Document:

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                                                                   EXHIBIT 10.16

                              INDEMNITY AGREEMENT

        This Indemnity Agreement (the "Agreement") is made and entered into as
of this 3rd day of July, 2000, by and between COHU, INC., a Delaware corporation
(the "Indemnitor") and IPX CAMELBACK, LLC, an Arizona limited liability company
("IPX") with reference to the following facts:

                                    RECITALS

        A. Indemnitor and IPX have entered into a certain Lease and Real Estate
Purchase Option Agreement (the "Lease and Option Agreement") of even date
herewith whereby IPX has agreed to acquire certain real property (the
"Property") located at 12365 Crosthwaite Circle, Poway, California, 92064, and
identified as the Anacomp Building.

        B. In fulfilling its obligations under the Lease and Option Agreement,
IPX will be entering into a certain Purchase and Sale Agreement and Escrow
Instructions (the "Purchase Agreement") dated July 3, 2000

        C. Certain liabilities or claims thereof may arise or be asserted
against IPX solely by reason of its becoming a party to the Purchase Agreement.

        D. As a result of IPX entering into the Purchase Agreement, Indemnitor
is willing to indemnify IPX for any loss IPX may sustain by reason of such
actions.

        NOW THEREFORE, in consideration of the above recitals, the mutual
covenants of the parties herein contained and other valuable consideration, the
parties agree as follows:

                                    AGREEMENT

        1. Subject to all the terms and conditions of this Agreement, Indemnitor
agrees to indemnify and hold IPX, its officers, directors, employees,
shareholders, successors and assigns free and harmless from any and all damages
IPX may sustain by reason of IPX entering into the Purchase Agreement, including
but not limited to making any representation, warranty, covenant, or obligation
of Indemnitor.

        2. Subject to all the terms and conditions of this Agreement, Indemnitor
shall indemnify and hold IPX harmless from any and all loss, costs, damages,
attorneys' fees and expenses of every kind and nature which it may suffer,
expend or incur under or by reason of its entering into the Purchase Agreement.
Indemnitor further agrees, upon the request of IPX, to defend at Indemnitor's
expense, any suit, action or proceeding which may arise in connection with
entering into the Purchase Agreement.

        3. IPX shall have the right at any time, when IPX shall, in its sole
discretion, deem it necessary, to pay, discharge, satisfy, compromise or settle
any claim made against it arising out of or in connection with entering into the
Purchase Agreement. Indemnitor agrees to pay to IPX all amounts so expended upon
demand.

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        4. Indemnitor acknowledges and agrees that IPX is undertaking a risk
significantly greater than that undertaken in the normal course of providing
services for tax deferred exchanges. Accordingly, Indemnitor declares its
willingness to enter into this Agreement, acknowledging that, in the opinion of
Indemnitor, the best interests of Indemnitor are being served.

        5. In the event any party hereto brings an action to enforce this
Agreement, the prevailing party shall be entitled to reasonable attorney's fees.

        6. Interpretation of this Agreement shall be governed by the laws of the
State of California.

        7. This Agreement contains the entire agreement of the parties with
respect to its subject matter and shall not be modified, except by an instrument
in writing executed by all parties hereto.

        8. This Agreement shall inure to the benefit of and bind the successors
and assigns of the parties hereto.

        9. This document may be executed in counterparts, each of which together
shall be considered as an original and effective as such.

        10. In witness whereof, the parties hereto have executed this Agreement
as of the day and year first above written.

INDEMNITOR:                            COHU, Inc., a Delaware corporation

                                       By: /s/ John H. Allen
                                           -------------------------------------
                                            John H. Allen
                                       Its: Vice President, Finance and
                                            Chief Financial Officer

IPX:                                   IPX Camelback, LLC, an Arizona limited
                                       liability company

                                       By: Pacific American Property Exchange
                                           Corporation, a California corporation

                                       Its: Manager

                                       By:   /s/ Karin A. Church
                                           -------------------------------------
                                             Karin A. Church

                                       Its: Assistant Vice President and
                                            Exchange Coordinator

                                        2<PAGE>   1

                                                                   EXHIBIT 10.17

                        BASIC LEASE INFORMATION SCHEDULE

Lease Date:                  October 27, 2000

Landlord:                    IPX Camelback, LLC, an Arizona limited liability
                             company,

Address of Landlord:         2390 E. Camelback Road, Suite 210, Phoenix,
                             AZ 85016

Tenant:                      Cohu, Inc. a Delaware corporation

Address of Tenant:           5755 Kearny Villa Road, San Diego, CA 92123

Telephone:                   858-541-5194

Premises:                    Those premises described in Exhibit B.

Term
Commencement Date:           October 27, 2000

Term Expiration Date:        180 Days from October 27, 2000

Base Rent:                   $ 100.00 per month

Security Deposit:            N/A

Permitted Uses:              The Premises shall be used for all lawful purposes

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

The signatures on this Basic Lease Information Schedule constitute the parties'
signatures to the entire Lease of which this is a part.

LANDLORD:

IPX Camelback, LLC, an Arizona limited liability company

By:  Pacific American Property Exchange Corporation, a California corporation

Its: Sole Member

By:  /s/  Karin A. Church                            Date: October 27, 2000
     -------------------------------------------
     Karin A. Church, Assistant Vice President

TENANT:

Cohu, Inc., a Delaware corporation

By:  /s/  John H. Allen                              Date: October 27, 2000
     -------------------------------------------
     John H. Allen, VP Finance/CFO

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                                      LEASE

                                     BETWEEN

                               IPX CAMELBACK, LLC

                      AN ARIZONA LIMITED LIABILITY COMPANY

                                   AS LANDLORD

                                       AND

                                   COHU, INC.

                             A DELAWARE CORPORATION

                                    AS TENANT

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                                     LEASE (C)

        1. DEFINITIONS. Unless the context of this Lease shall require
otherwise, the following terms as used herein shall have the following meanings:

                1.1 "Basic Lease Information Schedule" shall mean and refer to
the attachment to this Lease containing Basic Lease Information as provided
thereon.

                1.2 "Insurance" shall mean the insurance in such amounts and
providing such coverage as set forth in Exhibit "A".

                1.3 "Landlord" shall mean and refer to IPX Camelback, LLC an
Arizona limited liability company, its successors and assigns. In any case where
this Lease is signed by more than one person, the obligations hereunder shall be
joint and several.

                1.4 "Laws" shall mean all laws, statutes, ordinances, rules and
regulations now in force or hereafter enacted or adopted, to the extent such
laws affect the Premises.

                1.5 "Lease" shall mean and refer to this document, the Basic
Lease Information Schedule made a part hereof and any Exhibits attached hereto
and incorporated herein by reference.

                1.6 "Maintenance Costs" shall mean the reasonable costs incurred
for the operation, maintenance, repair and management of the Premises, which
costs shall include, without limitation: (i) the cost of maintaining the
exterior windows, the mechanical, plumbing and electrical equipment serving
buildings now or hereafter constructed on the Premises, and all roofs,
foundations and outside walls of any such buildings now or hereafter constructed
on the Premises, in good condition; (ii) the cost of services and utilities
supplied to the Premises such as security protection, water, sewage, trash
removal, fuel, electricity, heat, lighting systems, fire protection systems,
storm drainage and sanitary sewer systems, HVAC (including air conditioning),
cleaning, labor, materials, supplies, tools, equipment and rental of equipment,
service agreements on equipment, cleaning, sweeping, striping, resurfacing of
parking and driveway areas (if any); (iii) costs related to irrigation systems,
landscape maintenance and signs; (iv) fees for licenses and permits required for
the operation of the Premises; (v) the cost of complying with rules, regulations
and orders of governmental authorities, including without limitation
maintenance, alterations and repairs required in connection therewith; (vi) the
cost of contesting the validity or applicability of any governmental enactments
which may affect Maintenance Costs; and (vii) any other expense related to the
operation, management, repair and maintenance of the Premises. It is the intent
of the parties hereto that Maintenance Costs shall include every cost paid or
incurred in connection with the operation, management, repair and maintenance of
the Premises and the specific examples set forth in this definition are in no
way intended to, and shall not, limit the costs comprising the Maintenance
Costs.

                1.7 "Mortgage Payments" shall mean and refer to all sums due,
whether for principal, interest or penalties under any obligation secured by a
Permitted Mortgage.

                1.8 "Permitted Mortgage" shall mean any deed of trust or
mortgage encumbering the Premises which exists as of the commencement of the
Term or which is thereafter created with the prior consent of the Tenant.

                1.9 "Permitted Mortgagee" shall mean the holder of a beneficial
interest in a Permitted Mortgage.

                1.10 "Premises" shall mean and refer to that certain improved
parcel of real property located in the City of Poway, County of San Diego, State
of California commonly known as 12365 Crosthwaite Circle, and more particularly
described in Exhibit B together with any and all improvements of whatsoever kind
located on said parcel of land.

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                1.11 "Rent" shall mean and refer to all sums payable by Tenant
to Landlord hereunder, including but not limited to Base Rent and Additional
Rent.

