Document:

United States Securities & Exchange Commission EDGAR Filing

EXHIBIT 10.2

Term Sheet

Ecosphere Technologies, Inc.

Note Payable – Robert O. Baratta $1,297,870

Due July 13, 2007

		
	Total Principal due

	$1,297,870

	Accrued Interest due

    Interest will be paid up to date on closing of this Extension Agreement. 

	From February 22 through July __, 2007. Late fees due under the previous Extension is payable upon closing of this Extension Agreement.  

	Twelve Month Extension

     The Extension Period will be for twelve months from the due date of July 13, 2007 or July 13, 2008

	 

	Extension Fee

      Fee of $50,000 payable in ESPH Stock on Closing of this Extension Agreement. 

	Cash payment of $25,000

Additional payment in restricted stock of $25,000  valued at  $0.48 or 52,083 X 3 = 156,250 shares  

	Principal Reduction 

    Ecosphere agrees to pay down the principal, upon Closing of this Extension Agreement.

	The amount of cash reduction of the principal will be $175,000 plus $67,000 or $242,000 plus $200,000 in lieu of any collateral requirements plus $83,000.00. 

	Ecosphere payment of Baratta Attorney

    Ecosphere agrees to pay for the initial preparation and follow up by David Carter to prepare the Extension Agreement estimated by Baratta as $3,500. 

	The initial Agreement will be drafted by Carter and sent directly to Ecosphere and Adam Palmer simultaneously for Palmer’s review and advice to Ecosphere. 

	Interest Payable during the Term of the Extension

     Interest will be paid, in cash, by Ecosphere during the term of the Extension on October 13, 2007 and January 13, 2008 April 13, 2008 and July 13, 2008. Interest rate is the same as in the original Note being extended by this Extension Agreement. Interest shall continue to accrue at the Matured Note rate of Northern Trust Bank's prime plus three percent (prime + 3%).

	Any payment made late will incur a late fee of $500 beginning on the 1st  day after due date and will incur an additional $500 fee each 10 days it remains unpaid thereafter. 

	“Take out” provision

     Ecosphere will make principal and interest payments upon collection of a major funding achieved by Ecosphere during  the extension period. 

	If a major funding transaction is executed by Ecosphere during the extension period of at least five (5) times the remaining principal balance during the term of the Extension Agreement, Ecosphere agrees to pay off the remaining balance. If the funding is less than five times the remaining balance the balance will be paid down by 20% of the amount of the funding. 

	Agreed this 25 day of July 2007

/s/ Robert O. Baratta 

­­­­­­­­­­­­­­­­­­­ Robert O. Baratta

/s/ James C. Rushing III                           7-25-07

Ecosphere Technologies, Inc. 

James C. Rushing III, Chief Financial Officer

	The closing date for this transaction will be one day after the closing of the pending UES related sale transaction. The funds to execute this agreement will be derived directly from the proceeds of that transaction. We expect that closing, after the purchaser’s due diligence, to occur within the next three weeks. 

	Baratta Extension Agreement Term Sheet

	8/14/2007United States Securities & Exchange Commission EDGAR Filing

EXHIBIT 10.5

Joe M. Allbaugh

Equity Compensation

Term Sheet

April 26, 2007

		
	Purpose

	Convert Joe M. Allbaugh’s Consulting Agreement to ownership of Ecosphere Systems, Inc. (“ESI”)

	 
	 

	Offer

	Issue Joe M. Allbaugh, or his designee, 10% of Ecosphere Systems, Inc. in exchange for cancellation of the existing Consulting Agreement 

	 
	 

	Duties

	Meet with or otherwise communicate with key executives of Pierce Manufacturing, Inc, attend trade shows, or other arranged marketing events, and manage the relationship with Pierce Manufacturing, Inc./OshKosh Truck, Inc. 

	 
	 

	Term

	Balance of the term of the 2005 Ecosphere Technologies, Inc. Joint Marketing & Supply Agreement with Pierce Manufacturing, Inc. dated December 5, 2005. 

	 
	 

	Vesting

	In four increments or  2.5% of ESI on each future anniversary date of the Joint Marketing and Supply :

~   December 5, 2007

~   December 5, 2008

~   December 5, 2009

~   December 5, 2010

Upon a sale of ESI, all remaining shares vest immediately. 

	 
	 

		
	Joe M. Allbaugh

	Ecosphere Technologies Inc.

Dennis E. McGuire, President & CEO

	

/s/ Joe M. Allbaugh                          5-7-07

	

/s/ Dennis E. McGuire                  5-8-07

	Signature                                                     Date

	Signature                                                 Date

Joe M. Allbaugh – ESI 10% Term Sheet April 26, 2007ex10_1.htm

    
      

      

    

    Exhibit
      10.1

    STANDARD
      MULTI-TENANT OFFICE LEASE - GROSS

    AIR
      COMMERCIAL REAL ESTATE ASSOCIATION

     

    1.     
      Basic
      Provisions ("Basic Provisions").

     

    
      1.1 
        Parties:
        This
        Lease ("Lease"),
        dated
        for reference purposes only April
        16,
        2007,
        is
        made
        by and between CIP
        Centerpointe 123, LLC, a California limited liability company ("Lessor")
        and
        Primal
        Solutions, Inc., a Delaware corporation ("Lessee"),
        (collectively
        the "Parties",
        or
        individually a "Party").

    

     

    1.2(a) 
      Premises:
      That
      certain portion of the Project (as defined below), known as Suite Numbers(s)
      100,
      first
      floor(s),
      consisting of approximately 10,342
      rentable
      square feet and approximately - 
      ___________ useable
      square feet ("Premises").
      The
      Premises are located at: 19732
      MacArthur Boulevard, in
      the
      City of Irvine,
      County
      of Orange,
      State
      of
California
      ,
      with
      zip code 92612
      .
      In
      addition to Lessee's rights to use and occupy the Premises
      as hereinafter specified, Lessee shall have non-exclusive rights to the Common
      Areas (as defined in Paragraph 2.7 below) as hereinafter specified,
      but shall not have any rights to the roof, the exterior walls, the area above
      the dropped ceilings, or the utility raceways of the building containing
      the Premises ("Building")
      or to
      any other buildings in the Project. The Premises, the Building, the Common
      Areas, the land upon which they
      are
      located, along with all other buildings and improvements thereon, are herein
      collectively referred to as the "Project."
      The
      Project consists of approximately
      25,064
      rentable
      square feet. (See also Paragraph 2)

     

    1.2
      (b)  Parking:
      41
      unreserved
      and 0
      reserved
      vehicle parking spaces at a no
      monthly
      cost of $_____
      per unreserved space and $_______ per reserved space. (See Paragraph
      2.6)

     

    1.3  Term:
      Five
      (5)
years
      and
zero
      (0)
months
      ("Original
      Term")
      commencing
      May
      1,
      2007 or
      the
      date of occupancy, whichever is earlier ("Commencement
      Date")
      and
      ending April
      30,
      2012 ("Expiration
      Date").
      (See
      also Paragraph 3)

     

    1.4 
      Early
      Possession:
      _________________("Early
      Possession Date").
      (See
      also
      Paragraphs 3.2 and 3.3)

     

    1.5 
      Base
      Rent:
      $20,684.00
      per
      month
      ("Base
      Rent)",
      payable on the first
      (1st) day
      of
      each month commencing
      July
      1,
      2007 .
      (See
      also Paragraph 4)

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

     

    1.6 
      Lessee's
      Share of Operating Expense Increase:
      twenty-four
      and
      7/100ths percent
      (24.07%)
      ("Lessee's
      Share").
      Lessee's Share has been calculated by dividing the approximate rentable square
      footage of the Premises by the total approximate square footage
      of the rentable space contained in the Project and shall not be subject to
      revision except in connection with an actual change in the size of the
Premises
      or a change in the space available for lease in the Project.

     

    1.7 
      Base
      Rent and Other Monies Paid Upon Execution:

      (a)
Base
      Rent:
      $20,684.00
      for
      the
      period July
      1,
      2007 through July 31, 2007.

      (b)
Security
      Deposit:
      $25,000.00
      ("Security
      Deposit").
      (See
      also Paragraph 5)

    (c)
      Parking:
      $ for
      the period .

      (d)
Other:
      $ for
      .

      (e)
Total
      Due Upon Execution of this Lease:
      $45,684.00
      .

     

    1.8 
      Agreed
      Use:
      General
      and administrative offices, sales and marketing for a software
      company.
      (See
      also Paragraph 6)

     

    1.9
      Base
      Year; Insuring Party.
      The
      Base Year is 2007
      .
      Lessor
      is the "Insuring
      Party".
      (See
      also Paragraphs 4.2 and 8)

     

    1.10
      Real
      Estate Brokers:
      (See
      also Paragraph 15)

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

    ⑀⏅ Brian
      Garbutt, Lee & Associates represents
      Lessor exclusively ("Lessor's
      Broker");

    ⑀⏅ Jonti
      Bacharach, CresaPartners - West, Inc. represents
      Lessee exclusively ("Lessee's
      Broker");
      or

    ⑀⍻
      ________________represents
      both Lessor and Lessee ("Dual
      Agency").

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

    
       

          1.11
        Guarantor.
        The
        obligations of the Lessee under this Lease shall be guaranteed by ("Guarantor").
        (See
        also Paragraph 37)

       

          1.12
        Business
        Hours for the Building: 8:00
        a.m.
        to
6:00
        p.m.,
        Mondays through Fridays (except Building Holidays) and 8:00
        a.m.
        to
1:00
        p.m.
        on
        Saturdays (except Building Holidays). "Building
        Holidays"
        shall
        mean the dates of observation of New Year's
        Day, President's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving
        Day, Christmas Day, and TBD
        .

    

    

    
      
        
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	 INITIALS	
                       INITIALS

                    

            

             

            
              ©1999
                - AIR COMMERCIAL REAL ESTATE ASSOCIATION                                                                                       FORM
                OFG-4-6/06E

            

          

          
            

          

        

        
          
          

        

      

    

        1.13
      Lessor
      Supplied Services.
      Notwithstanding the provisions of Paragraph 11.1, Lessor is NOT obligated to
      provide the following:

    o
Janitorial
      services

    o
      Electricity

    o
Other
      (specify):
      ____________________________________________

     

    1.14
      Attachments.
      Attached hereto are the following, all of which constitute a part of this
      Lease:

    þ
an
      Addendum consisting
      of Paragraphs 50
      through
      70
      ;

    þ
a
      plot plan depicting
      the Premises;

    þ
a
      current set of the
      Rules and Regulations;

    o
a
      Work
      Letter;

    o
a
      janitorial
      schedule;

    þ
other
      (specify):
Tenant
      information, Pricing Plan

    .

    2.      Premises.

     

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

     

    2.2 
      Condition.
      Lessor
      shall deliver the Premises to Lessee in a clean condition on the Commencement
      Date or the Early Possession Date,
      whichever first occurs ("Start
      Date"),
      and
      warrants that the existing electrical, plumbing, fire sprinkler, lighting,
      heating, ventilating and air conditioning
      systems ("HVAC"),
      and
      all other items which the Lessor is obligated to construct pursuant to the
      Work
      Letter attached hereto, if any, other than
      those constructed by Lessee, shall be in good operating condition on said date,
      that the structural elements of the roof, bearing walls and foundation
      of the Unit shall be free of material defects, and that the Premises do not
      contain hazardous levels of any mold or fungi defined as toxic under
      applicable state or federal law.

     

    2.3 
      Compliance.
      Lessor
      warrants to the best of its knowledge that the improvements comprising the
      Premises and the Common Areas
      comply with the building codes that were in effect at the time that each such
      improvement, or portion thereof, was constructed, and also with all applicable
      laws, covenants or restrictions of record, regulations, and ordinances
      ("Applicable
      Requirements")
      in
      effect on the Start Date. Said warranty
      does not apply to the use to which Lessee will put the Premises, modifications
      which may be required by the Americans with Disabilities Act or any
      similar laws as a result of Lessee's use (see Paragraph 49), or to any
      Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made
      or to
be
      made
      by Lessee. NOTE:
      Lessee is responsible for determining whether or not the zoning and other
      Applicable Requirements are appropriate
      for Lessee's intended use, and acknowledges that past uses of the Premises
      may
      no longer be allowed. If
      the
      Premises do not comply
      with said warranty, Lessor shall, except as otherwise provided, promptly after
      receipt of written notice from Lessee setting forth with specificity
the
      nature and extent of such non-compliance, rectify the same. 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 Premises,
      the
      remediation of any Hazardous Substance, or the reinforcement or other
      physical modification of the Premises ("Capital
      Expenditure"),
      Lessor and Lessee shall allocate the cost of such work as follows:

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

    (b)
      If
      such Capital Expenditure is not the result of the specific and unique use of
      the
      Premises by Lessee (such as, governmentally mandated
      seismic modifications), then Lessor shall pay for such Capital Expenditure
      and
      Lessee shall only be obligated to pay, each month during the remainder
      of the term of this Lease, on the date that on which the Base Rent is due,
      an
      amount equal to 144th of the portion of such costs reasonably attributable
      to the Premises. Lessee shall pay Interest on the balance but may prepay its
      obligation at any time. If, however, such Capital Expenditure is
      required during the last 2 years of this Lease or if Lessor reasonably
      determines that it is not economically feasible to pay its share thereof, Lessor
      shall
      have the option to terminate this Lease upon 90 days prior written notice to
      Lessee unless Lessee notifies Lessor, in writing, within 10 days after
receipt
      of Lessor's termination notice that Lessee will pay for such Capital
      Expenditure. If Lessor does not elect to terminate, and fails to tender its
      share
      of
      any such Capital Expenditure, Lessee may advance such funds and deduct same,
      with Interest, from Rent until Lessor's share of such costs have
      been
      fully paid. If Lessee is unable to finance Lessor's share, or if the balance
      of
      the Rent due and payable for the remainder of this Lease is not sufficient
      to fully reimburse Lessee on an offset basis, Lessee shall have the right to
      terminate this Lease upon 30 days written notice to Lessor.

