Exhibit 10.1

# LEASE

# DATED DECEMBER 21, 2005

# BY AND BETWEEN

# BRE/PCCP ORCHARD LLC

# as Landlord

# and

# TEGAL CORPORATION

# as Tenant

# AFFECTING PREMISES
COMMONLY KNOWN AS

# 51 EAST DAGGETT DRIVE

# SAN JOSE, CALIFORNIA
95134

# [12/15/95 MULTI TENANT
NET INDUSTRIAL LEASE]

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# TABLE OF CONTENTS

`ARTICLE  1 - DEFINITIONS                                                                                      PAGE:

         1.1      General                                                                                         1
         1.2      Additional Rent                                                                                 1
         1.3      Address for Notices                                                                             1
         1.4      Agents                                                                                          1
         1.5      Agreed Interest Rate                                                                            1
         1.6      Base Monthly Rate                                                                               1
         1.7      Building                                                                                        1
         1.8      Commencement Date                                                                               1
         1.9      Common Area                                                                                     1
         1.10     Common Operating Expense                                                                        1
         1.11     Consumer Price Index                                                                            1
         1.12     Effective Date                                                                                  1
         1.13     Event of Tenant's Default                                                                       1
         1.14     Hazardous Materials                                                                             1
         1.15     Insured and Uninsured Peril                                                                     1
         1.16     Law                                                                                             1
         1.17     Lease                                                                                           1
         1.18     Lease Term                                                                                      1
         1.19     Lender                                                                                          1
         1.20     Permitted Use                                                                                   1
         1.21     Premises                                                                                        1
         1.22     Project                                                                                         2
         1.23     Private Restrictions                                                                            2
         1.24     Real Property Taxes                                                                             2
         1.25     Scheduled Commencement Date                                                                     2
         1.26     Security Instrument                                                                             2
         1.27     Summary                                                                                         2
         1.28     Tenant's Alterations                                                                            2
         1.29     Tenant's Share                                                                                  2
         1.30     Trade Fixtures                                                                                  2


ARTICLE 2 - DEMISE, CONSTRUCTION, AND ACCEPTANCE                                                                  2

         2.1      Demise of Premises                                                                              2
         2.2      Commencement Date                                                                               2
         2.3      Construction of Improvements                                                                    2
         2.4      Delivery and Acceptance of Possession                                                           2
         2.5      Early Occupancy                                                                                 2


ARTICLE 3 - RENT                                                                                                  3

         3.1      Base Monthly Rent                                                                               3
         3.2      Additional Rent                                                                                 3
         3.3      Payment of Rent                                                                                 3
         3.4      Late Charge and Interest on Rent in Default                                                     3
         3.5      Security Deposit                                                                                3


ARTICLE 4 - USE OF PREMISES                                                                                       3

         4.1      Limitation on Use                                                                               3
         4.2      Compliance with Regulations                                                                     4
         4.3      Outside Areas                                                                                   4
         4.4      Signs                                                                                           4
         4.5      Parking                                                                                         4
         4.6      Rules and Regulations                                                                           4`

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# TABLE OF CONTENTS

# (continued)

`PAGE:

ARTICLE 5 - TRADE FIXTURES AND ALTERATIONS                                                                        4

         5.1      Trade Fixtures                                                                                  4
         5.2      Tenant's Alterations                                                                            4
         5.3      Alterations Required by Law                                                                     5
         5.4      Amortization of Certain Capital Improvements                                                    5
         5.5      Mechanic's Liens                                                                                5
         5.6      Taxes on Tenant's Property                                                                      5

ARTICLE 6 - REPAIR AND MAINTENANCE                                                                                5

         6.1      Tenant's Obligation to Maintain                                                                 5
         6.2      Landlord's Obligation to Maintain                                                               6
         6.3      Control of Common Area                                                                          6


ARTICLE 7 - WASTE DISPOSAL AND UTILITIES                                                                          6

         7.1      Waste Disposal                                                                                  6
         7.2      Hazardous Materials                                                                             6
         7.3      Utilities                                                                                       7
         7.4      Compliance with Governmental Regulations                                                        7


ARTICLE 8 - COMMON OPERATING EXPENSES                                                                             8

         8.1      Tenant's Obligation to Reimburse                                                                8
         8.2      Common Operating Expenses Defined                                                               8
         8.3      Real Property Taxes Defined                                                                     8


ARTICLE 9 - INSURANCE                                                                                             9

         9.1      Tenant's Insurance                                                                              9
         9.2      Landlord's Insurance                                                                            9
         9.3      Tenant's Obligation to Reimburse                                                               10
         9.4      Release and Waiver of Subrogation                                                              10


ARTICLE 10 - LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY                                                    10

         10.1     Limitation on Landlord's Liability                                                             10
         10.2     Limitation on Tenant's Recourse                                                                10
         10.3     Indemnification of Landlord                                                                    10


ARTICLE 11 - DAMAGE TO PREMISES                                                                                  10

         11.1     Landlord's Duty to Restore                                                                     10
         11.2     Landlord's Right to Terminate                                                                  11
         11.3     Tenant's Right to Terminate                                                                    11
         11.4     Abatement of Rent                                                                              11`

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# TABLE OF CONTENTS

# (continued)

`Page:

ARTICLE 12 - CONDEMNATION                                                                                        11

         12.1     Landlord's Termination Right                                                                   11
         12.2     Tenant's Termination Right                                                                     12
         12.3     Restoration and Abatement of Rent                                                              12
         12.4     Temporary Taking                                                                               12
         12.5     Division of Condemnation Award                                                                 12


ARTICLE 13 - DEFAULT AND REMEDIES                                                                                12

         13.1     Events of Tenant's Default                                                                     12
         13.2     Landlord's Remedies                                                                            13
         13.3     Waiver                                                                                         13
         13.4     Limitation on Exercise of Rights                                                               14
         13.5     Waiver by Tenant of Certain Remedies                                                           14


ARTICLE 14 - ASSIGNMENT AND SUBLETTING                                                                           14

         14.1     Transfer by Tenant                                                                             14
         14.2     Transfer by Landlord                                                                           16


ARTICLE 15 - GENERAL PROVISIONS                                                                                  16

         15.1     Landlord's Right to Enter                                                                      16
         15.2     Surrender of the Premises                                                                      16
         15.3     Holding Over                                                                                   16
         15.4     Subordination                                                                                  16
         15.5     Mortgagee Protection and Attornment                                                            17
         15.6     Estoppel Certificates and Financial Statements                                                 17
         15.7     Reasonable Consent                                                                             17
         15.8     Notices                                                                                        17
         15.9     Attorney's Fees                                                                                17
         15.10    Corporate Authority                                                                            17
         15.11    Miscellaneous                                                                                  17
         15.12    Termination by Exercise of Right                                                               18
         15.13     Brokerage Commissions                                                                         18
         15.14     Force Majeure                                                                                 18
         15.15     Entire Agreement                                                                              18


EXHIBITS

         Exhibit A -   Site plan of the Project

         Exhibit B -   Improvement Agreement - Not Applicable

         Exhibit C -   Approved Specifications - Not Applicable

         Exhibit D -   Acceptance Agreement

         Exhibit E -   Description of Private Restrictions

         Exhibit F -   Sign Criteria

         Exhibit G -   Form of Subordination Agreement

         Exhibit H -   Hazardous Materials Questionnaire`

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# SUMMARY OF BASIC LEASE TERMS

`SECTION                                     TERMS
(LEASE REFERENCE)

              A.                    Lease Reference Date:         December 21, 2005
       (Introduction)


              B.                    Landlord:        BRE/PCCP ORCHARD L.L.C.
         (Introduction)                              a Delaware limited liability company


              C.                    Tenant:          TEGAL CORPORATION
         (Introduction)                              a Delaware corporation


              D.                    Premises:        That area consisting of 12,717 square feet
         (§ 1.21)                                    of gross leasable area, the address of which is
                                                     51 East Daggett Drive, San Jose within the
                                                     Building as shown on Exhibit A.


              E.                    Project:         The land and improvements shown on Exhibit A
         (§ 1.22)                                    consisting of 6 buildings, the aggregate gross leasable
                                                     area of which is 248,835 square feet.


              F.                    Building:        The building in which the Premises are located
         (§ 1.7)                                     known as Building F containing 39,314 square feet of
                                                     gross leasable area.


              G.                    Tenant's Share:  32.35% of Building F
         (§ 1.29)


              H.                    Tenant's Allocated Parking Stalls:  44 stalls.
         (§ 4.5)


              I.                    Scheduled Commencement Date:       February 1, 2008
         (§ 1.26)


              J.                    Lease Term:      24 calendar months (plus the partial month following
         (§ 1.18)                                    the Commencement Date if such date is not the first day
                                                     of a month).


              K.                    Base Monthly Rent:
         (§ 3.1)                    February 1, 2008 through and including January 31, 2009: $13,988.70
                                    February 1, 2009 through and including January 31, 2010: $14,624.55


              L.                    Prepaid Rent:      $13,988.70
         (§ 3.3)


              M.                    Security Deposit:  $35,000.00
         (§ 3.5)


              N.                    Permitted Use:    Research and development, storage and distribution, offices,
         (§ 4.1)                    marketing, and other legal related uses.


              O.                    Permitted Tenant's Alterations Limit:    $2,500.00
         (§ 5.2)


              P.                    Tenant's Liability Insurance Minimum: $2,000,000.00
         (§ 9.1)


              Q.                    Landlord's Address:                BRE/PCCP Orchard, L.L.C.
         (§ 1.3)                                                       c/o Orchard Commercial, Inc.
                                                                       2262 North First Street
                                                                       San Jose, CA 95131


              R.                    Tenant's Address:                  Tegal Corporation
         (§ 1.3)                                                       51 East Daggett Drive
                                                                       San Jose, CA 95134


              S.                    Retained Real Estate Brokers:      Equis
         (§ 15.13)                                                     Cornish & Carey Commercial
                                                                       Orchard Commercial, Inc.



              T.                    Lease:           This Lease includes the summary of the Basic Lease Terms,
         (§ 1.17)                                    the Lease,  and the  following  exhibits  and  addenda:  First  Addendum to Lease;
                                                     Exhibit A (site  plan of the  Project  containing  description  of the  Premises),
                                                     Exhibit B (Improvement Agreement),  Exhibit C (Approved Specifications),  Exhibit
                                                     D  (Acceptance  Agreement),  Exhibit  E  (description  of  Private  Restrictions),
                                                     Exhibit F (sign criteria),  Exhibit G (form of Subordination Agreement),  Exhibit
                                                     H (Hazardous Materials Questionnaire).`

The
foregoing Summary is hereby incorporated into and made part of this Lease. Each reference
in this Lease to any term of the Summary shall mean the respective information set forth
above shall be construed to incorporate all of the terms provided under the particular
paragraph pertaining to such information. In the event of any conflict between the Summary
and the Lease, the Summary shall control.

`LANDLORD:                                                     TENANT:

BRE/PCCP ORCHARD, L.L.C.                                      TEGAL CORPORATION
a Delaware limited liability company                          a Delaware corporation

By: Orchard 702/703 Investors, LLC                            By:   /s/ Thomas R. Mika  
    a Delaware limited liability company, its Member                 Thomas R. Mika  
                                                                  [Print Name and Title]
By:    /s/ Michael J. Biggar                                        President & CEO
         Michael J. Biggar
         Managing Member                                      By:                        
                                                                                         
                                                                  [Print Name and Title]
Dated: 1/4/06                                                 Dated: 12/30/05`

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# LEASE

This Lease is dated as of the lease
reference date specified in Section A of the Summary and is made by and between the
party identified as Landlord in Section B of the Summary and the party identified
as Tenant in Section C of the Summary.

ARTICLE 1

DEFINITIONS

1.1
General: Any initially capitalized term that is given a special meaning by this
Article 1, the Summary, or by any other provision of this Lease (including the exhibits
attached hereto) shall have such meaning when used in this Lease or any addendum or
amendment hereto unless otherwise clearly indicated by the context.

1.2
Additional Rent: The term "Additional Rent" is defined in ¶3.2.

1.3
Address for Notices: The term Address for Notices shall mean the
addresses set forth in Sections Q and R of the Summary; provided, however, that
after the Commencement Date, Tenants Address for Notices shall be the address of the
Premises.

1.4
Agents: The term Agents shall mean the following: (i) with respect to
Landlord or Tenant, the agents, employees, contractors, and invitees of such party; and
(ii) in addition with respect to Tenant, Tenants subtenants and their respective
agents, employees, contractors, and invitees.

1.5
Agreed Interest Rate: The term Agreed Interest Rate shall mean that
interest rate determined as of the time it is to be applied that is equal to the lesser of
(i) 5% in excess of the discount rate established by the Federal Reserve Bank of San
Francisco as it may be adjusted from time to time, or (ii) the maximum interest rate
permitted by Law.

1.6
Base Monthly Rent: The term Base Monthly Rent shall mean the fixed
monthly rent payable by Tenant pursuant to ¶3.1 which is specified in Section
K of the Summary.

1.7
Building: The term Building shall mean the building in which the
Premises are located which Building is identified in Section F of the Summary, the
gross leasable area of which is referred to herein as the Building Gross Leasable
Area.

1.8
Commencement Date: The term "Commencement Date" is the date the Lease Term commences,
which term is defined in ¶2.2.

1.9
Common Area: The term Common Area shall mean all areas and facilities
within the Project that are not designated by Landlord for the exclusive use of Tenant or
any other lessee or other occupant of the Project, including the parking areas, access and
perimeter roads, pedestrian sidewalks, landscaped areas, trash enclosures, recreation
areas and the like.

