Document:

EX-10.1

SECOND AMENDMENT TO

EMPLOYMENT AGREEMENT

THIS AMENDMENT, made this 1st day of April, 2009 (the “Effective Date”), by and between Saia,
Inc., a Delaware corporation (“Saia”) and Richard D. O’Dell (the “Executive”).

WITNESSETH:

WHEREAS, Saia and the Executive entered into an Employment Agreement on October 24, 2006
pursuant to which the Executive agreed to serve as President and Chief Executive Officer of Saia,
as amended by an Amendment to Employment Agreement dated as of October 23, 2008 (the “Agreement”);
and

WHEREAS, the parties retained the right to amend the Agreement pursuant to Section 25 thereof;
and

WHEREAS, the parties desire to amend certain provisions of the Agreement.

NOW, THEREFORE, effective as of the Effective Date, the parties agree as follows:

1. Section 4(a) of the Agreement is amended to read as follows:

	 	(a)	 	Base Salary. Saia shall pay to the Executive base salary at
the rate of $408,028 per annum which shall be payable in accordance with the
standard payroll practices of Saia. Such base salary rate shall be reviewed
annually in accordance with Saia’s normal policies beginning for calendar year
2010; provided, however, that at no time during the term of this Agreement shall
the Executive’s base salary be decreased from the rate then in effect.

	 	2.	 	The Executive hereby acknowledges that the Company has discontinued the
Company’s contributions under the Saia, Inc. Executive Capital Accumulation Plan (equal
to 5% of the Executive’s base salary).

	 	 	 	3. Except as expressly amended hereby, the Agreement shall remain as in effect
immediately prior to the Effective Date. The parties reaffirm all of their rights and
obligations under the Agreement, as amended hereby.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the Effective Date.

	 	 	 
	EXECUTIVE
	 	SAIA, INC.

	     
	 	By:     

	Richard D. O’Dell
	 	James A. Darby

Vice President – Finance and Chief Financial

OfficerEX-10.2

SECOND AMENDMENT TO

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDMENT, made this 1st day of April, 2009 (the “Effective Date”), by and between Saia,
Inc., a Delaware corporation (“Saia”) and Anthony D. Albanese (the “Executive”).

WITNESSETH:

WHEREAS, Saia and the Executive entered into an Amended and Restated Employment Agreement on
October 24, 2006 pursuant to which the Executive agreed to serve as Senior Vice President,
Operations and Sales of Saia, as amended by an Amendment to Amended and Restated Employment
Agreement dated as of October 23, 2008 (the “Agreement”); and

WHEREAS, the parties retained the right to amend the Agreement pursuant to Section 25 thereof;
and

WHEREAS, the parties desire to amend certain provisions of the Agreement.

NOW, THEREFORE, effective as of the Effective Date, the parties agree as follows:

1. Section 4(a) of the Agreement is amended to read as follows:

	 	(a)	 	Base Salary. Saia shall pay to the Executive base salary at
the rate of $257,070 per annum which shall be payable in accordance with the
standard payroll practices of Saia. Such base salary rate shall be reviewed
annually in accordance with Saia’s normal policies beginning for calendar year
2010; provided, however, that at no time during the term of this Agreement shall
the Executive’s base salary be decreased from the rate then in effect.

	 	2.	 	The Executive hereby acknowledges that the Company has discontinued the
Company’s contributions under the Saia, Inc. Executive Capital Accumulation Plan (equal
to 5% of the Executive’s base salary).

	 	 	 	3. Except as expressly amended hereby, the Agreement shall remain as in effect
immediately prior to the Effective Date. The parties reaffirm all of their rights and
obligations under the Agreement, as amended hereby.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the Effective Date.

	 	 	 
	EXECUTIVE
	 	SAIA, INC.

	     
	 	By:     

	Anthony D. Albanese
	 	Richard D. O’Dell

President and Chief Executive Officernewarklease.htm

     

    Exhibit
10.30

     

    STANDARD
INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE — NET

    

    1.           Basic Provisions ("Basic
Provisions").

    

    1.1           Parties: This Lease ("Lease"), dated for reference
purposes only February
18, 2009 is made by and between Newark Eureka Industrial
Capital LLC, a Delaware limited liability company ("Lessor") and Smart Modular
Technologies, Inc., a California 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 39870
Eureka Drive, located in the City of Newark, the County of
Alameda, State
of California,
with zip code 94560, as outlined on
Exhibit “A” attached hereto ("Premises") and generally
described as (describe briefly the nature of the Premises):

    

    The
Premises encompasses approximately 79,480 square feet and is more particularly
described as 39870 Eureka Drive contained within an approximate 79,480 square
foot building.

    

    In
addition to Lessee's right to use and occupy the Premises as hereinafter
specified, Lessee shall have right to the use the Common Areas (as defined in
Paragraph 2.7 below) in common with all other persons and entities entitled to
the use thereof as set forth in the Declaration (as defined in Paragraph 2.4
below), and, subject to the terms and conditions of the Declaration, the
exclusive rights to the roof, exterior walls and utility raceways of the
building containing the Premises ("Building"). 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: Subject to the
Association Project Documents (as defined in Paragraph 2.4 below), Lessee shall
have the right to use all of the vehicle parking spaces on the Project
identified as the Project Parking Spaces on Exhibit “B” attached hereto ("Project Parking Spaces").
(See also Paragraph 2.6)

    

    1.3           Term: Seven (7) years and
zero (0) months
("Original Term")
commencing, May 1,
2009 ("Commencement Date") and ending
April 30, 2016
("Expiration Date").
(See also Paragraph 3)

    

    1.4           Early Possession: Upon delivery of a
fully-executed Lease by both parties ("Early Possession Date"). (See
also Paragraphs 3.2 and
3.3)

    

    1.5           Base Rent: $36,560.80 per month
("Base Rent"), payable
in advance on or before the first day of each month commencing May 1, 2010. (See
also Paragraph 4)

    [P] 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: Lessee's Share is the percentage obtained by dividing
the number of square feet contained in the Premises by the number of square feet
of leasable area in the Building or the Project (whichever is applicable). The
Lessee's Share as of the Commencement Date is one hundred percent
(100.00%) of
the Building and one
hundred percent (100.00%) of the
Project ("Lessee's
Share").

    

    1.7           Base Rent and Other Monies Paid Upon
Execution:

    (a)           Base Rent: $36,560.80 for the
period May 1, 2010 –
May 31, 2010.

    (b)           Estimated Monthly Common Area
Operating Expenses: $17,485.60 for
the period May 1, 2009
– May 31, 2009.

    (c)           Security Deposit:
$54,046.40("Security
Deposit"). (See Also Paragraph 5)

    (d)           Total Due Upon Execution of this
Lease: $108,092.80

    

    1.8           Agreed Use: Design, manufacturing,
assembly and test, packaging, distribution and warehousing of memory modules,
solid-state drives, embedded computing subsystems, TFT-LCD display and similar
computer peripheral products and office related uses.  (See also Paragraph
6)

    

    1.9           Insuring Party. Lessor is the
"Insuring Party". (See
also Paragraphs 4.2 and 8)

    

    1.10         Real Estate Brokers (see also
Paragraph 15):

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

    [P] Cornish &
Carey Commercial represents Lessor exclusively ("Lessor's
Broker");

    [P] Cresa
Partners represents Lessee exclusively ("Lessee's
Broker");

    

    1.11         Guarantor. The obligations of
the Lessee under this Lease are to be guaranteed by n/a ("Guarantor"). (See also
Paragraph 37)

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.12         Addenda and Exhibits. Attached
hereto is an Addendum or Addenda consisting of Paragraphs 59 through 63, and
Exhibits “A,” “B” and “C,” all of which constitute a part of this
Lease.

    
       

      2.           Premises

    

    

    2.1           Letting. Lessor hereby leases
to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at
the rental, and upon all of the terms, covenants and conditions set forth in
this Lease. Unless other 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 revisions whether or not the actual size is more or
less.

    

    2.2          
Condition. EXCEPT AS
EXPRESSLY SET FORTH HEREIN, THE PREMISES IS BEING DELIVERED TO LESSEE IN "AS IS, WHERE IS" CONDITION AND
LESSOR IS NOT MAKING ANY REPRESENTATIONS OR WARRANTIES AS TO THE HABITABILITY OF
THE PREMISES OR THE SUITABILITY OF THE PREMISES GENERALLY OR FOR ANY PARTICULAR
PURPOSE. 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, provided
the required service contracts described in Paragraph 7.1(a) below are obtained
by Lessee, in effect and delivered to Lessor within thirty (30) days following
the Start Date, warrants that the existing electrical, plumbing, fire sprinkler,
lighting, heating, ventilating and air conditioning systems ("HVAC"), loading doors, if any,
except for elements thereof constructed or altered by Lessee ("Base Unit Systems"), shall be
in good operating condition on said Start Date and that the structural elements
of the Unit’s roof be in watertight condition and that the structural elements
of the bearing walls and foundation of the Unit shall be free of material
defects except to the extent caused by the actions or alterations of Lessee or
any agent, contractor, or invitee of Lessee (each, a “Lessee Party” and
collectively, the “Lessee
Parties”) ("Base Unit
Structure"). 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 cost and
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 sole expense. The warranty periods shall be as
follows: (i) 180 days as to the HVAC systems, and (ii) 180 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, structural elements of the roof, foundations, and/or bearing walls -
see Paragraph 7).

    

    2.3           Compliance. Lessor warrants
that the Base Unit Systems and the Base Unit Structure and the Common Areas
comply with all applicable laws, covenants or restrictions of record,
regulations, and ordinances in effect on the date of execution of this Lease
("Applicable
Requirements"). Said warranty does not apply to: (i) the use to which
Lessee will put the Premises; (ii) any legal obligations triggered or made
applicable due to lessee improvements or Alterations made by or for the benefit
of Lessee; or (iii) any Alterations or Utility Installations (as defined in
Paragraph 7.3(a)) made or to be made by Lessee.  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 (except as otherwise
the responsibility of a particular Party to remediate as set forth in Paragraph
6.2 below, in which case such responsible party shall be responsible for the
cost of such remediation), 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: (i) of the specific and unique use of the Premises by Lessee; or (ii) of
improvements made or proposed to be made by Lessee, Lessee shall be fully
responsible for the cost thereof, provided, however that if such Capital
Expenditure is required during the last 12 months 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: (i) the specific and unique use
of the Premises by Lessee (such as, governmentally mandated seismic
modifications), or (ii) improvements made or proposed to be made by Lessee, 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(c); provided, however, that if such Capital Expenditure is
required during the last 12 months 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.

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.4           Acknowledgements. Lessee
acknowledges that: (a) it has been advised by Lessor and/or Brokers to satisfy
itself with respect to the condition of the Premises (including but not limited
to the information technology infrastructure, electrical, HVAC and other
air-handling equipment, 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, subject to the provisions of Paragraphs 2.2, 2.3, 7.2 and 9 hereof, 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. No later discovery by Lessee that the Premises are
unsuitable for Lessee's intended use, or that Lessee is unable to use the
Premises for Lessee's intended use because of any Applicable Requirements and
the like, shall relieve Lessee from any of Lessee's obligations including
payment of Rent when due, under this Lease.   Lessee further
acknowledges and agrees that: (i) this Lease, and all rights and obligations
hereunder, shall be subject and subordinate, in all respects, to the terms and
conditions of that certain Declaration of Covenants, Conditions, and
Restrictions for Stevenson Point Techpark, as the same may be amended from time
to time (the “Declaration”), the Articles of
Incorporation and the By-Laws for Stevenson Point Techpark Owners’ Association,
as the same may be amended from time to time (the “Association Documents”), and
any and all rules and regulations established by Stevenson Point Techpark
Owners’ Association, or any successor thereto (the “Association”), as the same may
be amended from time to time (the “Association Rules”) (the
Declaration, Association Documents and Association Rules are collectively
referred to herein as the “Association Project
Documents”), and (ii) any breach by Lessee of any of the terms or
conditions of the Association Project Documents shall, after applicable notice
and cure periods, be a default under this Lease.

    
       

    

    2.5           Lessee as Prior Owner/Occupant and/or
New Leases Under 12 Months in Duration. The warranties, if any, 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, or if the initial
lease term is less than 12 months in duration. In such event, Lessee shall be
responsible for any necessary corrective work including, but not limited to,
compliance with Applicable Requirements in effect as of the Commencement Date,
unless otherwise expressly set forth in the Addendum, if any.

    

    2.6           Vehicle Parking. Lessee shall
be entitled to the use the Project Parking Spaces specified in Paragraph
1.2(b).  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." No vehicles other than Permitted Size Vehicles may be parked
in the Common Area without the prior written permission of Lessor (which
permission may be withheld in Lessor’s sole discretion if such vehicles violates
the terms of the Declaration or Association Rules).  Lessee shall
comply, and shall cause its employees, suppliers, shippers, customers,
contractors and invitees, to comply, with all provisions of the Declaration and
all Association Rules relating to vehicles and the use thereof.

    (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 immediately be
payable upon Lessor's demand.

    

    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 specifically 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 but limited
to fences and gates, common entrances, lobbies, windows, corridors, restrooms,
public spaces, elevators, escalators, windows, stairways, airshafts, common area
lighting facilities, roof & roof drainage systems, parking areas, loading
and unloading areas, utility raceways, trash areas, areas of ingress and egress,
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 (as defined in Paragraph 2.9) 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 or place any signage, temporarily or permanently, in the
Common Areas in violation of the Declaration. Any such signage shall be
permitted only by the prior written consent of Lessor or Lessor's designated
agent, which consent may be given or withheld in Lessor's sole discretion and
revoked at any time. All such signage shall also comply with the provisions of
Paragraph 34 hereof. In the event that any unauthorized storage shall occur, or
any unauthorized signage be installed, 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/or signage and charge the cost to Lessee, which cost
shall be immediately payable upon Lessor's demand.

    

    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") regarding the Project and the Common Areas including
but not limited to 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 hereby agrees
to abide by and conform to all such Rules and Regulations, and 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.
Provided that Lessee’s rights hereunder are not materially and adversely
affected and Lessee’s obligations hereunder and not materially and adversely
increased, then Lessor shall have the right, in Lessor's sole discretion, from
time to time and at any time:

    (a)           To
make changes to the Common Areas, including, without limitation, changes in
public spaces, driveways, entrances, parking spaces, parking areas, loading and
unloading areas, trash areas, ingress, egress, fences, gates, lighting,
direction of traffic, landscaped areas, roadways, walkways, driveways, utility
locations and landscaped areas;

    (b)           To
close any of the Common Areas for maintenance purposes provided 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, including, without limitation, any or all portions of the “Common
Area” as defined in the Declaration;

    (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 Lessor's sole
discretion, deem to be appropriate.

