and interest therein, thereto or thereunder:
(a)     All lots, pieces, tracts and parcels of land described 
in Exhibit A (the "Land");
(b)     All Improvements located on the Land;
(c)     All Appurtenant Rights belonging, relating or 
pertaining to any of the Land or Improvements;
(d)     All Related Goods (including those described in 
Exhibit B and in each Exhibit B Supplement), Related Permits and 
Related Agreements related to any of the foregoing Land, 
Improvements or Appurtenant Rights; and
(e)     All accessions and accretions to and replacements and 
substitutions for the foregoing.
(Lessee acknowledges that Lessor's only estate, right, title and 
interest in the Land is through the Ground Lease and is a leasehold 
interest only.)
2.02.   Term.
(a)     Original Term.  The original term of this Agreement 
shall commence on the Closing Date (the "Commencement Date") and 
shall end on the first Business Day of November, 2004 (such date 
as it may be extended pursuant to Subparagraph 2.02(b) to be 
referred to as the "Scheduled Expiration Date").  (For purposes of 
Oregon law, the Scheduled Expiration Date shall be the maturity 
date if this Agreement is construed as the parties intend.)
(b)     Extensions.  Lessee may request Lessor to extend the 
Scheduled Expiration Date in effect for three (3) additional 
periods of one (1) year each, as provided in Subparagraph 2.09(b) 
of the Participation Agreement.  If Lessor and each Participant 
consents to any such a request in accordance with such provision, 
the current Scheduled Expiration Date shall be deemed extended by 
one (1) year.  Lessee acknowledges that neither Lessor nor any  
Participant has any obligation or commitment (either express or 
implied) to extend, or consent to the extension of, the Scheduled 
Expiration Date at any time.
2.03.   Rent.
(a)     Base Rent.
(i)     Lessee shall pay as base rent hereunder ("Base 
Rent") for each Rental Period an amount equal to the product 
of (A) the Rental Rate for such Rental Period, times (B) the 
Outstanding Lease Amount on the first day of such Rental 
Period, times (C) a fraction, the numerator of which is the 
number of days in such Rental Period and the denominator of 
which is 360.  If the Rental Rate shall change during any 
Rental Period, the Rental Rate for such Rental Period shall 
be the weighted average of the Rental Rates in effect from 
time to time during such Rental Period.
(ii)    The Term shall consist of the following rental 
periods (individually, a "Rental Period"):

(A)     The period which begins on the 
Commencement Date and ends on the first Business Day 
in the first calendar month immediately following the 
month in which the Commencement Date occurs;

(B)     Each successive period thereafter which 
begins on the last day of the immediately preceding 
Rental Period and ends one (1) month thereafter on the 
first Business Day of a calendar month through and 
including the Commitment Termination Date; and 

(C)     Each successive period thereafter which 
begins on the last day of the immediately preceding 
Rental Period and ends one (1), two (2), three (3) or 
six (6) months thereafter, as determined in accordance 
with this clause (ii), on the first Business Day of a 
calendar month through and including the Scheduled 
Expiration Date.

Lessee may select a Rental Period of one (1), two (2), three 
(3) or six (6) months for the Rental Period which begins on 
the Commitment Termination Date or for any Rental Period 
thereafter by delivering to Lessor, at least three (3) 
Business Days prior to the first day of such Rental Period, 
a written notice of such selection (a "Notice of Rental 
Period Selection"); provided, however, that (1) each Rental 
Period shall begin and end on the first Business Day of a 
calendar month, (2) no Rental Period shall end after the 
Scheduled Expiration Date, (3) no Rental Period shall be 
longer than one (1) month if a Default has occurred and is 
continuing on the date three (3) Business Days prior to the 
first day of such Rental Period and (4) each Rental Period 
for which Lessee fails to make a selection in accordance 
with this clause (ii) shall be one (1) month.  Each Notice 
of Rental Period Selection shall be delivered by first-class 
mail or facsimile as required by Subparagraph 2.02(a) and 
Paragraph 7.01 of the Participation Agreement; provided, 
however, that Lessee shall promptly deliver the original of 
any Notice of Rental Period Selection initially delivered by 
facsimile.

(iii)   The rental rate for each Rental Period ("Rental 
Rate") shall be the LIBOR Rental Rate for such Rental 
Period, except as follows:
(A)     The Rental Rate for the Rental Period that 
begins on the Closing Date and ends on January 1, 1998 
shall be the Alternate Rental Rate; or
(B)     If any other Rental Period is less than 
seven (7) days, the Rental Rate for such Rental Period 
shall be the Alternate Rental Rate; or
(C)     If the LIBOR Rental Rate is unavailable 
for any Rental Period pursuant to Subparagraph 2.12(a) 
or Subparagraph 2.12(b) of the Participation 
Agreement, the Rental Rate for such Rental Period 
shall be the Alternate Rental Rate.
(iv)    Lessee shall pay Base Rent in arrears (A) on the 
last day of each Rental Period and, in the case of any 
Rental Period which exceeds three (3) months, each day 
occurring every three (3) months after the first day of such 
Rental Period (individually, a "Scheduled Rent Payment 
Date") and (B) on the Expiration Date.
(b)     Supplemental Rent.  Lessee shall pay as supplemental 
rent hereunder ("Supplemental Rent") all amounts (other than Base 
Rent, the purchase price payable by Lessee for any purchase of the 
Property by Lessee pursuant to the Purchase Agreement and the 
Residual Value Guaranty Amount payable under the Purchase 
Agreement) payable by Lessee under this Agreement and the other 
Operative Documents.  Lessee shall pay all Supplemental Rent 
amounts on the dates specified in this Agreement and the other 
Operative Documents for the payment of such amounts or, if no date 
is specified for the payment of any such amount, upon the demand 
of Lessor or any other Person to whom such amount is payable.
2.04.   Use.  Lessee may use the Property for office, research and 
development, warehouse and manufacturing purposes, and for any other 
purpose which is in compliance with applicable zoning laws and 
ordinances for the Property.
2.05.   "As Is" Lease.  Lessee has conducted, or will conduct from 
time to time with regard to property that may be added hereto after the 
date hereof, all due diligence which it deems appropriate regarding the 
Property and agrees that no Lessor Party has any obligation to conduct 
any such due diligence.  Lessee is leasing the Property "as is, with all 
faults" without any representation, warranty, indemnity or undertaking 
by any Lessor Party regarding any aspect of the Property, including (a) 
the condition of the Property (including any Improvements to the 
Property made prior to the Commencement Date or during the Term); (b) 
title to the Property (including possession of the Property by any 
Person or the existence of any Lien or any other right, title or 
interest in or to any of the Property in favor of any Person); (c) the 
value, habitability, usability, design, operation or fitness for use of 
the Property; (d) the availability or adequacy of utilities and other 
services to the Property; (e) any latent, hidden or patent defect in the 
Property; (f) the zoning or status of the Property or any other 
restrictions on the use of the Property; (g) the economics of the 
Property; (h) any Casualty or Condemnation; or (i) the compliance of the 
Property with any applicable Governmental Rule or Insurance Requirement; 
provided, however, that Lessor shall be obligated to remove Lessor Liens 
to the extent required in Subparagraph 5.04(b) of the Participation 
Agreement.  Without limiting the generality of the foregoing, Lessee 
specifically waives any covenant of quiet enjoyment except as otherwise 
provided in Subparagraph 5.04(b) of the Participation Agreement.
2.06.   Nature of Transaction.  As more fully provided in Paragraph 
2.10 of the Participation Agreement, Lessee and the Lessor Parties 
intend that the transaction evidenced by this Agreement and the other 
Operative Documents constitute an operating lease in accordance with 
FASB 13 for accounting purposes and a loan secured by the Property for 
other purposes, including federal, state and local income tax purposes 
and commercial, real estate and bankruptcy law purposes.
2.07.   Security, Etc.  In order to secure the Lessee Obligations 
and otherwise to assure the Lessor Parties the benefits hereof in the 
event that the transaction evidenced by this Agreement and the other 
Operative Documents is, pursuant to the intent of Lessee and the Lessor 
Parties, treated as a loan for certain purposes, Lessee hereby makes the 
following grants and agrees as follows:
(a)     Real Property Security.  As security for the Lessee 
Obligations, Lessee hereby irrevocably and unconditionally grants, 
conveys, transfers and assigns to Trustee, as beneficiary (in 
trust for the benefit of the Lessor Parties), with power of sale 
and right of entry and possession, all estate, right, title and 
interest of Lessee in the following property, whether now owned or 
leased or hereafter acquired, (collectively, the "Real Property 
Collateral"):
(i)     The Land;
(ii)    All Improvements located on the Land;
(iii)   All Appurtenant Rights belonging, relating or 
pertaining to any of the foregoing Land or Improvements;
(iv)    All Subleases of and all Issues and Profits 
accruing from any of the foregoing Land, Improvements or 
Appurtenant Rights to the extent that such Subleases and 
Issues and Profits constitute real property;
(v)     All Related Goods, Related Permits and Related 
Agreements related to any of the foregoing Land, 
Improvements or Appurtenant Rights to the extent that such 
Related Goods, Related Agreements and Related Permits 
constitute real property;
(vi)    All other Property to the extent that such 
property constitutes real property; and
(vii)   All proceeds of the foregoing, including 
Casualty and Condemnation Proceeds.