    (c)
      Notwithstanding the above, the provisions concerning Capital Expenditures are
      intended to apply only to nonvoluntary, unexpected,
      and new Applicable Requirements. If the Capital Expenditures are instead
      triggered by Lessee as a result of an actual or proposed change
      in
      use, change in intensity of use, or modification to the Premises then, and
      in
      that event, Lessee shall either: (i) immediately cease such changed
      use or intensity of use and/or take such other steps as may be necessary to
      eliminate the requirement for such Capital Expenditure, or (ii) complete
      such Capital Expenditure at its own expense. Lessee shall not have any right
      to
      terminate this Lease.

     

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

     

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

     

    2.6 
      Vehicle
      Parking.
      So long
      as Lessee is not in default, and subject to the Rules and Regulations attached
      hereto, and as established
      by Lessor from time to time, Lessee shall be entitled to rent and use the number
      of parking spaces specified in Paragraph 1.2(b) at the
rental
      rate applicable from time to time for monthly parking as set by Lessor and/or
      its licensee. 

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

       (b)
      The monthly
      rent per parking space specified in Paragraph 1.2(b) is subject to change upon
      30 days prior written notice to Lessee.
      The rent for the parking is payable one month in advance prior to the first
      day
      of each calendar month.

     

        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 Premises that are provided and designated by the Lessor from
      time
      to time for the general nonexclusive use of Lessor, Lessee and other tenants
      of
      the Project and their respective employees, suppliers, shippers,
      customers, contractors and invitees, including, but not limited to, common
      entrances, lobbies, corridors, stairwells, public restrooms, elevators,
      parking areas, loading and unloading areas, trash areas, roadways, walkways,
      driveways and landscaped areas.

     

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

     

        2.9
      Common
      Areas - Rules and Regulations.
      Lessor
      or such other person(s) as Lessor may appoint shall have the exclusive
      control

    

    
      
        
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	 INITIALS	
                     INITIALS

                  

             

            
              ©1999
                - AIR COMMERCIAL REAL ESTATE ASSOCIATION                                                                                       FORM
                OFG-4-6/06E

            

          

          
            

          

        

        
          
          

        

      

    

    

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

       

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

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

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

    

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

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

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

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

     

    3.     Term.

     

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

     

        3.2 
      Early
      Possession.
      If
      Lessee totally or partially occupies the Premises prior to the Commencement
      Date, the obligation to pay Base
      Rent
      shall be abated for the period of such early possession. All other terms of
      this
      Lease (including but not limited to the obligations to pay Lessee's
      Share of the Operating Expense Increase) shall be in effect during such period.
      Any such early possession shall not affect the Expiration Date.

     

        3.3 
      Delay
      In Possession.
      Lessor
      agrees to use its best commercially reasonable efforts to deliver possession
      of
      the Premises to Lessee
      by
      the Commencement Date. If, despite said efforts, Lessor is unable to deliver
      possession by such date, Lessor shall not be subject to any liability
      therefor, nor shall such failure affect the validity of this Lease. Lessee
      shall
      not, however, be obligated to pay Rent or perform its other obligations
      until Lessor delivers possession of the Premises and any period of rent
      abatement that Lessee would otherwise have enjoyed shall run from the
      date
      of delivery of possession and continue for a period equal to what Lessee would
      otherwise have enjoyed under the terms hereof, but minus any days
      of
      delay caused by the acts or omissions of Lessee. If possession is not delivered
      within 60 days after the Commencement Date, as the same may
      be
      extended under the terms of any Work Letter executed by Parties, Lessee may,
      at
      its option, by notice in writing within 10 days after the end of such
      60
      day period, cancel this Lease, in which event the Parties shall be discharged
      from all obligations hereunder. If such written notice is not received
      by Lessor within said 10 day period, Lessee's right to cancel shall terminate.
      If possession of the Premises is not delivered within 120 days after
      the
      Commencement Date, this Lease shall terminate unless other agreements are
      reached between Lessor and Lessee, in writing. 

     

        3.4 
      Lessee
      Compliance.
      Lessor
      shall not be required to deliver 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
      Operating
      Expense Increase. Lessee
      shall pay to Lessor during the term hereof, in addition to the Base Rent,
      Lessee's Share of the
      amount by which all Operating Expenses for each Comparison Year exceeds the
      amount of all Operating Expenses for the Base Year, such excess being
      hereinafter referred to as the "Operating
      Expense Increase",
      in
      accordance with the following provisions: 

          (a)
      "Base
      Year"
      is as
      specified in Paragraph 1.9.

          (b)
      "Comparison
      Year"
      is
      defined as each calendar year during the term of this Lease subsequent to the
      Base Year; provided,
      however, Lessee shall have no obligation to pay a share of the Operating Expense
      Increase applicable to the first 12 months of the Lease Term
      (other than such as are mandated by a governmental authority, as to which
      government mandated expenses Lessee shall pay Lessee's Share, notwithstanding
      they occur during the first twelve (12) months). Lessee's Share of the Operating
      Expense Increase for the first and last Comparison Years
      of
      the Lease Term shall be prorated according to that portion of such Comparison
      Year as to which Lessee is responsible for a share of such increase.

          (c)
      The following costs relating to the ownership and operation of the Project,
      calculated as if the Project was at least 95% occupied,
      are defined as "Operating
      Expenses"
      :

                (i)
      Costs
      relating to the operation, repair, and maintenance in neat, clean, safe, good
      order and condition, but not the
      replacement (see subparagraph (g)), of the following: 

                    (aa)
      The
      Common Areas, including their surfaces, coverings, decorative items, carpets,
      drapes and window
      coverings, and including parking areas, loading and unloading areas, trash
      areas, roadways, sidewalks, walkways, stairways, parkways, driveways,
      landscaped areas, striping, bumpers, irrigation systems, Common Area lighting
      facilities, building exteriors and roofs, fences and gates;

                    (bb)
      All
      heating, air conditioning, plumbing, electrical systems, life safety equipment,
      communication systems
      and other equipment used in common by, or for the benefit of, tenants or
      occupants of the Project, including elevators and escalators, tenant
directories,
      fire detection systems including sprinkler system maintenance and
      repair.

                (ii)
      The
      cost of trash disposal, janitorial and security services, pest control services,
      and the costs of any environmental
      inspections;

                (iii)
      The
      cost of any other service to be provided by Lessor that is elsewhere in this
      Lease stated to be an "Operating
      Expense";
                  (iv)
        The
        cost of the premiums for the insurance policies maintained by Lessor pursuant
        to
        paragraph 8 and any deductible
        portion of an insured loss concerning the Building or the Common
        Areas;

                  (v)
        The
        amount of the Real Property Taxes payable by Lessor pursuant to paragraph
        10;

                  (vi)
        The
        cost of water, sewer, gas, electricity, and other publicly mandated services
        not
        separately metered;

                  (vii)
        Labor,
        salaries, and applicable fringe benefits and costs, materials, supplies and
        tools, used in maintaining and/or
        cleaning the Project and accounting and management fees attributable to the
        operation of the Project;

                  (viii)
        The
        cost of any capital improvement 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
        improvement over a 12 year period and Lessee shall not be required
        to pay more than Lessee's Share of 1/144th of the cost of such Capital
        Expenditure in any given month;

                  (ix)
        The
        cost to replace equipment or improvements that have a useful life for accounting
        purposes of 5 years or less.

               
(d)
        Any item of Operating Expense that is 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. However, any such item
        that
        is not specifically attributable to the Building or to any other building
        or to
        the operation, repair and maintenance thereof, shall be equitably

      allocated
        by Lessor to all buildings in the Project.

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

                (f)
        Lessee's Share of Operating Expense Increase is payable monthly on the same
        day
        as the Base Rent is due hereunder. The
        amount of such payments shall be based on Lessor's estimate of the Operating
        Expense Expenses. Within 60 days after written request (but not more
        than
        once each year) Lessor shall deliver to Lessee a reasonably detailed statement
        showing Lessee's Share of the actual Common Area Operating
        Expenses incurred during the preceding year.a reasonably detailed statement
        showing Lessee's Share of the actual Operating Expense Increase
        incurred during such year. If Lessee's payments during such Year exceed Lessee's
        Share, Lessee shall credit the amount of such over-payment
        against Lessee's future payments. If Lessee's payments during such Year were
        less than Lessee's Share, Lessee shall pay to Lessor the amount
        of
        the deficiency within 10 days after delivery by Lessor to Lessee of said
        statement. Lessor and Lessee shall forthwith adjust between them by cash
        payment any balance determined to exist with respect to that portion of the
        last
        Comparison Year for which Lessee is responsible as to Operating Expense
        Increases, notwithstanding that the Lease term may have terminated before
        the
        end of such Comparison Year.

               
(g)
        Operating Expenses shall not include the costs of replacement for equipment
        or
        capital components such as the roof,

    

    
      
        
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                - AIR COMMERCIAL REAL ESTATE ASSOCIATION                                                                                       FORM
                OFG-4-6/06E

            

          

          
            

          

        

        
          
          

        

      

    

     

    foundations,
      exterior walls or a Common Area capital improvement, such as the parking lot
      paving, elevators, fences that have a useful life for accounting
      purposes of 5 years or more.

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

     

        4.3
       Payment.
      Lessee
      shall cause payment of Rent to be received by Lessor in lawful money of the
      United States on or before the day on
      which
      it is due, without offset or deduction (except as specifically permitted in
      this
      Lease). All monetary amounts shall be rounded to the nearest whole
      dollar. In the event that any invoice prepared by Lessor is inaccurate such
      inaccuracy shall not constitute a waiver and Lessee shall be obligated
to
      pay
      the amount set forth in this Lease. Rent for any period during the term hereof
      which is for less than one full calendar month shall be prorated based
      upon the actual number of days of said month. Payment of Rent shall be made
      to
      Lessor at its address stated herein or to such other persons or place
      as
      Lessor may from time to time designate in writing. Acceptance of a payment
      which
      is less than the amount then due shall not be a waiver of Lessor's
      rights to the balance of such Rent, regardless of Lessor's endorsement of any
      check so stating. In the event that any check, draft, or other instrument
      of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees
      to pay to Lessor the sum of $25 in addition to any Late Charge
      and Lessor, at its option, may require all future Rent be paid by cashier's
      check. Payments will be applied first to accrued late charges and attorney's
      fees, second to accrued interest, then to Base Rent and Common Area Operating
      Expenses, and any remaining amount to any other outstanding
      charges or costs.

     

    5.    
      Security
      Deposit.
      Lessee
      shall deposit with Lessor upon execution hereof the Security Deposit as security
      for Lessee's faithful performance of
      its
      obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults
      under this Lease, Lessor may use, apply or retain all or any portion
of
      said
      Security Deposit for the payment of any amount due already due Lessor, for
      Rents
      which will be due in the future, and/ or to reimburse or

    compensate
      Lessor for any liability, expense, loss or damage which Lessor may suffer or
      incur by reason thereof. If Lessor uses or applies all or any portion
      of the Security Deposit, Lessee shall within 10 days after written request
      therefor deposit monies with Lessor sufficient to restore said Security
Deposit
      to the full amount required by this Lease. If the Base Rent increases during
      the
      term of this Lease, Lessee shall, upon written request from

    Lessor,
      deposit additional monies with Lessor so that the total amount of the Security
      Deposit shall at all times bear the same proportion to the increased
      Base Rent as the initial Security Deposit bore to the initial Base Rent. Should
      the Agreed Use be amended to accommodate a material change
      in
      the business of Lessee or to accommodate a sublessee or assignee, Lessor shall
      have the right to increase the Security Deposit to the extent
      necessary, in Lessor's reasonable judgment, to account for any increased wear
      and tear that the Premises may suffer as a result thereof. If a change
      in
      control of Lessee occurs during this Lease and following such change the
      financial condition of Lessee is, in Lessor's reasonable judgment, significantly
      reduced, Lessee shall deposit such additional monies with Lessor as shall be
      sufficient to cause the Security Deposit to be at a commercially
      reasonable level based on such change in financial condition. Lessor shall
      not
      be required to keep the Security Deposit separate from its general
      accounts. Within 90 days after the expiration or termination of this Lease,
      Lessor shall return that portion of the Security Deposit not used or
applied
      by Lessor. No part of the Security Deposit shall be considered to be held in
      trust, to bear interest or to be prepayment for any monies to be paid
by
      Lessee
      under this Lease.

     

    6.     Use.

     

        6.1
      Use.
      Lessee
      shall use and occupy the Premises only for the Agreed Use, or any other legal
      use which is reasonably comparable thereto,
      and for no other purpose. Lessee shall not use or permit the use of the Premises
      in a manner that is unlawful, creates damage, waste or a nuisance,
      or that disturbs occupants of or causes damage to neighboring premises or
      properties. Other than guide, signal and seeing eye dogs, Lessee shall
      not
      keep or allow in the Premises any pets, animals, birds, fish, or reptiles.
      Lessor shall not unreasonably withhold or delay its consent to any written
      request for a modification of the Agreed Use, so long as the same will not
      impair the structural integrity of the improvements of the Building, will
not
      adversely affect the mechanical, electrical, HVAC, and other systems of the
      Building, and/or will not affect the exterior appearance of the Building. 
If
      Lessor
      elects to withhold consent, Lessor shall within 7 days after such request give
      written notification of same, which notice shall include an explanation
      of Lessor's objections to the change in the Agreed Use.

