{"id":41813,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/2890-de-la-cruz-boulevard-san-jose-ca-lease-the-equitable.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"2890-de-la-cruz-boulevard-san-jose-ca-lease-the-equitable","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/land\/2890-de-la-cruz-boulevard-san-jose-ca-lease-the-equitable.html","title":{"rendered":"2890 De La Cruz Boulevard (San Jose, CA) Lease &#8211; The Equitable Life Assurance Society of the United States and FMC Corp."},"content":{"rendered":"<pre>\n                                  LEASE\n\n                              BY AND BETWEEN\n\n         THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES,\n\n                     a New York corporation, as Landlord\n\n\n                                   and\n\n                             FMC CORPORATION,\n\n                         a Delaware corporation,\n\n                                as Tenant\n\n\n                                   for\n\n                                 BUILDING A\n\n\n                               TABLE OF CONTENTS\n\n                                                                  Page\n                                                                  -----\n\nARTICLE 1.  DEFINITIONS...........................................  1\n\n    1.1.  Commencement Date.......................................  1\n    1.2.  Rent Start Date.........................................  1\n    1.3.  Lease Term..............................................  1\n    1.4.  Property................................................  1\n    1.5.  Premises................................................  2\n    1.6.  Permitted Use...........................................  2\n    1.7.  Tenant's Minimum Liability Insurance Coverage...........  2\n    1.8.  Tenant's Allocated Parking Stalls.......................  2\n    1.9.  Retained Real Estate Brokers............................  2\n    1.10. Address for Notices.....................................  2\n    1.11. Lease...................................................  2\n    1.12. Building C Lease........................................  2\n    1.13. Tenant's Allocated Share................................  2\n    1.14. Continuing Tenant Default...............................  3\n    1.15. Additional Definitions..................................  3\n\nARTICLE 2.  DEMISE AND ACCEPTANCE.................................  3\n\n    2.1.  Demise of Premises......................................  3\n    2.2.  Delivery and Acceptance of Possession...................  3\n    2.3.  Construction of Interior Improvements...................  3\n    2.4.  Options to Extend Lease Term............................  3\n\nARTICLE 3.  RENT..................................................  5\n\n    3.1.  Base Monthly Rent.......................................  5\n    3.2.  Additional Rent.........................................  6\n    3.3.  Payment of Rent.........................................  6\n    3.4.  Late Charge and Interest on Rent in Default.............  6\n\nARTICLE 4.  USE OF PREMISES.......................................  7\n\n    4.1.  Limitation on Type......................................  7\n    4.2.  Compliance with Laws and Private Restrictions...........  7\n    4.3.  Insurance Requirements..................................  7\n    4.4.  Outside Areas...........................................  8\n    4.5.  Signs...................................................  8\n    4.6.  Rules and Regulations...................................  8\n\n                                  -i-\n\n\n    4.7.  Parking.................................................  8\n    4.8.  Window Coverings........................................  9\n    4.9.  Outside Sales...........................................  9\n\nARTICLE 5.  TRADE FIXTURES AND LEASEHOLD IMPROVEMENTS.............  9\n\n    5.1.  Trade Fixtures..........................................  9\n    5.2.  Leasehold Improvements..................................  9\n    5.3.  Alterations Required by Law............................. 10\n    5.4.  Landlord's Improvements................................. 11\n    5.5.  Liens................................................... 11\n    5.6.  Modifications to the Premises........................... 11\n\nARTICLE 6.  REPAIR AND MAINTENANCE................................ 12\n\n    6.1.  Tenant's Obligation to Maintain......................... 12\n    6.2.  Landlord's Obligation to Maintain....................... 12\n    6.3.  Tenant's Obligation to Reimburse........................ 13\n    6.4.  Common Operating Expenses Defined....................... 14\n    6.5.  Control of Common Area.................................. 14\n    6.6.  Tenant's Negligence..................................... 15\n\nARTICLE 7.  WASTE DISPOSAL AND UTILITIES.......................... 15\n\n    7.1.  Waste Disposal.......................................... 15\n    7.2.  Hazardous Materials..................................... 15\n    7.3.  Utilities............................................... 17\n    7.4.  Compliance with Governmental Regulations................ 17\n\nARTICLE 8.  REAL PROPERTY TAXES................................... 18\n\n    8.1.  Real Property Taxes Defined............................. 18\n    8.2.  Tenant's Obligation to Reimburse........................ 18\n    8.3.  Taxes on Tenant's Property.............................. 19\n\n\nARTICLE 9.  INSURANCE............................................. 19\n\n    9.1.  Tenant's Insurance...................................... 19\n    9.2.  Landlord's Insurance.................................... 20\n    9.3.  Tenant's Obligation to Reimburse........................ 20\n    9.4.  Release and Waiver of Subrogation....................... 20\n\nARTICLE 10.  LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY..... 21\n\n    10.1. Limitation on Landlord's Liability...................... 21\n\n                                  -ii-\n\n\n    10.2. Limitation on Tenant's Recourse......................... 