Document:

STANDARD INDUSTRIAL NET LEASE

CENTER NAME: Sorrento Square

LANDLORD: Sorrento Square

TENANT: OCET Corporation, a Delaware Corporation

                         STANDARD INDUSTRIAL NET LEASE

                               TABLE OF CONTENTS

BASIC LEASE TERMS ......................1
1.1 Address for Notice ....................1
1.2 Description of Premises ............1
1.3 Commencement Date ..............1
1.4 Lease Term .....................1
1.5 Minimum Monthly Rent .............1
1.6 Security Deposit ......................1
1.7 Tenant's Pro Rata Share of Operating Costs ...................1
1.8 Permitted Use ...........................1
1.9 Tenant's Guarantor ...............................1
1.10 Tenant's Parking Spaces ...........................1
1.11 Landlord's Broker/Tenant's Broker .................1
1.12 Additional Provisions .............................1
1.13 Exhibits ................................
2. LEASE OF PREMISES . . 1
3. LEASE TERM .........1
3.1 Commencement........1................
3.2 Delay In Commencement .................2
3.3 Early Occupancy ............................2
4. RENT.....................................2
4.1 Minimum Monthly Rent .......2............
4.2 Lease Year ...........................2
4.3 Additional Rent .....................2....
4.4 Impounds.............................2
5. SECURITY DEPOSIT .........2
6. OPERATING COSTS ............2........
6.1 Payment of Operating Costs by Tenant 2
6.2 Pro Rata Share of Operating Costs ............2.
6.3 Operating Costs .........................................2
6.4 Common Facilities.............2
7. MAINTENANCE AND REPAIRS 3
7.1 Tenant's Obligations 3
7.2 Landlord's Obligations 3
7.3 Performance By Landlord 3
8. REAL PROPERTY TAXES 3
8.1 Payment of Real Property Taxes by Tenant 3
8.2 Real Properly Taxes Defined 3
8.3 Personal Properly Taxes 3
9. INSURANCE 3
9.1 All Risk Coverage .........................3
9.2 Tenant's Personal Property and Fixtures .....3
9.3 Tenant's Liability Insurance ...............3
9.4 Payment of Insurance Costs ..............4
9.5 Waiver of Subrogation ...................4
9.6 Tenant's Use Not to Increase Premium ......4
9.7 Boiler and Machinery Coverage ............4
10. UTII ITIES...4
11. USE...4
11.1 Permitted Use...4
11.2 Compliance with Law and Other Requirements 4
11.3 Waste, Quiet Conduct 4
11.4 Rules and Regulations 4
11.5 Signs 4
11.6 Parking 5
11.7 Entry by Landlord 5
12. ACCEPTANCE OF PREMISES; NON-LIABILITY
OF LANDLORD; DISCLAIMER .....................................5
12.1 Acceptance of Premises .................................5
12.2 Landlord's Exemption From Liability ....................5
12.3 No Warranties or Representations .......................5
12.4 Keys ...................................................5
13. INDEMNIFICATION .....5
14. HAZARDOUS MATERIALS...6
14.1 Definitions ......6
14.2 Use of Hazardous Materials 6
14.3 Compliance With Laws; Handling Hazardous Materials .....6
14.4 Notice; Reporting .................6
14.5 Indemnity.......................6
14.6 Entry and Inspection, Cure ............6
14.7 Termination/Expiration ...............6
14.8 Exit Assessment ....................6
14.9 Event of Default ....................7
15. ALTERATIONS; LIENS .......................7
15.1 Alterations by Tenant ...................7
15.2 Permits and Govemmental Requirements ....7
15.3 Liens ...............................7
16. DAMAGE AND DESTRUCTION 7
16.1 Partial Insured Damage 7
16.2 Insurance Deductible ...................7
16.3 Uninsured Damage 7
16.4 Total Destruction ......................7
16.5 Partial Destruction of Center ..............7
16.6 Tenant's Obligations ...................7
16.7 RentAbatement.......................7
16.8 Waiver of Inconsistent Statutes .........8
17. CONDEMNATION 8
17.1 Condemnation of Premises 8
17.2 Condemnation of Parking Area 8
17.3 Condemnation Award 8
18. ASSIGNMENT AND SUBLETTING 8
18.1 Landlord's Consent Required 8
18.2 Landlord's Election 8
18.3 Costs; Transfer Fee 8
18.4 Assumption;No Release of Tenant .8
18.5 No Merger 8
18.6 Reasonable Restriction 8
19. SUBORDINATION; ATTORNMENT;
ESTOPPEL CERTIFICATE ........................................8
19.1 Subordination ...........................................8
19.2 Attornment ..............................................9
19.3 Estoppel Certificates ...................................9
20. SURRENDER OF PREMISES ...................................9
20.1 Condition of Premises ...................................9
20.2 Removal of Certain Alterations,
Fixtures and Equipment Prohibited ............................9
20.3 Holding Over ............................................9
21. DEFAULT BY TENANT ........................................9
22. REMEDIES 9
22.1 Termination of Lease . .9
22.2 Continuation of Lease . .10
22.3 Performance By Landlord 10
22.4 Late Charge; Interest on Overdue Payments 10
22.5 Landlord's Right to Require Advance
Payment of Rent; Cashier's Checks . .10
23. DEFAULT BY LANDLORD 10
23.1 Notice to Landlord 10
23.2 Notice to Mortgagees 10
23.3 Limitations on Remedies Against Landlord 10
24. GENERAL PROVISIONS 10
24.1 Action or Defense by Tenant 10
24.2 Arbitration and Mediation
Waiver of Jury Trial 11
24.3 Attorneys' Fees 11
 .......... 24.4 Authority of Tenant 11
24.5 Binding Effect 11
24.6 Brokers 11
24.7 Construction 11
24.8 Counterparts 11
24.9 Covenants and Conditions 11
24.10 Entire Agreement 11
24.11 Exhibits 11
24.12 Financial Statements 11
24.13 Force Majeure 11
24.14 Governing Law 11
24.15 Joint and Several Liability 11
24.16 Modification 11
24.17 Modification for Lender 11
24.18 Nondiscrimination 11
24.19 Notice 11
24.20 Partial Invalidity 11
24.21 Quiet Enjoyment 11
24.22 Recording 11
24.23 Relationship of the Parties 12
24.24 Relocation of Tenant 12
24.25 Rights of Redemption Waived 12
24.26 Time of Essence 12
24.27 Transfer of Landlord's Interest . . .12
24.28 Waiver 12

Exhibit"A" - Descrioption of Premises
Exhibit "B" RulesandRegulations
Exhibit"C" - Sign Criter

                         STANDARD INDUSTRIAL NET LEASE

This STANDARD INDUSTRIAL NET LEASE ('Lease" ), dated for reference purposes only
May 10, 2000, is entered into by Sorrento Square' a Limited Partnership
('Landlord"), and OCET Corporation, a Delaware Corporation, a wholly owned
(Tenant") subsidiary of S.G.I. International, a Utah Corporation.

1. BASIC LEASE TERMS.
The basic terms of the Lease set forth in this Article 1 shall be read in
conjunction with the other Articles of this Lease, which define and explain the
basic terms. 1.1 Address for Notice (see Section 24.19):

Landlord: 11750 Sorrento Valley Road, Suite 209
San Diego, California 92121
Attention: [Center Name] Property Management
Tenant At the Premises, or

Address for Tenant other than at the Premises (required):
1200 Prospect Stree, Suite 325
La Jolla, CA 92037
1.2 Description of Premises:
Center Name: Sorrento Square
Address: 115 88 Sorrento Valley Road

San Diego, CA 92121
Suite/Unit 20 & 21
Approximate Rentable Square Footage (see Exhibit "A"): 5,060
1.3 Commencement Date: June 1, 2000
1.4 Lease Term (see Article e 3): Approximately three years and -0- months,
beginning on the Commencement Date and ending on the last day of the last day of
the calendar month May, 2003 (the "Expiration Date"). 1.5 Minimum Monthly Rent
$10,120 per month for the first Lease Year, as provided in Article 4. The
Minimum Monthly Rent shall be increased on the first day of the second (2nd)
Lease Year and each first day of each succeeding Lease Year by five percent (5%)
of the Minimum Monthly Rent in effect emmediately prior to the date of such
adjustment.

6/1/2001 - 5/31/2002 - $10,525 per month,
6/2/2002 - 5/31/2003 - per month - $10,946
1.6 Security Deposit $3,800.00* (see Article 5).
*already on deposit
1.7 Tenant's Pro Rata Share of Operating Costs (see Articie 6): 5.8%
1.8 Permitted Use (see Article 11): Laboratory office and storage space
associated with a scientific research firm 1.9 Tenants Guarantor (lf none, so
state): S.G.I. International, a Utah-Corporation 1.10 Tenant's Parking Spaces
(Unassigned) (see Section 11.6): fifteen (15) 1.11 Landlord's Broker (lf none,
so state): Asset Management Group Tenant's Broker (If none, so state): none 1.12
Additional Provisions: The following additional provisions are attached to and
made a part of this Lease (if none, so state): First Addendum - Tenant
Improvements 1.13 Exhibits: The following Exhibits are attached to and made a
part of this lease Exhibit"A" - Description of Premises Exhibit "B" - Rules and
Regulations Exhibit"C" - Sign Criteria 2. LEASE OF PREMISES. Landlord hereby
leases to Tenant, and Tenant hereby leases from Landlord, the premises (the
"Premises") described in Section 1.2 which are indicated on the site/floor plan
attached as Exhibit "A". The Premises are part of the office or industrial
center identified in Section 1.2 (the "Center"). The approximate Rentable Square
Footage identified in Section 1.2 is a measurement of the net leasable floor
area of the Premises, as determine by landlord and applied on a consistent basis
throughout the Center. 3. LEASE TERM. 3.1 Commencement. The term of this Lease
(the "Lease term shall commence on the Commencement Date stated in Section 1.3
and shall continue for the period stated in Section 1.4, unless sooner
terminated pursuant to any provision of this Lease. 3.2 Delay In Commencement.
If Landlord cannot deliver possession of the Premises to Tenant on the
Commencement Date specified in Section 1.3 for any reason, Landlord shall not be
subject to any liability therefor. Such non-delivery shall not affect the
validity of this Lease nor the obligations of Tenant hereunder. However (a)
Tenant shall not be obligated to pay rent until possession of the Premises is
delivered to Tenant, (b) if possession of the Premises is not delivered to
Tenant within thirty (30) days of the Commencement Date, the last day of the
Lease Term shall be extended by the total number of days that possession is so
delayed, plus the minimum number of additional days necessary to make the
Expiration Date the last day of a calendar month, and (c) if Landlord has not
delivered possession of the Premises thin ninety (90) days after the
Commencement Date, Tenant may elect to terminate this Lease by delivering
written notice to Landlord within ten (10) days thereafter, in which event the
parties shall be discharged from all further obligations hereunder.

3.3 Early Occupancy. If Tenant occupies the Premises prior to the Commencement
Date, such occupancy shalt be subject to all
provisions of this Lease. Such occupancy shall not advance the Expiration Date.
Tenant shall pay Minimum Monthly Rent at the rate in
effect for the first Lease Year, Additional Rent and all other charges required
hereunder for such early occupancy period.
4. RENT.
4.1 Minimum Monthly Rent. Tenant shall pay minimum monthly rent ('Minimum
Monthly Rent') in the initial amount stated in Section 1.5. The Minimum Monthly
Rent shall be increased as set forth in Section 1.5 and/or elsewhere in this
Lease. Tenant shall pay the Minimum Monthly Rent on or before the first day of
each calendar month, in advance, at the office of Landlord or at such other
place designated by Landlord, without deduction, offset or prior demand. If the
Commencement Date is not the first day of a calendar month, the rent for the
partial month at the beginning of the Lease Term shall be prorated on a per diem
basis and shall be due on the first day of such partial month. Upon execution of
this Lease, Tenant shall pay the first month's Minimum Monthly Rent to Landlord.

4.2 Lease Year. As used in this Lease, the term "Lease Year" means (i) the
first period of twelve (12) full calendar months following the Commencement Date
(including, if the Commencement Date is not the first day of a calendar month,
the period between the Commencement Date and the next first day of the month),
(ii) each period of twelve (12) full calendar months thereafter, and (iii) any
remaining period at the end of the Lease Term of less than twelve (12) full
calendar months.

4.3 Additional Rent. All charges payable by Tenant in addition to Minimum
Monthly Rent shall constitute Additional Rent to Landlord. All remedies
available to Landlord for nonpayment of rent shall be available for nonpayment
of any such Additional Rent. Unless this Lease provides otherwise, all
Additional Rent shall be paid by Tenant, without limitation or offset, within
fifteen (15) days after Tenant's receipt of a statement from Landlord.
Additional Rent includes, without limitation, Operating Costs (see Article 6),
Maintenance and Repairs (see Article 7), Real Property Taxes (see Article 8),
insurance costs (see Article 9), Utilities (see Article 10), and attomeys' fees
and costs (see Section 24.3). If any Minimum Monthly Rent is abated or waived
pursuant to another specific term of this Lease or in any separate agreement, it
is understood that such abatement or waiver shall apply only to the Minimum
Monthly Rent, and Tenant shall be obligated to pay all components of Additional
Rent (including the applicable impounds thereof) during the periods of abatement
or waiver of Minimum Monthly Rent and throughout the Lease Term. Minimum Monthly
Rent, Additional Rent, and all other charges and monetary amounts due Landlord
from Tenant hereunder shall constitute "rent." 4.4 Impounds. Landlord shall have
the right, but not the obligation, to collect and impound, in advance, any or
all components of Operating Costs, Real Property Taxes and insurance costs based
upon Landlord's reasonable estimate of Tenant's future liability for such
amounts under this Lease. Landlord shall initially establish the monthly amount
of such impound ("Monthly Impound Payments"), based upon its estimate of
one-twelfth of Tenant's annual liability therefor, Landlord shall have the
right, at any time during the Lease term to adjust the amount of the Monthly
Impound Payment upon notice to Tenant. The Monthly Impound Payment shall be due
and payable on the first day of each month throughout the Lease Term Any failure
to pay the Monthly Impound Payment when due shall be an Event of Default under
this Lease and shall entitle Landlord to exercise any or all of its remedies
available in the same manner as for the failure to pay rent, including the
imposition of late charges and interest, and the right of Landlord to require
that future payment of the Monthly Impound Payments be made by cashier's check.
Upon the occurrence of any Event of Default by Tenant hereunder, Landlord shall
have the right to apply all unapplied amounts of Monthly Impound Payments to
Tenant's default. Within ninety (90) days after the end of each calendar year,
Landlord shall deliver to Tenant an accounting of Tenant's actual Pro Rata Share
of Operating Costs and the estimated amounts paid by Tenant. Any overpayment by
Tenant shall be credited against next Monthly Impound Payments due hereunder,
or, at Landlord's option, shall be remitted to Tenant. Tenant shall pay the
amount of any underpayment within fifteen (15) days after receipt of the
accounting. Tenant acknowledges that the Monthly Impound Payments are estimates
only and not a representation of the amount of Tenant's ultimate liability for
Operating Costs, Real Property Taxes and insurance costs. 5. SECURITY DEPOSIT.