(b)     Personal Property Security.  As security for the 
Lessee Obligations, Lessee hereby irrevocably and unconditionally 
assigns and grants to Lessor, for the benefit of the Lessor 
Parties, a security interest in all estate, right, title and 
interest of Lessee in the following property, whether now owned or 
leased or hereafter acquired, (collectively, the "Personal 
Property Collateral"):
(i)     All Subleases of and all Issues and Profits 
accruing from any of the Land, Improvements or Appurtenant 
Rights to the extent that such Subleases and Issues and 
Profits constitute personal property;
(ii)    All Related Goods, Related Permits and Related 
Agreements related to any of the Land, Improvements or 
Appurtenant Rights to the extent that such Related Goods, 
Related Agreements and Related Permits constitute personal 
property;
(iii)   All Cash Collateral and all other deposit 
accounts, instruments, investment property and monies held 
by any Lessor Party in connection with this Agreement or any 
other Operative Document (including any Repair and 
Restoration Account);
(iv)    All other Property to the extent such Property 
constitutes personal property; and
(v)     All proceeds of the foregoing, including 
Casualty and Condemnation Proceeds.
For purpose of the provisions of this Agreement related to the 
creation and enforcement of this Agreement as a security agreement 
and a fixture filing with respect to the Related Goods, Lessee is 
the "debtor" and Lessor is the "secured party," acting for the 
benefit of the Lessor Parties.  This Agreement constitutes a 
fixture filing for purposes of the Oregon Commercial Code with 
respect to the Related Goods which are or are to become fixtures 
on the Land or Improvements. The mailing addresses of Lessee and 
of Lessor from which information concerning security interests 
hereunder may be obtained are as set forth on the signature page 
of this Agreement.  A carbon, photographic or other reproduction 
of this Agreement or of any financing statement related to this 
Agreement shall be sufficient as a financing statement for any of 
the purposes referenced herein.  

(c)     Absolute Assignment of Subleases, Issues, and Profits.  
Lessee hereby irrevocably assigns to Lessor, for the benefit of 
the Lessor Parties, all of Lessee's estate, right, title and 
interest in, to and under the Subleases and the Issues and 
Profits, whether now owned or hereafter acquired.  This is a 
present and absolute assignment for security purposes in 
accordance with Oregon Revised Statute ("ORS") Section 93.805, and 
Lessor's right to the Subleases and Issues and Profits is not 
contingent upon, and may be exercised without possession of, the 
Property.
(i)     If no Event of Default has occurred and is 
continuing, Lessee shall have a revocable license to collect 
and retain the Issues and Profits as they become due.  Upon 
the occurrence and during the continuance of an Event of 
Default, such license shall automatically terminate, and 
Lessor may collect and apply the Issues and Profits pursuant 
to Subparagraph 5.02(d) without further notice to Lessee or 
any other party and without taking possession of the 
Property.  All Issues and Profits thereafter collected by 
Lessee shall be held by lessee as trustee in a constructive 
trust for the benefit of Lessor.  Lessee hereby irrevocably 
authorizes and directs the sublessees under the Subleases, 
without any need on their part to inquire as to whether an 
Event of Default has actually occurred or is then existing, 
to rely upon and comply with any notice or demand by Lessor 
for the payment to Lessor of any rental or other sums which 
may become due under the Subleases or for the performance of 
any of the sublessees' undertakings under the Subleases.  
Collection of any Issues and Profits by Lessor shall not 
cure or waive any default or notice of default hereunder or 
invalidate any acts done pursuant to such notice.
(ii)    The foregoing irrevocable assignment shall not 
cause any Lessor Party to be (A) a mortgagee in possession; 
(B) responsible or liable for (1) the control, care, 
management or repair of the Property or for performing any 
of Lessee's obligations or duties under the Subleases, (2) 
any waste committed on the Property by the sublessees under 
any of the Subleases or by any other Persons, (3) any 
dangerous or defective condition of the Property, or (4) any 
negligence in the management, upkeep, repair or control of 
the Property resulting in loss or injury or death to any 
sublessee, licensee, employee, invitee or other Person; or 
(C) responsible for or impose upon any Lessor Party any duty 
to produce rents or profits.  No Lessor Party, in the 
absence of gross negligence or willful disregard on its 
part, shall be liable to Lessee as a consequence of (y) the 
exercise or failure to exercise any of the rights, remedies 
or powers granted to Lessor hereunder or (z) the failure or 
refusal of Lessor to perform or discharge any obligation, 
duty or liability of Lessee arising under the Subleases.
SECTION 3.      OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS.
3.01.   Maintenance, Repair, Etc.
(a)     General.  Lessee shall not permit any waste of the 
Property, except for ordinary wear and tear, and shall, at its 
sole cost and expense, maintain the Property in good working 
order, mechanical condition and repair and make all necessary 
repairs thereto, of every kind and nature whatsoever, whether 
interior or exterior, ordinary or extraordinary, structural or 
nonstructural or foreseen or unforeseen, in each case as required 
by all applicable Governmental Rules and Insurance Requirements 
and on a basis consistent with the operation and maintenance of 
commercial properties comparable in type and location to the 
Property and in compliance with prudent industry practice.
(b)     New Improvements.  Lessee shall make or cause to be 
made all of the New Improvements authorized and required by the 
Construction Agency Agreement in accordance with the Construction 
Agency Agreement.
(c)     Other Modifications.  Lessee, at its sole cost and 
expense, may from time to time make alterations, renovations, 
improvements and additions to the Property and substitutions and 
replacements therefor (collectively, "Modifications") in addition 
to the New Improvements; provided that:
(i)     No Modification impairs the value, utility or 
useful life of the Property or any part thereof from that 
which existed immediately prior to such Modification;
(ii)    All Modifications are made expeditiously and, in 
no case unless Lessee currently is exercising either the 
Term Purchase Option or the Expiration Date Purchase Option, 
shall Modifications  in an aggregate amount of $1,000,000 
remain uncompleted later than six (6) months prior to the 
Scheduled Expiration Date;
(iii)   All Modifications are made in a good and 
workmanlike manner and in compliance with all applicable 
Governmental Rules and Insurance Requirements;
(iv)    Subject to Paragraph 3.12 relating to permitted 
contests, Lessee pays all costs and expenses and discharges 
(or cause to be insured or bonded over) any Liens arising in 
connection with any Modification not later than the earlier 
of (A) sixty (60) days after the same shall be filed (or 
otherwise becomes effective) and (B)unless Lessee currently 
is exercising either the Term Purchase Option or the 
Expiration Date Purchase Option, six (6) months prior to the 
Scheduled Expiration Date;
(v)     At least one (1) month prior to the commencement 
of (A) any Modifications which are anticipated to cost 
$1,000,000 or more in the aggregate, or (B) any 
Modifications which cause the total of all Modifications 
undertaken during the previous twelve-month period to exceed 
an aggregate cost of $2,500,000, Lessee shall deliver to 
Lessor, with sufficient copies for Agent and each 
Participant, a brief written description of such 
Modifications; and
(vi)    All Modifications otherwise comply with this 
Agreement and the other Operative Documents.
(d)     Abandonment.  Lessee shall not abandon the Property or 
any material portion thereof for any period in excess of thirty 
(30) consecutive days during the term hereof, except as a part of 
any New Improvements or Modifications as permitted herein or in 
the other Operative Documents. 

(e)     Maintenance. Lessee shall maintain the Property and 
each material portion thereof in a manner consistent with other 
similar properties in the same area, except as a part of any New 
Improvements or Modifications as permitted herein.
3.02.   Risk of Loss.  Lessee assumes all risks of loss arising from 
any Casualty or Condemnation which arises or occurs prior to the 
Expiration Date or while Lessee is in possession of the Property and all 
liability for all personal injuries and deaths and damages to property 
suffered by any Person or property on or in connection with the Property 
which arises or occurs prior to the Expiration Date or while Lessee is 
in possession of the Property, except in each case to the extent any 
such loss or liability is primarily caused by the gross negligence or 
willful misconduct of a Lessor Party.  Lessee hereby waives any and all 
applicable existing or future Governmental Rules permitting the 
termination of this Agreement as a result of any Casualty or 
Condemnation, and Lessor shall in no event be answerable or accountable 
for any risk of loss of or decrease in the enjoyment and beneficial use 
of the Property as a result of any such event.
3.03.   Insurance.
(a)     Coverage.  Lessee, at its sole cost and expense, shall 
carry and maintain the following insurance coverage:
(i)     At all times during the Term, commercial 
liability insurance covering claims for injuries or death 
sustained by persons or damage to property while on the 
Property, and workers' compensation insurance;
(ii)    At all times after commencement of construction 
of the structure, (A) unless covered by builders' risk 
insurance pursuant to clause (ii) of Subparagraph 3.03(a),  
property insurance covering loss or damage by earthquake in 
an amount not less than the then current probable maximum 
loss (as determined by a seismic expert reasonably approved 
by Lessor and Agent) and (B) property insurance covering 
loss or damage by fire, flood and other risks (other than 
earthquake) in an amount not less than the then current 
replacement cost of the Improvements on the Property;
(iii)   During the construction of any Improvements, 
builders' risk insurance covering fire, flood, earthquake 
and other normal insured risks; and
(iv)    At all times during the Term as appropriate, 
such other insurance of the types customarily carried by a 
reasonably prudent Person owning or operating properties 
similar to the Property in the same geographic area as the 
Property.