21\n    10.3. Indemnification of Landlord............................. 22\n\nARTICLE 11.  DAMAGE TO PREMISES................................... 22\n\n    11.1. Landlord's Duty to Restore.............................. 22\n    11.2. Landlord's Right to Terminate........................... 22\n    11.3. Tenant's Right to Terminate............................. 23\n    11.4. Abatement of Rent....................................... 23\n\nARTICLE 12.  CONDEMNATION......................................... 24\n\n    12.1. Tenant's Termination Right.............................. 24\n    12.2. Restoration and Abatement of Rent....................... 24\n    12.3. Temporary Taking........................................ 24\n    12.4. Division of Condemnation Award.......................... 24\n\nARTICLE 13.  DEFAULT AND REMEDIES................................. 25\n\n    13.1. Events of Tenant's Default.............................. 25\n    13.2. Landlord's Remedies..................................... 26\n    13.3. Waiver by Tenant of Certain Remedies.................... 27\n    13.4. Waiver.................................................. 27\n    13.5. Limitation on Exercise of Rights........................ 27\n\nARTICLE 14.  ASSIGNMENT AND SUBLETTING............................ 27\n\n    14.1. By Tenant............................................... 27\n    14.2. By Landlord............................................. 29\n\nARTICLE 15.  GENERAL PROVISIONS................................... 30\n\n    15.1. Landlord's Right to Enter............................... 30\n    15.2. Surrender of the Premises............................... 30\n    15.3. Holding Over............................................ 30\n    15.4. Subordination........................................... 31\n    15.5. Tenant's Attornment..................................... 31\n    15.6. Mortgagee Protection.................................... 31\n    15.7. Estoppel Certificates and Financial Statements.......... 31\n    15.8. Force Majeure........................................... 32\n    15.9. Notices................................................. 32\n    15.10. Obligation to Act Reasonably........................... 32\n    15.11. Corporate Authority.................................... 32\n    15.12. Additional Definitions................................. 32\n\n                                  -iii-\n\n\n    15.13. Miscellaneous.......................................... 33\n    15.14. Termination by Exercise of Right....................... 33\n    15.15. Brokerage Commissions.................................. 34\n    15.16. Entire Agreement....................................... 34\n    15.17. Right of First Offer to Lease.......................... 34\n\nSCHEDULE OF EXHIBITS\n\nEXHIBIT A - SITE PLAN OF PROPERTY\nEXHIBIT B - APPROVED PLANS FOR INTERIOR IMPROVEMENTS\nEXHIBIT C - INTERIOR IMPROVEMENT AGREEMENT\nEXHIBIT D - FORM OF SUBORDINATION AGREEMENT\n\n                                  -iv-\n\n                                  LEASE\n\n                               (Building A)\n\n     THIS LEASE, dated June 1, 1989 for reference purposes only, is made by \nand between THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, a New \nYork corporation (\"Landlord\"), and FMC CORPORATION, a Delaware corporation \n(\"Tenant\").\n\n                                 ARTICLE 1.\n\n                               DEFINITIONS\n\n     1.1.  COMMENCEMENT DATE:  The term \"Commencement Date\" shall mean the date \nthe last signatory to this Lease whose execution is required to make it \nbinding on Landlord and Tenant shall have executed this Lease.\n\n     1.2.  RENT START DATE:  The term \"Rent Start Date\" shall mean November 1, \n1989; provided, however, that if the Interior Improvements to be constructed \npursuant to the Interior Improvement Agreement attached as EXHIBIT \"C\" are \nnot \"Substantially Completed\" (as defined in EXHIBIT \"C\") by November 1, 1989 \nbecause of delays in construction resulting from \"Force Majeure\" (as defined \nin this paragraph 1.2), then the Rent Start Date shall be extended for one \nday for each such day of delay experienced by Tenant in constructing the \nInterior Improvements pursuant to EXHIBIT \"C\".  For purposes of this \nparagraph, the following shall apply:\n\n           A.   The term \"Force Majeure\" shall mean (i) any material default \nby Landlord of its obligations under this Lease which delays construction; \n(ii) strikes, labor disputes or work stoppages which are not directed solely \nat the construction of the Interior Improvements or only because of job \nconditions at the Premises but which also affect other construction projects; \n(iii) damage to the Interior Improvements or the Premises caused by fire, \nearthquake, vandalism or other peril; and (iv) civil commotion, civil unrest, \nor acts of war.  The term \"Force Majeure\" shall not include any of the \nfollowing:  (i) delays caused by the Prime Contractor or any subcontractor, \nincluding delays resulting from contractor default; (ii) inability to obtain \nlabor, materials, equipment, or reasonable substitutes therefor when ordered; \nor (iii) inability to obtain any governmental approval required in connection \nwith the construction of the Interior Improvements.\n\n           B.   Tenant shall notify Landlord promptly of the occurrence of \nany event of Force Majeure.  If Tenant does not notify Landlord in writing of \nthe occurrence of an event of Force Majeure within five (5) days after such \nevent has commenced to occur, then the Rent Start Date shall only be extended \nby the amount of delay that occurs after Tenant actually gives written notice \nto Landlord of the occurrence of the event of Force Majeure in question.\n\n     1.3.  LEASE TERM:  The Lease Term shall commence on the Commencement \nDate and shall continue until the tenth (10th) anniversary of the Rent Start \nDate (unless the Lease Term is extended pursuant to paragraph 2.4 hereof).\n\n     1.4.  