                1.12 "Subtenant" shall mean and refer to any person or entity
other than Tenant who occupies the Premises as of the date of this Lease, and to
all such persons or entities to whom Tenant sublets the Premises pursuant to
authority granted under this Lease.

                1.13 "Taxes" shall mean and refer to all taxes and assessments
levied, assessed or imposed at any time by any governmental authority upon or
against the Premises (including State, County and City, if applicable, ad
valorem real and personal property taxes); any tax or assessment levied,
assessed or imposed at any time by any governmental authority in connection with
the receipt of income or rents from said Premises to the extent that same shall
be in lieu of all or a portion of any of the aforesaid taxes or assessments; any
and all taxes levied assessed or imposed, and which become payable by Landlord
or Tenant during the Term of this Lease, whether or not now customary or within
the contemplation of the parties hereto, which are based upon, measured by or
otherwise calculated with respect to the value of Tenant's equipment, furniture,
fixtures or Tenant's other personal property located in the Premises, or the
value of any leasehold improvements, alterations, or additions made in or to the
Premises following the Term Commencement Date, regardless of whether title to
such improvements, alterations or additions shall be in Tenant or Landlord; any
and all other taxes or other similar charges payable by Landlord or Tenant
(other than Landlord's net income, succession, transfer, gift, franchise, estate
or inheritance taxes), whether or not customary or within the contemplation of
the parties hereto, now in force or hereafter effective, including but not
limited to: (i) taxes allocated or measured by the area of the Premises or the
Rent payable hereunder; (ii) taxes upon or with respect to the use, possession,
occupancy, leasing, operation and management of the Premises or any portion
thereof; (iii) taxes imposed upon this transaction or any subsequent assignment
or sublease of the Premises; or (iv) taxes imposed as a means of controlling or
abating environmental pollution, traffic or the use of energy, or to provide for
social services (such as child care) including, without limitation, parking or
vehicular taxes, or other "user" fees. Tenant shall also pay, prior to
delinquency, all privilege, sales, excise, use, business, occupation or other
taxes, and all license fees and other charges levied upon Tenant's business
operations conducted at the Premises.

                1.14 "Tenant" shall mean and refer to Cohu, Inc., a Delaware
corporation, Cohu, Inc.'s successors, and permitted assigns, according to the
context hereof.

                1.15 "Term" shall mean and refer to the period commencing on the
Term Commencement Date and terminating on the Term Expiration Date shown on the
Basic Lease Information Schedule, as described in Section 4.

        2. LEASE OF PREMISES. Landlord, in consideration of the covenants and
agreements herein contained, hereby leases to Tenant and Tenant hereby leases
from Landlord the Premises.

        3. USE OF PREMISES.

                3.1 General. The Premises shall be used only for the Permitted
Uses as set forth in the Basic Lease Information Schedule. Any change in the use
of the Premises by Tenant without the prior written consent of Landlord, which
consent shall not be unreasonably withheld, shall constitute a "Default" (as
defined in Section 20.1).

                3.2 No Representation as to Suitability. Tenant acknowledges
that neither Landlord nor any agent of Landlord has made any representation or
warranty with respect to the Premises or with respect to the suitability of the
same for the conduct of Tenant's business, nor has Landlord agreed to undertake
any modification, alteration or improvement to the Premises. Landlord shall
grant to Tenant reasonable time and access to inspect the Premises prior to the
Commencement Date, and Tenant's occupancy of the Premises after that date shall
be conclusive evidence that the Premises are in good and satisfactory condition,
acceptable for use by Tenant, and that Tenant so accepts the Premises. By taking
possession of the Premises, Tenant accepts the Premises as being in good and
sanitary order, condition and repair, and accepts the Premises in their
condition existing as of the date of such possession.

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<PAGE>   5

                3.3 Prohibited Uses and Activities.

                        3.3.1 Tenant shall not do or permit anything to be done
in or about the Premises, nor bring or keep anything which will in any way
increase the existing rate of, or affect any policy of, insurance covering the
Premises or any part thereof, or cause a cancellation of any insurance policy
covering the Premises, or any part thereof, or any of its contents, nor shall
Tenant keep, use or sell, or permit to be kept, used or sold in or about the
Premises any articles which may be prohibited by a standard form policy of fire
insurance.

                        3.3.2 The following provisions shall apply with respect
to Hazardous Materials and Tenant's responsibility with respect to Environmental
Laws, as defined herein:

                                (1) Tenant shall permit no installation or
placement of "Hazardous Material" (as defined below) on the Premises in
violation of any "Environmental Laws" (as defined below). Tenant shall permit no
release of Hazardous Material on to or from the Premises in violation of any
Environmental Laws and Tenant shall cause the Premises to comply with all
Environmental Laws and to be free and clear of any liens imposed pursuant to any
Environmental Laws. Tenant shall obtain and maintain and ensure compliance with
all licenses, permits and other governmental regulatory actions, if any,
necessary for the Premises to comply with the Environmental Laws. Tenant shall
give Landlord prompt written notice if Tenant receives any notice with respect
to Hazardous Material on, from or affecting the Premises and shall conduct and
complete all investigations and all clean up actions necessary to remove, in
accordance with Environmental Laws, such Hazardous Material from the Premises.
Notwithstanding the introduction or use of Hazardous Materials by Tenant in the
ordinary course of business and in full compliance with Environmental Laws, if
use of such Hazardous Materials by Tenant causes any insurance policy required
to be maintained by Tenant hereunder to be cancelled or threatened to be
cancelled or not be renewed, then Tenant shall immediately take all necessary
actions to (i) cease the activity causing the threatened or actual cancellation
or non-renewal of any such insurance policy, and (ii) reinstate the, or obtain a
similar, insurance policy.

                                (2) Landlord shall have the right at any time
during the term of this Lease, whether before or after a Default, to conduct or
cause to be conducted an environmental inspection or audit of the Premises by
internal personnel or by a qualified environmental consultant or engineer
selected by Landlord and Tenant hereby grants to Landlord respective employees,
agents and independent contractors (hereinafter collectively referred to as
"Representatives"), a right to enter the Premises upon reasonable notice for the
purpose of conducting, whether before or after the Default, any inspection,
audit or tests, making soil borings, extracting samples, installing monitoring
wells, and conducting such other procedures as Landlord and its respective
Representatives deem necessary or desirable in connection with such inspection
or audit. If Landlord discovers, based on such audit, any breach by Tenant of
its obligations under this Section 3, Tenant will reimburse Landlord for the
costs of such audit.

                                (3) Tenant shall indemnify and hold harmless
Landlord from and against all losses, expenses (including, without limitation,
attorney's fees) and claims of every kind suffered by or asserted against
Landlord (except any arising out of the negligence or willful misconduct of
Landlord, its agents, employees or contractors) as a direct or indirect result
of (i) the presence on or release from the Premises of any Hazardous Material
during the Term, whether or not caused by Tenant, (ii) the violation of
Environmental Laws applicable to the Premises during the Term, whether or not
caused by Tenant (iii) the requirement to conduct any remediation of Hazardous
Material from the Premises during the Term, or (iv) the failure by Tenant to
comply fully with the terms and provisions of this Section 3.3.

                                (4) For the purposes of this Lease, "Hazardous
Material" means polychlorinated biphenyls, petroleum, flammable explosives,
radioactive materials, asbestos, lead, and any hazardous, toxic or dangerous
waste, substance or materials as defined as such in (or for purposes of)
Environmental Laws or listed by the U.S. Environmental Protection Agency or any
Environmental Protection agency of the State where the Premises are located. For
purposes of this Lease, "Environmental Laws" means any current or future
federal, state or local law, regulation or ruling applicable to environmental
conditions on, under or about the Premises, as may be amended from time to time,
together with any regulations adopted in publications promulgated pursuant
thereto, including without limitation, the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et
seq.; the

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Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., Toxic
Substances Control Act, 15 U.S.C. Section 2601, et seq., Clean Air Act, 42
U.S.C. Section 7401, et seq., and Safe Drinking Water Act, 42 U.S.C. Section
300F, et seq. and those substances defined as "hazardous waste" in any
applicable state law; or as any of such terms are used or referred to in any
federal law or state law, as any said above mentioned laws may be amended from
time to time, and in the regulations adopted and the publications promulgated
pursuant to said laws

                                (5) Tenant hereby acknowledges and agrees that
the terms, provisions and conditions of Section 3.3.2 shall survive the
expiration or termination of the Lease, the transfer of the Premises, the
satisfaction of any Permitted Mortgage, and all other events relating to the
Premises or the interests of Landlord and any Permitted Mortgagee therein.

                        3.3.3 Tenant shall not commit or suffer to be committed
any waste in or upon the Premises. Tenant shall not do, or permit anything to be
done in or about the Premises which will in any way obstruct or interfere with
the rights of or neighboring properties. Tenant shall at all times cooperate
with Landlord and its agents in the performance of their respective duties and
responsibilities.

