AMERICAN
                  INDUSTRIAL REAL ESTATE
                  ASSOCIATION

              


      

    

    STANDARD
      INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE —
      NET

    (DO
      NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)

     

    1. Basic
      Provisions (“Basic Provisions”).

     

    1.1 Parties:
      This
      Lease (“Lease”),
      dated
      for reference purposes only, April 30, 2001, is made by and between World Oil
      Corp. (“Lessor”)
      and
      Quintessence Photonics Corporation, a Delaware Corporation (“Lessee”),
      (collectively the “Parties,”
      or
      individually a “Party”).

     

    1.2 Premises:
      That
      certain real property, including all improvements therein or to be provided
      by
      Lessor under the terms of this Lease, and commonly known as 15632 Roxford
      Street, Sylmar, California 91342, located in the County of Los Angeles, State
      of
      California, and generally described as (describe briefly the nature of the
      property and, if applicable, the “Project”,
      If the
      property is located within a Project) approximately 40,320 square feet of
      free-standing building that is part of a larger industrial zoned property and
      including 70 parking spaces as depicted on Exhibit “A” hereto (the “Project”)
(“Premises”).
      (See
      also Paragraph 2)

     

    1.3 Term:
      5 years
      and -0- months (“Original
      Term”)
      commencing June 1, 2001 (“Commencement
      Date”)
      and
      ending May 31, 2006 (“Expiration
      Date”).
      (See
      also Paragraph 3) 

     

    1.4 Early
      Possession;
      upon
      full lease execution (“Early
      Possession Date”).
      (See
      also Paragraphs 3.2 and 3.3)

     

    1.5 Base
      Rent:
      $22,579.20 per month (“Base
      Rent”),
      payable
      on the first day of each month commencing the Commencement Date and thereafter
      on the first day of each month . (See also Paragraph 4) 

     

    R If
      this
      box is checked, there are provisions in this Lease for the Base Rent to be
      adjusted.

     

    1.6 Base
      Rent Paid Upon Execution:
      $22,579.20 as Base Rent for the period June 1, 2001- June 30, 2001.

     

    1.7 Security
      Deposit:
      $112,
      896.00 one
      (1) month shall be applied to Base Rent on the 25th and 37th month of the
      Initial Lease Term provided that Lessee is not then in default under this Lease
      (“Security Deposit”).
      (See
      also Paragraph 5)

     

    1.8 Agreed
      Use:
      development, light manufacturing and sales of advanced active fiber optics
      components (See also Paragraph 6)

     

    1.9 Insuring
      Party:
      Lessor
      is the “Insuring
      Party”
      unless
      otherwise stated herein. (See also Paragraph 8)

     

    1.10 Real
      Estate Brokers:
      (See
      also Paragraph 15)

     

    (a) Representation:
      The
      following real estate brokers (collectively, the “Brokers”)
      and
      brokerage relationships exist in this transaction (check applicable
      boxes):

    


    R 
      Daum
      Commercial Real Estate Services/ CB Richard Ellis, Inc. represents Lessor
      exclusively (“Lessor’s
      Broker”);
      

     

    R Delphi
      Business Properties represents
      Lessee exclusively (“Lessee’s
      Broker”);
      or


     

    o _________________________
      represents both Lessor and Lessee (“Dual
      Agency”).

     

    (b) Payment
      to Brokers:
      Upon
      execution and delivery of this Lease by both Parties, Lessor shall pay to the
      Broker the fee agreed to in their separate written agreement (or if there is
      no
      such agreement, the sum of per separate agreement % of the total Base Rent
      for
      the brokerage services rendered by said Broker).

     

    1.11 Guarantor.
      The
      obligations of the Lessee under this Lease are to be guaranteed by N/A
(“Guarantor”).
      (See
      also Paragraph 37)

     

    1.12 Addenda
      and Exhibits.
      Attached
      hereto is an Addendum or Addenda consisting of Paragraphs 50 through 55 and
      Exhibits A & B, all of which constitute a part of this Lease.

     

    2. Premises.

     

    2.1 Letting.
      Lessor
      hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises,
      for
      the term, at the rental, and upon all of the terms, covenants and conditions
      set
      forth in this Lease. Unless otherwise provided herein, any statement of size
      set
      forth in this Lease, or that may have been used in calculating rental, is an
      approximation which the Parties agree is reasonable and the rental based thereon
      is not subject to revision whether or not the actual size is more or
      less.

     

    2.2 Condition.
      Lessor
      shall deliver the Premises to Lessee broom clean and free of debris on the
      Commencement Date or the Early Possession Date, whichever first occurs
(“Start
      Date”),
      and, so
      long as the required service contracts described in Paragraph 7.1(b) below
      are
      obtained by Lessee within thirty (30) days following the Start Date, warrants
      that the existing electrical, plumbing, fire sprinkler, lighting, heating,
      ventilating and air conditioning systems (“HVAC”),
      loading
      doors, if any, and all other such elements in the Premises, other than those
      constructed by Lessee, shall be in good operating condition on said date and
      that the structural elements of the roof, bearing walls and foundation of any
      buildings on the Premises (the “Building”) shall be free of
      material defects. If a non-compliance with said warranty exists as of the Start
      Date, Lessor shall, as Lessor’s sole obligation with respect to such matter,
      except as otherwise provided in this Lease, promptly after receipt of written
      notice from Lessee setting forth with specificity the nature and extent of
      such
      non-compliance, rectify same at Lessor’s expense. If, after the Start Date,
      Lessee does not give Lessor written notice of any non-compliance with this
      warranty within: (i) one year as to the surface of the roof and the structural
      portions of the roof, foundations and bearing walls, (ii) six (6) months as
      to
      the HVAC systems, (iii) thirty (30) days as to the remaining systems and other
      elements of the Building, correction of such non-compliance shall be the
      obligation of Lessee at Lessee’s sole cost and expense.

     

    2.3 Compliance.
      Lessor
      warrants that the improvements on the Premises comply with all applicable laws,
      covenants or restrictions of record, building codes, regulations and ordinances
      (“Applicable
      Requirements”)
      in
      effect on the Start Date. See Addendum. Said warranty does not apply to the
      use
      to which Lessee will put the Premises or to any Alterations or Utility
      Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee.
      NOTE: Lessee is responsible for determining whether or not the zoning is
      appropriate for Lessee’s intended use, and acknowledges that past uses of the
      Premises may no longer be allowed. If the Premises do not comply with said
      warranty, Lessor shall, except as otherwise provided, promptly after receipt
      of
      written notice from Lessee setting forth with specificity the nature and extent
      of such non-compliance, rectify the same at Lessor’s expense. If Lessee does not
      give Lessor written notice of a non-compliance with this warranty within six
      (6)
      months following the Start Date, correction of that non-compliance shall be
      the
      obligation of Lessee at Lessee’s sole cost and expense. If the Applicable
      Requirements are hereafter changed (as opposed to being in existence at the
      Start Date, which is addressed in Paragraph 6.2(e) below) so as to require
      during the term of this Lease the construction of an addition to or an
      alteration of the Building, the remediation of any Hazardous Substance, or
      the
      reinforcement or other physical modification of the Building (“Capital
      Expenditure”),
      Lessor
      and Lessee shall allocate the cost of such work as follows:

    


    
      	 	
              Page
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              Initials

            	
              

            
	 	 	 	 
	
              Ó1997
                - American Industrial Real Estate Association

            	
              REVISED

            	 	
              FORM
                STN-6-2/97E

            


    

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (a) Subject
      to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result
      of the specific and unique use of the Premises by Lessee as compared with uses
      by tenants, in general, Lessee shall be fully responsible for the cost thereof,
      provided, however that if such Capital Expenditure is required during the last
      two (2) years of this Lease and the cost thereof exceeds six (6) months’ Base
      Rent, Lessee may instead terminate this Lease unless Lessor notifies Lessee,
      in
      writing, within ten (10) days after receipt of Lessee’s termination notice that
      Lessor has elected to pay the difference between the actual cost thereof and
      the
      amount equal to six (6) months’ Base Rent. If Lessee elects termination, Lessee
      shall immediately cease the use of the Premises which requires such Capital
      Expenditure and deliver to Lessor written notice specifying a termination date
      at least ninety (90) days thereafter, Such termination date shall, however,
      in
      no event be earlier than the last day that Lessee could legally utilize the
      Premises without commencing such Capital Expenditure.

     

    (b) If
      such
      Capital Expenditure is not the result of the specific and unique use of the
      Premises by Lessee (such as, governmentally mandated seismic modifications),
      then Lessor and Lessee shall allocate the obligation to pay for such costs
      pursuant to the provisions of Paragraph 7.1 (c); provided, however, that if
      such
      Capital Expenditure is required during the last two years of this Lease or
      if
      Lessor reasonably determines that it is not economically feasible to pay its
      share thereof, Lessor shall have the option to terminate this Lease upon ninety
      (90) days prior written notice to Lessee unless Lessee notifies Lessor, in
      writing, within ten (10) days after receipt of Lessor’s termination notice that
      Lessee will pay for such Capital Expenditure. If Lessor does not elect to
      terminate, and falls to tender Its share of any such Capital Expenditure, Lessee
      may advance such funds and deduct same, with interest, from Rent until Lessor’s
      share of such costs have been fully paid. If Lessee is unable to finance
      Lessor’s share, or if the balance of the Rent due and payable for the remainder
      of this Lease is not sufficient to fully reimburse Lessee on an offset basis,
      Lessee shall have the right to terminate this Lease upon thirty (30) days
      written notice to Lessor.

     

    (c) Notwithstanding
      the above, the provisions concerning Capital Expenditures are intended to apply
      only to non-voluntary, unexpected, and new Applicable Requirements. If the
      Capital Expenditures are instead triggered by Lessee as a result of an actual
      or
      proposed change in use, change in intensity of use, or modification to the
      Premises then, and in that event, Lessee shall be fully responsible for the
      cost
      thereof, and Lessee shall not have any right to terminate this
      Lease.

     

    2.4 Acknowledgements.
      Lessee
      acknowledges that: (a) It has been advised by Lessor and/or Brokers to satisfy
      itself with respect to the condition of the Premises (including but not limited
      to the electrical, HVAC and fire sprinkler systems, security, environmental
      aspects, and compliance with Applicable Requirements), and their suitability
      for
      Lessee’s intended use; (b) Lessee has made such investigation as it deems
      necessary with reference to such matters and assumes all responsibility therefor
      as the same relate to its occupancy of the Premises; and (c) neither Lessor,
      Lessor’s agents, nor any Broker has made any oral or written representations or
      warranties with respect to said matters other than as set forth in this Lease.
      In addition, Lessor acknowledges that: (a) Broker has made no representations,
      promises or warranties concerning Lessee’s ability to honor the Lease or
      suitability to occupy the Premises; and (b) It is Lessor’s sole responsibility
      to investigate the financial capability and/or suitability of all proposed
      tenants.

     

    2.5 Lessee
      as Prior Owner/Occupant.
      The
      warranties made by Lessor in Paragraph 2 shall be of no force or effect if
      Immediately prior to the Start Date Lessee was the owner or occupant of the
      Premises. In such event, Lessee shall be responsible for any necessary
      corrective work.

     

    3. Term.

     

    3.1 Term.
      The
      Commencement Date, Expiration Date and Original Term of this Lease are as
      specified in Paragraph 1.3.

     

    3.2 Early
      Possession.
      If
      Lessee totally or partially occupies the Premises prior to the Commencement
      Date, the obligation to pay Base Rent shall be abated for the period of such
      early possession. All other terms of this Lease (including, but not limited
      to,
      the obligations to
      pay Real Property Taxes and insurance premiums and
      to
      maintain the Premises) shall, however, be in effect during such period. Any
      such
      early possession shall not affect the Expiration Date.

     

    3.3 Delay
      in Possession.
      Lessor
      agrees to use its best commercially reasonable efforts to deliver possession
      of
      the Premises to Lessee by the Commencement Date. If, despite said efforts,
      Lessor is unable to deliver possession as agreed. Lessor shall not be subject
      to
      any liability therefor, nor shall such failure affect the validity of this
      Lease. Lessee shall not, however, be obligated to pay Rent or perform its other
      obligations until it receives possession of the Premises. If possession is
      not
      delivered within sixty (60) days after the Commencement Date, Lessee may, at
      its
      option, by notice in writing within ten (10) days after the end of such sixty
      (60) day period, cancel this Lease, in which event the Parties shall be
      discharged from all obligations hereunder. If such written notice is not
      received by Lessor within said ten (10) day period, Lessee’s right to cancel
      shall terminate. Except as otherwise provided, if possession is not tendered
      to
      Lessee by the Start Date and Lessee does not terminate this Lease, as aforesaid,
      any period of rent abatement that Lessee would otherwise have enjoyed shall
      run
      from the date of delivery of possession and continue for a period equal to
      what
      Lessee would otherwise have enjoyed under the terms hereof, but minus any days
      of delay caused by the acts or omissions of Lessee. If possession of the
      Premises is not delivered within four (4) months after the Commencement Date,
      this Lease shall terminate unless other agreements are reached between Lessor
      and Lessee, in writing.

     

    3.4 Lessee
      Compliance.
      Lessor
      shall not be required to tender possession of the Premises to Lessee until
      Lessee complies with its obligation to provide evidence of insurance (Paragraph
      8.5). Pending delivery of such evidence, Lessee shall be required to perform
      all
      of its obligations under this Lease from and after the Start Date, including
      the
      payment of Rent, notwithstanding Lessor’s election to withhold possession
      pending receipt of such evidence of insurance. Further, if Lessee is required
      to
      perform any other conditions prior to or concurrent with the Start Date, the
      Start Date shall occur but Lessor may elect to withhold possession until such
      conditions are satisfied.

     

    4. Rent.

     

    4.1. Rent
      Defined.
      All
      monetary obligations of Lessee to Lessor under the terms of this Lease (except
      for the Security Deposit) are deemed to be rent
      (“Rent”).

     

    4.2. Payment
      Lessee
      shall cause payment of Rent to be received by Lessor in lawful money of the
      United States, without offset or deduction (except as specifically permitted
      in
      this Lease), on or before the day on which It is due. Rent for any period during
      the term hereof which is for less than one (1) full calendar month shall be
      prorated based upon the actual number of days of said month. Payment of Rent
      shall be made to Lessor at its address stated herein or to such other persons
      or
      place as Lessor may from time to time designate in writing. Acceptance of a
      payment which is less than the amount then due shall not be a waiver of Lessor’s
      rights to the balance of such Rent, regardless of Lessor’s endorsement of any
      check so stating.

     

    5. Security
      Deposit.
      Lessee
      shall deposit with Lessor upon execution hereof the Security Deposit as security
      for Lessee’s faithful performance of its obligations under this Lease. If Lessee
      fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use,
      apply
      or retain all or any portion of said Security Deposit for the payment of any
      amount due Lessor or to reimburse or compensate Lessor for any liability,
      expense, loss or damage which Lessor may suffer or incur by reason thereof.
      If
      Lessor uses or applies all or any portion of said Security Deposit, Lessee
      shall
      within ten (10) days after written request therefor deposit monies with Lessor
      sufficient to restore said Security Deposit to the full amount required by
      this
      Lease. If the Base Rent increases during the term of this Lease, Lessee shall,
      upon written request from Lessor, deposit additional monies with Lessor so
      that
      the total amount of the Security Deposit shall at all times bear the same
      proportion to the increased Base Rent as the initial Security Deposit bore
      to
      the initial Base Rent. Should the Agreed Use be amended to accommodate a
      material change in the business of Lessee or to accommodate a sublessee or
      assignee, Lessor shall have the right to increase the Security Deposit to the
      extent necessary, in Lessor’s reasonable Judgment, to account for any increased
      wear and tear that the Premises may suffer as a result thereof. If a change
      in
      control of Lessee occurs during this Lease and following such change the
      financial condition of Lessee is, in Lessor’s reasonable judgment significantly
      reduced, Lessee shall deposit such additional monies with Lessor as shall be
      sufficient to cause the Security Deposit to be at a commercially reasonable
      level based on said change in financial condition. Lessor shall not be required
      to keep the Security Deposit separate from its general accounts. Within fourteen
      (14) days after the expiration or termination of this Lease, if Lessor elects
      to
      apply the Security Deposit only to unpaid Rent, and otherwise within thirty
      (30)
      days after the Premises have been vacated pursuant to Paragraph 7.4(c) below,
      Lessor shall return that portion of the Security Deposit not used or applied
      by
      Lessor. No part of the Security Deposit shall be considered to be held in trust,
      to bear interest or to be prepayment for any monies to be paid by Lessee under
      this Lease.

     

    6. Use.

     

    6.1 Use.
      Lessee
      shall use and occupy the Premises only for the Agreed Use, or any other legal
      use which is reasonably comparable thereto, and for no other purpose. Lessee
      shall not use or permit the use of the Premises in a manner that is unlawful,
      creates damage, waste or a nuisance, or that disturbs owners and/or occupants
      of, or causes damage to neighboring properties. Lessor shall not unreasonably
      withhold or delay its consent to any written request for a modification of
      the
      Agreed Use, so long as the same will not impair the structural integrity of
      the
      improvements on the Premises or the mechanical or electrical systems therein,
      is
      not significantly more burdensome to the Premises. If Lessor elects to withhold
      consent, Lessor shall within five (5) business days after such request give
      written notification of same, which notice shall include an explanation of
      Lessor’s objections to the change in use.