     

        6.2 
      Hazardous
      Substances.

             
          (a)
Reportable
      Uses Require Consent.
      The
      term "Hazardous
      Substance"
      as used
      in this Lease shall mean any product, substance,
      or waste whose presence, use, manufacture, disposal, transportation, or release,
      either by itself or in combination with other materials expected
      to be on the Premises, is either: (i) potentially injurious to the public
      health, safety or welfare, the environment or the Premises, (ii) regulated
      or
      monitored by any governmental authority, or (iii) a basis for potential
      liability of Lessor to any governmental agency or third party under any
      applicable statute
      or common law theory. Hazardous Substances shall include, but not be limited
      to,
      hydrocarbons, petroleum, gasoline, and/or crude oil or any products,
      byproducts or fractions thereof. Lessee shall not engage in any activity in
      or
      on the Premises which constitutes a Reportable Use of Hazardous
      Substances without the express prior written consent of Lessor and timely
      compliance (at Lessee's expense) with all Applicable Requirements.
      "Reportable
      Use"
      shall
      mean (i) the installation or use of any above or below ground storage tank,
      (ii)
      the generation, possession, storage,
      use, transportation, or disposal of a Hazardous Substance that requires a permit
      from, or with respect to which a report, notice, registration or business
      plan is required to be filed with, any governmental authority, and/or (iii)
      the
      presence at the Premises of a Hazardous Substance with respect to
      which
      any Applicable Requirements requires that a notice be given to persons entering
      or occupying the Premises or neighboring properties.  Notwithstanding
      the foregoing, Lessee may use any ordinary and customary materials reasonably
      required to be used in the normal course of the Agreed
      Use such as ordinary office supplies (copier toner, liquid paper, glue, etc.)
      and common household cleaning materials, so long as such use is in compliance
      with all Applicable Requirements, is not a Reportable Use, and does not expose
      the Premises or neighboring property to any meaningful

    risk
      of
      contamination or damage or expose Lessor to any liability therefor. In addition,
      Lessor may condition its consent to any Reportable Use upon receiving
      such additional assurances as Lessor reasonably deems necessary to protect
      itself, the public, the Premises and/or the environment against damage,
      contamination, injury and/or liability, including, but not limited to, the
      installation (and removal on or before Lease expiration or termination)
      of

    protective
      modifications (such as concrete encasements) and/or increasing the Security
      Deposit. 

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

    Substance.

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

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

                      
      (e) Lessor
      Indemnification.
      Lessor
      and its successors and assigns shall indemnify, defend, reimburse and hold
      Lessee, its employees
      and lenders, harmless from and against any and all environmental damages,
      including the cost of remediation, which result from Hazardous Substances
      which existed on the Premises prior to Lessee's occupancy or which are caused
      by
      the gross negligence or willful misconduct of Lessor, its

    agents
      or
      employees. Lessor's obligations, as and when required by the Applicable
      Requirements, shall include, but not be limited to, the cost of investigation,
      removal, remediation, restoration and/or abatement, and shall survive the
      expiration or termination of this Lease.

                      
      (f) Investigations
      and Remediations.
      Lessor
      shall retain the responsibility and pay for any investigations or remediation
      measures
      required by governmental entities having jurisdiction with respect to the
      existence of Hazardous Substances on the Premises prior to Lessee's
      occupancy, unless such remediation measure is required as a result of Lessee's
      use (including "Alterations", as defined in paragraph 7.3(a) below)
      of
      the Premises, in which event Lessee shall be responsible for such payment.
      Lessee shall cooperate fully in any such activities at the request of
      Lessor, including allowing Lessor and Lessor's agents to have reasonable access
      to the Premises at reasonable times in order to carry out Lessor's investigative
      and remedial responsibilities.
                        
        (g) Lessor
        Termination Option.
        If a
        Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term
        of
        this Lease, unless
        Lessee is legally responsible therefor (in which case Lessee shall make the
        investigation and remediation thereof required by the Applicable Requirements
        and this Lease shall continue in full force and effect, but subject to Lessor's
        rights under Paragraph 6.2(d) and Paragraph 13), Lessor may,
        at
        Lessor's option, either (i) investigate and remediate such Hazardous Substance
        Condition, if required, as soon as reasonably possible at Lessor's
        expense, in which event this Lease shall continue in full force and effect,
        or
        (ii) if the estimated cost to remediate such condition exceeds
        12

    

    
      
        
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              ©1999
                - AIR COMMERCIAL REAL ESTATE ASSOCIATION                                                                                       FORM
                OFG-4-6/06E

            

          

          
            

          

        

        
          
          

        

      

    

     

    times
      the
      then monthly Base Rent or $100,000, whichever is greater, give written notice
      to
      Lessee, within 30 days after receipt by Lessor of knowledge of
      the
      occurrence of such Hazardous Substance Condition, of Lessor's desire to
      terminate this Lease as of the date 60 days following the date of such
notice.
      In the event Lessor elects to give a termination notice, Lessee may, within
      10
      days thereafter, give written notice to Lessor of Lessee's commitment
      to pay the amount by which the cost of the remediation of such Hazardous
      Substance Condition exceeds an amount equal to 12 times the then
      monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor
      with said funds or satisfactory assurance thereof within 30 days
      following such commitment. In such event, this Lease shall continue in full
      force and effect, and Lessor shall proceed to make such remediation as
      soon
      as reasonably possible after the required funds are available. If Lessee does
      not give such notice and provide the required funds or assurance thereof
      within the time provided, this Lease shall terminate as of the date specified
      in
      Lessor's notice of termination.

     

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

     

        6.4
      Inspection;
      Compliance.
      Lessor
      and Lessor's "Lender"
      (as
      defined in Paragraph 30) and consultants shall have the right to enter
into
      Premises at any time, in the case of an emergency, and otherwise at reasonable
      times, after reasonable notice, for the purpose of inspecting the condition
      of the Premises and for verifying compliance by Lessee with this Lease. The
      cost
      of any such inspections shall be paid by Lessor, unless a violation
      of Applicable Requirements, or a Hazardous Substance Condition (see paragraph
      9.1e) is found to exist or be imminent, or the inspection is requested
      or ordered by a governmental authority. In such case, Lessee shall upon request
      reimburse Lessor for the cost of such inspection, so long as
      such
      inspection is reasonably related to the violation or contamination. In addition,
      Lessee shall provide copies of all relevant material safety data sheets
      (MSDS)
      to
      Lessor within 10 days of the receipt of written request therefor.

     

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

     

        7.1
      Lessee's
      Obligations.
      Notwithstanding Lessor's obligation to keep the Premises in good condition
      and
      repair, Lessee shall be responsible
      for payment of the cost thereof to Lessor as additional rent for that portion
      of
      the cost of any maintenance and repair of the Premises, or any
      equipment (wherever located) that serves only Lessee or the Premises, to the
      extent such cost is attributable to causes beyond normal wear and tear.
      Lessee shall be responsible for the cost of painting, repairing or replacing
      wall coverings, and to repair or replace any improvements with the Premises.
      Lessor may, at its option, upon reasonable notice, elect to have Lessee perform
      any particular such maintenance or repairs the cost of which
      is
      otherwise Lessee's responsibility hereunder.

     

        7.2
      Lessor's
      Obligations.
      Subject
      to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 4.2
      (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,
      fire alarm and/or smoke detection systems, fire hydrants, and the Common Areas.
      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 lines, vacuum lines, power panels,
electrical
      distribution, security and fire protection systems, communication cabling,
      lighting fixtures, HVAC equipment, and plumbing in or on the Premises.
      The term "Trade
      Fixtures"
      shall
      mean Lessee's machinery and equipment that can be removed without doing material
      damage to the Premises.
      The term " Alterations"
      shall
      mean any modification of the improvements, other than Utility Installations
      or
      Trade Fixtures, whether by addition
      or deletion. "Lessee
      Owned Alterations and/or Utility Installations"
      are
      defined as Alterations and/or Utility Installations made by Lessee that
      are
      not yet owned by Lessor pursuant to Paragraph 7.4(a).

                      
      (b) Consent.
      Lessee
      shall not make any Alterations or Utility Installations to the Premises without
      Lessor's prior written consent.  Lessee
      may, however, make non-structural Utility Installations to the interior of
      the
      Premises (excluding the roof) without such consent but upon notice to
      Lessor, as long as they are not visible from the outside, do not involve
      puncturing, relocating or removing the roof, ceilings, floors or any existing
      walls,
      will not affect the electrical, plumbing, HVAC, and/or life safety systems,
      and
      the cumulative cost thereof during this Lease as extended does not exceed
      $2000. Notwithstanding the foregoing, Lessee shall not make or permit any roof
      penetrations and/or install anything on the roof without the prior
      written approval of Lessor. Lessor may, as a precondition to granting such
      approval, require Lessee to utilize a contractor chosen and/or
      approved

    by
      Lessor. Any Alterations or Utility Installations that Lessee shall desire to
      make and which require the consent of the Lessor shall be presented to
Lessor
      in
      written form with detailed plans. Consent shall be deemed conditioned upon
      Lessee's: (i) acquiring all applicable governmental permits, (ii) furnishing
      Lessor with copies of both the permits and the plans and specifications prior
      to
      commencement of the work, and (iii) compliance with all conditions
      of said permits and other Applicable Requirements in a prompt and expeditious
      manner. Any Alterations or Utility Installations shall be performed
      in a workmanlike manner with good and sufficient materials. Lessee shall
      promptly upon completion furnish Lessor with asbuilt plans and specifications.
      For work which costs an amount in excess of one month's Base Rent, Lessor may
      condition its consent upon Lessee providing a lien and
      completion bond in an amount equal to 150% of the estimated cost of such
      Alteration or Utility Installation and/or upon Lessee's posting an additional
      Security Deposit with Lessor.

                      
      (c) Liens;
      Bonds.
      Lessee
      shall pay, when due, all claims for labor or materials furnished or alleged
      to
      have been furnished to or for
      Lessee at or for use on the Premises, which claims are or may be secured by
      any
      mechanic's or materialmen's lien against the Premises or any interest
      therein. Lessee shall give Lessor not less than 10 days notice prior to the
      commencement of any work in, on or about the Premises, and Lessor
      shall have the right to post notices of non-responsibility. If Lessee shall
      contest the validity of any such lien, claim or demand, then Lessee shall,
      at
      its sole expense defend and protect itself, Lessor and the Premises against
      the
      same and shall pay and satisfy any such adverse judgment that may
      be
      rendered thereon before the enforcement thereof. If Lessor shall require, Lessee
      shall furnish a surety bond in an amount equal to 150% of the amount
      of
      such contested lien, claim or demand, indemnifying Lessor against liability
      for
      the same. If Lessor elects to participate in any such action, Lessee
      shall pay Lessor's attorneys' fees and costs.

     

        7.4
      Ownership;
      Removal; Surrender; and Restoration.

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

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

                      
      (c) Surrender;
      Restoration.
      Lessee
      shall surrender the Premises by the Expiration Date or any earlier termination
      date, with all of the
      improvements, parts and surfaces thereof clean and free of debris, and in good
      operating order, condition and state of repair, ordinary wear and tear,
      casualty, condemnation and Hazardous Substances not otherwise Lessee's
      obligation pursuant to Section 6.2 excepted.
      "Ordinary
      wear and tear" shall not include any damage or deterioration that would have
      been prevented by good maintenance practice. Notwithstanding the
      foregoing, if this Lease is for 12 months or less, then Lessee shall surrender
      the Premises in the same condition as delivered to Lessee on the Start
Date
      with
      NO allowance for ordinary wear and tear. Lessee shall repair any damage
      occasioned by the installation, maintenance or removal of Trade Fixtures,
      Lessee owned Alterations and/or Utility Installations, furnishings, and
      equipment as well as the removal of any storage tank installed by or for
Lessee.
      Lessee shall also completely remove from the Premises any and all Hazardous
      Substances brought onto the Premises by or for Lessee, or any
      third
      party (except Hazardous Substances which were deposited via underground
      migration from areas outside of the Premises) even if such removal
      would require Lessee to perform or pay for work that exceeds statutory
      requirements. Trade Fixtures shall remain the property of Lessee and
shall
      be
      removed by Lessee. Any personal property of Lessee not removed on or before
      the
      Expiration Date or any earlier termination date shall be

    deemed
      to
      have been abandoned by Lessee and may be disposed of or retained by Lessor
      as
      Lessor may desire. The failure by Lessee to timely vacate
      the Premises pursuant to this Paragraph 7.4(c) without the express written
      consent of Lessor shall constitute a holdover under the provisions of
Paragraph
      26 below.