Except as otherwise specifically required above, such insurance 
shall be in amounts, in a form and with deductibles approved by 
Lessor.
(b) Carriers.
(i) Any primary insurance carried and maintained by 
Lessee pursuant to this Paragraph 3.03 shall be underwritten 
by an insurance company which (A) has, at the time such 
insurance is placed and at the time of each renewal thereof, 
a general policyholder rating of "A" and a financial rating 
of at least 13 from A.M. Best and Company or any successor 
thereto (or if there is none, an organization having a 
similar national reputation) or (B) is otherwise approved by 
Lessor and Required Participants.
(ii) Any "differences in conditions" insurance carried 
and maintained by Lessee in addition to insurance carried 
and maintained by Lessee in accordance with clause (b)(i) of 
this Paragraph 3.03 shall be underwritten by an insurance 
company which has, at the time such insurance is placed and 
at the time of each renewal thereof, a general policyholder 
rating of at least "B+" and a financial rating of at least 7 
from A.M. Best and Company or any successor thereto (or if 
there is none, an organization having a similar national 
reputation).  With respect to the foregoing, at no time 
shall "differences in conditions" insurance underwritten by 
any such "B+/7" rated insurance company exceed in the 
aggregate 20% of the total insurance coverage limits in 
place pursuant to this Paragraph 3.03 or be in the "primary" 
or "first excess" position.
(c)     Terms.  Each insurance policy maintained by Lessee 
pursuant to this Paragraph 3.03 shall provide as follows, whether 
through endorsements or otherwise:
(i)     Lessor and Agent shall be named as additional 
insureds, in the case of each policy of liability insurance, 
and additional loss payees, in the case of each policy of 
property insurance.
(ii)    In respect of the interests of Lessor in the 
policy, the insurance shall not be invalidated by any action 
or by inaction of Lessee or by any Person having temporary 
possession of the Property while under contract with Lessee 
to perform maintenance, repair, alteration or similar work 
on the Property, and shall insure the interests of Lessor 
regardless of any breach or violation of any warranty, 
declaration or condition contained in the insurance policy 
by Lessee, Lessor or any other additional insured (other 
than by such additional insured, as to such additional 
insured); provided, however, that the foregoing shall not be 
deemed to (A) cause such insurance policies to cover matters 
otherwise excluded from coverage by the terms of such 
policies or (B) require any insurance to remain in force 
notwithstanding non-payment of premiums except as provided 
in clause (iii) below.
(iii)   If the insurance policy is cancelled for any 
reason whatsoever, or substantial change is made in the 
coverage that affects the interests of Lessor, or if the 
insurance coverage is allowed to lapse for non-payment of 
premium, such cancellation, change or lapse shall not be 
effective as to Lessor for thirty (30) days after receipt by 
Lessor of written notice from the insurers of such 
cancellation, change or lapse.
(iv)    No Lessor Party shall have any obligation or 
liability for premiums, commissions, assessments, or calls 
in connection with the insurance.
(v)     The insurer shall waive any rights of set-off or 
counterclaim or any other deduction, whether by attachment 
or otherwise, that it may have against any Lessor Party.
(vi)    The insurance shall be primary without right of 
contribution from any other insurance that may be carried by 
any Lessor Party with respect to its interest in the 
Property.
(vii)   The insurer shall waive any right of subrogation 
against any Lessor Party.
(viii)  All provisions of the insurance, except 
the limits of liability, shall operate in the same manner as 
if there were a separate policy covering each insured party.
(ix)    The insurance shall not be invalidated should 
Lessee or any Lessor Party waive, in writing, prior to a 
loss, any or all rights of recovery against any Person for 
losses covered by such policy, nor shall the insurance in 
favor of any Lessor Party or Lessee, as the case may be, or 
their respective rights under and interests in said policies 
be invalidated or reduced by any act or omission or 
negligence of any Lessee Party or Lessor, as the case may 
be, or any other Person having any interest in the Property.
(x)     All insurance proceeds with a value of less than 
five million Dollars ($5,000,000) in respect of any loss or 
occurrence with respect to the Property shall be paid to and 
adjusted solely by Lessee and all other insurance proceeds 
shall be paid to Lessor and adjusted jointly by Lessor and 
Lessee, except that, from and after the date on which the 
insurer receives written notice from Lessor that an Event of 
Default has occurred and is continuing (and unless and until 
such insurer receives written notice from Lessor that all 
Events of Default have been cured), all losses shall be 
adjusted solely by, and all insurance proceeds shall be paid 
solely to, Lessor.
(xi)    Each policy shall contain a standard form 
mortgagee endorsement in favor of Lessor.
(d)     Evidence of Insurance.  Lessee, at its sole cost and 
expense, shall furnish to Lessor from time to time upon the 
request of Lessor such certificates or other documents as Lessor 
may reasonably request to evidence Lessee's compliance with the 
insurance requirements set forth in this Paragraph 3.03.
(e)     Release of Lessor Parties.  Lessee hereby waives, 
releases and discharges each Lessor Party and its directors, 
officers, employees, agents and advisors from all claims 
whatsoever arising out of any loss, claim, expense or damage to or 
destruction covered or coverable by insurance required under this 
Paragraph 3.03, notwithstanding that such loss, claim, expense or 
damage may have been caused by any such Person, and, as among 
Lessee and such Persons, Lessee agrees to look to the insurance 
coverage only in the event of such loss. 
(f)     Forced Placement of Insurance.  Pursuant to Oregon 
Revised Statutes Section 746.201, Lessor hereby provides Lessee 
with the following notice:
"WARNING"
Unless you provide us with evidence of the insurance 
coverage as required by our contract or loan agreement, we 
may purchase insurance at your expense to protect our 
interest.  This insurance may, but need not, also protect 
your interest.  If the collateral becomes damaged, the 
coverage we purchase may not pay any claim you make or any 
claim made against you.  You may later cancel this coverage 
by providing evidence that you have obtained property 
coverage elsewhere.
You are responsible for the cost of any insurance 
purchased by us.  The cost of this insurance may be added to 
your contract or loan balance.  If the cost is added to your 
contract or loan balance, the interest rate on the 
underlying contract or loan will apply to this added amount.  
The effective date of coverage may be the date your prior 
coverage lapsed or the date you failed to provide proof of 
coverage.
The coverage that we purchase may be considerably more 
expensive than insurance you can obtain on your own and may 
not satisfy any need for property damage coverage or any 
mandatory liability insurance requirements imposed by 
applicable law.
As used in the above notice, (i) "you" and "your" shall refer to 
Lessee, (ii) "we", "us" and "our" shall refer to Lessor, (iii) 
"contract or loan agreement" shall refer to the Participation 
Agreement, this Agreement and the other Operative Documents, (iv) 
"collateral" shall refer to the Property, (v) "contract or loan 
balance" shall refer to the Outstanding Lease Amount and (vi) 
"interest rate" shall refer to Rental Rate.
3.04.   Casualty and Condemnation.
(a)     Notice.  Lessee shall give Lessor prompt written 
notice of the occurrence of any Material Casualty affecting, or 
the institution of any proceedings for the Condemnation of, the 
Property or any portion thereof.
(b)     Repair or Purchase Option.  After the occurrence of 
any Material Casualty or Condemnation affecting the Property or 
any portion thereof, Lessee shall either (i) repair and restore 
the Property as required by Subparagraph 3.04(c) or (ii) exercise 
the Term Purchase Option and purchase the Property pursuant to the 
Purchase Agreement; provided, however, that Lessee may not elect 
to repair and restore the Property if such casualty or 
condemnation is a Major Casualty or Major Condemnation or if an 
Event of Default has occurred and is continuing, unless Lessor and 
the Required Participants shall consent in writing.  Not later 
than one (1) month after the occurrence of any Material Casualty 
or Condemnation, Lessee shall deliver to Lessor a written notice 
indicating whether it elects to repair and restore or purchase the 
Property.
(c)     Repair and Restoration.  If Lessee elects to repair 
and restore the Property following any Material Casualty or 
Condemnation, Lessee shall diligently proceed to repair and 
restore the Property to the condition in which it existed 
immediately prior to such Material Casualty or Condemnation and 
shall use reasonable efforts to complete all such repairs and 
restoration as soon as reasonably practicable, but not later than 
the earlier of (y) six (6) months after the occurrence of the 
Material Casualty or Condemnation and (z) six (6) months prior to 
the Scheduled Expiration Date unless Lessee currently is 
exercising either the Term Purchase Option or the Expiration Date 
Purchase Option,.  Lessee shall use its own funds to make such 
repairs and restoration, except to the extent any Casualty and 
Condemnation Proceeds are available and are released to Lessee for 
such purpose pursuant to Subparagraph 3.04(f).  Lessee's exercise 
of the repair and restoration option shall, if Lessor or Required 
Participants direct, be subject to satisfaction of the following 
conditions:
(i)     Within two (2) months after the occurrence of 
the Material Casualty or Condemnation, Lessee shall deposit 
in a deposit account acceptable to and controlled by Lessor 
(a "Repair and Restoration Account") of funds (including any 
Casualty and Condemnation Proceeds which are available and 
are released to Lessee pursuant to Subparagraph 3.04(f)) in 
the amount which Lessor determines is needed to complete and 
fully pay all costs of the repair or restoration (including 
taxes, financing charges, insurance and rent during the 
repair period).