    


    
      	 	
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              Initials

            	
              

            
	 	 	 	 
	
              Ó1997
                - American Industrial Real Estate Association

            	
              REVISED

            	 	
              FORM
                STN-6-2/97E

            


    

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      6.2 Hazardous
        Substances.

       

      (a) Reportable
        Uses Require Consent. The term “Hazardous Substance”
as
        used
        in this Lease shall mean any product, substance, or waste whose presence,
        use,
        manufacture, disposal, transportation, or release, either by itself or in
        combination with other materials expected to be on the Premises, is either:
        (i)
        potentially injurious to the public health, safety or welfare, the environment
        or the Premises, (ii) regulated or monitored by any governmental authority,
        or
        (iii) a basis for potential liability of Lessor to any governmental agency
        or
        third party under any applicable statute or common law theory. Hazardous
        Substances shall include, but not be limited to, hydrocarbons, petroleum,
        gasoline, and/or crude oil or any products, by-products or fractions thereof.
        Lessee shall not engage in any activity in or on the Premises which constitutes
        a Reportable Use of Hazardous Substances without the express prior written
        consent of Lessor and timely compliance (at Lessee’s expense) with all
        Applicable Requirements. “Reportable
        Use” shall
        mean (i) the installation or use of any above or below ground storage tank,
        (ii)
        the generation, possession, storage, use, transportation, or disposal of
        a
        Hazardous Substance that requires a permit from, or with respect to which
        a
        report, notice, registration or business plan is required to be filed with,
        any
        governmental authority, and/or (iii) the presence at the Premises of a Hazardous
        Substance with respect to which any Applicable Requirements requires that
        a
        notice be given to persons entering or occupying the Premises or neighboring
        properties. Notwithstanding the foregoing, Lessee may use any ordinary and
        customary materials reasonably required to be used in the normal course of
        the
        Agreed Use, so long as such use is in compliance with all Applicable
        Requirements, is not a Reportable Use, and does not expose the Premises or
        neighboring property to any meaningful risk of contamination or damage or
        expose
        Lessor to any liability therefor. In addition, Lessor may condition its consent
        to any Reportable Use upon receiving such additional assurances as Lessor
        reasonably deems necessary to protect itself, the public, the Premises and/or
        the environment against damage, contamination, injury and/or liability,
        including, but not limited to, the installation (and removal on or before
        Lease
        expiration or termination) of protective modifications (such as concrete
        encasements) and/or increasing the Security Deposit.

       

      (b) Duty
        to inform Lessor. If Lessee
        knows, or has reasonable cause to believe, that a Hazardous Substance has
        come
        to be located in, on, under or about the Premises, other than as previously
        consented to by Lessor, Lessee shall immediately
        give written notice of such fact to Lessor, and provide Lessor with a copy
        of
        any report, notice, claim or other documentation which it has concerning
        the
        presence of such Hazardous Substance.

       

      (c) Lessee
        Remediation. Lessee
        shall not cause or permit any Hazardous Substance to be spilled or released
        in,
        on, under, or about the Premises (including through the plumbing or sanitary
        sewer system) and shall promptly, at Lessee’s expense, take all investigatory
        and/or remedial action reasonably recommended, whether or not formally ordered
        or required, for the cleanup of any contamination of, and for the maintenance,
        security and/or monitoring of the Premises or neighboring properties, that
        was
        caused or materially contributed to by Lessee, or pertaining to or involving
        any
        Hazardous Substance brought onto the Premises during the term of this Lease,
        by
        or for Lessee, or any third party.

       

      (d) Lessee
        Indemnification. Lessee
        shall indemnify, defend and hold Lessor, its agents, employees, lenders and
        ground lessor. If any, harmless from and against any and all loss of rents
        and/or damages, liabilities, judgments, claims, expenses, penalties, and
        attorneys’ and consultants’ fees arising out of or involving any Hazardous
        Substance brought onto the Premises by or for Lessee, or any third party
        (provided, however, that Lessee shall have no liability under this Lease
        with
        respect to underground migration of any Hazardous Substance under the Premises
        from adjacent properties). Lessee’s obligations shall include, but not be
        limited to, the effects of any contamination or injury to person, property
        or
        the environment created or suffered by Lessee, and the cost of investigation,
        removal, remediation, restoration and/or abatement, and shall survive the
        expiration or termination of this Lease. No
        termination, cancellation or release agreement entered into by Lessor and
        Lessee
        shall release Lessee from its obligations under this Lease with respect to
        Hazardous Substances, unless specifically so agreed by Lessor in writing
        at the
        time of such agreement.

       

      (e) Lessor
        Indemnification. Lessor
        and its successors and assigns shall indemnify, defend, reimburse and hold
        Lessee, its employees and lenders, harmless from and against any and all
        environmental damages, including the cost of remediation, which existed as
        a
        result of Hazardous Substances on the Premises prior to the Start Date or
        which
        are caused by the gross negligence or willful misconduct of Lessor, its agents
        or employees. Lessor’s obligations, as and when required by the Applicable
        Requirements, shall include, but not be limited to, the cost of investigation,
        removal, remediation, restoration and/or abatement, and shall survive the
        expiration or termination of this Lease.

       

      (f) Investigations
        and Remediations. Lessor
        shall retain the responsibility and pay far any investigations or remediation
        measures required by governmental entities having jurisdiction with respect
        to
        the existence of Hazardous Substances
        on the
        Premises prior to the Start Date, unless such remediation measure is required
        as
        a result of Lessee’s use (including “Alterations”, as defined in Paragraph
        7.3(a) below) of the Premises, in which event Lessee shall be responsible
        for
        such payment. Lessee shall cooperate fully in any such activities at the
        request
        of Lessor, including allowing Lessor and Lessor’s agents to have reasonable
        access to the Premises at reasonable times in order to carry out Lessor’s
        investigative and remedial responsibilities.

       

      (g) Lessor
        Termination Option. If a
        Hazardous Substance Condition occurs during the term of this Lease, unless
        Lessee
        is
        legally responsible therefor (in which case Lessee shall make the investigation
        and remediation thereof required by the Applicable Requirements and this
        Lease
        shall continue in full force and effect, but subject to Lessor’s rights under
        Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor’s option, either (i)
        investigate and remediate such Hazardous Substance Condition, if required,
        as
        soon as reasonably possible at Lessor’s expense, in which event this Lease shall
        continue in full force and effect, or (ii) if the estimated cost to remediate
        such condition exceeds twelve (12) times the then monthly Base Rent or $100,000,
        whichever is greater, give written notice to Lessee, within thirty (30) days
        after receipt by Lessor of knowledge of the occurrence of such Hazardous
        Substance Condition, of Lessor’s desire to terminate this Lease as of the date
        sixty (60) days following the date of such notice. In the event Lessor elects
        to
        give a termination notice, Lessee may, within ten (10) days thereafter, give
        written notice to Lessor of Lessee’s commitment to pay the amount by which the
        cost of the remediation of such Hazardous Substance Condition exceeds an
        amount
        equal to twelve (12) times the then monthly Base Rent or $100,000, whichever
        is
        greater. Lessee shall provide Lessor with said funds or satisfactory assurance
        thereof within thirty (30) days following such commitment. In such event,
        this
        Lease shall continue in full force and effect, and Lessor shall proceed to
        make
        such remediation as soon as reasonably possible after the required funds
        are
        available. If Lessee does not give such notice and provide the required funds
        or
        assurance thereof within the time provided, this Lease shall terminate as
        of the
        date specified in Lessor’s notice of termination.

       

      6.3 Lessee’s
        Compliance with Applicable Requirements. Except
        as
        otherwise provided in this Lease, Lessee shall, at Lessee’s sole expense, fully,
        diligently and in a timely manner, materially comply with all Applicable
        Requirements, the requirements of any applicable fire insurance underwriter
        or
        rating bureau, and the recommendations of Lessor’s engineers and/or consultants
        which relate in any manner to the Premises, without regard to whether said
        requirements are now in effect or become effective after the Start Date.
        Lessee
        shall, within ten (10) days after receipt of Lessor’s written request, provide
        Lessor with copies of all permits and other documents, and other information
        evidencing Lessee’s compliance with any Applicable Requirements specified by
        Lessor, and shall immediately upon receipt, notify Lessor in writing (with
        copies of any documents involved) of any threatened or actual claim, notice,
        citation, warning, complaint or report pertaining to or involving the failure
        of
        Lessee or the Premises to comply with any Applicable Requirements.

       

      6.4 Inspection;
        Compliance. Lessor
        and Lessor’s “Lender” (as defined in Paragraph 30 below) and consultants shall
        have the right to enter into Premises at any time, in the case of an emergency,
        and otherwise at reasonable times, for the purpose of inspecting the condition
        of the Premises and for verifying compliance by Lessee with this Lease. The
        cost
        of any such inspections shall be paid by Lessor, unless a violation of
        Applicable Requirements, or a contamination is found to exist or be imminent,
        or
        the inspection is requested or ordered by a governmental authority. In such
        case, Lessee shall upon request reimburse Lessor for the cost of such
        inspections, so long as such inspection is reasonably related to the violation
        or contamination.

       

      7. Maintenance;
        Repairs, Utility Installations; Trade Fixtures and
        Alterations.

       

      7.1 Lessee’s
        Obligations.

       

      (a) In
        General. Subject
        to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee’s
        Compliance with Applicable Requirements), 7.2 (Lessor’s Obligations), 9 (Damage
        or Destruction), and 14 (Condemnation), Lessee shall, at Lessee’s sole expense,
        keep the Premises, Utility Installations, and Alterations in good order,
        condition and repair (whether or not the portion of the Premises requiring
        repairs, or the means of repairing the same, are reasonably or readily
        accessible to Lessee, and whether or not the need for such repairs occurs
        as a
        result of Lessee’s use, any prior use, the elements or the age of such portion
        of the Premises), including, but not limited to, all equipment or facilities,
        such as plumbing, heating, ventilating, air-conditioning, electrical, lighting
        facilities, boilers, pressure vessels, fire protection system, fixtures,
        walls (interior and exterior), foundations, ceilings, roofs, floors, windows,
        doors, plate glass, skylights, landscaping, driveways, parking lots, fences,
        retaining walls, signs, sidewalks and parkways located in, on, or adjacent
        to
        the Premises. Lessee, in keeping the Premises in good order, condition and
        repair, shall exercise and perform good maintenance practices, specifically
        including the procurement and maintenance of the service contracts required
        by
        Paragraph 7.1(b) below. Lessee’s obligations shall include restorations,
        replacements or renewals when necessary to keep the Premises and all
        Improvements thereon or a part thereof in good order, condition and state
        of
        repair. Lessee shall, during the term of this Lease, keep the exterior
        appearance of the Building in a first-class condition consistent with the
        exterior appearance of other similar facilities of comparable age and size
        in
        the vicinity, including, when necessary, the exterior repainting of the
        Building.

      


      
        	 	
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                  - American Industrial Real Estate
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                REVISED

              	 	
                FORM
                  STN-6-2/97E

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b) Service
        Contracts. Lessee
        shall, at Lessee’s sole expense, procure and maintain contracts, with copies to
        Lessor, in customary form and substance for, and with contractors specializing
        and experienced in the maintenance of the following equipment and improvements,
        if any, if and when installed on the Premises: (i) HVAC equipment, (ii) boiler,
        and pressure vessels, (iii) fire extinguishing systems, including fire alarm
        and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof
        covering and drains, (vi) driveways and parking lots, (vii) clarifiers (viii)
        basic utility feed to the perimeter of the Building, and (ix) any other
        equipment if reasonably required by Lessor.

       

      (c) Replacement.
        Subject
        to Lessee’s indemnification of Lessor as set forth in Paragraph 8.7 below, and
        without relieving Lessee of liability resulting from Lessee’s failure to
        exercise and perform good maintenance practices, if the Basic Elements described
        in Paragraph 7.1 (b) cannot be repaired other’ than at a cost which is in excess
        of 50% of the cost of replacing such Basic Elements, then such Basic Elements
        shall be replaced by Lessor, and the cost thereof shall be prorated between
        the
        Parties and Lessee shall only be obligated to pay, each month during the
        remainder of the term of this Lease, on the date on which Base Rent is due,
        an
        amount equal to the product of multiplying the cost of such replacement by
        a
        fraction, the numerator of which is one, and the denominator of which is
        the
        number of months of the useful life of such replacement as such useful life
        is
        specified pursuant to Federal Income tax regulations or guidelines for
        depreciation thereof (including interest on the unamortized balance as is
        then
        commercially reasonable in the judgment of Lessor’s accountants), with Lessee
        reserving the right to prepay its obligation at any time.

       

      7.2 Lessor’s
        Obligations.
        Subject
        to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage
        or
        Destruction) and 14 (Condemnation), it is intended by the Parties hereto
        that
        Lessor have no obligation, in any manner whatsoever, to repair and maintain
        the
        Premises, or the equipment therein, all of which obligations are intended
        to be
        that of the Lessee. It is the intention of the Parties that the terms of
        this
        Lease govern the respective obligations of the Parties as to maintenance
        and
        repair of the Premises, and they expressly waive the benefit of any statute
        now
        or hereafter in effect to the extent it is inconsistent with the terms of
        this
        Lease.

       

      7.3 Utility
        Installations; Trade Fixtures; Alterations.

       

      (a) Definitions;
        Consent Required. The
        term
“Utility Installations” refers to all floor and window
        coverings, air lines, power panels, electrical distribution, security and
        fire
        protection systems, communication systems, lighting fixtures, HVAC equipment,
        plumbing, and fencing in or on the Premises. The term “Trade
        Fixtures” shall mean Lessee’s machinery and equipment that can be
        removed without doing material damage to the Premises. The term
“Alterations” shall mean any modification of the improvements,
        other than Utility Installations or Trade Fixtures, whether by addition or
        deletion. “Lessee Owned Alterations and/or Utility
        Installations” are defined as Alterations and/or Utility Installations
        made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).
        Lessee shall not make any Alterations or Utility Installations to the Premises
        without Lessor’s prior written consent. Lessee may, however, make non-structural
        Utility Installations to the interior of the Premises (excluding the roof)
        without such consent but upon notice to Lessor, as long as they are not visible
        from the outside, do not involve puncturing, relocating or removing the roof
        or
        any existing walls, and the cumulative cost thereof during this Lease as
        extended does not exceed $50,000 in the aggregate or $10,000 in any one
        year.

       

      (b) Consent.
        Any
        Alterations or Utility Installations that Lessee shall desire to make and
        which
        require the consent of the Lessor shall be presented to Lessor in written
        form
        with detailed plans. Consent shall be deemed conditioned upon Lessee’s: (i)
        acquiring all applicable governmental permits, (ii) furnishing Lessor with
        copies of both the permits and the plans and specifications prior to
        commencement of the work, and (iii) compliance with all conditions of said
        permits and other Applicable Requirements in a prompt and expeditious manner.
        Any Alterations or Utility Installations shall be performed in a workmanlike
        manner with good and sufficient materials. Lessee shall promptly upon completion
        furnish Lessor with as-built plans and specifications. For work which costs
        an
        amount equal to the greater of one month’s Base Rent, or $10,000, Lessor may
        condition its consent upon Lessee providing a lien and completion bond in
        an amount equal to one and one-half times the estimated cost of such Alteration
        or Utility Installation and/or upon Lessee’s posting an additional Security
        Deposit with Lessor.

       

      (c) Indemnification.
        Lessee
        shall pay, when due, all claims for labor or materials furnished or alleged
        to
        have been furnished to or for Lessee at or for use on the Premises, which
        claims
        are or may be secured by any mechanic’s or materialmen’s lien against the
        Premises or any interest therein. Lessee shall give Lessor not less than
        ten
        (10) days’ notice prior to the commencement of any work in, on or about the
        Premises, and Lessor shall have the right to post notices of non-responsibility.
        If Lessee shall contest the validity of any such lien, claim or demand, then
        Lessee shall, at its sole expense defend and protect itself, Lessor and the
        Premises against the same and shall pay and satisfy any such adverse judgment
        that may be rendered thereon before the enforcement thereof. If Lessor shall
        require. Lessee shall furnish a surety bond in an amount equal to one and
        one-half times the amount of such contested lien, claim or demand, indemnifying
        Lessor against liability for the same. If Lessor elects to participate in
        any
        such action, Lessee shall pay Lessor’s attorneys’ fees and costs.

       

      7.4 Ownership;
        Removal; Surrender; and Restoration.

       

      (a) Ownership.
        Subject
        to Lessor’s right to require removal or elect ownership as hereinafter provided,
        all Alterations and Utility Installations made by Lessee shall be the property
        of Lessee, but considered a part of the Premises. Lessor may, at any time,
        elect
        in writing to be the owner of all or any specified part of the Lessee Owned
        Alterations and Utility Installations. Unless otherwise instructed per Paragraph
        7.4(b) hereof, all Lessee Owned Alterations and Utility Installations shall,
        at
        the expiration or termination of this Lease, become the property of Lessor
        and
        be surrendered by Lessee with the Premises.

       

      (b) Removal.
        By
        delivery to Lessee of written notice from Lessor not earlier than ninety
        (90) and not later than thirty (30) days prior to the end of the term of
        this
        Lease, Lessor may require that any or all Lessee Owned Alterations or Utility
        Installations be removed by the expiration or termination of this Lease.
        Lessor
        may require the removal at any time of all or any part of any Lessee Owned
        Alterations or Utility Installations made without the required
        consent.