     

    8.     Insurance;
      Indemnity.

     

        8.1 
      Insurance
      Premiums.
      The
      cost of the premiums for the insurance policies maintained by Lessor pursuant
      to
      paragraph 8 are included
      as Operating Expenses (see paragraph 4.2 (c)(iv)). Said costs shall include
      increases in the premiums resulting from additional coverage

     

    
      
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            ©1999
              - AIR COMMERCIAL REAL ESTATE ASSOCIATION                                                                                       FORM
              OFG-4-6/06E

          

        

        
          

        

      

      
        
        

      

    

    

    
      related
        to requirements of the holder of a mortgage or deed of trust covering the
        Premises, Building and/or Project, increased valuation of the Premises,
Building
        and/or Project, and/or a general premium rate increase. Said costs shall
        not,
        however, include any premium increases resulting from the nature
        of
        the occupancy of any other tenant of the Building. If the Project was not
        insured for the entirety of the Base Year, then the base premium shall
        be
        the lowest annual premium reasonably obtainable for the required insurance
        as of
        the Start Date, assuming the most nominal use possible of the
        Building and/or Project. In no event, however, shall Lessee be responsible
        for
        any portion of the premium cost attributable to liability insurance coverage
        in excess of $2,000,000 procured under Paragraph 8.2(b).

       

          8.2 
        Liability
        Insurance.

                        
        (a) Carried
        by Lessee.
        Lessee
        shall obtain and keep in force a Commercial General Liability policy of
        insurance protecting Lessee and
        Lessor as an additional insured against claims for bodily injury, personal
        injury and property damage based upon or arising out of the ownership,
use, occupancy or maintenance of the Premises and all areas appurtenant
        thereto. Such insurance shall be on an occurrence basis providing single
limit
        coverage in an amount not less than $1,000,000 per occurrence with an annual
        aggregate of not less than $2,000,000. Lessee shall add Lessor as an
        additional insured by means of an endorsement at least as broad as the Insurance
        Service organization's "Additional Insured-Managers or Lessors of
        Premises" Endorsement and coverage shall also be extended to include damage
        caused by heat, smoke or fumes from a hostile fire. The policy shall
        not
        contain any intra-insured exclusions as between insured persons or
        organizations, but shall include coverage for liability assumed under this
        Lease
        as
        an "insured
        contract"
        for the
        performance of Lessee's indemnity obligations under this Lease. The limits
        of
        said insurance shall not, however,
        limit the liability of Lessee nor relieve Lessee of any obligation hereunder.
        Lessee shall provide an endorsement on its liability policy(ies) which
        provides that its insurance shall be primary to and not contributory with
        any
        similar insurance carried by Lessor, whose insurance shall be considered
        excess insurance only.

    

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

     

        8.3
      Property
      Insurance - Building, Improvements and Rental Value.

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

             
(b)
      Rental
      Value.
      Lessor
      shall also obtain and keep in force a policy or policies in the name of Lessor
      with loss payable to Lessor and
      any
      Lender, insuring the loss of the full Rent for one year with an extended period
      of indemnity for an additional 180 days ("Rental
      Value insurance").
      Said
      insurance shall contain an agreed valuation provision in lieu of any coinsurance
      clause, and the amount of coverage shall be adjusted
      annually to reflect the projected Rent otherwise payable by Lessee, for the
      next
      12 month period.

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

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

     

        8.4
      Lessee's
      Property; Business Interruption Insurance.

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

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

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

     

        8.5
       Insurance
      Policies.
      Insurance required herein shall be by companies duly licensed or admitted to
      transact business in the state where
      the
      Premises are located, and maintaining during the policy term a "General
      Policyholders Rating" of at least A-, VI, as set forth in the most current
      issue of "Best's Insurance Guide", or such other rating as may be required
      by a
      Lender. Lessee shall not do or permit to be done anything which
      invalidates the required insurance policies. Lessee shall, prior to the Start
      Date, deliver to Lessor certified copies of policies of such insurance or
certificates
      evidencing the existence and amounts of the required insurance. No such policy
      shall be cancelable or subject to modification except after 10
      days
      prior written notice to Lessor. Lessee shall, at least 30 days prior to the
      expiration of such policies, furnish Lessor with evidence of renewals or
"insurance
      binders" evidencing renewal thereof, or Lessor may order such insurance and
      charge the cost thereof to Lessee, which amount shall be payable
      by Lessee to Lessor upon demand. Such policies shall be for a term of at least
      one year, or the length of the remaining term of this Lease, whichever
      is less. If either Party shall fail to procure and maintain the insurance
      required to be carried by it, the other Party may, but shall not be required
      to, procure and maintain the same.

     

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

     

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

     

        8.8
      Exemption
      of Lessor and its Agents from Liability.
      Notwithstanding the negligence or breach of this Lease by Lessor or its
agents,
      neither Lessor nor its agents shall be liable under any circumstances for:
      (i)
      injury or damage to the person or goods, wares, merchandise or other
      property of Lessee, Lessee's employees, contractors, invitees, customers, or
      any
      other person in or about the Premises, whether such damage or injury
      is
      caused by or results from fire, steam, electricity, gas, water or rain, indoor
      air quality, the presence of mold or from the breakage, leakage, obstruction
      or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC
      or
      lighting fixtures, or from any other cause, whether the said injury
      or
      damage results from conditions arising upon the Premises or upon other portions
      of the Building, or from other sources or places, (ii) any damages
      arising from any act or neglect of any other tenant of Lessor or from the
      failure of Lessor or its agents to enforce the provisions of any other
lease
      in
      the Project, or (iii) injury to Lessee's business or for any loss of income
      or
      profit therefrom. Instead, it is intended that Lessee's sole recourse in
the
      event
      of such damages or injury be to file a claim on the insurance policy(ies) that
      Lessee is required to maintain pursuant to the provisions of paragraph
      8. 

     

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

      9.     Damage
        or Destruction.

       

          9.1
        Definitions.

               
(a)
        "Premises
        Partial Damage"
        shall
        mean damage or destruction to the improvements on the Premises, other than
        Lessee

    

    

    
      
        
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              ©1999
                - AIR COMMERCIAL REAL ESTATE ASSOCIATION                                                                                       FORM
                OFG-4-6/06E

            

          

          
            

          

        

        
          
          

        

      

    

    Owned
      Alterations and Utility Installations, which can reasonably be repaired in
      3
      months or less from the date of the damage or destruction, and the cost
      thereof does not exceed a sum equal to 6 month's Base Rent. Lessor shall notify
      Lessee in writing within 30 days from the date of the damage or destruction
      as to whether or not the damage is Partial or Total.

             
(b)
      "Premises
      Total Destruction"
      shall
      mean damage or destruction to the improvements on the Premises, other than
      Lessee Owned
      Alterations and Utility Installations and Trade Fixtures, which cannot
      reasonably be repaired in 3 months or less from the date of the damage or
destruction
      and/or the cost thereof exceeds a sum equal to 6 month's Base Rent. Lessor
      shall
      notify Lessee in writing within 30 days from the date of the
      damage or destruction as to whether or not the damage is Partial or Total.
      

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

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

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

     

        9.2
      Partial
      Damage - Insured Loss.
      If a
      Premises Partial Damage that is an Insured Loss occurs, then Lessor shall,
      at
      Lessor's expense,
      repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations
      and Utility Installations) as soon as reasonably possible and
      this
      Lease shall continue in full force and effect; provided, however, that Lessee
      shall, at Lessor's election, make the repair of any damage or destruction
      the total cost to repair of which is $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 effect 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 of Lessee (in which event Lessee shall make the repairs at
      Lessee's expense), Lessor may either: (i) repair such damage as soon
      as
      reasonably possible at Lessor's expense, in which event this Lease shall
      continue in full force and effect, or (ii) terminate this Lease by giving
written
      notice to Lessee within 30 days after receipt by Lessor of knowledge of the
      occurrence of such damage. Such termination shall be effective 60 days
      following the date of such notice. In the event Lessor elects to terminate
      this
      Lease, Lessee shall have the right within 10 days after receipt of the
termination
      notice to give written notice to Lessor of Lessee's commitment to pay for the
      repair of such damage without reimbursement from Lessor. Lessee
      shall provide Lessor with said funds or satisfactory assurance thereof within
      30
      days after making such commitment. In such event this Lease shall
      continue in full force and effect, and Lessor shall proceed to make such repairs
      as soon as reasonably possible after the required funds are available.
      If Lessee does not make the required commitment, this Lease shall terminate
      as
      of the date specified in the termination notice.

     

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

     

        9.5
      Damage
      Near End of Term.
      If at
      any time during the last 6 months of this Lease there is damage for which the
      cost to repair exceeds
      one month's Base Rent, whether or not an Insured Loss, Lessor may terminate
      this
      Lease effective 60 days following the date of occurrence of such
      damage by giving a written termination notice to Lessee within 30 days after
      the
      date of occurrence of such damage. Notwithstanding the foregoing,
      if Lessee at that time has an exercisable option to extend this Lease or to
      purchase the Premises, then Lessee may preserve this Lease by, (a)
      exercising such option and (b) providing Lessor with any shortage in insurance
      proceeds (or adequate  assurance thereof) needed to make the repairs
      on or before the earlier of (i) the date which is 10 days after Lessee's receipt
      of Lessor's written notice purporting to terminate this Lease, or (ii)
the
      day
      prior to the date upon which such option expires. If Lessee duly exercises
      such
      option during such period and provides Lessor with funds (or adequate
      assurance thereof) to cover any shortage in insurance proceeds, Lessor shall,
      at
      Lessor's commercially reasonable expense, repair such damage
      as
      soon as reasonably possible and this Lease shall continue in full force and
      effect. If Lessee fails to exercise such option and provide such funds
      or
      assurance during such period, then this Lease shall terminate on the date
      specified in the termination notice and Lessee's option shall be extinguished.

     

        9.6
      Abatement
      of Rent; Lessee's Remedies.

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

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

     

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

     

    10.           
      Real
      Property Taxes.

        10.1 
      Definitions.
      As used
      herein, the term "Real
      Property Taxes"
      shall
      include any form of assessment; real estate, general, special, ordinary
      or extraordinary, or rental levy or tax (other than inheritance, personal income
      or estate taxes); improvement bond; and/or license fee imposed upon
      or
      levied against any legal or equitable interest of Lessor in the Project,
      Lessor's right to other income therefrom, and/or Lessor's business of
leasing,
      by any authority having the direct or indirect power to tax and where the funds
      are generated with reference to the Project address and where the
      proceeds so generated are to be applied by the city, county or other local
      taxing authority of a jurisdiction within which the Project is located.
"Real
      Property
      Taxes" shall
      also include any tax, fee, levy, assessment or charge, or any increase therein:
      (i) imposed by reason of events occurring during the
      term
      of this Lease, including but not limited to, a change in the ownership of the
      Project, (ii) a change in the improvements thereon, and/or (iii) levied
or
      assessed on machinery or equipment provided by Lessor to Lessee pursuant to
      this
      Lease.  

     

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

     

        10.3
      Additional
      Improvements.
      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 Operating Expenses are payable under Paragraph
      4.2, the entirety of any increase in Real Property Taxes if assessed solely
      by
      reason of Alterations, Trade Fixtures or Utility Installations placed
      upon the Premises by Lessee or at Lessee's request or by reason of any
      alterations or improvements to the  remises made by Lessor subsequent
      to the execution of this Lease by the Parties.

     

        10.4
      Joint
      Assessment.
      If the
      Building is not separately assessed, Real Property 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

     

    
      
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            ©1999
              - AIR COMMERCIAL REAL ESTATE ASSOCIATION                                                                                       FORM
              OFG-4-6/06E

          

        

        
          

        

      

      
        
        

      

    

    possible,
      Lessee shall cause its Lessee Owned Alterations and Utility Installations,
      Trade
      Fixtures, furnishings, equipment and all other personal property
      to be assessed and billed separately from the real property of Lessor. If any
      of
      Lessee's said property shall be assessed with Lessor's real property,
      Lessee shall pay Lessor the taxes attributable to Lessee's property within
      10
      days after receipt of a written statement setting forth the taxes applicable
      to Lessee's property.

     

    11.           
      Utilities
      and Services.

        11.1
      Services
      Provided by Lessor. Lessor
      shall provide heating, ventilation, air conditioning, reasonable amounts of
      electricity for normal
      lighting and office machines, water for reasonable and normal drinking and
      lavatory use in connection with an office, and replacement light bulbs
and/or
      fluorescent tubes and ballasts for standard overhead fixtures. Lessor shall
      also
      provide janitorial services to the Premises and Common Areas 5 times
      per
      week, excluding Building Holidays, or pursuant to the attached janitorial
      schedule, if any. Lessor shall not, however, be required to provide janitorial
      services to kitchens or storage areas included within the Premises.

     

        11.2
      Services
      Exclusive to Lessee. Lessee
      shall pay for all water, gas, light, power, telephone and other utilities and
      services specially or exclusively
      supplied and/or metered exclusively to the Premises or to Lessee, together
      with
      any taxes thereon. If a service is deleted by Paragraph 1.13
      and
      such service is not separately metered to the Premises, Lessee shall pay at
      Lessor's option, either Lessee's Share or a reasonable proportion to
      be
      determined by Lessor of all charges for such jointly metered service.

     

        11.3
      Hours
      of Service. Said
      services and utilities shall be provided during times set forth in Paragraph
      1.12;
      provided, however, electricity
      and water service shall be provided at all times.
      Utilities and services required at other times shall be subject to advance
      request and
      reimbursement by Lessee to Lessor of the cost thereof.

     

        11.4
      Excess
      Usage by Lessee. Lessee
      shall not make connection to the utilities except by or through existing outlets
      and shall not install or use
      machinery or equipment in or about the Premises that uses excess water, lighting
      or power, or suffer or permit any act that causes extra burden upon
      the
      utilities or services, including but not limited to security and trash services,
      over standard office usage for the Project. Lessor shall require Lessee
      to
      reimburse Lessor for any excess expenses or costs that may arise out of a breach
      of this subparagraph by Lessee. Lessor may, in its sole discretion,
      install at Lessee's expense supplemental equipment and/or separate metering
      applicable to Lessee's excess usage or loading.

