Document:

Exhibit 10.32

    
      Exhibit
        10.32

    

    

    AIR
      COMMERCIAL REAL ESTATE ASSOCIATION

    STANDARD
      INDUSTRIAL/COMMERCIAL

    MULTI-TENANT
      LEASE - GROSS

    

    1.     Basic
      Provisions ("Basic Provisions").

     1.1     Parties:
      This Lease ("Lease"), dated for reference purposes only
JULY
      25, 2006
      is
      made
      by and between PLETA
      & SAN GAL TRUST dba: OCEAN POINT TECH CENTRE ("Lessor")
      and
      HIFN INC., A DELAWARE CORPORATION
      ("Lessee"), (collectively the "Parties", or
      individually a "Party").

                    
      1.2(a)          Premises:
      That certain portion of the Project (as defined below), including all
      improvements therein or to be provided by Lessor under the terms of this Lease,
      commonly known by the street address of 5411
      AVENIDA ENCINAS, SUITE 120 located
      in the City of CARLSBAD,
      County
      of SAN
      DIEGO,
      State
      of CAL
      I
      FORNIA,
      with zip
      code 92008,
      as
      outlined on Exhibit 56
      hereto
      ("Premises") and generally described as (describe briefly the
      nature of the Premises): APPROXIMATELY
      2,700 RENTABLE SQUARE FEET OF OFFICE SPACE.
      In
      addition to Lessee's rights to use and occupy the Premises as hereinafter
      specified, Lessee shall have non-exclusive rights to any utility raceways of
      the
      building containing the Premises ("Building") and to the Common
      Areas (as defined in Paragraph 2.7 below), but shall not have any rights to
      the
      roof, or exterior walls of the Building or to any other buildings in the
      Project. The Premises, the Building, the Common Areas, the land upon which
      they
      are located, along with all other buildings and improvements thereon, are herein
      collectively referred to as the "Project." (See also Paragraph
      2)

    1.2(b)        
       Parking:
      8unreserved
      vehicle parking spaces. (See also Paragraph 2.6)

    1.3 
Term:
      3years
      and
0 months
      ("Original Term") commencing SEPTEMBER
      1, 2006("Commencement
      Date") and ending AUGUST
      31, 2009 ("Expiration
      Date"). (See also Paragraph 3)

    1.4 
Early
      Possession:
      N/A("Early
      Possession Date"). (See also Paragraphs 3.2 and 3.3)

    1.5 
Base
      Rent: $ 5,400.00
      per
      month ("Base Rent"), payable on the 1st
      day of
      each month commencing SEPTEMBER
      1ST.
      (See
      also Paragraph 4)

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

    1.6 Lessee's
      Share of Common Area Operating Expenses:THREE AND 28/100
      percent (3.28%) (Lessee’s Share”).

    Lessee's
      Share has been calculated by dividing the approximate square footage of the
      Premises by the approximate square footage of the Project. In the event that
      that size of the Premises and/or the Project are modified during the term of
      this Lease, Lessor shall recalculate Lessee's Share to reflect such
      modification.

                   
      1.7  
Base
      Rent and Other Monies Paid Upon Execution:

                (a)     Base
      Rent: $ 5,400.00
      for the
      period 09/01/06
      TO 09/30/06

               
      (b) 
      Common
      Area Operating Expenses: $216.00 for the period 09/01/06 TO
      09/30/06.

                       
      (c) 
Security
      Deposit:$5,886.00 ("Security Deposit”) (See
      also Paragraph 5)

                       
      (d) 
Other:
      $ ___________ for ____________________.

                       
      (e) 
Total
      Due Upon Execution of this Lease:$11,502.00.

          
      1.8 
Agreed
      Use: GENERAL
      OFFICE FOR A NETWORK SECURITY SOLUTIONS COMPANY.
      (See
      also Paragraph 6)

          
      1.9       Insuring
      Party. Lessor is the "Insuring Party". (See also
      Paragraph 8)

          
      1.10            
Real
      Estate Brokers: (See also Paragraph 15)

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

    þMONIQUE
      MEDLEY, GRUBB & ELLIS/BRE represents
      Lessor exclusively ("Lessor's Broker"); 

    þJUSTIN
      HALENZA, GRUBB & ELLIS/BRE 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 Brokers the brokerage fee agreed to
      in
      a separate written agreement (or if there is no such agreement, the
      sum of
      N/A
or
      %
      of the total Base Rent for the brokerage services rendered by the
      Brokers).

    1.11            
      Guarantor.
      The obligations of the Lessee under this Lease are to be guaranteed by
NONE
      ("Guarantor").
      (See also Paragraph 37)

    1.12            Attachments.
      Attached hereto are the following, all of which constitute a part of this
      Lease:

    þ
      an Addendum consisting
      of Paragraphs 50
      through
      55;

    þ 
a
      site plan depicting the
      Premises;

    o
      a site plan depicting the
      Project;

    þ 
a
      current set of the Rules and
      Regulations for the Project;

     

    
      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

    

     

    
      
        
          
          

        

        
          PAGE
            1 OF
            17 

          
            

          

        

        
          
          

        

      

    

    

    o
      a current set of the Rules and
      Regulations adopted by the owners' association;

    o
      a Work Letter;

    o
      other (specify): PROPOSAL
      1186 FROM NATIONA AIR & ENERGY FOR HVAC WORK.

    

    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 Rent, is an
      approximation which the Parties agree is reasonable and any payments based
      thereon are not subject to revision whether or not the actual size is more
      or
      less. NOTE:
      Lessee is advised to verify the actual size prior to executing this
      Lease.

     
      2.2     Condition.
      Lessor
      shall deliver that portion of the Premises contained within the Building
      ("Unit") 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 and in effect within thirty days following the Start
      Date, warrants that the existing electrical, plumbing, fire sprinkler, lighting,
      heating, ventilating and air conditioning systems ("HVAC"),
      loading doors, sump pumps, if any, and all other such elements in the Unit,
      other than those constructed by Lessee, shall be in good operating condition
      on
      said date, that the structural elements of the roof, bearing walls and
      foundation of the Unit shall be free of material defects, and that the Unit
      does
      not contain hazardous levels of any mold or fungi defined as toxic under
      applicable state or federal law. If a non-compliance with such warranty exists
      as of the Start Date, or if one of such systems or elements should malfunction
      or fail within the appropriate warranty period, 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, malfunction or
      failure, rectify same at Lessor's expense. The warranty periods shall be as
      follows: (i) 6 months as to the HVAC systems, and (ii) 30 days as to the
      remaining systems and other elements of the Unit. If Lessee does not give Lessor
      the required notice within the appropriate warranty period, correction of any
      such non-compliance, malfunction or failure shall be the obligation of Lessee
      at
      Lessee's sole cost and expense (except for the repairs to the fire sprinkler
      systems, roof, foundations, and/or bearing walls - see Paragraph
      7).

     
      2.3     Compliance.
      Lessor
      warrants that to the best of its knowledge the improvements on the Premises
      and
      the Common Areas comply with the building codes that were in effect at the
      time
      that each such improvement, or portion thereof, was constructed, and also with
      all applicable laws, covenants or restrictions of record, regulations, and
      ordinances in effect on the Start Date ("Applicable
      Requirements").
      Said
      warranty does not apply to the use to which Lessee will put the Premises,
      modifications which may be required by the Americans with Disabilities Act
      or
      any similar laws as a result of Lessee's use (see Paragraph 49), 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 Applicable
      Requirements, and especially the zoning are 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 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
      so
      as to require during the term of this Lease the construction of an addition
      to
      or an alteration of the Unit, Premises and/or Building, the remediation of
      any
      Hazardous Substance, or the reinforcement or other physical modification of
      the
      Unit, Premises and/or Building ("Capital
      Expenditure"),
      Lessor
      and Lessee shall allocate the cost of such work as follows:

                (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
      2 years of this Lease and the cost thereof exceeds 6 months' Base Rent, Lessee
      may instead terminate this Lease unless Lessor notifies Lessee, in writing,
      within 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 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 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 the portion of such costs
      reasonably attributable to the Premises pursuant to the formula set out in
      Paragraph 7.1 (d); provided, however, that if such Capital Expenditure is
      required during the last 2 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 90 days prior written notice
      to Lessee unless Lessee notifies Lessor, in writing, within 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 fails 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 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 either: (i) immediately cease
      such changed use or intensity of use and/or take such other steps as may be
      necessary to eliminate the requirement for such Capital Expenditure, or (ii)
      complete such Capital Expenditure at its own expense. 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 the Americans with
      Disabilities Act), 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 Brokers have 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: (i)
      Brokers have made no representations, promises or warranties concerning Lessee's
      ability to honor
      the
      Lease or suitability to occupy the Premises, and (ii) 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.  

    2.6     Vehicle
      Parking. Lessee
      shall be entitled to use the number of Parking Spaces specified in Paragraph
      1.2(b) on those portions of

    the
      Common Areas designated from time to time by Lessor for parking. Lessee shall
      not use more parking spaces than said number. Said parking spaces shall be
      used
      for parking by vehicles no larger than full-size passenger automobiles or
      pick-up trucks, herein called “Permitted
      Size Vehicles.”

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

    

     

    
      
        
          
          

        

        
          PAGE
            2 OF
            17 

          
            

          

        

        
          
          

        

      

    

     

    
 

    Lessor
      may regulate the loading and unloading of vehicles by adopting Rules and
      Regulations as provided in Paragraph 2.9. No vehicles other than Permitted
      Size
      Vehicles may be parked in the Common Area without the prior written permission
      of Lessor. In addition:

    (a) Lessee
      shall not permit or allow any vehicles that belong to or are controlled by
      Lessee or Lessee's employees, suppliers, shippers, customers, contractors or
      invitees to be loaded, unloaded, or parked in areas other than those designated
      by Lessor for such activities.

    (b) Lessee
      shall not service or store any vehicles in the Common Areas.

    (c) If
      Lessee
      permits or allows any of the prohibited activities described in this Paragraph
      2.6, then Lessor shall have the right, without notice, in addition to such
      other
      rights and remedies that it may have, to remove or tow away the vehicle involved
      and charge the cost to Lessee, which cost shall be immediately payable upon
      demand by Lessor.

    2.7     Common
      Areas
      - Definition.
      The
      term "Common Areas" is defined as all areas and facilities
      outside the Premises and within the exterior
      boundary line of the Project and interior utility raceways and installations
      within the Unit that are provided and designated by the Lessor from time to
      time
      for the general non-exclusive use of Lessor, Lessee and other tenants of the
      Project and their respective employees, suppliers, shippers, customers,
      contractors and invitees, including parking areas, loading and unloading areas,
      trash areas, roadways, walkways, driveways and landscaped areas.

    2.8    Common
      Areas - Lessee's Rights.
      Lessor
      grants to Lessee, for the benefit of Lessee and its employees, suppliers,
      shippers, contractors, customers and invitees, during the term of this Lease,
      the non-exclusive right to use, in common with others entitled to such use,
      the
      Common Areas as they exist from time to time, subject to any rights, powers,
      and
      privileges reserved by Lessor under the terms hereof or under the terms of
      any
      rules and regulations or restrictions governing the use of the Project. Under
      no
      circumstances shall the right herein granted to use the Common Areas be deemed
      to include the right to store any property, temporarily or permanently, in
      the
      Common Areas. Any such storage shall be permitted only by the prior written
      consent of Lessor or Lessor's designated agent, which consent may be revoked
      at
      any time. In the event that any unauthorized storage shall occur, then Lessor
      shall have the right, without notice, in addition to such other rights and
      remedies that it may have, to remove the property and charge the cost to Lessee,
      which cost shall be immediately payable upon demand by Lessor.

    2.9     Common
      Areas
      - Rules and Regulations.
      Lessor
      or such other person(s) as Lessor may appoint shall have the exclusive control
      and management of the Common Areas and shall have the right, from time to time,
      to establish, modify, amend and enforce reasonable rules and regulations ("Rules
      and Regulations") for the management, safety, care, and cleanliness of the
      grounds, the parking and unloading of vehicles and the
      preservation of good order, as well as for the convenience of other occupants
      or
      tenants of the Building and the Project and their invitees. Lessee agrees to
      abide by and conform to all such Rules and Regulations, and shall use its best
      efforts to cause its employees, suppliers, shippers, customers, contractors
      and
      invitees to so abide and conform. Lessor shall not be responsible to Lessee
      for
      the non-compliance with said Rules and Regulations by other tenants of the
      Project.