       

      (c) Surrender/Restoration.
        Lessee
        shall surrender the Premises by the Expiration Date or any earlier termination
        date, with all of the improvements, parts and surfaces thereof broom clean
        and
        free of debris, and in good operating order, condition and state of repair,
        ordinary wear and tear excepted. “Ordinary wear and tear” shall not include any
        damage or deterioration that would have been prevented by good maintenance
        practice. Lessee shall repair any damage occasioned by the installation,
        maintenance or removal of Trade Fixtures, Lessee Owned Alterations and/or
        Utility Installations, furnishings, and equipment as well as the removal
        of any
        storage tank installed by or for Lessee, and the removal, replacement, or
        remediation of any soil, material or groundwater contaminated by Lessee.
        Trade
        Fixtures shall remain the property of Lessee and shall be removed by Lessee.
        The
        failure by Lessee to timely vacate the Premises pursuant to this Paragraph
        7.4(c) without the express written consent of Lessor shall constitute a holdover
        under the provisions of Paragraph 26 below.

       

      8. Insurance;
        Indemnity.

       

      8.1 Payment
        For Insurance. Lessee
        shall pay for all insurance required under Paragraph 8 except to the extent
        of
        the cost attributable to liability insurance carried by Lessor under Paragraph
        8.2(b) in excess of $2,000,000 per occurrence. Premiums for policy periods
        commencing prior to or extending beyond the Lease term shall be prorated
        to
        correspond to the Lease term. Payment shall be made by Lessee to Lessor within
        ten (10) days following receipt of an invoice.

       

      8.2 Liability
        Insurance.

       

      (a) Carried
        by Lessee. Lessee
        shall obtain and keep in force a Commercial General Liability Policy of
        insurance protecting Lessee and Lessor against claims for bodily injury,
        personal injury and property damage based upon or arising out of  the
        ownership, use, occupancy or maintenance of the Premises and all areas
        appurtenant thereto. Such insurance shall be on an occurrence basis providing
        single limit coverage in an amount not less than $2,000,000 per occurrence
        with
        an “Additional Insured-Managers or Lessors of Premises
        Endorsement” and contain the“Amendment of the Pollution
        Exclusion Endorsement” for damage caused by heat, smoke or fumes from a
        hostile fire and
        include
        pollution legal liability coverage
        protecting
        Lessor and the premises against damage
        caused
        by
        any release of hazardous substances. Such pollution legal liability
        insurance shall be required as of the commencement
        of Lessee’s
        Operations. The Policy shall not contain any intra-insured exclusions as
        between
        insured persons or organizations, but shall include coverage for liability
        assumed under this Lease as an ‘insured contract’ for the performance of
        Lessee’s indemnity obligations under this Lease. The limits of said insurance
        shall not, however, limit the liability of Lessee nor relieve Lessee of any
        obligation hereunder. All insurance carried by Lessee shall be primary to
        and
        not contributory with any similar insurance carried by Lessor, whose insurance
        shall be considered excess insurance only.

       

      (b) Carried
        by Lessor.
        Lessor
        shall maintain liability insurance as described in Paragraph 8.2(a), in addition
        to, and not in lieu of, the insurance required to be maintained by Lessee.
        Lessee shall not be named as an additional insured therein.

       

      8.3 Property
        Insurance - Building, Improvements and Rental Value.

       

      (a)
        Building and Improvements. The
        Insuring Party shall obtain and keep in force a policy or policies in the
        name
        of Lessor, with loss payable to Lessor, any groundlessor, and to any Lender(s)
        insuring loss or damage to the Premises. The amount of such insurance shall
        be
        equal to the full replacement cost of the Premises, as the same shall exist
        from
        time to time, or the amount required by any Lenders, but in no event more
        than
        the commercially reasonable and available insurable value thereof. If Lessor
        is
        the insuring Party, however, Lessee Owned Alterations and Utility Installations,
        Trade Fixtures, and Lessee’s personal property shall be insured by Lessee under
        Paragraph 8.4 rather than by Lessor. If the coverage is available and
        commercially appropriate, such policy or policies shall insure against all
        risks
        of direct physical loss or damage (except the perils of flood and/or earthquake
        unless required by a Lender), including coverage for debris removal and the
        enforcement of any Applicable Requirements requiring the upgrading, demolition,
        reconstruction or replacement of any portion of the Premises as the result
        of a
        covered loss. Said policy or policies shall also contain an agreed valuation
        provision in lieu of any coinsurance clause, waiver of subrogation, and
        inflation guard protection causing an increase in the annual property insurance
        coverage amount by a factor of not less than the adjusted U.S. Department
        of
        Labor Consumer Price index for All Urban Consumers for the city nearest to
        where
        the Premises are located. If such insurance coverage has a deductible clause,
        the deductible amount shall not exceed $1,000 per occurrence, and Lessee
        shall
        be liable for such deductible amount in the event of an insured
        Loss.

       

      
        	 	
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                Ó1997
                  - American Industrial Real Estate
                  Association

              	
                REVISED

              	 	
                FORM
                  STN-6-2/97E

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

    
      (b) Rental
        Value. The
        Insuring Party
        shall obtain and keep in force a policy or policies in the name of Lessor
        with
        loss payable to Lessor and
        any
        Lender, insuring the loss of the full Rent for one (1) year. Said insurance
        shall provide that in the event the Lease is terminated by reason of an
insured
        loss, the period of indemnity for such coverage shall be extended beyond
        the
        date of the completion of repairs or replacement of the Premises, to provide
        for
        one full year’s loss of Rent from the date of any such loss. Said insurance
        shall contain an agreed valuation provision in lieu of any coinsurance
clause,
        and the amount of coverage shall be adjusted annually to reflect the projected
        Rent otherwise payable by Lessee, for the next twelve (12) month period.
        Lessee shall be liable for any deductible amount in the event of such
        loss.

       

      (c) Adjacent
        Premises. If
        the
        Premises are part of a larger building, or of a group of buildings owned
        by
        Lessor which are adjacent to the Premises,
        the Lessee shall pay for any increase in the premiums for the property insurance
        of such building or buildings if said increase is caused by Lessee’s
        acts, omissions, use or occupancy of the Premises.

       

         
        8.4 Lessee’s
        Property/Business interruption insurance.

       

      (a) Property
        Damage. Lessee
        shall obtain and maintain insurance coverage on all of Lessee’s personal
        property, Trade Fixtures, and Lessee Owned Alterations and Utility
        installations. Such insurance shall be full replacement cost coverage with
        a
        deductible of not to exceed $1,000 per occurrence.
        The proceeds from any such insurance shall be used by Lessee for the replacement
        of personal property, Trade Fixtures and Lessee Owned Alterations
        and Utility installations. Lessee shall provide Lessor with written evidence
        that such insurance is
        in
        force.

       

      (b) Business
        Interruption. Lessee
        shall obtain and maintain loss of income and extra expense insurance in amounts
        as will reimburse Lessee
        for direct or indirect loss of earnings attributable to all perils commonly
        insured against by prudent lessees in the business of Lessee or attributable
        to
        prevention of access to the Premises as a result of such perils.

       

      (c) No
        Representation or Adequate Coverage. Lessor
        makes no representation that the limits or forms of coverage of insurance
        specified herein
        are adequate to cover Lessee’s property, business operations or obligations
        under this Lease.

       

      8.5 Insurance
        Policies. Insurance
        required herein shall be by companies duly licensed or admitted to transact
        business in the state where the Premises
        are located, and maintaining during the policy term a “General Policyholders
        Rating” of at least B+, V, as set forth in the most current issue of “Best’s
        insurance Guide”, or such other rating as may be required by a Lender. Lessee
        shall not do or permit to be done anything which invalidates the required
        insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor
        certified copies of policies of such insurance or certificates evidencing
        the
existence
        and amounts of the required insurance. No such policy shall be cancelable
        or
        subject to modification except after thirty (30) days prior written notice
        to
        Lessor. Lessee shall, at least thirty (30) days prior to the expiration of
        such
        policies, furnish Lessor with evidence of renewals or “insurance binders”
evidencing renewal thereof, or Lessor may order such insurance and charge
        the
        cost thereof to Lessee, which amount shall be payable by Lessee to Lessor
        upon
        demand. Such policies shall be for a term of at least one year, or the length
        of
        the remaining term of this Lease, whichever is less. If either Party shall
        fall
        to
        procure and maintain the insurance required to be carried by it, the other
        Party
        may, but shall not be required to, procure and maintain the same.

       

      8.6 Waiver
        of
        Subrogation.
        Without
        affecting any other rights or remedies. Lessee and Lessor each hereby release
        and relieve the other, and waive their entire right to recover damages against
        the other, for loss of or damage to its property arising out of or incident
        to
        the perils required to be insured against herein. The effect of such releases
        and waivers is not limited by the amount of insurance carried or required,
        or by
        any deductibles
        applicable hereto. The Parties agree to have their respective property damage
        insurance carriers waive any right to subrogation
        that
        such companies may have against Lessor or Lessee, as the case may be, so
        long as
        the insurance is not invalidated thereby.

       

      8.7 Indemnity.
        Except
        for Lessor’s gross negligence or willful misconduct, Lessee shall indemnify,
        protect, defend and hold harmless the Premises,
        Lessor and its agents, Lessor’s master or ground lessor, partners and Lenders,
        from and against any and all claims, loss of rents and/or damages, liens,
        judgments, penalties, attorneys’ and consultants’ fees, expenses and/or
        liabilities arising out of, involving, or in connection with, the use and/or
        occupancy
        of the Premises by Lessee. If any action or proceeding is brought against
        Lessor
        by reason of any of the foregoing matters, Lessee shall upon notice defend
        the
        same at Lessee’s expense by counsel reasonably satisfactory to Lessor and Lessor
        shall cooperate with Lessee in such defense. Lessor need
        not
        have first paid any such claim in order to be defended or
        indemnified.

       

      8.8 Exemption
        of Lessor from Liability. Lessor
        shall not be liable for injury or damage to the person or goods, wares,
        merchandise or other property
        of Lessee, Lessee’s employees, contractors, invitees, customers, or any other
        person in or about the Premises, whether such damage or injury is caused
        by
        or results from fire, steam, electricity, gas, water or rain, or from the
        breakage, leakage, obstruction or other defects of pipes, fire sprinklers,
        wires, appliances, plumbing, HVAC or lighting fixtures, or from any other
        cause,
        whether the said injury or damage results from conditions arising upon the
        Premises or
        upon
        other portions of the Building of which the Premises are a part, or from
        other
        sources or places. Lessor shall not be liable for any damages arising
from
        any
        act or neglect of any other tenant of Lessor. Notwithstanding Lessor’s
        negligence or breach of this Lease, Lessor shall under no circumstances be
        liable for injury to Lessee’s business or for any loss of income or profit
        therefrom.

       

      9. Damage
        or
        Destruction.

       

         
        9.1 Definitions.

       

      (a) “Premises
        Partial Damage” shall
        mean damage or destruction to the improvements on the Premises, other than
        Lessee Owned Alterations
        and Utility installations, which can reasonably be repaired in six (6) months
        or
        less from the date of the damage or destruction. Lessor shall notify Lessee
        in
        writing within thirty (30) days from the date of the damage or destruction
        as to
        whether or not the damage is Partial or Total.

       

      (b) “Premises
        Total Destruction” shall
        mean damage or destruction to the Premises, other than Lessee Owned Alterations
        and Utility installations
        and Trade Fixtures, which cannot reasonably be repaired in six (6) months
        or
        less from the date of the damage or destruction. Lessor shall notify Lessee
        in
        writing within thirty (30) days from the date of the damage or destruction
        as to
        whether or not the damage is Partial or Total.

       

      (c) “Insured
        Loss” shall
        mean damage or destruction to improvements on the Premises, other than Lessee
        Owned Alterations and Utility installations
        and Trade Fixtures, which was caused by an event required to be covered by
        the
        insurance described in Paragraph 8.3(a), irrespective of any deductible
        amounts or coverage limits involved.

       

      (d) “Replacement
        Cost” shall
        mean the cost to repair or rebuild the improvements owned by Lessor at the
        time
        of the occurrence to their condition
        existing immediately prior thereto,
        including demolition, debris removal and upgrading required by the operation
        of
        Applicable Requirements, and without
        deduction for depreciation.

       

      (e) “Hazardous
        Substance Condition” shall
        mean the occurrence or discovery of a condition involving the
        presence of, or a contamination by,
        a
        Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
        Premises.

       

         
        9.2 Partial
        Damage - Insured Loss. If
        a
        Premises Partial Damage that is an insured Loss occurs, then Lessor shall,
        at
        Lessor’s expense, repair
        such damage (but not Lessee’s Trade Fixtures or Lessee Owned Alterations and
        Utility Installations) as soon as reasonably possible and this Lease
shall
        continue in full force and effect; provided, however, that Lessee shall,
        at
        Lessor’s election, make the repair of any damage or destruction the total cost
        to repair
        of
        which is $10,000
        or less, and, in such event, Lessor shall make any applicable insurance proceeds
        available to Lessee on a reasonable basis for that
        purpose. Notwithstanding the foregoing, if the required insurance was not
        in
        force or the insurance proceeds are not sufficient to effect such repair,
        the
insuring
        Party shall promptly
        contribute the shortage in proceeds (except as to the deductible which is
        Lessee’s responsibility) as and when required to complete
        said repairs. In the event, however, such shortage was due to the fact that,
        by
        reason of the unique nature of the Improvements, full replacement cost insurance
        coverage was not commercially reasonable and available. Lessor shall have
        no
        obligation to pay for the shortage in insurance proceeds or to fully restore
        the
        unique aspects of the Premises unless Lessee provides Lessor with the funds
        to
        cover same, or adequate assurance thereof, within ten (10) days
        following receipt of written notice of such shortage and request therefor.
        If
        Lessor receives said funds or adequate assurance thereof within said ten
        (10)
        day
        period, the party responsible for making the repairs shall complete them
        as soon
        as reasonably possible and this Lease shall remain in full force and
effect.
        If such funds or assurance are not received, Lessor may nevertheless elect
        by
        written notice to Lessee within
        ten (10)
        days thereafter to: (i) make such
        restoration and repair as is commercially reasonable with Lessor paying any
        shortage in proceeds, in which case this Lease shall remain in full force
        and
        effect,
        or have this Lease terminate thirty (30) days thereafter. Lessee shall not
        be
        entitled to reimbursement of any funds contributed by Lessee to repair any
        ,
        such
        damage or destruction. Premises Partial Damage due to flood or earthquake
        shall
        be subject to Paragraph 9.3, notwithstanding that there may be some insurance
        coverage, but the net proceeds of any such insurance shall be made available
        for
        the repairs If made by either Party.

    

    
       

      
        
          	 	
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                  Ó1997
                    - American industrial Real Estate Association

                	
                  REVISED

                	 	
                  FORM
                    STN-6-2/97E

                


        



      
        
          
            
            

          

          
            
            

            
              

            

          

           

        

      

       

         
        9.3 Partial
        Damage - Uninsured Loss. If
        a
        Premises Partial Damage that is not an insured Loss occurs, unless caused
        by a
        negligent or willful
        act of Lessee (in which event Lessee shall make the repairs at Lessee’s
        expense), Lessor may either: (i)
        repair
        such damage as soon as reasonably possible at Lessor’s expense, in which event
        this Lease shall continue in full force and effect, or (ii) terminate this
        Lease
        by giving written notice to Lessee within
        thirty
        (30) days after receipt by Lessor of knowledge of the occurrence of such
        damage.
        Such termination shall be effective sixty (60) days following the date of
        such
        notice. In the event Lessor elects to terminate this Lease, Lessee shall
        have
        the right within
        ten (10)
        days after receipt of the termination notice
        to
        give written notice to Lessor of Lessee’s commitment to pay for the repair of
        such damage without reimbursement from Lessor. Lessee shall provide Lessor
        with
        said funds or satisfactory assurance thereof within thirty (30) days after
        making such commitment. in such event this Lease shall continue
        in full force and effect, and Lessor shall proceed to make such repairs as
        soon
        as reasonably possible after the required funds are available. If Lessee
        does not make the required commitment, this Lease shall terminate as of the
        date
        specified in the termination notice.

       

        
        9.4 Total
        Destruction. Notwithstanding
        any other provision hereof, if a Premises Total Destruction occurs, this
        Lease
        shall terminate sixty (60) days
        following such Destruction. If the damage or destruction was caused by the
        gross
        negligence or willful misconduct of Lessee, Lessor shall have the right
        to
        recover Lessor’s damages from Lessee, except as provided in Paragraph
        8.6.

       

        
        9.5 Damage
        Near End of Term. If
        at any
        time during the last six (6) months of this Lease there is damage for which
        the
        cost to repair exceeds one
        (1)
        month’s Base Rent, whether or not an insured Loss, Lessor may terminate this
        Lease effective sixty (60) days following the date of occurrence of such
        damage by giving a written termination notice to Lessee within thirty (30)
        days
        after the date of occurrence of such damage. Notwithstanding the foregoing,
        If Lessee at that time has an exercisable
        option to extend this Lease or to purchase the Premises, then Lessee may
        preserve this Lease by, (a) exercising
        such option and (b) providing Lessor with any shortage in insurance proceeds
        (or
        adequate assurance thereof) needed to make the repairs on or before the earlier
        of (i) the date which is ten
        days
        after Lessee’s receipt of Lessor’s written notice purporting to terminate this
        Lease, or (ii)
        the day
        prior to the date
        upon
        which such option expires. If Lessee duly exercises such option during such
        period and provides Lessor with funds (or adequate assurance thereof)
        to cover any shortage in insurance proceeds, Lessor shall, at Lessor’s
        commercially reasonable expense, repair such damage as soon as reasonably
        possible
        and this Lease shall continue in full force and effect. If Lessee falls to
        exercise such option and provide such funds or assurance during such period,
        then this Lease shall terminate on the date specified in the termination
        notice
        and Lessee’s option shall be extinguished.