    

    Notwithstanding
the introductory sentence of this Paragraph 2.10, Lessor shall have the right to
undertake the activities in subparagraphs (a), (b), (d), (e) and (f) above at
any time and from time to time if required in order for Lessor to comply with
its obligations hereunder or pursuant to the Association Project
Documents.

    

    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,
however, be in effect during such period. Any such early possession shall not
affect the Expiration Date.

    

    3.3           Delay In Possession. Lessor
agrees to use commercially reasonable efforts to deliver possession of the
Premises to Lessee simultaneously with the mutual execution of this
Lease.  If Lessor is unable to deliver possession within 7 days from
and after the mutual execution of this lease, Lessee may, at its option, by
notice in writing within 7 day period, cancel this Lease, in which event the
Parties shall be discharged from all obligations hereunder, and neither party
shall have any liability to the other for any actual or consequential damages
occasioned by the inability of Lessor to deliver possession of the Premises as
agreed herein. If such written notice is not received by Lessor within said 7
day period, Lessee's right to cancel shall terminate.

    

    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, and
if necessary the replacement, of the following:

    (aa)           The
Common Areas and Common Area improvements including but not limited to building
exterior painting and stucco coating, coverings, and including but not limited
to common entrances, lobbies, corridors, windows, stairways, airshafts,
restrooms, public spaces, trash areas, roadways, parkways, walkways, driveways,
landscaped areas, bumpers, irrigation systems, Common Area lighting facilities,
parking areas, loading and unloading areas, including but not limited to
slurrying and striping of the preceding, utility raceways, areas of ingress and
egress, fences and gates, roofs, and roof drainage systems.

    (bb)           Exterior
signs and any tenant directory installation, operation and repair.

    (cc)           Any
fire detection and/or sprinkler systems.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (ii)           The
cost of potable water, sewer, gas, steam, processed water, compressed air,
electricity, information technology infrastructure, and telephone to service the
Common Areas and any other utilities not separately metered including
distribution and powerhouse expenses if any) and the costs of any utility
surcharges to the Project.

    (iii)           Trash
disposal (if Tenant does not properly and adequately dispose of trash and
Landlord elects to perform such trash disposal), pest control services, property
management, security services (if the Premises are vacated due to casualty or
otherwise, Tenant does not provide adequate security services for the Property,
and Landlord elects to provide such security services), and the reasonable costs
of any environmental inspections, and compliance costs.

    (iv)           Reserves
in amounts as determined by Lessor in its reasonable discretion for maintenance,
repair and/or replacement of Common Area Improvements or equipment. Lessor may,
in its sole discretion, elect to maintain a reasonable reserve fund (hereinafter
the "Reserve Fund") for the replacement of any improvements comprising the
Common Area. In such event, and in addition to the Common Area Operating
Expenses, Lessee shall pay as additional Rent its proportionate share of the
Reserve Fund.

    (v)           Real
Property Taxes (as defined in Paragraph 10).

    (vi)           The
cost of insurance maintained by Lessor pursuant to Paragraph 8, including any
premium finance charges, broker's fees and charges for risk management services
which may be provided by Lessor or an Affiliate of Lessor.

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

    (viii)           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 pursuant to the formula set out in
Paragraph 7.1(c).

    (ix)           Labor,
salaries, and costs, materials, supplies and tools, used in maintaining and/or
cleaning the Project and accounting, legal and other professional fees and
management fees attributable to the operation of the Project;

    (x)           Costs
incurred to maintain the quality, integrity, functionality and appearance of the
Project;

    (xi)           Costs
incurred for the purpose of reducing expenses;

    (xii)           Costs
incurred in complying with laws affecting the Project and the ownership, use,
operation thereof and cost under any covenants conditions and restrictions,
entitlements, and voluntary energy savings and/or governmental
programs;

    (xiii)           Costs
incurred in providing security to the Project (if the Premises are vacated due
to casualty or otherwise, Tenant does not provide adequate security services for
the Property, and Landlord elects to provide such security
services);

    (xiv)           Auditor
verification fees, if any;

    (xv)           All
costs, assessments and fees allocated to the Project and/or payable by Lessor,
as owner of the Project, pursuant to the Declaration, including without
limitation, all Assessments, including Regular Assessments, Capital Improvement
Assessments, Reconstruction Assessments and Special Assessments, all as defined
in the Declaration;

    (xvi)           All
reserve amounts payable by Lessor, as owner of the Project, pursuant to the
Declaration; and

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

    

    (b)           Any
direct or indirect item of Common Area Operating Expenses and Real Property
Taxes, inclusive of any and all occupancy taxes imposed on the use and/or
occupancy of the Premises by Lessee or any assignee, subtenant or other occupant
claiming by, through, or under Lessee that are specifically attributable to the
Premises, the Building or to any other building in the Project or to the
operation, repair and maintenance thereof, shall be allocated entirely to such
Premises, Building, or other building including, but not limited to costs
incurred in contesting taxes, fees, or enactments affecting the Project.
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 equitably be 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.

    

    (d)           Lessee's
Share of Common Area Operating Expenses shall be payable by Lessee within ten
(10) days after a reasonably detailed statement of actual expenses is presented
to Lessee. At Lessor's option, however, an amount may be estimated by Lessor
from time to time of Lessee's Share of annual Common Area Operating Expenses and
the same shall be payable monthly or quarterly, as Lessor shall designate,
during each 12 month period of the Lease term, on the same day as the Base Rent
is due hereunder. Lessor shall deliver to Lessee within one hundred and twenty
(120) days after the expiration of each calendar year a reasonably detailed
statement showing Lessee's Share of the actual Common Area Operating Expenses
incurred during the preceding year provided that the failure of Lessor to timely
deliver such statement shall not relieve Lessee of the obligation to pay the
actual Common Area Expenses. If Lessee's payments under this Paragraph 4.2(d)
during the preceding year exceed Lessee's Share as indicated on such statement,
Lessor shall credit the amount of such over-payment against Lessee's Share of
Common Area Operating Expenses next becoming due. If Lessee's payments under
this Paragraph 4.2(d) during the preceding year were less than Lessee's Share as
indicated on such statement, Lessee shall pay to Lessor the amount of the
deficiency within 10 days after delivery by Lessor to Lessee of the
statement.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e)           Notwithstanding
anything to the contrary in the Lease, in no event shall Lessee have any
obligation to perform or to pay directly, or to reimburse Lessor for, all or any
portion of the following repairs, maintenance, improvements, replacements,
premiums, claims, losses, fees, charges, costs and expenses (collec­tively,
"Costs"): (i) Costs occa­sioned by the act, omission or violation of Law by
Lessor, any other occupant of the Project, or their respective agents, employees
or contractors from and after the Commencement Date (the parties hereby agreeing
that the foregoing exclusion shall not be construed to exclude costs or expenses
relating to the existing condition of the Project); (ii) Costs incurred by
Lessor to repair any damage to the improvements on the Premises occasioned by
casualties or by the exercise of the power of eminent domain, if and to the
extent Lessor is expressly responsible for such Costs as set forth in Paragraphs
9 and 14 below; (iii)  Costs relating to repairs, alterations,
improve­ments, equipment and tools which could properly be capitalized under
generally accepted account­ing principles, to the extent that such costs are
allocated to Lessor pursuant to Paragraph 7.1(c); (iv) Costs for which Lessor
has a right of reim­bursement from other parties utilizing the Premises; (v)
Taxes, assessments, all other governmental levies, and any increases in the
foregoing occasioned by or relating to construction of improvements for other
occupants of the Project; (vi) Depreciation, amortization or other expense
reserves except as otherwise expressly permitted herein; (vii) Interest, charges
and fees incurred on debt, payments on mortgages and rent under ground leases;
(viii) Increases in insurance Costs caused by the activities of another occupant
of the Project; (ix) Costs incurred by Lessor to comply with Lessor’s obligation
to investigate, remediate, remove, restore and/or abate any Hazardous Substance
as expressly set forth in Paragraph 6; (x) management fees in excess (as applied
on a pro-rata basis) of three percent (3%) of scheduled Rent payable hereunder
without reference to any rental abatement, and (xi) Costs and expenses for which
Lessee reimburses Lessor directly or which Lessee pays directly to a third
person.

    

    (f)            Lessee
shall have the right, at Lessee’s sole cost and expense, upon no less than
twenty (20) days prior written notice to Lessor given within thirty (30) days
after Lessor’s delivery to Lessee of the calendar year statement, to audit
Lessor’s books and records with respect to Common Area Operating Expenses for
the purpose of verifying the matters set forth in such statement (“Audit”).  The Audit
shall be conducted by a member of a “Big Four” accounting firm (the “Accountant”), which Accountant
shall not be working on a contingency fee basis, and shall be conducted at
Lessee’s sole cost and expense.  The Audit shall be conducted by the
Accountant during normal business hours at offices and hours designated by
Lessor and shall be completed within thirty (30) days after the commencement
thereof.  Lessee may not conduct an Audit (i) more than once in each
Lease year, (ii) while Lessee is delinquent in the payment of Rent, (iii) while
Lessee is in Default under this Lease, or (iv) unless Lessee shall have paid all
amounts required to be paid under the applicable statement.  The
result of any such Audit shall be kept confidential and Lessee shall not supply
any information obtained as a result of such Audit to any other tenants of
Lessor or representatives and affiliates of any other tenants of Lessor or to
any third party except on a confidential basis to Lessee’s legal counsel,
accountants or as otherwise required by law.  In the course of any
Audit, Lessor may request from Lessee from time to time, and Lessee shall
promptly provide to Lessor, (1) copies of all calculations and related
workpapers prepared by the Accountant in the course of the applicable Audit and
relating to the disputed items of Common Area Operating Expenses, and (2) a copy
of the engagement letter or other applicable agreement between Lessee and the
Accountant to the extent necessary to confirm that the Accountant is not engaged
to conduct the Audit on a contingency basis.  Lessee shall promptly
deliver a copy of the result of any such Audit promptly upon the completion
thereof, and if the results of the Audit does not result in a reimbursement
payable to Lessee for an amount greater than five percent (5%) of the total
amount charged to Lessee as previously set forth in Lessor’s calendar year
statement of Lessee’s Share of Common Area Operating Expenses, Lessee shall
reimburse Lessor for all of Lessor’s reasonable costs and expenses incurred by
Lessor in connection with the Audit.  Lessee’s failure to dispute the
amount of Common Area Operating Expenses set forth in any calendar year
statement within thirty (30) days of Lessor’s delivery to Lessee of such
statement shall be deemed to be Lessee’s approval of such statement and Lessee,
thereafter, waives the right or ability to dispute the amounts set forth in such
statement.

    

    4.3           Payment. Lessee shall cause
payment of Rent to be received by Lessor in immediately available, lawful money
of the United States, without offset or deduction (except as specifically
permitted in this Lease), on or before the day on which it is due. Rent for any
period during the term hereof which is for less than one 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 by wire transfer of
funds as directed by Lessor in writing or to such other persons or place or
different manner 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 $50 in addition to any late
charges which may be due and Lessor, at its option, may require all future rent
to be paid by cashier’s check.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    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, in
addition to all other remedies available to Lessor at law or in equity, or
otherwise available to Lessor under this Lease, 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, cost, 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. Lessee
agrees that if Lessor requires the removal of any of the Lessee Improvement Work
in accordance with the provisions of Paragraphs 7.4(b) or 63 hereof, Lessor
shall be entitled to require that the Security Deposit be increased and Lessee
shall deposit additional monies with Lessor so that the Security Deposit shall
be increased by an amount sufficient to reimburse Lessor for any cost or expense
which Lessor may incur by reason of Lessee’s failure to remove the Lessee
Improvement Work which Lessor requires to be removed by Lessee at the expiration
or earlier termination of this Lease. If a change in control of Lessee occurs
during this Lease which does not constitute an assignment requiring consent
pursuant to Paragraph 12.1(b) 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 Lessor, in the exercise of
its sole discretion, deems to be sufficient to cause the Security Deposit to be
at a sufficient 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.  Lessee hereby waives the provisions of Section 1950.7 of
the California Civil Code and all other provisions of law, now or hereafter in
effect, which provide that Lessor may claim from a security deposit only those
sums reasonably necessary to remedy Defaults in the payment of Rent, to repair
damage caused by Lessee or to clean the Premises, it being agreed that Lessee
may, in addition, claim those sums specified in this Paragraph 5 above and/or
those sums reasonably necessary to compensate Lessor for any other loss or
damage, foreseeable or unforeseeable, caused by any “Breach,”  as that
term is defined in this Lease, of Lessee under this Lease beyond the applicable
cure period.

     

    6.           Use.

    

    6.1           Use. Lessee shall use and
occupy the Premises only for the Agreed Use, and for no other purpose. Lessee
shall not use or permit the Premises to be used for any other purpose without
Lessor's prior written consent, which may be granted or withheld in Lessor's
sole discretion. Lessee shall not use or permit the use of the Premises in a
manner that is unlawful, violates applicable ordinances, regulations or zoning
requirements, creates damage, waste or a nuisance, or that disturbs owners
and/or occupants of, or causes damage to adjacent premises or neighboring
properties or for any improper, immoral, or objectionable purpose. Lessee shall
promptly comply with all governmental orders and directions for the correction,
prevention and abatement of any violations in or upon, or in connection with,
the Premises, at Lessee's sole expense. Lessor shall have no obligation to
consider any request by Lessee, or by an assignee or successor-in-interest of
Lessee, to allow a use other than the Agreed Use.  Lessee shall comply
with all use restrictions and limitations set forth in the
Declaration.