(ii)    As soon as reasonably possible and in no event 
later than six (6) months after the occurrence of the 
Material Casualty or Condemnation, Lessee shall establish an 
arrangement for lien releases and disbursement of funds 
acceptable to Lessor and in a manner and upon such terms and 
conditions as would be required by a prudent interim 
construction lender.
(iii)   As soon as reasonably possible and in no event 
later than six (6) months after the occurrence of the 
Material Casualty or Condemnation, Lessee shall deliver to 
Lessor the following, each in form and substance acceptable 
to Lessor;
        (A)     Evidence that the Property can, in 
Lessor's reasonable judgment, with diligent 
restoration or repair, be returned to a condition at 
least equal to the condition thereof that existed 
prior to the Casualty or partial Condemnation causing 
the loss or damage within the earlier to occur of (A) 
six (6) months after the occurrence of the Casualty or 
Condemnation and (B) unless Lessee currently is 
exercising either the Term Purchase Option or the 
Expiration Date Purchase Option, six (6) months prior 
to the Scheduled Expiration Date;
        (B)     Evidence that all necessary governmental 
approvals can be timely obtained to allow the 
rebuilding and reoccupancy of the Property;
(C)     Copies of all plans and specifications for 
the work;
(D)     Copies of all contracts for the work, 
signed by a contractor  reasonably acceptable to 
Lessor;
(E)     A cost breakdown for the work;
(F)     A payment and performance bond for the 
work or other security satisfactory to Lessor;
(G)     Evidence that, upon completion of the 
work, the size, capacity and total value of the 
Property will be at least as great as it was before 
the Casualty or Condemnation occurred; and
(H)     Evidence of satisfaction of any additional 
conditions that Lessor or Required Participants may 
reasonably establish to protect their rights under 
this Agreement and the other Operative Documents.
All plans and specifications for the work must be reasonably 
acceptable to Lessor, except that Lessor's approval shall 
not be required if the restoration work is based on the same 
plans and specifications as were originally used to 
construct the Property.  To the extent that the funds in a 
Repair and Restoration Account include both Casualty and 
Condemnation Proceeds and other funds deposited by Lessee, 
the other funds deposited by Lessee shall be used first.  
Lessee acknowledges that the specific conditions described 
above are reasonable.  
(d)     Prosecution of Claims for Casualty and Condemnation 
Proceeds.  Lessee shall proceed promptly and diligently to 
prosecute in good faith the settlement or compromise of any and 
all claims for Casualty and Condemnation Proceeds; provided, 
however, that any settlement or compromise of any such claim 
shall, except as otherwise provided in clause (x) of Subparagraph 
3.03(c), be subject to the written consent of Lessor and Required 
Participants, which consents shall not be unreasonably withheld.  
Lessor may participate in any proceedings relating to such claims, 
and, after the occurrence and during the continuance of any Event 
of Default, Lessor is hereby authorized, in its own name or in 
Lessee's name, to adjust any loss covered by insurance or any 
Casualty or Condemnation claim or cause of action, and to settle 
or compromise any claim or cause of action in connection 
therewith, and Lessee shall from time to time deliver to Lessor 
any and all further assignments and other instruments required to 
permit such participation.
(e)     Assignment of Casualty and Condemnation Proceeds.  
Lessee hereby absolutely and irrevocably assigns to Lessor all 
Casualty and Condemnation Proceeds and all claims relating 
thereto.  Except as otherwise provided in clause (x) of 
Subparagraph 3.03(c), Lessee agrees that all Casualty and 
Condemnation Proceeds are to be paid to Lessor and Lessee hereby 
authorizes and directs any insurer, Governmental Authority or 
other Person responsible for paying any Casualty and Condemnation 
Proceeds to make payment thereof directly to Lessor alone, and not 
to Lessor and Lessee jointly.  If Lessee receives any Casualty and 
Condemnation Proceeds payable to Lessor hereunder, Lessee shall 
promptly pay over such Casualty and Condemnation Proceeds to 
Lessor.  Lessee hereby covenants that until such Casualty and 
Condemnation Proceeds are so paid over to Lessor, Lessee shall 
hold such Casualty and Condemnation Proceeds in trust for the 
benefit of Lessor and shall not commingle such Casualty and 
Condemnation Proceeds with any other funds or assets of Lessee or 
any other Person.  Except as otherwise provided in clause (x) of 
Subparagraph 3.03(c), Lessor may commence, appear in, defend or 
prosecute any assigned right, claim or action, and may adjust, 
compromise, settle and collect all rights, claims and actions 
assigned to Lessor, but shall not be responsible for any failure 
to collect any such right, claim or action, regardless of the 
cause of the failure.
(f)     Use of Casualty and Condemnation Proceeds.
(i)     If (A) no Event of Default has occurred and is 
continuing, (B) Lessee exercises the repair and restoration 
option pursuant to Subparagraphs 3.04(b) and 3.04(c) and (C) 
Lessee complies with any conditions imposed pursuant to 
Subparagraph 3.04(c); then Lessor shall release any Casualty 
and Condemnation Proceeds to Lessee for repair or 
restoration of the Property, but may condition such release 
and use of the Casualty and Condemnation Proceeds upon 
deposit of the Casualty and Condemnation Proceeds in a 
Repair and Restoration Account.  Lessor shall have the 
option, upon the completion of such restoration of the 
Property, to apply any surplus Casualty and Condemnation 
Proceeds remaining after the completion of such restoration 
to the payment of Rent and/or the reduction of the 
Outstanding Lease Amount, notwithstanding that such amounts 
are not then due and payable or that such amounts are 
otherwise adequately secured.
(ii)    If (A) an Event of Default has occurred and is 
continuing, (B) Lessee fails to or is unable to comply with 
any conditions imposed pursuant to Subparagraph 3.04(c) or 
(C) Lessee elects to exercise the Term Purchase Option and 
purchase the Property pursuant to the Purchase Agreement; 
then, at the absolute discretion of Lessor and the Required 
Participants, regardless of any impairment of security or 
lack of impairment of security, but subject to applicable 
Governmental Rules governing use of Casualty and 
Condemnation Proceeds, if any, Lessor may (1) apply all or 
any of the Casualty and Condemnation Proceeds it receives to 
the expenses of Lessor Parties in obtaining such proceeds; 
(2) apply the balance to the payment of Rent and/or the 
reduction of the Outstanding Lease Amount, notwithstanding 
that such amounts are not then due and payable or that such 
amounts are otherwise adequately secured and/or (3) release 
all or any part of such proceeds to Lessee upon any 
conditions Lessor and the Required Participants may elect.
(iii)   Lessor shall apply any Casualty and Condemnation 
Proceeds which are to be used to reduce the Outstanding 
Lease Amount only on the last day of a Rental Period unless 
a Default has occurred and is continuing.
(iv)    Application of all or any portion of the 
Casualty and Condemnation Proceeds, or the release thereof 
to Lessee, shall not cure or waive any Default or notice of 
default or invalidate any acts done pursuant to such notice.
3.05.   Taxes.  Subject to Paragraph 3.12 relating to permitted 
contests, Lessee shall promptly pay when due all Indemnified Taxes 
imposed on or payable by Lessee or any Lessor Party in connection with 
the Property, this Agreement or any of the other Operative Documents, or 
any of the transactions contemplated hereby or thereby.  As promptly as 
possible after any Indemnified Taxes are payable by Lessee, Lessee shall 
send to Lessor for the account of the applicable Lessor Party a 
certified copy of an original official receipt received by Lessee 
showing payment thereof.  If Lessee fails to pay any such Indemnified 
Taxes when due to the appropriate taxing authority or fails to remit to 
Lessor the required receipts or other required documentary evidence, 
Lessee shall indemnify the Lessor Parties for any incremental taxes, 
interest or penalties that may become payable by the Lessor Parties as a 
result of any such failure.  The obligations of Lessee under this 
Paragraph 3.05 shall survive the payment and performance of the Lessee 
Obligations and the termination of this Agreement.
3.06.   Environmental Matters.
(a)     Lessee's Covenants.  Lessee shall not cause or permit 
Hazardous Materials to be used, generated, manufactured, stored, 
treated, disposed of, transported or present on or released or 
discharged from the Property in any manner that is reasonably 
likely to have a Material Adverse Effect.  Lessee may use 
Hazardous Materials in connection with the operation of its 
business (or the business of permitted subtenants) so long as such 
use is consistent with the preceding sentence.  Lessee shall 
immediately notify Lessor in writing of (i) any knowledge by 
Lessee that the Property does not comply with any Environmental 
Laws; and (ii) any claims against Lessee or the Property relating 
to Hazardous Materials or pursuant to Environmental Laws.  In 
response to the presence of any Hazardous Materials on, under or 
about the Property, Lessee shall immediately take, at Lessee's 
sole expense, all remedial action required by any Environmental 
Laws or any judgment, consent decree, settlement or compromise in 
respect to any claim based thereon.