       

        
        9.6 Abatement
        of Rent; Lessee’s Remedies.

       

      (a) Abatement.
        In
        the
        event of Premises Partial Damage or Premises Total Destruction or a
        Hazardous
        Substance Condition for which Lessee
        is
        not responsible under this Lease, the Rent payable by Lessee for the period
        required for the repair, remediation or restoration of such damage shall
        be
        abated
        in proportion to the degree to which Lessee’s use of the Premises is Impaired,
        but not to exceed the proceeds received from the Rental Value insurance.
        All
        other obligations of Lessee hereunder shall be performed by Lessee, and Lessor
        shall have no liability for any such damage, destruction, remediation,
        repair or restoration except as provided herein.

       

      (b) Remedies.
        If
        Lessor
        shall be obligated to repair or restore the Premises and does not commence,
        in a
        substantial and meaningful way, such
        repair or restoration within ninety (90) days after such obligation shall
        accrue, Lessee may, at any time prior to the commencement of such repair
        or
restoration,
        give written notice to Lessor and to any Lenders of which Lessee has actual
        notice, of Lessee’s election to terminate this Lease on a date not less
than
        sixty (60) days following the giving of such
        notice. If Lessee gives such notice and such repair or restoration is not
        commenced within thirty (30) days thereafter,
        this Lease shall terminate as of the date specified in said notice. If the
        repair or restoration is commenced within said thirty (30) days, this Lease
        shall
        continue in full force and effect. “Commence”
        shall
        mean either the unconditional authorization of the preparation of the required
        plans, or the beginning
        of the actual work on the Premises, whichever first occurs.

       

         
        9.7 Termination
        - Advance Payments. Upon
        termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an
        equitable adjustment shall
        be
        made concerning advance Base Rent and any other advance payments made by
        Lessee
        to Lessor. Lessor shall, in addition, return to Lessee so much
        of
        Lessee’s Security Deposit as has not been, or is not then required to be, used
        by Lessor.

       

        
        9.8 Waive
        Statutes. Lessor
        and Lessee agree that the terms of this Lease shall govern the effect of
        any
        damage to or destruction of the Premises
        with respect to the termination of this Lease and hereby waive the provisions
        of
        any present or future statute to the extent inconsistent herewith. 

       

      10.  
        Real Property Taxes.

       

      10.1  Definition
        of “Real Property Taxes.” As
        used
        herein, the term “Real
        Property Taxes” shall
        include any form of assessment; real estate, general, special, ordinary or
        extraordinary, or rental levy or tax (other than inheritance, personal income
        or
        estate taxes); Improvement bond; and/or license fee
        Imposed upon or levied against any legal or equitable interest of Lessor
        in the
        Premises, Lessor’s right to other income therefrom, and/or Lessor’s business
        of leasing, by any authority having the direct or indirect power to tax and
        where the funds are generated with reference to the Building address and
        where
        the proceeds so generated are to be applied by the city, county or other
        local
        taxing authority of a Jurisdiction within which the Premises are located.
        The
        term
“Real
        Property Taxes” shall
        also include any tax, fee, levy, assessment or charge, or any increase therein,
        imposed by reason of events occurring during
        the term of this Lease, including but not limited to, a change in the ownership
        of the Premises.

       

        
        10.2

       

      (a) Payment
        of Taxes. Lessee
        shall pay the Real Property Taxes applicable to the Premises during the term
        of
        this Lease. Subject to Paragraph
        10.2(b), all such payments shall
        be
        made
        at least ten (10) days prior to any delinquency date. Lessee shall promptly
        furnish Lessor with satisfactory
        evidence that such taxes have been paid. If any such taxes shall cover any
        period of time prior to or after the expiration or termination of this
Lease,
        Lessee’s share of such taxes shall be prorated to cover only that portion of the
        tax bill applicable to the period that this Lease is in effect, and Lessor
        shall
        reimburse Lessee for any overpayment. If Lessee shall fall to pay any required
        Real Property Taxes, Lessor shall have the right to pay the same, and
Lessee
        shall reimburse Lessor therefor upon demand.

       

      (b) Advance
        Payment. In
        the
        event Lessee incurs a late charge on any Rent payment, Lessor may, at Lessor’s
        option, estimate the current Real
        Property Taxes, and require that such taxes be paid in advance to Lessor
        by
        Lessee, either: (i) in a lump sum amount equal to the installment due, at
        least
        twenty (20) days prior to the applicable delinquency date, or (ii) monthly
        in
        advance with the payment of the Base Rent. If Lessor elects to require
payment
        monthly in advance, the monthly payment shall be an amount equal to the amount
        of the estimated installment of taxes divided by the number of months
        remaining before the month in which said installment becomes delinquent.
        When
        the actual amount of the applicable tax bill is known, the amount of
such
        equal monthly advance payments shall be adjusted as required to provide the
        funds needed to pay the applicable taxes. If the amount collected by
Lessor
        is
        insufficient to pay such Real Property Taxes when due, Lessee shall pay Lessor,
        upon demand, such additional sums as are necessary to pay such
        obligations. All monies paid to Lessor under this Paragraph may be intermingled
        with other monies of Lessor and shall not bear interest. in the event of
        a
        Breach
        by Lessee in the performance of Its obligations under this Lease, then any
        balance of funds paid to Lessor under the provisions of this Paragraph may,
        at
        the option of Lessor,
        be
        treated as an additional Security Deposit.

       

      10.3 Joint
        Assessment. If
        the
        Premises are not separately assessed. Lessee’s liability shall be an equitable
        proportion of the Real Property Taxes
        for
        all of the land and Improvements included within the tax parcel assessed,
        such
        proportion to be conclusively determined by Lessor from the respective
        valuations assigned in the assessor’s work sheets or such other information as
        may be reasonably available.

       

      10.4 Personal
        Property Taxes. Lessee
        shall pay, prior to delinquency, all taxes assessed against and levied upon
        Lessee Owned Alterations, Utility
        installations, Trade Fixtures, furnishings, equipment and all personal property
        of Lessee. When possible, Lessee shall cause such property to be assessed
        and
        billed separately from the real property of Lessor. If any of Lessee’s said
        personal property shall be assessed with Lessor’s real property, Lessee
        shall pay Lessor the
        taxes
        attributable to Lessee’s property within ten (10) days after receipt of a
        written statement.

       

      11. Utilities.
        Lessee
        shall pay for all water, gas, heat, light, power, telephone, trash disposal
        and
        other utilities and services supplied to the Premises, together
        with any taxes thereon. If any such services are not separately metered to
        Lessee, Lessee shall pay a reasonable proportion, to be determined by
Lessor,
        of all charges jointly metered.

       

      12. Assignment
        and Subletting.

       

         
        12.1  Lessor’s
        Consent Required.

       

      (a)
        Lessee shall not voluntarily or by operation of law assign, transfer, mortgage
        or encumber (collectively, “assign or
        assignment”) or
        sublet
        all or any part of Lessee’s interest in this Lease or in the Premises without
        Lessor’s prior written consent with the
        exception
        of an assignment or sublet
        resulting from a merger, consolidation, or sale of all or substantially all
        of
        the assets of Lessee, which shall not require Lessor’s prior
        written consent.

      

        
          	 	
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                    - American Industrial Real Estate Association

                	
                  REVISED

                	 	
                  FORM
                    STN-6-2/97E

                


        



      
        
          
            
            

          

          
            
            

            
              

            

          

           

        

      

       

    

    (b) A
      change in the control of Lessee shall constitute an assignment requiring
      consent. The transfer, on a cumulative basis, of twenty five percent (25%)
      or
      more of the voting control of Lessee shall constitute a change in control for
      this purpose.

     

    (c)
      The Involvement of Lessee or its assets in any transaction, or series of
      transactions (by way of merger, sale, acquisition, financing, transfer,
      leveraged buy out or otherwise), whether or not a formal assignment or
      hypothecation of this Lease or Lessee’s assets occurs, which results or will
      result in a reduction of the Net Worth of Lessee by an amount greater than
      twenty five (25%) of such Net Worth as it was represented at the time of the
      execution of this Lease or at the time of the most recent assignment to which
      Lessor has consented, or as it exists immediately prior to said transaction
      or
      transactions constituting such reduction, whichever was or is greater, shall
      be
      considered an assignment of this Lease to which Lessor may withhold its consent.
      “Net
      Worth Lessee”
      shall mean the net worth of Lessee (excluding any guarantors) established under
      generally accepted accounting principles.

     

    (d) An
      assignment or subletting without consent shall, at Lessor’s option, be a Default
      curable after notice per Paragraph 13.1(c), or a noncurable Breach without
      the
      necessity of any notice and grace period. If Lessor elects to treat such
      unapproved assignment or subletting as a noncurable Breach, Lessor may either:
      (i) terminate this Lease, or (ii) upon thirty (30) days written notice, increase
      the monthly Base Rent to one hundred ten percent (110%) of the Base Rent then
      in
      effect. Further, in the event of such Breach and rental adjustment, (i) the
      purchase price of any option to purchase the Premises held by Lessee shall be
      subject to similar adjustment to one hundred ten percent (110%) of the price
      previously in effect, and (ii) all fixed and non-fixed rental adjustments
      scheduled during the remainder of the Lease term shall be increased to One
      Hundred Ten Percent (110%) of the scheduled adjusted rent.

     

    (e) Lessee’s
      remedy for any breach of Paragraph 12.1 by Lessor shall be limited to
      compensatory damages and/or injunctive relief.

     

    12.2 Terms
      and Conditions Applicable to Assignment and Subletting.

     

    (a) Regardless
      of Lessor’s consent, any assignment or subletting shall not: (i) be effective
      without the express written assumption by such assignee or sublessee of the
      obligations of Lessee under this Lease; (ii) release Lessee of any obligations
      hereunder; or (iii) alter the primary liability of Lessee for the payment of
      Rent or for the performance of any other obligations to be performed by
      Lessee.

     

    (b) Lessor
      may accept Rent or performance of Lessee’s obligations from any person other
      than Lessee pending approval or disapproval of an assignment. Neither a delay
      in
      the approval or disapproval of such assignment nor the acceptance of Rent or
      performance shall constitute a waiver or estoppel of Lessor’s right to exercise
      its remedies for Lessee’s Default or Breach.

     

    (c) Lessor’s
      consent to any assignment or subletting shall not constitute a consent to any
      subsequent assignment or subletting.

     

    (d) In
      the
      event of any Default or Breach by Lessee, Lessor may proceed directly against
      Lessee, any Guarantors or anyone else responsible for the performance of
      Lessee’s obligations under this Lease, including any assignee or sublessee,
      without first exhausting Lessor’s remedies against any other person or entity
      responsible therefore to Lessor, or any security held by Lessor.

     

    (e) Each
      request for consent to an assignment or subletting shall be in writing,
      accompanied by information relevant to Lessor’s determination as to the
      financial and operational responsibility and appropriateness of the proposed
      assignee or sublessee, including but not limited to the intended use and/or
      required modification of the Premises, if any, together with a fee of $1,000
      or
      ten percent (10%) of the current monthly Base Rent applicable to the portion
      of
      the Premises which is the subject of the proposed assignment or sublease,
      whichever is greater, as consideration for Lessor’s considering and processing
      said request. Lessee agrees to provide Lessor with such other or additional
      information and/or documentation as may be reasonably requested.

     

    (f) Any
      assignee of, or sublessee under, this Lease shall, by reason of accepting such
      assignment or entering into such sublease, be deemed to have assumed and agreed
      to conform and comply with each and every term, covenant, condition and
      obligation herein to be observed or performed by Lessee during the term of
      said
      assignment or sublease, other than such obligations as are contrary to or
      inconsistent with provisions of an assignment or sublease to which Lessor has
      specifically consented to in writing.

     

    12.3 Additional
      Terms and Conditions Applicable to Subletting.
      The following terms and conditions shall apply to any subletting by Lessee
      of
      all or any part of the Premises and shall be deemed included in all subleases
      under this Lease whether or not expressly incorporated therein:

     

    (a) Lessee
      hereby assigns and transfers to Lessor all of Lessee’s interest in all Rent
      payable on any sublease, and Lessor may collect such Rent and apply same toward
      Lessee’s obligations under this Lease; provided, however, that until a Breach
      shall occur in the performance of Lessee’s obligations, Lessee may collect said
      Rent. Lessor shall not, by reason of the foregoing or any assignment of such
      sublease, nor by reason of the collection of Rent, be deemed liable to the
      sublessee for any failure of Lessee to perform and comply with any of Lessee’s
      obligations to such sublessee. Lessee hereby irrevocably authorizes and directs
      any such sublessee, upon receipt of a written notice from Lessor stating that
      a
      Breach exists in the performance of Lessee’s obligations under this Lease, to
      pay to Lessor all Rent due and to become due under the sublease. Sublessee
      shall
      rely upon any such notice from Lessor and shall pay all Rents to Lessor without
      any obligation or right to inquire as to whether such Breach exists,
      notwithstanding any claim from Lessee to the contrary.

     

    (b) In
      the
      event of a Breach by Lessee, Lessor may, at its option, require sublessee to
      attorn to Lessor, in which event Lessor shall undertake the obligations of
      the
      sublessor under such sublease from the time of the exercise of said option
      to
      the expiration of such sublease; provided, however, Lessor shall not be liable
      for any prepaid rents or security deposit paid by such sublessee to such
      sublessor or for any prior Defaults or Breaches of such sublessor.

     

    (c) Any
      matter requiring the consent of the sublessor under a sublease shall also
      require the consent of Lessor.

     

    (d) No
      sublessee shall further assign or sublet all or any part of the Premises without
      Lessor’s prior written consent.

     

    (e) Lessor
      shall deliver a copy of any notice of Default or Breach by Lessee to the
      sublessee, who shall have the right to cure the Default of Lessee within the
      grace period, if any, specified in such notice. The sublessee shall have a
      right
      of reimbursement and offset from and against Lessee for any such Defaults cured
      by the sublessee.

     

    13. Default;
      Breach; Remedies.

     

    13.1 Default;Breach.
      A “Default” is defined as a failure by the Lessee to comply with or perform any
      of the terms, covenants, conditions or rules under this Lease. A “Breach” is
      defined as the occurrence of one or more of the following Defaults, and the
      failure of Lessee to cure such Default within any applicable grace
      period:

     

    (a) The
      abandonment of the Premises; or the vacating of the Premises without providing
      a
      commercially reasonable level of security, or where the coverage of the property
      insurance described in Paragraph 8.3 is jeopardized as a result thereof, or
      without providing reasonable assurances to minimize potential
      vandalism.

     

    (b) The
      failure of Lessee to make any payment of Rent or any Security Deposit required
      to be made by Lessee hereunder, whether to Lessor or to a third party, when
      due,
      to provide reasonable evidence of insurance or surety bond, or to fulfill any
      obligation under this Lease which endangers or
      threatens life or property, where such failure continues for a period of
three
      (3)
      five (5)
      business days following written notice to Lessee.

     

    (c) The
      failure by Lessee to provide (i) reasonable written evidence of compliance
      with
      Applicable Requirements, (ii) the service contracts, (iii) the rescission of
      an
      unauthorized assignment or subletting, (iv) a Estoppel Certificate, (v) a
      requested subordination, (vi) evidence concerning any guaranty and/or Guarantor,
      (vii) any document requested under Paragraph 42 (easements), or (viii) any
      other
      documentation or information which Lessor may reasonably require of Lessee
      under
      the terms of this Lease, where any such failure continues for a period of ten
      (10) days following written notice to Lessee.

     

    (d) A
      Default
      by Lessee as to the terms, covenants, conditions or provisions of this Lease,
      or
      of the rules adopted under Paragraph 40 hereof, other than those described
      in
      subparagraphs 13.1(a), (b) or (c), above, where such Default continues for
      a
      period of thirty (30) days after written notice; provided, however, that if
      the
      nature of Lessee’s Default is such that more than thirty (30) days are
      reasonably required for its cure, then it shall not be deemed to be a Breach
      if
      Lessee commences such cure within said thirty (30) day period and thereafter
      diligently prosecutes such cure to completion.

     

    (e) The
      occurrence of any of the following events: (i) the making of any general
      arrangement or assignment for the benefit of creditors; (ii) becoming a “debtor”
as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the
      case of a petition filed against Lessee, the same is dismissed within sixty
      (60)
      days); (iii) the appointment of a trustee or receiver to take possession of
      substantially all of Lessee’s assets located at the Premises or of Lessee’s
      interest in this Lease, where possession is not restored to Lessee within thirty
      (30) days; or (iv) the attachment, execution or other Judicial seizure of
      substantially all of Lessee’s assets located at the Premises or of Lessee’s
      interest in this Lease, where such seizure is not discharged within thirty
      (30)
      days; provided, however, in the event that any provision of this subparagraph
      13.1 (e) is contrary to any applicable law, such provision shall be of no force
      or effect, and not affect the validity of the remaining provisions.

     

    (f) The
      discovery that any financial statement of Lessee or of any Guarantor given
      to
      Lessor was materially false.