    2.10     Common
      Areas
      - Changes.
      Lessor
      shall have the right, in Lessor's sole discretion, from time to
      time:

    (a) To
      make
      changes to the Common Areas. including, without limitation, changes in the
      location, size, shape and number of driveways, entrances, parking spaces,
      parking areas, loading and unloading areas, ingress, egress, direction of
      traffic, landscaped areas, walkways and utility raceways;

           
      (b) To
      close
      temporarily any of the Common Areas for maintenance purposes so long as
      reasonable access to the Premises remains available;

            (c) To
      designate other land outside the boundaries of the Project to be a part of
      the
      Common Areas;

           
      (d)
      To add
      additional buildings and improvements to the Common Areas;

          
       (e) To
      use
      the Common Areas while engaged in making additional improvements, repairs or
      alterations to the Project, or any portion thereof; and

    (f) To
      do and
      perform such other acts and make such other changes in, to or with respect
      to
      the Common Areas and Project as Lessor may, in the exercise of sound business
      judgment, deem to be appropriate.

    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 Lessee's Share of Common Area Operating Expenses, Real
      Property Taxes and insurance premiums and to maintain the Premises) shall 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
      or change the Expiration Date. Lessee shall not, however, be obligated to pay
      Rent or perform its other obligations until Lessor delivers possession of the
      Premises and any period of rent abatement that Lessee would otherwise have
      enjoyed shall run from the date of the delivery of possession and continue
      for a
      period equal to what Lessee would otherwise have enjoyed, but minus any days
      of
      delay caused by the acts or omissions of Lessee. If possession is not delivered
      within 60 days after the Commencement Date, Lessee may, at its option, by notice
      in writing within 10 days after the end of such 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 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 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     
Common
      Area
      Operating Expenses.
      Lessee
      shall pay to Lessor during the term hereof, in addition to the Base Rent,
      Lessee's Share (as specified in Paragraph 1.6) of all Common Area Operating
      Expenses, as hereinafter defined, during each calendar year of the term of
      this
      Lease, in accordance with the following provisions:

    (a)     "Common
      Area Operating Expenses" are defined, for purposes of this Lease, as
      all costs incurred by Lessor relating to the ownership and operation of the
      Project, including, but not limited to, the following:

        (i) The
      operation, repair and maintenance, in neat, clean, good order and condition,
      but
      not the replacement (see 

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

    

    

      
        
          
          

        

        
          PAGE
            3 OF
            17 

          
            

          

        

        
          
          

        

      

    

     

     

    subparagraph
      (e), of the following:

                (aa)      The
      Common Areas and Common Area improvements, including parking areas, loading
      and
      unloading areas, trash areas, roadways, parkways, walkways, driveways,
      landscaped areas, bumpers, irrigation systems, Common Area lighting facilities,
      fences and gates, elevators, roofs, and roof drainage systems.

                    (bb)      Exterior
      signs and any tenant directories.

                    (cc)     Any
      fire
      sprinkler systems.

               
      (ii)  The
      cost
      of water, gas, electricity and telephone to service the Common Areas and any
      utilities not separately metered.

        (iii)     Trash
      disposal, pest control services, property management, security services, owner's
      association dues and fees,
      the
      cost to repaint the exterior of any structures and the cost of any environmental
      inspections. 

        (iv)    Reserves
      set aside
      for maintenance and repair of Common Areas and Common Area
      equipment.

        (v)     Any
      increase
      above the Base Real Property Taxes (as defined in Paragraph 10).

        (vi)    Any
      "Insurance Cost
      Increase" (as defined in Paragraph 8).

        (vii)          
      Any
      deductible portion of an insured loss concerning the Building or the Common
      Areas.

        (viii)     
Auditors',
      accountants' and attorneys' fees and costs related to the operation,
      maintenance, repair and replacement
      of the Project.

        (ix)     The
      cost of
      any Capital Expenditure to the Building or the Project not covered under the
      provisions of Paragraph
      2.3 provided; however, that Lessor shall allocate the cost of any such Capital
      Expenditure over a 12 year period and Lessee shall not be required to pay more
      than Lessee's Share of 1/144th of the cost of such Capital Expenditure in any
      given month.

        (x)     Any
      other
      services to be provided by Lessor that are stated elsewhere in this Lease to
      be
      a Common Area Operating Expense.

    (b)     Any
      Common
      Area Operating Expenses and Real Property Taxes that are specifically
      attributable to the Unit, the Building or to any other building in the Project
      or to the operation, repair and maintenance thereof, shall be allocated entirely
      to such Unit, Building, or other building. However, any Common Area Operating
      Expenses and Real Property Taxes that are not specifically attributable to
      the
      Building or to any other building or to the operation, repair and maintenance
      thereof, shall be equitably allocated by Lessor to all buildings in the
      Project.

    (c)     The
      inclusion
      of the improvements, facilities and services set forth in Subparagraph 4.2(a)
      shall not be deemed to impose an obligation upon Lessor to either have said
      improvements or facilities or to provide those services unless the Project
      already has the same, Lessor already provides the services, or Lessor has agreed
      elsewhere in this Lease to provide the same or some of them.

    (d)     Lessee's
      Share of Common Area Operating Expenses is payable monthly on the same day
      as
      the Base Rent is due hereunder. The amount of such payments shall be based
      on
      Lessor's estimate of the annual Common Area Operating Expenses. Within
      60 days after written request (but not more than once each
      year)
      From
      time to time Lessor shall deliver to Lessee a reasonably detailed statement
      showing Lessee's Share of the actual Common Area Operating Expenses incurred
      during the preceding year. If Lessee's payments during such year exceed Lessee's
      Share, Lessor shall credit the amount of such over-payment against Lessee's
      future payments. If Lessee's payments during such year were less than Lessee's
      Share, Lessee shall pay to Lessor the amount of the deficiency within 10 days
      after delivery by Lessor to Lessee of the statement.

    (e)      Except
      as
      provided in paragraph 4.2(a)(viii), Common Area Operating Expenses shall not
      include the cost of replacing equipment or capital components such as the roof,
      foundations, exterior walls or Common Area capital improvements, such as the
      parking lot paving, elevators, fences that have a useful life for accounting
      purposes of 5 years or more.

    (f)      Common
      Area
      Operating Expenses shall not include any expenses paid by any tenant directly
      to
      third parties, or as to which Lessor is otherwise reimbursed by any third party,
      other tenant, or insurance proceeds.

    4.3            
      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. All monetary amounts
      shall
      be rounded to the nearest whole dollar. In the event that any statement or
      invoice prepared by Lessor is inaccurate such inaccuracy shall not constitute
      a
      waiver and Lessee shall be obligated to pay the amount set forth in this Lease.
      Rent for any period during the term hereof which is for less than one 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. In the event that any check,
      draft, or other instrument of payment given by Lessee to Lessor is dishonored
      for any reason, Lessee agrees to pay to Lessor the sum of
      $25 in
      addition to any Late Charge and Lessor, at its option, may require all future
      Rent be paid by cashier's check. Payments will be applied first to accrued
      late
      charges and attorney's fees, second to accrued interest, then to Base Rent
      and
      Common Area Operating Expenses, and any remaining amount to any other
      outstanding charges or costs.

    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 the Security Deposit, Lessee shall
      within 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 such change in financial condition. Lessor shall not be required
      to keep the Security Deposit separate from its general accounts. Within 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 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 occupants of or causes damage to neighboring premises or properties.
      Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow
      in
      the Premises any pets, animals, birds, fish, or reptiles. 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 Building or the mechanical or electrical systems
      therein, and/or is not significantly more burdensome to the Project. If Lessor
      elects to withhold consent, Lessor shall within 7 days

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

    

    

      
        
          
          

        

        
          PAGE
            4 OF
            17 

          
            

          

        

        
          
          

        

      

    

     

    after
      such request give written notification of same, which notice shall include
      an
      explanation of Lessor's objections to the change in the Agreed Use.

    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, ordinary office supplies (copier
      toner, liquid paper, glue, etc.) and common household cleaning materials, 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, comply with all
      Applicable Requirements and 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 areas outside of the Project not caused or contributed to by Lessee).
      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 suffered as
      a
      direct result of Hazardous Substances on the Premises prior to Lessee taking
      possession 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 for any investigations or remediation
      measures required by governmental entities having jurisdiction with respect
      to
      the existence of Hazardous Substances on the Premises prior to Lessee taking
      possession, 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 (see Paragraph 9.1 (e)) 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 12 times the then monthly
      Base Rent or $100,000, whichever is greater, give written notice to Lessee,
      within 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 60 days following the date of such notice. In the event Lessor elects
      to give a termination notice, Lessee may, within 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 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 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 such Requirements, without regard to whether
      said
      Requirements are now in effect or become effective after the Start Date. Lessee
      shall, within 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. Likewise, Lessee shall
      immediately give written notice to Lessor of: (i) any water damage to the
      Premises and any suspected seepage, pooling, dampness or other condition
      conducive to the production of mold; or (ii) any mustiness or other odors that
      might indicate the presence of mold in the Premises.

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

      
        
          
          

        

        
          PAGE
            5 OF
            17 

          
            

          

        

        
          
          

        

      

    

    6.4     Inspection;
      Compliance. Lessor and Lessor's "Lender"
      (as
      defined in Paragraph 30) and consultants shall have the right to enter into
      Premises at any time, in the case of an emergency, and otherwise at reasonable
      times after reasonable notice, 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 Hazardous Substance condition (see Paragraph 9.1) 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 inspection, so long as such inspection is reasonably
      related to the violation or contamination. In addition, Lessee shall provide
      copies of all relevant material safety data sheets (MSDS) to
      Lessor within 10 days of the receipt of written request therefor.

    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 (intended for Lessee's exclusive use,
      no matter where located), 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, HVAC equipment,
      electrical, lighting facilities, boilers, pressure vessels, fixtures, interior
      walls, interior surfaces of exterior walls, ceilings, floors, windows, doors,
      plate glass, and skylights but excluding any items which are the responsibility
      of Lessor pursuant to Paragraph 7.2. 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.

                   (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) clarifiers, and (iv) any other equipment, if
      reasonably required by Lessor. However, Lessor reserves the right, upon notice
      to Lessee, to procure and maintain any or all of such service contracts, and
      Lessee shall reimburse Lessor, upon demand, for the cost thereof.

                  
      (c) Failure
      to Perform.
      If
      Lessee fails to perform Lessee's obligations under this Paragraph 7.1, Lessor
      may enter upon the Premises after 10 days' prior written notice to Lessee
      (except in the case of an emergency, in which case no notice shall be required),
      perform such obligations on Lessee's behalf, and put the Premises in good order,
      condition and repair, and Lessee shall promptly pay to Lessor a sum equal to
      115% of the cost thereof.

               (d)
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 an item 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 item, then such item 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 144 (i.e. 1/144th of the cost
      per month). Lessee shall pay interest on the unamortized balance but may prepay
      its obligation at any time.

    7.2     Lessor's
      Obligations. Subject to the provisions of Paragraphs 2.2 (Condition),
      2.3 (Compliance), 4.2 (Common Area Operating Expenses),
      6 (Use), 7.1 (Lessee's Obligations), 9 (Damage or Destruction) and 14
      (Condemnation), Lessor, subject to reimbursement pursuant to Paragraph 4.2,
      shall keep in good order, condition and repair the foundations, exterior walls,
      structural condition of interior bearing walls, exterior roof, fire sprinkler
      system, Common Area fire alarm and/or smoke detection systems, fire hydrants,
      parking lots, walkways, parkways, driveways, landscaping, fences, signs and
      utility systems serving the Common Areas and all parts thereof, as well as
      providing the services for which there is a Common Area Operating Expense
      pursuant to Paragraph 4.2. Lessor shall not be obligated to paint the exterior
      or interior surfaces of exterior walls nor shall Lessor be obligated to
      maintain, repair or replace windows, doors or plate glass of the Premises.
      Lessee expressly waives 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.
      The term
      "Utility Installations" refers to all floor and window coverings, air and/or
      vacuum lines, power panels, electrical distribution, security and fire
      protection systems, communication cabling, 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).