(b)     Inspection By Lessor.  Upon reasonable prior notice to 
Lessee, Lessor, its employees and agents, may from time to time 
(whether before or after the commencement of a nonjudicial or 
judicial foreclosure proceeding), enter and inspect the Property 
for the purpose of determining the existence, location, nature and 
magnitude of any past or present release or threatened release of 
any Hazardous Materials into, onto, beneath or from the Property, 
provided that any such Person so entering and inspecting the 
Property shall do so without materially disrupting the operations 
of Lessee.
(c)     Indemnity.  Without in any way limiting any other 
indemnity contained in this Agreement or any other Operative 
Document, Lessee agrees to defend, indemnify and hold harmless the 
Lessor Parties and the other Indemnitees from and against any 
claim, loss, damage, cost, expense or liability directly or 
indirectly arising out of (i) the use, generation, manufacture, 
storage, treatment, release, threatened release, discharge, 
disposal, transportation or presence of any Hazardous Materials 
which are found in, on, under or about the Property or (ii) the 
breach of any covenant, representation or warranty of Lessee 
relating to Hazardous Materials or Environmental Laws contained in 
this Agreement or any Operative Document.  This indemnity shall 
include (A) the costs, whether foreseeable or unforeseeable, of 
any investigation, repair, cleanup or detoxification of the 
Property which is required by any Governmental Authority or is 
otherwise necessary to render the Property in compliance with all 
Environmental Laws; (B) all other direct or indirect consequential 
damages (including any third party claims, claims by any 
Governmental Authority,  or any fines or penalties against the 
Indemnitees; and (C) all court costs and attorneys' fees 
(including expert witness fees and the cost of any consultants) 
paid or incurred by the Indemnitees.  Lessee shall pay immediately 
upon Lessor's demand any amounts owing under this indemnity.  
Lessee shall use legal counsel reasonably acceptable to Lessor in 
any action or proceeding arising under this indemnity.  The 
obligations of Lessee under this Subparagraph 3.06(c) shall 
survive the payment and performance of the Lessee Obligations and 
the termination of this Agreement.
(d)     Legal Effect of Section.  Lessee and Lessor agree that 
(i) this Paragraph 3.06 and clause (i) of Subparagraph 4.01(u) of 
the Participation Agreement are intended as Lessor's written 
request for information (and Lessee's response) concerning the 
environmental condition of the real property security as required 
by California Code of Civil Procedure Section 726.5 and (ii) each 
representation and warranty and covenant herein and therein 
(together with any indemnity applicable to a breach of any such 
representation and warranty) with respect to the environmental 
condition of the Property is intended by Lessor and Lessee to be 
an "environmental provision" for purposes of California Code of 
Civil Procedure Section 736.
3.07.   Liens, Easements, Etc.
(a)     Lessee's Covenants.  Subject to Paragraph 3.12 
relating to permitted contests, Lessee shall not create, incur, 
assume or permit to exist any Lien or easement on or with respect 
to any of the Property of any character, whether now owned or 
hereafter acquired, except for the following ("Permitted Property 
Liens"):
(i)     Liens in favor of a Lessor Party securing the 
Lessee Obligations and other Lessor Liens;
(ii)    Liens and easements in existence on the 
Commencement Date to the extent reflected in the title 
insurance policies delivered to Agent pursuant to Paragraph 
3.01 of and Schedule 3.01 to the Participation Agreement and 
approved by Lessor;
(iii)   Liens for taxes or other Governmental Charges 
not at the time delinquent or thereafter payable without 
penalty; and
(iv)    Liens of carriers, warehousemen, mechanics, 
materialmen and vendors and other similar Liens imposed by 
law incurred in the ordinary course of business for sums not 
overdue.
Subject to Paragraph 3.12 relating to permitted contests, Lessee 
shall promptly (A) pay all Indebtedness of Lessee and other 
obligations prior to the time the non-payment thereof would give 
rise to a Lien on the Property and (B) discharge, at its sole cost 
and expense, any Lien on the Property which is not a Permitted 
Property Lien.
(b)     No Consents.  Nothing contained in this Agreement 
shall be construed as constituting the consent or request of any 
Lessor Party, express or implied, to or for the performance by any 
contractor, mechanic, laborer, materialman, supplier or vendor of 
any labor or services or for the furnishing of any materials for 
any construction, alteration, addition, repair or demolition of or 
to the Property or any part thereof.  NOTICE IS HEREBY GIVEN THAT 
NO LESSOR PARTY IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR 
MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE 
HOLDING THE PROPERTY OR ANY PART THEREOF THROUGH OR UNDER LESSEE, 
AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES 
OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF ANY LESSOR 
PARTY IN AND TO THE PROPERTY.
3.08.   Subletting.  Lessee may, in the ordinary course of business, 
sublease the Property or any portion thereof to any Person, provided, 
that (a) Lessee remains directly and primarily liable for performing its 
obligations under this Agreement and all other Lessee Obligations; (b) 
each sublease is subject to and subordinated to this Agreement; (c) each 
sublease has a term which expires on or prior to the Scheduled 
Expiration Date (or, if longer, includes a provision that the sublease 
terminates on the Expiration Date if such Expiration Date occurs prior 
to the Scheduled Expiration Date unless Lessee purchases the Property on 
the Expiration Date pursuant to the Purchase Agreement); (d) each 
sublease prohibits the sublessee from engaging in any activities on the 
Property other than those permitted by Paragraph 2.04; and (e) no 
sublease has a Material Adverse Effect.  Any sublease which does not 
satisfy each of the requirements of the immediately preceding sentence 
shall be null and void as to the Lessor Parties and their successor and 
assigns.  Except for such permitted subleases, Lessee shall not assign 
any of its rights or interests under this Agreement to any other Person.
3.09.   Utility Charges.  Lessee shall pay all charges for 
electricity, power, gas, oil, water, telephone, sanitary sewer service 
and all other utilities and services to, on or in connection with the 
Property during the Term.
3.10.   Removal of Property.  Lessee shall not remove any 
Improvements from the Land or any other Property from the Land or 
Improvements, except that, during the Term, Lessee may remove any 
Modification or any trade fixture, machinery, equipment, inventory or 
other personal property if such Modification or property (a) was not 
financed by an Advance, (b) is not required by any applicable 
Governmental Rule or Insurance Requirement and (c) is readily removable 
without impairing the value, utility or remaining useful life of the 
Property.
3.11.   Compliance with Governmental Rules and Insurance 
Requirements.  Lessee, at its sole cost and expense, shall, unless its 
failure is not reasonably likely to have a Material Adverse Effect, (a) 
comply, and cause its agents, sublessees, assignees, employees, 
invitees, licensees, contractors and tenants, and the Property to 
comply, with all Governmental Rules and Insurance Requirements relating 
to the Property (including the construction, use, operation, 
maintenance, repair and restoration thereof, whether or not compliance 
therewith shall require structural or extraordinary changes in the 
Improvements or interfere with the use and enjoyment of the Property), 
and (b) procure, maintain and comply with all licenses, permits, orders, 
approvals, consents and other authorizations required for the 
construction, use, maintenance and operation of the Property and for the 
use, operation, maintenance, repair and restoration of the Improvements.
3.12.   Permitted Contests.  Lessee, at its sole cost and expense, 
may contest any alleged Lien or easement on any of the Property or any 
alleged Governmental Charge, Indebtedness or other obligation which is 
payable by Lessee hereunder to Persons other than the Lessor Parties or 
which, if unpaid, would give rise to a Lien on any of the Property, 
provided that (a) each such contest is diligently pursued in good faith 
by appropriate proceedings; (b) the commencement and continuation of 
such proceedings suspends the enforcement of such Lien or easement or 
the collection of such Governmental Charge, Indebtedness or obligation; 
(c) Lessee has established adequate reserves for the discharge of such 
Lien or easement or the payment of such Governmental Charge, 
Indebtedness or obligation in accordance with GAAP and, if the failure 
to discharge such Lien or easement or the failure to pay such 
Governmental Charge, Indebtedness or obligation might result in any 
civil liability for any Lessor Party, Lessee has provided to such Lessor 
Party a bond or other security satisfactory to such Lessor Party; (d) 
the failure to discharge such Lien or easement or the failure to pay 
such Governmental Charge, Indebtedness or obligation could not result in 
any criminal liability for any Lessor Party; (e) the failure to 
discharge such Lien or easement or the failure to pay such Governmental 
Charge, Indebtedness or obligation is not otherwise reasonably likely to 
have a Material Adverse Effect; and (f) unless Lessee currently is 
exercising either the Term Purchase Option or the Expiration Date 
Purchase Option, any such contest is completed and such Lien or easement 
is discharged (either pursuant to such proceedings or otherwise) or such 
Governmental Charge, Indebtedness or obligation is declared invalid, 
paid or otherwise satisfied not later than six (6) months prior to the 
Scheduled Expiration Date.
3.13.   Lessor Obligations; Right to Perform Lessee Obligations.  No 
Lessor Party shall have any obligation to (a) maintain, repair or make 
any improvements to the Property, (b) maintain any insurance on the 
Property, (c) perform any other obligation of Lessee under this 
Agreement or any other Lessee Obligation, (d) make any expenditure on 
account of the Property (except to make Advances as required by the 
Participation Agreement) or (e) take any other action in connection with 
the Property, this Agreement or any other Operative Document, except as 
expressly provided herein or in another Operative Document; provided 
however, that Lessor may, in its sole discretion and without any 
obligation to do so, perform any Lessee Obligation not performed by 
Lessee when required.  Lessor may enter the Property or exercise any 
other right of Lessee under this Agreement or any other Operative 
Document to the extent Lessor determines in good faith that such entry 
or exercise is reasonably necessary for Lessor to perform any such 
Lessee Obligation not performed by Lessee when required.  Lessee shall 
reimburse Lessor and the other Lessor Parties, within five (5) Business 
Days after demand, for all fees, costs and expenses incurred by them in 
performing any such obligation or curing any Default.