                        3.3.4 Tenant shall not use the Premises or permit
anything to be done in or about the Premises which will in any way violate any
Law and all recorded documents affecting the Premises, insofar as the same
relate to or affect the condition, use or occupancy of the Premises, and the
requirements of any board of fire underwriters or other similar body now or
hereafter constituted relating to or affecting the condition, use or occupancy
of the Premises.

        4. LEASE TERM.

                4.1 Term. The Term of this Lease shall commence, subject to the
terms and conditions herein, on the Commencement Date and end on the Term
Expiration Date, as such dates are set forth in the Basic Lease Information
Schedule unless the Term is extended or sooner terminated pursuant to the terms
of this Lease.

                4.2 Option Terms

                        4.2.1 Tenant shall have one (1) consecutive six month
option to renew this Lease on the same terms and conditions.

        5. ACCESS TO PREMISES.

                5.1 Landlord's Access Rights. Landlord and its agents shall
have, at all times, free access to the Premises for purpose of: inspecting the
Premises; submitting the Premises to prospective lenders, purchasers and
tenants; posting notices of non-responsibility and "for sale" and "for lease"
signs; or for any other lawful purpose; provided, however, that except in case
of emergency, Landlord shall give Tenant twenty-four (24) hours notice prior to
entering the Premises for such purposes. All such entries shall be without
abatement of any Rent due from Tenant hereunder.

                5.2 Keys. For each of the aforesaid purposes, Tenant shall
provide Landlord, at Landlord's request, with a key which will unlock all of the
doors in, on or about the Premises, excluding Tenant's vaults and safes, and
Landlord shall have the right to use any and all means which Landlord may deem
proper to open said doors in an emergency, in order to obtain entry to the
Premises. Any entry to the Premises as permitted by this Lease shall not under
any circumstances be construed or deemed to be a forcible or unlawful entry
into, or a detainer of, the Premises, or any eviction of Tenant from the
Premises or any portion thereof.

        6. RENT.

                6.1 Payment of Base Rent. In advance of the Commencement Date,
Tenant shall pay to Landlord, without deduction or offset, except as expressly
provided in this Lease, all Base Rent as

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described in the Basic Lease Information Schedule due during the Term. As such
Base Rent for the Term is prepaid and non-refundable in the case of early
termination by Tenant. Upon any valid Option Terms of this Lease, Tenant shall
pay to Landlord, without deduction or offset, except as expressly provided in
this Lease, in monthly installments. Base Rent for the Option Term shall be paid
on a month-to-month basis.

                6.2 Additional Rent. Tenant further agrees to pay as additional
rental for the Premises all Mortgage Payments, as herein defined; all Taxes, as
herein defined; the cost of all premiums for Insurance as herein defined; and
all Maintenance Costs, as herein defined (the "Additional Rent"). The parties
expressly intend that this Lease is an absolute net lease. To the extent
permitted by law (and except as otherwise expressly provided for herein) Tenant
shall make all payments of Additional Rent directly to the appropriate person or
entity to whom such payments are customarily made, (including without limitation
the payment of Mortgage Payments directly to each Permitted Mortgagee as
required by each Permitted Mortgage) and shall provide Landlord, within thirty
(30) days thereafter, with proof of payment. Any Additional Rent which cannot be
lawfully paid by Tenant to the person to whom such payments are customarily paid
shall be paid by Tenant to Landlord within ten (10) business days of Landlord's
written demand therefore, accompanied by a valid invoice for the costs in
question, which demand shall be delivered by Landlord to Tenant at least thirty
(30) days prior to the date any such payment would bear a late payment penalty
or other similar delinquency charge, so that Landlord can make such payment in a
timely manner.

                6.3 Payments of Rent; Interest. The Rent and other obligations
of Tenant as specified herein are cumulative and Rent hereunder shall be payable
to Landlord in lawful money of the United States of America. Any payment due
from Tenant to Landlord (including but not limited to Base Rent and Additional
Rent) shall bear interest from the due date until paid at an annual rate (the
"Interest Rate") equal to the greater of twelve percent (12%), or four percent
(4%) plus the Prime Rate then announced by Bank of America, N.A. at its San
Francisco Main office.

                6.4 Reports of Payment of Additional Taxes. Tenant shall, within
ten (10) business days after payment of Additional Taxes, provide Landlord with
a written statement describing (i) the amount paid and (ii) the purpose for
which such payment was made (e.g., property taxes and insurance, etc.).

        7. SECURITY DEPOSIT. Landlord waives any requirement that Tenant pay,
concurrently with execution hereof, any security deposit.

        8. UTILITIES. Tenant shall pay for all utility charges incurred with
respect to the Premises, and shall make all necessary deposits to obtain service
of such utilities to the Premises.

        9. ALTERATIONS; SIGNS.

                9.1 Tenant's Alterations.

                        9.1.1 Tenant shall not make or suffer to be made any
alterations, additions or improvements in, on or to the Premises as delivered to
Tenant or any part thereof without the prior written consent of Landlord and
each Permitted Mortgagee, which shall not be unreasonably withheld (the
"Alterations"). In the event Landlord consents to the making of any such
Alterations by Tenant, the same shall be made by Tenant, at Tenant's sole cost
and expense, in accordance with plans and specifications approved by Landlord
and each Permitted Mortgagee, which consent or approval shall not be
unreasonably withheld or conditioned by either party; any contractor or person
selected by Tenant to make the same shall first be approved in writing by
Landlord and each Permitted Mortgagee, which consent or approval shall not be
unreasonably withheld or conditioned by either party. In no event shall Tenant
make any structural changes to the Premises or make any other changes to the
Premises which would weaken or impair the structural integrity of the Premises.
Consent of Landlord and each Permitted Mortgagee shall be deemed to have been
given if neither of such parties shall object within a period of five (5)
business days after actual receipt of detailed plans and specifications showing
Tenant's proposed Alterations as described on detailed plans and specifications
and including identification of all contractors proposed to be utilized in
performing the work. The approval and consent rights of Landlord and each
Permitted Mortgagee with respect to Alterations shall be limited to items that
affect the building structure, the building systems or are visible from the
exterior of the building or would decrease the fair market value of the Building
and neither Landlord nor any Permitted

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<PAGE>   8

Mortgagee shall have the right to withhold consent or disapprove any Alterations
that do not fall in those categories.

                        9.1.2 Any such Alterations, additions or improvements
in, on or to said Premises, except for Tenant's movable furniture and equipment,
shall immediately become Landlord's property and, at the end of the Term, shall
remain on the Premises without compensation to Tenant; provided, however, that
upon the expiration or sooner termination of the Term, Tenant may and shall upon
demand by Landlord, at Tenant's sole cost and expense, with all due diligence
remove any Alterations made by or for the account of Tenant following
commencement of the Term, designated by Landlord to be removed, and Tenant shall
with all due diligence, at its sole cost and expense, repair and restore the
Premises to their original condition. At Landlord's election and notwithstanding
the foregoing, however, Tenant shall pay to Landlord the cost of removing any
such Alterations and restoring the Premises to their original condition, such
cost to include a reasonable charge for Landlord's overhead and profit as
provided above, and such amount may be deducted from any sums or amounts held by
Landlord under this Lease.

                9.2 Signs. Tenant and its successors, and any permitted
subtenants and assigns shall be entitled without Landlord's consent, to maintain
any currently existing signs on or about the Premises and to inscribe, paint,
affix, place or permit to be placed any sign, advertisement, notice, logo or
placard anywhere on the Premises without the prior consent of Landlord, so long
as such signs comply in all respects with all laws, rules, and covenants
affecting the Premises and are of a type reasonable and customary for first
class office buildings in the metropolitan area in which the Premises are
located. If Tenant installs such items without Landlord's prior consent, Tenant,
at its sole expense, shall remove the same promptly upon receipt of a request
from Landlord to do so within thirty (30) days following the expiration or
termination of this Lease and Tenant shall promptly repair any damage arising
from such removal. If Tenant fails to do so, Landlord may cause the removal and
repair to be performed on Tenant's behalf at Tenant's expense, and the cost
thereof shall be Additional Rent hereunder.

        10. LIENS.

                10.1 Premises Lien-Free. Tenant shall give Landlord not less
than ten (10) business days prior written notice of the commencement of any work
in or on the Premises which could lawfully give rise to a claim for mechanics,
or materialmen's lien. Tenant shall keep the Premises free from liens arising
out of or related to work performed, materials or supplies furnished or
obligations incurred by Tenant or in connection with any Improvements. In the
event that Tenant shall not, within twenty (20) days following the imposition of
any such lien, cause the same to be released of record by payment or posting of
a proper bond, Landlord shall have, in addition to all other remedies provided
herein and by law, the right, but no obligation, to cause the same to be
released by posting a bond adequate under the law of the state where the
Premises are located. Landlord shall have the right at all times to post and
keep posted on the Premises any notices permitted or required by law, or which
Landlord shall deem proper, for the protection of Landlord, each Permitted
Mortgagee, the Premises, and any other party having an interest therein, from
mechanics, and materialmen's liens, and.