Upon execution of this Lease, Tenant shall deposit with Landlord the amount
specified in Section 1.6 (the "Security Deposit") to be held by Landlord,
without liability for interest, as security for tenant's performance of its
obligations under this Lease. Landlord shall not be required to keep the
Security Deposit separate from its other accounts. Landlord may apply all or a
part of the Security Deposit to any unpaid rent (including unpaid Additional
Rent or Monthly Impound Payments) or other monetary payments due from Tenant or
to cure any other default of Tenant hereunder and to compensate Landlord for all
damage and expense sustained as a result of such default. If all or any portion
of the Security Deposit is so applied, Tenant shall deposit cash sufficient to
restore the Security Deposit to its original amount within fifteen (15) days
after receipt of Landlord's written demand. If Tenant fully and faithfully
performs each of its obligations under this Lease, the Security Deposit or any
balance thereof shall be resumed to Tenant within thirty (30) days of the later
of the expiration or earlier termination of this Lease or the vacation of the
Premises by Tenant. At Landlord's request, Tenant shall accompany Landlord or
Landlord's representative on a "walk-through" of the Premises prior to
Landlord's return of the Security Deposit.

6. OPERATING COSTS.
6.1 Payment of Operating Costs by Tenant. Tenant shall pay its pro rata share of
Operating Costs for the Center, as defined herein. Tenant's pro rata share shall
be computed by Landlord on a monthly or other periodic basis selected by
Landlord. Tenant shall pay the amount of such pro rata share to Landlond, to the
extent such obligation exceeds any amount thereof impounded under Section 4.4,
within fifteen (15) days after receipt of a statement from Landlord.

6.2 Pro Rata Share of Operating Costs. Tenant's pro rata share of Operating
Costs is stated in Section 1.7 and represents the ratio of the Rentable Square
Footage of the Premises (identified in Section 1.2) to the total Rentable Square
Footage of the Center, as determined by Landlord from time to time Changes in
Rentable Square Footage shall be effective on the first day of the first
calendar month following the change. Tenant's share of Real Property Taxes!
insurance costs and other components of Additional Rent shall be computed on the
same basis as Tenant's Pro Rata Share of Operating Costs, unless Landlord
determines that some other basis would be equitable.

6.3 Operating Costs. "Operating Costs" includes all costs of operating,
managing, repairing and maintaining the Common Facilities, including without
limitation: gardening and landscaping; the cost of public liability and property
damage insurance; Real Property Taxes, as defined in Section 8.2 but applicable
to the Common Facilities; utilities; line painting and parking lot repairs; roof
repairs; lighting; trash and refuse removal; supplies; equipment; exterior
painting; capital improvements (including without limitation the costs of roof,
parking lot and underground utilities replacements); reasonable reserves for
repairs and replacements; the costs of altering, improving, renovating,
upgrading or retrofitting any portion of the Common Facilities to comply with
all laws, regulations and governmental requirements applicable to the Center
(including without limitation those related to disabled persons, hazardous
materials, lighting upgrades, sprinkler and energy-saving retrofits); security
service; property management costs and administrative fees; bookkeeping
services; labor; and the cost of personnel to implement such services and to
direct parking. In lieu of including the entire amount of any such expense in
Operating Costs in any one period, Landlord, at its election, may spread the
inclusion of, or may amortize, any such expenses, or a reasonable reserve for
anticipated expenses, in Operating Costs over such multiple periods as Landlord
shall determine.

6.4 Common Facilities. "Common Facilities" all areas, facilities,
utilities, equipment and services provided by Landlord for the common use or
benefit of the occupants of the Center and their employees, agents, customers
and other invitees, including without limitation: building lobbies, common
corridors and hallways, restrooms, pedestrian walkways, driveways and access
roads, access facilities for disabled persons (including elevators), truck
serviceways, loading docks, garages, driveways, parking lots, landscaped areas,
stairways, elevators, retaining walls, all areas required to be maintained under
the conditions of governmental approvals for the Center, and other generally
understood public or common areas. Landlord reserves the right to relocate,
alter, improve, or adjust the size and location of any, Common Facilities from
time to time without liability to Tenant.

7. MAINTENANCE AND REPAIRS.
7.1 Tenant's Obligations. Except as provided in Section 7.2, Tenant shall
keep the Premises in good order, condition and repair during the Lease Term
including without limitation: all nonstructural, interior, exterior, and
landscaped areas; all heating, ventilation and air conditioning systems and
equipment; all glass, glazing, windows, window moldings, partitions, doors and
door hardware; all interior painting; all f ixtures and appurtenances in the
Premises or exclusively serving the Premises including electrical, lighting and
plumbing fixtures; and all other portions of the Premises seen or unseen. Tenant
shall promptly replace at its sole cost and expense any of the systems,
equipment and other portions of the Premises for which it is responsible
hereunder during the Lease Term if and when necessary, regardless of whether the
benefit of such replacement extends beyond the Lease Term. It is the intention
of Landlord and Tenant that Tenant shall maintain the Premises, at all times
during the Lease Term, in an attractive, first class and fully operative
condition, at Tenant's expense. If any heating and air conditioning system or
equipment exclusively serves the Premises, Tenant shall additionally obtain and
keep in force a preventive maintenance contract providing for the regular (at
least quarterly) inspection and maintenance of the heating and air conditioning
system (including leaks around ducts, pipes, vents, and other parts of the air
conditioning) by a reputable licensed heating and air conditioning contractor
acceptable to Landlord. Prior to April 1 of each calendar year, Tenant shall
deliver Landlord written confirmation from such contractor verifying that such a
contract has been entered into and that the required service will be provided.
Notwithstanding the foregoing, Landlord shall have the right, upon written
notice to Tenant, to undertake the responsibility for preventive maintenance and
repair of the heating and air conditioning system, at Tenant's sole cost and
expense.

7.2 Landlord's Obligations. Landlord shall repair and maintain the Common
Facilities, subject to Tenant's obligation to pay its Pro Rata Share of
Operating Costs, as provided in Article 6. Landlord shall maintain the roof, the
foundations and structural portions of the Premises and any building of which
the Premises are a part, but Tenant shall pay (a) the full costs of such
maintenance, or an equitable share determined by Landlord if the Premises are
part of a multi-tenant building, (b) the full amount of any maintenance and
repairs necessitated by any act, omission, conduct or activity of, or breach of
finis lease by, Tenant or any of Ten ant's officers, agents, customers or
invitees (plus fifteen percent (15%) of the cost thereof for Landlord's
overhead); and (c) any maintenance and repairs necessitated by breaking and
entering of the Premises. Tenant shall pay its share of such maintenance and
repair costs incurred by Landlord, to the extent such obligation exceeds any
amount thereof impounded under Section 4.4, within fifteen (15) days after
receipt of a statement from Landlord. There shall be no abatement of rent, and
no liability of Landlord, by reason of any injury to or interference with Ten
ant's business arising from the making of any repairs alterations, or
improvements to any portion of the Premises or the Center. Except as provided in
Article 16 Damage and Destruction) and Article 17 (Condemnation), Landlord shall
have absolutely no other responsibility to repair, maintain or replace any
portion of the Premises at any time. Tenant waives the right to make repairs at
Landlord's expense under California Civil Code Section 1942, or under any other
law, statute or ordinance now or hereafter in effect. Landlord's obligations
under this Section are not intended to alter or modify in any way the provisions
of Article 12.

7.3 Performance By Landlord. If Tenant refuses or neglects to perform its
maintenance obligations hereunder to the reasonable satisfaction of Landlord,
Landlord shall have the right (but not the obligation), upon three (3) days'
prior notice to Tenant, to enter the Premises and perform such repairs and
maintenance on behalf of Tenant. Landlord shall also have the right (but not the
obligation), without prior notice to Tenant, to correct or remove any dangerous
or hazardous condition, to repair the heating, ventilation, air conditioning or
plumbing systems, to correct repair or bring into legal compliance any fire or
other life safety systems of the Premises, and to repair or replace any broken
glass or glazing, if Tenant fails to correct or repair the same within
twenty-four (24) hours after the need arises. Landlord shall not be liable to
Tenant for any loss or damage to Tenant's merchandise, fixtures, or other
properly or to Tenant's business in connection with Landlord's performance
hereunder, and Tenant shall pay Landlord's costs plus fifteen percent (15%) of
such amount for overhead, upon presentation of a statement therefor, as
Additional Rent. Tenant shall also pay interest at the rate provided in Section
22.4 from the date of completion of repairs by Landlord to the date paid by
Tenant.

8. REAL PROPERTY TAXES.
8.1 Payment of Real Property Taxes by Tenant. Tenant shall pay all Real
Property Taxes applicable to the Premises during the Lease Term, If the Premises
are not separately assessed, a share of the tax bill that includes the Premises
shall be allocated to the Premises. Such share shall be equitably determined by
Landlord based upon the Rentable Square Footage of the Premises compared to the
total Rentable Square Footage covered by the tax bill, the respective valuations
assigned in the assessor's worksheet, or other reasonably available information
Tenant shall pay its share of Real Property Taxes to Landlord, to the extent
such obligation exceeds any amount thereof impounded under Section 4.4, within
fifteen (15) days after receipt of a statement from Landlord.

8.2 Real Property Taxes Defined. "Real Property Taxes" means all taxes,
assessments, levies, fees and other governmental charges levied on or
attributable to the Premises or any part thereof, including without limitation:
(a) real properly taxes and assessments levied with respect to all or a portion
of the Premises, (b) assessments, charges and fees charged by governmental
agencies or districts for services or facilities provided to the Premises, (c)
transfer, transaction, rental, gross receipts, license or similar taxes or
charges measured by rent received by Landlord, excluding any federal or state
income, franchise, estate or inheritance taxes of Landlord, (d) taxes based upon
a reassessment of the Premises due to a transfer or change of ownership, and (e)
any assessment, charge or fee that is a substitute in whole or in part for any
tax now or previously included within the definition of Real Properly Taxes. If
Landlord elects to contest an assessment of any Real Properly Taxes, Landlord
shall have the right to recover its actual costs of such contest including
attorneys' fees and costs) as part of Real Property Taxes, but only to the
extent such contest has resulted in a reduction of Real Properly Taxes. Tenant
shall not be entitled to the benefit of any reduction, refund, rebate or credit
accruing or payable to Landlord prior to the commencement of or after the
expiration or other termination of the Lease Term.

8.3 Personal Property Taxes. Tenant shall pay prior to delinquency all
taxes charged against trade fixtures, fumishings, equipment or any other
personal properly belonging to Tenant. Tenant shall attempt to have such
personal property taxed separately from the Premises. If any such taxes on
Tenant's personal property are levied against Landlord or the Premises, or if
the assessed value of the Premises is increased by inclusion of a value placed
upon such personal properly of Tenant, then: (a) Landlord, after written notice
to Tenant, shall have the right to pay the taxes levied against Landlord, or the
taxes based upon such increased valuation, but under protest if so requested by
Tenant in writing and (b) Tenant shall pay to Landlord the taxes levied against
Landlord, or the taxes resulting from such increased valuation, within fifteen
(15) days after Tenant's receipt of a written statement from Landlord.

9. INSURANCE.
9.1 All Risk Coverage. During the Lease Term, Landlord shall maintain, at
Tenant's expense, insurance covering loss or damage to the Premises (excluding
Tenant's Alterations, fixtures, equipment and personal property), insuring
against any or all risks of physical loss (and including at Landlord's option,
flood and earthquake coverage), with the scope and amounts of such coverage as
determined by Landlord. Said insurance shall provide for payment of loss
thereunder to Landlond or to the holder of a first mortgage or deed of trust on
the Premises. Landlord may also maintain during the Lease Term, at Tenant's
expense, a policy of rental income insurance covering a period of one (1) year,
with loss payable to Landlord.

9.2 Tenant's Personal Property and Fixtures. Tenant shall at all times, at
Tenant's sole cost and expense, maintain insurance l | against any or all risks
of physical loss in an amount adequate to cover the cost of replacement of all
of Tenant's Alterations, trade fixtures, \ equipment and personal property. Such
policy shall be issued by an insurance company approved by Landlord, shall name
Landlord and \ Landlord's lender as additional insureds, and shall provide that
no cancellation or reduction in coverage shall be effective until thirty (30)
days after written notice to Landlord and Landlord's lender. Tenant shall
deliver a certificate evidencing such insurance to Landlord and a renewal or
binder at least twenty (20) days prior to expiration. Tenant acknowledges that
Landlord's insurance is not intended to cover Tenant's Alterations, trade
fixtures, equipment, and personal property. Provided, however, that at
Landlord's sole election, Landlord may obtain at Tenant's expense any or all of
the insurance described in this Section.

9.3 Tenant's Liability Insurance. Tenant shall, at Tenant's sole cost and
expense, provide comprehensive general liability insurance, fully covering and
indemnifying Landlord and Landlord's officers, directors, shareholders,
partners, principals, employees, agents, representatives, and other related
entities and individuals (together with, at Landlord's election, Landlord's
lender), as additional insureds, against any and all claims arising from
personal injury, death, and/or property damage occuring in or about the Premises
or the Center during the period of Tenant's possession (actual and/or
constructive) at the Premises. The initial limits of such insurance shall be at
least $2,000,000 combined single liability limit if the Rentable Square Footage
of the Premises (as indicated in Section 1.2) exceeds 3 000 square feet, or
$1,000,000 combined single liability limit if such Rentable Square Footage is
3,000 square feet or less. Such liability insurance limits shall be subject to
periodic increase, at Landlord's elect/on, based upon inflation, increased
liability awards, lender requirements, the recommendations of Landlord's
professional insurance advisors, and other relevant factors. Tenant shall also,
at its sole cost and expense, obtain workers' compensation insurance for the
protection of its employees such as will relieve Landlord of all liability to
such employees for any and all accidents that may arise on or about the Premises
or the Center. All insurance required to be carried by Tenant shall be primary
and noncontributory to any insurance carried by Landlord, regardless of the
absence of negligence or other fault of Tenant for alleged injury, death and/or
property damage. Each policy of insurance required to be canted by Tenant
hereunder shall: (a) contain cross-liability and contractual liability
endorsements, (b) provide that no cancellation or reduction in coverage shall be
effective until thirty (30) days after written notice to Landlord and Landlord's
lender, (c) be issued by an insurer licensed in California and reasonably
approved by Landlord, and (d) shall insure Tenant's performance of the indemnity
provisions of Article 13, but the amount of such insurance shall not limit
Tenant's liability nor relieve Tenant of any obligation hereunder. Prior to the
Commencement Date, Tenant shall deliver a certificate evidencing all such
insurance to Landlord. Tenant shall deliver a renewal or binder of such policy
at least thirty (30) days prior to expiration thereof. Tenant shall, at Tenant's
expense, maintain such other liability insurance as Tenant deems necessary to
protect Tenant. Tenant shall be in material breach of this Lease if Tenant fails
to obtain the insurance required under this Section, or if Tenant obtains
insurance with terms, conditions and/or exclusions that are inconsistent with
the requirements and terms of this Lease.