              (b)
Consent.
      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, will not affect the electrical, plumbing, HVAC, and/or life
      safety systems, and the cumulative cost thereof during this Lease as extended
      does not exceed a sum equal to 3 month's Base Rent in the aggregate or a sum
      equal to one month's Base Rent in anyone year. Notwithstanding the foregoing,
      Lessee shall not make or permit any roof penetrations and/or install anything
      on
      the roof without the prior written approval of Lessor. Lessor may, as a
      precondition to granting such approval, require Lessee to utilize a contractor
      chosen and/or approved by Lessor. 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 in excess of one month's Base Rent, Lessor may
      condition its consent upon Lessee providing a lien and completion bond in an
      amount equal to 150% of the estimated cost of such Alteration or Utility
      Installation and/or upon Lessee's posting an additional Security Deposit with
      Lessor.

              (c)
Liens;
      Bonds.
      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 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 150% of 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.

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

      
        
          
          

        

        
          PAGE
            6 OF
            17 

          
            

          

        

        
          
          

        

      

    

     

        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 90 and not
      later than 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. Notwithstanding
      the
      foregoing, if this Lease is for 12 months or less, then Lessee shall surrender
      the Premises in the same condition as delivered to Lessee on the Start Date
      with
      NO allowance for ordinary wear and tear. 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. Lessee
      shall
      also completely remove from the Premises any and all Hazardous Substances
      brought onto the Premises by or for Lessee, or any third party (except Hazardous
      Substances which were deposited via underground migration from areas outside
      of
      the Premises) even if such removal would require Lessee to perform or pay for
      work that exceeds statutory requirements. Trade Fixtures shall remain the
property
      of Lessee and shall be removed by Lessee. Any personal property of Lessee not
      removed on or before the Expiration Date or any earlier termination date shall
      be deemed to have been abandoned by Lessee and may be disposed of or retained
      by
      Lessor as Lessor may desire. 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
      of
      Premium Increases.

         
      (a)     As used herein, the
      term "Insurance
      Cost Increase"
      is
      defined as any increase in the actual cost of the insurance applicable to the
      Building and/or the Project and required to be carried by Lessor, pursuant
      to
      Paragraphs 8.2(b), 8.3(a) and 8.3(b), ("Required Insurance"), over and above
      the
      Base Premium, as hereinafter defined, calculated on an annual basis. Insurance
      Cost Increase shall include, but not be limited to, requirements of the holder
      of a mortgage or deed of trust covering the Premises, Building and/or Project,
      increased valuation of the Premises, Building and/or Project, and/or a general
      premium rate increase. The term Insurance Cost Increase shall not, however,
      include any premium increases resulting from the nature of the occupancy of
      any
      other tenant of the Building. If the parties insert a dollar amount in Paragraph
      1.9, such amount shall be considered the "Base
      Premium."
      The Base
      Premium shall be the annual premium applicable to the 12 month period
      immediately preceding the Start Date. If, however, the Project was not insured
      for the entirety of such 12 month period, then the Base Premium shall be the
      lowest annual premium reasonably obtainable for the Required Insurance as of
      the
      Start Date, assuming the most nominal use possible of the Building. In no event,
      however, shall Lessee be responsible for any portion of the premium cost
      attributable to liability insurance coverage in excess of $2,000,000 procured
      under Paragraph 8.2(b).

         
      (b)     Lessee shall pay any
      Insurance Cost Increase to Lessor pursuant to Paragraph 4.2. Premiums
      for policy periods commencing prior to, or extending beyond, the term of this
      Lease shall be prorated to coincide with the corresponding Start Date or
      Expiration Date.

    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 as an additional insured 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 $1,000,000 per occurrence
      with
      an annual aggregate of not less than $2,000,000. Lessee shall add Lessor as
      an
      additional insured by means of an endorsement at least as broad as the Insurance
      Service Organization's "Additional Insured-Managers or Lessors of Premises"
      Endorsement and coverage shall also be extended to include damage caused by
      heat, smoke or fumes from a hostile fire. 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. Lessee shall provide an endorsement on
      its
      liability policy(ies) which provides that its insurance 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.
      Lessor
      shall obtain and keep in force a policy or policies of insurance in the name
      of
      Lessor, with loss payable to Lessor, any ground-lessor, and to any Lender
      insuring loss or damage to the Premises. The amount of such insurance shall
      be
      equal to the full insurable replacement cost of the Premises, as the same shall
      exist from time to time, or the amount required by any Lender, but in no event
      more than the commercially reasonable and available insurable value thereof.
      Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee's
      personal property shall be insured by Lessee under Paragraph 8.4. 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.

              (b)
Rental
      Value.
      Lessor
      shall also 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 year with an extended period of indemnity for an additional 180 days
      ("Rental
      Value insurance"). 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 12 month
      period.

         
(c)
      Adjacent
      Premises.
      Lessee
      shall pay for any increase in the premiums for the property insurance of the
      Building and for the Common
      Areas or other buildings in the Project if said increase is caused by Lessee's
      acts, omissions, use or occupancy of the Premises.

         
(d)
      Lessee's
      Improvements.
      Since
      Lessor is the Insuring Party, Lessor shall not be required to insure Lessee
      Owned Alterations and Utility Installations unless the item in question has
      become the property of Lessor under the terms of this Lease.

    8.4 Lessee's
      Property; Business Interruption Insurance.

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

    

     

    
      
        
          
          

        

        
          PAGE
            7 OF
            17 

          
            

          

        

        
          
          

        

      

    

     

              (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 of 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 A-. VI,
      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 30 days prior written notice to Lessor. Lessee shall, at least 10 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 fail 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, indoor air quality, the presence of mold 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, 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 nor from the failure of Lessor to enforce
      the provisions of any other lease in the Project. 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.

    8.9     Failure
      to
      Provide Insurance.
      Lessee
      acknowledges that any failure on its part to obtain or maintain the insurance
      required herein will expose Lessor to risks and potentially cause Lessor to
      incur costs not contemplated by this Lease, the extent of which will be
      extremely difficult to ascertain. Accordingly, for any month or portion thereof
      that Lessee does not maintain the required insurance and/or does not provide
      Lessor with the required binders or certificates evidencing the existence of
      the
      required insurance, the Base Rent shall be automatically increased, without
      any
      requirement for notice to Lessee, by an amount equal to 10% of the then existing
      Base Rent or $100, whichever is greater. The parties agree that such increase
      in
      Base Rent represents fair and reasonable compensation for the additional
      risk/costs that Lessor will incur by reason of Lessee's failure to maintain
      the
      required insurance. Such increase in Base Rent shall in no event constitute
      a
      waiver of Lessee's Default or Breach with respect to the failure to maintain
      such insurance, prevent the exercise of any of the other rights and remedies
      granted hereunder, nor relieve Lessee of its obligation to maintain the
      insurance specified in this Lease.

    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 3 months or less from the date of the damage or destruction, and
      the
      cost thereof does not exceed a sum equal to 6 month's Base Rent. Lessor shall
      notify Lessee in writing within 30 days from the date of the damage or
      destruction as to whether or not the damage is Partial or Total. Notwithstanding
      the foregoing, Premises Partial Damage shall not include damage to windows,
      doors, and/or other similar items which Lessee has the responsibility to repair
      or replace pursuant to the provisions of Paragraph 7.1.

              (b)
"Premises
      Total Destruction"
      shall
      mean damage or destruction to the improvements on the Premises, other than
      Lessee Owned Alterations and Utility Installations and Trade Fixtures, which
      cannot reasonably be repaired in 3 months or less from the date of the damage
      or
      destruction and/or the cost thereof exceeds a sum equal to 6 month's Base Rent.
      Lessor shall notify Lessee in writing within 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 which requires repair, remediation, or
      restoration.

    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 as and when required to
      complete said repairs.

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

    
      
        
          
          

        

        
          PAGE
            8 OF
            17 

          
            

          

        

        
          
          

        

      

    

    

    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 10 days following receipt of written notice
      of such shortage and request therefor. If Lessor receives said funds or adequate
      assurance thereof within said 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
      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 (ii) have this Lease terminate 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.

    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 30 days after receipt by Lessor of knowledge
      of
      the occurrence of such damage. Such termination shall be effective 60 days
      following the date of such notice. In the event Lessor elects to terminate
      this
      Lease, Lessee shall have the right within 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
      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 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 6 months of this Lease there is damage for which the
      cost to repair exceeds one month's Base Rent, whether or not an Insured Loss,
      Lessor may terminate this Lease effective 60 days following the date of
      occurrence of such damage by giving a written termination notice to Lessee
      within 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 10 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 fails 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 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
      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 60 days following the giving of such notice.
      If Lessee gives such notice and such repair or restoration is not commenced
      within 30 days thereafter, this Lease shall terminate as of the date specified
      in said notice. If the repair or restoration is commenced within such 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    Definitions

              (a)
"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 Project, 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
      Project 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
      Project is located. The term "Real Property Taxes" shall also include any tax,
      fee, levy, assessment or charge, or any increase therein: (i) imposed by reason
      of events occurring during the term of this Lease, including but not limited
      to,
      a change in the ownership of the Project, (ii) a change in the improvements
      thereon, and/or (iii) levied or assessed on machinery or equipment provided
      by
      Lessor to Lessee pursuant to this Lease.

           (b)
      "Base
      Real Property Taxes."
      As used
      herein, the term "Base Real Property Taxes" shall be the amount
      of Real Property Taxes, which are assessed against the Premises, Building,
      Project or Common Areas in the calendar year during which the Lease is executed.
      In calculating Real Property Taxes for any calendar year, the Real Property
      Taxes for any real estate tax year shall be included in the calculation of
      Real
      Property Taxes for such calendar year based upon the number of days which such
      calendar year and tax year have in common.

    10.2     Payment
      of Taxes.
      Except
      as otherwise provided in Paragraph 10.3, Lessor shall pay the Real Property
      Taxes applicable to the Project, and said payments shall be included in the
      calculation of Common Area Operating Expenses in accordance with the provisions
      of Paragraph 4.2.

           
      10.3      Additional
      Improvements.
      Common
      Area Operating Expenses shall not include Real Property Taxes specified in
      the
      tax assessor's records and work sheets as being caused by additional
      improvements placed upon the Project by other lessees or by Lessor for the
      exclusive enjoyment of such other lessees. Notwithstanding Paragraph 10.2
      hereof, Lessee shall, however, pay to Lessor at the time Common
      Area

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

      
        
          
          

        

        
          PAGE
            9 OF
            17 

          
            

          

        

        
          
          

        

      

    

     

    Operating
      Expenses are payable under Paragraph 4.2, the entirety of any increase in Real
      Property Taxes if assessed solely by reason of Alterations, Trade Fixtures
      or
      Utility Installations placed upon the Premises by Lessee or at Lessee's request
      or by reason of any alterations or improvements to the Premises made by Lessor
      subsequent to the execution of this Lease by the Parties.

           
      10.4      Joint
      Assessment.
      If the
      Building is not separately assessed, Real Property Taxe5 allocated to the
      Building 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 determined by Lessor from the respective valuations assigned
      in
      the assessor's work sheets or such other information as may be reasonably
      available. Lessor's reasonable determination thereof, in good faith, shall
      be
      conclusive.

           
      10.5      Personal
      Property Taxes. Lessee
      shall pay prior to delinquency all taxes assessed against and levied upon Lessee
      Owned Alterations and Utility Installations, Trade Fixtures, furnishings,
      equipment and all personal property of Lessee contained in the Premises. When
      possible, Lessee shall cause its Lessee Owned Alterations and Utility
      Installations, Trade Fixtures, furnishings, equipment and all other personal
      property to be assessed and billed separately from the real property of Lessor.
      If any of Lessee's said property shall be assessed with Lessor's real property,
      Lessee shall pay Lessor the taxes attributable to Lessee's property within
      10
      days after receipt of a written statement setting forth the taxes applicable
      to
      Lessee's property.