PROPERTY:  The term \"Property\" shall mean that real property shown \non the site plan attached hereto as EXHIBIT \"A\" and all improvements now or \nhereafter located thereon, including, without limitation, the five (5) \nbuildings presently located thereon, including, without limitation, the give \n(5) buildings presently located thereon, the aggregate gross leasable area of \nwhich is approximately 295,271 square feet (the \"Property Gross Leasable \nArea\"), allocated among the five buildings as shown on the attached EXHIBIT \n\"A\"; provided, however, that Landlord may change the boundaries and \ncomposition of the Property by removing or adding land and\/or buildings and \nthereafter the term \"Property\" shall refer to such real property so enlarged \nor reduced and the amount of the \"Property Gross Leasable Area\" shall be \nappropriately adjusted.\n\n\n\n     1.5.  PREMISES:  The term \"Premises\" shall mean the building structure \nsituated on the Property commonly known as Building A of Airport Technology \nPark, 2890 De La Cruz Boulevard, Santa Clara, California, containing \napproximately 68,708 square feet of gross leasable area (the \"Premises Gross \nLeasable Area\") located as shown on EXHIBIT \"A\".  Landlord and Tenant agree \nthat (i) all measurements of gross leasable area contained in this Lease are \nconclusively agreed to be correct and binding upon the parties, even if a \nsubsequent measurement of any one of these areas determines that it is more \nor less than the amount of area reflected in this Lease; and (ii) any such \nsubsequent determination that the area is more or less than shown in this \nLease shall not result in a change in any of the computations of rent, \nimprovement allowances, or other matters described in this Lease where gross \nleasable area is a factor.\n\n     1.6.  PERMITTED USE:  The term \"Permitted Use\" shall mean the use of the \nPremises for (i) research and development, production, sales, and general \nadministrative offices and other legal uses incidental thereto, and (ii) any \nother legal use first approved in writing by Landlord.\n\n     1.7.  TENANT'S MINIMUM LIABILITY INSURANCE COVERAGE:  The term \"Tenant's \nMinimum Liability Insurance Coverage\" shall mean Two Million Five Hundred \nThousand Dollars ($2,500,000).\n\n     1.8.  TENANT'S ALLOCATED PARKING STALLS:  The term \"Tenant's Allocated \nParking Stalls\" shall mean 274 parking stalls for the non-exclusive use of \nTenant.  Notwithstanding the foregoing, or any other provision of this Lease, \nthe parties acknowledge that although Tenant is allocated a combined total of \n620 parking spaces pursuant to this Lease and the Building C Lease, after a \nrestripping of the parking areas on the Property to increase to 1,155 the \nnumber of spaces available, only a total of 603 spaces shall be available for \nTenant's use.  In this regard the parties agree that the total number of \nparking spaces allocated for Tenant's use under this Lease and under the \nBuilding C Lease shall be reduced by 17; such spaces shall be proportionably \nallocated between the Premises and the premises leased pursuant to the \nBuilding A Lease.  Landlord agrees, at the written request of Tenant, to \nconstruct at Landlord's expense 17 additional parking spaces on the Property, \nif Landlord can do so at a reasonable cost by relocating or removing \nlandscaped area or driveways, and the construction of such additional parking \nspaces is permitted by all applicable Laws.\n\n     1.9.  RETAINED REAL ESTATE BROKERS:  The term \"Retained Real Estate \nBrokers\" shall mean LaSalle Partners Limited and J.R. Parrish, Inc.\n\n     1.10. ADDRESS FOR NOTICES:  The term \"Address for Notices\" shall mean \nthe following:\n\n           A.   In the case of Landlord, such term shall mean The Equitable \nLife Assurance Society of the United States, One Market Plaza, 1900 Steuart \nTower, San Francisco, California  94105, Attention:  Property Management \nDepartment.\n\n           B.   In the case of Tenant, such term shall mean (i) before the \nCommencement Date, its present address which is 881 Martin Avenue, Box 58123, \nSanta Clara, California  95052; and (ii) after the Commencement Date, the \naddress of the Premises which is 2830 De La Cruz Boulevard, Santa Clara, \nCalifornia  95050.\n\n     1.11.  LEASE:  The term \"Lease\" shall mean this printed lease, Exhibits \n\"A\" (site plan), \"B\" (Approved Plans for Interior Improvements), \"C\" \n(Interior Improvement Agreement), \"D\" (form of subordination agreement), all \nof which are attached hereto and incorporated herein by this reference.\n\n     1.12.  BUILDING C LEASE:  The term \"Building C Lease\" shall mean that \nlease dated as of June 1, 1989 between Landlord and Tenant, pursuant to which \nTenant leases from Landlord that certain building identified as Building C on \nthe site plan attached hereto as EXHIBIT \"A\" and which contains approximately \n86,785 square feet, the address of which is 2830 De La Cruz Boulevard, Santa \nClara, California.\n\n     1.13.  TENANT'S ALLOCATED SHARE:  The term \"Tenant's Allocated Share\" \nshall mean one hundred percent (100%).\n\n                                     -2-\n\n\n     1.14.  CONTINUING TENANT DEFAULT:  A \"Continuing Tenant Default\" shall \nbe deemed to exist when an \"Event of Tenant's Default\" (as defined in \nparagraph 13.1) has occurred, and the underlying default or breach by Tenant \nof its obligations which resulted in such Event of Tenant's Default has not \nbeen completely cured.\n\n     1.15.  ADDITIONAL DEFINITIONS:  As used in this Lease or any addendum or \namendment thereto, the following terms shall have the meanings set forth in \nparagraph 15.12: \"Agreed Interest Rate\", \"Common Area\", \"Law\", \"Leasehold \nImprovements\", \"Lender\", \"Private Restrictions\" and \"Trade Fixtures\".\n\n                                    ARTICLE 2.\n\n                              DEMISE AND ACCEPTANCE\n\n\n     2.1.   