1.10
Common Operating Expenses: The term "Common Operating Expenses" is defined in ¶8.2.

1.11
Consumer Price Index: The term Consumer Price Index shall refer to the
Consumer Price Index, All Urban Consumers, subgroup All Items, for the San
Francisco-Oakland-San Jose metropolitan area (base year 1982-84 equals 100), which is
presently being published monthly by the United States Department of Labor, Bureau of
Labor Statistics. However, if this Consumer Price Index is changed so that the base year
is altered from that used as of the commencement of the initial term of this Lease, the
Consumer Price Index shall be converted in accordance with the conversion factor published
by the United States Department of Labor, Bureau of Labor Statistics to obtain the same
results that would have been obtained had the base year not been changed. If no conversion
factor is available, or if the Consumer Price Index is otherwise changed, revised or
discontinued for any reason, there shall be substituted in lieu thereof and the term
Consumer Price Index shall thereafter refer to the most nearly comparable
official price index of the United States government in order to obtain substantially the
same result as would have been obtained had the original Consumer Price Index not been
discontinued, revised or changed, which alternative index shall be selected by Landlord
and shall be subject to Tenants written approval.

1.12
Effective Date: The term Effective Date shall mean the date the last
signatory to this Lease whose execution is required to make it binding on the parties
hereto shall have executed this Lease.

1.13
Event of Tenant's Default: The term "Event of Tenant's Default" is defined in ¶13.1.

1.14
Hazardous Materials: The terms "Hazardous Materials" and "Hazardous Materials Laws" are
defined in ¶7.2E.

1.15
Insured and Uninsured Peril: The terms "Insured Peril" and "Uninsured Peril" are
defined in ¶11.2E.

1.16
Law: The term Law shall mean any judicial decision, statute,
constitution, ordinance, resolution, regulation, rule, administrative order, or other
requirement of any municipal, county, state, federal or other government agency or
authority having jurisdiction over the parties to this Lease or the Premises, or both, in
effect either at the Effective Date or any time during the Lease Term.

1.17
Lease: The term Lease shall mean the Summary and all elements of this
Lease identified in Section T of the Summary, all of which are attached hereto and
incorporated herein by this reference.

1.18
Lease Term: The term Lease Term shall mean the term of this Lease which
shall commence on the Commencement Date and continue for the period specified in
Section J of the Summary.

1.19
Lender: The term Lender shall mean any beneficiary, mortgagee, secured
party, lessor, or other holder of any Security Instrument.

1.20
Permitted Use: The term "Permitted Use" shall mean the use specified in Section N of
the Summary.

1.21
Premises: The term Premises shall mean that building area described in
Section D of the Summary that is within the Building.

1.22
Project: The term Project shall mean that real property and the
improvements thereon which are specified in Section E of the Summary, the aggregate
gross leasable area of which is referred to herein as the Project Gross Leasable
Area.

1.23
Private Restrictions: The term Private Restrictions shall mean all
recorded covenants, conditions and restrictions, private agreements, reciprocal easement
agreements, and any other recorded instruments affecting the use of the Premises which (i)
exist as of the Effective Date, or (ii) are recorded after the Effective Date and are
approved by Tenant.

1.24
Real Property Taxes: The term "Real Property Taxes" is defined in ¶8.3.

1.25
Scheduled Commencement Date: The term "Scheduled Commencement Date" shall mean
the date specified in Section I of the Summary.

1.26
Security Instrument: The term Security Instrument shall mean any
underlying lease, mortgage or deed of trust which now or hereafter affects the Project,
and any renewal, modification, consolidation, replacement or extension thereof.

1.27
Summary: The term Summary shall mean the Summary of Basic Lease Terms
executed by Landlord and Tenant that is part of this Lease.

1.28
Tenants Alterations: The term Tenants Alterations shall
mean all improvements, additions, alterations, and fixtures installed in the Premises by
Tenant at its expense which are not Trade Fixtures.

1.29
Tenants Share: The term Tenants Share shall mean the
percentage obtained by dividing Tenants Gross Leasable Area by the Building Gross
Leasable Area, which as of the Effective Date is the percentage identified in Section
G of the Summary.

1.30
Trade Fixtures: The term Trade Fixtures shall mean (i) Tenants
inventory, furniture, signs, and business equipment, and (ii) anything affixed to the
Premises by Tenant at its expense for purposes of trade, manufacture, ornament or domestic
use (except replacement of similar work or material originally installed by Landlord)
which can be removed without material injury to the Premises unless such thing has, by the
manner in which it is affixed, become an integral part of the Premises.

ARTICLE 2

DEMISE,
CONSTRUCTION, AND ACCEPTANCE

2.1
Demise of Premises: Landlord hereby leases to Tenant, and Tenant leases from
Landlord, for the Lease Term upon the terms and conditions of this Lease, the Premises for
Tenants own use in the conduct of Tenants business together with (i) the
non-exclusive right to use the number of Tenants Allocated Parking Stalls within the
Common Area (subject to the limitations set forth in ¶4.5), and (ii) the
non-exclusive right to use the Common Area for ingress to and egress from the Premises.
Landlord reserves the use of the exterior walls, the roof and the area beneath and above
the Premises, together with the right to install, maintain, use, and replace ducts, wires,
conduits and pipes leading through the Premises in locations which will not materially
interfere with Tenants use of the Premises.

2.2
Commencement Date: If Landlord is not obligated to construct improvements prior to
the Commencement Date pursuant to ¶2.3, then on the Scheduled Commencement Date
Landlord shall deliver possession of the Premises to Tenant and the Lease Term shall
commence, and such date shall be referred to herein as the Commencement Date.
If Landlord is required to construct improvements to the Premises prior to the
Commencement Date, then the Scheduled Commencement Date shall be only an estimate of the
actual Commencement Date, and the term of this Lease shall begin on the first to occur of
the following, which shall be the Commencement Date: (i) the date Landlord
offers to deliver possession of the Premises to Tenant following substantial completion of
all improvements to be constructed by Landlord pursuant to ¶2.3 except for punchlist
items which do not prevent Tenant from using the Premises for the Permitted Use and such
work as Landlord is required to perform but cannot complete until Tenant performs
necessary portions of construction work it has elected or is required to do; or (ii) the
date Tenant enters into occupancy of the Premises.

2.3
Construction of Improvements: Prior to the Commencement Date, Landlord shall
construct certain improvements that shall constitute or become part of the Premises if
required by, and then in accordance with, the terms of Exhibit B and Exhibit
C.

2.4
Delivery and Acceptance of Possession: If this Lease provides that Landlord must
deliver possession of the Premises to Tenant on a certain date, then if Landlord is unable
to deliver possession of the Premises to Tenant on or before such date for any reason
whatsoever, this Lease shall not be void or voidable for a period of 180 days thereafter,
and Landlord shall not be liable to Tenant for any loss or damage resulting therefrom.
Tenant shall accept possession and enter into good faith occupancy of the entire Premises
and commence the operation of its business therein within 30 days after the Commencement
Date. Tenant acknowledges that it has had an opportunity to conduct, and has conducted,
such inspections of the Premises as it deems necessary to evaluate its condition. Except
as otherwise specifically provided herein, Tenant agrees to accept possession of the
Premises in its then existing condition, as-is, including all patent and
latent defects. Tenants taking possession of any part of the Premises shall be
deemed to be an acceptance by Tenant of any work of improvement done by Landlord in such
part as complete and in accordance with the terms of this Lease except for defects of
which Tenant has given Landlord written notice prior to the time Tenant takes possession.
At the time Landlord delivers possession of the Premises to Tenant, Landlord and Tenant
shall together execute an acceptance agreement in the form attached as Exhibit D,
appropriately completed. Landlord shall have no obligation to deliver possession, nor
shall Tenant be entitled to take occupancy, of the Premises until such acceptance
agreement has been executed, and Tenants obligation to pay Base Monthly Rent and
Additional Rent shall not be excused or delayed because of Tenants failure to
execute such acceptance agreement.

2.5
Early Occupancy: If Tenant enters or permits its contractors to enter the Premises
prior to the Commencement Date with the written permission of Landlord, it shall do so
upon all of the terms of this Lease (including its obligations regarding indemnity and
insurance) except those regarding the obligation to pay rent, which shall commence on the
Commencement Date.

ARTICLE 3

RENT

3.1
Base Monthly Rent: Commencing on the Commencement Date and continuing throughout
the Lease Term, Tenant shall pay to Landlord the Base Monthly Rent set forth in
Section K of the Summary.

3.2
Additional Rent: Commencing on the Commencement Date and continuing throughout the
Lease Term, Tenant shall pay the following as additional rent (the Additional
Rent): (i) any late charges or interest due Landlord pursuant to ¶3.4; (ii)
Tenants Share of Common Operating Expenses as provided in ¶8.1; (iii)
Landlords share of any Subrent received by Tenant upon certain assignments and
sublettings as required by ¶14.1; (iv) any legal fees and costs due Landlord pursuant
to ¶15.9; and (v) any other charges due Landlord pursuant to this Lease.

3.3
Payment of Rent: Concurrently with the execution of this Lease by both parties,
Tenant shall pay to Landlord the amount set forth in Section L of the Summary as
prepayment of rent for credit against the first installment(s) of Base Monthly Rent. All
rent required to be paid in monthly installments shall be paid in advance on the first day
of each calendar month during the Lease Term. If Section K of the Summary provides
that the Base Monthly Rent is to be increased during the Lease Term and if the date of
such increase does not fall on the first day of a calendar month, such increase shall
become effective on the first day of the next calendar month. All rent shall be paid in
lawful money of the United States, without any abatement, deduction or offset whatsoever
(except as specifically provided in ¶11.4 and ¶12.3), and without any prior
demand therefor. Rent shall be paid to Landlord at its address set forth in Section
Q of the Summary, or at such other place as Landlord may designate from time to time.
Tenants obligation to pay Base Monthly Rent and Tenants Share of Common
Operating Expenses shall be prorated at the commencement and expiration of the Lease Term.

3.4
Late Charge and Interest on Rent in Default: If any Base Monthly Rent or Additional
Rent is not received by Landlord from Tenant within three (3) business days after Landlord
has notified Tenant in writing that payment of such rent has not been received by
Landlord, then Tenant shall immediately pay to Landlord a late charge equal to 5% of such
delinquent rent as liquidated damages for Tenants failure to make timely payment. In
no event shall this provision for a late charge be deemed to grant to Tenant a grace
period or extension of time within which to pay any rent or prevent Landlord from
exercising any right or remedy available to Landlord upon Tenants failure to pay any
rent due under this Lease in a timely fashion, including any right to terminate this Lease
pursuant to ¶13.2C. If any rent remains delinquent for a period in excess of 30 days
then, in addition to such late charge, Tenant shall pay to Landlord interest on any rent
that is not paid when due at the Agreed Interest Rate following the date such amount
became due until paid.

3.5
Security Deposit: On the Effective Date, Tenant shall deposit with Landlord the
amount set forth in Section M of the Summary as security for the performance by
Tenant of its obligations under this Lease, and not as prepayment of rent (the
Security Deposit). Landlord may from time to time apply such portion of the
Security Deposit as is reasonably necessary for the following purposes: (i) to remedy any
default by Tenant in the payment of rent; (ii) to repair damage to the Premises caused by
Tenant; (iii) to clean the Premises upon termination of the Lease; and (iv) to remedy any
other default of Tenant to the extent permitted by Law and, in this regard, Tenant hereby
waives any restriction on the uses to which the Security Deposit may be put contained in
California Civil Code Section 1950.7. In the event the Security Deposit or any portion
thereof is so used, Tenant agrees to pay to Landlord promptly upon demand an amount in
cash sufficient to restore the Security Deposit to the full original amount. Landlord
shall not be deemed a trustee of the Security Deposit, may use the Security Deposit in
business, and shall not be required to segregate it from its general accounts. Tenant
shall not be entitled to any interest on the Security Deposit. If Landlord transfers the
Premises during the Lease Term, Landlord may pay the Security Deposit to any transferee of
Landlords interest in conformity with the provisions of California Civil Code
Section 1950.7 and/or any successor statute, in which event the transferring Landlord will
be released from all liability for the return of the Security Deposit.

ARTICLE 4

USE OF PREMISES

4.1
Limitation on Use: Tenant shall use the Premises solely for the Permitted Use
specified in Section N of the Summary. Tenant shall not do anything in or about the
Premises which will (i) cause structural injury to the Building, or (ii) cause damage to
any part of the Building except to the extent reasonably necessary for the installation of
Tenants Trade Fixtures and Tenants Alterations, and then only in a manner
which has been first approved by Landlord in writing. Tenant shall not operate any
equipment within the Premises which will (i) materially damage the Building or the Common
Area, (ii) overload existing electrical systems or other mechanical equipment servicing
the Building, (iii) impair the efficient operation of the sprinkler system or the heating,
ventilating or air conditioning (HVAC) equipment within or servicing the
Building, or (iv) damage, overload or corrode the sanitary sewer system. Tenant shall not
attach, hang or suspend anything from the ceiling, roof, walls or columns of the Building
or set any load on the floor in excess of the load limits for which such items are
designed nor operate hard wheel forklifts within the Premises. Any dust, fumes, or waste
products generated by Tenants use of the Premises shall be contained and disposed so
that they do not (i) create an unreasonable fire or health hazard, (ii) damage the
Premises, or (iii) result in the violation of any Law. Except as approved by Landlord,
Tenant shall not change the exterior of the Building or install any equipment or antennas
on or make any penetrations of the exterior or roof of the Building. Tenant shall not
commit any waste in or about the Premises, and Tenant shall keep the Premises in an neat,
clean, attractive and orderly condition, free of any nuisances. If Landlord designates a
standard window covering for use throughout the Building, Tenant shall use this standard
window covering to cover all windows in the Premises. Tenant shall not conduct on any
portion of the Premises or the Project any sale of any kind, including any public or
private auction, fire sale, going-out-of-business sale, distress sale or other liquidation
sale.