    11.     Utilities
      and Services.
      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. Notwithstanding the provisions of Paragraph 4.2, if at any time in
      Lessor's sole judgment, Lessor determines that Lessee is using a
      disproportionate amount of water, electricity or other commonly metered
      utilities, or that Lessee is generating such a large volume of trash as to
      require an increase in the size of the trash receptacle and/or an increase
      in
      the number of times per month that it is emptied, then Lessor may increase
      Lessee's Base Rent by an amount equal to such increased costs. There shall
      be no
      abatement of Rent and Lessor shall not be liable in any respect whatsoever
      for
      the inadequacy, stoppage, interruption or discontinuance of any utility or
      service due to riot, strike, labor dispute, breakdown, accident, repair or
      other
      cause beyond Lessor's reasonable control or in cooperation with governmental
      request or directions.

    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.

                  
      (b) Unless Lessee is a corporation and its stock is publicly traded on a
      national stock exchange, a change in the control of Lessee shall constitute
      an
      assignment requiring consent. The transfer, on a cumulative basis, of 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
      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 of 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 30 days written notice, increase
      the monthly Base Rent to 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 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 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. 

              (f)
      Lessor may reasonably
      withhold consent to a proposed assignment or subletting if Lessee is in Default
      at the time consent is requested.

                                 
      (g) Notwithstanding the foregoing, allowing a diminimus portion of the Premises,
      ie. 20 square feet or less, to be used by a third party vendor in connection
      with the installation of a vending machine or payphone shall not constitute
      a
      subletting.

    12.2     Terms
      and
      Conditions Applicable to Assignment and Subletting.

              (a)
      Regardless of Lessor's
      consent, no assignment or subletting shall: (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 $500 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. (See also Paragraph 36)

              (f)
      Any assignee of, or sublessee
      under, this Lease shall, by reason of accepting such assignment, entering into
      such sublease, or entering into possession of the Premises or any portion
      thereof, 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.

         
(g)
      Lessor's consent to any assignment or subletting shall not transfer to the
      assignee or sublessee any Option granted to the original Lessee by this Lease
      unless such transfer is specifically consented to by Lessor in writing. (See
      Paragraph 39.2)

    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. In
      the
      event that the amount collected by Lessor exceeds Lessee's then outstanding
      obligations 

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

    

     

    
      
        
          
          

        

        
          PAGE
            10 OF
            17 

          
            

          

        

        
          
          

        

      

    

     

     

    any
      such
      excess shall be refunded to Lessee. 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 and Regulations 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 3 businessdays
      following written notice to Lessee.

         
      (c)     The commission of
      waste, act or acts constituting public or private nuisance, and/or an illegal
      activity on the Premises by Lessee, where such actions continue for a period
      of
      3 businessdays
      following written notice to Lessee.

         
      (d)     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) an Estoppel Certificate, (v) a
      requested subordination, (vi) evidence concerning any guaranty and/or Guarantor,
      (vii) any document requested under Paragraph 41, (viii) material data safety
      sheets (MSDS), or (ix) 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 10 days following written notice to
      Lessee.

         
      (e)     A Default by Lessee
      as to the terms, covenants, conditions or provisions of this Lease, or of the
      rules adopted under Paragraph 2.9 hereof, other than those described in
      subparagraphs 13.1(a), (b), (c) or (d), above, where such Default continues
      for
      a period of 30 days after written notice; provided, however, that if the nature
      of Lessee's Default is such that more than 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 30 day period and thereafter diligently prosecutes such cure
      to
      completion.

         
      (f)     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 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 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 30 days; provided, however, in the event that
      any provision of this subparagraph 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, (Hi) 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 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.

    13.2     Remedies.
      If
      Lessee fails to perform any of its affirmative duties or obligations, within
      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. Lessee
      shall
      pay to Lessor an amount equal to 115% of the costs and expenses incurred by
      Lessor in such performance upon receipt of an invoice therefor. 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 Premises, 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 (Hi) 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. 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

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

    

     

    
      
        
          
          

        

        
          PAGE
            11 OF
            17 

          
            

          

        

        
          
          

        

      

    

    greater
      or 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 5 days after such amount shall be due, then, without any requirement
      for
      notice to Lessee, Lessee shall immediately pay to Lessor a one-time late charge
      equal to 10% of each such overdue amount or $100, whichever is greater. 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
      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 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 31st day
      after
      it was due as to non-scheduled payments. The interest
      ("Interest") charged shall be computed at the rate of 10% per
      annum 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 fails 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
      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 30 days are
      reasonably required for its performance, then Lessor shall not be in breach
      if
      performance is commenced within such 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 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 the actual and reasonable cost to perform such
      cure, provided however, that such offset shall not exceed an amount equal to
      the
      greater of one month's Base Rent or the Security Deposit, reserving Lessee's
      right to reimbursement from Lessor for any such expense in excess of such
      offset. 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 10%
      of
      the floor area of the Unit, or more than 25% of Lessee's Reserved Parking
      Spaces, is taken by Condemnation, Lessee may, at Lessee's option, to be
      exercised in writing within 10 days after Lessor shall have given Lessee written
      notice of such taking (or in the absence of such notice, within 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.     Brokerage
      Fees.

    15.1     Additional
      Commission.
      In addition to the payments owed pursuant t0 Paragraph 1.10 above, and unless
      Lesser and the Brokers otherwise agree in writing, Lessor agrees that: (a)
      if
      Lessee exercises any Option, (b) if Lessee acquires from Lessor any rights
      to
      the Premises or other premises owned by Lessor and located within the Project,
      (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 the Brokers in effect at the
      time of the execution of this Lease.

    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. Brokers shall be third party beneficiaries of
      the
      provisions of Paragraphs 1.10, 15, 22 and 31. If Lessor fails to pay to Brokers
      any amounts due as and for brokerage fees pertaining to this Lease when due,
      then such amounts shall accrue Interest. In addition, if Lessor fails 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 fails to pay such amounts within
      10 days after said notice, Lessee 8hall 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 Lossor's Broker for the limited purpose of collecting any
      Brokerage fee owed.

    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 

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

      
        
          
          

        

        
          PAGE
            12 OF
            17 

          
            

          

        

        
          
          

        

      

    

     

    or
      other
      similar party by reason of any dealings or actions of the indemnifying Party,
      including any costs, expenses, attorneys' fees reasonably incurred with respect
      thereto.

    16.     Estoppel
      Certificates.

              (a)
      Each Party (as "Responding
      Party")
      shall
      within 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 AIR Commercial 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
      fail to execute or deliver the Estoppel Certificate within such 10 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 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.

    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.
      The
      obligations of Lessor under this Lease shall not constitute personal obligations
      of Lessor, or its partners, members, 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 Lessor's partners, members, 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 use, 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 or applicable law 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 72 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
      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 (confirmation report from fax machine
      is
      sufficient), 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.     Disclosures
      Regarding The Nature of a Real Estate Agency Relationship.

    (a)      When
      entering
      into a discussion with a real estate agent regarding a real estate transaction,
      a Lessor or Lessee should from the outset understand what type of agency
      relationship or representation it has with the agent or agents in the
      transaction. Lessor and Lessee acknowledge being advised by the Brokers in
      this
      transaction, as follows:

        (i)      Lessor's
      Agent. A
      Lessor's agent under a listing agreement with the Lessor acts as the agent
      for
      the Lessor only. A Lessor's agent or subagent has the following affirmative
      obligations: To
      the Lessor:
      A
      fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings
      with
      the Lessor. To
      the Lessee and the Lessor:
      a.
      Diligent exercise of reasonable skills and care in performance of the agent's
      duties. b. A duty of honest and fair dealing and good faith. c. A duty to
      disclose all facts known to the agent materially affecting the value or
      desirability of the property that are not known to, or within the diligent
      attention and observation of, the Parties. An agent is not obligated to reveal
      to either Party any confidential information obtained
      from the other Party
      which does not involve the affirmative duties set forth above.

              
      (ii)     Lessee's
      Agent.
      An
      agent
      can agree to act as agent for the Lessee only. In these situations, the agent
      is
      not the

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

      
        
          
          

        

        
          PAGE
            13 OF
            17 

          
            

          

        

        
          
          

        

      

    

     

     

    Lessor's
      agent, even if by agreement the agent may receive compensation for services
      rendered, either in full or in part from the Lessor. An agent acting only for
      a
      Lessee has the following affirmative obligations. To
      the Lessee: A
      fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings
      with
      the Lessee. To
      the Lessee and the Lessor:
      a.
      Diligent exercise of reasonable skills and care in performance of the agent's
      duties. b. A duty of honest and fair dealing and good faith. c. A duty to
      disclose all facts known to the agent materially affecting the value or
      desirability of the property that are not known to, or within the diligent
      attention and observation of, the Parties. An agent is not obligated to reveal
      to either Party any confidential information obtained from the other Party
      which
      does not involve the affirmative duties set forth above.

       (iii)     Agent
      Representing Both Lessor and Lessee.
      A
      real
      estate agent, either acting directly or
      through one or more associate licenses, can legally be the agent of both the
      Lessor and the Lessee in a transaction, but only with the knowledge and consent
      of both the Lessor and the Lessee. In a dual agency situation, the agent has
      the
      following affirmative obligations to both the Lessor and the Lessee: a. A
      fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings
      with either Lessor or the Lessee. b. Other duties to the Lessor and the Lessee
      as stated above in subparagraphs (i) or (ii). In representing both Lessor and
      Lessee, the agent may not without the express permission of the respective
      Party, disclose to the other Party that the Lessor will accept rent in an amount
      less than that indicated in the listing or that the Lessee is willing to pay
      a
      higher rent than that offered. The above duties of the agent in a real estate
      transaction do not relieve a Lessor or Lessee from the responsibility to protect
      their own interests. Lessor and Lessee should carefully read all agreements
      to
      assure that they adequately express their understanding of the transaction.
      A
      real estate agent is a person qualified to advise about real estate. If legal
      or
      tax advice is desired, consult a competent professional.

    (b)     Brokers
      have no responsibility with respect to any default or breach hereof by either
      Party. The Parties agree that no lawsuit or other legal proceeding involving
      any
      breach of duty, error or omission relating to this Lease may be brought against
      Broker
      more than one year after the Start Date and that the liability (including court
      costs and attorneys' fees), of any Broker with respect to any such lawsuit
      and/or legal proceeding shall not exceed 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.

    (c)      Buyer
      and
      Seller agree to identify to Brokers as "Confidential" any communication or
      information given Brokers that is considered by such Party to be
      confidential.

    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 150% of the Base Rent applicable
      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.

    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
"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.
      In the
      event that Lessor transfers title to the Premises, or the Premises are acquired
      by another upon the foreclosure or termination of a Security Devise to which
      this Lease is subordinated (i) Lessee shall, subject to the non-disturbance
      provisions of Paragraph 30.3, attorn to such new owner, and upon request, enter
      into a new lease, containing all of the terms and provisions of this Lease,
      with
      such new owner for the remainder of the term hereof, or, at the election of
      the
      new owner, this Lease will automatically become a new lease between Lessee
      and
      such new owner, and (ii) Lessor shall thereafter be relieved of any further
      obligations hereunder and such new owner shall assume all of Lessor's
      obligations, except that such new owner shall not: (a) be liable for any act
      or
      omission of any prior lessor or with respect to events occurring prior to
      acquisition of ownership; (b) be subject to any offsets or defenses which Lessee
      might have against any prior lessor, (c) be bound by prepayment of more than
      one
      month's rent, or (d) be liable for the return of any security deposit paid
      to
      any prior lessor.

    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 attorns
      to
      the record owner of the Premises. Further, within 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 60 days, then Lessee may, at Lessee's
      option, directly contact 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 whether
      founded in tort, contract or equity, 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 ($200 is a reasonable minimum per occurrence for such services
      and consultation).