     

        11.5
      Interruptions.
      There
      shall be no abatement of rent and Lessor shall not be liable in any respect
      whatsoever for the inadequacy, stoppage,
      interruption or discontinuance of any utility or service due to riot, strike,
      labor dispute, breakdown, accident, repair or other cause beyond Lessor's
      reasonable control or in cooperation with governmental request or
      directions.

     

    12.
      Assignment
      and Subletting.

        12.1
      Lessor's
      Consent Required.

    (a)
      Lessee shall not voluntarily or by operation of law assign, transfer, mortgage
      or encumber (collectively, "assign
      or assignment")
      or
      sublet all or any part of Lessee's interest in this Lease or in the Premises
      without Lessor's prior written consent. 

    (b)
      Unless Lessee is a corporation and its stock is publicly traded on a national
      stock exchange, a change in the control of Lessee shall
      constitute an assignment requiring consent. The transfer, on a cumulative basis,
      of 25% or more of the voting control of Lessee shall constitute a change
      in
      control for this purpose.

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

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

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

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

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

     

        12.2
      Terms
      and Conditions Applicable to Assignment and Subletting.

    (a)
      Regardless of Lessor's consent, no assignment or subletting shall: (i) be
      effective without the express written assumption by such
      assignee or sublessee of the obligations of Lessee under this Lease, (ii)
      release Lessee of any obligations hereunder, or (iii) alter the primary
liability
      of Lessee for the payment of Rent or for the performance of any other
      obligations to be performed by Lessee. 

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

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

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

    (e)
      Each
      request for consent to an assignment or subletting shall be in writing,
      accompanied by information relevant to Lessor's determination
      as to the financial and operational responsibility and appropriateness of the
      proposed assignee or sublessee, including but not limited to the
      intended use and/or required modification of the Premises, if any, together
      with
      a fee of $500 as consideration for Lessor's considering and processing
      said request. Lessee agrees to provide Lessor with such other or additional
      information and/or documentation as may be reasonably requested.
      (See also Paragraph 36)

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

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

     

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

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

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

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

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

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

     

    13.           
      Default;
      Breach; Remedies.

    

    
      
        
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              ©1999
                - AIR COMMERCIAL REAL ESTATE ASSOCIATION                                                                                       FORM
                OFG-4-6/06E

            

          

          
            

          

        

        
          
          

        

      

    

     

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

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

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

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

    (d)
      The
      failure by Lessee to provide (i) reasonable written evidence of compliance
      with
      Applicable Requirements, (ii) the service contracts,
      (iii) the rescission of an unauthorized assignment or subletting, (iv) an
      Estoppel Certificate, (v) a requested subordination, (vi) evidence concerning
      any guaranty and/or Guarantor, (vii) any document requested under Paragraph
      41,
      (viii) material data safety sheets (MSDS), or (ix) any other
      documentation or information which Lessor may reasonably require of Lessee
      under
      the terms of this Lease, where any such failure continues for a
      period
      of 10 days following written notice to Lessee.

    (e)
      A
      Default by Lessee as to the terms, covenants, conditions or provisions of this
      Lease, or of the rules adopted under Paragraph 2.9
      hereof, other than those described in subparagraphs 13.1(a), (b) 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 more
      than
      30 days are reasonably required for its cure, then it shall not be deemed
      to
      be a Breach if Lessee commences such cure within said 30 day period and
      thereafter diligently prosecutes such cure to completion.

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

    (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.

     

        13.2
      Remedies..
      If
      Lessee fails to perform any of its affirmative duties or obligations, within
      10
      days after written notice (or in case of an emergency,
      without notice), Lessor may, at its option, perform such duty or obligation
      on
      Lessee's behalf, including but not limited to the obtaining of reasonably
      required bonds, insurance policies, or governmental licenses, permits or
      approvals. Lessee shall pay to Lessor an amount equal to 115% of the
      costs
      and expenses incurred by Lessor in such performance upon receipt of an invoice
      therefor. In the event of a Breach, Lessor may, with or without
      further notice or demand, and without limiting Lessor in the exercise of any
      right or remedy which Lessor may have by reason of such Breach: 

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

    greater
      of the two such grace periods shall constitute both an unlawful detainer
      and a Breach of this Lease entitling Lessor to the remedies provided for
in
      this
      Lease and/or by said statute.

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

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

     

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

          13.4
        Late
        Charges.
        Lessee
        hereby acknowledges that late payment by Lessee of Rent will cause Lessor
        to
        incur costs not contemplated
        by this Lease, the exact amount of which will be extremely difficult to
        ascertain. Such costs include, but are not limited to, processing and
accounting
        charges, and late charges which may be imposed upon Lessor by any Lender.
        Accordingly, if any Rent shall not be received by Lessor within
        5
10
        days
        after such amount shall be due, then, without any requirement for notice
        to
        Lessee, Lessee shall immediately pay to Lessor a one-time late
        charge equal to 10 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 consecutive installments of Base Rent, then notwithstanding
        any provision of this Lease to the contrary, Base Rent shall, at Lessor's
        option, become due and payable quarterly in advance.

       

          13.5
        Interest.
        Any
        monetary payment due Lessor hereunder, other than late charges, not received
        by
        Lessor, when due as to scheduled
        payments (such as Base Rent) or within 30 days following the date on which
        it
        was due for nonscheduled payment, shall bear interest from the
        date
        when due, as to scheduled payments, or the 31st day after it was due as to
        nonscheduled payments. The interest ("Interest")
        charged shall be computed
        at the rate of 10% per annum but shall not exceed the maximum rate allowed
        by
        law. Interest is payable in addition to the potential late charge
        provided for in Paragraph 13.4.

       

          13.6
        Breach
        by Lessor.

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

       

    

    
      
        
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              ©1999
                - AIR COMMERCIAL REAL ESTATE ASSOCIATION                                                                                       FORM
                OFG-4-6/06E

            

          

          
            

          

        

        
          
          

        

      

    

     

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

     

    14.           
      Condemnation.
      If the
      Premises or any portion thereof are taken under the power of eminent domain
      or
      sold under the threat of the exercise of
      said
      power (collectively "Condemnation"),
      this
      Lease shall terminate as to the part taken as of the date the condemning
      authority takes title or possession,
      whichever first occurs. If more than 10% of the rentable floor area of the
      Premises, or more than 25% of Lessee's Reserved Parking Spaces,
      if any, are taken by Condemnation, Lessee may, at Lessee's option, to be
      exercised in writing within 10 days after Lessor shall have given Lessee
      written notice of such taking (or in the absence of such notice, within 10
      days
      after the condemning authority shall have taken possession) terminate
      this Lease as of the date the condemning authority takes such possession. If
      Lessee does not terminate this Lease in accordance with the foregoing,
      this Lease shall remain in full force and effect as to the portion of the
      Premises remaining, except that the Base Rent shall be reduced in proportion
      to the reduction in utility of the Premises caused by such Condemnation.
      Condemnation awards and/or payments shall be the property of Lessor,
      whether such award shall be made as compensation for diminution in value of
      the
      leasehold, the value of the part taken, or for severance damages;
      provided, however, that Lessee shall be entitled to any compensation paid by
      the
      condemnor for Lessee's relocation expenses, loss of business
      goodwill and/or Trade Fixtures, without regard to whether or not this Lease
      is
      terminated pursuant to the provisions of this Paragraph. All

    Alterations
      and Utility Installations made to the Premises by Lessee, for purposes of
      Condemnation only, shall be considered the property of the Lessee and
      Lessee shall be entitled to any and all compensation which is payable therefor.
      In the event that this Lease is not terminated by reason of the Condemnation,
      Lessor shall repair any damage to the Premises caused by such
      Condemnation.

     

    15.           
      Brokerage
      Fees.

     

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

     

        15.2
      Assumption
      of Obligations.
      Any
      buyer or transferee of Lessor's interest in this Lease shall be deemed to have
      assumed Lessor's obligation
      hereunder. Brokers shall be third party beneficiaries of the provisions of
      Paragraphs 1.10, 15, 22 and 31. If Lessor fails to pay to Brokers any
      amounts due as and for brokerage fees pertaining to this Lease when due, then
      such amounts shall accrue Interest. In addition, if Lessor fails to pay
      any
      amounts to Lessee's Broker when due, Lessee's Broker may send written notice
      to
      Lessor and Lessee of such failure and if Lessor fails to pay such
      amounts within 10 days after said notice, Lessee shall pay said monies to its
      Broker and offset such amounts against Rent. In addition, Lessee's Broker
      shall be deemed to be a third party beneficiary of any commission agreement
      entered into by and/or between Lessor and Lessor's Broker for the limited
      purpose of collecting any brokerage fee owed.

     

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

     

    16.           
      Estoppel
      Certificates.

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

    (b)
      If
      the Responding Party shall fail to execute or deliver the Estoppel Certificate
      within such 10 day period, the Requesting Party may
      execute an Estoppel Certificate stating that: (i) the Lease is in full force
      and
      effect without modification except as may be represented by the Requesting
      Party, (ii) there are no uncured defaults in the Requesting Party's performance,
      and (iii) if Lessor is the Requesting Party, not more than one month's
      rent has been paid in advance. Prospective purchasers and encumbrancers may
      rely
      upon the Requesting Party's Estoppel Certificate, and the responding
      Party shall be estopped from denying the truth of the facts contained in said
      Certificate.

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

     

    17.           
      Definition
      of Lessor.
      The
      term "Lessor"
      as used
      herein shall mean the owner or owners at the time in question of the fee title
      to the Premises,
      or, if this is a sublease, of the Lessee's interest in the prior lease. In
      the
      event of a transfer of Lessor's title or interest in the Premises or this
Lease,
      Lessor shall deliver to the transferee or assignee (in cash or by credit) any
      unused Security Deposit held by Lessor. Upon such transfer or assignment
      and delivery of the Security Deposit, as aforesaid, the prior Lessor shall
      be
      relieved of all liability with respect to the obligations and/or covenants
      under this Lease thereafter to be performed by the Lessor. Subject to the
      foregoing, the obligations and/or covenants in this Lease to be performed
      by the Lessor shall be binding only upon the Lessor as hereinabove
      defined.

     

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

     

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

     

    20.           
      Limitation
      on Liability.
      The
      obligations of Lessor under this Lease shall not constitute personal obligations
      of Lessor or its partners, members,
      directors, officers or shareholders, and Lessee shall look to the Project,
      and
      to no other assets of Lessor, for the satisfaction of any liability of
Lessor
      with respect to this Lease, and shall not seek recourse against Lessor's
      partners, members, directors, officers or shareholders, or any of their
personal
      assets for such satisfaction.

     

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

     

    22.           
      No
      Prior or Other Agreements; Broker Disclaimer.
      This
      Lease contains all agreements between the Parties with respect to any matter
      mentioned
      herein, and no other prior or contemporaneous agreement or  understanding
      shall be effective. Lessor and Lessee each represents and warrants
      to the Brokers that it has made, and is relying solely upon, its own
      investigation as to the nature, quality, character and financial
      responsibility

    of
      the
      other Party to this Lease and as to the use, nature, quality and character
      of
      the Premises. Brokers have no responsibility with respect thereto or
with
      respect to any default or breach hereof by either Party.

     

    23.           
      Notices.

     

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

     

        23.2
      Date
      of Notice.
      Any
      notice sent by registered or certified mail, return receipt requested, shall
      be
      deemed given on the date of delivery shown
      on
      the receipt card, or if no delivery date is shown, the postmark thereon. If
      sent
      by regular mail the notice shall be deemed given 72 hours after the
      same
      is addressed as required herein and mailed with postage prepaid. Notices
      delivered by United States Express Mail or overnight courier that guarantee
      next day delivery shall be deemed given 24 hours after delivery of the same
      to
      the Postal Service or courier. Notices transmitted by facsimile transmission
      or similar means shall be deemed delivered upon telephone confirmation of
      receipt (confirmation report from fax machine is sufficient), provided
      a copy is also delivered via delivery or mail. If notice is received on a
      Saturday, Sunday or legal holiday, it shall be deemed received on the
next
      business day.

     

    
      24.           
        Waivers.

      (a)
        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.

      (b)
        The
        acceptance of Rent by Lessor shall not be a waiver of any Default or Breach
        by
        Lessee. Any payment by Lessee

    

    

    
      
        
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                - AIR COMMERCIAL REAL ESTATE ASSOCIATION                                                                                       FORM
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    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.

    (c)
      THE
      PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL
      MATTERS RELATED
      THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO
      THE
      EXTENT THAT SUCH STATUTE
      IS INCONSISTENT WITH THIS LEASE.

     

    25.           
      Disclosures
      Regarding The Nature of a Real Estate Agency Relationship.

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

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

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

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

    (b)
      Brokers have no responsibility with respect to any default or breach hereof
      by
      either Party. The Parties agree that no lawsuit
      or other legal proceeding involving any breach of duty, error or omission
      relating to this Lease may be brought against Broker more than one year
      after the Start Date and that the liability (including court costs and
      attorneys' fees), of any Broker with respect to any such lawsuit and/or legal
      proceeding
      shall not exceed the fee received by such Broker pursuant to this Lease;
      provided, however, that the foregoing limitation on each Broker's liability
      shall not be applicable to any gross negligence or willful misconduct of such
      Broker. 