DEMISE OF PREMISES:  Landlord hereby leases to Tenant, and Tenant \nleases from Landlord, for the Lease Term upon the terms and conditions of \nthis Lease, the Premises together with (i) the non-exclusive right to use no \nmore than the number of Tenant's Allocated Parking Stalls within the Common \nArea (subject to the limitations set forth in paragraph 4.7), and (ii) the \nnon-exclusive right to use the Common Area for ingress to and egress from the \nPremises.  Tenant's lease of the Premises shall be subject to (i) all Laws, \n(ii) all Private Restrictions, easements, and other matters of public record, \nand (iii) the reasonable and non-discriminatory rules and regulations from \ntime to time promulgated by Landlord pursuant to paragraph 4.6.\n\n     2.2.   DELIVERY AND ACCEPTANCE OF POSSESSION:  Landlord shall deliver to \nTenant possession of the Premises on the Commencement Date in their presently \nexisting condition, broom clean.  Tenant shall accept possession of the \nPremises in its presently existing condition, \"as-is\" (except for latent \ndefects in the structural elements of the Premises), acknowledging that (i) \nTenant intends to do substantial renovation work and construct completely new \ninterior improvements pursuant to paragraph 2.3 hereof and the Interior \nImprovement Agreement attached as EXHIBIT \"C\", and (ii) Landlord is obligated \nto make certain repairs as set forth in the Interior Improvement Agreement.\n\n     2.3.   CONSTRUCTION OF INTERIOR IMPROVEMENTS:  Tenant shall construct \ncertain improvements for Tenant's use in the Premises pursuant to the terms \nof the Interior Improvement Agreement executed concurrently with this Lease \nby Landlord and Tenant and attached hereto as EXHIBIT \"C\".\n\n     2.4.   OPTIONS TO EXTEND LEASE TERM:  Landlord hereby grants to Tenant \ntwo (2) options (each referred to as the \"Option\") to extend the Lease Term \neach for a five (5) year period (the \"Option Term\"), on the following terms \nand conditions:\n\n            A.   Tenant must give Landlord notice in writing of its exercise \nof the Option before the later to occur of (i) the two hundred fortieth \n(240th) day before the date of the initial Lease Term (or then extended Lease \nTerm as the case may be) would end but for said exercise, or (ii) the seventh \n(7th) day following the establishment of the fair market rent for the \nPremises by appraisal pursuant to subparagraph 2.4F if such appraisal process \nis commenced pursuant to subparagraphs 2.4E and 2.4F.\n\n            B.   Tenant may not exercise the Option at any time that either \nof the following is true:  (i) a Continuing Tenant Default exists under this \nLease (unless caused by a subTenant of the  original Tenant under this Lease \nand such original Tenant is using reasonable efforts to cause such default to \nbe cured) or (ii) a Continuing Tenant Default exists under the Building A \nLease (unless caused by a subTenant or assignee of the original Tenant under \nthis Lease and such original Tenant is using reasonable efforts to cause such \ndefault to be cured) and the same person or entity is the owner of record of \nboth the Premises and the real property leased pursuant to the Building C \nLease.\n                                     -3-\n\n\n            C.   All terms and conditions of this Lease shall apply during \nthe Option Term, except that the Base Monthly Rent for the Option Term shall \nbe determined as provided in subparagraph 2.4D below.\n\n            D.   The Base Monthly Rent for the Option Term with respect to \nthe Premises shall be the ninety-five percent (95%) of the fair market rent \nfor the Premises for the Option Term on the terms contained in this Lease as \nof the commencement of the Option Term, determined pursuant to subparagraphs \n2.4E and 2.4F.  For purposes of this Lease, the term \"fair market rent for \nthe Premises\" shall mean the projected going market rent for the Premises as \nof the commencement of the Option Term in question, including a provision for \nperiodic increases of such rent during the Option Term (which increases shall \nbe established as part of such fair market rent), taking into account the \nvalue of all improvements in the Premises, regardless of whether made by \nLandlord or Tenant (except for those Leasehold Improvements that Tenant has \nthe right to remove at the expiration of the Lease Term).\n\n            E.   Tenant may not exercise the Option in question unless Tenant \nhas delivered to Landlord a written request (a \"Rent Quote Request\") that \nLandlord state in writing Landlord's opinion of the fair market rent for the \nPremises for the upcoming Option Term in question, which Rent Quote Request \nmay only be delivered and shall only be effective if delivered (i) no sooner \nthan fifteen (15) months before the expiration of the Lease Term, and (ii) no \nlater than thirteen (13) months prior to the expiration of the Lease Term.  \nAfter receipt of a Rent Quote Request and no later than twelve (12) months \nprior to the expiration of the Lease Term, Landlord shall deliver to Tenant a \nwritten statement setting forth Landlord's opinion of the fair market rent \nfor the Premises for the Option Term in question (a \"Landlord's Rent Quote\"). \n For a period of thirty (30) days following delivery to Tenant of Landlord's \nRent Quote (the \"Negotiation Period\"), Landlord and Tenant shall confer to \nattempt to reach agreement upon the fair market rent for the Premises for the \nOption Term in question.  If Landlord and Tenant are unable to reach \nagreement in writing within the Negotiation Period, for purposes of \nestablishing the Base Monthly Rent for the Option Term in question, the fair \nmarket rent for the Premises shall be deemed to be the amount stated in \nLandlord's Rent Quote unless Tenant delivers to Landlord during the \nNegotiation Period a written notice which states the following:  (i) Tenant \nrequires that the fair market rent for the Premises for the Option Term in \nquestion be established by the appraisal process described in subparagraph \n2.4F; and (ii) the name, address, and qualifications of the appraiser \nselected by Tenant for purposes of the appraisal process described in \nsubparagraph 2.4F (\"Tenant's Appraisal Demand\").  