    32.       
      Lessor's
      Access; Showing Premises; Repairs.
      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 after reasonable prior notice for the purpose of showing the

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

    

     

    
      
        
          
          

        

        
          PAGE
            14 OF
            17 

          
            

          

        

        
          
          

        

      

    

     

    same
      to
      prospective purchasers, lenders, or tenants, and making such alterations,
      repairs, improvements or additions to the Premises as Lessor may deem necessary
      or desirable and the erecting, using and maintaining of utilities, services,
      pipes and conduits through the Premises and/or other premises as long as there
      is no material adverse effect on Lessee's use of the Premises. All such
      activities shall be without abatement of rent or liability to
      Lessee.

    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.
      Lessor
      may place on the Premises ordinary "For Sale" signs at any time and ordinary
      "For Lease" signs during the last 6 months of the term hereof. Except for
      ordinary "For Sublease" signs which may be placed only on the Premises, Lessee
      shall not place
      any
      sign upon the Project 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 anyone or all
      existing subtenancies. Lessor's failure within 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 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 AIR Commercial Real Estate Association.

    37.2     Default.
      It shall
      constitute a Default of the Lessee if any Guarantor fails 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) an Estoppel Certificate, 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.
      If
      lessee is granted an option, as defined below, then the following provisions
      shall apply.

    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.
      Any
      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
      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 3 or more notices of separate
      Default, whether or not the Defaults are cured, during the 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 or completion of the purchase, (i) Lessee
      fails to pay Rent for a period of 30 days after such Rent becomes due (without
      any necessity of Lessor to give notice thereof), or (ii) if Lessee commits
      a
      Breach of this Lease.

    40.     Security
      Measures.
      Lessee
      hereby acknowledges that the Rent 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.

    41.     Reservations.
      Lessor
      reserves the right: (i) to grant, without the consent or joinder of Lessee,
      such
      easements, rights and dedications that Lessor deems necessary, (ii) to cause
      the
      recordation of parcel maps and restrictions, and (iii) to create and/or install
      new utility raceways, so long as such easements, rights, dedications, maps,
      restrictions, and utility raceways do not unreasonably interfere with the use
      of
      the Premises by Lessee. Lessee agrees to sign any documents reasonably requested
      by Lessor to effectuate such rights.

    42.     Performance
      Under Protest.
      If at
      any time a dispute shall 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. A Party who does not initiate suit for the recovery
      of
      sums paid "under protest" within 6 months shall be deemed to have waived its
      right to protest such payment.

    43.     Authority.;
      Multiple Parties; Execution.

          
      (a) 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 30 days
      after request, deliver to the other Party satisfactory evidence of such
      authority.

          
      (b) If this Lease is executed by more than one person or entity as "Lessee",
      each such person or entity shall be jointly
      and severally liable hereunder. It is agreed that any one of the named Lessees
      shall be empowered to execute any amendment to this Lease, or other
      document

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

    
      
        
          
          

        

        
          PAGE
            15 OF
            17 

          
            

          

        

        
          
          

        

      

    

    

    ancillary
      thereto and bind all of the named lessees, and lessor may rely on the same
      as if
      all of the named lessees had executed such document.

         
(c)
      This lease may be executed by the Parties in counterparts, each of which shall
      be deemed an original and all of which together shall constitute one and the
      same instrument.

    44.    
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.

    45.    
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.

    46.     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.

    47.     Waiver
      of
      Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY
      IN
      ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS
      AGREEMENT.

    48.     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.

    49.     Americans
      with Disabilities Act.
      Since
      compliance with the Americans with Disabilities Act (ADA) is dependent upon
      Lessee's specific use of the Premises, Lessor makes no warranty or
      representation as to whether or not the Premises comply with ADA or any similar
      legislation. In the event that Lessee's use of the Premises requires
      modifications or additions to the Premises in order to be in ADA compliance,
      Lessee agrees to make any such necessary modifications and/or additions at
      Lessee's expense.

    

    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 AIR COMMERCIAL 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,
      COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF
      THE
      PREMISES FOR LESSEE'S INTENDED USE.

    

    WARNING:
      IF THE PREMISES ARE 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 ARE LOCATED.

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

    

    
      	
              Executed
                at: San Diego

            	 	
              Executed:
                _________________________________

            
	
              On:
                8-17-06

            	 	
              On:
                ______________________________________

            

    

    

    
      	
              By
                LESSOR:

            	 	
              By
                LESSEE:

            
	
              PLETA
                & SAN GAL TRUST

            	 	
              HIFN
                INC.,

            
	
              dba:
                OCEAN POINT TECH CENTRE

            	 	
              A
                DELAWARE CORPORATION

            
	 	 	 
	
              By:
                /s/
                William H. Adair

            	 	
              By:
                /s/
                Jane Sinclair

            
	
              Name
                Printed: WILLIAM H. ADAIR

            	 	
              Name
                Printed: JANE SINCLAIR

            
	
              Title:
                SPECIAL TRUSTEE

            	 	
              Title:
                CONTROLLER

            
	 	 	 
	
              By:
                _____________________________

            	 	
              By:
                ___________________________________

            
	
              Name
                Printed: SANDY WATSON

            	 	
              Name
                Printed:

            
	
              Title:
                PROPERTY MANAGER

            	 	
              Title:

            
	 	 	 
	
              Address:
                5431 AVENIDA ENCINAS SUITE E

            	 	
              Address:
                5411 AVENIDA ENCINAS STE. 120

            
	
              CARLSBAD,
                CA 92008

            	 	
              CARLSBAD,
                CA 92008

            
	 	 	 
	
              Telephone:
                (760) 438-9200

            	 	
              Telephone:
                (760) 931-0555

            
	
              Facsimile:
                (760) 438-5964

            	 	
              Facsimile:
                (     )

            
	
              Federal
                ID No. 33-0436514

            	 	
              Federal
                ID No.

            

    

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

    

     

    
      
        
          
          

        

        
          PAGE
            16 OF
            17 

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              BROKER:

            	 	
              BROKER

            
	
              ____________________________________________

            	 	
              ____________________________________________

            
	
              ____________________________________________

            	 	
              ____________________________________________

            
	 	 	 
	
              Att:

            	 	
              Att:

            
	
              Title:

            	 	
              Title:

            
	
              Address:

            	 	
              Address:

            
	 	 	 
	
              Telephone:
                (     )

            	 	
              Telephone:
                (     ) 

            
	
              Facsimile:
                (     )

            	 	
              Facsimile:
                (     )

            
	
              Federal
                ID No. 

            	 	
              Federal
                ID No.

            

    

    

    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: AIR COMMERCIAL REAL ESTATE ASSOCIATION, 700 South Flower Street, Suite
      600, Los Angeles, CA 90017. (213) 687-8777.

    

    (c)Copyright
      1998 By AIR Commercial Real Estate Association.

    All
      rights reserved. 

    No
      part of these works may be reproduced in any form without permission in
      writing.

    

      
        	
                ________

              	 	
                ________

              
	
                ________

              	 	
                ________

              
	
                INITIALS

              	 	
                INITIALS

              

      

    

    

    
      
        
          
          

        

        
          PAGE
            17 OF
            17 

          
            

          

        

        
          
          

        

      

    

    

    

    

    Addendum

    

    Paragraph
      50

    

    RENTAL
      SCHEDULE

    

    This
      RENTAL SCHEDULE is attached to and made part of that certain Real Estate Lease
      (the "Lease") DATED
      JULY 25, 2006, between
      PLETA
      & SAN GAL TRUST Dba:
      OCEAN
      POINT TECH CENTRE as
      Lessor
      and HIFN
      INC. , A DELAWARE CORPORATION, as
      Lessee, covering the Property commonly known as 5411
      AVENIDA ENCINAS. SUITE 120, CARLSBAD, CALIFORNIA 92008. The
      terms
      used in this document shall have the same definitions as set forth in the
      Lease.

    

    

    

    RENTAL
      SCHEDULE

    

    
      	
              Date

            	 	
              Base
                Rent

            	 	
              CAM

            	 	
              TOTAL
                RENT

            
	 	 	 	 	 	 	 
	
              09/01/06-08/31/07

            	 	
              $5,400.00

            	 	
              $216.00

            	 	
              $5,616.00

            
	
              09/01/07-08/31/08

            	 	
              $5,535.00

            	 	
              $216.00

            	 	
              $5,751.00

            
	
              09/01/08-08/31/09

            	 	
              $5,670.00

            	 	
              $216.00

            	 	
              $5,886.00

            

    

    

    CAM

     

    CAM
      CHARGES ARE CAPPED AT $216.00 PER MONTH DURING THE ENTIRE THREE YEAR TERM OF
      THE
      LEASE.

    

    TAXES
      & INSURANCE

    

    TENANT
      WILL BE RESPONSIBLE FOR IDS PRO RATA SHARE OF INCREASES IN TAXES AND INSURANCE
      ABOVE AND BEYOND THE BASE YEAR OF 07/01106 THROUGH
      06/30/07

    

    

    

    

    
      	
              ACCEPTED:

            	 	 
	 	 	 
	
              LESSOR:

            	 	
              LESSEE:

            
	 	 	 
	
              PLETA
                & SAN GAL TRUST

            	 	
              HIFN,
                INC.,

            
	
              Dba:
                OCEAN POINT TECH CENTRE

            	 	
              A
                DELAWARE CORPORATION

            
	 	 	 
	
              By:
                /s/
                William H. Adair

            	 	
              By:
                /s/
                Jane Sinclair

            
	
              William
                H. Adair, “Special Trustee”

            	 	
              Jane
                Sinclair

            
	
              ITS:To
                Pleta and San Gal Trust

            	 	
              ITS:
                Controller

            

    

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
       

      Paragraph
        #51

    

    

    

    OCEAN
      POINT TECH CENTRE 

    SIGN
      CRITERIA

    

    This
      criteria establishes the policy governing all Tenant sign identification within
      Ocean Point Tech Centre. The purpose is to maintain the high quality of the
      Tech
      Centre. Conformance will be strictly enforced and any sign that does not conform
      shall be brought into conformity at the expense of the Tenant.

    

    GENERAL
      REQUIREMENTS

    

    1.    Landlord
      shall approve all copy and/or logo design prior to the installation of the
      sign.

    

    2.    Landlord
      shall approve the placement and method of all signs prior to
      installation.

    

    3.    Any
      and all
      permit approvals are the sale responsibility and expense of the
      tenant.

    

    GENERAL
      SPECIFICATIONS

    

    1.    Sign
      Type
      G: Front
      Door Suite Identification for Buildings 5421, 5431, 5441, 5451-shall be white
      vinyl letters applied to glass side panels. Suite designation has been provided
      and company name shall be "3" caps and lower case as shown on attached drawing.
      These letters are provided and installed by Signs On Time ( 760) 431--1050
      at
      the expense of the Tenant.

    

    2.    Sign
      Type
      11:  Major
      Tenant Building Identification       

    The
      size
      shall be limited to an area not more than 2' high X 10' long and shall be placed
      on the concrete beam in front of Tenant's space. In the event there is no beam
      in front, the sign may be placed on the third concrete panel from the ground
      adjacent to tenant's door. These signs shall be non-lit cut out letters. The
      material used should be durable, weather and fade resistant. Suggested materials
      are acrylic, high density urethane foam etc. The landlord accepts colors of
      Blue
      or White. Signs On Time ( 760-431-1050) is the sign contractor for Ocean Point
      Tech Centre.

    

    4.    Upon
      removal
      of any sign, any damage or disfiguration of the building will be repaired at
      Tenant's
      expense. It
      is the
      Tenant's responsibility to maintain their sign in a new condition at all
      times.

    

    

    No
      other
      signs, placards, banners, pennants, insignias, trademarks, security stickers
      or
      other descriptive materials shall be placed or affixed or maintained upon any
      glass parts, wall surfaces, landscaped areas, streets or parking
      areas.