9.4 Payment of Insurance Costs. Tenant shall pay directly all premiums for
its liability insurance required under Section 9.3, for its personal property
insurance to be carried by Tenant as required under this Article, and for all
other insurance Tenant elects to carry. Tenant shall pay the insurance premiums,
or, where applicable, its share thereof as equitably determined by Landlord, for
the insurance policies carried or obtained by Landlord as described in this
Article. If the Lease Term expires before the expiration of any such insurance
policy, Tenant's liability for premiums shall be prorated on an annual basis.
Tenant shall pay such insurance costs to Landlord, to the extent such obligation
exceeds any amount thereof impounded under Section 4.4, within fifteen (15) days
after receipt of a statement from Landlord. If any insurance policy maintained
by Landlord covers improvements or real properly other than the Premises,
Landlord shall reasonably determine the portion of the premiums applicable to
the Premises, and Tenant shall pay its share thereof as so determined In
addition, Tenant shall pay the full amount of any deductible amount under
Landlord's insurance policies, or where applicable its share thereof as
equitably determined by Landlord, within fifteen (15) days after receipt of a
statement from Landlord.

9.5 Waiver of Subrogation. Each party waives all rights of recovery
against the other party and its officers, employees, agents and representatives
for any claims for loss or damage to person or property caused by or resulting
from fire or any other risks insured against under any insurance policy in force
at the time of such loss or damage. Each party shall use each insurance policy
obtained by it to provide that the insurer waives all rights of recovery by way
of subrogation against the other party in connection with any damage covered by
such policy.

9.6 Tenant's Use Not to Increase Premium. Tenant shall not keep, use,
manufacture, assemble, sell or offer for sale in or upon the Premises any
article that may be prohibited by, or that might invalidate, in whole or in
part, the coverage afforded by, a standard form of fire or all risk insurance
policy. Tenant shall pay the entire amount of any increase in premiums that may
be charged during the Lease Term for the insurance that may be maintained by
Landlord on the Premises or the Center resulting from the type of materials or
products stored, manufactured, assembled or sold by Tenant in the Premises,
whether or not Landlord has consented to the same. In determining whether
increased premiums are the result of Tenant's use of the Premises, a schedule
issued by the entity making the insurance rate on the Premises showing the
various components of such rate shall be conclusive evidence of the items and
charges that make up the fire insurance rate on the Premises.

10. UTILITIES.
Tenant shall pay the cost of all water, gas, heat, light, power, sewer,
telephone, refuse disposal, and all other utilities and services supplied to the
Premises. Tenant shall make payments for all separately metered utilities, when
due, directly to the appropriate supplier. Landlord shall have the right to
require Tenant to install, at Tenant's sole expense, separate meters (or other
submeter, device or monitor for the measurement of utility usage) for any
utility for which a separate meter is not installed as of the Commencement Date.
If any utilities or services are not separately metered or monitored with
respect to the Premises, Landlord shall determine Tenant's equitable share
thereof, based on rentable square footage, intensity of use of any Utility,
hours of operation, and such other factors as Landlord deems relevant. Tenant
shall pay its equitable share of such utilities to Landlord to the extent such
obligation exceeds any amount thereof impounded under Section 4.5, within
fifteen (15) days after receipt of a statement from Landlord. If at any time
during the Lease Term electrical power or any other utility is available to the
Premises from multiple sources, Landlord shall have the right at any time and
from time to time to contract for service from any company or companies
providing electrical, telecommunication, or other utility service to the
Building. Tenant shall cooperate with Landlord and all providers of electrical,
telecommunication, or other utility service and, as reasonably necessary, allow
Landlord and such providers reasonable access to the Premises and to the electic
lines, feeders, risers, wiring and any other machinery or equipment within the
Premises. Landlord shall in no way be liable or responsible for any loss, damage
or expense that Tenant may sustain or incur by reason of any change, failure,
interruption interference or defect in the supply or character of the
electricity or other utilities supplied to the Premises. Landlord makes no
representation or warranty as the suitability of the utility service for
Tenant's requirements, and no such change, failure, defect, unavailability or
unsuitability shall constitute any actual or constructive eviction, in whole or
in part, or entitle Tenant to any abatement or diminution of rent, or relieve
Tenant of any of its obligations under the Lease. Landlord shall not be liable
in damages or otherwise for any failure or interrupt/on of any utility service,
and no such failure or interruption shall entitle Tenant to terminate this Lease
or abate the rent due hereunder. 11. USE.

11.1 Permitted Use. The Premises shall be used and occupied only for the
permitted uses specified in Section 1.8. The Premises shall not be used or
occupied for any other purposes without the prior written consent of Landlord.
Tenant shall provide such information about such proposed use as may be
reasonably requested by Landlord. Landlord shall not unreasonably withhold its
consent to any requested change of use, and shall have the right to impose
reasonable restrictions on such other use. Factors that Landlord may take into
account in granting or withholding its consent shall include, without
limitation: (a) whether the proposed use is compatible with the character and
tenant mix of the Center, (b) whether the proposed use poses any increased risk
to Landlord or any other occupant of the Center, (c) whether any proposed
Alterations to accommodate such proposed use might decrease the rental or sale
value of the Premises or the Center, and (d) whether Tenant has the requisite
expertise and financial ability to successfully operate in the Premises with the
proposed use.

11.2 Compliance with Law and Other Requirements. Tenant shall not do or
permit anything to be done in or about the Premises in conflict with all laws,
ordinances, rules, regulations, orders, requirements, and recorded covenants and
restrictions applicable to the Premises, whether now in force or hereafter in
effect, including any requirement to make alterations or to install additional
facilities required by Tenant's occupancy or the conduct of Tenant's business,
and Tenant shall promptly comply with the same at its sole expense,

11.3 Waste, Quiet Conduct Tenant shall not use or permit the use of the
Premises in any manner that tends to create waste or a nuisance, that will cause
objectionable noise or odors, or that may disturb the quiet enjoyment of any
other tenant in the Center.

11.4 Rules and Regulations Tenant shall comply with the Rules and
Regulations for the Center attached as Exhibit "B", as the same may be amended
by Landlord from time to time, upon notice to Tenant.

11.5 Signs. Tenant agrees, at Tenant's sole cost, to install a sign in
strict conformance with Landlord's sign criteria, attached hereto as Exhibit
"C", within fifteen (15) days after first occupying the Premises. Tenant shall
maintain all approved signs and other items described herein in good condition
and repair at all times All signs must be fabricated by a contractor selected by
Landlord. Prior to construction of any such sign, a detailed drawing of the
proposed sign shall be prepared by the Landlord's contractor, at the sole
expense of Tenant, and submitted to Landlord and Tenant for written approval. No
sign, placard, pennant, flag, awning, canopy, or advertising matter of any kind
shall be placed or maintained on any exterior door, wall or window of the
Premises or in any area outside the Premises, and no decoration, lettering or
advertising matter shall be placed or maintained on the glass of any window or
door, or that can be seen through the glass, of the Premises without first
obtaining Landlord's written approval. All signs and sign cases shall be
considered fixtures and improvements and shall become the properly of Landlord
upon expiration or termination of the Lease. If Tenant fails to comply with this
Section and Landlord serves upon Tenant a Notice to Perform or Quit (or similar
notice), any breach of the covenants of this Section occurring thereafter shall
be deemed to be noncurable. Landlord shall have the right from time to time to
revise the sign criteria, and within sixty (60) days after Tenant's receipt of
written notice of any new sign criteria, Tenant shall, at Tenant's expense,
remove all existing exterior signs and replace the same with' new signs
conforming to the new sign criteria.

11.6 Parking. Tenant shall have the nonexclusive right, in common with
others, to use the parking areas of the Center; provided, however, that Tenant
shall not use more than the number of parking spaces designated in Section 1.10,
or if no number of such spaces is so indicated, Tenant shall not use more than
its reasonable share of parking spaces, as Landlord shall determine. Landlord
reserves the right without liability to Tenant, to modify the parking areas, to
designate the specific location of the parking for Tenant and Tenant's customers
and employees, and to adopt reasonable rules and regulations for use of the
parking areas.

11.7 Entry by Landlord. Tenant shall permit Landlord and Landlord's agents
to enter the Premises at all reasonable times for any of the following purposes:
(a) to inspect the Premises, (b) to supply any services or to perform any
maintenance obligations of Landlord, including the erection and maintenance of
such scaffolding, canopies, fences, and props as may be required, (c) to make
such improvements, replacements or additions to the Premises or the Center as
Landlord deems necessary or desirable, (d) to post notices of nonresponsibility,
(e) to place any usual or ordinary "for sale" signs, or (f) within six (6)
months prior to the expiration of this Lease, to place any usual or ordinary
"for lease" signs. No such entry shall result in any rebate of rent or any
liability to Tenant for any loss of occupation or quiet enjoyment of the
Premises. Landlord shall give reasonable notice to Tenant prior to any entry
except in an emergency or unless Tenant consents at the time of entry. If Tenant
is not personally present to open and permit an entry into the Premises, at any
time when for any reason an entry therein shall be necessary or permissible
Landlord or Landlord's agents may enter the same by a master key, or may
forcibly enter the same without rendering Landlord or such agents liable
therefor, and without in any manner affecting the obligations and covenants of
this Lease. Nothing herein contained, however, shall be deemed or construed to
impose upon Landlord any obligation, responsibility or liability whatsoever for
the care, maintenance or repair of the Premises or any part thereof, except as
otherwise specifically provided herein.

12. ACCEPTANCE OF PREMISES; NONLIABILITY OF LANDLORD; DISCLAIMER.
12.1 Acceptance of Premises. By taking possession hereunder, Tenant
acknowledges that it has examined the Premises and accepts the condition
thereof. Tenant acknowledges and agrees that Landlord has no obligation to
improve the Premises other than as set forth specifically in this Lease, if at
all. In particular, Tenant acknowledges that any additional improvements or
Alterations needed to accommodate Tenant's intended use shall be made solely at
Tenant's sole cost and expense, and strictly in accordance with the requirements
of this Lease (including the requirement to obtain Landlord's consent thereto),
unless such improvements and alterations are specifically required of Landlord.
Landlord shall have no responsibility to do any work required under any building
codes or other governmental requirements not in effect or applicable at the time
the Premises were constructed, including without limitation any requirements
related to sprinkler retrofitting, seismic structural requirements,
accommodation of disabled persons, or hazardous materials. Landlord shall be
under no obligation to provide utility, telephone or other service or access
beyond that which exists at the Premises as of the date of this Lease, unless
Landlord specifically agrees in writing to provide the same. If it is
anticipated that Tenant will be doing any Alterations or installations prior to
taking occupancy, any delays encountered by Tenant in accomplishing such work or
obtaining any required permits therefor shall not delay the Commencement Date or
the date that Tenant becomes liable to pay rent, or the date that Landlord may
effectively deliver possession of the Premises to Tenant. By taking possession
hereunder, Tenant acknowledges that it accepts the square footage of the
Premises as delivered and as stated in this Lease. No discovery or alleged
discovery after such acceptance of any variance in such square footage as set
forth in this Lease (or in any proposal advertisement or other description
thereof) shall be grounds for any adjustment in any element of the rent payable
hereunder, unless such adjustment is initiated by and implemented by Landlord in
writing.

12.2 Landlord's Exemption From Liability. Landlord shall not be liable for
injury to Tenant's business or loss of income therefrom, or for personal injury
or property damage that may be sustained by Tenant or any subtenant of Tenant,
or their respective employees, invitees, customers, agents or contractors or any
other person in or about the Premises, caused by or resulting from fire, flood,
earthquake or other natural disaster, or from steam, electricity gas, water or
rain, that may leak or flow from or into any part of the Premises, or from the
breakage, leakage, obstruction or other defects of pipes, sprinklers, wires,
appliances, plumbing, air-conditioning, lighting fixtures or computer equipment
or software, whether such damage or injury results from conditions arising upon
the Premises or upon other portions of the building of which the Premises are a
part, or from other sources, and regardless of whether the cause of such damage
or injury or the means of repairing the same is inaccessible to Tenant. Landlord
shall not be liable for any damages to properly or for personal injury or loss
of life arising from any use, act or failure to act of any third parties
(including other occupants of the Center) occurring in, or about the Premises or
in or about the Center (including without limitation the criminal acts of any
third parties). Landlord shall not be liable for any latent defect in the
Premises or in the building of which the Premises are a part. All properly of
Tenant kept or stored on the Premises shall be so kept or stored at the risk of
Tenant only, and Tenant shall indemnify, defend and hold Landlord and Landlord's
officers, directors, shareholders, partners, principals, employees and agents,
and their respective successors and assigns, harmless from and against any
claims arising out of damage to the same, including subrogation claims by
Tenant's insurance carriers. Provided, however, that the indemnifications and
waivers of Tenant set forth in this Section shall not apply to damage and
liability caused (i) by the gross negligence or willful misconduct of Landlord,
and (ii) through no fault of Tenant, its assignees or subtenants, or their
respective agents, contractors, employees, customers, invitees or licensees.

12.3 No Warranties or Representations.
(a) Neither Landlord nor Landlord's agents make any warranty or
representation with respect to the suitability or fitness of the space for the
conduct of Tenant's business, or for any other purpose.

(b) Neither Landlord nor Landlord's agents make any warranty or
representation with respect to any other tenants or users that may or may not
construct improvements, occupy space or conduct business within the Center, and
Tenant hereby acknowledges and agrees that it is not relying on any warranty or
representation relating thereto in entering into this Lease.

(c) Landlord specifically disavows any oral representations made by or on
behalf of its employees, agents and independent contractors, and Tenant hereby
acknowledges and agrees that it is not relying and has not relied on any oral
representations in entering into this Lease.

(d) Landlord has not made any promises or representations, expressed or
implied, that it will renew, extend or modify this Lease in favor of Tenant or
any permitted transferee of Tenant, except as may be specifically set forth
herein or in a written instrument signed by both parties amending this Lease in
the future.

(e) Notwithstanding that the rent payable to Landlord hereunder may at
times include the cost of guard service or other security measures, it is
specifically understood that Landlord does not represent, guarantee or assume
responsibility that Tenant will be secure from any damage, injury or loss of
life because of such guard service. Landlord shall have no obligation to hire,
maintain or provide such services, which may be withdrawn or changed at any time
with or without notice to Tenant or any other person and without liability to
Landlord. To induce Landlord to provide such service if Landlord elects in its
sole discretion to do so, Tenant agrees that (i) Landlord shall not be liable
for any damage, injury or loss of life related to the provision or nonprovision
of such service, and (ii) Landlord shall have no responsibility to protect
Tenant, or its employees or agents, from the acts of any third parties
(including other occupants of the Center) occurring in or about the Premises or
in or about the Center (including without limitation the criminal acts of any
third parties), whether or not the same could have been prevented by any such
guard service or other security measures. 13. 13. INDEMNIFICATION.