If Tenant so timely \ndelivers to Landlord a Tenant's Appraisal Demand, the Base Monthly Rent for \nthe Option Term in question shall be established based on the result of the \nappraisal process described in subparagraph 2.4F.\n\n            F.   If Tenant delivers to Landlord a Tenant's Appraisal Demand \nduring the Negotiation Period, then the fair market rent for the Premises \nshall be determined by three (3) real estate appraisers, all of whom shall be \nmembers of the American Institute of Real Estate Appraisers with not less \nthan five (5) years experience appraising real property (other than \nresidential or agricultural property) located in Santa Clara County, \nCalifornia, in accordance with the following procedures:\n\n                 (1)  One of the appraisers shall be the appraiser identified \nin Tenant's Appraisal Demand.  Within ten (10) days of receipt of Tenant's \nAppraisal Demand, Landlord shall select its appraiser and notify Tenant, in \nwriting, of the name, address and qualifications of an appraiser selected by \nit.  Failure by Landlord to select a qualified appraiser within said ten (10) \nday period shall be deemed a waiver of its right to select a second appraiser \non its own behalf and Tenant shall select a second appraiser on behalf of \nLandlord within five (5) days after the expiration of said ten (10) day \nperiod.  Within ten (10) days from the date the second appraiser shall have \nbeen appointed, the two (2) appraisers selected by the parties shall appoint \na third appraiser.  If the two appraisers fail to select a third qualified \nappraiser, the third appraiser shall be selected by the American Arbitration \nAssociation at the request of either party or, if there is then no American \nArbitration Association or if it refuses to perform this function, then at \nthe request of either Landlord or Tenant, the third appraiser shall be \nappointed by the then Presiding Judge of the Superior Court of the State of \nCalifornia for the County of Santa Clara.\n\n                 (2)  The three (3) appraisers so selected shall meet in San \nJose,\n\n                                     -4-\n\n\nCalifornia, not later than twenty (20) days following the selection of the \nthird appraiser.  At said meeting the appraisers shall attempt to determine \nthe fair market rent for the Premises for the Option Term in question.\n\n                 (3)  If the appraisers are unable to complete their \ndeterminations in one meeting, they may continue to consult at such times as \nthey deem necessary for a fifteen (15) day period from the date of their \nfirst meeting, in an attempt to have at least two (2) of them agree.  If, at \nthe initial meeting or at any time during said fifteen (15) day period, two \n(2) or more of the appraisers agree on the fair market rent for the Premises, \nsuch agreement shall be determinative and binding on the parties hereto, and \nthe agreeing appraisers shall, in simple letter form executed by the agreeing \nappraisers, forthwith notify both Landlord and Tenant of the amount set by \nsuch agreement.\n\n                 (4)  If two (2) or more appraisers do not agree within said \nfifteen (15) day period as set forth above, then each appraiser shall, within \nfive (5) days after the expiration of said fifteen (15) day period, submit \nhis independent appraisal in simple letter form to Landlord and Tenant \nstating his determination of the fair market rent for the Premises for the \nOption Term in question. Landlord and Tenant shall then determine the fair \nmarket rent for the Premises for the Option Term by determining the average \nof the fair market rent set by each of the appraisers; provided, however, if \nthe lowest appraisal is less than eighty-five percent (85%) of the middle \nappraisal then such lowest appraisal shall be disregarded, and\/or if the \nhighest appraisal is greater than one hundred fifteen percent (115%) of the \nmiddle appraisal then such highest appraisal shall be disregarded.  If any \nappraisal is disregarded, then the average shall be determined by computing \nthe average set by the other appraisals that have not been disregarded.  For \npurposes of determining the relative amount of the appraisals to implement \nthe provisions of this subparagraph requiring that an appraisal be \ndisregarded if it is too high or too low, the amount of an appraisal that \ncalls for periodic rent increases based upon an index (E.G., the Consumer \nPrice Index) shall be determined by assuming that such index will increase at \nthe same average annual rate during the option period in question that such \nindex increased on an average annual basis during the five (5) year period \npreceding the commencement of the option period in question.\n\n                (5)  Each party shall bear the fees and expenses of the \nappraisers selected by or for it, and the fees and expenses of the third \nappraiser shall be borne fifty percent (50%) by Landlord and fifty percent \n(50%) by Tenant.\n\n                                 ARTICLE 3.\n\n                                   RENT\n\n     3.1.   BASE MONTHLY RENT:  Commencing on the Rent Start Date and \ncontinuing thereafter throughout the initial Lease Term, Tenant shall pay to \nLandlord a monthly rent (which rent is referred to as the \"Base Monthly \nRent\"), which shall be the following:\n\n            A.   No Base Monthly Rent shall be payable for the period \nbeginning on the Rent Start Date and ending on the last day of the sixth \n(6th) month of the Lease Term.\n\n            B.   The Base Monthly Rent for the period beginning on the first \nday of the seventh (7th) month of the Lease Term and ending on the last day \nof the twenty-fourth (24th) month of the Lease Term is Forty Eight Thousand \nNinety Six Dollars ($48,096) (I.E., $0.70 per square foot per month).\n\n            C.   