4.2
Compliance with Regulations: Tenant shall not use the Premises in any manner which
violates any Laws or Private Restrictions which affect the Premises. Tenant shall abide by
and promptly observe and comply with all Laws and Private Restrictions. Tenant shall not
use the Premises in any manner which will cause a cancellation of any insurance policy
covering Tenants Alternations or any improvements installed by Landlord at its
expense or which poses an unreasonable risk of damage or injury to the Premises. Tenant
shall not sell, or permit to be kept, used, or sold in or about the Premises any article
which may be prohibited by the standard form of fire insurance policy. Tenant shall comply
with all reasonable requirements of any insurance company, insurance underwriter, or Board
of Fire Underwriters which are necessary to maintain the insurance coverage carried by
either Landlord or Tenant pursuant to this Lease.

4.3
Outside Areas: No materials, supplies, tanks or containers, equipment, finished
products or semi-finished products, raw materials, inoperable vehicles or articles of any
nature shall be stored upon or permitted to remain outside of the Premises except in fully
fenced and screened areas outside the Building which have been designed for such purpose
and have been approved in writing by Landlord for such use by Tenant.

4.4
Signs: Tenant shall not place on any portion of the Premises any sign, placard,
lettering in or on windows, banner, displays or other advertising or communicative
material which is visible from the exterior of the Building without the prior written
approval of Landlord. All such approved signs shall strictly conform to all Laws, Private
Restrictions, and Landlords sign criteria attached as Exhibit F, and shall be
installed at the expense of Tenant. Tenant shall maintain such signs in good condition and
repair.

4.5
Parking: Tenant is allocated and shall have the non-exclusive right to use not more
than the number of Tenants Allocated Parking Stalls contained within the Project
described in Section H of the Summary for its use and the use of Tenants
Agents, the location of which may be designated from time to time by Landlord. Tenant
shall not at any time use more parking spaces than the number so allocated to Tenant or
park its vehicles or the vehicles of others in any portion of the Project not designated
by Landlord as a non-exclusive parking area. Tenant shall not have the exclusive right to
use any specific parking space. If Landlord grants to any other tenant the exclusive right
to use any particular parking space(s), Tenant shall not use such spaces. Landlord
reserves the right, after having given Tenant reasonable notice, to have any vehicles
owned by Tenant or Tenants Agents utilizing parking spaces in excess of the parking
spaces allowed for Tenants use to be towed away at Tenants cost. All trucks
and delivery vehicles shall be (i) parked at the rear of the Building, (ii) loaded and
unloaded in a manner which does not interfere with the businesses of other occupants of
the Project, and (iii) permitted to remain on the Project only so long as is reasonably
necessary to complete loading and unloading. In the event Landlord elects or is required
by any Law to limit or control parking in the Project, whether by validation of parking
tickets or any other method of assessment, Tenant agrees to participate in such validation
or assessment program under such reasonable rules and regulations as are from time to time
established by Landlord.

4.6
Rules and Regulations: Landlord may from time to time promulgate reasonable and
nondiscriminatory rules and regulations applicable to all occupants of the Project for the
care and orderly management of the Project and the safety of its tenants and invitees.
Such rules and regulations shall be binding upon Tenant upon delivery of a copy thereof to
Tenant, and Tenant agrees to abide by such rules and regulations. If there is a conflict
between the rules and regulations and any of the provisions of this Lease, the provisions
of this Lease shall prevail. Landlord shall not be responsible for the violation by any
other tenant of the Project of any such rules and regulations.

ARTICLE 5

TRADE FIXTURES AND
ALTERATIONS

5.1
Trade Fixtures: Throughout the Lease Term, Tenant may provide and install, and shall
maintain in good condition, any Trade Fixtures required in the conduct of its business
in the Premises. All Trade Fixtures shall remain Tenant's property.

5.2
Tenant's Alterations: Construction by Tenant of Tenant's Alterations shall be governed
by the following:

A.       
          Tenant shall not construct any Tenants Alterations or otherwise alter the
          Premises without Landlords prior written approval. Tenant shall be
          entitled, without Landlords prior approval, to make Tenants
          Alterations (i) which do not affect the structural or exterior parts or water
          tight character of the Building, and (ii) the reasonably estimated cost of
          which, plus the original cost of any part of the Premises removed or materially
          altered in connection with such Tenants Alterations, together do not
          exceed the Permitted Tenant Alterations Limit specified in Section O of
          the Summary per work of improvement. In the event Landlords approval for
          any Tenants Alterations is required, Tenant shall not construct the
          Leasehold Improvement until Landlord has approved in writing the plans and
          specifications therefor, and such Tenants Alterations shall be constructed
          substantially in compliance with such approved plans and specifications by a
          licensed contractor first approved by Landlord. All Tenants Alterations
          constructed by Tenant shall be constructed by a licensed contractor in
          accordance with all Laws using new materials of good quality.

B.       
          Tenant shall not commence construction of any Tenants Alterations until
          (i) all required governmental approvals and permits have been obtained, (ii) all
          requirements regarding insurance imposed by this Lease have been satisfied,
          (iii) Tenant has given Landlord at least five days prior written notice of
          its intention to commence such construction, and (iv) if reasonably requested by
          Landlord, Tenant has obtained contingent liability and broad form builders
          risk insurance in an amount reasonably satisfactory to Landlord if there are any
          perils relating to the proposed construction not covered by insurance carried
          pursuant to Article 9.

C.       
          All Tenants Alterations shall remain the property of Tenant during the
          Lease Term but shall not be altered or removed from the Premises. At the
          expiration or sooner termination of the Lease Term, all Tenants
          Alterations shall be surrendered to Landlord as part of the realty and shall
          then become Landlords property, and Landlord shall have no obligation to
          reimburse Tenant for all or any portion of the value or cost thereof; provided,
          however, that if Landlord requires Tenant to remove any Tenants
          Alterations, Tenant shall so remove such Tenants Alterations prior to the
          expiration or sooner termination of the Lease Term. Notwithstanding the
          foregoing, Tenant shall not be obligated to remove any Tenants Alterations
          with respect to which the following is true: (i) Tenant was required, or
          elected, to obtain the approval of Landlord to the installation of the Leasehold
          Improvement in question; (ii) at the time Tenant requested Landlords
          approval, Tenant requested of Landlord in writing that Landlord inform Tenant of
          whether or not Landlord would require Tenant to remove such Leasehold
          Improvement at the expiration of the Lease Term; and (iii) at the time Landlord
          granted its approval, it did not inform Tenant that it would require Tenant to
          remove such Leasehold Improvement at the expiration of the Lease Term.

5.3
Alterations Required by Law: Tenant shall make any alteration, addition or change
of any sort to the Premises that is required by any Law because of (i) Tenants
particular use or change of use of the Premises; (ii) Tenants application for any
permit or governmental approval; or (iii) Tenants construction or installation of
any Tenants Alterations or Trade Fixtures. Any other alteration, addition, or change
required by Law which is not the responsibility of Tenant pursuant to the foregoing shall
be made by Landlord (subject to Landlords right to reimbursement from Tenant
specified in ¶5.4).

5.4
Amortization of Certain Capital Improvements: Tenant shall pay Additional Rent in
the event Landlord reasonably elects or is required to make any of the following kinds of
capital improvements to the Project and the cost thereof is not reimbursable as a Common
Operating Expense: (i) capital improvements required to be constructed in order to comply
with any Law (excluding any Hazardous Materials Law) not in effect or applicable to the
Project as of the Effective Date; (ii) modification of existing or construction of
additional capital improvements or building service equipment for the purpose of reducing
the consumption of utility services or Common Operating Expenses of the Project, so
long as the amortized cost of the improvement does not exceed the savings generated unless
such improvement is required by governmental authority; (iii) replacement of capital
improvements or building service equipment existing as of the Effective Date when required
because of normal wear and tear; and (iv) restoration of any part of the Project that has
been damaged by any peril to the extent the cost thereof is not covered by insurance
proceeds actually recovered by Landlord up to a maximum amount per occurrence of 10% of
the then replacement cost of the Project. The amount of Additional Rent Tenant is to pay
with respect to each such capital improvement shall be determined as follows:

A.       
          All costs paid by Landlord to construct such improvements (including financing
          costs) shall be amortized over the useful life of such improvement (as
          reasonably determined by Landlord in accordance with generally accepted
          accounting principles) with interest on the unamortized balance at the then
          prevailing market rate Landlord would pay if it borrowed funds to construct such
          improvements from an institutional lender, and Landlord shall inform Tenant of
          the monthly amortization payment required to so amortize such costs, and shall
          also provide Tenant with the information upon which such determination is made.

B.       
          As Additional Rent, Tenant shall pay at the same time the Base Monthly Rent is
          due an amount equal to Tenants Share of that portion of such monthly
          amortization payment fairly allocable to the Building (as reasonably determined
          by Landlord) for each month after such improvements are completed until the
          first to occur of (i) the expiration of the Lease Term (as it may be extended),
          or (ii) the end of the term over which such costs were amortized.

5.5
Mechanics Liens: Tenant shall keep the Project free from any liens and shall
pay when due all bills arising out of any work performed, materials furnished, or
obligations incurred by Tenant or Tenants Agents relating to the Project. If any
claim of lien is recorded (except those caused by Landlord or Landlords Agents),
Tenant shall bond against or discharge the same within 10 days after the same has been
recorded against the Project. Should any lien be filed against the Project or any action
be commenced affecting title to the Project, the party receiving notice of such lien or
action shall immediately give the other party written notice thereof.

5.6
Taxes on Tenants Property: Tenant shall pay before delinquency any and all
taxes, assessments, license fees and public charges levied, assessed or imposed against
Tenant or Tenants estate in this Lease or the property of Tenant situated within the
Premises which become due during the Lease Term. If any tax or other charge is assessed by
any governmental agency because of the execution of this Lease, such tax shall be paid by
Tenant. On demand by Landlord, Tenant shall furnish Landlord with satisfactory evidence of
these payments.

ARTICLE 6

REPAIR AND
MAINTENANCE

6.1
Tenant's Obligation to Maintain: Except as otherwise provided in ¶6.2, ¶11.1, and ¶
12.3, Tenant shall be responsible for the following during the Lease Term:

A.       
          Tenant shall clean and maintain in good order, condition, and repair and replace
          when necessary the Premises and every part thereof, through regular inspections
          and servicing, including, but not limited to: (i) all plumbing and sewage
          facilities (including all sinks, toilets, faucets and drains), and all ducts,
          pipes, vents or other parts of the HVAC or plumbing system; (ii) all fixtures,
          interior walls, floors, carpets and ceilings; (iii) all windows, doors,
          entrances, plate glass, showcases and skylights (including cleaning both
          interior and exterior surfaces); (iv) all electrical facilities and all
          equipment (including all lighting fixtures, lamps, bulbs, tubes, fans, vents,
          exhaust equipment and systems); and (v) any automatic fire extinguisher
          equipment in the Premises.

B.       
          With respect to utility facilities serving the Premises (including electrical
          wiring and conduits, gas lines, water pipes, and plumbing and sewage fixtures
          and pipes), Tenant shall be responsible for the maintenance and repair of any
          such facilities which serve only the Premises, including all such facilities
          that are within the walls or floor, or on the roof of the Premises, and any part
          of such facility that is not within the Premises, but only up to the point where
          such facilities join a main or other junction (e.g., sewer main or electrical
          transformer) from which such utility services are distributed to other parts of
          the Project as well as to the Premises. Tenant shall replace any damaged or
          broken glass in the Premises (including all interior and exterior doors and
          windows) with glass of the same kind, size and quality. Tenant shall repair any
          damage to the Premises (including exterior doors and windows) caused by
          vandalism or any unauthorized entry.

C.       
          Tenant shall (i) maintain, repair and replace when necessary all building
          standard or Landlord installedHVAC equipment which services only the
          Premises, and shall keep the same in good condition through regular inspection
          and servicing, and (ii) maintain continuously throughout the Lease Term a
          service contract for the maintenance of all such HVAC equipment with a licensed
          HVAC repair and maintenance contractor approved by Landlord, which contract
          provides for the periodic inspection and servicing of the HVAC equipment at
          least once every 90 days during the Lease Term. Notwithstanding the
          foregoing, Landlord may elect at any time to assume responsibility for the
          maintenance, repair and replacement of such HVAC equipment which serves only the
          Premises. Tenant shall maintain continuously throughout the Lease Term a service
          contract for the washing of all windows (both interior and exterior surfaces) in
          the Premises with a contractor approved by Landlord, which contract provides for
          the periodic washing of all such windows at least once every 60 days during the
          Lease Term. Tenant shall furnish Landlord with copies of all such service
          contracts, which shall provide that they may not be cancelled or changed without
          at least 30 days prior written notice to Landlord.

D.       
          All repairs and replacements required of Tenant shall be promptly made with new
          materials of like kind and quality. If the work affects the structural parts of
          the Building or if the estimated cost of any item of repair or replacement is in
          excess of the Permitted Tenants Alterations Limit, then Tenant shall first
          obtain Landlords written approval of the scope of the work, plans
          therefor, materials to be used, and the contractor.

6.2
Landlords Obligation to Maintain: Landlord shall repair, maintain and
operate the Common Area and repair and maintain the roof, exterior and structural parts of
the building(s) located on the Project so that the same are kept in good order and repair.
If there is central HVAC or other building service equipment and/or utility facilities
serving portions of the Common Area and/or both the Premises and other parts of the
Building, Landlord shall maintain and operate (and replace when necessary) such equipment.
Landlord shall not be responsible for repairs required by an accident, fire or other peril
or for damage caused to any part of the Project by any act or omission of Tenant or
Tenants Agents except as otherwise required by Article 11. Landlord may engage
contractors of its choice to perform the obligations required of it by this Article, and
the necessity of any expenditure to perform such obligations shall be at the reasonable
butsole discretion of Landlord.