3.14.   Inspection Rights.  During the Term, Lessee shall permit any 
Person designated by Lessor, upon reasonable notice and during normal 
business hours, to visit and inspect any of the Property.
SECTION 4.      EXPIRATION DATE.
4.01.   Termination by Lessee Prior to Scheduled Expiration Date.  
Subject to the terms and conditions of the Purchase Agreement, Lessee 
may, at any time prior to the Scheduled Expiration Date, terminate this 
Agreement and purchase the Property pursuant to Section 2 of the 
Purchase Agreement.  Lessee shall notify Lessor of Lessee's election so 
to terminate this Agreement and purchase the Property by delivering to 
Agent a Notice of Term Purchase Option Exercise pursuant to and in 
accordance with the provisions of Paragraph 2.02 of the Purchase 
Agreement.
4.02.   Surrender of Property.  Unless Lessee purchases the Property 
on the Expiration Date pursuant to the Purchase Agreement, Lessee shall 
vacate and surrender the Property to Lessor on the Expiration Date in 
its then-current condition, subject to compliance by Lessee on or prior 
to such date of its obligations under this Agreement and the other 
Operative Documents (including the completion of the New Improvements 
and all Modifications, the completion of all permitted contests and the 
removal of all Liens which are not Permitted Property Liens of the types 
described in clauses (i), (ii) (iii) or (vi) of Subparagraph 3.07(a)).
4.03.   Holding Over.  If Lessee does not purchase the Property on 
the Expiration Date pursuant to the Purchase Agreement but continues in 
possession of any portion of the Property after the Expiration Date, 
Lessee shall pay rent for each day it so continues in possession, 
payable upon demand of Lessor, at a per annum rate equal to the 
Alternate Rental Rate plus two percent (2.0%) and shall pay and perform 
all of its other Lessee Obligations under this Agreement and the other 
Operative Documents in the same manner as though the Term had not ended; 
provided, however, that this Paragraph 4.03 shall not be interpreted to 
permit such holding over or to limit any right or remedy of Lessor for 
such holding over.
SECTION 5.      DEFAULT.
5.01.   Events of Default.  The occurrence or existence of any one 
or more of the following shall constitute an "Event of Default" 
hereunder:
(a)     Non-Payment. Lessee shall (i) fail to pay on the 
Expiration Date any amount payable by Lessee under this Agreement 
or any other Operative Document on such date, (ii) fail to pay 
within five (5) Business Days after any Scheduled Rent Payment 
Date any Base Rent payable on such Scheduled Rent Payment Date 
(other than the Base Rent payable on the Expiration Date) or (iii) 
fail to pay within five (5) Business Days after the same becomes 
due, any Supplemental Rent or other amount required under the 
terms of this Agreement or any other Operative Document (other 
than any such amount payable on the Expiration Date or Base Rent); 
or
(b)     Specific Defaults.  Lessee or any of its Subsidiaries 
shall fail to observe or perform any covenant, obligation, 
condition or agreement set forth in Subparagraph 3.01(d), 
Paragraph 3.03 or Subparagraph 3.07(a) hereof, in Subparagraph 
2.01(c), Paragraph 5.02 or Paragraph 5.03 of the Participation 
Agreement or in Paragraph 3.01 of the Construction Agency 
Agreement; or
(c)     Other Defaults.  Lessee or any of its Subsidiaries 
shall fail to observe or perform any other covenant, obligation, 
condition or agreement contained in this Agreement or any other 
Operative Document and such failure shall continue for a period of 
thirty (30) days after written notice thereof from Lessor; 
provided, however, that in the event that such failure cannot 
reasonably be cured within such thirty (30) day period, such 
failure shall not constitute an Event of Default hereunder so long 
as Lessee shall have commenced to cure such failure within such 
thirty (30) day period and shall thereafter diligently pursue such 
cure to completion, provided further that such failure shall in 
all events be cured by the earlier of (i) the Expiration Date and 
(ii) one hundred and eighty days (180) days after Lessor's notice 
thereof; or
(d)     Representations and Warranties.  Any representation, 
warranty, certificate, information or other statement (financial 
or otherwise) made or furnished by or on behalf of Lessee or any 
of its Subsidiaries to any Lessor Party in or in connection with 
this Agreement or any other Operative Document, or as an 
inducement to any Lessor Party to enter into this Agreement or any 
other Operative Document, shall be false, incorrect, incomplete or 
misleading in any material respect when made or furnished and 
Lessee shall not have cured the facts or circumstances causing 
such representation, warranty, certificate or other statement to 
be false, incorrect, incomplete or misleading within thirty (30) 
days of notice thereof from Lessor; or
 (e)    Cross-Default.  Lessee or any of its Subsidiaries (i) 
shall fail to make any payment when due on account of any 
Indebtedness or Contingent Obligation of such Person (excluding 
the Lessee Obligations but including all other Indebtedness and 
Contingent Obligations of Lessee or any of its Subsidiaries to any 
Lessor Party) and such failure shall continue beyond any period of 
grace provided with respect thereto, if the amount of such payment 
exceeds $10,000,000 or the effect of such failure is to cause, or 
permit the holder or holders thereof to cause, Indebtedness and/or 
Contingent Obligations in an aggregate amount exceeding 
$10,000,000 to become due or (ii) shall default in the observance 
or performance of any other agreement, term or condition contained 
in any agreement or instrument evidencing such Indebtedness or 
Contingent Obligation, if the effect of such default is to cause, 
or permit the holder or holders thereof to cause, Indebtedness 
and/or Contingent Obligations in an aggregate amount exceeding 
$10,000,000 to become due; or
(f)     Insolvency, Voluntary Proceedings.  Lessee or any of 
its Subsidiaries shall (i) apply for or consent to the appointment 
of a receiver, trustee, liquidator or custodian of itself or of 
all or a substantial part of its property, (ii) be unable, or 
admit in writing its inability, to pay its debts generally as they 
mature, (iii) make a general assignment for the benefit of its or 
any of its creditors, (iv) be dissolved or liquidated in full or 
in part, (v) become insolvent (as such term may be defined or 
interpreted under any applicable statute), (vi) commence a 
voluntary case or other proceeding seeking liquidation, 
reorganization or other relief with respect to itself or its debts 
under any bankruptcy, insolvency or other similar law now or 
hereafter in effect or consent to any such relief or to the 
appointment of or taking possession of its property by any 
official in an involuntary case or other proceeding commenced 
against it, or (vi) take any action for the purpose of effecting 
any of the foregoing; or
(g)     Involuntary Proceedings.  Proceedings for the 
appointment of a receiver, trustee, liquidator or custodian of 
Lessee or any of its Subsidiaries or of all or a substantial part 
of the property thereof, or an involuntary case or other 
proceedings seeking liquidation, reorganization or other relief 
with respect to Lessee or any of its Subsidiaries or the debts 
thereof under any bankruptcy, insolvency or other similar law now 
or hereafter in effect shall be commenced and an order for relief 
entered or such proceeding shall not be dismissed or discharged 
within sixty (60) days of commencement; or
(h)     Judgments.  (i) A final judgment or order for the 
payment of money in excess of $10,000,000 (exclusive of amounts 
covered by insurance issued by an insurer not an Affiliate of 
Lessee and otherwise satisfying the requirements set forth in 
Subparagraph 5.01(d)) shall be rendered against Lessee or any of 
its Subsidiaries and the same shall remain undischarged for a 
period of sixty (60) days during which execution shall not be 
effectively stayed or (ii) any judgment, writ, assessment, warrant 
of attachment, tax lien or execution or similar process shall be 
issued or levied against a substantial part of the property of 
Lessee or any of its Subsidiaries and such judgment, writ, or 
similar process shall not be released, stayed, vacated or 
otherwise dismissed within sixty (60) days after issue or levy; or
(i)     Operative Documents.  Any Operative Document or any 
material term thereof shall cease to be, or be asserted by Lessee 
or any of its Subsidiaries not to be, a legal, valid and binding 
obligation of Lessee or any of its Subsidiaries enforceable in 
accordance with its terms; or
(j)     ERISA.  Any Reportable Event which constitutes grounds 
for the termination of any Employee Benefit Plan by the PBGC or 
for the appointment of a trustee by the PBGC to administer any 
Employee Benefit Plan shall occur, or any Employee Benefit Plan 
shall be terminated within the meaning of Title IV of ERISA or a 
trustee shall be appointed by the PBGC to administer any Employee 
Benefit Plan; or
(k)     Change of Control.  Any Change of Control shall occur; 
or
(l)     Major Casualty or Condemnation. Any Major Casualty or 
Major Condemnation affecting the Property shall occur; or
(m)     Material Adverse Effect.  Any event(s) or condition(s) 
which has a Material Adverse Effect shall occur or exist.