    

      
        	
                Intial________

              	 	
                Initial________

              

      

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
       

      Addendum

      

      Paragraph
        52

      

      OUTSIDE
        STORAGE

      REPAIRS/REPLACEMENT

      AND
        GLASS

      

    

    This
      Outside Storage, Repairs/Replacement and Glass Section is attached to and made
      part of that certain real estate Lease (the "Lease")
      dated
      JULY
      25, 2006 between
      PLETA
      & SAN GAL TRUST Dba: OCEAN POINT TECH CENTRE as
      Lessor, and HIFN
      INC., A DELAWARE CORPORATION as
      Lessee, covering Property commonly known as 5411
      AVENIDA ENCINAS. SUITE #120. CARLSBAD. CALIFORNIA
      92008.
      The
      terms used in this document shall have the same definitions as set forth in
      the
      Lease.

    

    OUTSIDE
      STORAGE

    

    Lessee
      hereby grants permission to Lessor to tow away and store, at Lessee's expense,
      all automobiles or motor vehicles belonging to Lessee or its employees or
      customers, which remain in the common parking area for more than 48 consecutive
      hours. No automobiles or motor vehicles shall be parked or left unattended
      in
      any part of the common area or services yard not striped or designated for
      common area. Any materials, supplies, equipment or machinery outside the
      premises, whether in the open or in tanks, bins or other container devices,
      shall not obstruct parking or common areas.

    

    REPAIRS
      AND/OR REPLACEMENT

    

    Lessee
      shall, at its sole cost, keep and maintain the Leased Premises and appurtances
      and every part thereof (excepting exterior walls and roofs which Lessor agrees
      to repair unless damage is caused by Lessee or Lessee's agents or invitees),
      including but not limited to windows, skylights, doors and store front, floors,
      carpeting, ceilings, interior walls of the Leased premises, heating,
      ventilation, air conditioning, plumbing, electrical in good and sanitary order,
      condition and repair and shall repair or replace any asphalt paving damaged
      by
      Lessee or Lessee's agents or invitees.

    

    GLASS.

    

    Lessor
      shall replace, at the expense of the Lessee any and all plate and other glass
      damaged or broken from any cause whatsoever in and about the Leased Premises,
      or
      Lessee may, at its option, replace such glass at its expense provided Lessee
      receives approval from Lessor to perform this repair.

    

    
      	
              LESSOR:

            	 	
              LESSEE:

            
	 	 	 
	
              PLETA
                & SAN GAL TRUST

            	 	
              HIFN,
                INC.,

            
	
              Dba:
                OCEAN POINT TECH CENTRE

            	 	
              A
                DELAWARE CORPORATION

            
	 	 	 
	
              By:
                /s/
                William H. Adair

            	 	
              By:
                /s/
                Jane Sinclair

            
	
              William
                H. Adair, “Special Trustee”

            	 	
              Jane
                Sinclair

            
	 	 	 
	
              ITS:To
                Pleta and San Gal Trust

            	 	
              ITS:
                Controller

            

    

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    Addendum

    

    Paragraph
      53

    

    RULES
      AND REGULATIONS

    

    1.
       No
      sign,
      placard, pictures, advertisement, name or notices shall be inscribed, displayed
      or printed or affixed on or to any part of the outside or inside of the Building
      without the written consent of Lessor and Lessor shall have the right to remove
      any such sign, placard, picture, advertisement, name or notice without notice
      to
      and at the expense of the Lessee.

    

    All
      approved signs or lettering on doors shall be printed, painted, affixed or
      inscribed at the expense of Lessee by a person approved of by Lessor. Lessee
      shall not place anything or allow anything to be placed near the glass of any
      window, door, partition or wall which may appear unsightly from outside the
      Premises as determined by Lessor: provided, however, Lessor may require a
      Building Standard window covering at all exterior windows. Lessee shall not,
      without prior written consent of Lessor, sunscreen any window.

     

    2.
       The
      sidewalks, exits, entrances, shall not be obstructed by any of the Lessees,
      or
      used by them for any purpose other than for ingress and egress from their
      respective Premises.

    

    3. Lessee
      shall not alter any lock or install any new or additional locks or any bolts
      on
      any doors or windows of the Premises.

    

    4.
       The
      toilet rooms, urinal, wash bowls and other apparatus shall not be used for
      any
      purpose other than that for which they were constructed and no foreign substance
      of any kind whatsoever shall be thrown therein and the expense of any breakage,
      stoppage, or damage resulting from the violation of this rule shall be borne
      by
      the Lessee whom or whose employees or invitees shall have caused
      it.

    

    5. Lessee
      shall not in any way deface the Premises or any part thereof.

    

    6.
       Lessee
      shall not use, keep or permit to be used or kept any foul or noxious gas or
      substance in the Premises, or permit or suffer the Premises to be occupied
      or
      used in a manner offensive or objectionable to the Lessor or other occupants
      of
      the Building by reason of noise, odors, and/or vibrations or interfere in any
      way with other Lessees or those having business therein nor shall any animals
      of
      any kind be brought in or kept in or about the Premises or
      Building.

    

    7.
      Lessee
      shall not use or keep in the Premises or the Building any kerosene gasoline
      or
      inflammable or combustible fluid or material, or use any method of heating
      or
      air conditioning other than that supplied by Lessor.

    

    8.
      Lessor
      reserves the right to exclude or expel from the premises any person who, in
      the
      judgement of Lessor, is intoxicated or under the influence of liquor or drugs,
      or who shall in any manner do any act in violation of any these Rules and
      Regulations.

    

    9.
      No
      vending machine or machines of any description shall be installed, maintained
      or
      operated upon the Premises without the written consent of the
      Lessor.

    

    10.
      Lessor shall have the right, exercisable without notice and without liability
      to
      Lessor, to change the name and street address of the Building of which the
      Premises are a part.

    

    11.
      Lessee shall not disturb, solicit, canvas any occupant of the Building and
      shall
      cooperate to prevent same.

    

      
        	
                Initial
                  ____________

              	 	
                
                  Initial
                    ____________

                

              
	
                
                  Initial
                    ____________

                

              	 	
                
                  Initial
                    ____________

                

              

      

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    Addendum

    

    Paragraph
      53

    (continued)

    

    RULES
      AND REGULATIONS

    

    (continued)

    

    

    12.
      Without the written consent of Lessor, Lessee shall not use the name of the
      Building in connection with or in promoting or advertising the business of
      Lessee except as Lessee's address.

    

    13.
      All
      garbage and refuse shall be placed by Lessees in containers.

    

    14.
      No
      aerial or antenna shall be erected on roof or exterior walls of the Leased
      Premises, or on the grounds without, in each instance, the written consent
      of
      Lessor first being obtained. Any aerial or antenna so installed without such
      written consent shall be subject to removal by Lessor at any time without
      notice.

    

    15.
      No
      loud speakers, television, phonographs, radios or other devices shall be used
      in
      a manner so as to be heard or seen outside of the Leased Premises.

    

    16.
      The
      outside areas immediately adjoining the Leased Premises shall be kept dean
      and
      free and clear of dirt and rubbish by Lessee, to the satisfaction of the Lessor,
      and Lessee shall not place or permit any obstruction or materials in such areas.
      No exterior storage
      shall be allowed including, without limitation, the storage of motor vehicles,
      trucks, boats, trailers, pallets, drums, or equipment of any kind or nature,
      without the permission in writing from Lessor.

    

    17.
      Lessee shall use at Lessee's cost such pest extermination contractor as Lessor
      may direct and at such intervals as Lessor may require.

    

    18.
      Lessee shall not burn any trash or garbage of any kind in or about the Leased
      Premises or the Project.

    

    19.
      No
      residential use, including residing, sleeping or cooking is permitted on the
      Premises or anywhere on the Project.

    

    20.
      No
      animals of any type, including, without limiting the generality of the
      foregoing, pets, guard dogs, exotic animals, reptiles or birds, are permitted
      on
      the Premises or anywhere on the Project.

    

    21.
      Lessor reserves the right, by written notice to Lessee, to rescind, alter or
      waive any rule or regulation at any time prescribed for the Building when,
      in
      Lessor's judgement, it is necessary, desirable or proper for the best interest
      of the Building and its Lessees.

    

    22.
      The
      trash dumpsters in the common area are designed for office and light waste
      only.
      If a Lessee is a heavier generator of trash, it is the responsibility of the
      Lessee to contract directly with a trash disposal company for a dumpster and
      trash pickup. Under no circumstances are contractors allowed to place
      construction debris in any dumpster in the park.

    
      	
              Initial
                ____________

            	 	
              
                Initial
                  ____________

              

            
	
              
                Initial
                  ____________

              

            	 	
              
                Initial
                  ____________

              

            

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Addendum

    

    Paragraph
      54

     

    LESSEE
      IMPROVEMENTS

    

    
      	
              Project:

            	
              OCEAN
                POINT TECH CENTRE

            	
              DATE:
                07/25//06

            
	 	 	 
	
              Lessee:

            	
              HIFN
                INC.,

            	 
	 	 	 
	
              Unit
                Address:

            	
              5411
                AVENIDA ENCINAS, SUITE #120

            	 

    

    

    

    QUALITY
      AND/OR SIZE 

    HEIGHT,
      LENGTH, ETC.

    

    ITEM:

    

    
      	
              ______

            	
              Standard
                Improvements ONLY

            
	 	 
	
              __X__

            	
              Standard
                Improvements PLUS Those Shown Below (see “Other” for
                details):

            
	 	 
	
              ______

            	
              DOORS:

            
	 	 
	
              __X__

            	
              FLOOR
                COVERING Landlord will provide new building standard carpet at sole
                cost
                & expense

            
	 	 
	
              ______

            	
              PLUMBING:

            
	 	 
	
              __X__

            	
              ELECTRICAL:
                Landlord will provide 2 (15amp) circuits and 1 (230amp) twist lock
                circuit
                in server room at sole cost & expense.

            
	 	 
	
              ______

            	
              SWITCHES:

            
	 	 
	
              __X__

            	
              A/C-OR-VENT
                FAN: Landlord will relocate 2 ton HVAC unit as specified on Proposal
                1186
                from National Air dated 7/25/06 at sole cost and
                expense.

            
	 	 
	
              ______

            	
              WATER
                HEATER:

            
	 	 
	
              __X__

            	
              PAINTING:
                Landlord at sole cost & expense will paint entire suite in Building
                Standard Frazee White Shadow paint.

            
	 	 
	
              __X__

            	
              OTHER:
                Landlord will remove the glass partition in the center of the suite
                at
                sole cost & expense.

            

    

    

    

    UNLESS
      OTHERWISE STATED, THE IMPROVEMENTS LISTED ABOVE WILL BE FINAL. ANY
      ADDITIONS WILL BE PAID FOR BY THE LESSEE.

    
      	
              Initial
                ____________

            	 	
              
                Initial
                  ____________

              

            
	
              
                Initial
                  ____________

              

            	 	
              
                Initial
                  ____________

              

            

       

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    Addendum

    

    Paragraph
      55

    

    OCEAN
      POINT TECH CENTRE 

    LOCATED
      AT 5411 AVENIDA ENCINAS,

    CARLSBAD,
      CALIFORNIA

    

    Welcome
      to Ocean
      Point Tech Centre! To
      insure
      that your move goes smoothly, we have collected a list of services you may
      find
      useful. Please contact your insurance agent and give him/her a copy of your
      Lease. You
      must have public liability insurance, per your Lease. Please have your Insurance
      Agent forward a copy of your insurance to property management office 5431
      Avenida Encinas, Suite E, Carlsbad, Ca 92008

    

    At
      your
      earliest convenience please contact SDG&E
      to place Electrical Service in your Company's name.