6.3
Control of Common Area: Landlord shall at all times have exclusive control of the
Common Area. Landlord shall have the right, without the same constituting an actual or
constructive eviction and without entitling Tenant to any abatement of rent, to: (i) close
any part of the Common Area to whatever extent required in the opinion of Landlords
counsel to prevent a dedication thereof or the accrual of any prescriptive rights therein;
(ii) temporarily close the Common Area to perform maintenance or for any other reason
deemed sufficient by Landlord; (iii) change the shape, size, location and extent of the
Common Area; (iv) eliminate from or add to the Project any land or improvement, including
multi-deck parking structures; (v) make changes to the Common Area including, without
limitation, changes in the location of driveways, entrances, passageways, doors and
doorways, elevators, stairs, restrooms, exits, parking spaces, parking areas, sidewalks or
the direction of the flow of traffic and the site of the Common Area; (vi) remove
unauthorized persons from the Project; and/or (vii) change the name or address of the
Building or Project. Tenant shall keep the Common Area clear of all obstructions created
or permitted by Tenant. If in the opinion of Landlord unauthorized persons are using any
of the Common Area by reason of the presence of Tenant in the Building, Tenant, upon
demand of Landlord, shall restrain such unauthorized use by appropriate proceedings. In
exercising any such rights regarding the Common Area, (i) Landlord shall make a reasonable
effort to minimize any disruption to Tenants business, and (ii) Landlord shall not
exercise its rights to control the Common Area in a manner that would materially interfere
with Tenants use of the Premises without first obtaining Tenants consent.
Landlord shall have no obligation to provide guard services or other security measures for
the benefit of the Project. Tenant assumes all responsibility for the protection of Tenant
and Tenants Agents from acts of third parties; provided, however, that nothing
contained herein shall prevent Landlord, at its sole option, from providing security
measures for the Project.

ARTICLE 7

WASTE DISPOSAL AND
UTILITIES

7.1
Waste Disposal: Tenant shall store its waste either inside the Premises or within
outside trash enclosures that are fully fenced and screened in compliance with all Private
Restrictions, and designed for such purpose. All entrances to such outside trash
enclosures shall be kept closed, and waste shall be stored in such manner as not to be
visible from the exterior of such outside enclosures. Tenant shall cause all of its waste
to be regularly removed from the Premises at Tenants sole cost. Tenant shall keep
all fire corridors and mechanical equipment rooms in the Premises free and clear of all
obstructions at all times.

7.2
Hazardous Materials: Landlord and Tenant agree as follows with respect to the
existence or use of Hazardous Materials on the Project:

A.       
          Any handling, transportation, storage, treatment, disposal or use of Hazardous
          Materials by Tenant and Tenants Agents after the Effective Date in or
          about the Project shall strictly comply with all applicable Hazardous Materials
          Laws. Tenant shall indemnify, defend upon demand with counsel reasonably
          acceptable to Landlord, and hold harmless Landlord from and against any
          liabilities, losses, claims, damages, lost profits, consequential damages,
          interest, penalties, fines, monetary sanctions, attorneys fees,
          experts fees, court costs, remediation costs, investigation costs, and
          other expenses which result from or arise in any manner whatsoever out of the
          use, storage, treatment, transportation, release, or disposal of Hazardous
          Materials on or about the Project by Tenant or Tenants Agents after the
          Effective Date.

B.       
          If the presence of Hazardous Materials on the Project caused or permitted by
          Tenant or Tenants Agents after the Effective Date results in contamination
          or deterioration of water or soil resulting in a level of contamination greater
          than the levels established as acceptable by any governmental agency having
          jurisdiction over such contamination, then Tenant shall promptly take any and
          all action necessary to investigate and remediate such contamination if required
          by Law or as a condition to the issuance or continuing effectiveness of any
          governmental approval which relates to the use of the Project or any part
          thereof. Tenant shall further be solely responsible for, and shall defend,
          indemnify and hold Landlord and its agents harmless from and against, all
          claims, costs and liabilities, including attorneys fees and costs, arising
          out of or in connection with any investigation and remediation required
          hereunder to return the Project to its condition existing prior to the
          appearance of such Hazardous Materials.

C.       
          Landlord and Tenant shall each give written notice to the other as soon as
          reasonably practicable of (i) any communication received from any governmental
          authority concerning Hazardous Materials which relates to the Project, and (ii)
          any contamination of the Project by Hazardous Materials which constitutes a
          violation of any Hazardous Materials Law. Tenant may use small quantities of
          household chemicals such as adhesives, lubricants, and cleaning fluids in order
          to conduct its business at the Premises and such other Hazardous Materials as
          are necessary for the operation of Tenants business of which Landlord
          receives notice prior to such Hazardous Materials being brought onto the
          Premises and which Landlord consents in writing may be brought onto the
          Premises. At any time during the Lease Term, Tenant shall, within five days
          after written request therefor received from Landlord, disclose in writing all
          Hazardous Materials that are being used by Tenant on the Project, the nature of
          such use, and the manner of storage and disposal.

D        Landlord
may cause testing wells to be installed on the Project, and may cause the ground water to
be tested to detect the presence of Hazardous Material by the use of such tests as are
then customarily used for such purposes. If Tenant so requests, Landlord shall supply
Tenant with copies of such test results. The cost of such tests and of the installation,
maintenance, repair and replacement of such wells shall be paid by Tenant if such tests
disclose the existence of facts which give rise to liability of Tenant pursuant to its
indemnity given in ¶7.2A and/or ¶7.2B.

E.       
          As used herein, the term Hazardous Material, means any hazardous or
          toxic substance, material or waste which is or becomes regulated by any local
          governmental authority, the State of California or the United States Government.
          The term Hazardous Material, includes, without limitation, petroleum
          products, asbestos, PCBs, and any material or substance which is (i)
          listed under Article 9 or defined as hazardous or extremely hazardous pursuant
          to Article 11 of Title 22 of the California Administrative Code, Division 4,
          Chapter 20, (ii) defined as a hazardous waste pursuant to Section
          1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. 6901 et
          seq. (42 U.S.C. 6903), or (iii) defined as a hazardous substance
          pursuant to Section 101 of the Comprehensive Environmental Response;
          Compensation and Liability Act, 42 U.S.C. 9601 et seq. (42 U.S.C. 9601). As used
          herein, the term Hazardous Material Law shall mean any statute, law,
          ordinance, or regulation of any governmental body or agency (including the U.S.
          Environmental Protection Agency, the California Regional Water Quality Control
          Board, and the California Department of Health Services) which regulates the
          use, storage, release or disposal of any Hazardous Material.

F.       
          The obligations of Landlord and Tenant under this ¶7.2 shall survive the
          expiration or earlier termination of the Lease Term. The rights and obligations
          of Landlord and Tenant with respect to issues relating to Hazardous Materials
          are exclusively established by this ¶7.2. In the event of any inconsistency
          between any other part of this Lease and this ¶7.2, the terms of this
          ¶7.2 shall control.

7.3
Utilities: Tenant shall promptly pay, as the same become due, all charges for
water, gas, electricity, telephone, sewer service, waste pick-up and any other utilities,
materials or services furnished directly to or used by Tenant on or about the Premises
during the Lease Term, including, without limitation, (i) meter, use and/or connection
fees, hook-up fees, or standby fee (excluding any connection fees or hook-up fees which
relate to making the existing electrical, gas, and water service available to the Premises
as of the Commencement Date), and (ii) penalties for discontinued or interrupted service.
If any utility service is not separately metered to the Premises, then Tenant shall pay
its pro rata share of the cost of such utility service with all others served by the
service not separately metered. However, if Landlord determines that Tenant is using a
disproportionate amount of any utility service not separately metered, then Landlord at
its election may (i) periodically charge Tenant, as Additional Rent, a sum equal to
Landlords reasonable estimate of the cost of Tenants excess use of such
utility service, or (ii) install a separate meter (at Tenants expense) to measure
the utility service supplied to the Premises.

7.4
Compliance with Governmental Regulations: Landlord and Tenant shall comply with all
rules, regulations and requirements promulgated by national, state or local governmental
agencies or utility suppliers concerning the use of utility services, including any
rationing, limitation or other control. Tenant shall not be entitled to terminate this
Lease nor to any abatement in rent by reason of such compliance.

ARTICLE 8

COMMON OPERATING
EXPENSES

8.1
Tenants Obligation to Reimburse: As Additional Rent, Tenant shall pay
Tenants Share (specified in Section G of the Summary) of all Common Operating
Expenses; provided, however, if the Project contains more than one building, then Tenant
shall pay Tenants Share of all Common Operating Expenses fairly allocable to the
Building, including (i) all Common Operating Expenses paid with respect to the
maintenance, repair, replacement and use of the Building, and (ii) a proportionate share
(based on the Building Gross Leasable Area as a percentage of the Project Gross Leasable
Area) of all Common Operating Expenses which relate to the Project in general are not
fairly allocable to any one building that is part of the Project. Tenant shall pay such
share of the actual Common Operating Expenses incurred or paid by Landlord but not
theretofore billed to Tenant within 10 days after receipt of a written bill therefor from
Landlord, on such periodic basis as Landlord shall designate, but in no event more
frequently than once a month. Alternatively, Landlord may from time to time require that
Tenant pay Tenants Share of Common Operating Expenses in advance in estimated
monthly installments, in accordance with the following: (i) Landlord shall deliver to
Tenant Landlords reasonable estimate of the Common Operating expenses it anticipates
will be paid or incurred for the Landlords fiscal year in question; (ii) during such
Landlords fiscal year Tenant shall pay such share of the estimated Common Operating
Expenses in advance in monthly installments as required by Landlord due with the
installments of Base Monthly Rent; and (iii) within 90 days after the end of each
Landlords fiscal year, Landlord shall furnish to Tenant a statement in reasonable
detail of the actual Common Operating Expenses paid or incurred by Landlord during the
just ended Landlords fiscal year and thereupon there shall be an adjustment between
Landlord and Tenant, with payment to Landlord or credit by Landlord against the next
installment of Base Monthly Rent, as the case may require, within 10 days after delivery
by Landlord to Tenant of said statement, so that Landlord shall receive the entire amount
of Tenants Share of all Common Operating Expenses for such Landlords fiscal
year and no more. Tenant shall have the right at its expense, exercisable upon reasonable
prior written notice to Landlord, to inspect at Landlords office during normal
business hours Landlords books and records as they relate to Common Operating
Expenses. Such inspection must be within 30 days of Tenants receipt of
Landlords annual statement for the same, and shall be limited to verification of the
charges contained in such statement. Tenant may not withhold payment of such bill pending
completion of such inspection.

8.2
Common Operating Expenses Defined: The term "Common Operating Expenses" shall mean the
following:

A.       
          All costs and expenses paid or incurred by Landlord in doing the following
          (including payments to independent contractors providing services related to the
          performance of the following): (i) maintaining, cleaning, repairing and
          resurfacing the roof (including repair of leaks) and the exterior surfaces
          (including painting) of all buildings located on the Project; (ii) maintenance
          of the liability, fire and property damage insurance covering the Project
          carried by Landlord pursuant to ¶9.2 (including the prepayment of premiums
          for coverage of up to one year); (iii) maintaining, repairing, operating and
          replacing when necessary HVAC equipment, utility facilities and other building
          service equipment; (iv) providing utilities to the Common Area (including
          lighting, trash removal and water for landscaping irrigation); (v) complying
          with all applicable Laws and Private Restrictions; (vi) operating, maintaining,
          repairing, cleaning, painting, restriping and resurfacing the Common Area; (vii)
          replacement or installation of lighting fixtures, directional or other signs and
          signals, irrigation systems, trees, shrubs, ground cover and other plant
          materials, and all landscaping in the Common Area; and (viii) providing
          security;

B.       
          The following costs: (i) Real Property Taxes as defined in ¶8.3; (ii) the
          amount of any deductible paid by Landlord with respect to damage
          caused by any Insured Peril; (iii) the cost to repair damage caused by an
          Uninsured Peril up to a maximum amount in any 12 month period equal to 2% of the
          replacement cost of the buildings or other improvements damaged; and (iv) that
          portion of all compensation (including benefits and premiums for workers
          compensation and other insurance) paid to or on behalf of employees of Landlord
          but only to the extent they are involved in the performance of the work
          described by ¶8.2A that is fairly allocable to the Project;

C.       
          Fees for management services rendered by either Landlord or a third party
          manager engaged by Landlord (which may be a party affiliated with Landlord),
          except that the total amount charged for management services and included in
          Tenants Share of Common Operating Expenses shall not exceed the monthly
          rate of 5% of the Base Monthly Rent.

D.       
          All additional costs and expenses incurred by Landlord with respect to the
          operation, protection, maintenance, repair and replacement of the Project which
          would be considered a current expense (and not a capital expenditure) pursuant
          to generally accepted accounting principles; provided, however, that Common
          Operating Expenses shall not include any of the following: (i) payments on any
          loans or ground leases affecting the Project; (ii) depreciation of any buildings
          or any major systems of building service equipment within the Project; (iii)
          leasing commissions; (iv) the cost of tenant improvements installed for the
          exclusive use of other tenants of the Project; (v) any cost incurred in
          complying with Hazardous Materials Laws, which subject is governed exclusively
          by ¶7.2; and (vi) cost relating to other damages exclusively deemed to
          have been caused by other Tenants in the Project.