                10.2 Notice of Lien; Bond. Should any claims of lien relating to
work performed, materials furnished, or obligations incurred by Tenant be filed
against, or any action be commenced affecting, the Premises and/or Tenant's
interest therein, Tenant shall give Landlord and each Permitted Mortgagee notice
of such lien or action within three (3) days after Tenant receives notice of the
filing of the lien or the commencement of the action. In the event that Tenant
shall not, within twenty (20) days following the imposition of any such lien,
cause such lien to be released of record by payment or posting of a proper bond,
Landlord shall have, in addition to all other remedies provided herein and by
law, the right, but not the obligation, to cause the same to be released by
posting a bond adequate under law of the state where the Premises are located or
by requiring Tenant to post for Landlord's benefit a bond, surety, or cash
amount equal to one and one-half times the amount of the lien and sufficient to
release the Premises from the lien. All such sums paid by Landlord, and all
expenses incurred by it in connection therewith, including attorney's fees and
costs shall be payable to Landlord by Tenant as Additional Rent on demand.

                                       6
<PAGE>   9

        11. ASSIGNMENT AND SUBLETTING.

                11.1 Limitations on Subletting, Assignment or Transfer. Except
as permitted by Section 11.4 below, Tenant shall not (whether voluntarily,
involuntarily, or by operation of law) assign, encumber, hypothecate, sublet or
otherwise transfer this Lease or any interest therein (collectively, a
"Transfer") without Landlord's and each Permitted Mortgagee's prior written
consent in each instance, which consent may be withheld in Landlord's and each
Permitted Mortgagee's sole discretion.

                        11.1.1 In the event that Tenant should desire to effect
a Transfer of the Premises or any part thereof subject to the restrictions of
Section 11.1, Tenant shall provide Landlord and each Permitted Mortgagee with
written notice thereof at least thirty (30) days in advance of the date on which
Tenant intends to make such Transfer. Included with such notice shall be the
name and legal composition of the proposed assignee, sublessee, encumbrancer,
hypothecate, or transferee (collectively, "Transferee"), a current financial
statement of the Transferee, the nature of the proposed Transferee's business to
be carried on in the Premises, and such other pertinent information about the
Transferee which may reasonably be requested by Landlord, all in sufficient
detail to enable Landlord and each Permitted Mortgagee to evaluate the risks
associated with the proposed transfer.

                        11.1.2 Each of Landlord and each Permitted Mortgagee
shall then have a period of thirty (30) days following receipt of such notice
within which to notify Tenant in writing that it elects either (i) to refuse to
permit the Transfer; or, (ii) to permit Tenant to enter into such Transfer. In
any event, Landlord's consent to any proposed Transfer shall be conditioned upon
the receipt by Landlord and each Permitted Mortgagee of a written Assumption
Agreement, in a form approved by Landlord and each Permitted Mortgagee, executed
by the Transferee which Assumption Agreement shall include a provision that
Tenant's Transferee shall expressly assume all obligations of Tenant under this
Lease, and said Transferee shall be and remain jointly and severally liable with
Tenant for the performance of all conditions, covenants and obligations under
this Lease from the effective date of the Transfer of Tenant's interest in this
Lease.

                        11.1.3 The consent of both Landlord and each Permitted
Mortgagee shall be required for approval of any Transfer. If Landlord or any
Permitted Mortgagee should fail to notify Tenant in writing of its election
within said thirty (30) day period, Landlord or such Permitted Mortgagee, as the
case may be, shall be deemed to have consented to the proposed Transfer but the
Transferee shall still be required to execute the Assumption Agreement.

                11.2 Effect of Withholding Consent. Tenant shall not enter into
any transaction subject to this Section 11 without both Landlord's and each
Permitted Mortgagee's prior written consent which consent may be withheld in
Landlord and each Permitted Mortgagee's sole discretion. Any transaction
consummated without both Landlord's and each Permitted Mortgagee's prior written
consent, or waiver, shall be void.

                11.3 Tenant's Continued Obligations. Unless Landlord and Tenant
agree to the contrary, any permitted Transfer hereunder by Tenant shall not
result in Tenant being released or discharged from any liability or obligation
under this Lease nor shall it constitute a consent with respect to any
subsequent Transfer to which this section applies.

                11.4 Permitted Transfers. Notwithstanding anything to the
contrary contained in this Section 11, Landlord and each Permitted Mortgagee
have agreed that certain Transfers, as hereinafter described in this Section
11.4, do not require the consent of either of them and may be made by Tenant
without the consent of Landlord or each Permitted Mortgagee.

                                       7
<PAGE>   10

                        11.4.1 Landlord acknowledges that the Premises are
occupied at the Commencement Date by one or more Subtenants. Landlord
acknowledges that Tenant will enter into a sublease with Subtenants in the form
of Sublease attached hereto as Exhibit D.                                _______
                                                                         Initial

OR:

                        11.4.2 Landlord does hereby approve the execution and
entering into of the sublease in the form attached hereto as Exhibit D.  _______
                                                                         Initial

                        11.4.3 Tenant may assign this Lease or sublease all or
any portion of the Premises and/or the Personal Property to any entity which is
owned by Tenant, which owns Tenant or which is owned under common control with
Tenant, or to any entity into which or with which Tenant is merged or which
acquires all or substantially all of Tenant's assets. No consent by either
Landlord or each Permitted Mortgagee shall be required for this type of
Transfer, but in no event shall Tenant or any Guarantor of Tenant's obligations
under this Lease be released by said Transfer.

        12. TENANT'S OBLIGATIONS.

                12.1 Compliance with Rules, Regulations and Ordinances. Tenant
and its employees and agents shall comply with all statutes, ordinances, rules,
orders, regulations and directions relating to Tenant's occupancy and use of the
Premises which are in force or applicable during the periods specified herein,
issued, adopted or enacted by the federal or state governments or any
department, bureau or office thereof, including without limitation all rules,
orders and directions of the Fire Marshal, Fire Department and the Building
Department, and any requirements or conditions of any insurance policy. Any
material failure by Tenant or their employees or agents to observe and comply
with any of the foregoing shall be a Default hereunder.

                12.2 Maintenance and Repairs.

                        12.2.1 Tenant shall, at is sole cost and expense, keep
and maintain the Premises, including any altered, rebuilt or additional
improvements hereafter added by Tenant, in good repair and in first class
appearance and condition during the Term (normal wear and tear excepted) and
Tenant shall with reasonable promptness make all structural and non-structural
foreseen and unforeseen, ordinary and extraordinary changes and repairs of every
kind and nature which may be required to be made upon or in connection with the
Premises or any part thereof in order to keep and maintain same in good repair
and in first class appearance and condition.

                        12.2.2 Landlord shall not be required to maintain,
repair or rebuild, or to make any alterations, replacements or renewals of any
nature or description to Premises, or any part thereof, whether ordinary or
extraordinary, structural or non-structural , foreseen or unforeseen, or to
maintain same or any part thereof, and Tenant hereby expressly waives any right
to make repairs or to provide maintenance at the expense of Landlord as may be
provided for in any statute, ordinance, rule or regulation in effect at the time
of execution of this Lease, or at any time during the Term and not set forth in
this Lease as the responsibility of the Landlord.

                12.3 No Nuisance. Tenant shall not use or occupy the Premises or
permit same to be used or occupied, in any manner which would violate any
certificate of occupancy affecting the Premises or which would cause structural
damage to the Premises or which would constitute a public or private nuisance or
waste.

                                       8
<PAGE>   11

        13. PERFORMANCE OF LANDLORD'S OBLIGATIONS.

                13.1 Performance of Landlord's Obligations. Landlord shall not
be responsible for its failure to perform in whole or in part any obligation set
forth herein if occasioned directly or indirectly by natural disaster, labor
unrest, insurrections, Acts of God, enforcement of any Laws, or any cause, or
circumstance not reasonably subject to its control which prevents or hinders the
performance of its obligations.

                13.2 Landlord's Default. Landlord shall not be in default under
this Lease unless Tenant shall have given Landlord written notice of the breach,
and, within thirty (30) days after notice, Landlord has not cured the breach or,
if the breach is such that it cannot reasonably be cured under the circumstances
within thirty (30) days, has not commenced diligently to prosecute the cure to
completion. In the event of any Default (or any act or circumstance which with
the giving of notice or the passage of time, or both, could become a Default) on
the part of Landlord under this Lease, Tenant shall give notice by certified
mail to each Permitted Mortgagee and any beneficiary of a deed to secure debt or
mortgage encumbering the Premises, whose address shall have been furnished to
it, and shall offer such beneficiary or mortgagee a reasonable opportunity to
cure the Default beyond any cure period available to Landlord hereunder ,
including time to obtain possession of the Premises by power of sale or judicial
foreclosure, if such should prove necessary to affect a cure.