The Base Monthly Rent for the period beginning on the first \nday of the twenty-fifth (25th) month of the Lease Term and ending on the last \nday of the forty-eighth (48th) month of the Lease Term is Fifty Eight \nThousand Four Dollars ($58,402) (I.E., $0.85 per square foot per month).\n\n            D.   The Base Monthly Rent for the period beginning on the first \nday of the forty-ninth (49th) month of the Lease Term and ending on the last \nday of the seventy-second\n\n                                     -5-\n\n\n(72nd) month of the Lease Term is Sixty-One Thousand Eight Hundred \nThirty-Seven Dollars ($61,837.90) (I.E., $0.90 per square foot per month).\n\n            E.   The Base Monthly Rent for the period beginning on the first \nday of the seventy-third (73rd) month of the Lease Term and ending on the \nlast day of the one hundred twentieth (120th) month of the Lease Term is \nSixty-Five Thousand Two Hundred Seventy-Three Dollars ($65,273) (I.E., $0.95 \nper square foot per month).\n\n            F.   For purposes of applying the provisions of this paragraph \n3.1, the term \"month of the Lease Term\" shall mean that period which begins \non that day of the calendar month in question which corresponds to the Rent \nStart Date and which continues for thirty (30) or thirty-one (31) days until \nthe day of the next calendar month which precedes the day in that calendar \nmonth which corresponds to the Rent Start Date.  By way of example only, if \nit is assumed that the Rent Start Date is September 15, 1989, then for \npurposes of this paragraph 3.1 (i) the first month of the Lease Term would \ncommence September 15 and end on October 14, 1989; and (ii) the seventh (7th) \nmonth of the Lease Term would commence on March 15 and end on April 14, 1990.\n\n     3.2.   ADDITIONAL RENT:  Commencing on the Rent Start Date and \ncontinuing thereafter throughout the Lease Term, Tenant shall pay, as \nadditional rent (the \"Additional Rent\"), (i) Tenant's share of Common \nOperating Expenses as required by paragraph 6.3, (ii) Tenant's share of the \nReal Property Taxes as required by paragraph 8.2, (iii) Landlord's share of \nthe net consideration received by Tenant upon certain assignments and \nsublettings as required by paragraph 14.1, (iv) any late charges or interest \ndue Landlord pursuant to paragraph 3.4, (v) Tenant's share of the amortized \ncost of certain additional improvements as provided in paragraph 5.4, and \n(vi) any other charges due Landlord pursuant to this Lease.\n\n     3.3.   PAYMENT OF RENT:  All rent required to be paid in monthly \ninstallments shall be paid in advance on the first day of each calendar month \nduring the Lease Term.  All rent shall be paid in lawful money of the United \nStates, without any abatement, deduction or offset whatsoever (except as \npermitted by paragraphs 11.4 and 12.2), and without any prior demand \ntherefor, to Landlord at its address set forth above or at such other place \nas Landlord may designate from time to time.  Tenant's obligation to pay rent \nshall be prorated as of the Rent Start Date and at expiration or earlier \ntermination of the Lease Term such that Tenant shall not be required to pay \nBase Monthly Rent or Additional Rent for any period preceding the Rent Start \nDate or following the expiration or earlier termination of the Lease Term \n(except in the case of a termination of this Lease as a result of an Event of \nTenant's Default).\n\n     3.4.   LATE CHARGE AND INTEREST ON RENT IN DEFAULT:  Tenant acknowledges \nthat the late payment by Tenant of any monthly installment of Base Monthly \nRent or any Additional Rent will cause Landlord to incur certain costs and \nexpenses not contemplated under this Lease, the exact amount of which are \nextremely difficult or impractical to fix.  Such costs and expenses will \ninclude, without limitation, administration and collection costs and \nprocessing and accounting expenses.  Therefore, if any such Base Monthly Rent \nor Additional Rent is not received by Landlord from Tenant within five (5) \ndays after Landlord delivers written notice to Tenant that such amount is \ndelinquent, Tenant shall immediately pay to Landlord a late charge equal to \nfive percent (5%) of such delinquent rent.  Landlord and Tenant agree that \nthis late charge represents a reasonable estimate of such costs and expenses \nand is fair compensation to Landlord for its loss suffered by Tenant's \nfailure to make timely payment.  In no event shall this provision for a late \ncharge be deemed to grant to Tenant a grace period or extension of time \nwithin which to pay any rent or prevent Landlord from exercising any right or \nremedy available to Landlord upon Tenant's failure to pay any rent due under \nthis Lease in a timely fashion, including the right to terminate this Lease.  \nIf any rent remains delinquent for a period in excess of thirty (30) days \nafter Landlord delivers written notice to Tenant that such amount is \ndelinquent, in addition to such late charge, Tenant shall pay to Landlord \ninterest on any rent that is not paid when due at the Agreed Interest Rate \nfollowing the date such amount became due until paid.\n\n                                     -6-\n\n\n                                 ARTICLE 4.\n\n                              USE OF PREMISES\n\n     4.1.   LIMITATION ON TYPE:  Tenant shall use the Premises solely for the \nPermitted Use (as described in paragraph 1.6).  Tenant shall not do or permit \nanything to be done in or about the Premises or Common Area which will (i) \ninterfere with the rights of other occupants of the Property, (ii) cause \nstructural damage to the Premises and Tenant fails to promptly commence and \ndiligently pursue to completion the repair of such damage, or (iii) cause \ndamage to any part of the Premises or Property except to the extent \nreasonably necessary for the installation of Tenant's equipment and trade \nfixtures and Tenant fails to promptly commence and diligently pursue to \ncompletion the repair of such damage.  