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

     

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

     

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

     

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

     

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

     

    30.           
      Subordination;
      Attornment; Non-Disturbance.

     

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

     

        30.2
      Attornment.
      In the
      event that Lessor transfers title to the Premises, or the Premises are acquired
      by another upon the foreclosure or
      termination of a Security Devise to which this Lease is subordinated (i) Lessee
      shall, subject to the non-disturbance provisions of Paragraph 30.3, attorn
      to
      such new owner, and upon request, enter into a new lease, containing all of
      the
      terms and provisions of this Lease, with such new owner for the
      remainder of the term hereof, or, at the election of the new owner, this Lease
      will automatically become a new lease between Lessee and such new owner,
      and (ii) Lessor shall thereafter be relieved of any further obligations
      hereunder and such new owner shall assume all of Lessor's obligations,
except
      that such new owner shall not: (a) be liable for any act or omission of any
      prior lessor or with respect to events occurring prior to acquisition of
ownership;
      (b) be subject to any offsets or defenses which Lessee might have against any
      prior lessor, (c) be bound by prepayment of more than one month's
      rent, or (d) be liable for the return of any security deposit paid to any prior
      lessor which was not paid or credited to such new owner.

     

        30.3
      Non-Disturbance.
      With
      respect to Security Devices entered into by Lessor after the execution of this
      Lease, Lessee's subordination
      of this Lease shall be subject to receiving a commercially reasonable
      non-disturbance agreement (a "Non-Disturbance
      Agreement")
      from
      the
      Lender which Non-Disturbance Agreement provides that Lessee's possession of
      the
      Premises, and this Lease, including any options to extend the
      term
      hereof, will not be disturbed so long as Lessee is not in Breach hereof and
      attorns to the record owner of the Premises. Further, within 60 days
      after the execution of this Lease, Lessor shall, 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, at Lessee's option, directly
      contact Lender and attempt to negotiate for the execution
      and delivery of a Non-Disturbance Agreement.
       

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

       

      31.           
        Attorneys'
        Fees.
        If any
        Party or Broker brings an action or proceeding involving the Premises whether
        founded in tort, contract or equity, or to
        declare rights hereunder, the Prevailing Party (as hereafter defined) in
        any
        such proceeding, action, or appeal thereon, shall be entitled to reasonable
        attorneys'
        fees. Such fees may be awarded in the same suit or recovered in a separate
        suit,
        whether or not such action or proceeding is pursued to decision
        or judgment. The term, "Prevailing
        Party"
        shall
        include, without limitation, a Party or Broker who substantially obtains
        or
        defeats the relief sought,
        as the case may be, whether by compromise, settlement, judgment, or the
        abandonment by the other Party or Broker of its claim or defense. The
        attorneys' fees award shall not be computed in accordance with any court
        fee
        schedule, but shall be such as to fully reimburse all attorneys' fees
reasonably
        incurred. In addition, Lessor shall be entitled to attorneys' fees, costs
        and
        expenses incurred in the preparation and service of notices of Default
        and consultations in connection therewith, whether or not a legal action
        is
        subsequently commenced in connection with such Default or resulting Breach
        ($200 is a reasonable minimum per occurrence for such services and
        consultation).

       

      32.           
        Lessor's
        Access; Showing Premises; Repairs.
        Lessor
        and Lessor's agents shall have the right to enter the Premises at any time,
        in
        the case
        of
        an emergency, and otherwise at reasonable times after reasonable prior notice
        for the purpose of showing the same to prospective purchasers, lenders,
        or tenants, and making such alterations, repairs, improvements or additions
        to
        the Premises as Lessor may deem necessary or desirable and the
        erecting, using and maintaining of utilities, services, pipes and conduits
        through the Premises and/or other premises as long as there is no material
        adverse
        effect on Lessee's use of the Premises. All such activities shall be without
        abatement of rent or liability to Lessee. 

       

      33.           
        Auctions.
        Lessee
        shall not conduct, nor permit to be conducted, any auction upon the Premises
        without Lessor's prior written consent.

    

    

    
      
        
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                - AIR COMMERCIAL REAL ESTATE ASSOCIATION                                                                                       FORM
                OFG-4-6/06E

            

          

          
            

          

        

        
          
          

        

      

    

    

    Lessor
      shall not be obligated to exercise any standard of reasonableness in determining
      whether to permit an auction.

     

    34.           
      Signs.
      Lessor
      may place on the Premises ordinary "For Sale" signs at any time and ordinary
      "For Lease" signs during the last 6 months of the
      term
      hereof.

     

    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.

     

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

     

    37.           
      Guarantor.

     

        37.1
      Execution.
      The
      Guarantors, if any, shall each execute a guaranty in the form most recently
      published by the AIR Commercial Real Estate
      Association.

     

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

     

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

    hereof.

     

    39.           
      Options.
      If
      Lessee is granted an Option, as defined below, then the following provisions
      shall apply.

     

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

     

        39.2
      Options
      Personal To Original Lessee.
      Any
      Option granted to Lessee in this Lease is personal to the original Lessee,
      and
      cannot be
      assigned or exercised by anyone other than said original Lessee and only while
      the original Lessee is in full possession of the Premises and, if requested
      by Lessor, with Lessee certifying that Lessee has no intention of thereafter
      assigning or subletting.

     

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

     

        39.4
      Effect
      of Default on Options.

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

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

    (c)
      An
      Option shall terminate and be of no further force or effect, notwithstanding
      Lessee's due and timely exercise of the Option, if, after
      such exercise and prior to the commencement of the extended term or completion
      of the purchase, (i) Lessee fails to pay Rent for a period of 30 days
      after such Rent becomes due (without any necessity of Lessor to give notice
      thereof), or (ii) if Lessee commits a Breach of this Lease.

     

    40.           
      Security
      Measures.
      Lessee
      hereby acknowledges that the Rent payable to Lessor hereunder does not include
      the cost of guard service or other
      security measures, and that Lessor shall have no obligation whatsoever to
      provide same. Lessee assumes all responsibility for the protection of
the
      Premises, Lessee, its agents and invitees and their property from the acts
      of
      third parties. In the event, however, that Lessor should elect to
      provide

    security
      services, then the cost thereof shall be an Operating Expense. 

     

    41.           
      Reservations.

            (a)
      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,
      (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. Lessor
may
      also:
      change the name, address or title of the Building or Project upon at least
      90
      days prior written notice; provide and install, at Lessee's expense,
      Building standard graphics on the door of the Premises and such portions of
      the
      Common Areas as Lessor shall reasonably deem appropriate;
      grant to any lessee the exclusive right to conduct any business as long as
      such
      exclusive right does not conflict with any rights expressly given
      herein; and to place such signs, notices or displays as Lessor reasonably deems
      necessary or advisable upon the roof, exterior of the Building or the
      Project or on signs in the Common Areas. Lessee agrees to sign any documents
      reasonably requested by Lessor to effectuate such rights. The obstruction
      of Lessee's view, air, or light by any structure erected in the vicinity of
      the
      Building, whether by Lessor or third parties, shall in no way affect
this
      Lease or impose any liability upon Lessor.

            (b)
      Lessor
      also reserves the right to move Lessee to other space of comparable size in
      the
      Building or Project. Lessor must provide
      at least 45 days prior written notice of such move, and the new space must
      contain improvements of comparable quality to those contained within
      the Premises. Lessor shall pay the reasonable out of pocket costs that Lessee
      incurs with regard to such relocation, including the expenses of moving
      and necessary stationary revision costs. In no event, however, shall Lessor
      be
      required to pay an amount in excess of two months Base Rent.  Lessee
      may not be relocated more than once during the term of this Lease.

            (c)
      Lessee
      shall not: (i) use a representation (photographic or otherwise) of the Building
      or Project or their name(s) in connection with
      Lessee's business; or (ii) suffer or permit anyone, except in emergency, to
      go
      upon the roof of the Building.

     

    42.           
      Performance
      Under Protest.
      If at
      any time a dispute shall arise as to any amount or sum of money to be paid
      by
      one Party to the other under
      the
      provisions hereof, the Party against whom the obligation to pay the money is
      asserted shall have the right to make payment "under protest" and
      such
      payment shall not be regarded as a voluntary payment and there shall survive
      the
      right on the part of said Party to institute suit for recovery of such
      sum.
      If it shall be adjudged that there was no legal obligation on the part of said
      Party to pay such sum or any part thereof, said Party shall be entitled
      to recover such sum or so much thereof as it was not legally required to pay.
      A
      Party who does not initiate suit for the recovery of sums paid "under
      protest" within 6 months shall be deemed to have waived its right to protest
      such payment.

     

    43.           
      Authority;
      Multiple Parties; Execution

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

            (b)
      If this
      Lease is executed by more than one person or entity as "Lessee", each such
      person or entity shall be jointly and severally
      liable hereunder. It is agreed that any one of the named Lessees shall be
      empowered to execute any amendment to this Lease, or other document
      ancillary thereto and bind all of the named Lessees, and Lessor may rely on
      the
      same as if all of the named Lessees had executed such document.

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

     

    44.           
      Conflict.
      Any
      conflict between the printed provisions of this Lease and the typewritten or
      handwritten provisions shall be controlled by the typewritten
      or handwritten provisions.

     

    45.           
      Offer.
      Preparation of this Lease by either party or their agent and submission of
      same
      to the other Party shall not be deemed an offer to lease
      to
      the other Party. This Lease is not intended to be binding until executed and
      delivered by all Parties hereto.

     

    46.           
      Amendments.
      This
      Lease may be modified only in writing, signed by the Parties in interest at
      the
      time of the modification. As long as they do
      not
      materially change Lessee's obligations hereunder, Lessee agrees to make such
      reasonable nonmonetary modifications to this Lease as may be reasonably
      required by a Lender in connection with the obtaining of normal financing or
      refinancing of the Premises.

     

    47.           
      Waiver
      of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY
      JURY
      IN ANY ACTION OR

     

    
      
        
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                     INITIALS

                  

             

            
              ©1999
                - AIR COMMERCIAL REAL ESTATE ASSOCIATION                                                                                       FORM
                OFG-4-6/06E

            

          

          
            

          

        

        
          
          

        

      

    

     

    PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT
      OF
      THIS AGREEMENT.

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

     

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

     

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

    INTENT
      AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. 

     

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

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

    2.     RETAIN
      APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES.
      SAID INVESTIGATION
      SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE  RESENCE OF HAZARDOUS
      SUBSTANCES, THE ZONING AND
      SIZE OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND
      OPERATING SYSTEMS, COMPLIANCE WITH
      THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR
      LESSEE'S INTENDED USE.

     

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

     

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

     

    
      	Executed at:  Irvine,
              California	Executed at:  
              Irvine,
              California
	On:  April
              25, 2007	On:  April
              ___, 2007
	 	 
	By LESSOR:	By LESSEE:
	CIP
              Centerpointe 123 LLC, a California limited liability company	
              Primal
                Solutions, Inc., a
                Delaware corporation

            
	 	 
	By: 
              CIP
              Centerpointe 123 Inc.,	By:
              /s/ Joesph R. Simrell
	Name
              Printed:a  
              California corporation	
              Name
                Printed:  Joseph R. Simrell

            
	Title:  Its
              Manager	Title: 
CEO
	 	 
	By:   /s/ Katie
              McKenna	By:
	Name Printed:  
              Katie McKenna	Name Printed:
	Title:   Authorized
              Signatory	Title:
	Address:   19762
              MacArthur Boulevard, Suite 300, Irvine, California 92612	Address:
	
              Telephone: 
                (949)
                474-7030

            	Telephone:  ( 949)
              260-1500
	 Facsimile: 
(949)
              474-2101	 Facsimile: 
(949)
              260-1515
	 Federal ID No.
              ___________________________________________________________	 Federal ID
              No.  36-4170318
	 	 
	 

              LESSOR'S
                BROKER:

            	LESSEE'S
              BROKER: 
	Lee & Associates	CresaPartners - West, Inc.
	Attn:Brian
              Garbutt	
              Attn:Jonti
                Bacharach

            
	Address:3991
              MacArthur Boulevard, Suite 100	
              Address: 
                 610
                Newport Center Drive, Suite 500

            
	Newport Beach, California 92660	
              Newport
                Beach, California 92660

            
	Telephone:  (949)
              724-4704	Telephone: (  
              )
	Facsimile:  (949)
              752-7513	
              Facsimile:
                (   )

            
	 	 

    

     

    
      NOTICE:
        These forms are often modified to meet changing requirements of law and industry
        needs. Always write or call to make sure you are
        utilizing the most current form: AIR Commercial Real Estate Association,
        800 W
        6th Street, Suite 800, Los Angeles, CA 90017.  Telephone
        No. (213) 687-8777. Fax No.: (213) 687-8616.

    

     

    
      ©Copyright
        1999-By AIR Commercial Real Estate Association.

      All
        rights reserved.