    

    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, to 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 which may be given or withheld in Lessor's sole and
absolute discretion and timely compliance (at Lessee's expense) with all
Applicable Requirements. "Reportable Use" shall mean (i)
the installation or use of any above or below ground storage tank, (ii) the
generation, possession, storage, use, transportation, or disposal of a Hazardous
Substance that requires a permit from, or with respect to which a report,
notice, registration or business plan is required to be filed with, any
governmental authority, and/or (iii) the presence at the Premises of a Hazardous
Substance with respect to which any Applicable Requirements requires that a
notice be given to persons entering or occupying the Premises or neighboring
properties. Notwithstanding the foregoing, Lessee may use any ordinary and
customary materials reasonably required to be used in the normal course of the
Agreed Use, so long as such use is in compliance with all Applicable
Requirements, is not a Reportable Use of the type described in subsection (i) of
the definition of Reportable Use above and does not expose the Premises or
neighboring property to any material risk of contamination or damage or expose
Lessor to any liability therefor. Lessee will provide to Lessor copies of all
Hazardous Substance manifests (to the extent the same are requested in writing
by Lessor), inspection reports, permits and notices of violation from all
government authorities. In addition, Lessor may condition its consent to any
Reportable Use upon receiving such additional assurances as Lessor deems
necessary in Lessor's sole and absolute judgment to protect itself, the public,
the Premises, the Project 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, and/or any part of the
Project, 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, without limitation, through the
plumbing or sanitary sewer system) and/or any part of the Project and shall
promptly, at Lessee's expense, take all necessary or reasonably recommended
investigatory and/or remedial action, 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 (with
counsel satisfactory to Lessor) and hold Lessor, its officers, directors,
members, managers, partners, employees, agents, contractors, invitees, lenders
and master of ground lessor, if any, (each, a “Lessor Party” and collectively,
the “Lessor Parties”) harmless from and against any and all loss of rents and/or
damages, losses, liabilities, judgments, claims, costs, expenses, penalties, and
attorneys' and consultants' fees arising out of or involving either directly or
indirectly any Hazardous Substance brought, spilled or released in, on, under or
about the Premises and/or any part of the Project by or for Lessee, or any third
party (provided, however, that Lessee shall have no liability under this Lease
with respect to underground migration of any Hazardous Substance under the
Premises from adjacent properties except if caused by or contributed to by
Lessee and/or any Lessee Party). 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 caused by Lessee, and the cost of investigation,
removal, remediation, restoration and/or abatement, and shall survive the
expiration or termination of this Lease. No expiration, termination or
cancellation of this Lease and no 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 Remediation.
Lessor and its successors and assigns shall  be responsible for the
investigation, remediation, removal, restoration and/or abatement of 
all environmental damages to the Premises which existed as a
result of Hazardous Substances on the Premises prior to the Start Date or which
are caused by the gross negligence or willful misconduct of Lessor, its agents
or employees (provided, however, that Lessor shall have no liability under this
Lease with respect to underground migration of any Hazardous Substances under
the Premises from adjacent properties), 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 costs of investigation and remediation, as and when
required by the Applicable Requirements.

    

    (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 the Start Date (provided, however, that Lessor shall have no
liability under this Lease with respect to underground migration of any
Hazardous Substances under the Premises from adjacent properties), 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, without limitation,
allowing Lessor and Lessor's agents to have reasonable access to the Premises at
reasonable times in order to carry out Lessor's investigative and remedial
responsibilities.

    

    (g)           Lessor Termination Option. If
a Hazardous Substance Condition occurs during the term of this Lease, unless
Lessee is responsible therefor pursuant to this Paragraph 6 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 this Paragraph 6 and Paragraph 13, Lessor may, at
Lessor's option, either (i) investigate and remediate such Hazardous Substance
Condition, if required, as soon as reasonably possible at Lessor's expense, in
which event this Lease shall continue in full force and effect, or (ii) if the
estimated cost to remediate such condition exceeds twelve (12) times the then
monthly Base Rent or $500,000, whichever is greater, give written notice to
Lessee, within thirty (30) days after receipt by Lessor of knowledge of the
occurrence of such Hazardous Substance Condition, of Lessor's desire to
terminate this Lease as of the date sixty (60) days following the date of such
notice. In the event Lessor elects to give a termination notice, Lessee may,
within ten (10) days thereafter, give written notice to Lessor of Lessee's
commitment to pay the amount by which the cost of the remediation of such
Hazardous Substance Condition exceeds an amount equal to twelve (12) times the
then monthly Base Rent or $500,000, whichever is greater. Lessee shall provide
Lessor with said funds or satisfactory assurance thereof within thirty (30) days
following such commitment. In such event, this Lease shall continue in full
force and effect, and Lessor shall proceed to make such remediation as soon as
reasonably possible after the required funds are available. If Lessee does not
give such notice and provide the required funds or assurance thereof within the
time provided, this Lease shall terminate as of the date specified in Lessor's
notice of termination.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (h)          
Asbestos Notice. Both
state and federal applicable law requires disclosure of asbestos-containing
construction materials ("ACM") in the Building. This notification is being given
to provide the information required under such legislation in order to help
Lessee avoid any unintentional contact with the ACMs, and to assist Lessee in
making appropriate disclosures to Lessee's employees and others, as required by
applicable law.

    [ x
]           Lessee
acknowledges that Lessor has advised Lessee that Lessor has no actual knowledge
that the Building contains ACMs, but that Lessee has satisfied itself as to the
presence or absence of ACMs in the Building.

    If the
box above is not checked, Lessee acknowledges that Lessor has advised Lessee
that the Building contains ACMs. Lessor has made available to Lessee, Lessor's
asbestos management plan or other relevant data concerning same. However, Lessee
has satisfied itself as to the completeness and accuracy of same. If Lessee
undertakes any Alterations or repairs to the Premises (to the extent permitted
under Article 7), Lessee shall, in addition to complying with the requirements
of Article 7, undertake the Alterations or repairs at Lessee’s sole cost and
expense and in a manner that avoids disturbing any ACMs present in the Building,
if any. If ACMs exist in the Building and are likely to be disturbed in the
course of such work, Lessee shall encapsulate or remove the ACMs, if any, at
Lessee’s sole cost and expense and in accordance with an approved
asbestos-removal plan and otherwise in accordance with all applicable
environmental laws, including giving all notices required by the applicable
State and Federal Law.

    

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

    
       

    

    6.4           Inspection; Compliance. Lessor
and Lessor's "Lender"
(as defined in Paragraph 30 below) and consultants shall have the right to enter
into Premises at any time, in the case of an emergency, and otherwise at
reasonable times, for the purpose of inspecting the condition of the Premises
and for verifying compliance by Lessee with this Lease. The cost of any such
inspections shall be paid by Lessor, unless a violation of Applicable
Requirements or a Hazardous Substance Condition (see also Paragraph 9.1e) is
found to exist or be imminent, or the inspection is requested or ordered by a
governmental authority. In such case, Lessee shall promptly upon request
reimburse Lessor for the cost of such inspections, so long as such inspection is
reasonably related to the violation or contamination.

    

    6.5          
Safety And Health.
Lessee, at Lessee’s sole cost and expense, covenants at all times during the
term of this Lease to comply with the requirements of the Occupational Safety
and Health Act of 1970, 29 U.S.C. Subsection 65, et seq., and any similar
legislation in the state wherein the Premises is located (hereinafter, the
"Act"), to the extent that the Act applies to the Premises and any activities
thereon. Without limiting the generality of the foregoing, Lessee covenants to
maintain all working areas, all machinery, structures, electrical facilities,
and the like, at the Premises in a condition that fully complies with the
requirements of the Act, including such requirements as would be applicable with
respect to agents, employees or contractors of Lessor who may, from time to
time, be present upon the Premises, and Lessee agrees to indemnify and hold
Lessor and the Lessor Parties harmless from and against any liability, claim or
damages, arising as a result of Default and/or Breach of the foregoing covenant
and from all costs, expenses, and charges arising therefrom, including without
limitation, attorneys’ fees, expert and consultant fees, and other costs,
incurred by Lessor and/or Lessor Parties in connection therewith, which
indemnity shall survive the expiration or termination of this
Lease.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

    7.1           Lessee's
Obligations.

    

    In
General.       It is expressly
understood and agreed that Lessor is under no obligation to provide Lessee with
any services (including, without limitation, any security services) except as
otherwise expressly set forth in this Lease. 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 and facilities, including but not limited to plumbing (except
for the main underground plumbing connecting to the Premises during the Original
Term only, which shall be solely the responsibility of Lessor), 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, without limitation, the procurement and
maintenance of the service contracts required by Paragraph 7.1(a) below, and the
procurement of janitorial services through a contractor previously approved by
Lessor which services other tenants at the Project. 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. Notwithstanding the preceding sentence, only contractors
approved in writing by Lessor may do any work on the roof or roof membrane.
Other than contractors approved by Lessor, no person may be on the roof. If
Lessee requires rail spur service, Lessee, at its sole cost and expense, must
inspect, repair and maintain the physical aspects of the rail spur, and must
comply with and renew, when necessary, directly with the applicable rail service
provider any rail spur service or switch track agreements for the Premises.
Lessee hereby acknowledges that the rail service is provided by Lessor "As-Is,"
“Where Is," “With All Faults” without any representations or warranties, and
that any representations or warranties set forth in Article 2 do not apply to
the rail service or the physical condition thereof, and that Lessee hereby
agrees and warrants that it has investigated and inspected the condition of the
rail services and the rail spur and the suitability of the same for Lessee’s
purpose, and Lessee does hereby waive and disclaim any objection or cause of
action based upon the condition or availability of the rail service or rail
spur. Lessee warrants and represents to Lessor that Lessee, the Lessee Parties
and the Lessee’s Broker have no knowledge of and/or are not aware of any defects
in the main underground plumbing connecting to the Premises.

    
       

    

    (a)           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 and other air-handling
equipment, (ii) boiler and pressure vessels, (iii) clarifiers, and (iv) any
other equipment, if reasonably required by Lessor. However, Lessor reserves the
right to procure and maintain any or all of such service contracts if Lessee
fails to do so, and Lessee shall reimburse Lessor, promptly upon demand, for the
cost thereof. HVAC maintenance contracts obtained by Lessee shall at a minimum
require the following on a regular basis: (aa) check performance of all major
components, (bb) lubricate moving parts as required, (cc) check refrigerant
charges (during cooling season), (dd) inspect for oil, refrigerant, and other
leaks, (ee) check operating and safety controls, (ff) check pressures and
temperatures, (gg) inspect condensers, (hh) inspect fans, motors and starters,
(ii) tighten electrical connections at equipment, (jj) test amperages and
voltages, (kk) check belts and drives, (II) change oil and filters, or dryers,
as required (at least 4 times annually), (mm) check temperature on control
system, and (nn) thoroughly inspect heat exchanger.

    

    (b)           Failure to Perform. If Lessee
fails to perform Lessee's obligations under this Paragraph 7.1, Lessor may enter
upon the Premises, perform such obligations on Lessee's behalf, and put the
Premises in good order, condition and repair, and Lessee shall promptly
reimburse Lessor a sum equal to 115% of the cost thereof.

    

    (c)           Replacement. Subject to
Lessee's indemnification of Lessor as set forth in Paragraph 8.7 below, and
without relieving Lessee of liability resulting from Lessee's failure to
exercise and perform good maintenance practices, if one or more of the items
described in Paragraph 7.1(a) 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 allocated between the Parties
as set forth in this Section 7.1(c). 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 Lessee's portion
of the cost of such replacement by a fraction, the numerator of which is one,
and the denominator of which is the number of months remaining on the Term.
Lessee's portion of the cost of such replacement is determined by multiplying
the total cost of such replacement by a fraction, the numerator of which is the
number of months remaining in the Term, and the denominator of which is the
number of months of the useful life of such replacement as such useful life is
commercially reasonably determined by Lessor (including interest on the
unamortized balance as is then commercially reasonable in the judgment of
Lessor's accountants). Lessee may prepay its obligation at any time. The intent
of this paragraph 7.1(c) is that Lessee is solely responsible for that portion
of the cost of replacement attributed to the Term.

    

    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. 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. Lessor has no obligation to decorate, alter, repair or improve
the Premises or the Project. 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, steam lines, power
panels, electrical distribution, security and fire protection systems,
information technology infrastructure, communication systems (including
cabling), lighting fixtures, HVAC and other air-handling 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 Of Lessor. Except for
Lessee’s initial Lessee Improvement Work (for which Lessee shall obtain the
approvals of Lessor as described in Paragraph 60 on the Addendum attached
hereto), Lessee shall not make any Alterations or Utility Installations to the
Premises without Lessor's prior written consent, which said consent shall not be
unreasonably withheld, and, to the extent required under the Declaration,
without the prior written consent of the Architectural Committee (as such term
is defined in the Declaration).  Lessee shall be responsible, at its
cost, for any fees assessed under the Declaration for the review by the
Architectural Committee of Lessee’s plans and specifications. 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 and
in compliance with the provisions of Paragraphs 7.4(b) and 63 hereof, as long as
they are not visible from the outside, do not involve puncturing, relocating or
removing the roof or any existing walls, do not affect the structural elements
of the Building, and the cost thereof does not exceed $50,000 per event of
improvement. Notwithstanding the foregoing, Lessee shall not make or permit any
roof penetrations and/or install anything on the roof (including without
limitation, antennas, satellite reception devices, telephonic equipment,
electronic transmission or reception devises, signs, billboards, advertisements,
or any other equipment of any kind) without the prior written approval of: (a)
Lessor, which approval may be withheld for any reason or no reason; provided,
however, that if such roof penetration and/or roof installation is required for
the conduct of Tenant’s Agreed Use, Lessor shall not unreasonably withhold its
approval (provided further, that it shall be deemed reasonable for Lessor to
withhold its consent if any such roof work proposed by Lessee would be in
violation of the Declaration, or would adversely affect the structural elements
of the roof and/or Building), and (b) the Architectural Committee to the extent
required under the Declaration. Lessor may, as a precondition to granting any
approval under this Paragraph, 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 and/or the
Architectural Committee shall be presented to Lessor and/or the Architectural
Committee in written form with detailed plans as requested by the Lessor and/or
the Architectural Committee. 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. Lessee must reimburse Lessor
within ten (10) days after Lessee's receipt of Lessor's invoice for Lessor's
costs incurred relating to any Utility installations, Trade Fixtures or
Alterations, including but not limited to all management, engineering,
consulting, construction and legal fees incurred by Lessor for the review and
approval of Lessee's plans and specifications or for monitoring Lessee's
construction of any Utility Installations, Trade Fixtures or Alterations. On
completion of any Alterations by Lessee, Lessee shall promptly supply Lessor
with "as built" drawings accurately reflecting all such work.

    

    (c)           Liens; Bonds; and Indemnity.
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 materialman's lien
against the Premises or any interest therein. Lessee shall give Lessor not less
than twenty (20) 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, the Lessor Parties 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 and the Lessor Parties against liability for the
same. If Lessor elects to participate in any such action, Lessee shall pay
Lessor's and the Lessor Parties’ attorneys' fees and costs.