8.3
Real Property Taxes Defined: The term Real Property Taxes shall mean
all taxes, assessments, levies, and other charges of any kind or nature whatsoever,
general and special, foreseen and unforeseen (including all installments of principal and
interest required to pay any existing or future general or special assessments for public
improvements, services or benefits, and any increases resulting from reassessments
resulting from a change in ownership, new construction, or any other cause), now or
hereafter imposed by any governmental or quasi-governmental authority or special district
having the direct or indirect power to tax or levy assessments, which are levied or
assessed against, or with respect to the value, occupancy or use of all or any portion of
the Project (as now constructed or as may at any time hereafter be constructed, altered,
or otherwise changed) or Landlords interest therein, the fixtures, equipment and
other property of Landlord, real or personal, that are an integral part of and located on
the Project, the gross receipts, income, or rentals from the Project, or the use of
parking areas, public utilities, or energy within the Project, or Landlords business
of leasing the Project. If at any time during the Lease Term the method of taxation or
assessment of the Project prevailing as of the Effective Date shall be altered so that in
lieu of or in addition to any Real Property Tax described above there shall be levied,
assessed or imposed (whether by reason of a change in the method of taxation or
assessment, creation of a new tax or charge, or any other cause) an alternate or
additional tax or charge (i) on the value, use or occupancy of the Project or
Landlords interest therein, or (ii) on or measured by the gross receipts, income or
rentals from the Project, on Landlords business of leasing the Project, or computed
in any manner with respect to the operation of the Project, then any such tax or charge,
however designated, shall be included within the meaning of the term Real Property
Taxes for purposes of this Lease. If any Real Property Tax is based upon property or
rents unrelated to the Project, then only that part of such Real Property Tax that is
fairly allocable to the Project shall be included within the meaning of the term
Real Property Taxes. Notwithstanding the foregoing, the term Real
Property Taxes shall not include estate, inheritance, transfer, gift or franchise
taxes of Landlord or the federal or state net income tax imposed on Landlords income
from all sources.

ARTICLE 9

INSURANCE

9.1
Tenant's Insurance: Tenant shall maintain insurance complying with all of the following:

A.       
          Tenant shall procure, pay for and keep in full force and effect the following:

(1).       
          Commercial general liability insurance, including property damage, against
          liability for personal injury, bodily injury, death and damage to property
          occurring in or about, or resulting from an occurrence in or about, the Premises
          with combined single limit coverage of not less than the amount of Tenants
          Liability Insurance Minimum specified in Section P of the Summary, which
          insurance shall contain a contractual liability endorsement insuring
          Tenants performance of Tenants obligation to indemnify Landlord
          contained in ¶10.3;

(2).       
          Fire and property damage insurance in so-called all risk form
          insuring Tenants Trade Fixtures and Tenants Alterations for the full
          actual replacement cost thereof;

(3).       
          Such other insurance that is either (i) required by any Lender, or (ii)
          reasonably required by Landlord and customarily carried by tenants of similar
          property in similar businesses.

B.       
          Where applicable and required by Landlord, each policy of insurance required to
          be carried by Tenant pursuant to this ¶9.1: (i) shall name Landlord and
          such other parties in interest as Landlord reasonably designates as additional
          insured; (ii) shall be primary insurance which provides that the insurer shall
          be liable for the full amount of the loss up to and including the total amount
          of liability set forth in the declarations without the right of contribution
          from any other insurance coverage of Landlord; (iii) shall be in a form
          satisfactory to Landlord; (iv) shall be carried with companies reasonably
          acceptable to Landlord; (v) shall provide that such policy shall not be subject
          to cancellation, lapse or change except after at least 30 days prior written
          notice to Landlord so long as such provision of 30 days notice is reasonably
          obtainable, but in any event not less than 10 days prior written notice; (vi)
          shall not have a deductible in excess of such amount as is approved
          by Landlord; (vii) shall contain a cross liability endorsement; and (viii) shall
          contain a severability clause. If Tenant has in full force and
          effect a blanket policy of liability insurance with the same coverage for the
          Premises as described above, as well as other coverage of other premises and
          properties of Tenant, or in which Tenant has some interest, such blanket
          insurance shall satisfy the requirements of this ¶9.1.

C.       
          A copy of each paid-up policy evidencing the insurance required to be carried by
          Tenant pursuant to this ¶9.1 (appropriately authenticated by the insurer)
          or a certificate of the insurer, certifying that such policy has been issued,
          providing the coverage required by this ¶9.1, and containing the provisions
          specified herein, shall be delivered to Landlord prior to the time Tenant or any
          of its Agents enters the Premises and upon renewal of such policies, but not
          less than 5 days prior to the expiration of the term of such coverage. Landlord
          may, at any time, and from time to time, inspect and/or copy any and all
          insurance policies required to be procured by Tenant pursuant to this ¶9.1.
          If any Lender or insurance advisor reasonably determines at any time that the
          amount of coverage required for any policy of insurance Tenant is to obtain
          pursuant to this ¶9.1 is not adequate, then Tenant shall increase such
          coverage for such insurance to such amount as such Lender or insurance advisor
          reasonably deems adequate, not to exceed the level of coverage for such
          insurance commonly carried by comparable businesses similarly situated.

9.2
Landlord's Insurance: Landlord shall have the following obligations and options
regarding insurance:

A.       
          Landlord shall maintain a policy or policies of fire and property damage
          insurance in so-called all risk form insuring Landlord (and such
          others as Landlord may designate) against loss of rents for a period of not less
          than 12 months and from physical damage to the Project with coverage of not less
          than the full replacement cost thereof. Landlord may so insure the Project
          separately, or may insure the Project with other property owned by Landlord
          which Landlord elects to insure together under the same policy or policies. Such
          fire and property damage insurance (i) may be endorsed to cover loss caused by
          such additional perils against which Landlord may elect to insure, including
          earthquake and/or flood, and to provide such additional coverage as Landlord
          reasonably requires, and (ii) shall contain reasonable deductibles
          which, in the case of earthquake and flood insurance, may be up to 15% of the
          replacement value of the property insured or such higher amount as is then
          commercially reasonable. Landlord shall not be required to cause such insurance
          to cover any Trade Fixtures or Tenants Alterations of Tenant.

B.       
          Landlord may maintain a policy or policies of commercial general liability
          insurance insuring Landlord (and such others as are designated by Landlord)
          against liability for personal injury, bodily injury, death and damage to
          property occurring or resulting from an occurrence in, on or about the Project,
          with combined single limit coverage in such amount as Landlord from time to time
          determines is reasonably necessary for its protection.

9.3
Tenants Obligation to Reimburse: If Landlords insurance rates for the
Building are increased at any time during the Lease Term as a result of the nature of
Tenants use of the Premises, Tenant shall reimburse Landlord for the full amount of
such increase immediately upon receipt of a bill from Landlord therefor.

9.4
Release and Waiver of Subrogation: The parties hereto release each other, and their
respective agents and employees, from any liability for injury to any person or damage to
property that is caused by or results from any risk insured against under any valid and
collectible insurance policy carried by either of the parties which contains a waiver of
subrogation by the insurer and is in force at the time of such injury or damage; subject
to the following limitations: (i) the foregoing provision shall not apply to the
commercial general liability insurance described by subparagraphs ¶9.1A and
¶9.2B; (ii) such release shall apply to liability resulting from any risk insured
against or covered by self-insurance maintained or provided by Tenant to satisfy the
requirements of ¶9.1 to the extent permitted by this Lease; and (iii) Tenant shall
not be released from any such liability to the extent any damages resulting from such
injury or damage are not covered by the recovery obtained by Landlord from such insurance,
but only if the insurance in question permits such partial release in connection with
obtaining a waiver of subrogation from the insurer. This release shall be in effect only
so long as the applicable insurance policy contains a clause to the effect that this
release shall not affect the right of the insured to recover under such policy. Each party
shall use reasonable efforts to cause each insurance policy obtained by it to provide that
the insurer waives all right of recovery by way of subrogation against the other party and
its agents and employees in connection with any injury or damage covered by such policy.
However, if any insurance policy cannot be obtained with such a waiver of subrogation, or
if such waiver of subrogation is only available at additional cost and the party for whose
benefit the waiver is to be obtained does not pay such additional cost, then the party
obtaining such insurance shall notify the other party of that fact and thereupon shall be
relieved of the obligation to obtain such waiver of subrogation rights from the insurer
with respect to the particular insurance involved.

ARTICLE 10

LIMITATION ON
LANDLORDSLIABILITY AND INDEMNITY

10.1
Limitation on Landlords Liability: Landlord shall not be liable to Tenant,
nor shall Tenant be entitled to terminate this Lease or to any abatement of rent (except
as expressly provided otherwise herein), for any injury to Tenant or Tenants Agents,
damage to the property of Tenant or Tenants Agents, or loss to Tenants
business resulting from any cause, including without limitation any: (i) failure,
interruption or installation of any HVAC or other utility system or service; (ii) failure
to furnish or delay in furnishing any utilities or services when such failure or delay is
caused by fire or other peril, the elements, labor disturbances of any character, or any
other accidents or other conditions beyond the reasonable control of Landlord; (iii)
limitation, curtailment, rationing or restriction on the use of water or electricity, gas
or any other form of energy or any services or utility serving the Project; (iv) vandalism
or forcible entry by unauthorized persons or the criminal act of any person; or (v)
penetration of water into or onto any portion of the Premises or the Building through roof
leaks or otherwise. Notwithstanding the foregoing but subject to ¶9.4, Landlord shall
be liable for any such injury, damage or loss which is proximately caused by
Landlords willful misconduct or negligence of which Landlord has actual notice and a
reasonable opportunity to cure but which it fails to so cure.

10.2
Limitation on Tenants Recourse: If Landlord is a corporation, trust,
partnership, joint venture, unincorporated association or other form of business entity:
(i) the obligations of Landlord shall not constitute personal obligations of the officers,
directors, trustees, partners, joint venturers, members, owners, stockholders, or other
principals or representatives of such business entity; and (ii) Tenant shall not have
recourse to the assets of such officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, principals or representatives except to the extent of their
interest in the Project. Tenant shall have recourse only to the interest of Landlord in
the Project for the satisfaction of the obligations of Landlord and shall not have
recourse to any other assets of Landlord for the satisfaction of such obligations.

10.3
Indemnification of Landlord: Tenant shall hold harmless, indemnify and defend
Landlord, and its employees, agents and contractors, with competent counsel reasonably
satisfactory to Landlord (and Landlord agrees to accept counsel that any insurer requires
be used), from all liability, penalties, losses, damages, costs, expenses, causes of
action, claims and/or judgments arising by reason of any death, bodily injury, personal
injury or property damage resulting from (i) any cause or causes whatsoever (other than
the willful misconduct or gross negligence of Landlord of which Landlord has had notice
and a reasonable time to cure, but which Landlord has failed to cure) occurring in or
about or resulting from an occurrence in or about the Premises during the Lease Term; (ii)
the negligence or willful misconduct of Tenant or its agents, employees and contractors,
wherever the same may occur; or (iii) an Event of Tenants Default. The provisions of
this ¶10.3 shall survive the expiration or sooner termination of this Lease.

ARTICLE 11

DAMAGE TO PREMISES

11.1
Landlords Duty to Restore: If the Premises are damaged by any peril after the
Effective Date, Landlord shall restore the Premises unless the Lease is terminated by
Landlord pursuant to ¶11.2 or by Tenant pursuant to ¶11.3. All insurance
proceeds available from the fire and property damage insurance carried by Landlord
pursuant to ¶9.2 shall be paid to and become the property of Landlord. If this Lease
is terminated pursuant to either ¶11.2 or ¶11.3, then all insurance proceeds
available from insurance carried by Tenant which covers loss to property that is
Landlords property or would become Landlords property on termination of this
Lease shall be paid to and become the property of Landlord. If this Lease is not so
terminated, then upon receipt of the insurance proceeds (if the loss is covered by
insurance) and the issuance of all necessary governmental permits, Landlord shall commence
and diligently prosecute to completion the restoration of the Premises, to the extent then
allowed by Law, to substantially the same condition in which the Premises were immediately
prior to such damage. Landlords obligation to restore shall be limited to the
Premises and interior improvements constructed by Landlord as they existed as of the
Commencement Date, excluding any Tenants Alterations, Trade Fixtures and/or personal
property constructed or installed by Tenant in the Premises. Tenant shall forthwith
replace or fully repair all Tenants Alterations and Trade Fixtures installed by
Tenant and existing at the time of such damage or destruction, unless otherwise agreed
in writing between Tenant and Landlord,and all insurance proceeds received by Tenant
from the insurance carried by it pursuant to ¶9.1A(2) shall be used for such purpose.

11.2
Landlords Right to Terminate: Landlord shall have the right to terminate this
Lease in the event any of the following occurs, which right may be exercised only by
delivery to Tenant of a written notice of election to terminate within 30 days after the
date of such damage:

A.       
          Either the Project or the Building is damaged by an Insured Peril to such an
          extent that the estimated cost to restore exceeds 33% of the then actual
          replacement cost thereof;

B.       
          Either the Project or the Building is damaged by an Uninsured Peril to such an
          extent that the estimated cost to restore exceeds 2% of the then actual
          replacement cost thereof; provided, however, that Landlord may not terminate
          this Lease pursuant to this ¶11.2B if one or more tenants of the Project
          agree in writing to pay the amount by which the cost to restore the damage
          exceeds such amount and subsequently deposit such amount with Landlord within 30
          days after Landlord has notified Tenant of its election to terminate this Lease;

C.       
          The Premises are damaged by any peril within 12 months of the last day of the
          Lease Term to such an extent that the estimated cost to restore equals or
          exceeds an amount equal to six times the Base Monthly Rent then due; provided,
          however, that Landlord may not terminate this Lease pursuant to this ¶11.2C
          if Tenant, at the time of such damage, has a then valid express written option
          to extend the Lease Term and Tenant exercises such option to extend the Lease
          Term within 15 days following the date of such damage; or

D.       
          Either the Project or the Building is damaged by any peril and, because of the
          Laws then in force, (i) cannot be restored at reasonable cost to substantially
          the same condition in which it was prior to such damage, or (ii) cannot be used
          for the same use being made thereof before such damage if restored as required
          by this Article.