        14. INSURANCE AND INDEMNIFICATION.

                14.1 Waiver of Liability. Landlord shall not be liable to Tenant
and Tenant hereby waives all claims against Landlord for any injury or damage to
any person or property in or about the Premises by or from any cause whatsoever,
(other than Landlord's gross negligence or willful misconduct).

                14.2 Tenant's Indemnification. Tenant shall hold Landlord
harmless from and defend Landlord against any and all claims or liability
(except that Tenant shall not be liable under such indemnification with respect
to any claim or liability resulting from the gross negligence or willful
misconduct of Landlord) for any injury or damage to any person or property
whatsoever occurring in, on or about the Premises or any part thereof whether or
not such injury or damage shall be caused by the act, neglect, fault of or
omission of any duty with respect to the same by Tenant, its agents, servants,
employees or invitees. Tenant shall further indemnify and save harmless Landlord
against and from any and all claims by or on behalf of any person, firm or
corporation arising from the conduct or management of any work or thing
whatsoever done by or on behalf of Tenant in or about or from transactions of
Tenant concerning the Premises. Tenant will further indemnify and save Landlord
harmless against and from any and all claims arising from any breach or default
on the part of Tenant in the performance of any covenant or agreement on the
part of Tenant to be performed pursuant to the terms to this Lease or arising
from any act or negligence of Tenant, or any of its agents, contractors,
servants, employees or licensees, and from and against all costs, counsel fees,
expenses and liabilities incurred in connection with any such claim or action or
proceeding brought thereon. In case any action or proceeding is brought against
Landlord by reason of any claims or liability within the limits of the foregoing
indemnity, Tenant shall defend such action or proceeding at Tenant's sole
expense by counsel reasonably satisfactory to Landlord. Tenant shall not be
liable under such indemnification to the extent that insurance proceeds from
insurance actually carried by Landlord are made available with respect to such
item.

                14.3 Survival. The provisions of this Section 14 shall survive
the expiration or termination of this Lease with respect to any claims or
liability, or acts or occurrences subsequently creating or giving rise to such
claims or liability, occurring prior to such expiration or termination.

                14.4 Insurance. Tenant shall maintain the insurance policies
required under Exhibit A to this Lease. In the event Tenant fails to pay any
premium required by such insurance carriers and Landlord elects to pay such
premium in order to keep the applicable policy in force, Landlord shall notify
Tenant of such payment and the amount paid shall be payable by Tenant as
additional rent with the next installment of rent due.

                                       9
<PAGE>   12

        15. WAIVER OF SUBROGATION. To the extent permitted by law and without
affecting the coverage provided by insurance required to be maintained
hereunder, Landlord and Tenant each waive any right to recover against the other
(i) damages to both real and personal property, (ii) damage to the Premises or
any part thereof, or (iii) claims arising by reason of the foregoing, the
parties hereby agreeing that with respect to property damage the parties shall
look solely to the insurance required to be carried by Tenant pursuant to this
Lease. Tenant shall cause all insurance carriers issuing policies required
hereunder to waive all rights of subrogation with respect to property damage.
This provision is intended to waive fully, and for the benefit of each party,
any rights and/or claims which might give rise to a right of subrogation on any
insurance carrier. The coverage obtained by each party pursuant to this Lease
shall include, but without limitation, a waiver of subrogation by the carrier
which conforms to the provisions of this Section 15.

        16. DAMAGE OR DESTRUCTION.

                16.1 Damage or Destruction to Risk Covered by Insurance. If,
during the term of this Lease, the Premises are totally or partially destroyed,
rendering the Premises totally or partially inaccessible or unusable, Tenant
shall immediately restore the Premises to substantially the same condition as
they were in immediately before such destruction, whether or not available
insurance proceeds are sufficient to cover the actual cost of restoration. Such
destruction shall not terminate this Lease.

                16.2 Adjustment of Major Loss; Insurance Trustee.

                        16.2.1 If, during the term of this Lease, the Premises
are destroyed from a risk covered by Insurance described in EXHIBIT A, and the
total amount of loss exceeds 33 1/3% of the replacement cost of the Premises,
Tenant shall make the loss adjustment with the insurance company insuring the
loss, and upon receipt of the proceeds shall immediately pay them to an
insurance trustee mutually agreeable to both parties (the "Insurance Trustee").
If the amount of the loss is less than 33 1/3% of the replacement cost of the
Premises, the proceeds shall be paid directly to Tenant and applied by Tenant to
the restoration costs of the Premises.

                        16.2.2 If the Premises are destroyed and the available
insurance proceeds are not adequate to pay all restoration costs, Tenant shall
deposit with the Insurance Trustee an amount, if any, which, when added to
available insurance proceeds, will fully cover the cost of restoration. All sums
deposited with the Insurance Trustee shall be held by it for the following
purposes and the Insurance Trustee shall have the following powers and duties:

                                (1) The sums shall be paid by the Insurance
Trustee in installments to the contractor retained by the Tenant, as
construction progresses, for payment of the cost of restoration. A ten percent
(10%) retention fund shall be established which shall be paid to the contractor
upon completion of restoration, the issuance of any requisite governmental
permits for use and occupancy of the restored premises (e.g., Certificate of
Occupancy), payment of all costs, expiration of all applicable lien periods and
proof that the Premises are free of all mechanics' liens and lienable claims.

                                (2) Payments shall be made upon presentation of
certificates or vouchers from the architect or engineer retained by Tenant (such
architect or engineer selected with Landlord's prior written consent, which
shall not be unreasonably withheld) which shall show the amount due.

                                (3) If the sums held by the Insurance Trustee
are not sufficient to pay the actual cost of restoration, Tenant shall deposit
the amount of the deficiency with the Insurance Trustee within twenty (20) days
after request by the Insurance Trustee indicating the amount of the deficiency.

                                (4) Any sums not disbursed by the Insurance
Trustee after restoration has been completed and final payment has been made,
shall within ten (10) days after demand by Tenant, be paid to Tenant.

                                (5) All reasonable actual costs and charges of
the Insurance Trustee shall be paid by Tenant.

                                       10

<PAGE>   13

                                (6) If the Insurance Trustee resigns or for any
reason is unwilling to act or continue to act, Landlord shall substitute a new
trustee in the place of the designated Insurance Trustee. The new Insurance
Trustee shall be either an institutional lender or title company doing business
in the city where the Premises are located.

                                (7) Both parties shall promptly execute all
documents and perform all acts reasonably required by the Insurance Trustee to
perform their obligations under this Section.

                16.3 Procedure For Restoring Premises. Within forty-five (45)
days after Tenant becomes obligated to restore the Premises, Tenant shall at its
cost cause to be prepared final plans and specifications and working drawings
complying with applicable laws that will be necessary for the restoration of the
Premises and shall submit same to Landlord and each Fee Interest Mortgagee for
approval, which shall not be unreasonably withheld or conditioned and which
shall be deemed given to the extent that Landlord or any Fee Interest Mortgagee
does not respond within five (5) business days of the submission of such plans
and specifications.

        17. EMINENT DOMAIN.

                17.1 Taking of Premises. If any material part of the Premises
shall be taken or appropriated under the power of eminent domain or conveyed in
lieu thereof, either party shall have the right to terminate this Lease;
provided, however, that until the indebtedness secured by any Permitted Mortgage
has been paid in full, no party hereto shall have the right to terminate this
Lease. In the event of such taking, the party desiring to exercise its option
shall give to the other written notice of its exercise of this option within ten
(10) days after it receives information that a court proceeding has been
commenced to take the Premises by power of eminent domain.

                17.2 Rights of Parties to Condemnation Award. Subject to the
prior rights of each Permitted Mortgagee under any Permitted Mortgage, Landlord
shall receive (and Tenant shall assign to Landlord upon demand from Landlord)
any income, rent, award or any interest therein which may be paid in connection
with the exercise of such power of eminent domain.

                17.3 Temporary Taking. Notwithstanding anything to the contrary
contained in this Section 16, if the temporary use or occupancy of any part of
the Premises shall be taken or appropriated under power of eminent domain during
the Term, this Lease shall be and remain in full force and effect; and Tenant
shall restore the Premises at the end of such temporary taking to their
condition prior to such taking. In the event of any such temporary appropriation
or taking, Landlord shall be entitled, subject to the prior rights of each
Permitted Mortgagee, to receive any award which represents compensation for the
use of or occupancy of the Premises during the Term, and that portion of any
award which represents the cost of restoration of the Premises.

        18. ESTOPPEL CERTIFICATE. Within ten (10) days following any written
request which Landlord may make from time to time, Tenant shall execute and
deliver to Landlord and/or each Permitted Mortgagee a certificate substantially
in the form attached hereto as Exhibit "C" indicating thereon any exceptions
thereto which may exist at that time. Failure by Tenant to execute and deliver
such certificate shall constitute an acceptance of the Premises and
acknowledgment by Tenant that the statements included in Exhibit "C" are true
and correct without exception. Landlord and Tenant intend that any statement
delivered pursuant to this Section may be relied upon by any mortgagee,
beneficiary, grantee, purchaser or prospective purchaser of the Premises.
Landlord shall have the right to substitute in place of the attached Exhibit "C"
a certificate in form required by Landlord's mortgagee or provider of financing.