    

    7.4          
Ownership; Removal; Surrender;
and Restoration.

    

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

    

    (b)           Removal. By delivery to Lessee
of written notice from Lessor not later than ninety (90) 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, except those that Lessor has expressly agreed shall be permitted
to remain in the Premises in accordance with the terms of this Lease. The cost
of said removal shall be solely borne by Lessee. 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. (see Addendum Paragraph
63.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (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 as good and operating order, condition and state of
repair as when received, ordinary wear and tear excepted and subject to the
other provisions of this Lease with respect to which Lessee Owned Alterations,
Lessee Improvement Work and Utility Installations may remain in the Premises at
the end of the Term. 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 36 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 Project) 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.
Lessee shall notify Lessor in writing at least 120 days prior to vacating the
Premises and shall within 30 days prior to vacating arrange to meet with Lessor
for a joint inspection of the Premises prior to vacating. If Lessee fails to
give such notice or to arrange for such inspection, then Lessor's inspection of
the Premises shall be deemed conclusive for the purpose of determining Lessee's
responsibility for repairs and restoration of the Premises. 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. At least fourteen (14) days but no more than
thirty (30) days prior to the expiration or earlier termination of the Lease,
Lessee shall deliver to Lessor (i) a certificate from an engineer reasonably
acceptable to Lessor certifying that the HVAC and other air-handling systems are
then in good repair and working order and (ii) in the event Lessee utilizes
Hazardous Substances in or on the Premises during the Term, a Phase I
environmental assessment of the Premises and if so recommended in the Phase I, a
Phase II environmental site assessment prepared by an environmental engineer
reasonably acceptable to Lessor indicating that no Hazardous Substance Condition
exists on the Premises in violation of applicable law. In the event such Phase I
environmental assessment determines that no Hazardous Substance Condition exists
on the Premises for which Lessee is responsible pursuant to the terms hereof,
Lessor shall reimburse Lessee for the cost of such Phase I environmental
assessment.

    

    8.            Insurance;
Indemnity.

    

    8.1           Payment of Premiums. The cost
of the premiums for the insurance policies required to be carried by Lessor,
pursuant to Paragraphs 8.2(b), 8.3(a) and 8.3(b), shall be a Common Area
Operating Expense. 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 during the term of this Lease a Commercial
General Liability policy of insurance protecting Lessee, Lessor and any
Lender(s) whose names have been provided to Lessee in writing ( all as
additional insureds) against claims for bodily injury, property damage, personal
injury and advertising injury based upon, relating to, involving, or arising out
of the ownership, use, occupancy, or maintenance of the Premises and all areas
appurtenant thereto, and shall cover all owned, non-owned, and hired vehicles
used in the conduct of the Lessee's business and operated on or parked upon the
Project. Lessee shall promptly provide Lessor with evidence of such insurance in
the form of an endorsement to the policy or a copy of the policy.  A
Certificate of insurance is not acceptable. Such insurance shall be on an
occurrence basis for bodily injury and property damage coverage, providing
coverage in an amount not less than $2,000,000 for damages because of all bodily
injury and property damage arising out of any one occurrence and coverage in an
amount not less than $2,000,000 for all damages because of all personal injury
and all advertising injury sustained by any one person or organization. The
insurance shall include an "Additional Insured - Managers, Lessors, of Premises"
endorsement and contain the "Amendment of the Pollution Exclusion" endorsement
for damage or injury caused by heat, smoke or fumes from a hostile fire. The
policy shall not contain any inter-insured exclusions as between insured persons
or organizations, shall contain endorsements for cross-liability to ensure a
severability of interests, 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 required by
this Lease or as carried by Lessee shall not, however, limit the liability of
Lessee, nor relieve Lessee of any obligation hereunder. All insurance to be
carried by Lessee shall be primary to and not contributory with any insurance
carried by Lessor, whose insurance shall be considered excess insurance only and
shall not insure Lessee. The Parties acknowledge and agree that the failure by
Lessee to fully and continuously comply with all of the foregoing insurance
requirements and covenants, whether through Lessee's neglect, inability to
obtain such coverage, or otherwise, Shall constitute a material breach of this
Lease.

    

    (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 in the name of
Lessor, with loss payable to Lessor, any groundlessor, and to any Lender(s)
insuring loss or damage to the Premises. The amount of such insurance shall be
equal to the full replacement cost of the Premises, as the same shall exist from
time to time, or the amount required by any Lenders, but in no event shall
Lessor be required to carry 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 and not under any Lessor's policies of insurance. 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
terrorism, flood and/or earthquake unless required by Lessor or a Lender),
including, without limitation, 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. Without limiting the generality of the foregoing, said policy or
policies shall also contain if available and commercially appropriate 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 $100,000 per
occurrence, and Lessee shall be liable for such deductible amount in the event
of an Insured Loss.  In addition to the policies of property insurance
required to be carried by Lessor under the provisions of this Lease, Lessor
shall have the right (but not the obligation), if required by Lessor’s Lender,
to maintain terrorism, earthquake and/or flood insurance with respect to the
Building and the Project, in which event the costs of such insurance shall be
included in the Common Area Operation Expenses. Lessee acknowledges that the
current Lessor’s Lender requires the maintenance of terrorism, earthquake and
flood insurance with respect to the Building and the Project.

    

    (b)           Rental Value. Lessor may
obtain and keep in force if available and commercially appropriate 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 a minimum of one (1) year ("Rental Value Insurance"). Said
insurance, if obtained, shall provide that in the event the Lease is terminated
by reason of an insured loss, the period of indemnity for such coverage shall be
extended beyond the date of the completion of repairs or replacement of the
Premises, to provide for a minimum of one full year's loss of Rent from the date
of any such loss. Said insurance shall contain if available and commercially
appropriate an agreed valuation provision in lieu of any coinsurance clause, and
the amount of coverage shall be adjusted annually to reflect the projected
annual Rent otherwise payable by Lessee, for the next twelve (12) month period.
Lessee shall be liable for any deductible amount in the event of such
loss.

    

    (c)           Adjacent Premises. Lessee
shall pay for the entirety of 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. Because
Lessor is the Insuring Party, Lessor shall not be required to insure Lessee
Owned Alterations and Utility Installations unless and until the item in
question has become the property of Lessor under the terms of this
Lease.

    

    8.4           Lessee's Property; Business
Interruption Insurance.

    

    (a)           Property Damage. Lessee shall
obtain and maintain insurance coverage on all of Lessee's personal property,
Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such
insurance shall be full replacement cost coverage with a deductible of not to
exceed $1,000 per loss or 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. Upon written request from
Lessor, Lessee shall provide Lessor with written evidence that such insurance is
in force in the form of an endorsement to the policy or a copy of the
policy.

    

    (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 By Lessor 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+XV, 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
endorsements 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 30 days prior to the
expiration of such policies, furnish Lessor with evidence satisfactory to Lessor
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. Lessee shall thereafter deliver
copies of the policies that have been renewed before expiration of the insurance
binder.  If Lessee fails to do so, then Lessor, in is sole and
absolute discretion,  may order such insurance and charge the costs
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.  Lessee shall carry and maintain during the entire Term
(including any option periods), at Lessee’s sole cost and expense, increased
amounts of the insurance required to be carried by Lessee pursuant to this Lease
and such other reasonable types of insurance coverage and in such reasonable
amounts covering the Premises and Lessee’s operations therein, as may be
reasonably required by Lessor.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.6           Waiver of Subrogation.
Notwithstanding anything to the contrary contained in this Lease, 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
without regard to the negligence of the party receiving the benefit of the
waiver. 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 the Lessor Parties, from and against any
and all claims, loss of rents and/or damages, liens, judgments, penalties,
attorneys' fees, expert witness fees, and consultants' fees, expenses and/or
liabilities arising out of, involving, or in connection with, the use and/or
occupancy of the Premises or the Project by Lessee or any of the Lessee Parties
or any act, omission or negligence of any Lessee and/or any of the Lessee
Parties.  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 sole cost and expense by counsel reasonably satisfactory to Lessor
and Lessor shall reasonably cooperate with Lessee in such defense. If Lessor in
its sole discretion shall determine that it is in Lessor's interest to have
separate legal counsel, Lessee shall indemnify Lessor for any legal fees and
costs incurred by Lessor for the defense of any such claims, loss of rents
and/or damages, liens, judgments, penalties, expenses and/or liabilities. Lessor
need not have first paid any such claim in order to be defended or
indemnified.  Notwithstanding the foregoing, or anything to the
contrary contained herein except as set forth in Paragraph 8.6 hereof, Lessor
shall not be released from or indemnified for any losses, damages, liabilities,
claims, costs or expenses arising from the gross negligence or willful
misconduct of Lessor, or the breach of Lessor’s obligations or representations
under this Lease.

    

    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, or any of the Lessee Parties, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, HVAC or other air-handling equipment 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.  Lessor shall under no circumstances be liable for injury to
Lessee's business or for any loss of income or profit therefrom and Lessee
waives any claim against Lessor and/or the Lessor Parties for actual,
consequential, incidental, exemplary or punitive damages.

    

    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 nine (9) months or less from the date of the damage or destruction.
Lessee shall notify Lessor in writing within 24 hours following any damage to
the Premises ("Lessee Damage Notice"). Lessor shall notify Lessee in writing
within thirty (30) days from its receipt of the Lessee Damage Notice as to
whether or not the damage is Partial or Total.

    

    (b)           "Premises Total Destruction"
shall mean damage or destruction to the Premises or the Project, other than
Lessee Owned Alterations and Utility Installations and Trade Fixtures, which
cannot reasonably be repaired in nine (9) months or less from the date of the
damage or destruction. Lessee shall notify Lessor in writing within 24 hours
following any damage to the Premises ("Lessee Damage Notice"). Lessor shall
notify Lessee in writing within thirty (30) days from its receipt of the Lessee
Damage Notice as to whether or not the damage is Partial or Total.

    

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

    

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

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    9.2           Partial Damage - Insured Loss.
If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall,
at Lessor's expense, repair such damage (but not Lessee's Trade Fixtures or
Lessee Owned Alterations and Utility Installations) as soon as reasonably
possible and this Lease shall continue in full force and effect; provided,
however, that Lessee shall, at Lessor's election, make the repair of any damage
or destruction the total cost to repair of which is $5,000 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 affect such repair, the Insuring Party shall promptly contribute the shortage
in proceeds as and when required to complete said repairs. In the event,
however, such shortage was due to the fact that, by reason of the unique nature
of the improvements, full replacement cost insurance coverage was not
commercially reasonable and available, Lessor shall have no obligation to pay
for the shortage in insurance proceeds or to fully restore the unique aspects of
the Premises unless Lessee provides Lessor with the funds to cover same, or
adequate assurance thereof, within 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 or omission of
Lessee,  any Lessee Party or Lessee's licensees or customers (in which
event Lessee shall make the repairs at Lessee's sole cost and expense), Lessor
may either: (i) repair such damage as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full force and effect, or
(ii) terminate this Lease by giving written notice to Lessee within thirty (30)
days after receipt by Lessor of knowledge of the occurrence of such damage. Such
termination shall be effective sixty (60) days following the date of such
notice. In the event Lessor elects to terminate this Lease, Lessee shall have
the right within ten (10) days after receipt of the termination notice to give
written notice to Lessor of Lessee's commitment to pay for the repair of such
damage without reimbursement from Lessor. Lessee shall provide Lessor with said
funds or satisfactory assurance thereof within thirty (30) days after making
such commitment. In such event this Lease shall continue in full force and
effect, and Lessor shall proceed to make such repairs as soon as reasonably
possible after the required funds are available. If Lessee does not make the
required commitment, this Lease shall terminate as of the date specified in the
termination notice.

    

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

    

    9.5           Damage Near End of Term. If at
any time during the last six (6) months of this Lease there is damage for which
the cost to repair exceeds one (1) month's Base Rent, whether or not an Insured
Loss, Lessor may terminate this Lease effective sixty (60) days following the
date of occurrence of such damage by giving a written termination notice to
Lessee within thirty (30) days after the date of occurrence of such damage.
Notwithstanding the foregoing, if Lessee at that time has an exercisable option
to extend this Lease or to purchase the Premises, then Lessee may preserve this
Lease by, (a) exercising such option and (b) providing Lessor with any shortage
in insurance proceeds (or adequate assurance thereof) needed to make the repairs
on or before the earlier of (i) the date which is ten (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 a Hazardous Substance
Condition for which Lessee is not responsible under this Lease, the Rent payable
by Lessee for the period required for the repair, remediation or restoration of
such damage shall be abated in proportion to the degree to which Lessee's use of
the Premises is impaired, but not to exceed the proceeds received from the
Rental Value insurance. All other obligations of Lessee hereunder shall be
performed by Lessee, and Lessor shall have no liability for any such damage,
destruction, remediation, repair or restoration except as provided herein. In
the event of Premises Partial Damage or Premises Total Destruction or a
Hazardous Substance Condition for which Lessor is not expressly responsible
under this Lease, the Rent payable by Lessee for the period required for the
repair, remediation or restoration of such damage shall not be
abated.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)           Remedies. If Lessor shall be
obligated to repair or restore the Premises and does not commence, in a
substantial and material way, such repair or restoration within ninety (90) days
(subject to force majeure) after such obligation shall accrue, Lessee may, at
any time prior to the commencement of such repair or restoration, give written
notice to Lessor and to any Lenders of which Lessee has actual notice, of
Lessee's election to terminate this Lease on a date not less than sixty (60)
days following the giving of such notice. If Lessee gives such notice and such
repair or restoration is not commenced within thirty (30) days (subject to force
majeure) thereafter, this Lease shall terminate as of the date specified in said
notice. If the repair or restoration is commenced within said thirty (30) days
(subject to force majeure), this Lease shall continue in full force and effect.
"Commence" shall mean
either the authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs. For
purposes of this Paragraph 9.6(b), "force majeure" means any prevention, delay
or stoppage due to strikes, lockouts, labor disputes, acts of God, inability to
obtain labor or materials, or reasonable substitutes therefor, governmental
restrictions, governmental regulations, governmental controls, judicial orders,
enemy or hostile governmental action, civil commotion, fire or other casualty
and other causes beyond the reasonable control of Lessor shall excuse the
performance by Lessor for a period equal to any such prevention, delay or
stoppage.

    
       

    

    9.7           Termination - Advance
Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or
Paragraph 9, (i) an equitable adjustment shall be made concerning advance Base
Rent and any other advance payments made by Lessee to Lessor; and (ii) the
Lessee shall pay Lessor that portion of the insurance proceeds due pursuant to
Paragraph 8.4 equal to the total amount of such proceeds times a fraction the
numerator of which is the number of months elapsed in the term of the Lease and
the denominator of which is the total number of months in the Term. Lessor
shall, in addition, return to Lessee so much of Lessee's Security Deposit as has
not been, or is not then required to be, used by Lessor.

    

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

    

    10.           Real Property
Taxes.

    

    10.1         Definition. As used herein,
the term "Real Property
Taxes" shall include any form of assessment; real estate, ad valorem,
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, including, without limitation, gross receipts and gross rental taxes
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, state or other 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, 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 or
any portion thereof or a change in the improvements thereon or any other tax or
assessment imposed in lieu of any Real Property Taxes. 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.  Lessor shall pay the Real Property Taxes applicable to
the Project, and except as otherwise provided in Paragraph 10.3, any such
amounts 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 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.