     

    (g) If
      the
      performance of Lessee’s obligations under this Lease is guaranteed: (i) the
      death of a Guarantor; (ii) the termination of a Guarantor’s liability with
      respect to this Lease other than in accordance with the terms of such guaranty;
      (iii) a Guarantor’s becoming insolvent or the subject of a bankruptcy filing;
      (iv) a Guarantor’s refusal to honor the guaranty; or (v) a Guarantor’s breach of
      its guaranty obligation on an anticipatory basis, and Lessee’s failure, within
      sixty (60) days following written notice of any such event, to provide written
      alternative assurance or security, which, when coupled with the then existing
      resources of Lessee, equals or exceeds the combined financial resources of
      Lessee and the Guarantors that existed at the time of execution of this
      Lease.

    


    
      	
            	
               

              Page 7
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              Initials

            	
              

            
	 	 	 	 
	
              Ó1997
                - American Industrial Real Estate
                Association

            	
              REVISED

            	
            	
              FORM
                STN-6-2/97E

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    13.2 Remedies.
      If Lessee fails to perform any of its affirmative duties or
      obligations, within ten (10) days after written notice (or in case of an
      emergency, without notice), Lessor may, at its option, perform such duty or
      obligation on Lessee’s behalf, including but not limited to the obtaining of
      reasonably required bonds, insurance policies, or governmental licenses, permits
      or approvals. The costs and expenses of any such performance by Lessor shall
      be
      due and payable by Lessee upon receipt of invoice therefor. If any check given
      to Lessor by Lessee shall not be honored by the bank upon which it is drawn,
      Lessor, at its option, may require all future payments to be made by Lessee
      to
      be by cashier’s check. In the event of a Breach, Lessor may, with or without
      further notice or demand, and without limiting Lessor in the exercise of any
      right or remedy which Lessor may have by reason of such Breach:

     

    (a) Terminate
      Lessee’s right to possession of the Premises by any lawful means, in which case
      this Lease shall terminate and Lessee shall immediately surrender possession
      to
      Lessor. In such event Lessor shall be entitled to recover from Lessee: (i)
      the
      unpaid Rent which had been earned at the time of termination; (ii) the worth
      at
      the time of award of the amount by which the unpaid rent which would have been
      earned after termination until the time of award exceeds the amount of such
      rental loss that the Lessee proves could have been reasonably avoided; (iii)
      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 the Lessee proves could be reasonably avoided; and (iv) any
      other amount necessary to compensate Lessor for all the detriment proximately
      caused by the Lessee’s failure to perform its obligations under this Lease or
      which in the ordinary course of things would be likely to result therefrom,
      including but not limited to the cost of recovering possession of the Promises,
      expenses of reletting, including necessary renovation and alteration of the
      Premises, reasonable attorneys’ fees, and that portion of any leasing commission
      paid by Lessor in connection with this Lease applicable to the unexpired term
      of
      this Lease. The worth at the time of award of the amount referred to in
      provision (III) of the immediately preceding sentence shall be computed by
      discounting such amount at the discount rate of the Federal Reserve Bank of
      the
      District within which the Premises are located at the time of award plus one
      percent (1%). Efforts by Lessor to mitigate damages caused by Lessee’s Breach of
      this Lease shall not waive Lessor’s right to recover damages under Paragraph 12.
      If termination of this Lease is obtained through the provisional remedy of
      unlawful detainer, Lessor shall have the right to recover in such proceeding
      any
      unpaid Rent and damages as are recoverable therein, or Lessor may reserve the
      right to recover all or any part thereof in a separate suit. If a notice and
      grace period required under Paragraph 13.1 was not previously given, a notice
      to
      pay rent or quit, or to perform or quit given to Lessee under the unlawful
      detainer statute shall also constitute the notice required by Paragraph 13.1.
      In
      such case, the applicable grace period required by Paragraph 13.1 and the
      unlawful detainer statute shall run concurrently, and the failure of Lessee
      to
      cure the Default within the greater of the two such grace periods shall
      constitute both an unlawful detainer and a Breach of this Lease entitling Lessor
      to the remedies provided for in this Lease and/or by said statute.

     

    (b) Continue
      the Lease and Lessee’s right to possession and recover the Rent as it becomes
      due, in which event Lessee may sublet or assign, subject only to reasonable
      limitations. Acts of maintenance, efforts to relet, and/or the appointment
      of a
      receiver to protect the Lessor’s interests, shall not constitute a termination
      of the Lessee’s right to possession.

     

    (c) Pursue
      any other remedy now or hereafter available under the laws or judicial decisions
      of the state wherein the Premises are located. The expiration or termination
      of
      this Lease and/or the termination of Lessee’s right to possession shall not
      relieve Lessee from liability under any indemnity provisions of this Lease
      as to
      matters occurring or accruing during the term hereof or by reason of Lessee’s
      occupancy of the Premises.

     

    13.3 Inducement
      Recapture.
      Any
      agreement for free or abated rent or other charges, or for the giving or paying
      by Lessor to or for Lessee of any cash or other bonus, inducement or
      consideration for Lessee’s entering into this Lease, all of which concessions
      are hereinafter referred to as “Inducement Provisions,” shall
      be deemed conditioned upon Lessee’s full and faithful performance of all of the
      terms, covenants and conditions of this Lease. Upon Breach of this Lease by
      Lessee, any such Inducement Provision shall automatically be deemed deleted
      from
      this Lease and of no further force or effect, and any rent, other charge, bonus,
      inducement or consideration theretofore abated, given or paid by Lessor under
      such an Inducement Provision shall be immediately due and payable by Lessee
      to
      Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The
      acceptance by Lessor of Rent or the cure of the Breach which initiated the
      operation of this paragraph shall not be deemed a waiver by Lessor of the
      provisions of this paragraph unless specifically so stated in writing by Lessor
      at the time of such acceptance.

     

    13.4 Late
      Charges.
      Lessee
      hereby acknowledges that late payment by Lessee of Rent will cause Lessor to
      incur costs not contemplated by this Lease, the exact amount of which will
      be
      extremely difficult to ascertain. Such costs include, but are not limited to,
      processing and accounting charges, and late charges which may be imposed upon
      Lessor by any Lender. Accordingly, if any Rent shall not be received by Lessor
      within five (5) days after such amount shall be due, then, without any
      requirement for notice to Lessee. Lessee shall pay to Lessor a one-time late
      charge equal to ten percent (10%) of each such overdue amount. The Parties
      hereby agree that such late charge represents a fair and reasonable estimate
      of
      the costs Lessor will incur by reason of such late payment. Acceptance of such
      late charge by Lessor shall in no event constitute a waiver of Lessee’s Default
      or Breach with respect to such overdue amount, nor prevent the exercise of
      any
      of the other rights and remedies granted hereunder. In the event that a late
      charge is payable hereunder, whether or not collected, for three (3) consecutive
      installments of Base Rent, then notwithstanding any provision of this Lease
      to
      the contrary. Base Rent shall, at Lessor’s option, become due and payable
      quarterly in advance.

     

    13.5 Interest.
      Any
      monetary payment due Lessor hereunder, other than late charges, not received
      by
      Lessor, when due as to scheduled payments (such as Base Rent) or within thirty
      (30) days following the date on which it was due for non-scheduled payment,
      shall bear interest from the date when due, as to scheduled payments, or the
      thirty-first (31st) day after it was due as to non-scheduled payments. The
      Interest (“Interest”) charged shall be equal to the prime rate
      reported in the Wall Street Journal as published closest prior to the date
      when
      due plus four percent (4%), but shall not exceed the maximum rate allowed by
      law. Interest is payable in addition to the potential late charge provided
      for
      in Paragraph 13.4.

     

    13.6 Breach
      by Lessor.

     

    (a) Notice
      of Breach. Lessor shall not be deemed in breach of this Lease unless
      Lessor falls within a reasonable time to perform an obligation required to
      be
      performed by Lessor. For purposes of this Paragraph, a reasonable time shall
      in
      no event be less than thirty (30) days after receipt by Lessor, and any Lender
      whose name and address shall have been furnished Lessee in writing for such
      purpose, of written notice specifying wherein such obligation of Lessor has
      not
      been performed; provided, however, that if the nature of Lessor’s obligation is
      such that more than thirty (30) days are reasonably required for its
      performance, then Lessor shall not be in breach if performance is commenced
      within such thirty (30) day period and thereafter diligently pursued to
      completion.

     

    (b) Performance
      by Lessee on Behalf of Lessor. In the event that neither Lessor nor
      Lender cures said breach within thirty (30) days after receipt of said notice,
      or if having commenced said cure they do not diligently pursue it to completion,
      then Lessee may elect to cure said breach at Lessee’s expense and offset from
      Rent an amount equal to the greater of one month’s Base Rent or the Security
      Deposit, and to pay an excess of such expense under protest, reserving Lessee’s
      right to reimbursement from Lessor. Lessee shall document the cost of said
      cure
      and supply said documentation to Lessor.

     

    14. Condemnation.
      If the
      Premises or any portion thereof are taken under the power of eminent domain
      or
      sold under the threat of the exercise of said power (collectively
“Condemnation”), this Lease shall terminate as to the part taken as of the date
      the condemning authority takes title or possession, whichever first occurs.
      If
      more than ten percent (10%) of any building portion of the Premises, or more
      than twenty-five percent (25%) of the land area portion of the Premises not
      occupied by any building, is taken by Condemnation, Lessee may, at Lessee’s
      option, to be exercised in writing within ten (10) days after Lessor shall
      have
      given Lessee written notice of such taking (or in the absence of such notice,
      within ten (10) days after the condemning authority shall have taken possession)
      terminate this Lease as of the date the condemning authority takes such
      possession. If Lessee does not terminate this Lease in accordance with the
      foregoing, this Lease shall remain in full force and effect as to the portion
      of
      the Premises remaining, except that the Base Rent shall be reduced in proportion
      to the reduction in utility of the Premises caused by such Condemnation.
      Condemnation awards and/or payments shall be the property of Lessor, whether
      such award shall be made as compensation for diminution in value of the
      leasehold, the value of the part taken, or for severance damages; provided,
      however, that Lessee shall be entitled to any compensation for Lessee’s
      relocation expenses, loss of business goodwill and/or Trade Fixtures, without
      regard to whether or not this Lease is terminated pursuant to the provisions
      of
      this Paragraph. All Alterations and Utility Installations made to the Premises
      by Lessee, for purposes of Condemnation only, shall be considered the property
      of the Lessee and Lessee shall be entitled to any and all compensation which
      is
      payable therefor. In the event that this Lease is not terminated by reason
      of
      the Condemnation, Lessor shall repair any damage to the Premises caused by
      such
      Condemnation.

     

    15. Brokers’
      Fee.

     

    15.1 Additional
      Commission.
      In
      addition to the payments owed pursuant to Paragraph 1.10 above, and unless
      Lessor and the Brokers otherwise agree in writing, Lessor agrees that: (a)
      if
      Lessee exercises any Option, (b) if Lessee acquires any rights to the Premises
      or other premises owned
      by
      Lessor and located within the same Project, if any, within which the
      Premises is located, (c) if Lessee remains in possession of the Premises, with
      the, consent of Lessor, after the expiration of this Lease, or (d) if Base
      Rent
      is increased, whether by agreement or operation of an escalation clause herein,
      then, Lessor shall pay Brokers a fee in accordance with the schedule of said
      Brokers in effect at the time of the execution of this Lease.

    


    
      	
            	
               

              Page 8
                of 12

            	
               

              Initials

            	
              

            
	 	 	 	 
	
              Ó1997
                - American Industrial Real Estate
                Association

            	
              REVISED

            	 	
              FORM
                STN-6-2/97E

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    15.2 Assumption
      of Obligations. Any
      buyer
      or transferee of Lessor’s interest in this Lease shall be deemed to have assumed
      Lessor’s obligation hereunder. Each Broker shall be a third party beneficiary of
      the provisions of Paragraphs 1.10,15, 22 and 31. If Lessor falls to pay to
      a
      Broker any amounts due as and for commissions pertaining to this Lease when
      due,
      then such amounts shall accrue interest. In addition, if Lessor falls to pay
      any
      amounts to Lessee’s Broker when due, Lessee’s Broker may send written notice to
      Lessor and Lessee of such failure and if Lessor falls to pay such amounts within
      ten (10) days after said notice, Lessee shall pay said monies to its Broker
      and
      offset such amounts against Rent. In addition, Lessee’s Broker shall be deemed
      to be a third party beneficiary of any commission agreement entered into by
      and/or between Lessor and Lessor’s Broker.

     

    15.3 Representations
      and Indemnities of Broker Relationships. Lessee
      and Lessor each represent and warrant to the other that it has had no dealings
      with any person, firm, broker
      or
      finder (other than the Brokers, if any) in connection with this Lease, and
      that
      no one other than said named Brokers is entitled to any commission or finder’s
      fee in connection herewith. Lessee and Lessor do each hereby agree to indemnify,
      protect, defend and hold the other harmless from and against liability for
      compensation or charges which may be claimed by any such unnamed broker, finder
      or other similar party by reason of any dealings or actions of the indemnifying
      Party, including any costs, expenses, and/or attorneys’ fees reasonably incurred
      with respect thereto.

     

    16. Estoppel
      Certificates.

     

    (a) Each
      Party (as “Responding
      Party”) shall
      within ten (10) days after written notice from the other Party (the “Requesting
      Party”) execute,
      acknowledge and deliver to the Requesting Party a statement in writing in form
      similar to the then most current “Estoppel
      Certificate” form
      published by the American Industrial Real Estate Association, plus such
      additional information, confirmation and/or statements as may be reasonably
      requested by the Requesting Party.

     

    (b) If
      the
      Responding Party shall fall to execute or deliver the Estoppel Certificate
      within such ten day period, the Requesting Party may execute an Estoppel
      Certificate stating that: (i) the Lease is in full force and effect without
      modification except as may be represented by the Requesting Party, (ii) there
      are no uncured defaults in the Requesting Party’s performance, and (iii) If
      Lessor is the Requesting Party, not more than one month’s Rent has been paid in
      advance. Prospective purchasers and encumbrancers may rely upon the Requesting
      Party’s Estoppel Certificate, and the Responding Party shall be estopped from
      denying the truth of the facts contained in said Certificate.

     

    (c) If
      Lessor
      desires to finance, refinance, or sell the Premises, or any part thereof, Lessee
      and all Guarantors shall deliver to any potential lender or purchaser designated
      by Lessor such financial statements as may be reasonably required by such lender
      or purchaser, including, but not limited to Lessee’s financial statements for
      the past three (3) years. All such financial statements shall be received by
      Lessor and such lender or purchaser in confidence and shall be used only for
      the
      purposes herein set forth.


     

    17. Definition
      of Lessor. The
      term“Lessor”
      as
      used
      herein shall mean the owner or owners at the time in question of the fee title
      to the Premises, or, if this is a sublease, of the Lessee’s interest in the
      prior lease. In the event of a transfer of Lessor’s title or interest in the
      Premises or this Lease, Lessor shall deliver to the transferee or assignee
      (in
      cash or by credit) any unused Security Deposit held by Lessor. Except as
      provided in Paragraph 15, upon such transfer or assignment and delivery of
      the
      Security Deposit, as aforesaid, the prior Lessor shall be relieved of all
      liability with respect to the obligations and/or covenants under this Lease
      thereafter to be performed by the Lessor. Subject to the foregoing, the
      obligations and/or covenants in this Lease to be performed by the Lessor shall
      be binding only upon the Lessor as hereinabove defined. Notwithstanding the
      above, and subject to the provisions of Paragraph 20 below, the original Lessor
      under this Lease, and all subsequent holders of the Lessor’s interest in this
      Lease shall remain liable and responsible with regard to the potential duties
      and liabilities of Lessor pertaining to Hazardous Substances as outlined in
      Paragraph 6 above.

     

    18. Severability.
      The
      invalidity of any provision of this Lease, as determined by a court of competent
      jurisdiction, shall in no way affect the validity of any other provision
      hereof.

     

    19. Days.
      Unless
      otherwise specifically indicated to the contrary, the word “days” as used in
      this Lease shall mean and refer to calendar days.

     

    20. Limitation
      on Liability. Subject
      to the provisions of Paragraph 17 above, the obligations of Lessor under this
      Lease shall not constitute personal obligations of Lessor, the individual
      partners of Lessor or its or their individual partners, directors, officers
      or
      shareholders, and Lessee shall look to the Premises, and to no other assets
      of
      Lessor, for the satisfaction of any liability of Lessor with respect to this
      Lease, and shall not seek recourse against the individual partners of Lessor,
      or
      its or their individual partners, directors, officers or shareholders, or any
      of
      their personal assets for such satisfaction.

     

    21. Time
      of Essence. Time
      is
      of the essence with respect to the performance of all obligations to be
      performed or observed by the Parties under this Lease.

     

    22. No
      Prior or Other Agreements; Broker Disclaimer. This
      Lease contains all agreements between the Parties with respect to any matter
      mentioned herein, and no other prior or contemporaneous agreement or
      understanding shall be effective. Lessor and Lessee each represents and warrants
      to the Brokers that it has made, and is relying solely upon, its own
      investigation as to the nature, quality, character and financial responsibility
      of the other Party to this Lease and as to the nature, quality and character
      of
      the Premises. Brokers have no responsibility with respect thereto or with
      respect to any default or breach hereof by either Party. The liability
      (including court costs and Attorneys’ fees), of any Broker with respect to
      negotiation, execution, delivery or performance by either Lessor or Lessee
      under
      this Lease or any amendment or modification hereto shall be limited to an amount
      up to the fee received by such Broker pursuant to this Lease; provided, however,
      that the foregoing limitation on each Broker’s liability shall not be applicable
      to any gross negligence or willful misconduct of such Broker.