        19. SUBORDINATION; ATTORNMENT. This Lease shall be subject and
subordinate at all times to the lien of any mortgage security deed, or deed to
secure debt which may now exist or hereafter be executed in any amount for which
said Premises, or Landlord's interest or estate therein is specified as
security, if and only if the holder of such security deed or mortgage shall
execute a subordination, non-disturbance and attornment agreement, in form and
substance reasonably satisfactory to Tenant, in which such holder agrees not to
disturb the possessory rights of Tenant (or a Subtenant under any authorized

                                       11
<PAGE>   14

sublease) and to honor the duties and obligations of Landlord which arise after
the date such holder takes title and to recognize the rights of Tenant under
this Lease and any Subtenant under any authorized sublease so long as that party
is not in default. Notwithstanding the foregoing, each Permitted Mortgagee shall
have the right to subordinate or cause to be subordinated any such liens to this
Lease and such subordination shall be subject to any lienholder other then each
Permitted Mortgagee executing a non-disturbance and attornment agreement in form
and substance reasonably satisfactory to Tenant in which such holder agrees not
to disturb the possessory rights of Tenant and any Subtenant and to honor the
duties and obligations of Landlord under this Lease which arise after such
holder takes title to the Premises. In the event that any mortgage or deed to
secure debt is foreclosed or a conveyance in lieu of foreclosure is made for any
reason, Tenant shall, notwithstanding any subordination, attorn to and become
the tenant of the successor in interest to Landlord at the option of such
successor in interest, provided that such successor recognizes Tenant's rights
under this Lease from and after the date of such foreclosure or deed in lieu
thereof pursuant to a subordination and non-disturbance agreement as aforesaid.
Tenant shall execute and deliver, upon demand by Landlord or any Permitted
Mortgagee and in the form reasonably requested by Landlord and/or such Permitted
Mortgagee, any additional documents evidencing the priority or subordination of
this Lease with respect to the lien of any such mortgage or deed to secure debt;
provided, however that such mortgagee, holder or beneficiary agrees in writing
that this Lease shall not be terminated in the event of any foreclosure if
Tenant is not in default under this Lease at the time of such foreclosure
pursuant to a subordination and non-disturbance agreement as aforesaid. At the
request of Landlord or any Permitted Mortgagee, Tenant shall provide to Landlord
and each Permitted Mortgagee its current annual report containing a financial
statement or other information disclosing Tenant's financial worth which
Landlord shall use solely for purposes of this Lease and in connection with the
ownership, management and disposition of the Premises. In the event that Tenant
fails to execute and deliver in a timely manner, and without charge, such
further documents as may be reasonably requested by any Permitted Mortgagee to
which this Lease is hereby made subordinate, such failure shall constitute a
Default, as hereafter defined, by Tenant hereunder.

        20. DEFAULT BY TENANT.

                20.1 Events of Default. The occurrence of any of the following
shall constitute an event of default on the part of Tenant (hereinafter referred
to as a "Default").

                        20.1.1 Nonpayment of Rent. Failure to pay any
installment of Rent due and payable hereunder (or failure to pay any other
amount required to be paid hereunder, all such obligations to be construed as
the equivalent of obligations for payment of Rent) within five (5) business days
of the date when said payment is due, such failure continuing without cure by
payment of the delinquent Rent and late charge (if applicable) for a period of
five (5) business days after Landlord's written notice and demand specifying
such failure to pay; provided, however that Landlord shall be obligated to give
such written notice not more than one time in any twelve (12) month period and
thereafter for the next twelve months no notice shall be required as a condition
to Tenant's default for failure to pay Rent. The due dates for payment of
installments of Rent provided for herein shall be absolute and the existence of
a cure period or notice period shall not be deemed to extend said date for
purposes of determining Tenant's compliance with its obligations hereunder.

                        20.1.2 Other Obligations. Failure to perform any
material obligations, agreement or covenant under this Lease (other than that
matter specified in subsection 1 of this subsection 19.1) whether or not
identified as a Default hereunder, such failure continuing for thirty (30) days
after Landlord shall have given to Tenant written notice specifying such
failure, provided however, that if the default complained of shall be of such a
nature that the same cannot be completely remedied or cured within such thirty
(30) day period, then such failure shall not be an enforceable Default against
Tenant for the purposes of this Paragraph if Tenant shall have commenced curing
such Default within such thirty (30) day period and shall proceed with
reasonable diligence and in good faith to remedy the default complained of and,
in any event, such Default is cured within ninety (90) days;

                        20.1.3 General Assignment. A general assignment by
Tenant for the benefit of creditors;

                                       12
<PAGE>   15

                        20.1.4 Bankruptcy. The filing of any voluntary petition
in bankruptcy by Tenant, or the filing of an involuntary petition by Tenant's
creditors which involuntary petition remains undischarged for a period of thirty
(30) days. In the event that under applicable law the trustee in bankruptcy or
Tenant have the right to affirm this Lease and continue to perform the
obligations of Tenant hereunder, such trustee or Tenant shall, in such time
period as may be permitted by the bankruptcy court having jurisdiction, cure all
defaults of Tenant hereunder outstanding as of the date of the affirmance of
this Lease and provide to Landlord such adequate assurances as may be necessary
to ensure Landlord of the continued performance of Tenant's obligations under
this Lease. In the event the trustee in bankruptcy or the Tenant have the right
to reject this Lease, if such rejection is not made within sixty (60) days after
the date of the order for relief, or within such additional time as the court
may, for cause, within such sixty (60) day period, fix, then the Lease shall be
deemed rejected, and the trustee in bankruptcy or Tenant shall immediately
surrender the Premises to the Landlord.

                        20.1.5 Receivership. The engagement or appointment of a
receiver to take possession of substantially all of Tenant's assets or the
Premises, if such receivership remains undismissed or undischarged for a period
of thirty (30) business days after creation thereof;

                        20.1.6 Attachment. The attachment, execution or other
judicial seizure of all or substantially all of Tenant's assets or the Premises,
if such attachment or other seizure remains undismissed or undischarged for a
period of thirty (30) business days after the levy thereof;

                        20.1.7 Insolvency. The admission by Tenant in writing of
its inability to pay its debts as they become due, the filing by Tenant of a
petition seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, the filing by Tenant of an answer admitting or failing timely
to contest a material allegation of a petition filed against Tenant in any such
proceeding or, if within thirty (30) days after the commencement of any
proceeding against Tenant seeking any reorganization or arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such proceeding shall not have
been dismissed.

                        20.1.8 Transfer. Any Transfer in violation of the terms
of Section 11 of this Lease.

                20.2 Remedies Upon Default.

                        20.2.1 Notice. Tenant waives any right to notice Tenant
may have under Section 1951.3 of the Civil Code of the State of California, the
terms of this Section 19 being deemed such notice to Tenant as required by said
Section 1951.3.

                        20.2.2 Termination. In the event of the occurrence of
any Default, Landlord shall have the right immediately to terminate this Lease,
and at any time thereafter recover possession of the Premises or any part
thereof and expel and remove therefrom Tenant and any other person occupying the
same, by any lawful means, and again repossess and enjoy the Premises without
prejudice to any of the remedies that Landlord may have under this Lease, or at
law or equity by reason of Tenant's Default or of such termination.

                        20.2.3 Continuation After Default. Even though Tenant
has breached this Lease and/or abandoned the Premises, this Lease shall continue
in effect for so long as Landlord does not terminate Tenant's right to
possession under Section 19.3 hereof, and Landlord may enforce all its right and
remedies under this Lease, including (but without limitation) the right to
recover Rent as it becomes due; and Landlord, without terminating this Lease,
may exercise all of the rights and remedies of a landlord under Section 1951.4
of the Civil Code of the State of California or any successor code section.
Neither acts of maintenance, preservation or efforts to lease the Premises, nor
the appointment of a receiver upon application of Landlord to protect Landlord's
interests under this Lease nor other efforts of Landlord to mitigate damages
caused by a Default by Tenant, nor the acceptance of Rent shall constitute a
waiver of any of Landlord's rights and remedies or an election to terminate
Tenant's right to possession.

                                       13
<PAGE>   16

                        20.2.4 Reletting Premises. Landlord may, at Landlord's
election, re-enter the Premises and without terminating this Lease, and at any
time and from time to time, relet the Premises or any part thereof for the
account and in the name of Tenant or otherwise. Landlord may, at Landlord's
election, eject Tenant or any of Tenant's subtenants, assignees or other person
claiming any right in or through this Lease. Tenant shall nevertheless pay on
the due dates specified in this Lease all Rent and other sums required to be
paid by Tenant, plus Landlord's expenses incurred in retaking possession,
repairing the Premises, and obtaining new tenants, including brokerage
commissions and attorneys' fees, less the proceeds of any sublease or reletting.
No act by Landlord under this subsection 19.2.4 shall constitute a termination
of the Lease unless Landlord gives Tenant written notice of termination.
Notwithstanding any prior reletting without termination, Landlord may later
elect to terminate this Lease due to Tenant's Default.