Tenant shall indemnify, defend and hold Landlord and Landlord's officers,
directors, shareholders, partners, principals, employees, agents,
representatives, and other related entities and individuals (collectively,
"Landlord's Related Entities"), harmless from and against any and all claims,
actions, damages, liability, costs, and expenses, including attomeys' fees and
costs, arising from personal injury, death, and/or property damage and arising
from: (a) Tenant's use or occupation of the Premises or any work or activity
done or permitted by Tenant in or about the Premises (including without
limitation any storage or display of materials or merchandise, or other activity
by Tenant in the Common Facilities), (b) any activity, condition or occurrence
in the Premises or other area under the control of Tenant, (c) any breach or
failure to perform any obligation imposed on Tenant under this Lease, or (d) any
other act or omission of Tenant or its assignees or subtenants or their
respective agents, contractors, employees, customers, invitees or licensees.
Tenant's obligation to defend and indemnify shall include, but not be limited
to, claims based on duties, obligations, or liabilities imposed on Landlord or
Landlord's Related Entities by statute, ordinance, regulation, or other law,
such as claims based on theories of peculiar risk and nondelegable duty, and to
any and all other claims based on the negligent act or omission of Landlord or
Landlord's Related Entities. The parties intend that this provision be
interpreted as the broadest Type I indemnity provision as defined in McDonald &
Kruse, Inc. v. San Jose Steel Co., 29 Cal. App. 3rd 413 (1972), and as allowed
by law between a landlord and a tenant. Upon notice from Landlord, Tenant shall,
at Tenant's sole expense and by counsel satisfactory to Landlord, defend any
action or proceeding brought against Landlord or Landlord's Related Entities by
reason of any such claim. If Landlord or any of Landlord's Related Entities is
made a party to any litigation commenced by or against Tenant, then Tenant shall
indemnify, defend and hold Landlord and Landlord's Related Entities harmless
from, and shall pay all costs, expenses and attomeys' fees and costs incurred or
paid in connection with, such litigation. Tenant, as a material part of the
consideration to Landlord hereunder, assumes all risk of, and waives all claims
against Landlord for, personal injury or property damage in, upon or about the
Premises, from any cause whatsoever. Provided, however, that the
indemnifications and waivers of Tenant set forth in this Section shall not apply
to damage and liability caused (i) by the gross negligence or willful misconduct
of Landlord, and (ii) through no fault of Tenant, its assignees or subtenants,
or their respective agents, contractors, employees, customers, invitees or
licensees. 14. HAZARDOUS MATERIALS.

14.1 Definitions. "Hazardous Materials Laws" means any and all federal, state
or local laws, ordinances, rules, decrees, orders,
regulations or court decisions relating to hazardous substances, hazardous
materials, hazardous waste, toxic substances,
environmental conditions on, under or about the Premises, or soil and ground
water conditions, including, but not limited to, the
Comprehensive Environmental Response, Compensation and liability Act of 1980,
as amended, 42 U.S.C.ss.9601, et seq., the Resource
Conservation and Recovery Act ,42 U.S.C.ss.6901, et seq., the Hazardous
Materials Transportation Act, 49 U.S.C.ss.1801, et seq., the
California Hazardous Waste Control Act, Cal. Health and Safety Codess.25100, et
seq., the Carpenter-Presley-Tanner Hazardous
Substances Account Act, Cal. Health and Safety Codess.25300, et seq., the Safe
Drinking Water and Toxic Enforcement Act, Cal. Health
and Safety Codess.25249.5, et seq., the Porter-Cologne Water Quality Control
Act, Cal. Water Codess.13000, et seq., any amendments to
the foregoing, and any similar federal, state or local laws, ordinances, rules,
decrees, orders or regulations. "Hazardous Materials"
means any chemical, compound, material, substance or other matter that: (a) is
defined as a hazardous substance, hazardous material,
hazardous waste or toxic substance under any Hazardous Materials Law, (b) is
controlled or governed by any Hazardous Materials Law or
gives rise to any reporting, notice or publication requirements hereunder, or
gives rise to any liability, responsibility or duty on
the part of Tenant or Landlord with respect to any third person hereunder; or
(c) is flammable or explosive material, oil, asbestos,
urea fommaldehyde, radioactive material, nuclear medicine material, drug,
vaccine, bacteria, virus, hazardous waste, toxic substance,
or related injurious or potentially injurious material (by itself or in
combination with other materials).
14.2 Use of Hazardous Materials. Tenant shall not allow any Hazardous
Material to be used, generated, manufactured, released, stored or disposed of
on, under or about, or transported from the Premises, unless: (a) such use is
specifically disclosed to and approved by Landlord in writing prior to such use,
and (b) such use is conducted in compliance with the provisions of this Article.
Landlord's consent may be withheld in Landlord's sole discretion and, if
granted, may be revoked at any time. Landlord may approve such use subject to
reasonable conditions to protect the Premises and Landlord's interests. Landlord
may withhold approval if Landlord determines that such proposed use involves a
material risk of a release or discharge of Hazardous Materials or a violation of
any Hazardous Materials Laws or that Tenant has not provided reasonably
sufficient assurances of its ability to remedy such a violation and fulfill its
obligations under this Article. Notwithstanding the foregoing, Landlord hereby
consents to Tenant's use, storage or disposal of products containing small
quantities of Hazardous Materials that are of a type customarily found in
offices and households (such as aerosol cans containing insecticides, toner for
copies, paints, paint remover and the like) provided that Tenant shall handle,
use, store and dispose of such Hazardous Materials in a safe and lawful manner
and shall not allow such Hazardous Materials to contaminate the Premises.

14.3 Compliance With Laws; Handling Hazardous Materials. Tenant shall
strictly comply with, and shall maintain the Premises in compliance with, all
Hazardous Materials Laws. Tenant shall obtain, maintain in effect and comply
with the conditions of all permits, licenses and other governmental approvals
required for Tenant's operations on the Premises under any Hazardous Materials
Laws, including, but not limited to, the discharge of appropriately treated
Hazardous Materials into or through any sanitary sewer serving the Premises. At
Landlord's request, Tenant shall deliver copies of, or allow Landlord to
inspect, all such permits, licenses and approvals. All Hazardous Materials
removed from the Premises shall be removed and transported by duly licensed
haulers to duly licensed disposal facilities, in compliance with all Hazardous
Materials Laws. Tenant shall perform any monitoring, testing, investigation,
dean-up, removal, detoxification, preparation of closure or other required plans
and any other remedial work required by any governmental agency or lender, or
recommended by Landlord's environmental consultants, as a result of any release
or discharge or potential release or discharge of Hazardous Materials affecting
the Premises or the Center or any violation or potential violation of Hazardous
Materials Laws by Tenant or any assignee or subtenant of Tenant or their
respective agents, contractors, employees, licensees or invitees (collectively,
"Remedial Work"). Landlord shall have the right to intervene in any governmental
action or proceeding involving any Remedial Work, and to approve performance of
the work, in order to protect Landlord's interests. Tenant shall not enter into
any settlement agreement, consent decree or other compromise with respect to any
claims relating to Hazardous Materials without notifying Landlord and providing
ample opportunity for Landlord to intervene. Tenant shall additionally comply
with the recommendations of Landlord's and Tenant's insurers based upon National
Fire Protection Association standards or other applicable guidelines regarding
the management and handling of Hazardous Materials. If any present or future law
imposes any requirement of reporting, survey, investigation or other compliance
upon Landlord, Tenant, or the Premises, and if such requirement is precipitated
by a transaction involving the Lease (other than the natural expiration thereof
at the end of the lease term), including without limitation the assignment or
sublease, in whole or in part of Tenant's interest in the Lease, or the change
in the ownership of Tenant, then Tenant shall fully comply with and pay all
costs of compliance with such requirement, including Landlord's attomeys' fees
and costs.

14.4 Notice; Reporting. Tenant shall notify Landlord, in writing, within
three (3) days after any of the following: (a) Tenant has knowledge, or has
reasonable cause to believe, that any Hazardous Material has been released,
discharged or is located on, under or about the Premises, whether or not the
release or discharge is in quantities that would otherwise be reportable to a
public agency, (b) Tenant receives any order of a governmental agency requiring
any Remedial Work pursuant to any Hazardous Materials Laws, (c) Tenant receives
any warning, notice of inspection, notice of violation or alleged violation or
Tenant receives notice or knowledge of any proceeding, investigation or
enforcement action, pursuant to any Hazardous Materials Laws; or (d) Tenant
receives notice or knowledge of any claims made or threatened by any third party
against Tenant or the Premises relating to any loss or injury resulting from
Hazardous Materials. If the potential risk of any of the foregoing events is
material, Tenant shall deliver immediate verbal notice to Landlord, in addition
to written notice as set forth above. Tenant shall deliver to Landlord copies of
all test results, reports and business or management plans required In be filed
with any governmental agency pursuant to any Hazardous Materials Laws.

14.5 Indemnity. Tenant shall indemnify, defend and hold Landlord (and its
partners and their respective officers, directors, employees and agents)
harmless from and against any and all liabilities, claims, suits, judgments,
actions, investigations, proceedings, costs and expenses including attorneys'
fees and costs) arising out of or in connection with any breach of any
provisions of this Article or directly or indirectly arising out of the use,
generation, storage, release, disposal or transportation of Hazardous Materials
by Tenant, or any assignee or subtenant of Tenant, or their respective agents,
contractors, employees, licensees, or invitees, on, under or about the Premises
during the Lease Term or any other period of Tenant's actual or constructive
occupancy of the Premises, including but not limited to, all foreseeable and
unforeseeable consequential damages and the cost of any Remedial Work. Any
defense of Tenant pursuant to this Section shall be by counsel acceptable to
Landlord. Neither the consent by Landlord to the use, generation, storage,
release, disposal or transportation of Hazardous Materials nor l the strict
compliance with all Hazardous Materials Laws shall excuse Tenant from Tenant's
indemnification obligations pursuant to this Article. The foregoing indemnity
shall be in addition to and not a limitation of the indemnification provisions
of Article 13 of this Lease. Tenant's obligations pursuant to this Article shall
survive the termination or expiration of this Lease.

14.6 Entry and Inspection; Cure. Landlord and its agents, employees and
contractors, shall have the right (but not the obligation) to enter the Premises
at all reasonable Ames to inspect the Premises and Tenant's compliance with the
terms and conditions of this Article or to conduct investigations and tests. No
prior notice to Tenant shall be required in the event of an emergency, or if
Landlord has reasonable cause to believe that violations of this Article have
occurred, or if Tenant consents at the time of entry. In all other cases,
Landlord shall give at least twenty-four (24) hours' prior notice to Tenant.
Landlord shall have the right (but not the obligation) to remedy any violation
by Tenant of the provisions of this Article pursuant to Section 22.3 of this
Lease or to perform any Remedial Work. Tenant shall pay, upon demand, all costs
incurred by Landlord in investigating any such violations or potential
violations or performing Remedial Work, plus interest thereon at the rate
specified in this Lease from the date of demand until Tenant.

14.7 Termination/Expiration. Upon termination or expiration of this
Lease, Tenant shall, at Tenant's cost, remove any equipment, improvements or
storage facilities utilized in connection with any Hazardous Materials and shall
clean up, detoxify, repair and otherwies restore the Premises to a condition
free of Hazardous Materials, to the extent such condition is caused by Tenant or
any assignee or subtenant of Tenant or their respective agents, contractors,
employees, licensees or invitees.

14.8 Exit Assessment. No later than ten (10) days after the expiration
or earlier termination of this Lease, Tenant shall cause to be performed, at its
sole expense, an environmental assessment (the "Exit Assessment') of the
Premises. Landlord agrees to allow Tenant access to the Premises for such
purpose. The Exit Assessment must be performed by a qualified environmental
consultant acceptable to Landlord, and shall include without limitation the
following, as applicable to the Premises and Tenant's activities: (a) inspection
of all floors, walls, ceiling tiles, benches, cabinet interiors, sinks, the roof
and other surfaces for signs of contamination and/or deterioration related to
Hazardous Materials, (b) inspection of any and all ducts, hoods and exhaust
systems for signs of contamination, deterioration and/or leakage related or
potent/ally related to Hazardous Materials, (c) inspection of all readily
accessible drain lines and other discharge piping for signs of deterioration,
loss of integrity and leakage, (d) Tenant interviews and review of appropriate
Tenant records to detemmine the uses to which Tenant has put the Premises that
involve or may have involved Hazardous Materials, and to detemnine if any known
discharges to the Premises or ground or soils from Tenant's activities have
occurred, (e) documentation in detail of all observations, including dated
photographs, (f) if applicable a certification that all areas inspected are dean
and free of any Hazardous Materials and that the investigation conducted by the
consultant does indicate that any release of any Hazardous Materials has
occurred in the Premises or the Center as a result of Tenant's activities, (9)
if applicable, a detailed description of Hazardous Materials remaining in the
Premises and of any contamination, deterioration and/or leakage observed,
together with detailed recommendations for the removal, repair or abatement of
the same, and (h) if applicable, a detailed description of evidence of possible
or past releases of Hazardous Materials, together with detailed recommendations
for the prevention of the same in the future. Landlord shall have the right to
require additional evaluations or work in connection with the Exit Assessment
based upon Tenant's use of the Premises, any actual or suspected Hazardous
Materials issues, or other reasonable factors. The original of the Exit
Assessment shall be addressed to Landlord and shall be provided to the Landlord
within twenty (20) days of the expiration or earlier termination of the Lease.
In addition to Tenant's obligations under Section 14.7, Tenant agrees to fully
implement and address all recommended actions contained in the Exit Assessment,
at its sole cost, within thirty (30) days of the date thereof.*see below

14.9 Event of Default. The release or discharge of any Hazardous
Material or the violation of any Hazardous Materials Law by Tenant or any
assignee or subtenant of Tenant shall be a material Event of Default by Tenant
under this Lease. In addition to or in lieu of the remedies available under this
Lease as a result of such Event of Default, Landlord shall have the right,
without terminating this Lease, to require Tenant to suspend its operations and
activities on the Premises until Landlord is satisfied that appropriate Remedial
Work has been or is being' adequately performed; Landlord's election of this
remedy shall not constitute a waiver of Landlord's right thereafter to declare
an Event of Default and pursue any other available remedy. 15. ALTERATIONS;
LIENS.

15.1 Alterations by Tenant. Tenant shall not make any alterations,
additions or improvements ('AIterations') to the Premises without Landlord's
prior written consent, except for nonstructural Alterations that cost $5,000 or
less and are not visible from the exterior of the Premises. All Alterations
installed by Tenant shall be new or completely reconditioned. Landlord shall
have the right to approve the contractor, the method of payment of the
contractor, and the plans and specifications for all proposed Alterations.
Tenant shall obtain Landlord's consent to all proposed Alterations requiring
Landlord's consent prior to the commencement of any such Alterations. Tenant's
request for consent shall be accompanied by information identifying the
contractor and method of payment and two (2) copies of the proposed plans and
specifications. All Alterations of whatever kind and nature shall become at once
a part of the realty and shall be surrendered with the Premises upon expiration
or earlier termination of the Lease Term, unless Landlord requires Tenant to
remove the same as provided in Article 20. If Tenant demolishes or removes any
then-existing tenant improvements or other portions of the Premises or the
Building (including without limitation any previously installed Alterations),
Tenant shall promptly commence and diligently pursue to completion the
Alterations then underway or shall otherwise restore the Premises and the
Building to its condition and state of improvement prior to such demolition or
removal. During the Lease Term, Tenant agrees to provide, at Tenant's expense, a
policy of insurance covering loss or damage to Alterations made by Tenant, in an
amount adequate to repair or replace the same, naming Landlord as an additional
insured. Provided, however, Tenant may install movable furniture trade fixtures,
machinery or equipment in conformance with applicable governmental rules or
ordinances and remove the same upon expiration or earlier termination of this
Lease as provided in Article 20.