     

    23. Notices.

     

    23.1 Notice
      Requirements. All
      notices required or permitted by this Lease shall be in writing and may be
      delivered in person (by hand or by courier) or may be sent by regular, certified
      or registered mail or U.S. Postal Service Express Mail, with postage prepaid,
      or
      by facsimile transmission, and shall be deemed sufficiently given if served
      in a
      manner specified in this Paragraph 23. The addresses noted adjacent to a Party’s
      signature on this Lease shall be that Party’s address for delivery or mailing of
      notices. Either Party may by written notice to the other specify a different
      address for notice, except that upon Lessee’s taking possession of the Premises,
      the Premises shall constitute Lessee’s address for notice. A copy of all notices
      to Lessor shall be concurrently transmitted to such party or parties at such
      addresses as Lessor may from time to time hereafter designate in
      writing.

     

    23.2 Date
      of Notice. Any
      notice sent by registered or certified mail, return receipt requested, shall
      be
      deemed given on the date of delivery shown on the receipt card, or if no
      delivery date is shown, the postmark thereon. If sent by regular mail the notice
      shall be deemed given forty-eight (48) hours after the same is addressed as
      required herein and mailed with postage prepaid. Notices delivered by United
      States Express Mail or overnight courier that guarantee next day delivery shall
      be deemed given twenty-four (24) hours after delivery of the same to the Postal
      Service or courier. Notices transmitted by facsimile transmission or similar
      means shall be deemed delivered upon telephone confirmation of receipt, provided
      a copy is also delivered via delivery or mail. If notice is received on a
      Saturday, Sunday or legal holiday, it shall be deemed received on the next
      business day.


     

    24. Waivers.
      No
      waiver
      by Lessor of the Default or Breach of any term, covenant or condition hereof
      by
      Lessee, shall be deemed a waiver of any other term, covenant or condition
      hereof, or of any subsequent Default or Breach by Lessee of the same or of
      any
      other term, covenant or condition hereof. Lessor’s consent to, or approval of,
      any act shall not be deemed to render unnecessary the obtaining of Lessor’s
      consent to, or approval of, any subsequent or similar act by Lessee, or be
      construed as the basis of an estoppel to enforce the provision or provisions
      of
      this Lease requiring such consent. The acceptance of Rent by Lessor shall not
      be
      a waiver of any Default or Breach by Lessee. Any payment by Lessee may be
      accepted by Lessor on account of monies or damages due Lessor, notwithstanding
      any qualifying statements or conditions made by Lessee in connection therewith,
      which such statements and/or conditions shall be of no force or effect
      whatsoever unless specifically agreed to in writing by Lessor at or before
      the
      time of deposit of such payment.

     

    25. Recording.
      Either
      Lessor or Lessee shall, upon request of the other, execute, acknowledge and
      deliver to the other a short form memorandum of this Lease for recording
      purposes. The Party requesting recordation shall be responsible for payment
      of
      any fees applicable thereto.

     

    26. No
      Right To
      Holdover.
      Lessee
      has no right to retain possession of the Premises or any part thereof beyond
      the
      expiration or termination of this Lease. In the event that Lessee holds over,
      then the Base Rent shall be increased to one hundred fifty percent (150%) of
      the
      Base Rent applicable during the month immediately preceding the expiration
      or
      termination. Nothing contained herein shall be construed as consent by Lessor
      to
      any holding over by Lessee.

     

    27. Cumulative
      Remedies. No
      remedy
      or election hereunder shall be deemed exclusive but shall, wherever possible,
      be
      cumulative with all other remedies at law or in equity.

     

    28. Covenants
      and Conditions; Construction of Agreement. All
      provisions of this Lease to be observed or performed by Lessee are both
      covenants and conditions. In construing this
      Lease,
      all headings and titles are for the convenience of the Parties only and shall
      not be considered a part of this Lease. Whenever required by the context, the
      singular shall include the plural and vice versa. This Lease shall not be
      construed as if prepared by one of the Parties, but rather according to its
      fair
      meaning as a whole, as If both Parties had prepared it.

     

    29. Binding
      Effect; Choice of Law. This
      Lease shall be binding upon the parties, their personal representatives,
      successors and assigns and be “governed
      by the laws of the State in which the Premises are located. Any litigation
      between the Parties hereto concerning this Lease shall be initiated in the
      county in which the Premises are located.

     

    
      	 	
              Page
                9 of 12

            	
              Initials

            	
              

            
	 	 	 	 
	
              Ó1997
                - American Industrial Real Estate Association

            	
              REVISED

            	 	
              FORM
                STN-6-2/97E

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    30. Subordination;
      Attornment; Non-Disturbance.

     

    30.1 Subordination.
      This
      Lease and any Option granted hereby shall be subject and subordinate to any
      ground lease, mortgage, deed of trust, or other hypothecation or security device
      (collectively, “Security Device”), now or hereafter placed upon
      the Premises, to any and all advances made on the security thereof, and to
      all
      renewals, modifications, and extensions thereof. Lessee agrees that the holders
      of any such Security Devices (In this Lease together referred to as “Lessor’s
      Lender”) shall have no liability or obligation to perform any of the obligations
      of Lessor under this Lease. Any Lender may elect
      to have
      this Lease and/or any Option granted hereby superior to the lien of its Security
      Device by giving written notice thereof to Lessee, whereupon this Lease and
      such
      Options shall be deemed prior to such Security Device, notwithstanding the
      relative dates of the documentation or recordation thereof.

     

    30.2 Attornment.
      Subject
      to the non-disturbance provisions of Paragraph 30.3, Lessee agrees to attorn
      to
      a Lender or any other party who acquires ownership of the Premises by reason
      of
      a foreclosure of a Security Device, and that in the event of such foreclosure,
      such new owner shall not: (i) be liable for any act or omission of any prior
      lessor or with respect to events occurring prior to acquisition of ownership;
      (ii) be subject to any offsets or defenses which Lessee might have against
      any
      prior lessor; or (iii) be bound by prepayment of more than one (1) month’s
      rent.

     

    30.3 Non-Disturbance.
      With
      respect to Security Devices entered into by Lessor after the execution of this
      Lease, Lessee’s subordination of this Lease shall be subject to receiving a
      commercially reasonable non-disturbance agreement (a “Non-Disturbance
      Agreement”) from the Lender which Non-Disturbance Agreement provides
      that Lessee’s possession of the Premises, and this Lease, including any options
      to extend the term hereof, will not be disturbed so long as Lessee is not in
      Breach hereof and attoms to the record owner of the Premises. Further, within
      sixty (60) days after the execution of this Lease, Lessor shall use its
      commercially reasonable efforts to obtain a Non-Disturbance Agreement from
      the
      holder of any pre-existing Security Device which is secured by the Premises.
      In
      the event that Lessor is unable to provide the Non-Disturbance Agreement within
      said sixty (60) days, then Lessee may, at Lessee’s option, directly contact
      Lessor’s lender and attempt to negotiate for the execution and delivery of a
      Non-Disturbance Agreement.

     

    30.4 Self-Executing.
      The
      agreements contained in this Paragraph 30 shall be effective without the
      execution of any further documents; provided, however, that, upon written
      request from Lessor or a Lender in connection with a sale, financing or
      refinancing of the Premises, Lessee and Lessor shall execute such further
      writings as may be reasonably required to separately document any subordination,
      attornment and/or Non-Disturbance Agreement provided for
      herein.


     

    31. Attorneys’
      Fees. If
      any
      Party or Broker brings an action or proceeding involving the Premises to enforce
      the terms hereof or to declare rights hereunder, the Prevailing Party (as
      hereafter defined) in any such proceeding, action, or appeal thereon, shall
      be
      entitled to reasonable attorneys’ fees. Such fees may be awarded in the same
      suit or recovered in a separate suit, whether or not such action or proceeding
      is pursued to decision or Judgment. The term, “Prevailing
      Party” shall include, without limitation, a Party or Broker who
      substantially obtains or defeats the relief sought, as the case may be, whether
      by compromise, settlement, Judgment, or the abandonment by the other Party
      or
      Broker of its claim or defense. The attorneys’ fees award shall not be computed
      in accordance with any court fee schedule, but shall be such as to fully
      reimburse all attorneys’ fees reasonably incurred. In addition, Lessor shall be
      entitled to attorneys’ fees, costs and expenses incurred in the preparation and
      service of notices of Default and consultations in connection therewith, whether
      or not a legal action is subsequently commenced in connection with such Default
      or resulting Breach.

     

    32. Lessor’s
      Access; Showing
      Premises; Repairs. Lessor and Lessor’s agents shall have the right to
      enter the Premises at any time, in the case of an emergency, and otherwise
      at
      reasonable times for the purpose of showing the same to prospective purchasers,
      lenders, or lessees, and making such alterations, repairs, improvements or
      additions to the Premises as Lessor may deem necessary. All such activities
      shall be without abatement of rent or liability to Lessee. Lessor may at any
      time place on the Premises any ordinary “For Sale” signs and Lessor may during
      the last six (6) months of the term hereof place on the Premises any ordinary
      “For Lease” signs. Lessee may at any time place on or about the
      Premises any ordinary “For Sublease” sign. 

     

    33. Auctions.
      Lessee
      shall not conduct, nor permit to be conducted, any auction upon the Premises
      without Lessor’s prior written consent. Lessor shall not be obligated to
      exercise any standard of reasonableness in determining whether to permit an
      auction.

     

    34. Signs.
      Except
      for ordinary “For Sublease” signs, Lessee shall not place any sign upon the
      Premises without Lessor’s prior written consent. All signs must comply with all
      Applicable Requirements.

     

    35. Termination;
      Merger. Unless
      specifically stated otherwise in writing by Lessor, the voluntary or other
      surrender of this Lease by Lessee, the mutual termination or cancellation
      hereof, or a termination hereof by Lessor for Breach by Lessee, shall
      automatically terminate any sublease or lesser estate in the Premises; provided,
      however, that Lessor may elect to continue any one or all existing subtenancies.
      Lessor’s failure within ten (10) days following any such event to elect to the
      contrary by written notice to the holder of any such lesser interest, shall
      constitute Lessor’s election to have such event constitute the termination of
      such interest.

     

    36. Consents.
      Except
      as
      otherwise provided herein, wherever in this Lease the consent of a Party is
      required to an act by or for the other Party, such consent shall not be
      unreasonably withheld or delayed. Lessor’s actual reasonable costs and expenses
      (Including, but not limited to, architects’, attorneys’, engineers’ and other
      consultants’ fees) incurred in the consideration of, or response to, a request
      by Lessee for any Lessor consent, including, but not limited to, consents to
      an
      assignment, a subletting or the presence or use of a Hazardous Substance, shall
      be paid by Lessee upon receipt of an invoice and supporting documentation
      therefor. Lessor’s consent to any act, assignment or subletting shall not
      constitute an acknowledgment that no Default or Breach by Lessee of this Lease
      exists, nor shall such consent be deemed a waiver of any then existing Default
      or Breach, except as may be otherwise specifically stated in writing by Lessor
      at the time of such consent. The failure to specify herein any particular
      condition to Lessor’s consent shall not preclude the imposition by Lessor at the
      time of consent of such further or other conditions as are then reasonable
      with
      reference to the particular matter for which consent is being given. In the
      event that either Party disagrees with any determination made by the other
      hereunder and reasonably requests the reasons for such determination, the
      determining party shall furnish its reasons in writing and in reasonable detail
      within ten (10) business days following such request.

     

    37. Guarantor.


     

    37.1 Execution.
      The
      Guarantors, If any, shall each execute a guaranty in the form most recently
      published by the American Industrial Real Estate Association, and each such
      Guarantor shall have the same obligations as Lessee under this
      Lease.

     

    37.2 Default.
      It
      shall
      constitute a Default of the Lessee if any Guarantor falls or refuses, upon
      request to provide: (a) evidence of the execution of the guaranty, including
      the
      authority of the party signing on Guarantor’s behalf to obligate Guarantor, and
      in the case of a corporate Guarantor, a certified copy of a resolution of its
      board of directors authorizing the making of such guaranty, (b) current
      financial statements, (c) a Tenancy Statement, or (d) written confirmation
      that
      the guaranty is still in effect.


     

    38. Quiet
      Possession. Subject to payment by Lessee of the Rent and performance of
      all of the covenants, conditions and provisions on Lessee’s part to be observed
      and performed under this Lease, Lessee shall have quiet possession and quiet
      enjoyment of the Premises during the term hereof.

     

    39. Options.


     

    39.1 Definition.
      “Option” shall
      mean: (a) the right to extend the term of or renew this Lease or to extend
      or
      renew any lease that Lessee has on other property of Lessor; (b) the right
      of
      first refusal or first offer to lease either the Premises or other property
      of
      Lessor; (c) the right to purchase or the right of first refusal to purchase
      the
      Premises or other property of Lessor.

     

    39.2 Options
      Personal To Original Lessee.Each
      Option granted to Lessee in this Lease is personal to the original Lessee,
      and
      cannot be assigned or exercised by anyone other than said original Lessee and
      or
      a
      successor lessee as
      a
result
      of
      merger, consolidation, or sale of all or
      substantially
      all of the assets of Lessee and
      only
      while the original Lessee is in full possession of the Premises and, if
      requested by Lessor, with Lessee certifying that Lessee has no intention of
      thereafter assigning or subletting.

     

    39.3 Multiple
      Options. In
      the
      event that Lessee has any multiple Options to extend or renew this Lease, a
      later Option cannot be exercised unless the prior Options have been validly
      exercised.

     

    39.4 Effect
      of Default on Options.


     

    (a) Lessee
      shall have no right to exercise an Option: (i) during the period commencing
      with
      the giving of any notice of Default and continuing until said Default is cured,
      (ii) during the period of time any Rent is unpaid (without regard to whether
      notice thereof is given Lessee), (iii) during the time Lessee is in Breach
      of
      this Lease, or (iv) in the event that Lessee has been given three (3) or more
      notices of separate Default, whether or not the Defaults are cured, during
      the
      twelve (12) month period immediately preceding the exercise of the
      Option.

     

    (b) The
      period of time within which an Option may be exercised shall not be extended
      or
      enlarged by reason of Lessee’s inability to exercise an Option because of the
      provisions of Paragraph 39.4(a).

     

    (c) An
      Option
      shall terminate and be of no further force or effect, notwithstanding Lessee’s
      due and timely exercise of the Option, if, after such exercise and prior to
      the
      commencement of the extended term, (i) Lessee falls to pay Rent for a period
      of
      thirty (30) days after such Rent becomes due (without any necessity of Lessor
      to
      give notice thereof), (ii) Lessor gives to Lessee three (3) or more notices
      of
      separate Default during any twelve (12) month period, whether or not the
      Defaults are cured, or (iii) If Lessee commits a Breach of this
      Lease.

    


    
      	 	
              Page
                10 of 12

            	
              Initials

            	
              

            
	 	 	 	 
	
              Ó1997
                - American Industrial Real Estate Association

            	
              REVISED

            	 	
              FORM
                STN-6-2/97E

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      40. Multiple
        Buildings.
        If the
        Premises are a part of a group of buildings controlled by Lessor, Lessee
        agrees
        that it will observe all reasonable rules and regulations which Lessor may
        make
        from time to time for the management, safety, and care of said properties,
        including the care and cleanliness of the grounds and including the parking,
        loading and unloading of vehicles, and that Lessee will pay its fair share
        of
        common expenses incurred in connection therewith.

       

      41. Security
        Measures.
        Lessee
        hereby acknowledges that the rental payable to Lessor hereunder does not
        include
        the cost of guard service or other security measures, and that Lessor shall
        have
        no obligation whatsoever to provide same. Lessee assumes all responsibility
        for
        the protection of the Premises, Lessee, its agents and invitees and their
        property from the acts of third parties.

       

      42. Reservations.
        Lessor
        reserves to itself the right, from time to time, to grant, without the consent
        or joinder of Lessee, such easements, rights and dedications that Lessor
        deems
        necessary, and to cause the recordation of parcel maps and restrictions,
        so long
        as such easements, rights, dedications, maps and restrictions do not
        unreasonably interfere with the use of the Premises by Lessee. Lessee agrees
        to
        sign any documents reasonably requested by Lessor to effectuate any such
        easement rights, dedication, map or restrictions.

       

      43. Performance
        Under Protest.
        If at
        any time a dispute shell arise as to any amount or sum of money to be paid
        by
        one Party to the other under the provisions hereof, the Party against whom
        the
        obligation to pay the money is asserted shall have the right to make payment
        “under protest” and such payment shall not be regarded as a voluntary payment
        and there shall survive the right on the part of said Party to institute
        suit
        for recovery of such sum. If it shall be adjudged that there was no legal
        obligation on the part of said Party to pay such sum or any part thereof,
        said
        Party shall be entitled to recover such sum or so much thereof as it was
        not
        legally required to pay.

       

      44. Authority.
        If
        either Party hereto is a corporation, trust, limited liability company,
        partnership, or similar entity, each individual executing this Lease on behalf
        of such entity represents and warrants that he or she is duly authorized
        to
        execute and deliver this Lease on its behalf. Each Party shall, within thirty
        (30) days after request, deliver to the other Party satisfactory evidence
        of
        such authority.

       

      45. Conflict.
        Any
        conflict between the printed provisions of this Lease and the typewritten
        or
        handwritten provisions shall be controlled by the typewritten or handwritten
        provisions.