    

    10.4         Joint Assessment. If the
Building is not separately assessed, Real Property Taxes 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. Lessee shall obtain
and pay for all water (including, without limitation, all potable and processed
water), gas, steam, heat, light, electricity, telephone and other information
technology infrastructure, trash disposal and other utilities and services
supplied to the Premises, together with any taxes thereon. Lessee must arrange
and pay for the installation of any required utility meters. Lessee must pay any
fees or deposits required for any of the utilities. Notwithstanding the
provisions of Paragraph 1.6 and 4.2, if at any time Lessee is not obtaining and
directly paying for any of the items in this Paragraph 11 and either (i) Lessor
determines, in Lessor's sole, but good faith, judgment, or (ii) the Association
determines, in its sole judgment, that Lessee is using a disproportionate amount
of water, gas, steam, heat, light, electricity, telephone, information
technology infrastructure, other commonly metered utilities, trash disposal, or
that Lessee is generating such a large volume of trash as to require an increase
in the size of the dumpster and/or an increase in the number of times per month
that the dumpster is emptied, then Lessor may increase Lessee's Base Rent by an
amount equal to such increased costs. It is expressly understood and agreed that
Lessor shall have no liability for any interruption or termination of utility
services to the Premises and Lessee shall have no right to terminate this Lease
in the event of any such interruption or termination.

    
       

    

    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 which shall not
unreasonably be conditioned, delayed or withheld.

    

    (b)           Any
change in the control of Lessee or any change in the legal form of Lessee shall
constitute an assignment requiring consent. The (i) transfer, on a cumulative
basis, of twenty-five percent (25%) or more of the ownership interest in Lessee,
any entity directly or indirectly controlling Lessee, or Guarantor of this
Lease; or (ii), any other transfer or transactions which gives parties, other
than those parties currently comprising Lessee, the authority to direct the
management of the 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, reorganization, financing,
transfer, leveraged buy-out or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Lessee's assets occurs, which results or will
result in a reduction of the Net Worth of Lessee by an amount greater than
twenty-five percent (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) immediately prior to the transaction as established under generally
accepted accounting principles.

    

    (d)           An
assignment or subletting without consent shall, at Lessor's option, be null,
void and of no effect, and shall, at Lessor’s option, be a Default curable after
notice per Paragraph 3.1(d), 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, in addition to all other rights
and remedies of Lessor herein, Lessor may either: (i) terminate this Lease, or
(ii) upon thirty (30) days written notice, increase the monthly Base Rent to one
hundred ten percent (110%) of the Base Rent then in effect. Further, in the
event of such Breach and rental adjustment, (i) the purchase price of any option
to purchase the Premises held by Lessee shall be subject to similar adjustment
to one hundred ten percent (110%) of the price previously in effect, and (ii)
all fixed and non-fixed rental adjustments scheduled during the remainder of the
Lease term shall be increased to One Hundred Ten Percent (110%) of the scheduled
adjusted rent.

    

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

    

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

    

    (g)           The
parties hereby agree that it shall be reasonable under this Lease and under any
applicable law for Lessor to withhold consent to any proposed transfer where one
or more of the following apply, without limitation as to other reasonable
grounds for withholding consent.

    

    (h)           The
transferee is of a character or reputation or engaged in a business which is not
consistent with the quality of the Building or the Project, or would be a
significantly less prestigious occupant of the Building or the Project than
Lessee;

    (ii)           The
transferee intends to use the subject space for purposes which are not permitted
under Lease;

    (iii)           The
transferee is either a governmental agency or instrumentality
thereof;

    (iv)           The
transferee is not a party of reasonable financial worth and/or financial
stability in light of the responsibilities involved under the Lease on the date
consent is requested; or

    (v)           The
proposed transfer would cause Lessor to be in violation of another lease or
agreement to which Lessor is a party, or would give an occupant of the Building
a right to cancel its lease;

    (vi)           The
terms of the proposed transfer will allow the transferee to exercise a right of
renewal, right of expansion, right of first offer, or other similar right held
by Lessee (or will allow the transferee to occupy space leased by Lessee
pursuant to any such right); or

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (vii)           If
the proposed assignee’s or sublessee’s activates in or about the Premises, the
Building and/or the Project involve the use, handling, storage or disposal of
any Hazardous Substances other than those used by Lessee and in quantities and
processes similar to Lessee’s uses in compliance with this Lease, (x) it shall
be reasonable for Lessor to withhold its consent to such assignment or sublease
in light of the risk of contamination posed by such activities and/or (y) Lessor
may impose an additional condition to such assignment for sublease which
requires Lessee to reasonably establish that such assignee’s or sublessee’s
activities pose no materially greater risk of contamination to the Premises, the
Building and/or the Project than do lessee’s permitted activities in view of:
(a) the quantities, toxicity and other properties of the Hazardous Substances to
be used  by such assignee or sublessee; (b) the precautions against a
release of Hazardous Substances such assignee or sublessee agrees to
implement;  (c) such assignee’s or sublessee’s financial condition as
it relates to its ability to fund a major cleanup;  and (d) such
assignee’s  or sublessee’s policy and historical record respecting its
willingness to respond to the clean up of a release of Hazardous
Substances.

    (i)           
Notwithstanding anything to the contrary contained in this Paragraph 12.1, from
and after the second anniversary of the Commencement Date, Lessee may assign
this Lease or sublet the Premises to an entity controlled by or under common
control of Lessee (each a “Tenant Affiliate”) without
Lessor’s prior written consent, provided, that: (1) Lessee is not in Default at
the time of such proposed transfer; (2) such Tenant Affiliate is similar to or
consistent with the character of Lessee, and is of a character and reputation
which is not inconsistent with the quality and reputation of the Building and/or
the Project; (3) the proposed Tenant Affiliate transferee intends to use the
Premises for a use which is in compliance with the terms of Paragraph 6.1; (4)
such proposed transfer would not cause Lessor to be in violation of another
lease or agreement to which Lessor is a party, or would give an occupant of the
Building and/or the Project the right to cancel its lease; (5) Lessee shall
provide Lessor with notice of such proposed transfer in writing at least ten
(10) days prior to the effective date thereof; (6) Lessee is not released from
any of its obligations under this Lease; and (7) such assignment or sublease to
such Tenant Affiliate is not a subterfuge by Lessee to avoid its obligations
under this Lease.

    

    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,
(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, (iv) release the
Guarantor, if any, of any obligations hereunder, or (v) be effective without the
express written acknowledgment by Guarantor of its continuing obligations under
the Guaranty, if any.

    

    (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 therefor to Lessor, or any security held by Lessor.

    

    (e)           Each
request for consent to an assignment or subletting shall be in writing,
accompanied by information relevant to Lessor's determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a fee of $1,500, 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). Whether or
not Lessor shall grant consent, Lessee shall pay all reasonable attorneys’ fees
and costs incurred by Lessor in connection with reviewing, approving, drafting,
and consummating, if applicable, any assignment or sublease requested by
Lessee.

    

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

    

    (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 also 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. 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. If Lessee
does not require the sublessor to attorn to Lessor, the sublease shall be
extinguished upon the termination of this Lease as a result of Lessee's breach
hereunder, and the sublessee shall have no further right to occupy the
Premises.

    

    (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 make reasonable efforts to deliver a copy of any notice of Default or
Breach by Lessee to the sublessee, if possible, 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.

    

    (f)           
Lessee may list the Premises for sublease or assignment with only reputable
brokers approved in writing by Lessor. Any broker retained by Lessee is not the
agent of Lessor for any purpose, and unless expressly agreed in writing
otherwise, Lessor shall not be responsible for any compensation or charges
claimed by any broker retained by Lessee or the sublessee, or from and against
any party whose claim is based, directly or indirectly, on any proposed sublease
or assignment. Lessee must indemnify, protect, defend (with counsel satisfactory
to Lessor) and hold Lessor and the Lessor Parties harmless from and against any
claim for compensation or charges claimed by any broker retained by Lessee, or
from and against any party whose claim is based, directly or indirectly, on any
proposed sublease or assignment.

    

    12.4         Recapture. If prior to the
second anniversary of the Commencement Date, Lessee proposes to assign or
sublease all or any part of the Premises, and without limitation on Lessor’s
right to withhold consent pursuant to Paragraph 12.1(a) above, Lessor may, at
its option, upon written notice to Lessee given within thirty (30) days after
receipt of the Lessee’s request for consent to sublease or assign, elect to
recapture the Premises and upon such election this Lease shall terminate. Lessor
may, at its option, lease the recaptured Premises to the sublessee or assignee
identified in Lessee’s consent request without liability to Lessee. If Lessor
does not elect to recapture pursuant to this Paragraph 12.4 and has provided its
consent consistent with the terms and conditions of this Paragraph 12.4, Lessee
may thereafter enter into a valid sublease or assignment with the proposed
sublessee or assignee provided that: (i) the sublease or assignment in the form
approved by Lessor and consistent with the terms of 12.2 and 12.3 is executed by
Lessee and sublessee or assignee within thirty (30) days after Lessor’s consent,
and (ii) Lessee agrees to pay the Consent Fee as defined in Paragraph
12.5.

    

    12.5         Consent Fee. The fees
described in this Paragraph 12.5 are collectively referred to in this Lease as
the "Consent Fee."

    

    If Lessor shall consent to any proposed
sublease, and if Lessee shall enter into any sublease of the Premises or any
part thereof, Lessee agrees to pay to Lessor fifty percent (50%) of all excess
rental or other profit realized by Lessee from the sublease (the "Sublease
Consent Fee"), calculated on a per-square foot basis in the event of a sublease
of a portion of the Premises. In calculating the Sublease Consent Fee Lessee may
deduct all actual, reasonable, documented out-of-pocket expenses incurred by
Lessee in connection with the sublease amortized over the term of the sublease,
including, but not limited to Lessee’s costs of all tenant improvements made and
paid for by Lessee for the sublessee, real estate commissions, and reasonable
attorneys fees. Lessee agrees to pay to Lessor the Sublease Consent Fee within
five (5) business days after subrents are due or other profits are
realized.

    

    If Lessor shall consent to any proposed
assignment or other transfer, including but not limited to a sale of the
Lessee's business, Lessee agrees to pay to Lessor, fifty percent (50%) of all
consideration, in whatever form, realized by Lessee from the assignment or other
transfer (the "Transfer Consent Fee"). In calculating the Transfer Consent Fee
Lessee may deduct actual, reasonable, documented out-of-pocket expenses incurred
by Lessee in connection with the assignment or other transfer amortized over the
remaining portion of the term of this Lease, including, but not limited to
Lessee’s costs of all tenant improvements made and paid for by Lessee for the
sublessee, real estate commissions, and reasonable attorneys fees. Lessee agrees
to pay to Lessor the Transfer Consent Fee prior to the effective date of, and as
an express condition to Lessor's obligation to consent to, the assignment or
other transfer.

    

    For purposes of determining the
Sublease Consent Fee or the Transfer Consent Fee under this Paragraph 12.5, the
value attributed to Lessee's trade fixtures, inventory, equipment or other
personal property shall be the fair market value thereof determined as if sold
or transferred separately from the Premises.  Lessor or its authorized
representatives shall have the right at all reasonable times to audit the books,
records and papers of Lessee relating to any sublease, assignment or other
transfer, and shall have the right to make copies thereof.  If the
Consent Fee respecting any sublease, assignment or other transfer shall be found
understated, Lessee shall, within thirty (30) days after demand, pay the
deficiency and Lessor’s costs of such audit, and if understated by more than ten
percent (10%), Lessor shall have the right to cancel this Lease upon thirty (30)
days’ notice to Lessee.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    13.           Default; Breach;
Remedies.

    

    13.1         Default; Breach. A "Default" is defined as a
failure by the Lessee timely 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 or for a
continuous period of six (6) months or longer; or the vacating of fifty percent
(50%) or more of the Premises for a period of six (6) months or
longer.

    

    (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, within
five (5) days of receipt of written notice from Lessor that such amount was due
provided Lessor shall not be required to provide written notice more than once
in any twelve (12) month period and provided further if Lessor provides notice
more than once in any twelve (12) month period (without having any obligation to
provide more than one such notice), Lessor shall have no obligation to provide
any further notices to Lessee pursuant to this Paragraph 13.1(b).

    

    (c)           The
failure of Lessee to continuously and without interruption maintain any
insurance or surety bond required in this Lease, to provide reasonable evidence
of insurance or surety bond, or to fulfill any obligation under this Lease which
failure endangers or threatens life or property.

    

    (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, or (viii) any other
documentation or information which Lessor may reasonably require of Lessee under
the terms of this Lease.

    

    (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) or (c), 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 it is reasonably capable of cure
but more than 30 days are reasonably required for its cure, then it shall not be
deemed to be a Breach if Lessee promptly (but in no event later than 30 days)
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 (e) is
contrary to any applicable law, such provision shall be of no force or effect,
and not affect the validity of the remaining provisions.

    

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

    

    (h)           If
the performance of Lessee's obligations under this Lease is guaranteed: (i) the
death of a Guarantor, (ii) the termination of a Guarantor's liability with
respect to this Lease other than in accordance with the terms of such guaranty,
(iii) a Guarantor's becoming insolvent or the subject of a bankruptcy filing,
(iv) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's breach of
its guaranty obligation on an anticipatory basis, and Lessee's failure, within
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.

    

    (i)            Lessee
does or permits anything that creates a lien on the Premises or the Project, and
Lessee fails to discharge the lien within thirty days of its
filing.

    

    (j)           
Lessee's default beyond applicable notice and cure periods under any other lease
with Lessor or any parent, subsidiary or affiliate of Lessor.

    

    (k)           If
a Default occurs more than two times within any period of twelve months, then,
notwithstanding that Lessee cured those prior Defaults, any further Default is a
Breach of this Lease for which no notice is required or cure
available.

    

    (l)           
The Parties acknowledge and agree that the failure by Lessee to fully comply
with any of Lessee's covenants, commitments, responsibilities and other
obligations set forth in this Lease, shall constitute a material breach, and not
be construed for any purpose as a de minimis or immaterial breach
thereof.