15.2 Permits and Govemmental Requirements. Tenant shall obtain, at
Tenant's sole cost and expense, all building permits and other permits of every
kind and nature required by any governmental agency having jurisdiction in
connection with the Alterations. Tenant shall indemnify, defend and hold
Landlord and Landlord's officers, directors, shareholders, partners, principals,
employees and agents, and their respective successors and assigns, harmless from
and against any and all claims, actions, damages, liability, costs, and
expenses, including attorneys' fees and costs, arising out of any failure by
Tenant or Tenant's contractor or agents to obtain all required permits,
regardless of when such failure is discovered. Tenant shall do any and all
additional construction, alterations improvements and retrofittings required to
be made to the Premises and/or the Center, or any other properly of Landlord as
a result of or as may be triggered by, Tenants alterations Landlord shall have
the right to do such construction itself; but in all instances Tenant shall pay
all costs directly or indirectly related to such work and shall indemnify,
defend and hold Landlord and Landlord's.officers, directors, shareholders,
partners, principals, employees and agents, and their respective successors and
assigns, harmless from and against any and all claims, actions, damages,
liability, costs, and expenses, including attorneys' tees and costs, arising out
of any such additionally required work. All payment and indemnification
obligations under this Section shall survive the expiration or earlier
termination of the Lease Term.

15.3 Liens. Tenant shall pay when due a' claims for any work performed
materials furnished or obligations incurred by or for Tenant, and Tenant shall
keep the Premises free from any liens arising v with respect thereto. If Tenant
fails to cause any such lien to be released within fifteen (153 days after
imposition, by payment or posting of a proper bond, Landlord shall have the
right (but not the obligation) to cause such release by such means as Landlord
deems proper. Tenant shall pay Landlord upon demand for all costs incurred by
Landlord in connection therewith (including attorneys' fees and costs), with
interest at the rate specified in Section 22.4 from the date of payment by
Landlord to the date of payment by Tenant. Tenant will notify Landlord in
writing thirty (30) days prior to commencing any alterations, additions,
improvements or repairs in order to allow Landlord time to file a notice of
nonresponsibility.

16. DAMAGE AND DESTRUCTION.
16.1 Partial Insured Damage. If the Premises or any building in which
the Premises are located are partially damaged or destroyed during the Lease
Term, Landlord shall make the necessary repairs, provided such repairs can
reasonably be completed within sixty (60) days after the date of the damage or
destruction in accordance with applicable laws and regulations and provided that
Landlord receives sufficient insurance proceeds to pay the cost of such repairs.
In such event, this Lease shall continue in full force and effect. If such
repairs cannot reasonably be completed within sixty (60) days after the date of
the damage or destruction or if Landlord does not receive sufficient insurance
proceeds, then Landlord may at its option elect within forty (45) days of the
date of the damage or destruction to proceed with the

necessary repairs, in which event this Lease in continue force full force and
Landlord shall complete the same within a reasonably time. If Landlord does not
so elect to make such repairs or if such repairs cannot be made under
applicable laws and regulations, this

Lease // may be temminated at the option of either parry within ninety (90)
days of the or currence of such damage or destruction.
16.2 Insurance Deductible.. If Landlord elects to repair any damage caused by
an insured casualty as provided in Section 16.1, Tenant
shall, within fifteen (15) days after receipt of written notice from Landlord,
pay the amount of any deductible (or its share thereof) under any insurance
policy covering such damage or destruction, in accordance with Section 9.4
above. 16.3 Uninsured Damage. In the event of any damage or destruction of the
Premises or any building in which the Premises are located by an uninsured
casualty, Landlord shall have the right to elect either to repair such damage
or to temminate this Lease. Such election shall be exercised by written notice
to Tenant within forty-five (45) days of such damage or destruction.

A

16.4 Total Destruction. A total destruction (including any destruction required
by any authorized public authority) of either the Premises or any building in
which the Premises are located shall terminate this Lease.

16.5 Partial Destruction of Center. If fifty percent (50%) or more of the
rentable area of the Center is damaged or destroyed by fire
or other cause, notwithstanding that the Premises may be unaffected, Landlord
shall have the right, to be exercised by notice in
writing delivered to Tenant within ninety (90) days after said occurrence, to
elect to terminate this Lease.

*Tenant will employ an environmental consultant to perform a "baseline"
environmental assessment within thirty (30) days of signing Lease. Tenant will
be responsible to Landlord in accordance with Section 14.8 only for matters that
are not present and shown in the baseline assessment.

16.6 Tenant's Obligations. Landlord shall not be required to repair any
injury or damage by fire or other cause, or to make any restoration or
replacement of any Alterations, trade fixtures, equipment or personal properly
placed or installed in the Premises by or on behalf of Tenant Unless this Lease
is terminated Article, Tenant shall promptly repair, restore or replace the same
in the event of damage. Nothing contained in this Article shall be construed as
a limitation on Tenant's liability for any damage or destruction if such
liability otherwise exists.

16.7 Rent Abatement. If Landlord repairs the Premises or the building
after damage or destruction as described in this Article 16,, Minimum Monthly
Rent payable by Tenant hereunder from the date of damage until the repairs are
completed shall be equitably reduced, based upon the extent to which such
repairs interfere with the business carried on by Tenant in the Premises, but
only to the extent Landlord receives proceeds from rental income insurance paid
for by Tenant. Landlord agrees to take reasonable steps to make a claim for and
collect any rental income insurance proceeds that might be available.

16.8 Waiver of Inconsistent Statutes. The parties' rights and
obligations in the event of damage or destruction shall be governed by the
provisions of this Lease; accordingly, Tenant waives the provisions of
California Civil Code Sections 1932(2) and 1933(4), and any other statute, code
or judicial decisions that grants a tenant a right to terminate a lease in the
event of damage or destruction of a leased premises.

17. CONDEMNATION.
17.1 Condemnation of Premises. If any portion of the Premises is taken
or condemned for a public or quasi-public use ('Condemnation"), and a portion
remains that is susceptible of occupation, then this Lease shall terminate as to
the portion so taken as of the date title vests in the condemnor but shall
remain in full force and effect as to the remaining Premises Landlord shall,
within a reasonable period of time, restore the remaining Premises as nearly as
practicable to the condition existing prior to the condemnation; provided,
however, that if Landlord receives insufficient funds from the condenmno for
such purpose, Landlord may elect to terminate this Lease. If this Lease
continues in effect, the Minimum Monthly Rent shall be equitably adjusted, based
upon the value of the Premises remaining after the Condemnation compared to the
value of the Premises prior to Condemnation Provided, however, in the event of
any such partial condemnation, Landlord shall have the option to terminate this
Lease entirely as of the date title vests in the condemnor If all the Premises
are condemned, or such portion so that there does not remain a portion that is
susceptible of occupation, or if such a substantial portion of the Center is
condemned that it is no longer economically appropriate to lease the Premises on
the terms and conditions of this Lease, as reasonably determined by Landlord,
then at the election of Landlord this Lease shall terminate as of the date title
vests in the condemnor.

17.2 Condemnation of Parking Area. If all or any portion of the parking
area in the Center is condemned such that the ratio of the total square footage
of parking and other Common Facilities compared to the total rentable building
square footage of the Center is reduced to a ratio below two to one, then at the
election of Landlord this Lease shall terminate as of the date title vests in
the condemnor.

17.3 Condemnation Award. All compensation awarded upon any such partial
or total Condemnation shall be paid to Landlord and Tenant shall have no claim
thereto, and Tenant hereby irrevocably assigns and transfers to Landlord any
right to compensation or damages by reason of any such Condemnation. Provided,
however, that Tenant shall have the right to claim and recover from the
condemning authority, but not from Landlord, such compensation as may be
separately awarded or recoverable by Tenant in Tenant's own right on account of
any damage to Tenant's business by reason of the Condemnation and on account of
any cost that Tenant may incur in removing Tenants's merchandise, furniture,
fixtures, leasehold improvements and equipment. If this Lease is terminated in
whole or in part, in accordance with this Article as a result of a Condemnation,
Tenant shall have no claim for the value of any unexpired term of this Lease.

18 ASSIGNMENT AND SUBLETTING
18.1 Landlord's Consent Required. Tenant shall not voluntarily or
involuntarily assign, sublease, mortgage, encumber, or otherwise transfer all or
any portion of the Premises or its interest in this Lease (collectively,
Transfer") without Landlord's prior written consent, which consent Landlord
shall not unreasonably withhold. Landlord may withhold its consent until Tenant
has complied with the provisions of Sections 18.2 and 18.3. Any attempted
Transfer without Landlord's written consent shall be void and shall constitute a
noncurable Event of Default under finis Lease. If Tenant is a corporation, any
cumulative Transfer of more than twenty percent (20%) of the voting stock of
such corporation shall constitute a Transfer requiring Landlord's consent
hereunder; provided, however, that this sentence shall not apply to any
corporation whose stock is publicly traded. If Tenant is a partnership, limited
liability company, trust or other entity, any cumulative Transfer of more than
twenty percent (20%) of the partnership membership, beneficial or other
ownership interests therein shall constitute a Transfer requiring Landlord's
consent hereunder. Tenant shall not have the right to consummate a Transfer or
to request Landlord's consent to any Transfer if any Event of Default has
occurred and is continuing or if Tenant or any affiliate of Tenant is in default
under any lease of any other real property owned or managed (in whole or in
part) by Landlord or any affiliate of Landlord.

18.2 Landlord's Election. Tenant's request for consent to any Transfer
shall be accompanied by a written statement setting forth the details of the
proposed Transfer, including the name, business and financial condition of the
prospective Transferee, financial details of the proposed Transfer (e.g., the
ter, and tje rent and security deposit payable), and any other related
information that Landlord may reasonably require. Landlord shall have the right:
(a) to withhold consent to the Transfer, if reasonable, (b) to grant consent,
(c) to terminate this Lease as to the portion of the Premises affected by any
proposed Transfer, in which event LandIord may enter into a lease directly with
the proposed Transferee, or (d) to consent on the condition that Landlord be
paid, as Additional Rent hereunder, fifty percent ( 50%) of all subrent or other
consideration to be paid to Tenant under the terms of the Transfer in excess of
the total rent due hereunder (including, if such Transfer is an assignment or if
such Transfer is to occur directly or indirectly in connection with the sale of
any assets of Tenant, fifty percent (50%) of the amount of the consideration
attributable to the Transfer of the Lease, as reasonably determined by
Landlord). The grounds on which Landlord may reasonably withhold its consent to
any requested Transfer include, without limitation, that: (i) the proposed
Transferee's contemplated use of the Premises following the proposed Transfer is
not reasonably similar to the use of the Premises permitted hereunder, (ii) in
Landlord's reasonable business judgment, the proposed Transferee lacks
sufficient business reputation or experience to operate a successful business of
the type and quality permitted under this Lease, (iii) in Landlord's reasonable
business judgment, the proposed Transferee lacks sufficient net worth, working
capital, anticipated cash flow and other indications of financial strength to
meet all of its obligations under this Lease, (iv) the proposed Transfer would
breach any covenant of Landlord respecting a radius restriction, location, use
or exclusivity in any other lease, financing agreement, or of her agreement
relating to the Center, and (v) in Landlord's reasonable business judgment, the
possibility of a release of Hazardous Materials is materially increased as a
result of the Transfer or if Landlord does not receive sufficient assurances
that the proposed Transferee has the experience and financial ability to remedy
a violation of Hazardous Materials and to fulfill its obligations under Articles
13 and 14. In connection with any such Transfer, Landlord shall have the right
to require Tenant, at Tenant's sole cost, to cause environmental testing meeting
the requirements of an Exit Assessment described in Section 14.8 to be
performed. Landlord need only respond to any request by Tenant hereunder within
a reasonable time of not less than ten (10) business days after receipt of all
information and other submission required in connection with such request.

18.3 Costs; Transfer Fee. Tenant shall pay all costs and expenses in
connection with any permitted Transfer, including any real estate brokerage
commissions due with respect to the Transfer. Tenant shall pay all attorneys'
tees and costs incurred by Landlord and a fee of $500 to reimburse Landlord for
costs and expenses incurred in connection with any request by Tenant for
Landlord's consent to a Transfer. Such fee shall be delivered to Landlord
concurrently with Tenant's request for consent.

18.4 Assumption; Not Release of Tenant. Any permitted tranferee shall assume in
writing all obligations of Tenant under this Lease, utilizing a form of
assumption agreement provided or approved by Landlord, and an executed copy of
such assumption agreement shall be delivered to Landlord within fifteen) days
after the effective date of the Transfer. The taking of possession of all or
any part of the Premises by any such permitted assignee or subtenant shall
constitute an agreement by such person or entity to assume without limitation
or qualification all of the obligations of Tenant under this Lease,
notwithstanding any failure by such person to execute the assumption agreement
required in the immediately preceding sentence. No permitted Transfer shall
release or change Tenant's primary liability to pay the rent and to perform all
other obligations of Tenant under this Lease. Landlord's acceptance of rent
from any other person is not a waiver of any provision of this Article or a
consent to Transfer. Consent to one Transfer shall not constitute a consent to
any subsequent Transfer. If any transferee defaults under this Lease, Landlord
may proceed directly against Tenant without pursuing remedies against the
transferee. Landlord may consent to subsequent Transfers or modifications of
this Lease by Tenants transferee, without notifying Tenant or obtaining its
consent, and such action shall not relieve Tenant of Us liability under this
Lease.

18.5 No Merger. No merger shall result from any Transfer pursuant to this
Article, any surrender by Tenant of its interest under this Lease, or any
termination hereof in any other manner. In any such event, Landlord may either
terminate any or all subleases or succeed to the interest of Tenant thereunder.

18.6 Reasonable Restnction. Tenant acknowledges that the restrictions
on Transfer contained herein are reasonable restrictions for purposes of Section
22.2 of this Lease and California Civil Code Section 1951.4.

19. SUBORDINATION; ATTORNMENT; ESTOPEL
19.1 Subordination. This Lease is junior and subordinate to all ground
leases, mortgages, deeds of trust, and other security instruments now or
hereafter affecting the real property of which the Premises are a part, and to
all advances made on the security thereof, and to all renewals, modifications,
consolidations, replacements and extensions thereof. If any mortgagee,
beneficiary under deed of trust or ground lessor shall elect to have this Lease
prior to the lien of its mortgage, deed of tnust or ground lease, and gives
written notice thereof to Tenant, this Lease shall be deemed prior thereto.
Tenant agrees to execute any documents required to effectuate such subordination
or to make this Lease prior to the lien of any such mortgage, deed of trust or
ground lease, as the case may be, and if Tenant fails to do so within fifteen
(15) days after written demand, Tenant does hereby make, constitute and
irrevocably appoint Landlord as Tenant's attomey-in-fact and in Tenant's name,
place and stead, to do so.