                20.3 Damages Upon Termination. Should Landlord terminate this
Lease pursuant to the provisions of Section 19.2.2 hereof, Landlord shall have
all the rights and remedies of a landlord provided by Section 1951.2 of the
Civil Code of the State of California, or any successor code section. Upon such
termination, in addition to any other rights and remedies to which Landlord may
be entitled under applicable law, Landlord shall be entitled to recover from
Tenant:

                        20.3.1 the worth at the time of award of the unpaid Rent
and other amounts which had been earned at the time of termination;

                        20.3.2 a sum which, at the date of such termination,
equals the worth at the time of the award of the rental and all other sums which
would have been due and payable by Tenant hereunder for the remainder of the
Term, but if Landlord elects to exercise this remedy, Landlord and Tenant agree
that the amounts set forth in Section 19.3.1 and this Section 19.3.2 constitute
a good faith reasonable estimate of the damages which might be suffered by
Landlord upon the occurrence of a Default and that it is impossible to estimate
more precisely such damages. Tenant's receipt of the aforesaid amount is
intended not as a penalty but as full liquidated damages; and,

                               0.0.1 any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to perform
its obligations under this Lease or which, in the ordinary course of things,
would be likely to result therefrom, including, without limitation, the
reasonable costs and expenses incurred by Landlord for retaking possession of
the Premises, cleaning and making repairs and alterations necessary to return
the Premises to good condition and preparing the Premises for reletting,
removing transporting and storing Tenant's property left at the Premises
(although Landlord shall have no obligation to do so), and reletting the
Premises, including all costs incurred in connection with such reletting.

The "worth at the time of award" of the amounts referred to in (i) and (ii)
shall be computed with interest at the lesser of eighteen percent (18%) per
annum or the maximum rate allowed by law. The "worth at the time of award" of
the amount referred to in (iii) shall be computed by reference to competent
appraisal evidence or the formula prescribed by and using the lowest discount
rate permitted under applicable law.

The foregoing limitation of remedies in the event of Landlord's termination of
the Lease on Tenant's default is without prejudice to Landlord's and each
Permitted Mortgagee's right to enforce Tenant's indemnity obligation with
respect to claims, damages and liabilities resulting to Landlord and/or any
Permitted Mortgagee by or through Tenant's use and occupancy of the Premises.

                20.4 Remedies Cumulative. All rights, privileges and elections
or remedies of the parties are cumulative and not alternative to the extent
permitted by law and except as otherwise provided herein.

                20.5 Each Permitted Mortgagee's Consent Required for
Termination. Notwithstanding anything herein to the contrary, Landlord and
Tenant acknowledge that so long as any Permitted Mortgage remains outstanding,
this Lease shall not be terminated by either Landlord or Tenant without the
prior written consent of each Permitted Mortgagee and any attempt to terminate
this Lease without each Permitted Mortgagee's prior written consent shall be
null and void. If this Lease is terminated as a matter of law or otherwise while
any Permitted Mortgage remains outstanding, Tenant agrees promptly to enter into
a new Lease with the then owner of the Premises on substantially the same terms
as in this Lease and upon the request of such owner or any Permitted Mortgagee.
Each Permitted Mortgagee shall be considered a third

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<PAGE>   17

party beneficiary of this Lease for the purpose of enforcing this and each other
provision hereof which expressly or implicitly benefits that Permitted
Mortgagee.

        21. SALE BY LANDLORD AND TENANT'S REMEDIES. In the event of a sale or
conveyance of the Premises by Landlord, the same shall operate to release
Landlord from any future liability for any of the covenants or conditions,
express or implied, herein contained in favor of Tenant, and in such event
Tenant agrees to look solely to the responsibility of the successor in interest
of Landlord in and to this Lease. This Lease shall not be affected by any such
sale and Tenant agrees to attorn to the purchaser or assignee.

        22. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to be
performed by Tenant under the terms of this Lease shall be performed by Tenant
at Tenant's sole cost and expense and without any abatement of Rent. If Tenant
shall fail to pay any sum of money, other than Base Rent, required to be paid by
them hereunder or shall fail to perform any other act on their part to be
performed hereunder, and such failure shall continue after notice thereof by
Landlord and the expiration of the applicable cure period provided in Section
19, above, Landlord may, but shall not be obligated to do so, and without
waiving or releasing Tenant from any obligations of the Tenant, make any such
payment or perform any such act on the Tenant's part to be made or performed.
All sums so paid by Landlord and all necessary incidental costs together with
interest thereon from the date of such payment by the Landlord at the rate of
eighteen percent (18%) per annum or the maximum annual rate permitted by law
(whichever is less), shall be payable as Additional Rent to Landlord on demand,
and Tenant covenants to pay such sums, and Landlord shall have, in addition to
any other right or remedy of Landlord, the same right and remedies in the event
of the nonpayment thereof by Tenant as in the case of default by Tenant in the
payment of the Rent.

        23. SURRENDER OF PREMISES.

                23.1 Surrender of Premises. At the end of the Term or any
renewal thereof or other sooner termination of this Lease, Tenant shall
peaceably deliver up to Landlord possession of the Premises, together with all
improvements, fixtures or additions thereto by whomsoever made, broom clean,
trash free and in the same condition as received, or first installed, normal
wear and tear excepted. All Alterations shall be subject to the terms of Section
9.1. Tenant may, upon the termination of this Lease, remove all movable
furniture and equipment belonging to the Tenant, at Tenant's sole cost,
repairing any damage caused by such removal. Property not so removed shall after
notice from Landlord be deemed abandoned by the Tenant and title to the same
shall thereupon pass to Landlord, and Landlord may thereafter dispose of the
same as it deems appropriate. In order to comply with its obligations stated in
the first sentence of this Section Tenant shall, if necessary, repair any damage
to parking areas, driveways, landscaping, and all exterior and interior parts of
any building on the Premises when required by and to the reasonable satisfaction
of Landlord, and at Tenant's sole cost and expense.

                23.2 No Merger. The voluntary or other surrender of this Lease
by Tenant, or a mutual cancellation thereof, shall not work a merger and shall,
at the option of Landlord, terminate all or any existing subleases or
subtenancies or may, at the option of Landlord, operate as an assignment to it
of any or all such subleases or subtenancies.

                23.3 Holdover. If Tenant retains possession of the Premises or
any part thereof after the end of the Term pursuant to the anticipated
expiration date or earlier termination of this Lease, then such tenancy shall be
deemed to be of a month-to-month tenancy, upon the terms, provisions and
conditions set forth in this Lease; provided, however, that the monthly Base
Rent payable under Section 6.1 during any holdover period shall be equal to two
hundred (200%) of the Base Rental being paid monthly to Landlord under this
Lease immediately prior to such expiration or termination.

        24. WAIVER. No covenant, term or condition herein, or the breach
thereof, shall be deemed waived, except (i) as herein specifically provided, or
(ii) if not specifically provided, by written consent of the party against whom
the waiver is claimed. If either Landlord or Tenant waive the performance of any
term, covenant or condition contained in this Lease, such waiver shall not be
deemed to be a waiver of any subsequent breach of the same or any other term,
covenant or condition contained herein. The acceptance of Rent by Landlord shall
not constitute a waiver of any preceding breach or Default by Tenant of any
term, covenant or condition of this Lease, regardless of Landlord's knowledge of
such preceding breach or Default

                                       15
<PAGE>   18

at the time Landlord accepted such Rent. The acceptance by Landlord of any sum
less that which is required to be paid by Tenant shall not constitute an accord
and satisfaction notwithstanding any provisions to the contrary written on any
check or contained in any letter of transmittal. Failure by Landlord to enforce
any of the terms, covenants or conditions of this Lease for any length of time,
or efforts by Landlord to mitigate damages caused by any Default of Tenant,
shall not constitute a waiver of Landlord's right to recover damages for any
Default nor shall it be deemed to waive or to decrease the right of Landlord to
insist thereafter upon strict performance by Tenant.

        25. NOTICES. All notices and demands which may or are required to be
given by either party to the other hereunder shall be in writing, sent by United
States, certified mail, postage prepaid, return receipt requested, or by
overnight courier service prepaid for next day delivery (such as DHL, UPS or
Federal Express) addressed to the parties as set forth in the Basic Lease
Information Schedule, or to such other place as each of them may from time to
time designate in a notice to the other, and deemed delivered two (2) business
days after mailing (except in the case of overnight courier delivery, which
shall be deemed delivered the following weekday). Any notice required to be made
to a Permitted Mortgagee hereunder shall be addressed to that Permitted
Mortgagee at the address provided to the Tenant by that Permitted Mortgagee
pursuant to the terms hereof.

        26. SUCCESSORS/ASSIGNS; DEATH OR INCAPACITY OF TENANT. Subject to the
provisions of Section 11 hereof, the terms, covenants and conditions contained
herein shall be binding upon and inure to the benefit of the heirs, successors,
executors, administrators and assigns of the parties hereto.