    

    (m)          All
notices provided under this Paragraph 13 shall be in lieu of, and not in
addition to, any notice required under California law.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    13.2         Remedies. If Lessee fails to
perform any of its affirmative duties or obligations, within 5 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 of any such performance by Lessor
promptly upon receipt of invoice therefor. If any check given to Lessor by
Lessee shall not be honored by the bank upon which it is drawn, Lessor, at its
option, may require all future payments to be made by Lessee to be by cashier's
check or by wire transfer. 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 of possession, in which case this Lease shall immediately
terminate and Lessee shall immediately surrender possession of the Premises to
Lessor.  In such event, Lessor shall be entitled to recover from
Lessee:  (i) the unpaid Rent which has 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 (iii) of the
immediately preceding sentence shall be computed by discounting such amount at
the discount rate of the Federal Reserve Bank of the District within which the
Premises are located at the time of award plus one percent.  Efforts
by Lessor to mitigate damages caused by Lessee’s Breach of this Lease shall to
waive Lessor’s right to recover damages under this Paragraph 13.  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 damage 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 are required under Paragraph 13.1 was not previously given, a
notice to pay rent or quit, or to perform or quit given to Lessee under the
unlawful detainer statute shall also constitute the notice required by Paragraph
13.1.  In such case, the applicable grace period required by Paragraph
13.1 and the unlawful detainer statute shall run concurrently, and the failure
of Lessee to cure the Default within the greater of the two such grace periods
hall 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)           Maintain
Lessee’s right to possession, in which case this Lease shall continue in effect
whether or not Lessee has abandoned the Premises.  In such event,
Lessor shall be entitled to enforce all of Lessor’s rights and remedies under
this Lease, including the right to recover the rent as it becomes
due.  Lessor shall have the remedy described in California Civil Code
Section 1951.4 (lessor may continue lease in effect after lessee’s breach and
abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations).  Acts of
maintenance, efforts to relet, and/or the appointment or a receiver to protect
the Lessor’s interests shall not constitute a termination of the Lessee’s right
to possession.

    

    (c)           Pursue
the remedy of specific performance and/or injunctive relief.

    

    (d)           Change
or alter the locks at the Premises and otherwise lock Lessee out of the
Premises.

    

    (e)           Pursue
any other remedy now or hereafter available in equity or under the laws or
judicial decisions of the state wherein the Premises are located.

    

    (f)           
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 nor limit Lessee's
liability for, or obligation to pay, damages to which Lessor is entitled
hereunder as a result of Lessee's Breach, as provided in this Paragraph 13 or
elsewhere in this Lease or under applicable law, all of which expressly survive
the expiration or earlier termination of this Lease.

    

    (g)           The
acceptance by Lessor of any payments from Lessee after the expiration or earlier
termination of this Lease shall not preclude Lessor from commencing and
prosecuting a holdover or summary eviction proceeding;

    

    (h)           If
Lessee shall hold over or remain in possession of the Premises or any part
thereof beyond the expiration or earlier termination of this Lease, then Lessee
shall be subject not only to summary proceeding and liable for all damages
related thereto and all damages arising out of Lessee's Breach as hereinabove
provided, but also for all damages arising out of any lost opportunities (and/or
new leases) of Lessor to relet the Premises (or any part thereof). All damages
of Lessor by reason of such holding over by Lessee may be the subject of a
separate action and need not be asserted by Lessor in any summary proceedings
against Lessee.

    

    (i)           
Regardless of whether Lessor terminates the Lease, merely terminates the
Lessee's right to possession, or elects other remedies, the monetary claims of
Lessor to be made whole is unaffected by such election.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    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 (subject to any and all applicable cure periods), 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 pay to Lessor a one-time late charge equal to 5%
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 installments of Base Rent
in any 12 month period, then notwithstanding any provision of this Lease to the
contrary, Base Rent shall, at Lessor's option, become due and payable quarterly
in advance. The Parties acknowledge and agree that should Lessee tender Rent
without also tendering any Late Charges then due, Lessee shall continue to be in
material default of this Lease.

    

    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 equal to the
prime rate reported in the Wall Street Journal as published closest prior to the
date when due plus 4%, but shall not exceed the maximum rate allowed by law.
Interest is payable in addition to the potential late charge provided for in
Paragraph 13.4.

    

    13.6         Breach by Lessor.

    

    (a)           Notice of Breach. Lessor shall
not be deemed in breach of this Lease unless Lessor 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 an amount equal to
the greater of one month's Base Rent or the Security Deposit, and to pay an
excess of such expense under protest, reserving Lessee's right to reimbursement
from Lessor. Lessee shall document the cost of said cure and supply said
documentation to Lessor.

    

    14.           Condemnation. If the Premises
or any portion thereof are taken under the power of eminent domain or sold under
the threat of the exercise of said power (collectively "Condemnation"), this
Lease shall terminate as to the part taken as of the date the condemning
authority takes title or possession, whichever first occurs. If more than twenty
percent (20%) of the Premises, or more than thirty-five percent (35%) of the
Project Parking Spaces, is taken by Condemnation, Lessee may, at Lessee's
option, to be exercised in writing within ten (10) days after Lessor shall have
given Lessee written notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority shall have taken possession)
terminate this Lease as of the date the condemning authority takes such
possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in proportion
to the reduction in area 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 (it being understood and agreed that
Lessee hereby waives any claim to be compensated for the lost value of the
leasehold estate in the Premises), or for severance damages; provided, however,
that Lessee shall be entitled to make a separate claim directly against the
condemning authority for any compensation for Lessee's relocation expenses,
and/or Trade Fixtures, without regard to whether or not this Lease is terminated
pursuant to the provisions of this Paragraph so long as Lessor's claim is not
diminished thereby. Any and all compensation which is payable for Alterations
and Utility Installations made to the Premises by Lessee, for purposes of
Condemnation only, shall be apportioned between Lessor and Lessee, respectively,
in the same proportion as the number of months elapsed in the Term bears to the
total number of months in the Term. 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.           Representations and Indemnities of
Broker Relationships. Lessee and Lessor each represent and warrant to the
other that it has had no dealings with any person, firm, broker or finder (other
than the Brokers, if any) in connection with this Lease, and that no one other
than said named Brokers is entitled to any commission or finder's fee in
connection herewith. Lessee and Lessor do each hereby agree to indemnify,
protect, defend and hold the other harmless from and against liability for
compensation or charges which may be claimed by any such unnamed broker, finder
or other similar party by reason of any dealings or actions of the indemnifying
Party, including any costs, expenses, attorneys' fees reasonably incurred with
respect thereto.

    

    16.           Estoppel
Certificates.

    

    (a)           Each
Party (as "Responding
Party") shall within ten (10) days after written notice from the other
Party (the "Requesting
Party") execute, acknowledge and deliver to the Requesting Party the
"Estoppel Certificate"
in the form as submitted by Requesting Party, plus such additional information,
confirmation and/or statements as may be reasonably requested by the Requesting
Party, provided that the Responding Party may make such corrections as shall be
reasonably necessary to make the Estoppel Certificate accurate and shall timely
execute and deliver the same to the Requesting party within such ten (10) day
period.  A Responding Party’s delivery to the Requesting Party of
correspondence, comments, and unexecuted draft (with or without corrections), or
any other communication which is not an executed Estoppel Certificate shall
constitute a Breach by the Responding Party, and the Responding Party shall be
responsible for all losses, damages, costs, and expenses (including attorney’s
fees) incurred by the Requesting Party as a result of such Breach.

    

    (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 encumbrances 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 the prior Lessor shall fully be released from and 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, the individual partners, members or shareholders of Lessor or its or
their individual partners, members, directors, officers, managers, members or
shareholders, and Lessee shall look to the Premises, and to no other assets of
Lessor, for the satisfaction of any liability of Lessor with respect to this
Lease, and shall not seek recourse against the individual partners or members of
Lessor, or its or their individual partners, directors, officers, managers,
members, 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.
This Lease constitutes the entire agreement between Lessor and Lessee with
respect to the lease of the Premises and supersedes any and all other prior
written or oral agreements or understandings with respect to this transaction.
Except as expressly set forth in this Lease, no representations, inducements,
understanding or anything of any nature whatsoever, made, stated or represented
by Lessor or anyone acting on Lessor's behalf, either orally or in writing have
induced Lessee to enter into this Lease, and Lessee acknowledges, represents and
warrants that Lessee has entered into this Lease under and by virtue of Lessee's
own independent investigation.

    

    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 48
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 moneys or damages due Lessor, notwithstanding any
qualifying statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Lessor at or before the
time of deposit of such payment.

    

    25.           Recording. Neither this Lease,
nor any memorandum, affidavit or other writing with respect thereto, shall be
recorded by Lessee or by anyone acting through, under or on behalf of Lessee,
and the recording thereof in violation of this provision shall make this Lease
null and void at Lessor’s election.  Notwithstanding the foregoing, in
the event Lessor desires to record a memorandum of this Lease, promptly upon
notice thereof from Lessor, Lessee shall execute, acknowledge and deliver to
Lessor a short form memorandum of lease for recording purposes in form and
substance reasonably acceptable to Lessor.  In the event that such a
memorandum of lease has been recorded, upon termination of this Lease, Lessee
shall execute such documents as reasonably requested by Lessor in recordable
form to confirm the termination of this Lease.  In the event of a
transfer of Lessor’s title or interest in the Premises or this Lease, the
Parties agree to cause any recorded memorandum of this Lease to be removed from
record.  Lessee shall be responsible for payment of any fees
applicable to any recordings pursuant to this Paragraph.

    

    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 such holdover shall be deemed a Tenancy at Sufferance (with Lessee waiving,
to the fullest extent permitted by applicable law, any required statutory
notices to vacate the Premises), then the Base Rent shall be increased to 150%
of the Base Rent applicable immediately preceding the expiration or termination.
Any option (i.e., renewal, expansion) and rights of first refusal contained in
the Lease are terminated in the event of a holdover tenancy: 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. It is expressly
understood and agreed that Lessee's obligation to pay Rent and other charges due
hereunder is an independent covenant. 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. Lessee agrees to
attorn to a Lender or any other party who acquires ownership of the Premises by
reason of a foreclosure of a Security Device, and that in the event of such
foreclosure, such new owner shall not: (i) be liable for any act or omission of
any prior lessor or with respect to events occurring prior to acquisition of
ownership; (ii) be subject to any offsets or defenses which Lessee might have
against any prior lessor, or (iii) be bound by prepayment of more than one (1)
month's rent.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    30.3         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 or attornment agreement
provided for herein.

    

    30.4         Modifications Required by
Lender. If any Lender requires a modification of this Lease that will not
increase Lessee's cost or expense or materially or adversely change Lessee's
rights and obligations, this Lease shall be so modified and Lessee shall execute
whatever documents are required and deliver them to Lessor within ten (10) days
after the request.

    

    30.5         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
non-disturbance agreement on Lender’s standard form (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, if requested by Lessee, 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, thereafter at
Lessee’s option, directly contact Lender and attempt to negotiate for the
execution and delivery of a Non-Disturbance Agreement.

    

    31.           Attorneys' Fees And Costs. If
any Party 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 recover its attorneys' fees, expert witness fees,
consultant fees, and other costs incurred. 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 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 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 and costs 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. In
addition, if, as a result of any action or request of Lessee, Lessor consults or
retains attorneys, Lessee must reimburse Lessor for its attorneys' fee within
ten (10) days following Lessee's receipt of Lessor's invoice for those
attorneys' fees.

    

    32.           Lessor's Access; Showing Premises;
Repairs; Locks. Lessor and Lessor's agents shall have the right to enter
the Premises at any time, in the case of an emergency, and otherwise at
reasonable times for the purpose of: (i) showing the same to prospective
purchasers, lenders, or lessees; (ii) making such alterations, repairs,
improvements or additions to the Premises as Lessor may deem necessary; or,
(iii) any other reason as Lessor shall deem necessary. All such activities shall
be without abatement of rent or liability to Lessee. Lessor, may at any time,
place on the Premises any ordinary "For Sale" signs and Lessor may
during the last nine (9) months of the term hereof place on the Premises any
ordinary "For Lease"
signs. Lessee shall place no additional locks or bolts of any kind upon any of
the doors or windows, nor shall any changes be made in existing locks or the
mechanisms thereof unless Lessor gives prior written approval. Lessee shall bear
the cost of any lock changes or repairs required by Lessee, and shall
immediately provide Lessor with two (2) keys for each lock which is re-keyed or
installed. Lessee, upon termination or expiration of this Lease, shall deliver
to Lessor all keys to doors or other locked fixtures in the Premises. In the
event of the loss of any keys furnished by Lessor to Lessee, Lessee shall pay
Lessor the cost of changing or re-keying the locks. Additionally, upon
termination, Lessee shall replace any locks with locks and keys approved by
Lessor at Lessee's sole cost and at Lessor's sole and absolute discretion.
Lessee hereby waives any claim for damages or for any injury or any
inconvenience to or interference with Lessee's business, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss occasioned by Lessor's
entry onto the Premises or its activities thereon.  In addition to
Lessor’s entry rights hereunder, the Association and its agents, shall have the
right to enter the Premises for all purposes set forth in the Declaration,
including, without limitation, to inspect any improvements being constructed at
the Premises, and to make repairs, alterations, maintenance and/or replacements
in exercising the powers and duties of the Association under the
Declaration.

    

    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. Lessee shall not place
any sign upon the Project without Lessor's prior written consent. Lessor shall
have the right of approval over color schemes, illumination rights, lettering,
size, quality parameters, and other details over any signage that Lessee may
wish to use at or on the exterior of the Premises or on the Project. All signs
must comply with all Applicable Requirements and any Rules and Regulations
established by Lessor and all Association Rules and provisions of the
Declaration or requirements of the Architectural Committee relating thereto as
in effect from time to time.  Lessee shall also obtain all required
approvals from the Architectural Committee prior to placing any sign or
billboard on the Project, all in accordance with the terms of the
Declaration.

    

    35.           Termination; Merger. Unless
specifically stated otherwise in writing by Lessor, the voluntary or other
surrender of this Lease by Lessee, the mutual termination or cancellation
hereof, or a termination hereof by Lessor for Breach by Lessee, shall
automatically terminate any sublease or lesser estate in the Premises; provided,
however, that Lessor may elect to continue any one or all existing subtenancies.
Lessor's failure within 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. No payment of money by Lessee to Lessor after this Lease has
expired or terminated will reinstate or extend the Term or make ineffective any
notice given to Lessee prior to Lessee's payment. If after Lessor has filed and
served a law suit against Lessee or after a final judgment granting Lessor
possession of the Premises, Lessor may receive any sums due under this Lease and
the payment will not make ineffective any notice, or in any manner affect any
pending law suit or previously obtained judgment.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    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 promptly 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 attached hereto, and each such
Guarantor shall have the same obligations as Lessee under this
Lease.

    

    37.2         Default. It shall constitute a
Default of the Lessee if any Guarantor fails or refuses, upon request to
provide: (a) evidence of the execution of the guaranty, including, but not
limited to, 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
Paragraph 30, the 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, (i) Lessee fails to pay Rent for
a period of 15 days after such Rent becomes due (without any necessity of Lessor
to give notice thereof), (ii) Lessor gives to Lessee 3 or more notices of
separate Default during any 12 month period, whether or not the Defaults are
cured, or (iii) if Lessee commits a Breach of this Lease.