19.2 Attornment. If Landlord sells, transfers, or conveys its interest
in the Premises or this Lease, or if the same is foreclosed judicially or
nonjudicially, or is otherwise acquired, by a mortgagee, beneficiary under deed
of trust or ground lessor, upon the request and at the sole election of
Landlord's lawful successor, Tenant shall attorn to said successor, provided
said successor accepts the Premises subject to this Lease. Tenant shall upon
request of Landlord or any such mortgagee, beneficiary under deed of trust or
ground lessor, execute an attornment agreement confirming the same, in form and
substance acceptable to Landlord. Such agreement shall provide, among other
things, that said successor shall not be bound by (a) any prepayment of more
than one (1) month's rent (except any Security Deposit) or (b) any material
amendment of this Lease made after the later of the initial effective date of
this Lease, or the date that such successor's lien or interest first arose,
unless said successor shall have consented to such amendment.

19.3 Estoppel Certificates. Within fifteen (15) days after written
request from Landlord, Tenant at Tenant's sole cost shall execute, acknowledge
and deliver to Landlord a written statement certifying: (a) that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modifications and certifying that this Lease is in full force and effect as
so modified), (b) the amount of any rent paid in advance and (c) that, to
Tenant's knowledge, there are no uncured defaults on the part of Landlord, or
specifying the nature of such defaults if any are claimed. Any such statement
may be conclusively relied upon by any prosper tive purchaser of or lender on
the Premises. if Tenant fails to deliver such statement within said 1 15-day
period, Tenant shall be liable for the immediate payment of all foreseeable and
unforeseeable damages, penalties and attorneys' fees and costs incurred by
Landlord as a result of such failure. Tenant's failure to deliver such statement
within said Today period shall constitute a conclusive acknowledgment by Tenant:
(i) that this Lease is in full force and effect without modification except as
may be represented by Landlord, (ii) that not more than one (1) month's rent has
been paid in advance, and (iii) that there are no uncured defaults in Landlord's
performance.

20. SURRENDER OF PREMISES.
20.1 Condition of Premises. Upon the expiration or earlier termination
of this Lease, Tenant shall surrender the Premises to Landlord, broom dean and
in the same condition and state of repair as at the commencement of the Lease
Term, except for ordinary wear and tear that Tenant is not otherwise obligated
to remedy under the provisions of this Lease. Tenant shall deliver all keys to
the Premises and the building of which the Premises are a part to Landlord. Upon
Tenant's vacation of the Premises, Tenant shall remove all portable furniture,
trade fixtures, machinery, equipment, signs and other items of personal property
(unless prohibited from doing the same under Section 20.2), and shall remove any
Alterations (whether or not made with Landlord's consent) that Landlord may
require Tenant to remove. Tenant shall repair all damage to the Premises caused
by such removal and shall restore the Premises to its prior condition, all at
Tenant's expense. Such repairs shall be performed in a manner satisfactory to
Landlord and shall include, but are not limited to, the following: capping all
plumbing, capping all electrical wiring, repairing all holes in walls, restoring
damaged floor and/or ceiling tiles, and thorough cleaning of the Premises. If
Tenant fails to remove any items that Tenant has an obligation to remove under
this Section when required by Landlord or otherwise, such items shall, at
Landlord's option, become the property of Landlord and Landlord shall have the
right to remove and retain or dispose of the same in any manner, without any
obligation to account to Tenant for the proceeds thereof. Tenant waives all
claims against Landlord for any damages to Tenant resulting from Landlord's
retention or disposition of such Alterations or personal property. Tenant shall
be liable to Landlord for Landlord's costs of removing, storing and disposing of
such items.

20.2 Removal of Certain Alterations, Fixtures and Equipment Prohibited.
All Alterations, fixtures (whether or not trade fixtures) machinery, equipment,
signs and other items of personal properly that Landlord has not required Tenant
to remove under Section 20.1 shall become Landlord's property and shall be
surrendered to Landlord with the Premises, regardless of who paid for the same.
In particular and without limiting the foregoing, Tenant shall not remove any of
the following materials or equipment without Landlord's prior written consent
regardless of who paid for the same and regardless of whether the same are
permanently attached to the Premises: power wiring and power panels; piping for
industrial gasses or liquids; laboratory benches, sinks, cabinets and casework;
fume hoods or specialized air-handling and evacuation systems; drains or other
equipment for the handling of waste water or hazardous materials; computer,
telephone and telecommunications wiring, panels and equipment; lighting and
lighting fixtures; wall coverings; drapes, blinds and other window coverings;
carpets and other floor coverings; heaters, air conditioners and other heating
or air conditioning equipment; fencing, security gates and systems; and other
building operating equipment and decorations.*See below

20.3 Holding Over. Tenant shall vacate the Premises upon the expiration
or earlier termination of this Lease, and Tenant shall indemnify Landlord
against all liabilities, damages and expenses incurred by Landlord as a result
of any delay by Tenant in vacating the Premises. If Tenant remains in possession
of the Premises or any part thereof after the expiration of the Lease Term with
Landlord's written permission Tenant's occupancy shall be a tenancy from
month-to-month only, and not a renewal or extension hereof. All provisions of
this Lease (other than those relating to the term) shall apply to such
month-to-month tenancy, except that the Minimum Monthly Rent shall be increased
to 200% of the Minimum Monthly Rent in effect during the last month of the Lease
Term. No acceptance of rent, negotiation of rent checks or other act or omission
of Landlord or its agents shall extend the Expiration Date of this Lease other
than a writing executed by Landlord giving Tenant permission to remain in
occupancy beyond the Expiration Date under the terms of the immediately
preceding sentence.

21. DEFAULT BY TENANT.
The occurrence of 'any of the following shall constitute an "Event of
Default" under this Lease by Tenant: (a) Failure to pay when due the
rent or any other monetary sums required hereunder. (b) Failure to
perform any other agreement or obligation of Tenant hereunder, if such
failure continues for fiflteen (15)

days after written notice by Landlord to Tenant, except as to those Events of
Default that are noncurable in which case no such grace period shall apply.
Landlord's notice described herein is intended to satisfy, and is not in
addition to, any and all legal notices required prior to commencement of an
unlawful detainer action, including without limitation the notice requirements
of California Code of Civil Procedure Sections 1161 et seq.

(c) Abandonment or vacation of the Premises by Tenant, or failure to
occupy the Premises for a period of ten (10) consecutive days.

(d) If any of the following occurs: (i) a petition is filed for an order of
relief under the federal Banckruptcy Code or for an order or decree of
insolvency or reorganization or rearrangement under any state or federal law,
and such petition is not dismissed within thirty (30) days after the filing
thereof; (ii) Tenant makes a genera! assignment for the benefit of creditors;
(iii) a receiver or trustee is appointed to take possession of any substantial
part of Tenant's assets, unless such appointment is vacated within thirty (30)
days after the date thereof (iv) Tenant consents to or suffers an attachment,
execution or other judicial seizure of any substantial part of its assets or
its interest under this Lease, unless such process is released or satisfied
within thirty (30) days after the occurrence thereof; or (v) Tenant's net
worth, determined in accordance with generally accepted accounting principles
consistently applied, decreases, at any time during the Lease Term, below
Tenant's net worth as of the date of execution of this Lease. If a court of
competent jurisdiction determines that any of the foregoing events is not a
default under this Lease, and a trustee is appointed to take possession (or if
Tenant remains a debtor in possession), and such trustee or Tenant transfers
Tenant's interest hereunder, then Landlord shall receive, as Additional Rent,
the difference between the rent (or other consideration) paid in connection
with such transfer and the rent payable by Tenant hereunder. Any assignee
pursuant to the provisions of any bankruptcy law shall be deemed without
further act to have assumed all of the obligations of the Tenant hereunder
arising on or after the date of such assignment. Any such assignee shall, upon
demand, execute and deliver to Landlord an instrument confirming such
assumption.

(e) The occurrence of any other event that is deemed to be an Event of Default
under any other provision of this Lease. *Excepted from the application of
Section 20.2 is any personal property and equipment (including hoods and
cabinets) which are free standing and owned by Tenant.

22. REMEDIES.
Upon the occurrence of any Event of Default Landlord shall have the
following remedies, each of which shall be cumulative and in addition to any
other remedies now or hereafter available at law or in equity:

22.1 Termination of Lease. Landlord can terminate this Lease and
Tenant's right to possession of the Premises by giving written notice of
termination and then re-enter the Premises and take possession thereof. No act
by Landlord other than giving written notice to Tenant of such termination shall
terminate this Lease. Upon termination Landlord has the right to recover all
damages incurred by Landlord as a result of Tenant's default, including:

(a) The worth at the time of award of any unpaid rent that had been
earned at the time of such termination; plus (b) The worth at the time
of award of the amount by which the unpaid rent that would have been
earned after the date of

termination until the time of award exceeds the amount of the loss of rent that
Tenant proves could have been reasonably avoided; plus (c) The worth at
the time of award of the amount by which the unpaid rent for the
balance of the Lease Term after the time

of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided; plus (d) Any other amount necessary to
compensate Landlord for all the detriment proximately caused by
Tenant's default,

including, but not limited to (i) expenses for cleaning, repairing or restoring
the Premises, (ii) expenses for altering, remodeling or otherwise improving the
Premises for the purpose of reletting, (iii) brokers' fees and commissions,
advertising costs and other expenses of reletting the Premises, (iv) costs of
carrying the Premises, such as taxes, insurance premiums, utilities and security
precautions, (v) expenses in retaking possession of the Premises, (vi)
attorneys' fees and costs, (vii) any unearned brokerage commissions paid in
connection with this Lease, and (viii) payment of any previously waived or
abated Minimum Monthly Rent and/or Additional Rent; plus

(e) At Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time under applicable
law. As used in paragraphs (a) and (b) above, the "worth at the time of award"
shall be computed by allowing interest at the maximum permissible legal rate. As
used in paragraph (c) above, the "worth at the time of award" shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).

22.2 Continuation of Lease. Landlord has the remedy described in
California Civil Code Section 1951.4 (Landlord may continue the Lease in effect
after tenant's breach and abandonment and recover rent as it becomes due, if
Tenant has the right to sublet or assign, subject only to reasonable
limitations), as follows:

(a) Landlord can continue this Lease in full force and effect without
terminating Tenant's right of possession, and Landlord shall have the right to
collect rent and other monetary charges when due and to enforce all other
obligations of Tenant hereunder. Landlord shall have the right to enter the
Premises to do acts of maintenance and preservation of the Premises, to make
alterations and repairs in order to relet the Premises, and/or to undertake
other efforts to relet the Premises. Landlord may also remove personal property
from the Premises and store the same in a public warehouse at Tenant's expense
and risk. No act by Landlord permitted under this paragraph shall terminate this
Lease unless a written notice of termination is given by Landlord to Tenant or
unless the termination is decredd by a court of competent jurisdiction.

(b) In furtherance of the remedy set forth in this Section, Landlord
may relet the Premises or any part thereof for Tenanfs account, for such term
(which may extend beyond the Lease Term at such rent, and on such other terms
and conditions as Landlord may deem advisable in its sole discretion. Tenant
shall be liable immediately to Landlord for all costs Landlord incurs in
reletting the Premises. Any rents received by Landlord from such reletting shall
be applied to the payment of: (i) any indebtedness other than rent due hereunder
from Tenant to Landlord, (ii) the costs of such reletting, including brokerage
and attorneys' fees and costs, and the cost of any alterations and repairs to
the Premises, and (iii) the payment of rent due and unpaid hereunder, including
any previously waived or abated rent. Any remainder shall be held by Landlord
and applied in payment of future amounts as the same become due and payable
hereunder. In no event shall Tenant be entitled to any excess rent received by
Landlord after an Event of Default by Tenant and the exercise of Landlord's
remedies hereunder. If the rent from such reletting during any month is less
than the rent payable hereunder, Tenant shall pay such deficiency to Landlord
upon demand.

(c) Landlord shall not, by any re-entry or other act, be deemed to have
accepted any surrender by Tenant of the Premises or Tenant's interest therein,
or be deemed to have terminated this Lease or Tenant's right to possession of
the Premises or the liability of Tenant to pay rent accruing thereafter or
Tenant's liability for damages under any of the provisions hereof, unless
Landlord shall have given Tenant notice in writing that it has so elected to
terminate this Lease.

(d) Tenant acknowledges and agrees that the restrictions on the
Transfer of the Lease set forth in Article 18 of this Lease constitute
reasonable restrictions on such transfer for purposes of this Section and
California Civil Code Section 1951.4.

22.3 Performance By Landlord. If Tenant fails to pay any sum of money
or perform any other act to be performed by Tenant hereunder, and such failure
continues for fifteen (15) days after notice by Landlord, Landlord shall have
the right (but not the obligation) to make such payment or perform such other
act without waiving or releasing Tenant from its obligations. All sums so paid
by Landlord and all necessary incidental costs, together with interest thereon
at the rate specified in Section 22.4, shall be payable to Landlord on demand.
Landlord shall have the same rights and remedies in the event of nonpayment by
Tenant as in the case of default by Tenant in the payment of the rent.

22.4 Late Charge; Interest on Overdue Payments. The parties acknowledge
that late payment by Tenant of Minimum Monthly Rent or any Additional Rent will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of which will be extremely difficult and impractical to determine, including,
but not limited to, processing and accounting charges, administrative expenses,
and additional interest expenses or late charges that Landlord may be required
to pay as a result of late payment on Landlord's obligations. Therefore, if any
/ installment of Minimum Monthly Rent or Additional Rent is not received by
Landlord on the due date, and without regard to whether Landlord/gives Tenant
notice of such failure or exercises any of its remedies upon an Event of
Default, Tenant shall pay a late charge equal to the greater of ten percent
(10%) of the overdue amount or One Hundred Dollars ($100), as Additional Rent
hereunder. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the damages Landlord will incur by reason of late payment
by Tenant. In addition, any amount due from Tenant that is not paid when due
shall bear interest at a rate equal to two percent (2%) over the then current
Bank of America prime or reference rate or ten percent (10%) per annum,
whichever is greater, but not in excess of the maximum permissible legal rate,
from the date such payment is due until the date paid by Tenant. Landlord's
acceptance of any interest or late charge shall not constitute a waiver of
Tenant's default or prevent Landlord from exercising any other rights or
remedies available to Landlord.

22.5 Landlord's Right to Require Advance Payment of Rent; Cashier's
Checks. If Tenant is late in paying any component of rent more ore than three
(3) times during the Lease Term, Landlord shall have the right, upon notice to
Tenant, to require that all rent be paid three (3) months in advance.
Additionally, if any of Tenants checks are resumed for nonsuflicient funds, or
if Landlord at any time serves upon Tenant a Three Day Notice to Pay Rent or
Quit (pursuant to California Civil Code Sections 1161 et seq. or any successor
Of similar unlawful detainer statutes), Landlord may, at its option, require
that all future rent (including any sums demanded in any subsequent three (3)
day & exclusively by money order or cashier's check.

23. DEFAULT BY LANDLORD.
23.1 Notice to Landlord. Landlord shall not be in default under this
Lease unless Landlord fails to perform an obligation required of Landlord
within a reasonable Ume,but in no event later than thirty (30) days after
written notice by Tenant to Landlord and to each Mortgagee as provided in
Section 23.2, specifying the nature of the alleged default; provided, however,
that if the nature of the obligation is such that more than thirty (30)
business days are required for perfommance, then Landlord shall not be in
default if Landlord commences perfommance within such 3Way period and
thereafter diligently prosecutes the same to completion.