       

      46. Offer.
        Preparation of this Lease by either Party or their agent and submission of
        same
        to the other Party shall not be deemed an offer to lease to the other Party.
        This Lease is not intended to be binding until executed and delivered by
        all
        Parties hereto.

       

      47. Amendments.
        This
        Lease may be modified only in writing, signed by the Parties in interest
        at the
        time of the modification. As long as they do not materially change Lessee’s
        obligations hereunder, Lessee agrees to make such reasonable non-monetary
        modifications to this Lease as may be reasonably required by a Lender in
        connection with the obtaining of normal financing or refinancing of the
        Premises.

       

      48. Multiple
        Parties.
        If more
        than one person or entity is named herein as either Lessor or Lessee, such
        multiple Parties shall have Joint and several responsibility to comply with
        the
        terms of this Lease.

       

      49. Mediation
        and Arbitration of Disputes.
        An
        Addendum requiring the Mediation and/or the Arbitration of all disputes between
        the Parties and/or Brokers arising out of this Lease o
        is
þ
        is not
        attached to this Lease.

       

      LESSOR
        AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
        PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
        INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT
        THE
        TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
        AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO
        THE
        PREMISES.

       

      
        	
                ATTENTION:
                  NO
                  REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL
                  REAL
                  ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,
                  LEGAL
                  EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO
                  WHICH IT
                  RELATES. THE PARTIES ARE URGED TO:

                 

                1.
                  SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF
                  THIS LEASE.
                  

                2.
                  RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION
                  OF
                  THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED
                  TO: THE
                  POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES,
                  THE
                  STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS,
                  AND
                  THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED
                  USE.

                 

                WARNING:
                  IF
                  THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN
                  PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE
                  LAWS OF
                  THE STATE IN WHICH THE PREMISES IS
                  LOCATED.

              


      

      
      

       

      The
        parties hereto have executed this Lease at the place and on the dates specified
        above their respective signatures.

       

      
        	
                Executed
                  at: Los
                  Angeles, California

              	 	
                Executed
                  at: Los
                  Angeles, California

              
	
                On:
                  ________________________________________________

              	 	
                On:
                  5/2/01

              
	 	 	
                 

              
	
                By
                  LESSOR:

              	 	
                By
                  LESSEE:

              
	
                World
                  Oil Corp.

              	 	
                
                  Quintessence
                    Photonics Corporation, a

                

              
	
                 

              	 	Delaware
                Corporation
	 	 	 
	 	 	 
	
                By: 
                  

              	 	
                By: 
                  

              
	
                
                  

                

              	 	
                
                  

                

              
	
                Name
                  Printed: Steven Roth

              	 	
                Name
                  Printed: Jeffrey S. Ungar

              
	
                Title:
                  Executive Vice President

              	 	
                Title:
                  President

              
	 	 	 
	 	 	 
	
                By:
                  

              	 	
                By:
                  

              
	
                
                  

                

              	 	
                
                  

                

              
	
                Name
                  Printed : _____________________________

              	 	
                Name
                  Printed: George Lintz

              
	
                Title:
                  ____________________________________

              	 	
                Title:
                  CFO

              
	
                Address:
                  9302 S. Garfield Ave., Southgate,
                  CA                              
                  

              	 	
                Address:
                  __________________________________

              
	
                90280

              	 	
                                
                  __________________________________

              


      

       

      
        	 	
                Page
                  11 of 12

              	
                Initials

              	
                

              
	 	 	 	 
	
                Ó1997
                  - American Industrial Real Estate Association

              	
                REVISED

              	 	
                FORM
                  STN-6-2/97E

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                Telephone
                  : (562) 928-0100

              	 	
                Telephone
                  : (___) _______________________________

              
	
                Facsimile:
                  (562) 928-3234

              	 	
                Facsimile:
                  (___) _______________________________

              
	
                Federal
                  ID No: ____________________________________

              	 	
                Federal
                  ID No: 95-4833487

              


      

      


      NOTE: 
         These
        forms are often modified to meet the changing requirements of law and industry
        needs. Always write or call to make sure you
        are
        utilizing the most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION,
        700 So. Flower Street, Suite 600, Los
        Angeles, California 90017. (213) 687-8777. Fax No. (213) 687-8616

      


      
        	 	
                Page
                  12 of 12

              	
                 

              	
                

              
	 	 	 	 
	
                Ó1997
                  - American Industrial Real Estate Association

              	
                REVISED

              	 	
                FORM
                  STN-6-2/97E

              


      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

    
      
        

        RENT
          ADJUSTMENT(S)

        STANDARD
          LEASE ADDENDUM

        
          


          
            	 	
                    Dated   

                  	
                    April
                      30, 2001

                  
	 	
                    By
                      and Between (Lessor)

                  	
                    World Oil
                      Corp.

                  
	 	 	
                     

                  
	 	 	 
	 	
                                                          
                      (Lessee)

                  	
                    Quintessence
                      Photonics Corporation

                  
	 	 	
                     

                  
	 	 	 
	 	
                    Address
                      Of Premises:

                  	
                    15632
                      Roxford Street, Sylmar, California

                  
	 	 	
                     

                  


          

           

          Paragraph
            50   

        

        
           

          A.         RENT
            ADJUSTMENTS:

        

        
          
            
              
                 

                The
                  monthly rent for each month of the adjustment period(s) specified
                  below shall be
                  increased using the method(s) indicated below:

                 

                (Check
                  Method(s) to be Used and Fill in Appropriately)

                 

                o I.  
                   Cost of Living Adjustment(s)
                  (COLA)

              

            

          

        

        

          
            	
                    a.
                      On (Fill In COLA
                      Dates);_____________________________________________________________________________________________

                     

                    _________________________________________________________________________________________________________________________________________________________________

                     tho
                      Base Rent shall be adjusted by tho change, If any, from tho
                      Base Month
                      specified below, in the Consumer Price Index of the Bureau
                      of Labor
                      Statistics of  the U.S. Department of Labor for (select one): o CP1
                      W (Urban
                      Wage Earners and Clerical Workers) or o CPI U (AII Urban
                      -Consumers),
                      for (Fill in Urban Area):
                      ________________________________________________________________________

                  


          

        

      

    

    All
      Items (1982-19841 = 100), herein referred to as “CPI”.

     

    
      
        	
                
                  b.—The
                    monthly rent payable in accordance with paragraph A.I.a.of this
                    Addendum
                    shall-be calculated as follows: the Base Rent set forth in paragraph-1.5
                    of
                    the attached
                    Lease, shall be multiplied by a fraction the numerator of
                    which
                    shall bo the
                    CPI
                    of the calendar
                    month 2 months prior
                    to
                    the months(s)
                    specified
                    in
                    paragraph A I a above during which the adjustment is to take
                    effect, and
                    the denominator of which shall be the CPI of the calender month
                    which is 2 months prior to (select one): o-the
                    first month of the term of this Lease as set forth in paragraph
                    1,3
                    (“Base
                    Month”) or (fill in Other “Base
                    Month”): __________________________. 
                    The
                    sum so calculated shall constitute the new monthly rent hereunder,
                    but in
                    no
                    event,
                    shall any such-new monthly rent be less than the rent payable
                    for the
                    month immediately preceding the rent
                    adjustment.

                

              


      

    

     

    
      
        c.—In
          the
          event the compilation and/or publication of the CPI
          shall
          be
          transferred to any other governmental department or bureau or agency or
          shall be
          discontinued, then the index most nearly the same as the CPI shall be used
          to
          make such calculation. In the event that the Parties cannot agree on such
          alternative index, then the matter shall be submitted for decision to the
          American Arbitration Association in accordance with the then rules of said
          Association
          and the decision of the arbitrators shall be binding-upon the parties.
          The cost
          of said Arbitration shall be paid equally by the
          parties.

      

      
         

        o
          II.—Market
          Rental
          Value
          Adjustment(s)
          (MRV) 

         

        
          	
                  a.
                    On
                    (Fill
                    In
                    MRV Adjustment Date(s): ______________________________________________________________________________________

                  ___________________________________________________________________________________________________________________________________________

                  the
                    Base Rent
                    shall be adjusted to the “Market Rental Value” of the property as
                    follows:

                


        

      

    

     

    
      1)
        Four
        months prior to each Market
        Rental Value Adjustment Date described above, the Parties shall attempt to
        agree
        upon what the new MRV will be on the adjustment date. If agreement cannot
        be
        reached within thirty days, then;

       

      (a)
        Lessor
        and
        Lessee
        shall
        immediately
        appoint
        a
        mutually acceptable appraiser
        or
        broker
        to
        establish
        the new
        MRV
        within
        the
        next
        30
        days.
        Any
        associated
        costs
        will
        be
        split
        equally
        between
        the
        Parties,
        or

      
         

        (b)
          Both
          Lessor
          and
          Lessee
          shall
          each
          immediately
          make
          a
          reasonable
          determination
          of
          the
          MRV
          and
          submit
          such
          determination,
          in
          writing,
          to
          arbitration
          in
          accordance with tho following
          provisions:

        
           

          (i)  Within
            15
            days
            thereafter,
            Lessor and Lessee shall each select an o appraiser
            or o broker
            (“Consultant”
Check one) of their choice to act as an arbitrator. The two arbitrators
            so
            appointed shall immediately select a third mutually acceptable Consultant
            to act
            as a third arbitrator.

           

          (ii)
            The
            3 arbitrators shall within 30 days of the appointment of the third arbitrator
            reach a decision as to what the actual MRV for the Promises is, and whether
            Lessor’s or Lessee’s submitted MRV
            is
the
            closest thereto. The
            decision of a majority of the arbitrators shall be binding on the Parties.
            The
            submitted MRV which is determined to be the closest to the actual MRV
            shall
            thereafter be used by the Parties.

           

          (iii)
            If either of the Parties falls to appoint an arbitrator within the specified
            15
            days, the arbitrator timely appointed by one of them shall reach a decision
            on
            his or her own, and said decision shall be binding on the
            Parties.

           

          (iv)
            The
            entire
            cost of such
            arbitration-shall
            be
            paid
            by the
            party
            whose
            submitted
            MRV
            is
not
            selected, i.e.
            the
            one
            that
            is
            NOT
            the
closest
            to the actual MRV,
            

           

          2)
            Notwithstanding the foregoing, the new MRV shall not be less than the
            rent
            payable for the month immediately preceding the rent
            adjustment.

        

        
          


          
            	
                    Initials: 
                      ____________________

                  
	           ____________________


          

           

          
            	 	
                    RENT
                      ADJUSTMENT(S)
Page 1 of 2

                  	
                    Initials:

                  	
                    

                  
	 	 	 	 
	
                    ©2000
                      - American Industrial Real Estate Association

                  	
                    REVISED

                  	 	
                    FORM
                      RA-3-8/00E

                  


          

           

        

        
          
          

          
            

          

        

        
          
          

        

        
           

          b.
            Upon
            the
            establishment of each New Market Rental Value;

           

          1)
            the new MRV will become the new “Base Rent” for the purpose of calculating any
            further Adjustments, and

           

          2)
            the first month of each Market Rental Value term shall become the new
“Base
            Month” for the purpose of calculating any further
            Adjustments.

           

          þ   
            III.  Fixed Rental Adjustment(s) (FRA)

           

          The
            Base
            Rent shall be increased to the following amounts on the dates set forth
            below:

           

          
            	
                    On
                      (Fill in FRA Adjustment Date(s)):

                  	 	
                    The
                      New Base Rent shall be:

                  
	 	 	 
	
                    June
                      1,
                      2002

                  	
                  	 	
                    $23,256.58

                  	
                  
	
                    June
                      1,
                      2003

                  	
                  	 	
                    $23,954.27

                  	
                  
	
                    June
                      1,
                      2004

                  	
                  	 	
                    $24,672.90

                  	
                  
	
                    June
                      1,
                      2005

                  	
                  	 	
                    $25,413.09

                  	
                  


          

        

      

    

     

    
      B.      
        NOTICE:

       

      Unless
        specified otherwise herein, notice of any such adjustments, other than Fixed
        Rental Adjustments, shall be made as specified in paragraph 23 of the
        Lease.

       

      C.       
        BROKER’S
        FEE:

       

      The
        Brokers shall be paid a Brokerage Fee for each adjustment specified above
        in
        accordance with paragraph 15 of the Lease.

       

      
        NOTE:
          These forms are often modified to meet changing requirements of law and
          needs of
          the Industry. Always write or call to make sure you are utilizing the most
          current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 S. Flower
          Street,
          Suite 600, Los Angeles, Calif. 90017

         

        
          
            
              	
                      Initials: 
                        ____________________

                    
	           ____________________


            

             

            
              	 	
                      RENT
                        ADJUSTMENT(S)
Page 2 of 2

                    	
                      Initials:

                    	
                      

                    
	 	 	 	 
	
                      ©2000
                        - American Industrial Real Estate Association

                    	
                      REVISED

                    	 	
                      FORM
                        RA-3-8/00E

                    


            

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

          

        

      

    

    


    

    OPTION(S)
      TO EXTEND

    STANDARD
      LEASE ADDENDUM

    


    
      	 	
              Dated   

            	
              April
                30, 2001

            
	 	 	 
	 	
              By
                and Between (Lessor)

            	
              World
                Oil Corp.

            
	 	 	
               

            
	 	 	 
	 	
              (Lessee)

            	
              Quintessence
                Photonics Corporation

            
	 	 	
               

            
	 	 	 
	 	
              Address
                of Premises:

            	
              15632
                Roxford Street, Sylmar, California

            
	 	 	
               

            


    

     

    Paragraph
      51   

     

    A. OPTION(S)
      TO EXTEND:

     

    Lessor
      hereby grants to Lessee the option to extend the term of this Lease for
two
      (2) additional
      sixty
      (60)  month
      period(s) commencing when the prior term expires upon each and all of the
      following terms and conditions:

     

    (i) In
      order
      to exercise an option to extend. Lessee must give written notice of such
      election to Lessor and Lessor must receive the same at least 6 but
      not
      more than 9  months
      prior to the date that the option period would commence, time being of the
      essence. If proper notification of the exercise
      of an option is not given and/or received, such option shall automatically
      expire. Options (if there are more than one) may only be exercised consecutively.

     

    (ii) The
      provisions of paragraph 39, including those relating to Lessee’s Default set
      forth in paragraph 39.4 of this Lease, are conditions of this Option.

     

    (iii) Except
      for the provisions of this Lease granting an option or options to extend the
      term, all of the terms and conditions of this Lease except where
      specifically modified by this option shall apply.

     

    (iv)
      This
      Option is personal to the original Lessee, or
      a
successor
      lessee as a
      result
      of
      a merger, consolidation, or
      sale
      of
      all or substantially
      all of the assets of Lessee and cannot be assigned or exercised by anyone
      other than said original Lessee or
      a
successor
      lessee as
      a
result
      of
      a merger, consolidation, or
      sale
      of all or substantially all of the assets of Lessee and only while the
      original Lessee or a successor lessee
      as
      a result of a merger, consolidation, or sale of all or
      substantially
      all of the assets of Lessee is in full possession of the Premises and
without
      the intention of thereafter assigning or subletting.

     

    (v)
      The
      monthly rent for each month of the option period shall be calculated as follows,
      using the method(s) indicated below: (Check
      Method (s) to be Used and Fill in Appropriately)


    


    
      	o  	
              I. Cost
                of Living Adjustment(s)
                (COLA)

            


    

     

    a.  On
      (Fill
      in
      COLA Dates):
      _____________________________________________________________________________________________________

    ____________________________________________________________________________________________________________________________________________

    the
      Base Rent shall be adjusted by the change, if any, from the Base Month specified
      below, in the Consumer Price Index of the Bureau of Labor Statistics of the
      U.S.
      Department of Labor for (select one): o
      CPI W (Urban Wage Earners and Clerical Workers) or o
      CPI U (All Urban Consumers), for (Fill in Urban Area):

    ____________________________________________________________________________________________________________________________________________
      

    All
      items (1982-1984 - 100), herein referred to as “CPI.”

     

    b.  The
      monthly rent payable in accordance with paragraph A.I.s of this Addendum shall
      be calculated as follows: the Base rent set forth in paragraph 4.5 of the
      attached Lease, shall be multiplied by a fraction the numerator of which shall
      be the CPI if the calendar month 2 months prior to the month(s) specified in
      paragraph A.I.a. above during which the adjustment is to take effect, and the
      denominator of which shall be the CPI of the calendar month which is 2 months
      prior to (select one): o
      the first month of the term of this Lease as set forth in paragraph 1.3 (“Base
      Month”) or o
      (Fill in Other (“Base Month”): ______________________________________. The sum
      so calculated shall constitute the now monthly rent hereunder, but in no event,
      shall any such now monthly rent be less than the rent payable for the month
      immediately preceding the rent adjustment.

     

    c.  In
      the event the compilation and/or publication of the CPI shall be transferred
      to
      any other  governmental department or bureau or agency or shall be
      discontinued, then the index most nearly the same as the CPI shall be used
      to
      make such calculation. In the event that the Parties cannot agree on such
      alternative index, then the matter shall be submitted for decision to the
      American Arbitration Association. In accordance with the then rules of said
      Association and the decision of the arbitrators shall be binding upon the
      parties The cost of said Arbitration shall be paid equally by the
      Parties.