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

    

    

       

      
         

        
          
            
              PAGE
                13 OF 13

            

            
              
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                ©1999
                  - AIR COMMERCIAL REAL ESTATE ASSOCIATION                                                                                       FORM
                  OFG-4-6/06E

              

              
                

              

            

            
              
              

            

          

        

      

    

     

    

      ADDENDUM
        TO MULTI-TENANT OFFICE LEASE-GROSS

      

      Dated
        for Reference Purposes April 16, 2007

      

      By
        and Between

      

      CIP
        CENTERPOINTE 123 LLC,

      a
        California limited liability company

      (“Lessor”)

      

      and

      

      PRIMAL
        SOLUTIONS, INC.,

      a
        Delaware corporation

      (“Lessee”)

      

      for
        the Premises known as

      19732
        MacArthur Boulevard, Suite 100, Irvine, California

      

      THIS
        ADDENDUM TO LEASE (the “Addendum”)
        is made by and between CIP Centerpointe 123 LLC, a California limited liability
        company (“Lessor”), and Primal Solutions, Inc., a Delaware corporation
        (“Lessee”), to be a part of that certain Standard Multi-Tenant Office
        Lease–Gross and Addendum of even date herewith between Lessor and Lessee (the
“Lease”) concerning approximately 10,342 square feet of space located at 19732
        MacArthur Boulevard, Suite 100, Irvine, California (the
“Premises”).  Lessor and Lessee agree that, notwithstanding anything
        to the contrary in the Lease, the Lease is hereby modified and supplemented
        as
        set forth below.  All terms with initial capital letters used herein
        as defined terms shall have the meanings ascribed to them in the Lease unless
        specifically defined herein.  In the event of any inconsistency
        between this Addendum and the Lease, the terms of this Addendum shall
        prevail.

      

      ______________________________________________________________________________

      

      
        	
                50.

              	
                Base
                  Rent and Adjustments.  The monthly Base Rent defined in
                  Paragraph 1.5 of the Lease shall be increased in accordance with
                  the
                  following schedule:

              

      

       

       

      
        
          
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              1 OF 10

          

          
            
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                Months

              	
                Base
                  Rent

                Per
                  Sq. Foot

              	
                Total
                  Base

                Rent 

              
	
                5/01/07
                  – 6/30/07

              	
                $0.00

              	
                $         0.00

              
	
                7/01/07
                  – 4/30/08

              	
                $2.00

              	
                $20,684.00

              
	
                5/01/08
                  – 4/30/09

              	
                $2.05

              	
                $21,201.10

              
	
                5/01/09
                  – 4/30/10

              	
                $2.10

              	
                $21,718.20

              
	
                5/01/10
                  – 4/30/11

              	
                $2.15

              	
                $22,235.30

              
	
                5/01/11
                  – 4/30/12

              	
                $2.20

              	
                $22,752.40

              

      

      

       

      
        	
                51.

              	
                Lessee
                  Improvements.  Lessor, at its sole cost and expense,
                  shall undertake the improvements to the Premises described on the
                  pricing
                  plan attached hereto as Exhibit "D" ("Pricing Plan") prior to the
                  Commencement Date (or after the Commencement Date if mutually acceptable
                  to Lessor and Lessee) (collectively, the "Improvements"). Except
                  for those
                  certain Improvements described in the final Pricing Plan, Lessor
                  shall
                  have no obligation to expend any monies to design, plan or construct
                  the
                  Premises, it being acknowledged and agreed that Lessor shall otherwise
                  deliver the Premises to Lessee in their "as-is"
                  condition.

              

      

       

      
        	
                52.

              	
                Signage. Lessee
                  shall have the right to exterior signage on the Building ("Building
                  Signage").  Such Building Signage must comply with all
                  ordinances of the City of Irvine, its Architectural Review Board,
                  and any
                  other applicable governmental or quasi governmental agency and
                  any other
                  applicable laws, and the design, location and installation thereof
                  must be
                  approved by Lessor in Lessor's reasonable discretion.  All costs
                  associated with the Building Signage, including, without limitation,
                  the
                  design, permitting, installation, maintenance, removal and repair
                  to the
                  Building façade shall be at Lessee's obligation at Lessee's sole cost and
                  expense.

              

      

       

      
        	
                53.

              	
                Moving
                  Allowance.  Lessor shall provide Lessee with a one-time
                  moving allowance in the amount of Twenty Thousand Six Hundred Eight-Four
                  Dollars ($20,684.00) ("Moving Allowance").  Lessor shall pay
                  Lessee the Moving Allowance within thirty (30) days after the full
                  execution and delivery of the
                  Lease.

              

      

       

      
        	
                54.

              	
                Relocation
                  of Premises; Termination of
                  Lease. Lessor reserves and
                  is hereby granted the right, at any time after the expiration of
                  the
                  thirty-sixth (36th) month of the Original Term, in the exercise
                  of
                  Lessor's sole and absolute discretion, upon not less than ninety
                  (90)
                  days’ written notice to Lessee, to relocate Lessee and to substitute
                  as
                  the Premises hereunder other premises within the Building or other
                  premises within another office building located within the Project;
                  provided, however, that the substituted premises shall contain
                  an area not
                  less than the square footage contained in the Premises, all without
                  any
                  increase in the Rent payable hereunder. Lessor agrees to pay the
                  expenses
                  reasonably incurred by Lessee incidental to such substitution of
                  premises,
                  including, but not limited to, moving expenses, door lettering,
                  and
                  expenses in connection with change of telephone and stationery.
                   Lessor agrees to furnish the substitute premises with decoration
                  and
                  improvements similar to those in the Premises.  Notwithstanding
                  anything set forth in this Lease to the contrary, if, within sixty
                  (60)
                  days after Lessee's receipt of written notice of Lessor's election to
                  relocate Lessee from the Premises as described in this Paragraph
                  54 there
                  does not exist other premises within the Building or within another
                  office
                  building located within the Project suitable for Lessee's use as
                  determined by Lessor in its sole and absolution discretion, then
                  Lessor
                  shall have the right to cancel and terminate this Lease by giving
                  written
                  notice to Lessee.  In the event of such election by Lessor, (i)
                  this Lease shall terminate on the date that is two hundred ten
                  (210) days
                  after Lessee's receipt of such written notice, and (ii) Lessor
                  shall
                  reimburse Lessee for moving expenses in an amount not to exceed
                  One
                  Hundred Fifty Thousand Dollars ($150,000.00) upon the termination
                  of the
                  Lease.

              

      

      
         

        
          
            
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                55.

              	
                Exterior
                  Storage. Lessee shall neither store nor
                  permit to be stored any vehicles, boats, RV's, goods, machinery,
                  merchandise, equipment or any other items whatsoever on the Premises
                  other
                  than wholly within a closed building without the prior written
                  approval of
                  the Lessor.  Any item left unattended for ninety-six (96) hours
                  is subject to removal at owner's
                  expense.

              

      

       

      
        	
                56.

              	
                Dumping/Trash. Lessee
                  acknowledges that there shall be no dumping of carpet, cement,
                  concrete,
                  rock, wood, or any other such heavy materials into the trash bins
                  or
                  anywhere else on the Premises.  Lessee shall not dispose of
                  rubbish from off-site operations in the trash areas or elsewhere
                  in the
                  Project, nor shall Lessee permit or allow Lessee's employees, suppliers,
                  shippers, customers, contractors and invitees to do
                  so.

              

      

       

      
        	
                57.

              	
                Parking. Any
                  vehicle left unattended for ninety-six (96) hours is subject to
                  tow at
                  vehicles owner's expense.

              

      

       

      
        	
                58.

              	
                Lessee
                  Information. Is attached as Exhibit
                  "A."

              

      

       

      59.           Rules
        and Regulations.  Are attached as Exhibit "B."

       

      60.           Site
        Plan. Is attached as Exhibit "C."

       

      61.           Pricing
        Plan. Is attached as Exhibit "D."

       

      
        	
                62.

              	
                Confidentiality. The
                  terms of this Lease have been negotiated between Lessor and Lessee
                  and are
                  not for publication to other parties.  Lessee agrees to keep the
                  terms of this Lease confidential, except to the extent disclosure
                  is
                  required by law.

              

      

       

      
        	
                63.

              	
                Centerpointe. Lessee
                  acknowledges that the Building and the Project are within Centerpointe,
                  a
                  planned office development of eight (8) buildings, including the
                  Building,
                  which is subject to certain covenants, conditions and restrictions
                  of
                  record and subject to the authority of the Centerpointe Owners
                  Association.  Promptly upon execution of
                  the

              

      

      
         

        
          
            
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                3 OF 10

            

            
              
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                    Lease,
                      Lessor will provide Lessee with a full and complete copy of
                      the covenants,
                      conditions and restrictions and any other rules or regulations
                      set forth
                      by the Centerepoint Owners
                      Association.

                  

          

           

        

      

      
        	
                64.

              	
                Brokers. Lessee
                  is represented in this transaction by CresaPartners, a licensed
                  real
                  estate broker ("Lessee's Broker"), and Lessor is represented in
                  this
                  transaction by Lee & Associates, a licensed real estate broker
                  ("Lessor's Broker").  Lessor and Lessee each represent and
                  warrant to the other that it has had no dealings with any person,
                  firm,
                  broker or finder, other than the named Brokers, in connection with
                  this
                  Lease, and that no one other than said name Brokers is entitled
                  to any
                  commission or finder's fee in connection herewith.  Lessor and
                  Lessee 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 other 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.

              

      

       

      
        	
                65.

              	
                Audit
                  Right.  In the event Lessee disputes the amount of Operating
                  Expenses payable by Lessee, provided Lessee is not then in default
                  under
                  the Lease and no event shall have occurred which with the passage
                  of time
                  would constitute an event of default under the Lease, Lessee shall
                  be
                  entitled to retain an independent, certified public accountancy firm
                  (the “CPA”) engaged on a non-contingency fee basis, to audit and/or
                  review Lessor’s general ledger of expenses with respect to the calculation
                  of Operating Expenses.  Lessee shall give notice
                  ("Inspection  Notice") to Lessor of Lessee's intent to audit
                  within sixty (60) days after Lessee's receipt of Lessor's expense
                  statement which sets forth Lessor's actual Operating Expenses for
                  the
                  previous calendar year, identifying the expense in question and
                  setting
                  out in reasonable detail the reason why such expense should not
                  be binding
                  on Lessee.  Such audit shall be conducted at a mutually
                  agreeable time during normal business hours at the office of Lessor
                  or its
                  management agent where such accounts are maintained or at such
                  other
                  location as the parties shall mutually agree.  If Lessee does
                  not cause such audit to be accomplished within ninety (90) days
                  after
                  Lessor’s receipt of the Inspection Notice, Lessee’s right to object to any
                  such expense shall terminate.  In no event shall Lessee be
                  entitled to so inspect such records more than once per fiscal
                  year.  Lessee shall pay all costs of such audit including,
                  without limitation, any and all copying costs, unless the actual
                  Operating
                  Expenses submitted to Lessee by Lessor for any fiscal year are
                  determined
                  by the CPA to be overstated by five percent (5%) or greater (subject
                  to
                  Lessor's right to review and/or contest the audit results) in which
                  event
                  Lessor shall pay for the reasonable out-of-pocket costs incurred
                  by Lessee
                  in connection with the audit.  The amount of Additional Rent
                  payable by Lessee to Lessor shall be appropriately adjusted on
                  the basis
                  of such audit and, if the audit shows (a) that Lessor has overcharged
                  Lessee, then Lessor shall credit such overcharge against the next
                  installment of Rent coming due hereunder or (b) that Lessor has
                  undercharged Lessee, then Lessee shall pay to Lessor such amount
                  due as
                  Additional Rent within thirty (30) days following the completion
                  of such
                  audit. All of the information obtained by Lessee and/or its auditor
                  in connection with such audit, as well as any compromise, settlement,
                  or
                  adjustment reached between Lessor and Lessee as a result thereof,
                  shall be
                  held in strict confidence and, except as may be required pursuant
                  to
                  litigation, shall not be disclosed to any third party, directly
                  or
                  indirectly, by Lessee or its auditor or any of their
                  

              

      

      
        
           

          
            
              
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                  officers,
                    agents or employees.  Lessor may require Lessee's auditor to
                    execute a separate confidentiality agreement affirming the foregoing
                    as a
                    condition precedent to any audit.  In the event of a violation
                    of this confidentiality covenant in connection with any audit,
                    then in
                    addition to any other legal or equitable remedy available to
                    Lessor,
                    Lessee shall forfeit its right to any reconciliation or cost
                    reimbursement
                    payment from Lessor due to said audit (and any such payment theretofore
                    made by Lessor shall be promptly returned by Lessee), and Lessee
                    shall
                    have no further audit rights under this Lease.  Notwithstanding
                    the foregoing, Lessee shall have no right of audit with respect
                    to any
                    calendar year unless the total Operating Expenses per square
                    foot for such
                    calendar year, as set forth in Lessor's annual expense reconciliation,
                    exceed the total Operating Expenses per square foot during the
                    Base Year,
                    as increased by the percentage change in the United States Department
                    of
                    Labor, Bureau of Labor Statistics, Consumer Price Index for all
                    Urban
                    Consumers, Los Angeles - Riverside - Orange County Area Average,
                    all items
                    (1982-84 = 100) (the "Index"), which change in the Index shall
                    be measured
                    by comparing the Index published for January of the Base Year
                    with the
                    Index published for January of the applicable calendar year in
                    dispute.

                

        

         

      

      
        	
                66.

              	
                Common
                  Area – Rules and Regulations.  Lessee shall comply with
                  all new rules or regulations promulgated by Lessor; provided however,
                  such
                  new rules and regulations shall not unreasonably interfere with
                  (i)
                  Lessee’s use of the Premises as set forth in the Lease or (ii) Lessee’s
                  parking rights as set forth in the
                  Lease.

              

      

       

      
        	
                67.

              	
                Access
                  to Premises.  Lessor shall provide Lessee with keyed
                  access to the Premises twenty-four (24) hours a day, seven (7)
                  days a
                  week.

              

      

       

      
        	
                68.

              	
                Heating,
                  Ventilating and Air Conditioning.  Lessee shall have
                  unrestricted use and control of the heating, ventilation and air
                  conditioning system for the computer/server room located within
                  the
                  Premises twenty-four (24) hours a day, seven (7) days a
                  week.