    

    
      	
              Leasing
                Office:

            	
              Ocean
                Point Tech Centre

              Sandy
                Watson, Property Manager

              (760)
                438-9200

              (760)
                438-5964 (fax)

            
	 	 
	
              Make
                Rent Checks Payable To:

            	
              OCEAN
                POINT TECH CENTRE

            
	 	 
	
              Send
                Rent checks To:

            	
              Gildred
                Development Company

              550
                West “C” St., Suite 1820

              San
                Diego, CA 92101-3509

            
	 	 
	
              Electricity:

            	
              SDG&E

              1-800-411-7343

            
	 	 
	
              Telephone:

            	
              Pacific
                Bell

              1-(800)-310-2355

            
	 	 
	
              Police/Fire

            	
              911

            
	 	 
	
              Business
                License

            	
              1200
                Elm Ave.

              Carlsbad,
                CA

              (760)
                434-2882

            
	 	 
	
              Post
                Office

            	
              2772
                Roosevelt Street:

              Carlsbad,
                CA 

              1-800-275-8777

            

    

     

    
      	
              Initial
                ____________

            	 	
              
                Initial
                  ____________

              

            
	
              
                Initial
                  ____________

              

            	 	
              
                Initial
                  ____________

              

            

       

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    SUITE
      SPACE PLAN

    

    EXHIBIT
      56 

    

    

                    OCEAN
      POINT TECH
      CENTRE

                    5411
      Avenida Encinas,
      Carlsbad, CA 92008

    

    

    5411
      AVENIDA ENCINAS

    SUITE
      120

    2,700
      SF

    

    
 

    

    

     

                            § Open
      floor plan with private offices

                            §
First
      floor

                            §
Full
      height
      windows

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      
        

      

    

    PROPOSAL

    
      	 	 	 	 	
              DATE:

            	 	
              July
                25, 2006

            
	 	 	 	 	 	 	 
	 	 	 	 	
              PROPOSAL
                NO:

            	 	
              1186

            
	 	 	 	 	 	 	 
	
              TO:

            	 	
              Gildred
                Development Company

              5431
                Avenida Encinas, Suite E

              Carlsbad,
                CA 92008

            	 	
              PROJECT:

            	 	
              Install
                Tenant Furnished Split System

              Ocean
                Point Tech Centre

              5411
                Avenida Encinas

            
	 	 	 	 	 	 	 
	
              ATTN:

            	 	
              Ms.
                Sandy Watson

            	 	
              CONTRACT:

            	 	
              $4,803.00

            
	
              FAX#

            	 	
              (760)
                438-5964

            	 	
              (Four
                Thousand Eight Hundred Three
                Dollars)

            

    

    

    We
      propose to furnish the labor, materials, and equipment for the installation
      of a
      Temperature Control Reheat System at the above referenced location. The scope
      or
      work shall include the fol1owing:

    

    1.
      Recover the refrigerant from one (1) existing 2 ton split system at the tenant's
      current location 

    2.
      Disconnect and remove the split system, and transport to the new
      location

    3.
      Crane
      the condenser to the roof and install the fan coil above the
      ceiling

    4.
      Provide and install new refrigerant piping

    5.
      Supply
      and return air ductwork to the new server room.

    6.
      Condensate drain

    7.
      Mount
      the thermostat and provide control wiring

    8.
      Start
      and test the system for proper operation

    

    WORK
      NOT INCLUDED:

    1.
      Overtime (all work will be performed during normal business hours) 

    2.
      Line
      voltage electrical wiring and all conduit

    

    
      	
              SUBMITTED
                BY:

            	
              /s/
                Anthony R. Brunelle

            	
              DATE:

            	
              July
                25, 2006

            
	 	
              Anthony
                R. Brunelle, Engineer

            	 	 
	
              ACCEPTED
                BY:

            	 	 	 
	
              Firm
                Name

            	
              _______________________________

            	
              DATE:

            	
              _________________________________

            
	 	 	 	 
	
              Address

            	
              ___________________________________________________________________________________

            
	 	 	 	 
	
              By

            	
              ___________________________________________________________________________________

            
	 	 	 	 
	
              Title

            	
              ___________________________________________________________________________________

            
	 	 	 	 
	
              P.O.
                No.

            	
              ___________________________________________________________________________________

            

    

    

    Terms:
      Net 30 day. Interest at the rate of 1.5%/month (18% APR) will be charged on
      all
      past due invoices. Customer shall be responsible for the costs and expenses
      of
      collection of past due invoices including Attorney’s fees. Any alteration or
      deviation from above specifications involving extra costs will be executed
      only
      upon written orders and will become an extra charge over and above the
      estimate.

    
      
        

      

    

    2053
      KURTZ STREET  SAN
      DIEGO, CALIFORNIA 92110  (619)
      299-2500 
FAX
      (619)
      299-2592Exhibit 10.33

    
      EXHIBIT
        10.33

         

        HI/FN,
          INC.

         

        ALBERT
          E. SISTO EMPLOYMENT AGREEMENT

         

        This
          Employment Agreement (the “Agreement”) is entered into as of November 16, 2006,
          by and between Hi/fn, Inc. (the “Company”) and Albert E. Sisto
          (“Executive”).

         

        1. Duties
          and Scope of Employment.

         

            (a) Positions
          and Duties.
          As of
          November 9, 2006 (the “Effective Date”), Executive will serve as the Company’s
          Interim Chief Executive Officer. Executive will report to the Company’s Board of
          Directors (the “Board”) and will continue in his role as Chairman of the Board.
          As of the Effective Date, Executive will render such business and professional
          services in the performance of his duties, consistent with Executive’s position
          within the Company, as will reasonably be assigned to him by the Board.
          The
          period Executive is employed by the Company under this Agreement is referred
          to
          herein as the “Employment Term”.

         

        Subject
          to the termination and notice provisions herein, Executive agrees to remain
          employed with the Company until the date upon which a successor Chief Executive
          Officer commences employment with the Company. However, in the event that
          the
          Company desires to retain Executive as its regular Chief Executive Officer,
          then
          this Agreement will be terminated and the parties hereto will negotiate
          a new
          employment agreement covering the terms and conditions of Executive’s ongoing
          role.

         

            (b) Board
          Membership.
          Executive was appointed to serve as a member of the Board prior to the
          Effective
          Date and was appointed Chairman of the Board on the Effective Date. During
          the
          Employment Term, at each annual meeting of the Company’s stockholders at which
          Executive’s term as a member of the Board has otherwise expired, the Company
          will nominate Executive to serve as a member of the Board. Executive’s service
          as a member of the Board will be subject to any required stockholder approval.
          Upon the termination of Executive’s employment for any reason, unless otherwise
          requested by the Board, Executive will be deemed to have resigned from
          all
          positions held at the Company and its affiliates, except that of Chairman
          of the
          Board, voluntarily, without any further required action by Executive, as
          of the
          end of Executive’s employment and Executive, at the Board’s request, will
          execute any documents necessary to reflect his resignation. 

         

            (c) Obligations.
          During
          the Employment Term, Executive will devote Executive’s full business efforts and
          time to the Company and will use good faith efforts to discharge Executive’s
          obligations under this Agreement to the best of Executive’s ability and in
          accordance with each of the Company’s corporate guidance and ethics guidelines,
          conflict of interests policies and code of conduct. For the duration of
          the
          Employment Term, Executive agrees not to actively engage in any other
          employment, occupation, or consulting activity for any direct or indirect
          remuneration without the prior approval of the Board (which approval will
          not be
          unreasonably withheld); provided, however, that Executive may, without
          the
          approval of the Board, serve in any capacity with any civic, educational,
          or
          charitable organization, provided such services do not interfere with
          Executive’s obligations to Company. Executive expects to serve as a member of
          the Board of Directors of Digital Signal Corporation, Tulip Ego Lifestyle,
          and
          Validity Sensors, Inc. and such service will not constitute a violation
          of this
          section 1(c).

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

            Executive
          hereby represents and warrants to the Company that Executive is not party
          to any
          contract, understanding, agreement or policy, written or otherwise, that
          would
          be breached by Executive’s entering into, or performing services under, this
          Agreement. Executive further represents that he has disclosed to the Company
          in
          writing all threatened, pending, or actual claims that are unresolved and
          still
          outstanding as of the Effective Date, in each case, against Executive of
          which
          he is aware, if any, as a result of his employment with his current employer
          (or
          any other previous employer) or his membership on any boards of directors.
          

         

            (d) Other
          Entities.
          Executive agrees to serve and will be appointed, without additional
          compensation, as an officer and director for each of the Company’s subsidiaries,
          partnerships, joint ventures, limited liability companies and other affiliates,
          including entities in which the Company has a significant investment as
          determined by the Company. As used in this Agreement, the term “affiliates” will
          include any entity controlled by, controlling, or under common control
          of the
          Company.

         

        2. At-Will
          Employment.
          Executive and the Company agree that Executive’s employment with the Company
          constitutes “at-will” employment. Executive and the Company acknowledge that
          this employment relationship may be terminated at any time, upon written
          notice
          to the other party, with or without good cause or for any or no cause,
          at the
          option either of the Company or Executive. 

         

        3. Compensation.

         

            (a) Base
          Salary.
          As of
          the Effective Date, the Company will pay Executive an annual salary of
          $350,000
          as compensation for his services (such annual salary, as is then effective,
          to
          be referred to herein as “Base Salary”). The Base Salary will be paid
          periodically in accordance with the Company’s normal payroll practices and be
          subject to the usual, required withholdings. 

         

            (b) Annual
          Incentive.
          Executive will be eligible to receive annual cash incentives payable for
          the
          achievement of performance goals established by the Board or by the Compensation
          Committee of the Board (the “Committee”). During the Employment Term,
Executive’s
          target annual incentive (“Target Annual Incentive”) will equal 65% of
          Executive’s Base Salary. The actual earned annual cash incentive, if any,
          payable to Executive for any performance period will depend upon the extent
          to
          which the applicable performance goal(s) specified by the Committee are
          achieved
          or exceeded and will be adjusted for under- or over-performance. 

         

            (c) Stock
          Options.
          

         

                (i) Following
          the Effective Date, the Committee will grant an
          option
to
          purchase 225,000 shares of Company common stock at a per share exercise
          price
          equal to the closing price per share on the Nasdaq Global Market (“Nasdaq”) for
          the common stock of the Company on the date of grant (the “Option”). The Option
          will be granted under and subject to the terms, definitions and provisions
          of
          the Company’s Amended and Restated 1996 Equity Incentive Plan (the “Plan”) and
          will be scheduled to vest 1/36th
          of the
          shares subject to the Option each month following the Effective Date, subject
          to
          Executive’s continued employment with the Company as its Chief Executive Officer
          (whether on an interim basis or otherwise) through each scheduled vesting
          date.
          Upon Executive ceasing to be the Company’s Chief Executive Officer (whether on
          an interim

        
          
             

          

          
            -2-

            
              

            

          

          
             

          

        

         

        basis
          or
          otherwise), all vesting of the Option will terminate immediately and the
          unvested portion of the Option will immediately terminate. Notwithstanding
          the
          foregoing vesting schedule, if during the first year of the Employment
          Term
          while Executive is acting as the Company’s Chief Executive Officer, the Company
          hires a successor Chief Executive Officer other than Executive, the Option
          will
          immediately vest and become exercisable as to 75,000 shares in addition
          to the
          number of shares subject to the Option that have vested as of such date.
          Except
          as provided in this Agreement, the Option will be subject to the Company’s
          standard terms and conditions for options granted under the Plan. 

         

                (ii) Following
          the Effective Date, the Committee will grant Executive 75,000 shares of
          restricted stock (the “Stock Grant”). The Stock Grant will be granted under and
          subject to the terms, definitions and provisions of the Plan, and will
          vest six
          (6) months from the Effective Date, subject to Executive’s continued employment
          with the Company as its Chief Executive Officer on such date. Subject to
          the
          provisions of Section 7 of this Agreement, upon Executive’s termination as the
          Company’s Chief Executive Officer, all further vesting of the Stock Grant will
          terminate immediately and such shares will be forfeited to the Company
          at no
          cost to the Company. Notwithstanding the foregoing, if during the first
          six (6)
          months of the Employment Term, the Company hires a successor Chief Executive
          Officer other than Executive, the Stock Grant will fully vest. Except as
          provided in this Agreement, the Stock Grant will be subject to the Company’s
          standard terms and conditions for restricted stock granted under the
          Plan.

         

        4. Employee
          Benefits.
          

         

            (a) Generally.
          Executive will be eligible to participate in accordance with the terms
          of all
          Company employee benefit plans, policies and arrangements that are applicable
          to
          other executive officers of the Company, as such plans, policies and
          arrangements may exist from time to time. 

         

            (b) Vacation.
          Executive will be entitled to receive paid annual vacation in accordance
          with
          Company policy for other senior executive officers. 