        27. ATTORNEYS' FEES. In the event that any action or proceeding is
brought to enforce or interpret any term, covenant or condition of this Lease by
or on behalf of either party, the prevailing party in such action shall be
entitled to reasonable attorneys' fees, in addition to such court costs, to be
awarded by the court in such action or proceeding.

        28. MISCELLANEOUS.

                28.1 Section Captions. The captions of the Sections herein are
for convenience of reference and shall in no way define, increase, limit or
describe the scope or intent of any provision of this Lease.

                28.2 Definitions. The terms "Landlord" and "Tenant" shall
include the plural as well as the singular. Words used in neuter gender include
the masculine and feminine, and words in the masculine and feminine include the
neuter. As to any Tenant which consists of a husband and wife, the obligations
hereunder shall extend individually to their sole and separate property as well
as community property. The term "Landlord" shall mean only the fee title owner
or owners of the Premises at the time in question. The words "agent" and the
meaning of the term "agency" shall be deemed to include the agents, employees,
servants, invitees, contractors, successors, guests, customers, subcontractors,
representatives, partners, affiliated companies, and any other person or entity
related in any way to the respective party. The words "person" or "persons"
shall mean individuals, partnerships, firms, associations, corporations, or
other legal entities.

                28.3 Time; Joint And Several Liabilities and Remedies. Time is
of the essence of this Lease and all of its provisions. All of the terms,
covenants and conditions contained herein to be performed by either party, if
such party shall consist of more than one person, shall be deemed to be joint
and several, and all rights and remedies of the parties shall be cumulative and
nonexclusive of any other remedy at law or in equity.

                28.4 Choice of Law; Venue. This Lease shall in all respects be
governed by the laws of the State of California. Any legal proceeding with
respect to this Lease shall be held in the Superior Court of the County in which
the Premises are located.

                28.5 Integration of Agreements. This Lease, together with the
Basic Lease Information Schedule, its exhibits, contains all the agreements of
the parties hereto (with respect only to the subject matter contained herein)
and supersedes any previous or contemporaneous negotiations or agreements,
whether

                                       16
<PAGE>   19

written or oral. Any agreements, warranties or representations dealing with the
subject matter contained herein not expressly contained herein shall in no way
bind either Landlord or Tenant, and Landlord and Tenant expressly waive all
claims for damages by reason of any statement, representation, warranty, promise
or agreement (if any) not contained in this Lease.

                28.6 Amendments. This Lease may not be modified or amended
except by written instrument signed by the parties hereto.

                28.7 Severability. If for any reason whatsoever any of the
provisions hereof shall be determined by a court of competent jurisdiction to be
invalid or unenforceable, all of the other provisions shall be and remain in
full force and effect; provided, however, if Tenant's obligation to pay Rent, or
any other sum due hereunder, is determined to be invalid or unenforceable, the
Landlord shall have the option to thereafter terminate this Lease.

                28.8 Consent; Reasonableness. Except as set forth herein,
whenever the consent or approval of any party to the actions of another party is
required hereunder, such consent or approval shall not be unreasonably withheld.
Notwithstanding the foregoing, where Tenant is required to obtain the consent of
Landlord to do any act, or to refrain from the performance of any act, Tenant
agree that if they are in default with respect to any term, condition, covenant
or provision of this Lease, or if Landlord reasonably asserts that Tenant is in
default, then Landlord shall be deemed to have acted reasonably in withholding
its consent if such consent is, in fact, withheld.

                28.9 No Partnership Or Joint Venture. Nothing in this Lease
shall be construed as creating a partnership or joint venture between Landlord
and Tenant, or cause Landlord to be responsible for the debts or obligations of
Tenant or any other party.

                28.10 Exhibits. Each and all exhibits to this Lease shall be
deemed to be incorporated herein by reference, and shall be a part of this Lease
as if set forth in full in the body hereof.

                               xxxxxxxxxxxxxxxxxx

The signatures on the Basic Lease Information Schedule shall constitute the
parties' signatures to the entire Lease.

                                       17
<PAGE>   20

                                   EXHIBIT "A"
                                    INSURANCE

        The Tenant shall maintain in effect at all times from the date of
commencement of the Term to the date of termination of this Lease insurance
coverages with limits not less than those set forth below with insurers
licensed, authorized or approved to do business in the State where the Premises
are located and under forms of policies satisfactory to Landlord.

        A.      Comprehensive
                General Liability

                Bodily Injury/Property       $1,000,000.00 each occurrence or
                Damage                       equivalent/aggregate

                These policies shall be on a form reasonably acceptable to
Landlord endorsed to include the Landlord and any beneficiary of any deed of
trust or mortgagee of any mortgage secured by the Premises, (collectively,
"Insured Parties") as additional insureds, and shall state that the insurance
coverage provided is primary with respect to the Premises as regards any other
insurance carried by said parties. The policy shall include the following
coverages:

               (1)    Independent Contractors

               (2)    Broad Form Comprehensive General Liability

               (3)    Broad Form Personal Injury Liability including
                      contractual coverage to conform in all respects
                      of item (2) above

               (4)    Removal of any "x", "c", and "u" exclusion from
                      their operations coverage

               (5)    Severability of Interests clause.

        B.      Comprehensive Automobile Liability.

                a.      Bodily Injury             $250,000.00 each person
                                                  $500,000.00 each occurrence or
                                                   equivalent

                b.      Property Damage           $100,000.00 each occurrence or
                                                   equivalent

                This policy shall provide coverage for all owned, hired, and
                non-owned automobiles used by Tenant.

        C.      Umbrella/Excess Liability Insurance.

                a.      Bodily Injury/            $ 3,000,000 per occurrence
                        Property Damage           $ 3,000,000 aggregate

                This policy shall be written on an umbrella/excess basis (but in
                no event shall coverage be less than primary coverages as
                described in Paragraphs A, B and C, and shall name the Insured
                Parties as additional insureds.

        D.      Fire and Extended Coverage Insurance (if Improvements are
                constructed)

                Coverage:                           Actual Replacement Value

                The policy shall include vandalism and malicious mischief
endorsements and shall be endorsed to include the Insured Parties as additional
insureds.

                                       i
<PAGE>   21

        E. Certificate of Insurance. Evidence of the insurance coverage
described in the above Paragraphs shall be represented by certificates of
insurance in form satisfactory to Landlord issued by the insurance carrier and
shall be furnished to the Landlord upon commencement of the Term. Such
certificates of insurance shall state that Landlord will be notified in writing
by the insurance carrier at least thirty (30) days prior to cancellation or
material change, and shall include, in addition to the name of the carrier and
the policy number, the names of the insured(s) and additional insured(s), the
coverages provided, the policy limits and period of coverage, the waivers of
subrogation (if requested by landlord, and there shall be attached to said
certificates, a copy of the applicable policies. Renewal certificates of
coverage will be supplied to the Landlord prior to the expiration date of any
required coverage.

                                       ii
<PAGE>   22

                                   EXHIBIT "B"
                             DESCRIPTION OF PREMISES

The land consisting of Parcels 101,102 and 103 of Parcel Map No. 16320, in the
City of Poway, County of San Diego, State of California filed in the Office of
the County Recorder of San Diego County December 10, 1990 as file No. 90-655448
of official records and the industrial and office building thereon containing
approximately 338,485 square feet and related improvements.

                                        i
<PAGE>   23

                                   EXHIBIT "C"
                       FORM OF TENANT ESTOPPEL CERTIFICATE

IPX Camelback, LLC

Re:   Premises located at 12365 Crosthwaite Circle, City of Poway, County of San
      Diego, State of California

Gentlemen:

        The undersigned, as Tenant under that certain lease dated [DATE] (the
"Lease"), made with IPX Camelback, LLC an Arizona limited liability company as
Landlord (the "Landlord"), does hereby certify:

        1. That the copy of the Lease attached hereto as Exhibit "A" is a true
and complete copy of the Lease, and there are no amendments, modifications or
extensions of or to the Lease and the Lease is now in full force and effect.

        2. That it began paying rent on ___________________, 200__, and that,
save only as may be required by the terms of the Lease, no rental has been paid
in advance, nor has the undersigned deposited any sums with Landlord as
security.

        3. That there exist no defenses or offsets to enforcement of the Lease
by the Landlord and, so far as is known to the undersigned, the Landlord is not,
as of the date hereof, in default in the performance of the Lease, nor has the
Landlord committed any breach thereof, nor has any event occurred which, with
the passage of time or the giving of notice, or both, would constitute a default
or breach by the Landlord.

        The undersigned acknowledge that you are relying on the above
representation of the undersigned and do hereby warrant and affirm to and for
your benefit, and that of your successors and assigns, that to the best of their
knowledge and belief, each of the foregoing representations is true, correct and
complete as of the date hereof.

TENANT:
Cohu, Inc. a Delaware corporation

By:_________________________________________   Date:_____________
Its:________________________________________

                                       ii

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