              

      

       

      
        	
                69.

              	
                Hazardous
                  Substances. To the current actual knowledge of Lessor, (a) no
                  Hazardous Substances are present on the Project or the soil, surface
                  water
                  or groundwater thereof in violation of applicable law, (b) no underground
                  storage tanks are present on the Project, and (c) no action, proceeding
                  or
                  claim is pending or threatened regarding the Project concerning
                  any
                  Hazardous Substances or pursuant to any Applicable
                  Requirements.  Under no circumstance shall Lessee be liable for
                  any damages arising from any Hazardous Substances present on or
                  about the
                  Project, or the soil, air, improvements, groundwater or surface
                  water
                  thereof, or the violation of any laws, orders or regulations relating
                  to
                  such Hazardous Substance, to the extent occurring prior to the
                  Commencement Date.

              

      

       

      
        	
                70.

              	
                Assignment
                  and Subletting.  Notwithstanding the provisions of
                  Section 12 of the Lease, provided Lessee is not in default of the
                  Lease, Lessee may sublet the Premises or assign the Lease to any
                  affiliate
                  or successor organization resulting from the merger, consolidation,
                  sale
                  or acquisition of Lessee or substantially all of Lessee’s assets (a
                  "Successor Affiliate"), provided, however, as a condition to the
                  effectiveness of any such assignment or sublease: (i) such Successor
                  Affiliate shall have a minimum net worth equal to or greater than
                  Lessee
                  as of the date hereof, (ii) Lessee shall not be relieved of
                  

              

      

      
        
           

          
            
              
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                        any
                          liability or obligation hereunder, (iii) Lessee shall provide
                          prior
                          written notice to Lessor of such sublease or assignment,
                          and (iv) such
                          Successor Affiliate shall assume all obligations of Lessee
                          under this
                          Lease pursuant to a written agreement in form and substance
                          reasonably
                          satisfactory to Lessor.  Lessee shall promptly notify Lessor in
                          writing of such an assignment or subletting and furnish
                          Lessor with
                          documentary evidence of the relationship of the entities
                          and a copy of the
                          proposed assignment and assumption agreement or sublease,
                          as the case may
                          be.  As set forth above, no such sublease or assignment of the
                          Lease shall relieve Lessee or any prior assignee(s) from
                          liability to
                          Lessor for the further performance of the covenants, terms
                          and conditions
                          of the Lease which the Lessee hereunder is required to
                          perform, and Lessor
                          shall be entitled at Lessor’s discretion to pursue any remedy for any
                          default hereunder first against Lessee, or any prior assignee(s)
                          (without
                          being required to pursue its remedies first against any
                          assignee).

                      

              

              
                
                   

                

              

            

          

        

      

      
         

        
          	By LESSOR:	By LESSEE:
	CIP
                  Centerpointe 123 LLC, a California limited liability company	
                  Primal
                    Solutions, Inc., a
                    Delaware corporation

                
	 	 
	By: 
                  CIP
                  Centerpointe 123 Inc.,	By:
                  /s/ Joesph R. Simrell
	    a
                  California corporation	
                  Name: 
                    Joseph R. Simrell

                
	    Its
                  Manager	Its:  CEO
	 	 
	By:   /s/ Katie
                  McKenna	By:
	Name:   Katie
                  McKenna	Name:
	Its:   Authorized
                  Signatory	Its:
	Date:  
                  4-25-07	Date: 
                  4-16-07
	 	 

        

      

       

      If
        Lessee
        is a CORPORATION, the authorized officers must sign on behalf of the
        corporation and indicate the capacity in which they are signing.  The
        Lease must be executed by the president or vice-president and the
        secretary or assistant secretary, unless the bylaws or a resolution of
        the board of directors shall otherwise provide, in which event, the bylaws
        or a
        certified copy of the resolution, as the case may be, must be attached to
        this
        Lease.

       

       

      
        
          
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      EXHIBIT
        A

       

      TENANT
        INFORMATION

       

       
        
          

        

      

       

      Your
        mailing address will be:

      

      19732
        MacArthur Blvd., Suite 100

      Irvine,
        California 92612

      

      You
        must
        go to the City Hall to apply for a business license. The address
        is:

      

      City
        of Irvine

      1
        Civic Center Plaza

      P.O.
        Box 19575

      Irvine,
        California 92612

      949.724.6310

      

      City
        of
        Irvine website for other City services;

      

      www.ci.irvine.ca.us

      

      Please
        make checks payable to:

      

      CIP
        CENTERPOINTE 123 LLC

      

      Mail
        checks to:

      

      CIP
        Real Estate

      19762
        MacArthur Blvd., Suite
        300

      Irvine,
        CA 92612

      Attention:
        Accounts
        Payable

      

      Pursuant
        to Paragraph 8.2 of the Lease, the Lessor is required to be listed as an
        additional insured on Lessee’s Commercial General Liability Policy. Please list
        as follows:

      

      CIP
        Centerpointe 123 LLC,

      a
        California limited liability
        company

      C/O
        CIP Real Estate

      

      Property
        Management Company:

      

      CIP
        Real
        Estate Property Services

      Telephone:
        949.474.7030, ext. 314

      Facsimile:
        949.474.2101

      Contact:
        Devon Stanke

      

       

      
        
          
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      EXHIBIT
        B

      

      RULES
        AND REGULATIONS

      
        

      

      

      

      TO
        BE INSERTED

      

         

        
          
            
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        RULES
          AND REGULATIONS FOR

        STANDARD
          OFFICE LEASE

         

        Dated: 
          April 16, 2007

        By
          and Between  CIP Centerpointe
          123 LLC and Primal Solutions, Inc.

         

        GENERAL
          RULES

         

        
          
            	
                    1.

                  	 	Lessee
                    shall not suffer or permit the obstruction of any Common Arease,
                    including
                    driveways, walkways and stairways.
	
                    2.

                  	 	
                    Lessor
                      reserves the right to refuse access to any
                      persons Lessor in good faith judegs to be a threat to the safety
                      and
                      reputation of the Project and is occupants. 

                  
	
                    3.

                  	 	Lessee
                    shall not make or permit an noise or odors that annoy or interfere
                    with
                    other lessees or persons having business within the
                    Project. 
	
                     4.

                  	 	Lessee
                    shall not keep animals or birds within the Project, and shall
                    not bring
                    bicycles, motorcycles or other vehicles into areas not designated
                    as
                    authorized for same.
	
                    5.

                  	
                     

                  	Lessee
                    shall not make, suffer, or permit litter except in appropriate
                    receptacles
                    for that purpose.
	
                    6.

                  	 	Lessee
                    shall not alter any lock or install new or additional locks or
                    bolts.
	
                     7.

                  	 	Lessee
                    shall be responsible for the inappropriate use of any toilet
                    rooms,
                    plumbing or other utilities.  No foreign substances of any kind are
                    to be inserted therein.
	
                     8.

                  	 	Lessee
                    shall not deface the walls, partitions, or other surfaces of
                    the Premises
                    or Project.
	
                     9.

                  	 	Lessee
                    shall not suffer or permit anything in or around the Premises
                    or Buildign
                    tht causes excessive vibration or floor loading in any part of
                    the
                    Project.
	
                     10.

                     

                  	 	Furniture,
                    significant freight and equipment shall be moved into or out
                    of the
                    building only with the Lessor's knowledge and consent, and subject
                    to such
                    reasonable limitations, techniques and timing, as may be designated
                    by
                    Lessor.  Lessee shall be responsible for any damage to the Office
                    Building Project arising from such activity.
	
                     11.

                  	 	Lessee
                    shall not employ any service or contractor for services or work
                    to be
                    performed in the Building, except as approved by Lessor.
	
                     12.

                  	 	Lessor
                    reserves the right to close and lock the Building on Saturdays,
                    Sundays
                    and Building Holidays, and on other days between the hours of
                    ____ P.M.
                    and _____ A.M. of the following day.  If Lessee uses the Premises
                    during such periods, Lessee shall be responsible for securely
                    locking any
                    doors it may have opened for entry.
	
                     13.

                  	 	Lessee
                    shall return all keys at the termination of its tenancy and shall
                    be
                    responsible for the cost of replacing any keys that are lost.
	
                     14.

                  	 	No
                    window coverings, shades or awnings shall be installed or used by
                    Lessee.
	
                     15.

                  	 	No
                    Lessee, employee or invitee shall go upon the roof of the
                    Building. 
	
                    16.

                  	 	Lessee
                    shall not suffer or permit smoking or carrying of lighted cigars
                    or
                    ciagrettes in areas reasonably designated by Lessor or by applicable
                    governmental agencies as non-smoking areas. 
	
                     17.

                  	 	Lessee
                    shall not use any method of heating or air conditioning other
                    than as
                    provided by Lessor. 
	
                     18.

                  	 	Lessee
                    shall not install, maintain or operate any vending machines upon
                    the
                    Premises without Lessor's written consent. 
	
                    19.

                  	 	The
                    Premises shall not be used for lodging or manufacturing, cooking
                    or food
                    presentation. 
	
                     20.

                  	 	Lessee
                    shall comply with all safety, fire protection and evacuation
                    regulations
                    established by Lessor or any
                    applicable governmental agency. 
	
                     21.

                     

                  	 	Lessor
                    reserves the right to waive any one of these rules or regulations,
                    and/or as to any particular Lessee, and any such waiver shall
                    not
                    constitute a waiver of any other rule or regulation or any subsequent
                    application thereof to such Lessee. 
	
                     22.

                  	 	Lessee
                    assumes all risks from theft or vandalism and agrees to keep
                    its Premises
                    locked as may be required. 
	
                    23.

                  	 	Lessor reserves
                    the right to make such other resaonable rules and regulations
                    as it may
                    from time to time deem necessary for the appropriate operation
                    and safety
                    of the Project and its occupants.  Lessee agrees to abide by these
                    and such rules and regulations. 

          

           

            

        

        
          PARKING
            RULES

           

          
            
              	
                      1.

                       

                    	
                       

                    	Parking
                      areas shall be used only for parking by vehicles no longer
                      than full size,
                      passenger automobiles herein called "Permitted Size Vehicles." 
                      Vehicles other than Permitted Size Vehicles are herein referred
                      to as
                      "Oversized Vehicles."
	
                      2.

                       

                    	
                       

                       

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

                      

                    
	
                      3.

                       

                    	 	Parking
                      stickers or identification devices shall be the property of
                      Lessor and be
                      returned to Lessor by the holder thereof upon termination of
                      the holder's
                      parking privileges.  Lessee will pay such replacement charge as is
                      reasonably established by Lessor for the loss of such
                      devices. 
	
                       4.

                    	 	Lessor
                      reserves the right to refuse the sale of monthly identification
                      devices to
                      any person or entity that willfully refuses to comply with
                      the applicable
                      rues, regulations, laws and/or agreements.
	
                      5.

                       

                    	
                       

                    	Lessor
                      reserves the right to relocate all or a part of parking spaces
                      form floor
                      to floor within one floor, and/or to reasonably adjacent offsite
                      location(s), and to reasonably allocate them between compact
                      and standard
                      size spaces, as long as the same complies with applicable laws,
                      ordinances
                      and regulations.
	
                      6.

                    	 	Users
                      of the parking area will obey all posted signs and park only
                      in the areas
                      designated for vehicle parking.
	
                       7.

                       

                    	 	Unless
                      otherwise instructed, every person using the parking area is
                      required to
                      park and lock his own vehicle.  Lessor will not be responsible for
                      any damage to vehicles, injury to persons or loss of property,
                      all of
                      which risks are assumedby the party using the parking area.
	
                       8.

                    	 	Validation,
                      if established, will be permissible only by such method or
                      methods as
                      Lessor and/or its licensee may establish at rates generally
                      applicable to
                      visitor parking.
	
                       9.

                    	 	The
                      maintenance, washing, waxing or cleaning of vehicles in the
                      parking
                      structure of Common Areas is prohibited.
	
                       10.

                    	 	Lessee
                      shall be responsible for seeing that all of its employees,
                      agents and
                      invitees comply with the applicable parking rules, regulations,
                      laws and
                      agreements.
	
                       11.

                    	 	Lessor
                      reserves the right to modify these rules and/or adopt such
                      other
                      reasonable and non-discriminatory rules and regulations as
                      it may deem
                      necessary for the proper operation of parking area.
	
                       12.

                    	 	Such
                      parking use as is herein provided is intended merely as license
                      only and
                      no bailment is intended or shall be created
                      hereby.

            

              

          

        

        
           

          
            NOTICE:
              These forms are often modified to meet changing requirements of law
              and industry
              needs. Always write or call to make sure you are
              utilizing the most current form: AIR Commercial Real Estate Association,
              800 W
              6th Street, Suite 800, Los Angeles, CA 90017.  Telephone
              No. (213) 687-8777. Fax No.: (213) 687-8616.

             

             

             

          

        

        
          
            
              
                
                  PAGE
                    1 OF 1

                

                
                  
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                    ©1999
                      - AIR COMMERCIAL REAL ESTATE ASSOCIATION                                                                                       FORM
                      OFG-4-6/06E

                  

                  
                    

                  

                

                
                  
                  

                

              

            

          

        

         

      

      

      

      EXHIBIT
        C

      

      SITE
        PLAN

       

      
 

      
         

        
          
            
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      EXHIBIT
        D

      

      PRICING
        PLAN

      
        

      

      

       

      

      
         

      

      

      
        

      

      
         

        
          
            
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