     

    þ
 II. Market
      Rental Value Adjustment(s) (MRV)

    


    
      	
              a. On
                (Fill in MRV Adjustment Date(s)) June
                1, 2006 and June 1, 2011
                ____________________________________________________________________

              ___________________________________________________________________________________________________________________________________________

              the
                Base Rent shall be adjusted to the “Market Rental Value” of the property
                as follows:

            


    

     

    1) Four
      months prior to each Market Rental Value Adjustment Date described above, the
      Parties shall attempt to agree upon what the new MRV will be on the adjustment
      date. If agreement cannot be reached, within thirty days, then:

     

    
      	
              Initials: 
                ____________________

            
	           ____________________


    

     

    
      	 	
              Page
                1 of 2

            	
              Initials:

            	
              

            
	 	 	 	 
	
              ©2000
                - American Industrial Real Estate Association

            	
              REVISED

            	 	
              FORM
                OE-3-8/00E

            


    

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (a) Lessor
      and Lessee shall immediately appoint a mutually acceptable appraiser or broker
      to establish the new MRV within the next 30 days. Any
      associated costs will be split equally between the Parties, or

     

    (b) Both
      Lessor and Lessee shall each immediately make a reasonable determination of
      the
      MRV and submit such determination, in writing, to arbitration in accordance
      with
      the following provisions:


     

    (i) Within
      15
      days thereafter, Lessor and Lessee shall each select an o appraiser or
þ
      broker
(“Consultant” - check one) of their choice
      to
      act as an arbitrator. The two arbitrators so appointed shall Immediately select
      a third mutually acceptable Consultant to act as a third
      arbitrator.

     

    (ii) The
      3
      arbitrators shall within 30 days of the appointment of the third arbitrator
      reach a decision as to what the actual MRV for the Premises is, and whether
      Lessor’s or Lessee’s submitted MRV is the closest thereto. The decision of a
      majority of the arbitrators shall be binding on the Parties.
      The submitted MRV which is determined to be the closest to the actual MRV shall
      thereafter be used by the Parties.

     

    (iii) If
      either
      of the Parties fails to appoint an arbitrator within the specified 15 days,
      the
      arbitrator timely appointed by one of them shall reach
      a
      decision on his or her own, and said decision shall be binding on the
      Parties.

     

    (iv) The
      entire cost of such arbitration shall be paid by the party whose submitted
      MRV
      is not selected, ie. the one that is NOT the closest
      to the actual MRV.

     

    2) Notwithstanding
      the foregoing, the new MRV shall not be less than the rent payable for the
      month
      immediately preceding the rent adjustment.

     

    b. Upon
      the
      establishment of each New Market Rental Value:

     

    1) the
      new
      MRV will become the new “Base Rent” for the purpose of calculating any further
      Adjustments, and

     

    2) the
      first
      month of each Market Rental Value term shall become the new “Base Month” for the
      purpose of calculating any further Adjustments.

    


    
      	
              o
                 III. Fixed
                Rental Adjustment(s) (FRA)

            	 
	 	 
	
              The
                Base shall be increased to the following amounts on the dates set
                forth
                below:

            
	 	 
	
              On
                (Fill in FRA Adjustment Date(s)):

            	
              The
                Now Base Rent shall be:

            
	
              - __________________________________

            	
              $ __________________________________

            
	
              - __________________________________

            	
              $ __________________________________

            
	
              - __________________________________

            	
              $ __________________________________

            
	
              - __________________________________

            	
              $ __________________________________

            


    

     

    B. NOTICE:

     

    Unless
      specified otherwise herein, notice of any rental adjustments, other than Fixed
      Rental Adjustments, shall be made as specified in paragraph 23 of the
      Lease.

     

    C. BROKER’S
      FEE:

     

    The
      Brokers shall be paid a Brokerage Fee for each adjustment specified above in
      accordance with paragraph 15 of the Lease.

     

    NOTE:
      These forms are often modified to meet changing requirements of law and needs
      of
      the Industry. Always write or call to make sure you are utilizing the most
      current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 S. Flower Street,
      Suite 600, Lob
      Angeles,
      Calif. 90017

     

    
      
        	
                Initials:

              	
                ____________________

              
	 	
                ____________________

              


      

       

    

    
      	 	
              Page
                2 of 2

            	
              Initials

            	
              

            
	 	 	 	 
	
              ©2000
                - American Industrial Real Estate Association

            	
              REVISED

            	 	
              
                FORM
                  OE-3-8/00E

              

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ADDENDUM

     

    ADDENDUM
      TO THAT STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE
      WITH WORLD OIL CORP. AS “LESSOR” AND QUINTESSENCE PHOTONICS
CORP.,
      AS “LESSEE” FOR THE PREMISES COMMONLY KNOWN AS 15632
      ROXFORD STREET, SYLMAR, CALIFORNIA.

     

    52. LESSOR’S
      IMPROVEMENTS:

     

    Prior
      to
      Lease Commencement Date Lessor, at Lessor’s sole cost and expense, shall
upgrade
      the current electrical system to a 2000 amp, 277/480 volt, 3-phase
      panel.

     

    Lessor
      shall also provide Lessee with an improvement allowance for the installation
      of
lighting
      in the warehouse area. The allowance shall be in an amount not to exceed
$40,320.00
      and shall be solely used for the cost of said lighting. Lessee shall provide
      Lessor
      paid invoices for said work and Lessor shall reimburse Lessee within two (2)
      weeks of
      receipt of bills.

     

    53. LESSEE’S
      IMPROVEMENTS:

     

    Lessor
      consents to Lessee making the following improvements pursuant to Paragraph
      7.3
and
      7.4
      of the Lease at Lessee’s sole cost and expense. All such improvements shall be
done
      in
      accordance with plans and specifications approved by Lessor which shall not
      be
      unreasonably withheld or delayed.

     

    a. Construct
      approximately 1,500 square feet of additional offices adjacent to the
existing
      offices.

     

    b. Construct
      an approximately 4,000 square foot clean room.

     

    c. Construct
      approximately 800 square foot concrete block compressed gas storage room,
      either inside or outside the building, in accordance with all City and County
      applicable
      governmental regulations.

     

    d. Install
      roof mounted HVAC equipment. Said equipment will be screened from public
      view and installed in accordance with all applicable governmental requirements.

     

    e. Install
      some or all of the following equipment outside and adjacent to the building:
      liquid
      nitrogen storage tank, backup power generator, chemical safety storage
module,
      and water chiller(s) pursuant to Exhibit “B”. The final plan to be provided
to
      Lessor
      for review and approval. Said equipment shall be screened from public
view
      and
      installed in accordance with all applicable governmental
      requirements.

     

    54. COMMON
      AREA:

     

    Lessee
      may, subject to any covenants, conditions or restrictions of record
      (“CC&R’s”) and reasonable
      and non-discriminatory rules made by Lessor, use the following areas
(collectively,
      the “Common Area”) in common with Lessor and other Lessees of the Project;
      refuse facilities, landscaped areas, driveways necessary for access to the
      Premises as
      depicted on Exhibit A, the parking depicted on Exhibit A and other common
      facilities designated
      by Lessor from time to time for the common use of all Lessees of the Building
      or
      the
      Project. 

     

    a. Operating
      Expenses. Lessee
      shall pay to Lessor Lessee’s Share of the Operating Expenses
      in each calendar year.

     

    b. Definitions.

     

    
      	
            	(i)	
              “Estimated
                Expenses” for any particular year shall mean Lessor’s estimate
                of
                Operating Expenses for a calendar
                year.

            


    

     

    
      	
            	(ii)	
              “Lessee’s
                Share” shall mean twenty-four and 02/100ths percent (24.02%) which
                is the percentage based on the ratio that the square footage of the
                Building
                is estimated to bear to the aggregate square footage of all of the
                buildings
                to be developed within the Project.

            


    

    

      
        	 	 	 	
                 

                

              


      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
            	(iii)	
              “Operating
                Expenses” shall mean all reasonable and necessary expenses incurred by
                Lessor in the operation, maintenance, repair and management of
                the Project, the Common Area and the improvements, including, but
                not
                limited
                to (i) repair, maintenance, utility costs and landscaping of the
                Common
                Area, including, but not limited to, any and all costs of maintenance
                of common driveways, parking areas, walkways, landscaping and other
                costs
                which are allocable to the property under the terms of any CC&R’s
                affecting the property; (ii) insurance premiums for the insurance
                policies
                maintained by Lessor with respect to the Project (excluding any
                rental
                protection or business interruption insurance), including deductibles
                for
                “all-risk” policies (iii) maintenance contracts for heating, ventilation
                and air-conditioning
                systems and elevators, if any; (iv) the amortizable portion of
                the costs of capital improvements made to, or capital assets acquired
                for,
                the
                Project that, in any case, are constructed or acquired after the
                completion
                and occupancy of the respective building within the Project and
                are
                (A) designed to reduce Operating Expenses, (B) reasonably necessary
                for
                the health and safety of the occupants of the Project or (C) required
                under
                any governmental law or regulation, which such costs, or the allocable
                portion thereof attributable to the term of this Lease, shall be
                amortized
                at Lessor’s average cost of funds at the time the improvement is
                placed
                in service over the period determined by Lessor on a straight-line
                basis
                and in compliance with applicable Internal Revenue Service regulations;
                and (v) Property Taxes attributable to the Common Areas. Operating
                Expenses shall also include an administrative fee to Lessor for
                accounting
                and project management services relating to the Project in an amount
                equal to ten percent (10%) of the Operating Expenses (other than
                the
                administrative fee, property taxes and insurance premiums applicable
                to
                the Premises). Operating Expenses shall not include (w) replacement
                of or
                structural
                repairs to the roof, foundation or exterior walls of the building
                and
                other improvements; (x) the cost of repairs or maintenance attributable
                to
                the gross negligence or willful misconduct of Lessor; (y) repairs
                to the
                extent
                covered by insurance proceeds, or paid by Lessee or other third
                parties;
                or (z) alterations solely attributable to lessees of the Project
                other
                than
                Lessee.

            


    

     

    
      	
            	(iv)	
              “Operating
                Expense Adjustment” (or “Adjustment”) shall mean the difference between
                Lessee’s Share of Estimated Expenses and Lessee’s Share of Operating
                Expenses for any calendar year.

            


    

     

    
      	
            	c.	
              Payment.
                On
                or about the last month of each calendar year, or as soon thereafter
                as
                practicable. Lessor shall give Lessee notice of the Estimated Expenses
                for
                the ensuing
                calendar year. Lessee shall pay Lessee’s Share of the Estimated Expenses
                with
                installments of Base Rent in monthly installments of one-twelfth
                (1/12th)
                thereof
                on the first day of each calendar month during such year. If at any
                time
                Lessor determines that Operating Expenses are projected to vary from
                the
                then Estimated
                Expenses by more than ten percent (10%), Lessor may, by notice to
                Lessee,
                revise such Estimated Expenses, and Lessee’s monthly installments for the
                remainder
                of such year shall be adjusted so that by the end of such calendar
                year
                Lessee
                has paid to Lessor Lessee’s Share of the revised Estimated Expenses for
                such
                year.

            


    

     

    
      	
            	d.	
              Adjustment.
                After
                the end of each calendar year, Lessor shall deliver to Lessee a
                statement
                of Lessee’s Share of Operating Expenses for such calendar year,
                accompanied
                by a computation of the Adjustment. If Lessee’s payments are less
                that
                Lessee’s Share, then Lessee shall pay the difference within twenty (20)
                days after
                receipt of such statement. Lessee’s obligation to pay such amount shall
                survive
                the termination of this Lease. If Lessee’s payments exceed Lessee’s Share,
                then
                (provided that Lessee is not in default), Lessor shall credit such
                excess
                amount to
                future installments of Rent for the next calendar year (or, in the
                case of
                the last calendar
                year of the Lease term only, Lessor shall reimburse Lessee for such
                excess
                amount within twenty (20) days following expiration or other termination
                of the
                Lease). If Lessee is
                in
                default, Lessor may, but shall not be required to, credit such
                amount to Rent arrearages.

            


    

    

      
        	 	 	 	
                 

                

              


      

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    55.  
      Notwithstanding the provisions of Section 2.3, Lessee acknowledges that the
      Premises may not
      have
      been permitted for the Agreed Use and that Lessee shall be responsible for
      obtaining
      any and all entitlements necessary in order for Lessee to use the Premises
      for
      the Agreed
      Use and, in connection therewith, pay for any and all improvements to the
Premises
      and all fees and/or deposits with respect to the Premises that may be required
      in order
      to
      obtain all such entitlements, including sewer fees and additional parking,
      if
required.

     

    THE
      ABOVE IS HEREBY ACKNOWLEDGED AND AGREED TO:

     

    
      	LESSEE:	 	LESSOR:
	 	 	 
	By:  
              	 	By:   
              
	
              
                

              

            	 	
              
                
 

            
	
              Its:     
                President

            	 	Its:   
              Executive Vice President
	
              
                

              

            	 	
              
                
 

            
	Date:  
              5/2/01	 	Date:   5/3/01
	
              
                

              

            	 	
              
                

              

            
	
               ,
                CFO

            	 	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      “A”

     

    Premises
      is Building B

     

    

    

      
        	 	 	 	
                 

                

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      “B”

     

    Lessee’s
      Improvements Paragraph 53 e.

     

    

    

      
        	 	 	 	
                 

                

              


      

    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ADDENDUM

     

    This
      Addendum dated August 22, 2005, pertains to that original Standard Multi-Tenant
      Industrial Net
      Lease
      dated April 30, 2001 (the “Lease”), by World Oil Corp. (“Lessor”), and
      Quintessence Photonics
      Corporation, a Deleware Corporation (“Lessee”), and pertains to 15632 Roxford
      Street, Sylmar,
      California.

     

    The
      Lease
      shall be amended only to reflect the following terms:

     

    1.3
      Term: The
      undersigned hereby agrees that the Lease term shall be extended from May 31,
      2006
      to
      May 31, 2016.

     

    1.5
      Base Rent and Rental Adjustments: The
      Base
      Rent effective June 1, 2006 shall be $25,413.09.
      The Base Rent shall be abated for the months of September 2005 and August
      2006.

     

    Rental
      Adjustments: The
      monthly rent shall be adjusted for each month of the adjustment period(s)
      specified below using Cost of Living Adjustment(s) (COLA) method.

     

    On
      June
      1, 2008, June 1, 2010, June 1, 2012 and June 1, 2014 the Base Rent shall be
      adjusted by the change
      from the Base Month specified below, in the Consumer Price Index of the Bureau
      of Labor Statistics
      of the U.S. Department of Labor for CPI W (Urban Wage Earners and Clerical
      Workers). All
      Items
      (1982-1984=100), herein referred to as “CPI”.

     

    The
      monthly rent payable shall be calculated as follows: the Base Rent set forth
      above in this Addendum
      shall be multiplied by a fraction, the numerator of which shall be the CPI
      of
      the calendar month
      2
      months prior to June 1, 2006 (April 2006). The sum so calculated shall
      constitute the Base Rent
      hereunder, but in no event, shall any such increase be less than three percent
      (3%) or more than six percent (6%) per
      annum.

     

    In
      the
      event the compilation and/or publication of the CPI shall be transferred to
      any
      other governmental
      department or bureau or agency or shall be discontinued, then the index most
      nearly the
      same
      as the CPI shall be used to make such calculation. In the event that the Parties
      cannot agree on
      such
      alternative index, then the matter shall be submitted for decision to the
      American Arbitration Association
      in accordance with the then rules of said Association and the decision of the
      arbitrators shall be binding upon the parties. The cost of said Arbitration
      shall be paid equally by the Parties.

     

    1.7
      Security Deposit: Lessor
      shall apply $25,413.09 of the existing Security Deposit to Base Rent
      for
      the month of November 2005. The remaining security deposit on file will be
      $42,324.51 after
      the
      credit in November 2005.

     

    51
      Options to Extend: Lessee
      shall have one (1) five-year Fair Market Value option to extend the
      Lease
      term until May 31, 2021 as per the language in Paragraph 51 of the Lease. There
      shall be no
      brokerage fee due on the exercise of the option.

     

    CONSULT
      YOUR ATTORNEY/ADVISORS —
This
      document has been prepared for approval by
      your
      attorney. No representation or recommendation is made by CB Richard Ellis,
      Inc.
      or the American
      Industrial Real Estate Association (AIR) or the agents or employees of this
      document or the
      transaction to which it relates. These are questions for your
      attorney.

     

    In
      any
      real estate transaction it is recommended that you consult with a professional,
      such as a civil engineer,
      industrial hygienist or other person with experience in evaluating the condition
      of the property,
      including the possible presence of asbestos, hazardous materials and underground
      storage tanks.

     

    In
      addition, please be advised that an Owner or Tenant of real property may be
      subject to the Americans
      with Disabilities Act (the ADA), a federal law codified at 42 USC Section 12101
      et seq. Among
      other requirements of the ADA that could apply to your property, Title III
      of
      the ADA requires
      Owners and Tenants of “public accommodations” to remove barriers to access by
      disabled persons
      and provide auxiliary aids and services for hearing, vision or speech impaired
      persons by January
      26, 1992. The regulations under Title III of the ADA are codified at 28 CFR
      Part
      36.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    CB
      Richard Ellis, Inc. recommends that you and your attorney, engineer and/or
      architect review the ADA
      and
      the regulations, and, if appropriate, your proposed lease agreement, to
      determine if this law would
      apply to you, and the nature of the requirement.


     

    THE
      ABOVE IS HEREBY ACKNOWLEDGED AND AGREED TO:

     

    
      	 	 	 
	LESSEE:	LESSOR:
	 	 
 	 
 
	By:             	By:  	
              

            
	
              
                
 

            	
              
                

              

            
	
              Date:           9/1/05

            	Date:	
              9/15/05