    

    40.           Multiple Buildings/Lessor's Right of
Relocation. If the Premises are a part of a group of buildings controlled
by Lessor, Lessee agrees that it will observe all reasonable rules and
regulations which Lessor may make from time to time for the management, safety,
and care of said properties, including the care and cleanliness of the grounds
and including the parking, loading and unloading of vehicles, and that Lessee
will pay its fair share of common expenses incurred in connection therewith.
Lessor reserves the right, at its sole option and upon thirty (30) days prior
written notice to Lessee, to relocate Lessee to a comparable space (the
Relocation Space) in the Building or group of buildings controlled by Lessor in
the Project. Lessor may use decorations and materials from the Premises or other
materials in making the Relocation Space comparable to the Premises. Neither the
fixed minimum Base Rent nor the Lessee's Share percentage shall be changed on
account of the move unless it is raised or reduced in accordance with the share
percentage for the Relocation Space. Lessee agrees that no right granted in this
Lease shall be deemed breached by Lessor's exercise of rights under this
paragraph. Lessor shall pay the actual moving expenses for furniture, fixtures,
product and equipment and reasonable actual out-of-pocket expenses incurred by
Lessee not to exceed $1,000, provided Lessee provides Lessor with written proof
thereof.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    41.           Intentionally
Omitted.

    

    42.           Intentionally
Omitted.

    

    43.           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, and the Lessee Parties and their
property from the acts of third parties. In the event that Lessor exercises its
right to take possession of the Premises for any breach of Lessee of this Lease,
Lessor shall have no obligation to provide security over the Premises so as to
protect the personal property of Lessee in the Premises, In the event of breach
of this Lease by Lessee, and the exercise of any lawful remedy by Lessor, Lessee
hereby waives, releases, and discharges any claim it may have against Lessor for
any alleged break-in, theft, or removal of Lessee's goods, inventory, equipment,
fixtures, furniture, improvements, chattel paper, accounts, and general
intangibles, and other personal property by third-parties.

    

    44.           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. Lessor further reserves the right to change
the name by which the Building or the Project is called.

    

    45.           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.

    

    46.           Authority and Publication. 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. Lessee hereby authorizes Lessor to use Lessee's name, corporate logo,
images of Lessee's buildings and the Premises and any terms of this Lease, in
any publication at any time by Lessor or Lessor's affiliates, including, without
limitation, web-based advertising and public relations materials.

    

    47.           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.

    

    48.           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.

    

    49.           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.

    

    50.           Multiple Parties;
Counterparts.  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.  This Lease may be executed by the Parties
in counterparts, each of which shall be deemed an original and all which
together shall constitute one and the same instrument.

    

    51.           Waiver of Trial By
Jury.  LESSEE HEREBY KNOWINGLY, INTENTIONALLY, AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO A TRIAL
BY JURY IN ANY ACTION BROUGHT BY LESSOR AGAINST LESSEE IN CONNECTION WITH THIS
LEASE, OR IN CONNECTION WITH ANY CAUSE OF ACTION, CLAIM, COUNTER-CLAIM, OR
CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY LESSOR OR
LESSEE IN ANY WAY CONNECTED WITH THIS LEASE OR THE NEGOTIATIONS LEADING UP THE
LEASE, THE RELATIONSHIP OF LESSOR AND LESSEE, LESSEE’S USE OR OCCUPANCY OF THE
PREMISES OR ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY
UNDER ANY LAW, STATUE OR REGULATION NOW OR HEREAFTER IN EFFECT.

    

    52.           Interpretation. The Parties
hereby acknowledge and agree that each has been given the opportunity to
independently review this Lease with legal counsel, and/or have the requisite
experience and sophistication to understand, interpret, and agree to the
particular language of the provisions hereof. In the event of any ambiguity in
or dispute regarding the interpretation of the same, the interpretation of this
Lease shall not be resolved by any rule of interpretation providing for the
interpretation against the party who caused the uncertainty to exist or against
the draftsman.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    53.           Mutual Agency; Co-Lessee. In
the event the Lessee hereunder is comprised or constituted of more than one
person or entity, each Lessee hereby appoints each remaining Lessee as his, her
or its agent, representative and attorney-in-fact, to act for and on behalf of
said Lessee with respect to all matters relating to, or arising from this Lease,
the tenancy created hereby, the obligations herein set forth, and the use and
occupancy of the Premises, specifically including but not limited to the right
to alter, amend, modify, extend, supplement and terminate this Lease and the
tenancy created hereunder. This agency shall continue and is irrevocable at all
times during the period that the Premises is occupied by any co-lessee. Each
Lessee further appoints Lessor as his, her or its attorney-in-fact to act on
Lessee's behalf wherever this Lease requires Lessee to undertake any act or
execute any document and Lessee fails or refuses to timely undertake such action
or execute such document. Notwithstanding such appointment, Lessor shall not be
obligated to perform any act or execute any document on Lessee's behalf, and
Lessor shall not be liable to Lessee or any third-party for Lessor's failure or
refusal to perform any act or execute any document on Lessee's
behalf.

    
       

    

    54.           Confidentiality. Lessee
acknowledges and agrees that as a material condition of this Lease, the
negotiations preceding the execution of this Lease and the terms and conditions
herein are confidential and are to remain strictly private to the fullest extent
permitted by law. With the exception of Lessee's attorney, accountants, tax
preparers, insurers and/or lenders, and any governmental agency having
jurisdiction or authority over Lessee or the Premises, Lessee shall not
disclose, consent to the disclosure or otherwise disseminate the foregoing
confidential information to any person or third-party, including, but not
limited to, any existing prospective lessee at the Project, any real estate
broker or to any other person or entity.  Lessee further acknowledges
that damages may be an inadequate remedy for the breach of this provision by
Lessee and/or any of the Lessee parties and Lessor shall have the right to
specific performance of this provision and the right to injunctive relief to
prevent its breach or continued breach.  In addition, Lessee shall
forfeit the Security Deposit and Lessor may terminate this Lease upon three (3)
days written notice to Lessee.  The foregoing restriction shall
survive the termination of this Lease for a period of five (5) years, and any
violation of this provision shall constitute a material Breach of this
Lease.

    

    55.           Americans With Disabilities
Act.  Since compliance with the American With Disabilities Act
(“ADA”) is dependent upon Lessee’s specific use of the Premises, Lessor makes no
warranty or representation as 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 compliant
with ADA, Lessee agrees to make any such necessary modifications and/or
additions at Lessee’s sole cost and expense.

    

    56.           Patriot Act and Executive Order
13224.  As an inducement to Lessor to enter into this Lease,
Lessee hereby represents and warrants that:  (i) Lessee is not, nor is
it owned or controlled directly or indirectly by, any person, group, entity or
nation named on any list issued by the Office of Foreign Assets Control of the
United States Department of the Treasury (“OFAC”) pursuant to Executive Order
13224 or any similar list or any law, order, rule or regulation or any Executive
Order of the President of the United States as a terrorist, “Specially
Designated National and Blocked Person” or other banned or blocked person (any
such person, group, entity or nation being hereinafter referred to as a
“Prohibited Person”); (ii) Lessee is not (nor is it owned or controlled,
directly or indirectly, by any person, group, entity or nation which is) acting
directly or indirectly for or on behalf of any Prohibited Person; and (iii)
neither Lessee (nor any person, group, entity or nation which owns or controls
Lessee, directly or indirectly) has conducted or will conduct business or has
engaged or will engage in any transaction or dealing with any Prohibited Person,
including without limitation any assignment of this Lease or any subletting of
all or any portion of the Premises or the making or receiving of any
contribution of funds, goods or services to or for the benefit of a Prohibited
Person.  In connection with the foregoing, it is expressly understood
and agreed that (x) any breach by Lessee of the foregoing representations and
warranties shall be deemed a Default by Lessee under this Lease and shall be
covered by the indemnity provisions hereof, and (y) the representations and
warranties contained in this Paragraph 56 shall be continuing in nature and
shall survive the expiration or earlier termination of this Lease.

    

    57.           Intentionally
Omitted.

    
       

    

    58.           Communication Systems
Leases.  Lessor reserves the right to lease space on the
Premises, the Building and/or the Project, including, but not limited to, the
roof, parking lot, utility room, or excess land, for the existing and/or future
installation and operation of wired and wireless communications systems for, but
not limited to, PCS, cellular, or pagers.  The communications systems
shall not be installed if it will materially and adversely interfere with
Lessee’s use of the Premises, its business or operation thereof, and if there is
heretofore an existing system. Lessee agrees not to place like equipment that
will interfere with existing systems, if any.  Lessee will have no
right to any or all rents paid by operators of the communications systems to
Lessor.  Lessee agrees to provide Lessor and communications systems
providers reasonable access for such systems.  Lessee shall not be
responsible for any increase in property taxes and/or insurance resulting from a
communications systems lease by Lessor.

    

    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.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    
       

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	Executed
      at:  Los Angeles  	 
      	Executed
      at: 
	Date:              03-18-09                           
             	 
      	Date:                             
                                         
      
	 	 	 
	By
      LESSOR:	 
      	By
      LESSEE:
	
                                         

                                      	 
      	 
      
	Newark
      Eureka Industrial Capital LLC,  	 
      	Smart
      Modular Technologies, Inc.,
	a
      Delaware limited liability company	 
      	a
      California corporation
	
                                         

                                      	 
      	 
      
	By:     Continental
      Industrial Capital, LLC,	 
      	By:         /s/
      IAIN MACKENZIE                   
      
	          
      a Delaware limited liability company  	 
      	Name:    Iain MacKenzie
                                     
      
	Its:      Sole
      Member and Sole Manager  	 
      	Title:      President and
      CEO                          
	 
      	 
      	 
      
	          
      By: Cohen Asset Management, Inc.,	 
      	 
      
	          
      a California corporation	 
      	 
      
	           Its:
      Manager	 
      	 
      
	           
      By:         /s/ BRADLEY S.
      COHEN  	 	 
	                       
      Bradley S. Cohen, President	 	 
	 	 	 
	Address:                       P.O. Box
      24710	 	Address: 
                                
                                   
      
	                              
      Los Angeles, CA 90024	 	                   
                                                             
      
	Telephone
      ( )                       
        310-860-0598	 	Telephone
      (
      )                                                   
      
	Facsimile  ( )                           
      310-860-0599	 
      	Facsimile  ( )                        
                                  
      
	 	 	Federal
      ID No.                                                 
      
	 	 	CORPORATE RESOLUTION
      REQUIRED

                              

                            

                          

                           

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    ADDENDUM

    

    THIS
ADDENDUM is attached to and made a part of that certain Lease (“Lease”) dated
for reference purposes only February 18, 2009, between Newark Eureka Industrial
Capital LLC, a Delaware limited liability company as Lessor and Smart Modular
Technologies, Inc., a California corporation as Lessee with respect to the
Premises described more particularly in the body of the Lease to which this
Addendum is attached and made a part as if fully set forth
therein.  Unless the context otherwise requires, defined terms used
herein and not otherwise defined shall have the same meanings ascribed to them
in the body of the Lease.  In the event of any conflict or
inconsistency between the terms of this Addendum and the terms contained in the
body of the Lease, the terms set forth in this Addendum shall supersede, control
and take precedence over the conflicting or inconsistent terms set forth in the
body of the Lease to the full extent of such conflict or inconsistency. Except
to the extent expressly modified by this Addendum, the Lease is unmodified and
remains in full force and effect in accordance with its terms. 

     

    
      
        	
                59.  

              	
                Base Rent
      Adjustments.  Lessee shall pay to Lessor Base Rent in
      advance, on or before the first day of each calendar month, as
      follows:

              

      

       

    

    
    

    
      	
              (a)  

            	
              During
      the period from May 1, 2009 through April 30, 2010, Lessee shall pay to
      Lessor Base Rent in equal monthly installments the sum of Thirty Six
      Thousand Five Hundred Sixty Dollars and Eighty Cents ($36,560.80);
      provided that so long as Lessee is not in default under the terms of the
      Lease, Base Rent shall be abated for this period as an Inducement
      Provision. Notwithstanding such abatement of Base Rent, Lessee’s Share of
      Common Area Operating Expenses and all other charges payable during such
      period shall not be abated and shall be payable by
  Lessee.

            

    

    

    
      	
              (b)  

            	
              During
      the period from May 1, 2010 through April 30, 2011, Lessee shall pay to
      Lessor Base Rent in equal monthly installments the sum of Thirty Six
      Thousand Five Hundred Sixty Dollars and Eighty Cents
      ($36,560.80).

            

    

    

    
      	
              (c)  

            	
              During
      the period from May 1, 2011 through April 30, 2012, Lessee shall pay to
      Lessor Base Rent in equal monthly installments the sum of Thirty Seven
      Thousand Eight Hundred Forty Dollars and Forty Three Cents
      ($37,840.43).

            

    

    

    
      	
              (d)  

            	
              During
      the period from May 1, 2012 through April 30, 2013, Lessee shall pay to
      Lessor Base Rent in equal monthly installments the sum of Thirty Nine
      Thousand One Hundred Sixty Seven Dollars and Seventy Four Cents
      ($39,167.74).

            

    

    

    
      	
              (e)  

            	
              During
      the period from May 1, 2013 through April 30, 2014, Lessee shall pay to
      Lessor Base Rent in equal monthly installments the sum of Forty Thousand
      Five Hundred Thirty Four Dollars and Eighty Cents
      ($40,534.80).

            

    

    

    
      	
              (f)  

            	
              During
      the period from May 1, 2014 through April 30, 2015, Lessee shall pay to
      Lessor Base Rent in equal monthly installments the sum of Fifty Thousand
      Seventy Two Dollars and Forty Cents
  ($50,072.40).

            

    

    

    
      	
              (g)  

            	
              During
      the period from May 1, 2015 through April 30, 2016, Lessee shall pay to
      Lessor Base Rent in equal monthly installments the sum of Fifty Four
      Thousand Forty Six Dollars and Forty Cents
  ($54,046.40).

            

    

    

    
      	
              60.  