E.       
          As used herein, the following terms shall have the following meanings: (i) the
          term Insured Peril shall mean a peril actually insured against for
          which the insurance proceeds actually received by Landlord are sufficient
          (except for any deductible amount specified by such insurance) to
          restore the Project under then existing building codes to the condition existing
          immediately prior to the damage; and (ii) the term Uninsured Peril
          shall mean any peril which is not an Insured Peril. Notwithstanding the
          foregoing, if the deductible for earthquake or flood insurance
          exceeds 2% of the replacement cost of the improvements insured, such peril shall
          be deemed an Uninsured Peril.

11.3
Tenants Right to Terminate: If the Premises are damaged by any peril and
Landlord does not elect to terminate this Lease or is not entitled to terminate this Lease
pursuant to ¶11.2, then as soon as reasonably practicable, Landlord shall furnish
Tenant with the written opinion of Landlords architect or construction consultant as
to when the restoration work required of Landlord may be completed. Tenant shall have the
right to terminate this Lease in the event any of the following occurs, which right may be
exercised only by delivery to Landlord of a written notice of election to terminate within
7 days after Tenant receives from Landlord the estimate of the time needed to complete
such restoration.

A.       
          The Premises are damaged by any peril and, in the reasonable opinion of
          Landlords architect or construction consultant, the restoration of the
          Premises cannot be substantially completed within 230 days after the date
          of such damage; or

B.       
          The Premises are damaged by any peril within 12 months of the last day of the
          Lease Term and, in the reasonable opinion of Landlords architect or
          construction consultant, the restoration of the Premises cannot be substantially
          completed within 90 days after the date of such damage and such damage renders
          unusable more than 30% of the Premises.

11.4
Abatement of Rent: In the event of damage to the Premises which does not result in
the termination of this Lease, the Base Monthly Rent and the Additional Rent shall be
temporarily abated during the period of restoration in proportion to the degree to which
Tenants use of the Premises is impaired by such damage starting with the date of
such damage. Tenant shall not be entitled to any compensation or damages from Landlord
for loss of Tenants business or property or for any inconvenience or annoyance
caused by such damage or restoration. Tenant hereby waives the provisions of California
Civil Code Sections 1932(2) and 1933(4) and the provisions of any similar law hereinafter
enacted.

ARTICLE 12

CONDEMNATION

12.1
Landlords Termination Right: Landlord shall have the right to terminate this
Lease if, as a result of a taking by means of the exercise of the power of eminent domain
(including a voluntary sale or transfer by Landlord to a condemnor under threat of
condemnation), (i) all or any part of the Premises is so taken, (ii) more than 10% of the
Building Leasable Area is so taken, or (iii) more than 50% of the Common Area is so taken.
Any such right to terminate by Landlord must be exercised within a reasonable period of
time, to be effective as of the date possession is taken by the condemnor.

12.2
Tenants Termination Right: Tenant shall have the right to terminate this
Lease if, as a result of any taking by means of the exercise of the power of eminent
domain (including any voluntary sale or transfer by Landlord to any condemnor under threat
of condemnation), (i) 10% or more of the Premises is so taken and that part of the
Premises that remains cannot be restored within a reasonable period of time and thereby
made reasonably suitable for the continued operation of the Tenants business, or
(ii) there is a taking affecting the Common Area and, as a result of such taking, Landlord
cannot provide parking spaces within reasonable walking distance of the Premises equal in
number to at least 80% of the number of spaces allocated to Tenant by ¶2.1, whether
by rearrangement of the remaining parking areas in the Common Area (including construction
of multi-deck parking structures or restriping for compact cars where permitted by Law) or
by alternative parking facilities on other land. Tenant must exercise such right within a
reasonable period of time, to be effective on the date that possession of that portion of
the Premises or Common Area that is condemned is taken by the condemnor.

12.3
Restoration and Abatement of Rent: If any part of the Premises or the Common Area
is taken by condemnation and this Lease is not terminated, then Landlord shall restore the
remaining portion of the Premises and Common Area and interior improvements constructed by
Landlord as they existed as of the Commencement Date, excluding any Tenants
Alterations, Trade Fixtures and/or personal property constructed or installed by Tenant.
Thereafter, except in the case of a temporary taking, as of the date possession is taken
the Base Monthly Rent shall be reduced in the same proportion that the floor area of that
part of the Premises so taken (less any addition thereto by reason of any reconstruction)
bears to the original floor area of the Premises.

12.4
Temporary Taking: If any portion of the Premises is temporarily taken for six
months or less, this Lease shall remain in effect. If any portion of the Premises is
temporarily taken by condemnation for a period which exceeds six months or which
extends beyond the natural expiration of the Lease Term, and such taking prevents
Tenants ability to use the Premises for the Permitted Use, then Tenant shall have
the right to terminate this Lease, effective on the date possession is taken by the
condemnor.

12.5
Division of Condemnation Award: Any award made as a result of any condemnation of
the Premises or the Common Area shall belong to and be paid to Landlord, and Tenant hereby
assigns to Landlord all of its right, title and interest in any such award; provided,
however, that Tenant shall be entitled to receive any condemnation award that is made
directly to Tenant for the following so long as the award made to Landlord is not thereby
reduced: (i) for the taking of personal property or Trade Fixtures belonging to Tenant;
(ii) for the interruption of Tenants business or its moving costs; (iii) for loss of
Tenants goodwill; or (iv) for any temporary taking where this Lease is not
terminated as a result of such taking. The rights of Landlord and Tenant regarding any
condemnation shall be determined as provided in this Article, and each party hereby waives
the provisions of California Code of Civil Procedure Section 1265.130 and the provisions
of any similar law hereinafter enacted allowing either party to petition the Superior
Court to terminate this Lease in the event of a partial taking of the Premises.

ARTICLE 13

DEFAULT AND REMEDIES

13.1
Events of Tenant's Default: Tenant shall be in default of its obligations under this
Lease if any of the following events occurs (an "Event of Tenant's Default"):

A.       
          Tenant shall have failed to pay Base Monthly Rent or Additional Rent when due,
          and such failure is not cured within 3 days after delivery of written notice
          from Landlord specifying such failure to pay; or

B.       
          Tenant shall have failed to perform any term, covenant, or condition of this
          Lease except those requiring the payment of Base Monthly Rent or Additional
          Rent, and Tenant shall have failed to cure such breach within 30 days after
          written notice from Landlord specifying the nature of such breach where such
          breach could reasonably be cured within said 30 day period, or if such breach
          could not be reasonably cured within said 30 day period, Tenant shall have
          failed to commence such cure within said 30 day period and thereafter continue
          with due diligence to prosecute such cure to completion within such time period
          as is reasonably needed but not to exceed 90 days from the date of
          Landlords notice; or

C.       
          Tenant shall have sublet the Premises or assigned its interest in the Lease in
          violation of the provisions contained in Article 14; or

D.       
          Tenant shall have abandoned the Premises or left the Premises substantially
          vacant; or

E.       
          The occurrence of the following: (i) the making by Tenant of any general
          arrangements or assignments for the benefit of creditors; (ii) Tenant becomes a
          debtor as defined in 11 USC §101 or any successor statute
          thereto (unless, in the case of a petition filed against Tenant, the same is
          dismissed within 60 days); (iii) the appointment of a trustee or receiver to
          take possession of substantially all of Tenants assets located at the
          Premises or of Tenants interest in this Lease, where possession is not
          restored to Tenant within 30 days; or (iv) the attachment, execution or other
          judicial seizure of substantially all of Tenants assets located at the
          Premises or of Tenants interest in this Lease, where such seizure is not
          discharged within 30 days; provided, however, in the event that any provision of
          this Section 13.1E is contrary to any applicable Law, such provision shall be of
          no force or effect; or

F.       
          Tenant shall have failed to deliver documents required of it pursuant to
          ¶15.4 or ¶15.6 within the time periods specified therein.

13.2
Landlords Remedies: If an Event of Tenants Default occurs, Landlord
shall have the following remedies, in addition to all other rights and remedies provided
by any Law or otherwise provided in this Lease, to which Landlord may resort cumulatively
or in the alternative:

A.       
          Landlord may keep this Lease in effect and enforce by an action at law or in
          equity all of its rights and remedies under this Lease, including (i) the right
          to recover the rent and other sums as they become due by appropriate legal
          action,;(ii) the right to make payments required of Tenant or perform
          Tenants obligations and be reimbursed by Tenant for the cost thereof with
          interest at the Agreed Interest Rate from the date the sum is paid by Landlord
          until Landlord is reimbursed by Tenant; and (iii) the remedies of injunctive
          relief and specific performance to compel Tenant to perform its obligations
          under this Lease. Notwithstanding anything contained in this Lease, in the event
          of a breach of an obligation by Tenant which results in a condition which poses
          an imminent danger to safety of persons or damage to property, an unsightly
          condition visible from the exterior of the Building, or a threat to insurance
          coverage, then if Tenant does not cure such breach within 3 days after delivery
          to it of written notice from Landlord identifying the breach, Landlord may cure
          the breach of Tenant and be reimbursed by Tenant for the cost thereof with
          interest at the Agreed Interest Rate from the date the sum is paid by Landlord
          until Landlord is reimbursed by Tenant.

B.       
          Landlord may enter the Premises and release them to third parties for
          Tenants account for any period, whether shorter or longer than the
          remaining Lease Term. Tenant shall be liable immediately to Landlord for all
          costs Landlord incurs in releasing the Premises, including brokers
          commissions, expenses of altering and preparing the Premises required by the
          releasing. Tenant shall pay to Landlord the rent and other sums due under this
          Lease on the date the rent is due, less the rent and other sums Landlord
          received from any releasing. No act by Landlord allowed by this subparagraph
          shall terminate this Lease unless Landlord notifies Tenant in writing that
          Landlord elects to terminate this Lease. Notwithstanding any releasing without
          termination, Landlord may later elect to terminate this Lease because of the
          default by Tenant.

C.       
          Landlord may terminate this Lease by giving Tenant written notice of
          termination, in which event this Lease shall terminate on the date set forth for
          termination in such notice. Any termination under this ¶13.2C shall not
          relieve Tenant from its obligation to pay sums then due Landlord or from any
          claim against Tenant for damages or rent previously accrued or then accruing. In
          no event shall any one or more of the following actions by Landlord, in the
          absence of a written election by Landlord to terminate this Lease, constitute a
          termination of this Lease: (i) appointment of a receiver or keeper in order to
          protect Landlords interest hereunder; (ii) consent to any subletting of
          the Premises or assignment of this Lease by Tenant, whether pursuant to the
          provisions hereof or otherwise; or (iii) any other action by Landlord or
          Landlords Agents intended to mitigate the adverse effects of any breach of
          this Lease by Tenant, including without limitation any action taken to maintain
          and preserve the Premises or any action taken to relet the Premises or any
          portions thereof to the extent such actions do not affect a termination of
          Tenants right to possession of the Premises.

D.       
          In the event Tenant breaches this Lease and abandons the Premises, this Lease
          shall not terminate unless Landlord gives Tenant written notice of its election
          to so terminate this Lease. No act by or on behalf of Landlord intended to
          mitigate the adverse effect of such breach, including those described by
          ¶13.C, shall constitute a termination of Tenants right to possession
          unless Landlord gives Tenant written notice of termination. Should Landlord not
          terminate this Lease by giving Tenant written notice, Landlord may enforce all
          its rights and remedies under this Lease, including the right to recover the
          rent as it becomes due under the Lease as provided in California Civil Code
          Section 1951.4.

E.       
          In the event Landlord terminates this Lease, Landlord shall be entitled, at
          Landlords election, to damages in an amount as set forth in California
          Civil Code Section 1951.2 as in effect on the Effective Date. For purposes of
          computing damages pursuant to California Civil Code Section 1951.2, (i) an
          interest rate equal to the Agreed Interest Rate shall be used where permitted,
          and (ii) the term rent includes Base Monthly Rent and Additional
          Rent. Such damages shall include:

(1).       
          The worth at the time of award of the amount by which the unpaid rent for the
          balance of the term after the time of award exceeds the amount of such rental
          loss that Tenant proves could be reasonably avoided, computed by discounting
          such amount at the discount rate of the Federal Reserve Bank of San Francisco at
          the time of award plus one percent (1%); and

(2).       
          Any other amount necessary to compensate Landlord for all detriment proximately
          caused by Tenants failure to perform Tenants obligations under this
          Lease, or which in the ordinary course of things would be likely to result
          therefrom, including the following: (i) expenses for cleaning, repairing or
          restoring the Premises; (ii) expenses for altering, remodeling or otherwise
          improving the Premises for the purpose of reletting, including installation of
          leasehold improvements (whether such installation be funded by a reduction of
          rent, direct payment or allowance to a new tenant, or otherwise); (iii)
          brokers fees, advertising costs and other expenses of reletting the
          Premises; (iv) costs of carrying the Premises, such as taxes, insurance
          premiums, utilities and security precautions; (v) expenses in retaking
          possession of the Premises; and (vi) attorneys fees and court costs
          incurred by Landlord in retaking possession of the Premises and in releasing the
          Premises or otherwise incurred as a result of Tenants default.