23.2 Notice to Mortgagees. Tenant agrees to give each mortgagee or tnust
deed holder on the Premises or the Center ('Mortgagee'9, by registered mail, a
copy of any notice of default served upon Landiord, provided that Tenant has
been previously notified in writing of the address of such Mortgagee. Tenant
further agrees that H Landlord fails to cure such default within the time
provided for in this Lease, then the Mortgagees shall have an additional
thirty (30) days within which to cure such default, or if such default cannot
reasonably be cured within that Ume, then such additional time as may be
necessary if, within said Today period, any Mortgagee has commenced and is
diligently pursuing the remedies necessary to wire the default (induding but
not limited to commencement of foreclosure proceedings if necessary to affect
such cure), in which event this Lease shall not be temminated while such
remedies are being so diligently pursued.

23.3 Limitations on Remedies Against Landlord. In the event Tenant has
any claim or cause of action against Landlord: (a) Tenant's sole and exclusive
remedy shall be against Landlord's interest in the building of which the
Premises are a part, and neither Landlord nor any partner of Landlord nor any
other properly of Landlord shall be liable for any deficiency, (b) no partner
of Landlord shall be sued or named as a party in any suit or action (except as
may be necessary to secure jurisdiction over Landlord), (c) no service of
process shall be made against any partner of Landlord (except as may be
necessary to secure jurisdiction over the partnership), and no such partner
shall be required to answer or otherwise plead to any service of process, (d)
no judgment shall be taken against any partner of Landlord and any judgment
taken against any partner may be vacated and set aside at any time, and (e) no
writ of execution will ever be levied against the assets of any partner of
Landlord. The covenants and agreements set forth in this Section shall be
enforceable by Landlord and/or by any partner of Landlord. If Landlord fails
to give any consent that a court later holds Landlord was required to give
under the terms of this Lease, Tenant shall be entitled solely to specific
performance and such other remedies as may be specifically reserved to Tenant
under this Lease, but in no, event shall Landlord be responsible for monetary
damages (including incidental and consequential damages) for such failure to
give consent.

24. GENERAL PROVISIONS.
24.1 Action or Defense by Tenant. Any claim, demand, right or defense
of any kind by Tenant that is based upon or arises in any connection with the
Lease or negotiations prior to its execution shall be barred unless Tenant
commences an action thereon or initiates a legal proceeding or defense by reason
thereof within six (6) months after the date of the occurrence of the event, act
or omission to which the claim demand, right or defense relates. Tenant
acknowledges and understands that, after having had an opportunity to consult
with legal counsel the purpose of this paragraph is to shorten the time period
within which Tenant would otherwise have to raise such claims, demands or rights
of defense.

24.2 Arbitration and Mediation; Waiver of Jury Trial. Except as
provided in this Section, if any dispute ensues between Landlord and Tenant
arising out of or concerning this Lease, and if said dispute cannot be settled
through direct discussions between the parties, the parties shall first to
attempt to settle the dispute through mediation before a mutually acceptable
mediator. The cost of mediation shall be divided equally between the parties.
Thereafter, any remaining, unresolved disputes or claims shall be resolved by
binding arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator may be
entered in any court of competent jurisdiction. The prevailing party in any such
arbitration shall be entitled to recover reasonable costs and attorneys' fees
and costs as determined by the arbitrator; provided, however, that the foregoing
provisions regarding mediation and arbitration shall not apply to (a) any issue
or claim that might properly be adjudicated in an unlawful detainer proceeding,
or (b) to any issue or claim that Landlord elects not to have resolved through
arbitration and with respect to which Landlord commences an action in law or
equity to determine, the same. Without limiting the foregoing, Landlord and
Tenant hereby waive trial by jury in any action, proceeding or counterclaim
(including any claim of injury or damage and any emergency and other statutory
remedy in respect thereof) brought by either against the other on any matter
arising out of or in any way connected with this Lease, the relationship of
Landlord and Tenant, or Tenant's use or occupancy of the Premises.

24.3 Attorneys' Fees. If either parry brings any legal action or
proceeding, declaratory or otherwise, arising out of this Lease, including any
suit by Landlord to recover rent or possession of the Premises or to otherwise
enforce this Lease, the losing party shall pay the prevailing party's costs and
attorneys' fees and costs incurred in such proceeding. If Landlord issues
notice(s) to pay rent, notice(s) to perform Covenant, notice(s) of abandonment,
or comparable documents as a result of Tenant's default under this Lease, and if
Tenant cures such default, Tenant shall pay to Landlord the reasonable costs
incurred by Landlord, including Landlord's attorneys' fees and costs, of
preparation and delivery of same.

24.4 Authority of Tenant. Tenant represents and warrants that it has
full power and authority to execute and fully perform its obligations under this
Lease pursuant to its governing instruments, without the need for any further
action, and that the person(s) executing this Agreement on behalf of Tenant are
the duly designated agents of Tenant and are authorized to do so. Prior to
execution of this Lease, Tenant shall supply Landlord with such evidence as
Landlord may request regarding the authority of Tenant to enter into this Lease.
Any actual or constructive taking of possession of the Premises by Tenant shall
constitute a ratification of this Lease by Tenant.

24.5 Binding Effect. Subject to the provisions of Article 18
restricting transfers by Tenant and subject to Section 24.27 regarding transfer
of Landlord's interest, all of the provisions of this Lease shall bind and inure
to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.

24.6 Brokers. Tenant warrants that it has had no dealings with any real
estate broker or agent in connection with the negotiation of this transaction
other than the broker(s) described in the Basic Lease Provisions (if any), and
it knows of no other real estate broker or agent who are entitled to a
commission in connection with this transaction. Tenant agrees to indemnify,
defend and hold Landlord harmless from and against any obligation or liability
to pay any commission or compensation to any other party arising from the act or
agreement of Tenant.

24.7 Construction. The headings and captions used in this Lease are for
convenience only and are not a part of the terms and provisions of this Lease.
In any provision relating to the conduct, acts or omissions of Tenant, the Term
"Tenant" shall include Tenant, its subtenants and assigns and their respective
agents, employees, contractors, and invitees, and any others using the Premises
with Tenant's express or implied permission Any use in this Lease, or in any
addendum, amendment or other document related hereto, of the terms "lessor" or
"lessee to refer to a parry to this Lease shall be deemed to be references to
Landlord and Tenant, respectively.

24.8 Counterparts. This Lease may be executed in multiple copies, each
of which shall be deemed an original, but all of which shall constitute one
Lease binding on all parties after all parties have signed such a counterpart.

24.9 Covenants and Conditions. Each provision to be performed by Tenant shall
be deemed to be both a covenant and a condition.
24.10 Entire Agreement This Lease, together with all exhibits and
addenda, if any, attached hereto, constitutes the entire agreement between the
parries with respect to the subject matter hereof. There are no oral or written
agreements or representations between the parties hereto affecting this Lease,
and this Lease supersedes, cancels, and merges any and all previous verbal or
written negotiations, arrangements representations, brochures, displays, models,
photographs, renderings, floor plans, elevations, projections, estimates,
agreements and understandings if any, made by or between Landlord and Tenant and
their agents, with respect to the subject matter, and none thereof shall I be
used to interpret, construe, supplement or contradict this Lease. This Lease,
and all amendments thereto, is and shall be considered to. I be the only
agreement between the parties hereto and their representatives and agents. There
are no other representations or warranties between the parties, and all reliance
with respect to representations is solely based upon the representations and
agreements contained in this Lease.

24.11 Exhibits. All exhibits, addenda and riders attached or referred to herein
are hereby incorporated herein by reference.
24.12 Financial Statements. Within ten (10) days after written request from
Landlord, Tenant shall deliver to Landlord such
financial statements as are reasonably requested by Landlord to verify the net
worth of Tenant, or any assignee, subtenant, or guarantor of Tenant. In
addition, Tenant shall deliver to any proposed or actual lender or purchaser of
the Premises designated by Landlord any financial statements required by such
party to facilitate the sale, financing or refinancing of the Premises,
including the past three (3) years' financial statements. Tenant represents and
warrants to Landlord that: (a) each such financial statement is a true and
accurate statement as of the date of such statement; and (b) at all times during
the Lease Term or any extension thereof, Tenant's net worth shall not be reduced
below Tenant's net worth as of the date of execution of this Lease. Landlord
shall take reasonable precautions to protect the confidentiality of such
financial statements. Tenant hereby irrevocably authorizes Landlord to conduct
credit checks and other investigations into Tenant's financial affairs.

24.13 Force Majeure. If Landlord is delayed in performing any of its
obligations hereunder due to strikes; labor problems: inability In procure
utilities materials equipment or transportation; governmental regulations;
weather conditions; riots, insurrection, or war; or other events beyond
Landlor's control; then the time for performance of such obligation shall be
extended to the extent reasonably necessary as a result of such event.

24.14 Governing Law. This Lease shall be governed, construed and enforced in
accordance with the laws of the State of California.
24.15 Joint and Several Liability. If more than one person or entity
executes this Lease as Tenant, each of them is jointly and severally liable for
all of the obligations of Tenant hereunder.

24.16 Modification. The provisions of this Lease may not be modified of amended,
 except by a written instrument signed by all parties.
24.17 Modification for Lender. If, in connection with obtaining
financing or refinancing for the Premisis or the Center, Landlord's lender
requests reasonable modifications to this Lease, Tenant will not unreasonably
withhold or delay its consent thereto, provided that such modifications do not
increase the obligations of Tenant hereunder or materially and adversely affect
Tenant's rights hereunder.

24.18 Non discrimination. Tenant for itself and its officers,
directors, shareholders, partners, principals, employees, agents,
representatives, and other related entities and individuals, agrees to comply
fully with any and all laws and other requirements prohibiting discrimination
against any person or group of persons on account of race, color, religion,
creed, sex, martial status, secual orientation, national orgiin, ancestry, age,
physical handicap or medical condition, in the use occupancy or patronage of the
Premises and/or of Tenant's business. Tenant shall indemnify, defend and hold
Landlord and Landlord's officers, directors, shareholders, partners, princaplas,
employees and agents, and their respective successors and assigns, harmless form
and against all damage and liability incurred by Landlord's in the event of any
violation of the foregoing covenant or because of any event of or practice of
discrimination against any such persons or group of persons by Tenant or its
officers, directors, shareholders, partners, principals, employees, agents,
representatives, and other related entities and individuals in accordance with
the indemnification provisions of Article 13.

24.19 Notice. Any and all notices to either party shall be personally
delivered or sent by regular mail, postage prepaid, addressed to the parry to be
notified at the address specified Section 1.1, or at such other address as such
party may from time to time designate in writing. Notice shall be deemed
delivered on the date of personal delivery or three (3) business days after
deposit in the U.S. Mail, certified, return receipt requested.

24.20 Partial Invalidity. If any provision of this Lease is determined
by a court of competent jurisdiction to be invalid or unenforceable, the
remainder of this Lease shall not be affected thereby. Each provision shall be
valid and enforceable to the fullest extent permitted by law.

24.21 Quiet Enjoyment Landlord agrees that Tenant, upon paying the rent
and performing the terms covenants and conditions of this Lease, may quietly
have, hold and enjoy the Premises from and after Landlord's delivery of the
Premises to Tenant and until the end of the Lease Term subject, however, to the
lien and provisions of any mortgage or deed of trust to which this Lease is or
becomes subordinate.

24.22 Recording. Tenant shall not record this Lease or any memorandum hereof
without Landlord's prior written consent.
24.23 Relationship of the Parties. Nothing contained in this Lease shall be
deemed or construed as creating a partnership,
joint venture, principal-agent, or employer-employee relationship between
Landlord and any other person or entity (including, without limitation, Tenant)
or as causing Landlord to be responsible in any way for the debts or obligations
of such other person or entity.

24.24 Relocation of Tenant. In the event Landlord requires the Premises
for use in conjunction with other premises or for other reasons related to the
planning program for the Center, Landlord, upon delivering written notice to
Tenant (the "Relocation Notice"), shall have the right to relocate Tenant to
other space in the Center, at Landlord's sole cost and expense (except that
Tenant shall bear the cost of moving and installing private telephone systems),
and the terms and conditions of the original Lease shall remain in full force
and effect, except that the Premises will be in a new location. However if the
new space does not meet with Tenant's reasonable approval, Tenant shall have the
right to terminate this Lease upon delivering notice to Landlord within fifteen
(15) days after Tenant's receipt of the Relocation Notice. If Tenant elects to
terminate the Lease pursuant to this Section, the termination shall be effective
on the effective date of the proposed relocation of Tenant as indicated in the
Relocation Notice.

24.25 Rights of Redemption Waived. Tenant hereby expressly waives any
and all rights of redemption under any present or future laws in the event
Tenant is evicted or dispossessed for any cause, or in the event Landlord
obtains possession of the Premises by reason of Tenant's violation of any of the
covenants and conditions of this Lease or otherwise.

24.26 Time of Essence. Time is of the essence of each and every provision of
this Lease.
24.27 Transfer of Landlord's Interest. In the event of a sale,
assignment, exchange or other disposition of Landlord's interest in the
Premises, other than a transfer for security purposes only, Landlord shall be
relieved of all obligations and liabilities accruing hereunder after the
effective date of said sale, assignment, exchange or other disposition, provided
that any Security Deposit or other funds then held by Landlord in which Tenant
has an interest are delivered to Landlord's successor. The obligations to be
performed by Landlord hereunder shall be binding on Landlord's successors and
assigns only during their respective periods of ownership.

24.28 Waiver. No provision of this Lease or the breach thereof shall be
deemed waived, except by written consent of the party against whom the waiver is
claimed. A waiver of any such breach shall not be deemed a waiver of any
preceding or succeeding breach of the same or any other provision. No delay or
omission by Landlord in exercising any of its remedies shall impair or be
construed as a waiver thereof unless such waiver is expressly set forth in a
written instrument signed by Landlord. The subset subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant, other than the failure of Tenant to pay the particular rental so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent.

THE SUBMISSION OF THIS LEASE FOR EXAMINATION AND/OR SIGNATURE BY TENANT IS NOT A
COMMITMENT BY LANDLORD OR ITS AGENTS TO RESERVE THE PREMISES OR TO LEASE THE
PREMISES TO TENANT. THIS LEASE SHALL BECOME EFFECTIVE AND LEGALLY BINDING ONLY
UPON FULL EXECUTION AND DELIVERY BY BOTH LANDLORD AND TENANT. UNTIL LANDLORD
DELIVERS A FULLY EXECUTED COUNTERPART HEREOF TO TENANT, LANDLORD HAS THE RIGHT
TO OFFER AND TO LEASE THE PREMISES TO ANY OTHER PERSON TO THE EXCLUSION OF
TENANT.

EXECUTED, by Landlord and Tenant as of the date first written above.