         

        5. Expenses.
          The
          Company will reimburse Executive for reasonable travel, entertainment and
          other
          expenses incurred by Executive in the furtherance of the performance of
          Executive’s duties hereunder, in accordance with the Company’s expense
          reimbursement policy as in effect from time to time.

         

        6. Termination
          of Employment.
          In the
          event Executive’s employment with the Company terminates for any reason,
          Executive will be entitled to any (a) unpaid Base Salary accrued up to the
          effective date of termination; (b) unpaid, but earned and accrued annual
          incentive for any completed fiscal year as of his termination of employment;
          (c) pay for accrued but unused vacation; (d) benefits or compensation
          as provided under the terms of any employee benefit and compensation agreements
          or plans applicable to Executive (e) unreimbursed business expenses
          required to be reimbursed to Executive, and (f) rights to indemnification
          Executive may have under the Company’s Articles of Incorporation, Bylaws, the
          Agreement, or separate indemnification agreement, as applicable.

        
          
             

          

          
            -3-

            
              

            

          

          
             

          

        

         

        7. Severance.
          If
          Executive’s employment with the Company is terminated by the Company without
          Cause or by Executive for Good Reason, and the termination is in Connection
          with
          a Change of Control, then, subject to Executive signing and not revoking
          a
          separation agreement and release of claims in a form acceptable to the
          Company,
          the Stock Grant will vest in full. 

         

            (a) For
          purposes of this Agreement, “Cause” means:

         

                (i) A
          failure
          by Executive to substantially perform Executive’s duties as an employee, other
          than a failure resulting from the Executive’s complete or partial incapacity due
          to physical or mental illness or impairment;

         

                (ii) A
          willful
          act by Executive that constitutes misconduct;

         

                (iii) Circumstances
          where Executive intentionally or negligently imparts material confidential
          information relating to the Company or its business to competitors or to
          other
          third parties other than in the course of carrying out Executive’s
          duties;

         

                (iv) A
          material violation by Executive of a federal or state law or regulation
          applicable to the business of the Company;

         

                (v) A
          willful
          violation of a material Company employment policy or the Company’s insider
          trading policy;

         

                (vi) 
          Any act
          or omission by Executive constituting dishonesty (other than a good faith
          expense account dispute) or fraud, with respect to the Company or any of
          its
          affiliates, or any other misconduct which is injurious to the financial
          condition of the Company or any of its affiliates or is injurious to the
          business reputation of the Company or any of its affiliates;

         

                (vii)
          Executive’s
          failure to cooperate with the Company in connection with any actions, suits,
          claims, disputes or grievances against the Company or any of its officers,
          directors, employees, shareholders, affiliates, divisions, subsidiaries,
          predecessor and successor corporations, and assigns, whether or not such
          cooperation would be adverse to Executive’s own interest; or 

         

                (viii)
          Executive’s
          conviction or plea of guilty or no contest to a felony.

         

            (b) Change
          of Control.
          For
          purposes of this Agreement, “Change of Control” will mean the occurrence of any
          of the following events: 

         

                (i) The
          sale,
          lease, conveyance or other disposition of all or substantially all of the
          Company’s assets to any “person” (as such term is used in Section 13(d) of the
          Securities Exchange Act of 1934, as amended (the “Exchange Act”)), entity or
          group of persons acting in concert;

        
          
             

          

          
            -4-

            
              

            

          

          
             

          

        

         

                (ii) Any
          person or group of persons becoming the “beneficial owner” (as defined in Rule
          13d-3 under the Exchange Act), directly or indirectly, of securities of
          the
          Company representing 50% or more of the total voting power represented
          by the
          Company’s then outstanding voting securities; 

         

                (iii) A
          merger
          or consolidation of the Company with any other corporation, other than
          a merger
          or consolidation that would result in the voting securities of the Company
          outstanding immediately prior thereto continuing to represent (either by
          remaining outstanding or by being converted into voting securities of the
          surviving entity or its controlling entity) at least 50% of the total voting
          power represented by the voting securities of the Company or such surviving
          entity (or its controlling entity) outstanding immediately after such merger
          or
          consolidation; or

         

                (iv) A
          contest
          for the election or removal of members of the Board that results in the
          removal
          from the Board of at least 50% of the incumbent members of the
          Board.

         

            (c) Good
          Reason.
          For
          purposes of this Agreement, “Good Reason” means (without Executive’s
          consent):

         

                (i) A
          material reduction in Executive’s title, authority, status, or responsibilities,
          unless Executive is provided with a comparable position (i.e. a position
          of
          equal or greater organizational level, duties, authority, compensation
          and
          status); 

         

                (ii) The
          reduction of Executive’s aggregate Base Salary and Target Annual Incentive as in
          effect immediately prior to such reduction (other than a reduction applicable
          to
          executives generally); or 

         

                (iii) A
          relocation of Executive’s principal place of employment by more than fifty (50)
          miles.

         

            (d) In
          Connection with a Change of Control.
          For
          purposes of this Agreement, a termination of Executive’s employment with the
          Company is “in Connection with a Change of Control” if Executive’s employment is
          terminated within twelve (12) months following a Change of Control

         

        8. Indemnification.
          Subject
          to applicable law, Executive will be provided indemnification to the maximum
          extent permitted by the Company’s Articles of Incorporation or Bylaws,
          including, if applicable, any directors and officers insurance policies,
          with
          such indemnification to be on terms determined by the Board or any of its
          committees, but on terms no less favorable than provided to any other Company
          executive officer or director and subject to the terms of any separate
          written
          indemnification agreement.

         

        9. Confidential
          Information.
          As a
          condition of employment with the Company, Executive will execute the Company’s
          standard form of Proprietary Information
          and Inventions Agreement
          (the
“Confidential Information Agreement”). 

         

        10. Assignment.
          This
          Agreement will be binding upon and inure to the benefit of (a) the heirs,
          executors and legal representatives of Executive upon Executive’s death, and
          (b) any

        
          
             

          

          
            -5-

            
              

            

          

          
             

          

        

         

        successor
          of the Company. Any such successor of the Company will be deemed substituted
          for
          the Company under the terms of this Agreement for all purposes. For this
          purpose, “successor” means any person, firm, corporation, or other business
          entity which at any time, whether by purchase, merger, or otherwise, directly
          or
          indirectly acquires all or substantially all of the assets or business
          of the
          Company. None of the rights of Executive to receive any form of compensation
          payable pursuant to this Agreement may be assigned or transferred except
          by will
          or the laws of descent and distribution. Any other attempted assignment,
          transfer, conveyance, or other disposition of Executive’s right to compensation
          or other benefits will be null and void.

         

        11. Notices.
          All
          notices, requests, demands and other communications called for hereunder
          will be
          in writing and will be deemed given (a) on the date of delivery if
          delivered personally; (b) one (1) day after being sent overnight by a
          well-established commercial overnight service, or (c) four (4) days after
          being mailed by registered or certified mail, return receipt requested,
          prepaid
          and addressed to the parties or their successors at the following addresses,
          or
          at such other addresses as the parties may later designate in
          writing:

         

        If
          to the
          Company:

         

        Attn:
          Chairman of the Compensation Committee

        c/o
          Corporate Secretary

        750
          University Avenue

        Los
          Gatos, CA 95032

         

        If
          to
          Executive:

         

        at
          the
          last residential address known by the Company.

         

        12. Severability.
          If any
          provision hereof becomes or is declared by a court of competent jurisdiction
          to
          be illegal, unenforceable, or void, this Agreement will continue in full
          force
          and effect without said provision.

         

        13. Arbitration.
          The
          Parties agree that any and all disputes arising out of the terms of this
          Agreement, their interpretation, and any of the matters herein released,
          will be
          subject to arbitration in Santa Clara County before JAMS, pursuant to its
          Employment Arbitration Rules & Procedures (“JAMS Rules”). The Arbitrator
          will administer and conduct any arbitration in accordance with California
          law,
          including the California Code of Civil Procedure, and the Arbitrator will
          apply
          substantive and procedural California law to any dispute or claim, without
          reference to any conflict-of-law provisions of any jurisdiction. To the
          extent
          that the JAMS rules conflict with California law, California law will take
          precedence. The Arbitrator may grant injunctions and other relief in such
          disputes. The decision of the Arbitrator will be final, conclusive, and
          binding
          on the parties to the arbitration. The Parties agree that the prevailing
          party
          in any arbitration will be entitled to injunctive relief in any court of
          competent jurisdiction to enforce the arbitration award. The
          Arbitrator will award
          attorneys’ fees and costs to the prevailing party, except as prohibited by law.
          The
          Parties hereby agree to waive their right to have any dispute between them
          resolved in a court of law by a judge or jury.
          This
          paragraph will not prevent either party from seeking injunctive relief
          (or any
          other provisional remedy) from any court having jurisdiction over the Parties
          and the subject matter

        
          
             

          

          
            -6-

            
              

            

          

          
             

          

        

         

        of
          their
          dispute relating to Executive’s obligations under this Agreement and the
          Confidential Information Agreement.

         

        14. Integration.
          This
          Agreement, together with the Confidential Information Agreement and the
          standard
          forms of equity award grant that describe Executive’s outstanding equity awards,
          represents the entire agreement and understanding between the parties as
          to the
          subject matter herein and supersedes all prior or contemporaneous agreements
          whether written or oral. No waiver, alteration, or modification of any
          of the
          provisions of this Agreement will be binding unless in a writing and signed
          by
          duly authorized representatives of the parties hereto. In entering into
          this
          Agreement, no party has relied on or made any representation, warranty,
          inducement, promise, or understanding that is not in this Agreement. To
          the
          extent that any provisions of this Agreement conflict with those of any
          other
          agreement to be signed upon Executive’s hire, the terms in this Agreement will
          prevail.

         

        15. Waiver
          of Breach.
          The
          waiver of a breach of any term or provision of this Agreement, which must
          be in
          writing, will not operate as or be construed to be a waiver of any other
          previous or subsequent breach of this Agreement.

         

        16. Survival.
          The
          Confidential Information Agreement will survive the termination of this
          Agreement. 

         

        17. Headings.
          All
          captions and Section headings used in this Agreement are for convenient
          reference only and do not form a part of this Agreement.

         

        18. Tax
          Withholding.
          All
          payments made pursuant to this Agreement will be subject to withholding
          of
          applicable taxes.

         

        19. Governing
          Law.
          This
          Agreement will be governed by the laws of the state of California without
          regard
          to its conflict of laws provisions.

         

        20. Code
          Section 409A.
          The
          Company and the Executive agree to work together in good faith to consider
          amendments to this Agreement necessary or appropriate to avoid imposition
          of any
          additional tax or income recognition prior to actual payment to Executive
          under
          Internal Revenue Code Section 409A and any temporary or final Treasury
          Regulations and Internal Revenue Service guidance thereunder.

         

        21. Acknowledgment.
          Executive acknowledges that he has had the opportunity to discuss this
          matter
          with and obtain advice from his private attorney, has had sufficient time
          to,
          and has carefully read and fully understands all the provisions of this
          Agreement, and is knowingly and voluntarily entering into this
          Agreement.

         

        22. Counterparts.
          This
          Agreement may be executed in counterparts, and each counterpart will have
          the
          same force and effect as an original and will constitute an effective,
          binding
          agreement on the part of each of the undersigned.

         

        

        
          
             

          

          
            -7-

            
              

            

          

          
             

          

        

         

        IN
          WITNESS WHEREOF, each of the parties has executed this Agreement, in the
          case of
          the Company by a duly authorized officer, as of the day and year written
          below.

         

        COMPANY:

         

        HI/FN,
          INC.

         

        
          	/s/
                  William R. Walker	 	
                  Date:
                    November 16, 2006

                
	
                  William
                    R. Walker

                  Vice
                    President of Finance, Chief Financial Officer

                  and
                    Secretary

                	 	 

        

         

        

         

        

        EXECUTIVE:

        
          	/s/
                  Albert E. Sisto	 	
                  Date:
                    November 16, 2006

                
	
                  ALBERT
                    E. SISTO

                	 	 

        

         

        

        
          [SIGNATURE
            PAGE TO SISTO EMPLOYMENT AGREEMENT]

           

          -8-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}]]