F.       
          Nothing in this ¶13.2 shall limit Landlords right to indemnification
          from Tenant as provided in ¶7.2 and ¶10.3. Any notice given by
          Landlord in order to satisfy the requirements of ¶13.1A or ¶13.1B
          above shall also satisfy the notice requirements of California Code of Civil
          Procedure Section 1161 regarding unlawful detainer proceedings.

13.3
Waiver: One partys consent to or approval of any act by the other party
requiring the first partys consent or approval shall not be deemed to waive or
render unnecessary the first partys consent to or approval of any subsequent similar
act by the other party. The receipt by Landlord of any rent or payment with or without
knowledge of the breach of any other provision hereof shall not be deemed a waiver of any
such breach unless such waiver is in writing and signed by Landlord. No delay or omission
in the exercise of any right or remedy accruing to either party upon any breach by the
other party under this Lease shall impair such right or remedy or be construed as a waiver
of any such breach theretofore or thereafter occurring. The waiver by either party of any
breach of any provision of this Lease shall not be deemed to be a waiver of any subsequent
breach of the same or of any other provisions herein contained.

13.4
Limitation On Exercise of Rights: At any time that an Event of Tenants
Default has occurred and remains uncured, (i) it shall not be unreasonable for Landlord to
deny or withhold any consent or approval requested of it by Tenant which Landlord would
otherwise be obligated to give, and (ii) Tenant may not exercise any option to extend,
right to terminate this Lease, or other right granted to it by this Lease which would
otherwise be available to it.

13.5
Waiver by Tenant of Certain Remedies: Tenant waives the provisions of Sections
1932(1), 1941 and 1942 of the California Civil Code and any similar or successor law
regarding Tenants right to terminate this Lease or to make repairs and deduct the
expenses of such repairs from the rent due under this Lease. Tenant hereby waives any
right of redemption or relief from forfeiture under the laws of the State of California,
or under any other present or future law, including the provisions of Sections 1174 and
1179 of the California Code of Civil Procedure.

ARTICLE 14

ASSIGNMENT AND
SUBLETTING

14.1
Transfer By Tenant: The following provisions shall apply to any assignment,
subletting or other transfer by Tenant or any subtenant or assignee or other successor in
interest of the original Tenant (collectively referred to in this ¶14.1 as
Tenant):

A.       
          Tenant shall not do any of the following (collectively referred to herein as a
          Transfer), whether voluntarily, involuntarily or by operation of
          law, without the prior written consent of Landlord, which consent shall not be
          unreasonably withheld or delayed: (i) sublet all or any part of the Premises or
          allow it to be sublet, occupied or used by any person or entity other than
          Tenant; (ii) assign its interest in this Lease; (iii) mortgage or encumber the
          Lease (or otherwise use the Lease as a security device) in any manner; or (iv)
          materially amend or modify an assignment, sublease or other transfer that has
          been previously approved by Landlord. Tenant shall reimburse Landlord for all
          reasonable costs and attorneys fees incurred by Landlord in connection
          with the evaluation, processing, and/or documentation of any requested Transfer,
          whether or not Landlords consent is granted. Landlords reasonable
          costs shall include the cost of any review or investigation performed by
          Landlord or consultant acting on Landlords behalf of (i) Hazardous
          Materials (as defined in Section 7.2E of this Lease) used, stored, released, or
          disposed of by the potential Subtenant or Assignee, and/or (ii) violations of
          Hazardous Materials Law (as defined in Section 7.2E of this lease) by the Tenant
          or the proposed Subtenant or Assignee. Any Transfer so approved by Landlord
          shall not be effective until Tenant has delivered to Landlord an executed
          counterpart of the document evidencing the Transfer which (i) is in a form
          reasonably approved by Landlord; (ii) contains the same terms and conditions as
          stated in Tenants notice given to Landlord pursuant to ¶14.1B; and
          (iii) in the case of an assignment of the Lease, contains the agreement of the
          proposed transferee to assume all obligations of Tenant under this Lease arising
          after the effective date of such Transfer and to remain jointly and severally
          liable therefor with Tenant. Any attempted Transfer without Landlords
          consent shall constitute an Event of Tenants Default and shall be voidable
          at Landlords option. Landlords consent to any one Transfer shall not
          constitute a waiver of the provisions of this ¶14.1 as to any subsequent
          Transfer or a consent to any subsequent Transfer. No Transfer, even with the
          consent of Landlord, shall relieve Tenant of its personal and primary obligation
          to pay the rent and to perform all of the other obligations to be performed by
          Tenant hereunder. The acceptance of rent by Landlord from any person shall not
          be deemed to be a waiver by Landlord of any provision of this Lease nor to be a
          consent to any Transfer.

B.       
          At least 30 days before a proposed Transfer is to become effective, Tenant shall
          give Landlord written notice of the proposed terms of such Transfer and request
          Landlords approval, which notice shall include the following: (i) the name
          and legal composition of the proposed transferee; (ii) a current financial
          statement of the transferee, financial statements of the transferee covering the
          preceding three years if the same exist, and (if available) an audited financial
          statement of the transferee for a period ending not more than one year prior to
          the proposed effective date of the Transfer, all of which statements are
          prepared in accordance with generally accepted accounting principles; (iii) the
          nature of the proposed transferees business to be carried on in the
          Premises; (iv) all consideration to be given on account of the Transfer; (v) a
          current financial statement of Tenant; and (vi) an accurately filled out
          response to Landlords standard Hazardous Materials Questionnaire. Tenant
          shall provide to Landlord such other information as may be reasonably requested
          by Landlord within seven days after Landlords receipt of such notice from
          Tenant. Landlord shall respond in writing to Tenants request for
          Landlords consent to a Transfer within the later of (i) 15 days of receipt
          of such request together with the required accompanying documentation, or (ii)
          seven days after Landlords receipt of all information which Landlord
          reasonably requests within seven days after it receives Tenants first
          notice regarding the Transfer in question. If Landlord fails to respond in
          writing within said period, Landlord will be deemed to have withheld consent to
          such Transfer. Tenant shall immediately notify Landlord of any material
          modification to the proposed terms of such Transfer.

C.       
          In the event that Tenant seeks to make any Transfer, Landlord shall have the
          right to terminate this Lease or, in the case of a sublease of less than all of
          the Premises, terminate this Lease as to that part of the Premises proposed to
          be so sublet, either (i) on the condition that the proposed transferee
          immediately enter into a direct lease of the Premises with Landlord (or, in the
          case of a partial sublease, a lease for the portion proposed to be so sublet) on
          the same terms and conditions contained in Tenants notice, or (ii) so that
          Landlord is thereafter free to lease the Premises (or, in the case of a partial
          sublease, the portion proposed to be so sublet) to whomever it pleases on
          whatever terms are acceptable to Landlord. In the event Landlord elects to so
          terminate this Lease, then (i) if such termination is conditioned upon the
          execution of a lease between Landlord and the proposed transferee, Tenants
          obligations under this Lease shall not be terminated until such transferee
          executes a new lease with Landlord, enters into possession and commences the
          payment of rent, and (ii) if Landlord elects simply to terminate this Lease (or,
          in the case of a partial sublease, terminate this Lease as to the portion to be
          so sublet), the Lease shall so terminate in its entirety (or as to the space to
          be so sublet) fifteen (15) days after Landlord has notified Tenant in writing of
          such election. Upon such termination, Tenant shall be released from any further
          obligation under this Lease if it is terminated in its entirety, or shall be
          released from any further obligation under the Lease with respect to the space
          proposed to be sublet in the case of a proposed partial sublease. In the case of
          a partial termination of the Lease, the Base Monthly Rent and Tenants
          Share shall be reduced to an amount which bears the same relationship to the
          original amount thereof as the area of that part of the Premises which remains
          subject to the Lease bears to the original area of the Premises. Landlord and
          Tenant shall execute a cancellation and release with respect to the Lease to
          effect such termination.

D.       
          If Landlord consents to a Transfer proposed by Tenant, Tenant may enter into
          such Transfer, and if Tenant does so, the following shall apply:

(1).       
          Tenant shall not be released of its liability for the performance of all of its
          obligations under the Lease.

(2).       
          If Tenant assigns its interest in this Lease, then Tenant shall pay to Landlord
          50% of all Subrent (as defined in ¶14.1D(5)) received by Tenant over and
          above (i) the assignees agreement to assume the obligations of Tenant
          under this Lease, and (ii) all Permitted Transfer Costs related to such
          assignment. In the case of assignment, the amount of Subrent owed to Landlord
          shall be paid to Landlord on the same basis, whether periodic or in lump sum,
          that such Subrent is paid to Tenant by the assignee.

(3).       
          If Tenant sublets any part of the Premises, then with respect to the space so
          subleased, Tenant shall pay to Landlord 50% of the positive difference, if any,
          between (i) all Subrent paid by the subtenant to Tenant, less (ii) the sum of
          all Base Monthly Rent and Additional Rent allocable to the space sublet and all
          Permitted Transfer Costs related to such sublease. Such amount shall be paid to
          Landlord on the same basis, whether periodic or in lump sum, that such Subrent
          is paid to Tenant by its subtenant. In calculating Landlords share of any
          periodic payments, all Permitted Transfer Costs shall be first recovered by
          Tenant.

(4).       
          Tenants obligations under this ¶14.1D shall survive any Transfer, and
          Tenants failure to perform its obligations hereunder shall be an Event of
          Tenants Default. At the time Tenant makes any payment to Landlord required
          by this ¶14.1D, Tenant shall deliver an itemized statement of the method by
          which the amount to which Landlord is entitled was calculated, certified by
          Tenant as true and correct. Landlord shall have the right at reasonable
          intervals to inspect Tenants books and records relating to the payments
          due hereunder. Upon request therefor, Tenant shall deliver to Landlord copies of
          all bills, invoices or other documents upon which its calculations are based.
          Landlord may condition its approval of any Transfer upon obtaining a
          certification from both Tenant and the proposed transferee of all Subrent and
          other amounts that are to be paid to Tenant in connection with such Transfer.

(5).       
          As used in this ¶14.1D, the term Subrent shall mean any
          consideration of any kind received, or to be received, by Tenant as a result of
          the Transfer, if such sums are related to Tenants interest in this Lease
          or in the Premises, including payments from or on behalf of the transferee (in
          excess of the book value thereof) for Tenants assets, fixtures, leasehold
          improvements, inventory, accounts, goodwill, equipment, furniture, and general
          intangibles. As used in this ¶14.1D, the term Permitted Transfer
          Costs shall mean (i) all reasonable leasing commissions paid to third
          parties not affiliated with Tenant in order to obtain the Transfer in question;
          and (ii) all reasonable attorneys fees incurred by Tenant with respect to
          the Transfer in question.

E.       
          If Tenant is a corporation, the following shall be deemed a voluntary assignment
          of Tenants interest in this Lease: (i) any dissolution, merger,
          consolidation, or other reorganization of or affecting Tenant, whether or not
          Tenant is the surviving corporation; and (ii) if the capital stock of Tenant is
          not publicly traded, the sale or transfer to one person or entity (or to any
          group of related persons or entities) stock possessing more than 50% of the
          total combined voting power of all classes of Tenants capital stock
          issued, outstanding and entitled to vote for the election of directors. If
          Tenant is a partnership, any withdrawal or substitution (whether voluntary,
          involuntary or by operation of law, and whether occurring at one time or over a
          period of time) of any partner owning 25% or more (cumulatively) of any interest
          in the capital or profits of the partnership, or the dissolution of the
          partnership, shall be deemed a voluntary assignment of Tenants interest in
          this Lease.

F.       
          Notwithstanding anything contained in ¶14.1, so long as Tenant otherwise
          complies with the provisions of ¶14.1 Tenant may enter into any of the
          following transfers (a Permitted Transfer) without Landlords
          prior written consent, and Landlord shall not be entitled to terminate the Lease
          pursuant to ¶14.1C or to receive any part of any Subrent resulting
          therefrom that would otherwise be due it pursuant to ¶14.1D:

(1).       
          Tenant may sublease all or part of the Premises or assign its interest in this
          Lease to any corporation which controls, is controlled by, or is under common
          control with the original Tenant to this Lease by means of an ownership interest
          of more than 50%;

(2).       
          Tenant may assign its interest in the Lease to a corporation which results from
          a merger, consolidation or other reorganization in which Tenant is not the
          surviving corporation, so long as the surviving corporation has a net worth at
          the time of such assignment that is equal to or greater than the net worth of
          Tenant immediately prior to such transaction; and

(3).       
          Tenant may assign this Lease to a corporation which purchases or otherwise
          acquires all or substantially all of the assets of Tenant, so long as such
          acquiring corporation has a net worth at the time of such assignment that is
          equal to or greater than the net worth of Tenant immediately prior to such
          transaction.

14.2
Transfer By Landlord: Landlord and its successors in interest shall have the right
to transfer their interest in this Lease and the Project at any time and to any person or
entity. In the event of any such transfer, the Landlord originally named herein (and, in
the case of any subsequent transfer, the transferror) from the date of such transfer,
shall be automatically relieved, without any further act by any person or entity, of all
liability for the performance of the obligations of the Landlord hereunder which may
accrue after the date of such transfer. After the date of any such transfer, the term
Landlord as used herein shall mean the transferee of such interest in the
Premises.

ARTICLE 15

GENERAL PROVISIONS

15.1
Landlords Right to Enter: Landlord and its agents may enter the Premises at
any reasonable time after giving at least 24 hours prior notice to Tenant (and
immediately in the case of emergency) for the purpose of: (i) inspecting the same; (ii)
posting notices of non-responsibility; (iii) supplying any service to be provided by
Landlord to Tenant; (iv) showing the Premises to prospective purchasers, mortgagees or
tenants; (v) making necessary alterations, additions or repairs; (vi) performing
Tenants obligations when Tenant has failed to do so after written notice from
Landlord; (vii) placing upon the Premises ordinary for lease signs or
for sale signs; and (viii) responding to an emergency. Landlord shall have the
right to use any and all means Landlord may deem necessary and proper to enter the
Premises in an emergency. Any entry into the Premises obtained by Landlord in accordance
with this ¶15.1 shall not be a forcible or unlawful entry into, or a detainer of, the
Premises, or an eviction, actual or constructive, of Tenant from the Premises.