Tenant shall not operate any equipment \nwithin the Premises which will (i) injure, vibrate or shake the Premises, \n(ii) overload existing electrical systems or other mechanical equipment \nservicing the Premises, or (iii) impair the efficient operation of the \nsprinkler system or the heating, ventilating or air conditioning (\"HVAC\") \nequipment servicing the Premises, or (iv) damage, overload or corrode the \nsanitary sewer system.  Tenant shall not attach, hang or suspend anything \nfrom the ceiling, roof, walls or columns of the Premises or set any load on \nthe floor in excess of approved structural limits as defined by Landlord's \narchitect.  Any dust, fumes, or waste products generated by Tenant's use of \nthe Premises shall be contained and disposed so that they do not (i) create a \nfire or health hazard, (ii) damage the Premises, or (iii) interfere with the \nbusinesses of other Tenants of the Property.  All noise or odors generated by \nTenant's use of the Premises shall be contained or muffled so that they do \nnot interfere with the businesses of other Tenants of the Property. Tenant \nshall not (i) change the exterior of the Premises (subject to Tenant's right \nto install signs pursuant to paragraph 4.5), or (ii) install any equipment or \nantennas on or make any penetrations of the exterior or roof of the Premises \nwithout the prior written consent of Landlord.  Tenant shall not commit nor \npermit to be committed any waste in or about the Premises, and Tenant shall \nkeep the Premises in a neat, clean, attractive and orderly condition, free of \nany objectionable noises, odors, dust or nuisances which may disturb the \nquiet enjoyment of other Tenants or occupants of the Property.  \nNotwithstanding the foregoing restrictions, the parties agree as follows:\n\n            A.   Tenant may bring military fighting vehicles onto the first \nfloor of the Premises so long as (i) Tenant puts into place such reinforcing \nas is reasonably necessary to upgrade the floor load capacity so that it will \naccept such fighting vehicles; and (ii) Tenant repairs any damage to the \nPremises caused by the entry of such vehicles.\n\n            B.   Tenant may install antennas, radio \"dishes\" or other \nelectronic equipment reasonably necessary for the conduct of Tenant's \nbusiness upon the roof of the Premises so long as (i) such installations are \ndone in compliance with all Laws and Private Restrictions; (ii) such \ninstallations are accomplished in a manner which does not compromise the \nwatertight integrity of the roof; (iii) all damage to the Premises caused by \nsuch installation is repaired by Tenant; and (iv) any such equipment is \nproperly and effectively screened from view in a manner reasonably acceptable \nto Landlord.\n\n            C.   In the event Tenant desires to operate equipment within the \nPremises that will or may overload existing mechanical, electrical, or other \nsystems, Tenant may do so only if it first installs, at its sole cost, all \nnecessary modifications, repairs or upgrades of existing systems so that such \nequipment may be operated without overloading such systems as so modified by \nTenant.\n\n     4.2.   COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS:  Tenant shall not \nuse or permit any person to use the Premises in any manner which violates any \nLaws or Private Restrictions.  Tenant shall abide by and promptly observe and \ncomply with all Laws and Private Restrictions and shall indemnify and hold \nLandlord harmless from any liability resulting from Tenant's failure to do so.\n\n     4.3.   INSURANCE REQUIREMENTS:  Tenant shall not use or permit any \nperson to use the Premises or Common Area in any manner which will cause a \ncancellation of any insurance policy covering the Premises.  Tenant shall not \nsell, or permit to be kept, used, or sold in or about\n\n                                     -7-\n\n\nthe Premises any article which may be prohibited by the standard form of fire \ninsurance policy; provided, however, that Tenant may bring military fighting \nvehicles onto the first floor of the Premises as permitted pursuant to \nsubparagraph 4.1A.  Tenant shall comply with all reasonable requirements of \nany insurance company, insurance underwriter, or Board of Fire Underwriters \nwhich are necessary to maintain, at reasonable rates, the insurance coverage \ncarried by Landlord pursuant to this Lease.\n\n     4.4.   OUTSIDE AREAS:  No materials, supplies, storage tanks or \ncontainers, equipment, finished products or semi-finished products, raw \nmaterials, inoperable vehicles or articles of any nature shall be stored upon \nor permitted to remain outside of the Premises except in fully fenced and \nscreened areas outside the Premises which have been designed for such purpose \nand have been approved in writing by Landlord for such use by Tenant; \nprovided, however, that Tenant may bring military fighting vehicles onto the \nfirst floor of the Premises as permitted pursuant to subparagraph 4.1A.\n\n     4.5.   SIGNS:  Tenant shall not place on any portion of the Premises or \nthe Property any sign, placard, lettering in or on windows, banner, displays \nor other advertising or communicative material which is visible from the \nexterior of the Premises without the prior written approval of Landlord. All \nsuch approved signs shall strictly conform to all Laws and Private \nRestrictions and shall be installed at the expense of Tenant.  If Landlord so \nelects, Tenant shall, at the expiration or sooner termination of this Lease, \nremove all signs installed by it and repair any damage caused by such \nremoval. Tenant shall at all times maintain such signs in good condition and \nrepair. Upon Tenant's written request and at Tenant's cost and expense, \nLandlord shall remove both of the Airport Technology Park monument signs \nlocated on De La Cruz Boulevard.  Subject to Landlord's prior written \napproval of Tenant's specific design plan, (i) Tenant shall have the right to \ninstall a monument sign at the entrance to the Premises, and at the two \nentrances to Airport Technology Park, and (ii) Tenant shall have the right to \ninstall signs on the exterior of the Premises.  