            	
              Lessee Improvement
      Allowance.  Lessor agrees to provide to Lessee a building
      improvement allowance  in an amount of up to Three Hundred
      Ninety Seven Thousand Four Hundred Dollars ($397,400.00) (the “Lessee
      Improvement Allowance”) subject to each and all of the following
      conditions:

            

    

    

    
      	
              (a)  

            	
              The
      Lessee Improvement Allowance shall be used solely for those improvements
      to the Premises required for Lessee’s occupancy that are permanent in
      nature and of a character that adds permanent value to the Building
      including but not limited to reasonable architectural and engineering
      expenses, installation and distribution of HVAC in warehouse and lab
      areas, additional electrical power panels and distribution, demolition and
      reconfiguration of interior offices, installation of ESD flooring in
      production areas, reasonable design fees, permit fees, construction
      material and supplies, and amounts paid to contractors and subcontractors
      or are included within the categories set forth on Exhibit “C” attached
      hereto (“Lessee Improvement Work”). The Lessee Improvement Work shall be
      subject to approval of Lessor in accordance with the provisions of
      Paragraph 7.3(b) and 60.(c). The Lessee Improvement Allowance may not be
      used for Lessee’s furniture, fixtures or
  equipment.

            

    

    

    
      	
              (b)  

            	
              The
      Lessee Improvement Work shall be of a quality and quantity consistent with
      that of a first class research and development (R&D)
      property.

            

    

    

    
      	
              (c)  

            	
              Prior
      to commencing the Lessee Improvement Work, Lessee shall present to Lessor
      for Lessor’s review and written approval plans, specifications and a
      schedule of the Lessee Improvement Work providing detailed information
      such as make, model and specifications of equipment to be installed,
      quantities, unit pricing, specific location of the Building where
      improvements will be performed, the name of the contractor, phasing of
      work and total contract price for the Lessee Improvement
    Work.

            

    

    

    
      	
              (d)  

            	
              Lessee
      shall comply with all terms and conditions set forth in the Declaration in
      connection with the construction of the Lessee Improvement Work,
      including, without limitation, obtaining all necessary approvals of the
      Lessee Improvement Work by the Architectural Committee, and complying with
      all Architectural Standards (as defined in the Declaration), if any,
      established pursuant to the
Declaration.

            

    

    

    
      	
              (e)  

            	
              Lessor
      shall not have any obligation to provide the Lessee Improvement Allowance
      unless all of the following conditions are
met:

            

    

    

    
      	
              (i)  

            	
              Lessor
      shall have received written verification of all hard and soft costs
      actually incurred by Lessee for the Lessee Improvement Work including
      copies of all work orders, invoices, contracts together with evidence of
      payment thereof and any other documents reasonably requested by Lessor and
      that the aggregate amount actually expended and paid by Lessee for the
      Lessee Improvement Work is not less than Two Million Dollars ($2,000,000),
      exclusive of said Improvement
Allowance.

            

    

    

    
      	
              (ii)  

            	
              Lessor
      shall have received written verification that all lien releases, waivers,
      copies of checks paid by Lessee and any other documents necessary for lien
      free completion of the Lessee Improvement Work have been obtained from all
      contractors, subcontractors and
materialmen.

            

    

    

    
      	
              (iii)  

            	
              Lessor
      shall have received copies of all permits, consents, approvals, inspection
      sign-offs and other documents necessary to confirm that the Lessee
      Improvement Work has been constructed in accordance with all Applicable
      Requirements and approved as to
occupancy.

            

    

    

    
      	
              (iv)  

            	
              Lessee
      Improvement Allowance may only be used to pay for the cost of the Lessee
      Improvement Work agreed to by Lessor and Lessee in advance and, under no
      circumstances, will any unused amount of the Lessee Improvement Allowance
      be paid to the Lessee.

            

    

    

    
      	
              (v)  

            	
              Lessee
      Improvement Work shall be completed no later than October 31, 2009
      (“Completion Date”) subject to unavoidable delays beyond Lessee’s control,
      force majeure and acts of God.  In such event the Completion
      Date will be extended on a day-for-day basis for each day of delay;
      provided, however, that no such delay shall delay the
      Commencement  Date or the payment of Rent by
    Lessee.

            

    

    

    
      	
              (f)  

            	
              The
      contractor for the Lessee Improvement Work shall be selected and mutually
      approved by Lessor and Lessee, such approval not to be unreasonably
      withheld, conditioned or delayed.

            

    

     

    
      	
              (g)  

            	
              All
      contracts for the Lessee Improvement Work shall be entered into by Lessee
      and Lessor shall have no obligation to enter into any contracts for the
      Lessee Improvement Work.

            

    

     

    
      	
              (h)  

            	 

    

    

    Lessor
shall pay to Lessee the Lessee Improvement Allowance within thirty (30) days
after Lessee’s written request therefor subject to Lessee’s full and complete
satisfaction of the provisions of this Paragraph 60, inclusive of delivery to
Lessor of all materials to be delivered to Lessor pursuant to subparagraph
60.(d). Notwithstanding the foregoing, any unused amount of the Lessee
Improvement Allowance held by Lessor as of December 31, 2009 shall be retained
by Lessor and Lessee shall have no further right to utilize or request such
unused portion of the Lessee Improvement Allowance.

    

    
      	
              61.  

            	
              Options.  Lessor
      hereby grants to Lessee one (1) option (“Option”) to extend the term of
      this Lease for a period of five (5) years (“Option Term”) commencing when
      the term in paragraph 1.3 expires upon each and all of the following terms
      and conditions:

            

    

    

    
      	
              (a)  

            	
              Lessee
      gives Lessor, and Lessor actually receives on a date that is prior to the
      date that the Option Term would commence (if exercised) by at least six
      (6) months and no more than nine (9) months in advance, a written notice
      of the exercise of the Option to extend this Lease for said additional
      term, time being of the essence.  If said notification of the
      exercise of said option is not so given and received, the Option shall
      automatically expire;

            

    

    

    
      	
              (b)  

            	
              The
      provisions of paragraph 39, including the provision relating to default of
      Lessee set forth in paragraph 39.4 of this Lease are conditions of this
      Option;

            

    

    

    
      	
              (c)  

            	
              All
      the terms and conditions of this Lease except where specifically modified
      by this Option shall apply;

            

    

    

    
      	
              (d)  

            	
              The
      monthly rent for each month of the first year of the Option Term shall be
      calculated at 95% of Fair Market Value (“Market Rent”), but under no
      circumstance shall the Market Rent be less than the Base Rent payable
      during the last month of the original term of the
  Lease;

            

    

    

    
      	
              (e)  

            	
              The
      Market Rent shall be established by Lessor and used as the Base Rent
      during the first year of the Option Term.  Lessor shall notify
      Lessee of Lessor’s determination of Fair Market Value and Market Rent no
      later than ninety (90) days after Lessor’s receipt of Lessee’s written
      notice of the exercise of the Option as described in (a) above. Should the
      Lessee disagree with the Market Rent as determined by the Lessor and the
      Lessee and the Lessor are unable to resolve their differences within ten
      (10) days after the Lessor notifies the Lessee of the Market Rent, then
      each party shall, within the following ten (10) days, appoint a qualified
      real estate appraiser with at least five (5) years full time appraisal
      experience with respect to commercial rental properties in the
      Newark/Fremont area to appraise and set the Market Rent. In determining
      the Fair Market Value, the appraisers shall determine the per-usable
      square foot rental that a willing, non-equity tenant would pay and a
      willing landlord at a comparable property in the marketplace would accept
      at arm’s length for an extension term of an existing lease for a single
      tenant facility, giving appropriate consideration to rental rates,
      existing tenant improvements, availability of parking, rental increases,
      the type of operating expense escalation clauses, age, quality and
      condition of the Premises, length of term, size and location of the
      premises being leases in the marketplace at the time of such determination
      of Market Rent.

            

    

    

    
      	
              (f)  

            	
              If
      the two appraisers are unable to agree on a Market Rent within thirty (30)
      days after the second appraiser has been appointed, they shall within ten
      (10) days thereafter select a third appraiser, meeting the qualifications
      stated in paragraph (e).  If they are unable to agree on a third
      appraiser, either of the parties to this Lease, by giving ten (10) days
      notice to the other party, may apply to the president of East Bay Brokers
      Association for the selection of a third appraiser who meets the
      qualifications stated in paragraph (e).  Each of the two parties
      shall bear one-half of the cost of appointing the third appraiser and of
      paying for the third appraiser’s fee.  Within ten (10) days
      after the selection of the third appraiser a majority of the appraisers
      shall set the Market Rent for the first year of the Option
      Term.

            

    

    

    
      	
              (g)  

            	
              If
      a majority of the appraisers are unable to set the Market Rent within ten
      (10) days, the three appraisals shall be added together and their total
      divided by three; the resulting quotient shall be the initial Market Rent
      for the Premises during the first year of the Option
  Term.

            

    

    

    
      	
              (h)  

            	
              However,
      if either or both of the low appraisal and/or the high appraisal are more
      than ten percent (10%) lower or higher than the middle appraisal, then the
      appraisals which are more than 10% lower or higher than the middle
      appraisal shall be disregarded.  If only one appraisal is
      disregarded, the remaining two appraisals shall be added together and
      their total divided by two.  The resulting quotient shall be the
      initial Market Rent for the Premises during the Option Term.  If
      both the low appraisal and the high appraisal are disregarded as stated in
      this paragraph, the middle appraisal shall be the initial Market Rent for
      the Premises for such Option Term.  Notwithstanding anything
      contained herein to the contrary, if the rent payable for the Option Term
      as determined herein is within 10% of the Market Rent rate initially
      presented by Lessor, then Lessee shall pay all costs and expenses incurred
      by Lessor as a result of the appraisal
process.

            

    

     

    
      	
              (i)  

            	
              The
      Market Rent as determined pursuant to this Paragraph 61 shall be increased
      (but never decreased) effective as of the first day of the thirteenth
      (13th)
      full calendar month of the Option Term and on the first day of each
      succeeding twelfth (12th)
      month during the Option Term (each an “Adjustment Date”) in accordance
      with percentage increases, if any, in the Consumer Price
      Index – Urban Consumers San Francisco/Oakland/San Jose CA, Area;
      Base 1982–84  =  100) (“Index”), as published by the
      United States Department of Labor, Bureau of Labor Statistics (“Bureau”),
      during the immediately preceding twelve (12) calendar
      months.  The Index for the month (“Comparison Month”) which is
      four (4) months prior to each Adjustment Date during the Term of the Lease
      shall be compared with the Index for the Comparison Month that is sixteen
      (16) months prior to such Adjustment Date, and the Market Rent shall be
      increased upon the Adjustment Date in accordance with the percentage
      increase, if any, between such Comparison Month indexes.  Lessor
      shall use commercially reasonable efforts to calculate and give Lessee
      written notice of any such increase in the Market Rent prior to, and
      Lessee shall pay the increased Market Rent effective on, each Adjustment
      Date. Should the Bureau discontinue the publication of the Index, or
      publish the same less frequently, or alter the same in some other manner,
      Lessor, in its discretion, shall adopt a substitute index or procedure
      which reasonably reflects and monitors consumer
  prices.

            

    

    

    

    
      	
              62.  

            	
               Use of Existing
      Furniture.  Lessee shall have the right to use of the
      thirty-nine (39) Herman Miller modular office cubicles (the “Furniture”)
      currently located in the Premises during the Term; provided, however, that
      Lessee acknowledges and agrees that use of the Furniture is on an “AS-IS
      WHERE-IS” basis, and neither Lessor nor Lessor’s agents have made any
      representations or warranties of any kind, whether express or implied, as
      to the condition of the Furniture, including without limitation warranties
      of merchantability or fitness for a particular purpose. Lessee
      acknowledges and agrees that it has made its own independent investigation
      of the Furniture and assumes all risks from the use thereof by Lessee, its
      employees, agents, contractors or representatives. Lessee shall maintain
      the Furniture during the Term and shall deliver possession thereof to
      Lessor at the expiration or earlier termination of the Lease in
      substantially the same condition as of the date hereof, reasonable wear
      and tear excepted.

            

    

    

    
      	
              63.  

            	
              Removal of
      Improvements.  Notwithstanding the provisions of
      Paragraph 7.4(b), in the event Lessee, concurrently with its written
      request for Lessor’s consent to any Alterations or Utility Installation in
      accordance with Paragraph 7.3(b) or the Lessee Improvement Work in
      accordance with Paragraph 60.(c), requests that Lessor notify Lessee
      concurrently with Lessor’s consent to Lessee’s proposed Alterations or
      Utility Installation or Lessee Improvement Work that Lessor will require
      the removal of all or any portion of such Alterations or Utility
      Installation or Lessee Improvement Work at the expiration or earlier
      termination of this Lease, then Lessor, no later than ten (10) business
      days following such request, shall provide Lessee with such notice
      specifying the portions of the Alterations or Utility Installation or
      Lessee Improvement Work that Lessee will be required to remove. If
      Lessor’s consent to any Alterations or Utility Installations is not
      required pursuant to Paragraph 7.3(b) hereof, Lessee shall be required to
      remove the same at the expiration or earlier termination of this Lease
      unless Lessee has requested Lessor’s determination as to whether such
      Alterations or Utility Installations may remain in the Premises and Lessor
      has expressly consented thereto.

            

    

    

    
      
        
          STANDARD INDUSTRIAL LEASE / MULTI NET –
Rev 05/14/07  Initials  IM  BC

          36938.4    COHE.75    Cohen
Smart Modular Lease

        

         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
“A”

    

    Premises

    
      
        
          STANDARD INDUSTRIAL LEASE / MULTI NET –
Rev 05/14/07  Initials  IM BC

          36938.4    COHE.75    Cohen
Smart Modular Lease

        

         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
“B”

    

    Project Parking
Spaces

    
      
        
          STANDARD INDUSTRIAL LEASE / MULTI NET –
Rev 05/14/07  Initials  IM BC 

          36938.4    COHE.75    Cohen
Smart Modular Lease

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    

    Exhibit
“C”

    

    Architect

    Additional
Architect Drawings (Change Orders)

    General
Contractor

    Demolition

    ESD

    Paint

    MEP

    HVAC

    Chiller
Relocation

    Exterior
Equipment Pad/Fencing (estimated) Fire Sprinklers

    Signage
(estimated)

    CDA and
vacuum line installation and distribution

    

    Permits

    Project
Management Services/ADA

    

    Cubicles

    Private
Office Furniture

    Private
Offices installation

    Cubicle
Workstations, Inscape Platform and Storewall 6x8 Workstations with 57.5” high
panels

    Employee
Nameplates

    

    UPS and
Power Distribution Equipment

    Office
Cabling (estimated)

    RD/Tech
Support/CTS Labs

    Lab Rack
and Cabling (estimated)

    Routers,
switches, UPS, PBX wiring and distribution

    Security
Systems (estimated)

    

    Movers

    Post
Move-Fit Up

    
      
        
          STANDARD INDUSTRIAL LEASE / MULTI NET –
Rev 05/14/07  Initials  IM BC 

          36938.4    COHE.75    Cohen
Smart Modular Lease

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