15.2
Surrender of the Premises: Upon the expiration or sooner termination of this Lease,
Tenant shall vacate and surrender the Premises to Landlord in the same condition as
existed at the Commencement Date, except for (i) reasonable wear and tear, (ii) damage
caused by any peril or condemnation, and (iii) contamination by Hazardous Materials for
which Tenant is not responsible pursuant to ¶7.2A or ¶7.2B. In this regard,
normal wear and tear shall be construed to mean wear and tear caused to the Premises by
the natural aging process which occurs in spite of prudent application of the
reasonable standards for maintenance, repair and janitorial practices, and does not
include items of neglected or deferred maintenance. In any event, Tenant shall cause the
following to be done prior to the expiration or the sooner termination of this Lease: (i)
all interior walls shall be painted or cleaned so that they appear freshly painted; (ii)
all tiled floors shall be cleaned and waxed; (iii) all carpets shall be cleaned and
shampooed; (iv) all broken, marred, stained or nonconforming acoustical ceiling tiles
shall be replaced; (v) all windows shall be washed; (vi) the HVAC system shall be serviced
by a reputable and licensed service firm and left in good operating condition and repair
as so certified by such firm; and (vii) the plumbing and electrical systems and lighting
shall be placed in good order and repair (including replacement of any burned out,
discolored or broken light bulbs, ballasts, or lenses). If Landlord so requests, Tenant
shall, prior to the expiration or sooner termination of this Lease, (i) remove any
Tenants Alterations which Tenant is required to remove pursuant to ¶5.2 and
repair all damage caused by such removal, and (ii) return the Premises or any part thereof
to its original configuration existing as of the time the Premises were delivered to
Tenant. If the Premises are not so surrendered at the termination of this Lease, Tenant
shall be liable to Landlord for all costs incurred by Landlord in returning the Premises
to the required condition, plus interest on all costs incurred at the Agreed Interest
Rate. Tenant shall indemnify Landlord against loss or liability resulting from delay by
Tenant in so surrendering the Premises, including, without limitation, any claims made by
any succeeding tenant or losses to Landlord due to lost opportunities to lease to
succeeding tenants.

15.3
Holding Over: This Lease shall terminate without further notice at the expiration
of the Lease Term. Any holding over by Tenant after expiration of the Lease Term shall not
constitute a renewal or extension of the Lease or give Tenant any rights in or to the
Premises except as expressly provided in this Lease. Any holding over after such
expiration with the written consent of Landlord shall be construed to be a tenancy from
month to month on the same terms and conditions herein specified insofar as applicable
except that Base Monthly Rent shall be increased to an amount equal to 150% of the Base
Monthly Rent payable during the last full calendar month of the Lease Term.

15.4
Subordination: The following provisions shall govern the relationship of this Lease to
any Security Instrument:

A.       
          The Lease is subject and subordinate to all Security Instruments existing as of
          the Effective Date. However, if any Lender so requires, this Lease shall become
          prior and superior to any such Security Instrument.

B.       
          At Landlords election, this Lease shall become subject and subordinate to
          any Security Instrument created after the Effective Date. Notwithstanding such
          subordination, Tenants right to quiet possession of the Premises shall not
          be disturbed so long as Tenant is not in default and performs all of its
          obligations under this Lease, unless this Lease is otherwise terminated pursuant
          to its terms.

C.       
          Tenant shall upon request execute any document or instrument reasonably required
          by any Lender to make this Lease either prior or subordinate to a Security
          Instrument, which may include such other matters as the Lender customarily and
          reasonably requires in connection with such agreements, including provisions
          that the Lender not be liable for (i) the return of any security deposit unless
          the Lender receives it from Landlord, and (ii) any defaults on the part of
          Landlord occurring prior to the time the Lender takes possession of the Project
          in connection with the enforcement of its Security Instrument. Tenants
          failure to execute any such document or instrument within 10 days after written
          demand therefor shall constitute an Event of Tenants Default. Tenant
          approves as reasonable the form of subordination agreement attached to this
          Lease as Exhibit G.

15.5
Mortgagee Protection and Attornment: In the event of any default on the part of the
Landlord, Tenant will use reasonable efforts to give notice by registered mail to any
Lender whose name has been provided to Tenant and shall offer such Lender a reasonable
opportunity to cure the default, including time to obtain possession of the Premises by
power of sale or judicial foreclosure or other appropriate legal proceedings, if such
should prove necessary to effect a cure. Tenant shall attorn to any purchaser of the
Premises at any foreclosure sale or private sale conducted pursuant to any Security
Instrument encumbering the Premises, or to any grantee or transferee designated in any
deed given in lieu of foreclosure.

15.6
Estoppel Certificates and Financial Statements: At all times during the Lease Term,
each party agrees, following any request by the other party, promptly to execute and
deliver to the requesting party within 15 days following delivery of such request an
estoppel certificate: (i) certifying that this Lease is unmodified and in full force and
effect or, if modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect, (ii) stating the date to which the
rent and other charges are paid in advance, if any, (iii) acknowledging that there are
not, to the certifying partys knowledge, any uncured defaults on the part of any
party hereunder or, if there are uncured defaults, specifying the nature of such defaults,
and (iv) certifying such other information about the Lease as may be reasonably required
by the requesting party. A failure to deliver an estoppel certificate within 15 days after
delivery of a request therefor shall be a conclusive admission that, as of the date of the
request for such statement: (i) this Lease is unmodified except as may be represented by
the requesting party in said request and is in full force and effect, (ii) there are no
uncured defaults in the requesting partys performance, and (iii) no rent has been
paid more than 30 days in advance. At any time during the Lease Term Tenant shall, upon 15
days prior written notice from Landlord, provide Tenants most recent financial
statement and financial statements covering the 24 month period prior to the date of such
most recent financial statement to any existing Lender or to any potential Lender or buyer
of the Premises. Such statements shall be prepared in accordance with generally accepted
accounting principles and, if such is the normal practice of Tenant, shall be audited by
an independent certified public accountant.

15.7
Reasonable Consent: Whenever any partys approval or consent is required by
this Lease before an action may be taken by the other party, such approval or consent
shall not be unreasonably withheld or delayed.

15.8
Notices: Any notice required or desired to be given regarding this Lease shall be
in writing and may be given by personal delivery, by facsimile telecopy, by courier
service, or by mail. A notice shall be deemed to have been given (i) on the third business
day after mailing if such notice was deposited in the United States mail, certified or
registered, postage prepaid, addressed to the party to be served at its Address for
Notices specified in Section Q or Section R of the Summary (as applicable),
(ii) when delivered if given by personal delivery, and (iii) in all other cases when
actually received at the partys Address for Notices. Either party may change its
address by giving notice of the same in accordance with this ¶15.8, provided,
however, that any address to which notices may be sent must be a California address.

15.9
Attorneys Fees: In the event either Landlord or Tenant shall bring any action
or legal proceeding for an alleged breach of any provision of this Lease, to recover rent,
to terminate this Lease or otherwise to enforce, protect or establish any term or covenant
of this Lease, the prevailing party shall be entitled to recover as a part of such action
or proceeding, or in a separate action brought for that purpose, reasonable
attorneys fees, court costs, and experts fees as may be fixed by the court.

15.10
Corporate Authority: If Tenant is a corporation (or partnership), each individual
executing this Lease on behalf of Tenant represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of such corporation in accordance
with the by-laws of such corporation (or partnership in accordance with the partnership
agreement of such partnership) and that this Lease is binding upon such corporation (or
partnership) in accordance with its terms. Each of the persons executing this Lease on
behalf of a corporation does hereby covenant and warrant that the party for whom it is
executing this Lease is a duly authorized and existing corporation, that it is qualified
to do business in California, and that the corporation has full right and authority to
enter into this Lease.

15.11
Miscellaneous: Should any provision of this Lease prove to be invalid or illegal,
such invalidity or illegality shall in no way affect, impair or invalidate any other
provision hereof, and such remaining provisions shall remain in full force and effect.
Time is of the essence with respect to the performance of every provision of this Lease in
which time of performance is a factor. The captions used in this Lease are for convenience
only and shall not be considered in the construction or interpretation of any provision
hereof. Any executed copy of this Lease shall be deemed an original for all purposes. This
Lease shall, subject to the provisions regarding assignment, apply to and bind the
respective heirs, successors, executors, administrators and assigns of Landlord and
Tenant. Party shall mean Landlord or Tenant, as the context implies. If Tenant
consists of more than one person or entity, then all members of Tenant shall be jointly
and severally liable hereunder. This Lease shall be construed and enforced in accordance
with the laws of the State of California. The language in all parts of this Lease shall in
all cases be construed as a whole according to its fair meaning, and not strictly for or
against either Landlord or Tenant. When the context of this Lease requires, the neuter
gender includes the masculine, the feminine, a partnership or corporation or joint
venture, and the singular includes the plural. The terms shall,
will and agree are mandatory. The term may is
permissive. When a party is required to do something by this Lease, it shall do so at its
sole cost and expense without right of reimbursement from the other party unless a
provision of this Lease expressly requires reimbursement. Landlord and Tenant agree that
(i) the gross leasable area of the Premises includes any atriums, depressed loading docks,
covered entrances or egresses, and covered loading areas, (ii) each has had an opportunity
to determine to its satisfaction the actual area of the Project and the Premises, (iii)
all measurements of area contained in this Lease are conclusively agreed to be correct and
binding upon the parties, even if a subsequent measurement of any one of these areas
determines that it is more or less than the amount of area reflected in this Lease, and
(iv) any such subsequent determination that the area is more or less than shown in this
Lease shall not result in a change in any of the computations of rent, improvement
allowances, or other matters described in this Lease where area is a factor. Where a party
hereto is obligated not to perform any act, such party is also obligated to restrain any
others within its control from performing said act, including the Agents of such party.
Landlord shall not become or be deemed a partner or a joint venturer with Tenant by reason
of the provisions of this Lease.

15.12
Termination by Exercise of Right: If this Lease is terminated pursuant to its terms
by the proper exercise of a right to terminate specifically granted to Landlord or Tenant
by this Lease, then this Lease shall terminate 30 days after the date the right to
terminate is properly exercised (unless another date is specified in that part of the
Lease creating the right, in which event the date so specified for termination shall
prevail), the rent and all other charges due hereunder shall be prorated as of the date of
termination, and neither Landlord nor Tenant shall have any further rights or obligations
under this Lease except for those that have accrued prior to the date of termination or
those obligations which this Lease specifically provides are to survive termination. This
¶15.12 does not apply to a termination of this Lease by Landlord as a result of an
Event of Tenants Default.

15.13
Brokerage Commissions: Each party hereto (i) represents and warrants to the other
that it has not had any dealings with any real estate brokers, leasing agents or salesmen,
or incurred any obligations for the payment of real estate brokerage commissions or
finders fees which would be earned or due and payable by reason of the execution of
this Lease, other than to the Retained Real Estate Brokers described in Section S
of the Summary, and (ii) agrees to indemnify, defend, and hold harmless the other party
from any claim for any such commission or fees which result from the actions of the
indemnifying party. Landlord shall be responsible for the payment of any commission owed
to the Retained Real Estate Brokers if there is a separate written commission agreement
between Landlord and the Retained Real Estate Brokers for the payment of a commission as a
result of the execution of this Lease.

15.14
Force Majeure: Any prevention, delay or stoppage due to strikes, lock-outs,
inclement weather, labor disputes, inability to obtain labor, materials, fuels or
reasonable substitutes therefor, governmental restrictions, regulations, controls, action
or inaction, civil commotion, fire or other acts of God, and other causes beyond the
reasonable control of the party obligated to perform (except financial inability) shall
excuse the performance, for a period equal to the period of any said prevention, delay or
stoppage, of any obligation hereunder except the obligation of Tenant to pay rent or any
other sums due hereunder.

15.15
Entire Agreement: This Lease constitutes the entire agreement between the parties,
and there are no binding agreements or representations between the parties except as
expressed herein. Tenant acknowledges that neither Landlord nor Landlords Agents has
made any legally binding representation or warranty as to any matter except those
expressly set forth herein, including any warranty as to (i) whether the Premises may be
used for Tenants intended use under existing Law, (ii) the suitability of the
Premises or the Project for the conduct of Tenants business, or (iii) the condition
of any improvements. There are no oral agreements between Landlord and Tenant affecting
this Lease, and this Lease supercedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between Landlord and
Tenant or displayed by Landlord to Tenant with respect to the subject matter of this
Lease. This instrument shall not be legally binding until it is executed by both Landlord
and Tenant. No subsequent change or addition to this Lease shall be binding unless in
writing and signed by Landlord and Tenant.

IN
WITNESS WHEREOF, Landlord and Tenant have executed this Lease with the intent to be
legally bound thereby, to be effective as of the Effective Date.

LANDLORD:

BRE/PCCP ORCHARD, L.L.C.a
Delaware limited liability company

By: Orchard 702/703
Investors, LLC       a Delaware limited liability company, its Member

By: /s/ Michael J. Biggar       
Michael J. Biggar       Managing Member

Dated: 1/4/06

TENANT:

TEGAL CORPORATIONa Delaware corporation

By: /s/ Thomas R. Mika     
  THOMAS R. MIKA       [Print Name and Title]       PRESIDENT & CEO

Dated: 12/30/05

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