TENANT: LANDLORD:

OCET Corporation, a Delaware Sorrento Square, a
Corporation, a wholly owned subsidiary Limited Partnership, by: Collins
of SGI International a Utah Corp. Development Company, General Partner

By: /s/ MICHAEL L. ROSE By: /s/
Title: President Title:

By: By:
Title: Title:

Tenant's Information:

Driver's Lic. No.
SSN/EIN

FIRST ADDENDUM TO STANDARD INDUSTRIAL NET LEASE

This addendum is made to that certain Standard Industrial Net Lease dated May
10, 2000, by and between Sorrento Square, a Limited Partnership ("Landlord") and
OCET Corporation, a Delaware Corporation, a wholly owned subsidiary of S.G.I.
International, a Utah Corporation ("Tenant") for Suites 20 & 21, located at
11588 Sorrento Valley Road, San Diego, California, containing approximately
5,060 square feet.

A. Tenant Improvements: Landlord, at Landlord's expense, shall conduct the
following repairs to the premises:
------------------------

1. Repair roof leaks and ceiling tiles as needed. However, if any leaks are
found around Tenant's installed ductwork, Tenant shall pay the cost of repairing
the roof leaks caused by its roof perforations.

2. Landlord shall provide up to a $2,000 allowance to evaluate and upgrade the
heating and air conditioning duct work and balancing in the front office
area. Any additional expense for the HVAC re-balancing, evaluation and
upgrade shall be borne by the Tenant.

3. Install "instahot" type under sink water heaters in the downstairs restroom
of Suite 20 and upstairs restroom in Suite 21.

4. Paint the office areas only. Tenant shall be responsible for moving its
computer and office equipment.

5. Install weather-stripping, as needed, around office doors to keep breeze
and dirt out of the of fice areas.

6. Replace ballast and fluorescent light fixtures as needed (it is agreed that
Landlord shall not be responsible for replacing more than five light
fixtures).

7. Repair the latch on the conference room door, as the striker is not aligned.

8. Landlord and Tenant shall coordinate a mutually agreeable time to complete
the tenant improvements to minimize disruption of Tenant's business /
operations.

It is agreed that any additional tenant improvement costs not specifically
itemized in this section shall be borne entirely by Tenant.

All other terms and conditions contained in said lease shall remain in full
force and effect.

OCET Corporation, a Delaware Sorrento Square, a Limited

Corporation, a wholly owned subsidiary Partnership, by : Collins
Of SGI International a Utah Development Company, General
Corporation Partner

By /s/ MICHAEL L. ROSE By /s/

"Tenant" "Landlord"
May 19, 2000

EXHIBIT "B"
RULES AND REGULATIONS

The following Rules and Regulations shall apply to the Center. Tenant agrees to
comply with the same and to require its agents, employees, contractors,
customers and invitees to comply with the same. Landlord shall have the right
from time to time to amend or supplement these Rules and Regulations, and Tenant
agrees to comply, and to require its agents, employees, contractors, customers
and invitees to comply, with such amended or supplemented Rules and Regulations,
provided that (a) notice of such amended or supplemental Rules and Regulations
is given to Tenant, and (b) such amended or supplemental Rules and Regulations
apply uniformly to all tenants of the Center. if Tenant or its subtenants,
employees, agents, or invitees violate any of these Rules and Regulations,
resulting in any damage to the Center or increased costs of maintenance of the
Center, or causing Landlord to incur expenses to enforce the Rules and
Regulations, Tenant shall pay all such costs to Landlord as Additional Rent. In
the event of any conflict between the Lease and these or any amended or
supplemental Rules and Regulations, the provisions of the Lease shall control.

1. Tenant shall be responsible at its sole cost for the removal of all of
Tenant's refuse or rubbish. All garbage and refuse shall be disposed of
outside of the Premises, shall be placed in the kind of container specified
by Landlord, and shall be prepared for collection in the manner and at the
times and places specified by Landlord. If Landlord provides or designates
a service for picking up refuse and garbage, Tenant shall use the same at
Tenant's sole cost. Tenant shall not bum any trash or garbage of any kind
in or about the Premises. If Landlord supplies janitorial services to the
Premises, Tenant shall not, without Landlord's prior written consent,
employ any person or persons other than Landlord's janitorial service to
dean the Premises.

2. No aerial, satellite dish, transceiver, or other electronic communication
equipment shall be erected on the roof or exterior walls of the Premises, or in
any other part of the Center, without Landlord's prior written consent. Any
aerial, satellite dish, transceiver, or other electronic communication equipment
so installed without Landlord's prior written consent shall be subject to
removal by Landlord without notice at any time and without liability to
Landlord.

3. No loudspeakers, televisions, phonographs, radios, or other devices shall be
used in a manner so as to be heard or seen outside of the Premises without
Landlord's prior written consent. Tenant shall conduct its business in a quiet
and orderly manner so as not to create unnecessary or unreasonable noise. Tenant
shall not cause or permit any obnoxious or foul odors that disturb the public or
other occupants of the Center. If Tenant operates any machinery or mechanical
equipment that causes noise or vibration that is transmitted to the structure of
the building in which the Premises are located, or to other parts of the Center,
to such a degree as to be objectionable to Landlord or to any other occupant of
the Center, Tenant shall install and maintain, at Tenant's expense, such
vibration eliminators or other devices sufficient to eliminate the objectionable
noise or vibration.

4. Tenant shall keep the outside-areas immediately adjoining the Premises
clean and free from dirt, rubbish, pallets and other debris to the
satisfaction of Landlord. If Tenant fails to cause such outside areas to be
maintained as required within twelve (12) hours after verbal notice that
the same do not so comply, Tenant shall pay a fee equal to the greater of
Fifty Dollars ($50.00) or the costs incurred by Landlord to dean up such
outside areas.

5. Tenant shall not store any merchandise, inventory, equipment, supplies,
finished or semi-finished products, raw materials, or other articles of any
nature outside the Premises (or the building constructed thereon if the
Premises includes any outside areas) without Landlord's prior written
consent.

6. Tenant and Tenant's subtenants, employees, agents, or invitees shall park
only the number of cars allowed under the Lease and only in those portions
of the parking area designated for that purpose by Landlord. Upon request
by Landlord, Tenant shall provide the license plate numbers of the cars of
Tenant and Tenant's employees in order to facilitate enforcement of this
regulation. Tenant and Tenant's employees shall not store vehicles or
equipment in the parking areas, or park in such a manner as to block any of
the accessways serving the Center and its occupants.

7 The Premises shall not be used for lodging, sleeping, cooking, or for any
immoral or illegal purposes, or for any purpose that will damage the
Premises or the reputation thereof. Landlord reserves the right to expel
from the Center any person who is intoxicated or under the influence of
liquor or drugs or who shall act in violation of any of these Rules and
Regulations. Tenant shall not conduct or permit any sate by auction on the
Premises. No video, pinball, or similar electronic game machines of any
description shall be installed, maintained or operated upon the Premises
without the prior written consent of Landlord.

8. Neither Tenant nor Tenant's employees or agents shall disturb, solicit, or
canvas any occupant of the Center, and Tenant shall take reasonable steps to
discourage others from doing the same.

9. Tenant shall not keep in, or allow to be brought into, the Premises or
Center any pet, bird or other animal, other than "seeing-eye" dogs or other
animals under the control of and specifically assisting any disabled
person.

10. The plumbing facilities shall not be used for any other purpose than that
for which they are constructed, and no foreign substance of any kind shall
be disposed of therein. The expense of any breakage, stoppage, or damage
resulting from a violation of this provision shall be borne by Tenant.
Tenant shall not waste or use any excessive or unusual amount of water.

11. Tenant shall use, at Tenant's cost, such pest extermination contractor as
Landlord may direct and at such intervals as Landlord may require.

12. Tenant will protect the carpeting from undue wear by providing carpet
protectors under chairs with casters, and by providing protective covering
in carpeted areas where spillage or excessive wear may occur.

13. Tenant shall be responsible for repair of any damage caused by the moving
of freight, furniture or other objects into, within, or
out of the Premises or the Center. No heavy objects (such as safes, fumiture,
equipment, freight, etc.) shall be placed upon any floor without

15, No electrical wiring, electrical apparatus, or additional electrical
outlets shall be installed in the Premises without Landlord's prior written
approval. Any such installation not so approved by Landlord may be removed
by Landlord at Tenant's expense. Tenant may not alter any existing
electrical outlets or overburden them beyond their designed capacity.
Landlord reserves the right to enter the Premises, with reasonable notice
to Tenant, for the purpose of installing additional electrical wiring and
other utilities for the benefit of Tenant or adjoining tenants. Landlord
will direct electricians as to where and how telephone and affixed wires
are to be installed in the Premises The location of telephones, call boxes,
and other equipment affixed to the Premises shall be subject to the prior
written approval of Landlord.

16. If Tenant's use of the Premises involves the sale and/or preparation of
food, Tenant shall at all times maintain a health department rating of "A"
(or such other highest health department or similar rating as is
available). Any failure by Tenant to maintain such "A" rating twice in any
twelve (12) month period shall, at the election of Landlord, constitute a
noncurable Event of Default under the Lease.

17. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency.

18. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed.

19. If Tenant occupies any air-conditioned space, Tenant shall keep entry doors
opening onto corridors, lobby or courtyard closed at all times. All truck
and loading doors shall be closed at all times when not in use.

20. Tenant shall not paint any floor of the Premises without Landlord's prior
written consent. Prior to surrendering the Premises upon expiration or
termination of the Lease, Tenant shall remove any paint or sealer therefrom
(whether or not previously permitted by Landlord) and restore the floor to
its original condition as of the Commencement Date, reasonable wear and
tear excepted. Tenant shall not affix any floor covering to the floor of
the Premises in any manner except as approved by Landlord.

/s/ MLR
Tenant's InitialsSecond Amendment to Lease

This Second Amendment, dated this 19th day of June 2000, shall be effective as
of December 16, 2000, and is between La Jolla Financial Building, LLC
(hereinafter referred to as "Landlord") and SGI International (hereinafter
referred to as "Tenant"), with respect to the following facts.

A. Landlord and Tenant have heretofore entered into a lease dated as of
December 3, 1990 (hereinafter referred to as the "Master Lease") for
certain space located on the Third Floor of the La Jolla Financial
Building, Suite #325, located at 1200 Prospect Street, La Jolla,
California 92037.

B. Landlord and Tenant have heretofore entered into a First Amendment to
Lease, dated October 17, 1995 for certain space located on the Third Floor
of the La Jolla Financial Building, Suite #325 located at 1200 Prospect
Street, La Jolla, California 92037.

WHEREFORE the parties hereto agree as follows:

1. Space. Landlord hereby leases to tenant and Tenant hereby hires from
Landlord, subject to all of the terms and conditions of the Master Lease
and this First Amendment, 5,475 rentable square feet on the Third Floor
identified as "Exhibit A" attached hereto.

2. Term. The term of this Lease shall be for sixty (60) months commencing upon
December 16, 2000.

3. Annual Basic Rent.

(a) Tenant agrees to pay Landlord as Annual Basic Rent for the
Premises the sum of One Hundred Eighty Thousand Six Hundred Seventy Five
Dollars and no/100 Dollars ($180,675.00) (subject to adjustment as hereinafter
provided) in twelve (12) equal monthly installments of Fifteen Thousand and
Fifty Six Dollars and 25/100 Dollars ($15,056.25) each, in advance on the first
day of each calendar month during the term. If the term of this Lease commences
or ends on a day other than the first day of a calendar month, then the rental
for such period shall be prorated in the proportion that the number of days
this Lease is in effect during such period bears to thirty (30). In addition to
the Annual Basic Rent, Tenant agrees to pay as additional rental the amount of
rental adjustments and other charges required by this Lease as described in
Sections 3(b), 3(c), and 3(d) All rental shall be paid to Landlord, without
prior demand and without any deduction or offset, in lawful money of the United
States of America, at the address of Landlord designated at the end of the
Lease or to such other person or at such other place Landlord may from time to
time designate in writing.

(b) The rental payable by Tenant shall be increased for each year of
this lease commencing with the beginning of the second Lease Year by adjusting
the Annual Basic Rental reserved in Section 3(a) to reflect any increase in the
cost of living, which adjustment shall be determined as follows:

(i) The monthly rent as set forth shall be increased each
subsequent year of the term of this lease following the first year
if the Consumer Price Index (the "Index") for the "Comparison
Month" (described below) increases over the Index for the calendar
month ("Base Month") which shall be the month the lease commences.
The Base Month Index shall be compared with the Index for the same
calendar month for each Subsequent Year ("Comparison Month"). If
the Index for any Comparison Month is higher than the Base Month
Index, then the monthly rent shall increase beginning with the
first month of such subsequent year by ratio which shall be
calculated by dividing the Comparison Month Index by the Base Month
Index.

** In no event shall the increase be less than 1.015 per year or greater than
1.070 per year.

By way of illustration only, if tenant commences paying monthly rent
in August of 1981, then the Base Month Index would be that for August, 1981
(assume such Index at 130) and that Index shall be compared with Index for
August, 1982 (assume such Index at 136). Because the Index for August, 1982 is
four and six-tenths percent (4.6%) higher than the Index for August, 1981 based
on the assumptions of 136 and 130, respectively, the monthly rent commencing in
August of 1982 would be four and six-tenths percent (4.6%) higher than the
monthly rent commencing August, 1981. Likewise, the Index for August, 1983
would be compared with the Index for August, 1981. Should said Bureau
discontinue the publication of the above Index or publish the same less
frequently, or alter the same in some other manner, then Landlord shall adopt a
substitute index or substitute procedure which reasonably reflects and monitors
consumer prices.

(ii) For the purpose of this Lease, the term "Consumer Price
Index" or "Index" shall refer to the "Consumer Price Index for All
Urban Consumer Price Index for Los Angeles-Anaheim-Riverside Areas
(all terms)" as published by the U.S. Government Printing office, or
the successor thereto.

(iii) If the base of the Consumer Price Index should
hereafter be changed, then the new base shall be converted to the base
in existence on the date of the execution of this amendment and the
base as so converted shall be used. In the event that the Bureau shall
cease to publish the Consumer Price Index, then the successor or most
nearly comparable index thereto shall be used.

(c) Late Charges. Within thirty (30) days after December 16, 2000, if
Landlord has not received the monthly rent payment, or in the event Tenant
fails to make any other payment for which Tenant is obligated under this lease
on or before the fifth (5) day of each month, tenant agrees to pay, as a
penalty, an amount equal to 10% of the monthly rent and or other payment due
for each occurrence.

(d) For purposes of Article 4 of the Master Lease the percentage
occupied by Tenant with respect to the space is 6.46%. The base year for
determination of the Direct Expense Base is 2001.

4. Tenant Improvement. Landlord will at its sole expense recarpet the premises
with building standard carpet and repaint the suite as directed by Tenant.

5. Parking. Tenant shall for the term of the lease receive $640.00 a month in
parking credits against its monthly rent to be used at the La Jolla Financial
Building.

6. Incorporation of Master Lease. Except as otherwise expressly set forth
herein, all other terms and provisions of the Master Lease shall be
incorporated herein and apply. Said Additional space shall be deemed as part of
the leased premises covered by said Master Lease.

IN WITNESS WHEREOF, Landlord and Tenant have executed this First
Amendment to Lease as of the date set forth above.

SGI International
"Tenant"
By

La Jolla Financial Building, LLC
"Landlord"
By

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