5.02.   General Remedies.  In all cases, upon the occurrence or 
existence of any Event of Default and at any time thereafter unless such 
Event of Default is waived, Lessor may, with the consent of the Required 
Participants, or shall, upon instructions from the Required 
Participants, exercise any one or more of the following rights and 
remedies (except that the remedy set forth in the first sentence of 
Subparagraph 5.02(a) shall be automatic):
(a)     Termination of Commitments.  If such Event of Default 
is an Event of Default of the type described in Subparagraph 
5.01(f) or Subparagraph 5.01(g) affecting Lessee, immediately and 
without notice the obligation of Lessor to make Advances and the 
obligations of the Participants to fund Advances shall 
automatically terminate.  If such Event of Default is any other 
Event of Default, Lessor may by written notice to 
Lessee, terminate the obligation of Lessor to make Advances and 
the obligations of the Participants to fund Advances.
(b)     Appointment of a Receiver.  Lessor may apply to any 
court of competent jurisdiction for, and obtain appointment of, a 
receiver for the Property.
(c)     Specific Performance.  Lessor may bring an action in 
any court of competent jurisdiction to obtain specific enforcement 
of any of the covenants or agreements of Lessee in this Agreement 
or any of the other Operative Documents.
(d)     Collection of Issues and Profits.  Lessor may collect 
Issues and Profits as provided in Subparagraph 2.07(c) and apply 
the proceeds to pay Lessee Obligations.
(e)     Protection of Property.  Lessor may enter, take 
possession of, manage and operate all or any part of the Property 
or take any other actions which it reasonably determines are 
necessary to protect the Property and the rights and remedies of 
the Lessor Parties under this Agreement and the other Operative 
Documents, including (i) taking and possessing all of Lessee's 
books and records relating to the Property; (ii) entering into, 
enforcing, modifying, or canceling subleases on such terms and 
conditions as Lessor may consider proper; (iii) obtaining and 
evicting tenants; (iv) fixing or modifying sublease rents; (v) 
collecting and receiving any payment of money owing to Lessee; 
(vi) completing any unfinished Improvements; and/or (vii) 
contracting for and making repairs and alterations.
(f)     Other Rights and Remedies.  In addition to the 
specific rights and remedies set forth above in this Paragraph 
5.02 and in Paragraph 5.03 and Paragraph 5.04, Lessor may exercise 
any other right, power or remedy permitted to it by any applicable 
Governmental Rule, either by suit in equity or by action at law, 
or both.
5.03.   Lease Remedies.  If the transaction evidenced by this 
Agreement and the other Operative Documents is treated as a lease, upon 
the occurrence or existence of any Event of Default and at any time 
thereafter unless such Event of Default is waived, Lessor may, with the 
consent of the Required Participants, or shall, upon instructions from 
the Required Participants, exercise any one or more of the following 
rights and remedies in addition to those rights and remedies set forth 
in Paragraph 5.02:
(a)     Termination of Lease.  Lessor may, by written notice 
to Lessee, terminate this Agreement on a Termination Date which is 
prior to the Scheduled Expiration Date, subject to Subparagraph 
3.02(1) of the Purchase Agreement.  Such Termination Date shall be 
the last day of a Rental Period unless Required Participants shall 
otherwise direct.  On such Termination Date (which shall then be 
the Expiration Date), Lessee shall pay all unpaid Base Rent 
accrued through such date, all Supplemental Rent due and payable 
on or prior to such date and all other amounts payable by Lessee 
on the Expiration Date pursuant to this Agreement and the other 
Operative Documents.  Lessee also shall pay to Lessor, in addition 
to all accrued Base Rent, the worth at the time of such payment of 
the amount by which the unpaid Base Rent through the Scheduled 
Expiration Date exceeds the amount of such rental loss for the 
same period that Lessee proves could reasonably be avoided.
(b)     Continuation of Lease.  Lessor may exercise the rights 
and remedies provided by Oregon law, including the right to 
continue this Agreement in effect after Lessee's breach and 
abandonment and recover Rent as it becomes due.  Acts of 
maintenance or preservation, efforts to relet the Property, the 
appointment of a receiver upon Lessor's initiative to protect its 
interest under this Agreement or withholding consent to or 
terminating a sublease shall not of themselves constitute a 
termination of Lessee's right to possession.
(c)     Removal and Storage of Property.  Lessor may enter the 
Property and remove therefrom all Persons and property, store such 
property in a public warehouse or elsewhere at the cost of and for 
the account of Lessee and sell such property and apply the 
proceeds therefrom pursuant to applicable Oregon law.
5.04.   Loan Remedies.  If the transaction evidenced by this 
Agreement and the other Operative Documents is treated as a loan, upon 
the occurrence or existence of any Event of Default and at any time 
thereafter unless such Event of Default is waived, Lessor may, with the 
consent of the Required Participants, or shall, upon instructions from 
the Required Participants, exercise any one or more of the following 
rights and remedies in addition to those rights and remedies set forth 
in Paragraph 5.02:
(a)     Acceleration of Lessee Obligations.  Lessor may, by 
written notice to Lessee, terminate this Agreement on a 
Termination Date which is prior to the Scheduled Expiration Date, 
subject to Subparagraph 3.02(1) of the Purchase Agreement, and 
declare all unpaid Lessee Obligations due and payable on such 
Termination Date.  Such Termination Date shall be the last day of 
a Rental Period unless Required Participants shall otherwise 
direct.  On such Termination Date (which shall then be the 
Expiration Date), Lessee shall pay all unpaid Base Rent accrued 
through such date, all Supplemental Rent due and payable on or 
prior to such date and all other amounts payable by Lessee on the 
Expiration Date pursuant to this Agreement and the other Operative 
Documents.
(b)     Uniform Commercial Code Remedies.  Lessor may exercise 
any or all of the remedies granted to a secured party under the 
Oregon Uniform Commercial Code.
(c)     Judicial Foreclosure.  Lessor may bring an action in 
any court of competent jurisdiction to foreclose the security 
interest in the Property granted to Lessor by this Agreement or 
any of the other Operative Documents.
(d)     Power of Sale.  Lessor may cause some or all of the 
Property, including any Personal Property Collateral, to be sold 
or otherwise disposed of in any combination and in any manner 
permitted by applicable Governmental Rules.
(i)     Sales of Personal Property.  Lessor may dispose 
of any Personal Property Collateral separately from the sale 
of Real Property Collateral, in any manner permitted by 
Chapter 79 of the Oregon Uniform Commercial Code, including 
any public or private sale, or in any manner permitted by 
any other applicable Governmental Rule.  Any proceeds of any 
such disposition shall not cure any Event of Default or 
reinstate any Lessee Obligation.  In connection with any 
such sale or other disposition, Lessee agrees that the 
following procedures constitute a commercially reasonable 
sale:
        (A)     Lessor shall mail written notice of the 
sale to Lessee not later than thirty (30) days prior 
to such sale.
(B)     Once per week during the three (3) weeks 
immediately preceding such sale, Lessor will publish 
notice of the sale in a local daily newspaper of 
general circulation.
(C)     Upon receipt of any written request, 
Lessor will make the Property available to any bona 
fide prospective purchaser for inspection during 
reasonable business hours.
(D)     Notwithstanding, Lessor shall be under no 
obligation to consummate a sale if, in its judgment, 
none of the offers received by it equals the fair 
value of the Property offered for sale.
(E)     If Lessor so requests, Lessee shall 
assemble all of the Personal Property Collateral and 
make it available to Lessor at the site of the Land.  
Regardless of any provision of this Agreement or any 
other Operative Document, Lessor shall not be 
considered to have accepted any property other than 
cash or immediately available funds in satisfaction of 
any Lessee Obligation, unless Lessor has given express 
written notice of its election of that remedy in 
accordance with Oregon Uniform Commercial Code Section 
9505 (ORS Section 79.5050).
The foregoing procedures do not constitute the only 
procedures that may be commercially reasonable.
(ii)    Lessor's Sales of Real Property or Mixed 
Collateral.  Lessor may choose to dispose of some or all of 
the Property which consists solely of Real Property 
Collateral in any manner then permitted by applicable 
Governmental Rules.  In its discretion, Lessor may also or 
alternatively choose to dispose of some or all of the 
Property, in any combination consisting of both Real 
Property Collateral and Personal Property Collateral, 
together in one sale to be held in accordance with the law 
and procedures applicable to real property, as permitted by 
Section 9501(4) of the Oregon Uniform Commercial Code (ORS 
Section 79.5010(4)).  Lessee agrees that such a sale of 
Personal Property Collateral together with Real Property 
Collateral constitutes a commercially reasonable sale of the 
Personal Property Collateral. (For purposes of this power of 
sale, either a sale of Real Property Collateral alone, or a 
sale of both Real Property Collateral and Personal Property 
Collateral together in accordance with Oregon Uniform 
Commercial Code Section 9501(4) (ORS Section 79.5010(4)), 
will sometimes be referred to as a "Lessor's Sale.")
(A)     Before any Lessor's Sale, Lessor shall 
give such notice of default and election to sell as 
may then be required by applicable Governmental Rules.
(B)     When all time periods then legally 
mandated have expired, and after such notice of sale 
as may then be legally required has been given, Lessor 
shall sell the property being sold at a public auction 
to be held at the time and place specified in the 
notice of sale.
(C)     Neither Lessor nor Agent shall have any 
obligation to make demand on Lessee before any 
Lessor's Sale.
(D)     From time to time in accordance with then 
applicable law, Lessor may postpone any Lessor's Sale 
by public announcement at the time and place noticed 
for that sale.
(E)     At any Lessor's Sale, Lessor shall sell to 
the highest bidder at public auction for cash in 
lawful money of the United States.
(F)     Lessor shall execute and deliver to the 
purchaser(s) a deed or deeds conveying the Property 
being sold without any covenant or warranty 
whatsoever, express or implied. The recitals in any 
such deed of any matters or facts, including any facts 
bearing upon the regularity or validity of any 
Lessor's Sale, shall be conclusive proof of their 
truthfulness. Any such deed shall be conclusive 
against all Persons as to the facts recited in it.
(e)     Foreclosure Sales.
(i)     Single or Multiple.  If the Property consists of 
more than one lot, parcel or item of property, Lessor may:
        (A)     Designate the order in which the lots, 
parcels and/or items shall be sold or disposed of or 
offered for sale or disposition; and
(B)     Elect to dispose of the lots, parcels 
and/or items through a single consolidated sale or 
disposition to be held or made under the power of sale 
granted in Subparagraph 5.04(d), or in connection with 
judicial proceedings, or by virtue of a judgment and 
decree of foreclosure and sale; or through two or more 
such sales or dispositions; or in any other manner 
Lessor may deem to be in its best interests (any such 
sale or disposition, a "Foreclosure Sale;" any two or 
more, "Foreclosure Sales").
If Lessor chooses to have more than one Foreclosure Sale, 
Lessor at its option may cause the Foreclosure Sales to be 
held simultaneously or successively, on the same day, or on 
such different days and at such different times and in such 
order as it may deem to be in its best interests.  No 
Foreclosure Sale shall terminate or affect the security 
interests granted to Lessor in the Property by this 
Agreement on any part of the Property which has not been 
sold, until all of the Lessee Obligations have been paid in 
full.
(ii)    Credit Bids.  At any Foreclosure Sale, any 
Person, including any Lessor Party, may bid for and acquire 
the Property or any part of it to the extent permitted by 
then applicable Governmental Rules. Instead of paying cash 
for that property, Lessor may settle for the purchase price 
by crediting the sales price of the Property against the 
Lessee Obligations in any order and proportions as Lessor in 
its sole discretion may choose.
5.05.   Remedies Cumulative.  The rights and remedies of Lessor 
under this Agreement and the other Operative Documents are cumulative 
and may be exercised singularly, successively, or together.
5.06.   No Cure or Waiver.  Neither the performance by Lessor of any 
of Lessee's obligations pursuant to Paragraph 3.13 nor the exercise by 
Lessor of any of its other rights and remedies under this Agreement or 
any other Operative Document  (including the collection of Issues and 
Profits and the application thereof to the Lessee Obligations) shall 
constitute a cure or waiver of any Default or nullify the effect of any 
notice of default or sale, unless and until all Lessee Obligations are 
paid in full.
5.07.   Exercise of Rights and Remedies.  The rights and remedies 
provided to Lessor under this Agreement may be exercised by Lessor 
itself, by Agent pursuant to Subparagraph 2.02(c) of the Participation 
Agreement, by a court-appointed receiver or by any other Person 
appointed by any of the foregoing to act on its behalf.  All of the 
benefits afforded to Lessor under this Agreement and the other Operative 
Documents shall accrue to the benefit of Agent to the extent provided in 
Subparagraph 2.02(c) of the Participation Agreement.
SECTION 6.      MISCELLANEOUS.
6.01.   Notices.  Except as otherwise specified herein, all notices, 
requests, demands, consents, instructions or other communications to or 
upon Lessee or Lessor under this Agreement shall be given as provided in 
Subparagraph 2.02(c) and Paragraph 7.01 of the Participation Agreement.
6.02.   Waivers; Amendments.  Any term, covenant, agreement or 
condition of this Agreement may be amended or waived only as provided in 
the Participation Agreement.  No failure or delay by any Lessor Party in 
exercising any right hereunder shall operate as a waiver thereof or of 
any other right nor shall any single or partial exercise of any such 
right preclude any other further exercise thereof or of any other right.  
Unless otherwise specified in any such waiver or consent, a waiver or 
consent given hereunder shall be effective only in the specific instance 
and for the specific purpose for which given.
6.03.   Successors and Assigns.  This Agreement shall be binding 
upon and inure to the benefit of the Lessor Parties and Lessee and their 
permitted successors and assigns; provided, however, that the Lessor 
Parties and Lessee shall not sell, assign or delegate their respective 
rights and obligations hereunder except as provided in the Participation 
Agreement.
6.04.   No Third Party Rights.  Nothing expressed in or to be 
implied from this Agreement is intended to give, or shall be construed 
to give, any Person, other than the Lessor Parties  and Lessee and their 
permitted successors and assigns, any benefit or legal or equitable 
right, remedy or claim under or by virtue of this Agreement or under or 
by virtue of any provision herein.
6.05.   Partial Invalidity.  If at any time any provision of this 
Agreement is or becomes illegal, invalid or unenforceable in any respect 
under the law or any jurisdiction, neither the legality, validity or 
enforceability of the remaining provisions of this Agreement nor the 
legality, validity or enforceability of such provision under the law of 
any other jurisdiction shall in any way be affected or impaired thereby.
6.06.   Governing Law.  This Agreement shall be governed by and 
construed in accordance with the laws of the State of California without 
reference to conflicts of law rules, except as otherwise provided in 
Subparagraph 7.14 of the Participation Agreement.
6.07.   Counterparts.  This Agreement may be executed in any number 
of identical counterparts, any set of which signed by all the parties 
hereto shall be deemed to constitute a complete, executed original for 
all purposes.
6.08.   Nature of Lessee's Obligations.
(a)     Independent Obligation.  The obligation of Lessee to 
pay the amounts payable by Lessee under this Agreement and the 
other Operative Documents and to perform the other Lessee 
Obligation are absolute, unconditional and irrevocable obligations 
which are separate and independent of the obligations of the 
Lessor Parties under this Agreement and the other Operative 
Documents and all other events and circumstances, including the 
events and circumstances set forth in Subparagraph 6.08(c).
(b)     No Termination or Abatement.  This Agreement and the 
other Operative Documents and Lessee's obligation to pay Rent and 
to pay and perform all other Lessee Obligations shall continue in 
full force and effect without abatement notwithstanding the 
occurrence or existence of any event or circumstance, including 
any event or circumstance set forth in Subparagraph 6.08(c).
(c)     Full Payment and Performance.  Lessee shall make all 
payments under this Agreement and the other Operative Documents in 
the full amounts and at the times required by the terms of this 
Agreement and the other Operative Documents without setoff, 
deduction or reduction of any kind and shall perform all other 
Lessee Obligations as and when required, without regard to any 
event or circumstances whatsoever, including (i) the condition of 
the Property (including any Improvements to the Property made 
prior to the Commencement Date or during the Term); (ii) title to 
the Property (including possession of the Property by any Person 
or the existence of any Lien or any other right, title or interest 
in or to any of the Property in favor of any Person); (iii) the 
value, habitability, usability, design, operation or fitness for 
use of the Property; (iv) the availability or adequacy of 
utilities and other services to the Property; (v) any latent, 
hidden or patent defect in the Property; (vi) the zoning or status 
of the Property or any other restrictions on the use of the 
Property; (g) the economics of the Property; (vii) any Casualty or 
Condemnation; (viii) the compliance of the Property with any 
applicable Governmental Rule or Insurance Requirement; (ix) any 
failure by any Lessor Party to perform any of its obligations 
under this Agreement or any other Operative Document; or (x) the 
exercise by any Lessor Party of any of its remedies under this 
Agreement or any other Operative Document; provided, however, that 
this Paragraph 6.08 shall not abrogate any right which Lessee may 
have to recover damages from any Lessor Party for any material 
breach by such Lessor Party of its obligations under this 
Agreement or any other Operative Document to the extent permitted 
hereunder or thereunder.
6.09.   Non-Residential Trust Deed . Lessee as grantor warrants that 
this Agreement, as a deed of trust or trust deed under Oregon law, is 
not and will not at anytime constitute a residential trust deed, as that 
term is defined in ORS 86.705 or its successor statutes.  Lessee 
warrants that it is engaging in this transaction exclusively for 
business, commercial or investment purposes.
[The signature page follows.]

IN WITNESS WHEREOF, Lessee and Lessor have caused this Agreement 
to be executed as of the day and year first above written.

LESSEE:
ETEC SYSTEMS, INC.

By:     
        Name:   
        Title:  

Etec Systems, Inc.
26460 Corporate Ave. 
Hayward, CA 94545
Attn:  Treasurer
Tel. No:  (510) 887-3649
Fax. No:  (510) 780-3845

LESSOR:
LEASE PLAN NORTH AMERICA, INC.

By:     
        Name:   
        Title:  

Lease Plan North America, Inc. 
c/o ABN AMRO Bank N.V.
135 South LaSalle Street, Suite 711
Chicago, IL 60603
Attn: David M. Shipley
Tel. No: (312) 904-2183
Fax. No: (312) 904-6217