Approved signs installed by \nTenant may be illuminated in compliance with the provisions of applicable \nlaws and Private Restrictions.\n\n     4.6.   RULES AND REGULATIONS:  Landlord may from time to time promulgate \nreasonable and nondiscriminatory rules and regulations applicable to all \noccupants of the Property for the care and orderly management of the Property \nand the safety of its Tenants and invitees.  Such rules and regulations shall \nbe binding upon Tenant upon delivery of a copy thereof to Tenant, and Tenant \nagrees to abide by such rules and regulations.  If there is a conflict \nbetween the rules and regulations and any of the provisions of this Lease, \nthe provisions of this Lease shall prevail.  Landlord shall not be \nresponsible for the violation by any other Tenant of the Property of any such \nrules and regulations.\n\n     4.7.   PARKING:  Tenant is allocated and shall have the non-exclusive \nright to use (without charge in addition to the Base Monthly Rent) no more \nthan the number of parking spaces contained within the Property described in \nparagraph 2.1 for its use and the use of its employees and invitees, the \nlocation of which may be designated from time to time by Landlord but shall \nbe on the Property and within reasonable proximity to the Premises.  Tenant \nshall not at any time use or permit its employees or invitees to use more \nparking spaces than the number so allocated to Tenant or to park or permit \nthe parking of its vehicles or the vehicles of others in any portion of the \nProperty not designated by Landlord as a non-exclusive parking area.  \nLandlord shall not oversubscribe the parking within the Property, and shall \nassure that the total number of spaces committed to the non-exclusive use of \nall Tenants of the Property shall not exceed the total number of spaces \nwithin the Common Area.  Of the parking spaces allotted to Tenant pursuant to \nparagraph 2.1, Tenant shall have the right to designate a reasonable number \nof such spaces as reserved spaces for its executives, which shall not exceed \nten percent (10%) of the total of spaces and which shall be in immediate \nproximity to the Premises.  In the event Tenant elects to install a patio as \nset forth in subparagraph 5.6A, the number of parking spaces allocated to \nTenant shall be reduced based upon the square footage of said patio, which at \nthe time this Lease is executed is anticipated to be a reduction in eight (8) \nparking spaces.  If Landlord grants to any other Tenant the exclusive right \nto use any particular parking space(s), neither Tenant nor its employees or \ninvitees shall use such spaces.  Within ten (10) business days after written \nrequest therefor from Landlord, Tenant shall furnish Landlord with a list of \nits and its employees vehicle license numbers and Tenant shall thereafter \nnotify Landlord of any change in such list within five\n\n                                     -8-\n\n\n(5) days after each such change occurs.  Tenant shall have the right, at \nTenant's option, to provide its employees with stickers or other \nidentification markers or tags to be affixed to or on the employees' \nautomobiles or other vehicles, evidencing the right of such employees to use \nthe parking area.  Such stickers shall be subject to prior review and \napproval by Landlord, which shall not be unreasonably withheld or delayed.  \nTenant shall furnish to Landlord a list of identifying numbers for the \nstickers distributed from time to time by Tenant to its employees.  If Tenant \nelects to use such stickers as provided herein, Tenant shall not be obligated \nto furnish Landlord with a list of vehicle license numbers for its employees, \nfor as long as Tenant maintains such sticker system of identification.  \nLandlord reserves the right, after having given Tenant reasonable notice, to \nhave any vehicles owned by Tenant or its employees or invitees utilizing \nparking spaces in excess of the parking spaces allowed for Tenant's use to be \ntowed away at Tenant's cost.  All trucks and delivery vehicles shall be (i) \nparked at the rear of the Premises, (ii) loaded and unloaded in a manner \nwhich does not interfere with the businesses of other occupants of the \nProperty, and (iii) permitted to remain on the Property only so long as is \nreasonably necessary to complete loading and unloading.  In the event \nLandlord elects or is required by any Law to limit or control parking in the \nProperty, whether by validation of parking tickets or any other method of \nassessment, Tenant agrees to participate in such validation or assessment \nprogram under such reasonable rules and regulations as are from time to time \nestablished by Landlord, so long as such participation does not result in any \nincrease in costs to Tenant.\n\n     4.8.   WINDOW COVERINGS:  To the extent Tenant elects to use window \ncoverings visible from the exterior of the Premises, Tenant shall use the \nsame window covering to cover all windows Tenant so elects to cover in the \nPremises to maintain a consistent and uniform exterior appearance.\n\n     4.9.   OUTSIDE SALES:  Tenant shall not conduct or permit to be \nconducted on any portion of the Common Area any sale of any kind, including \n(i) any public or private auction, fire sale, going-out-of-business sale, \ndistress sale or other liquidation sale, or (ii) any so-called \"flea market\", \nopen-air market or any other similar activity.  Notwithstanding the \nforegoing, Tenant shall be allowed to conduct occasional sales outside of the \nPremises on that part of the Common Area that is in close proximity to the \nPremises so long as each of the following conditions is satisfied with \nrespect to each such sale: (i) Landlord is given at least two (2) business \ndays prior written notice of the date of any such sale; (ii) such sale does \nnot violate any Laws; (iii) such sale is conducted in a manner that does not \ninterfere with the rights of other occupants of the Property; (iv) Tenant \nprovides all necessary security, cleans up all debris and repairs any damage \ncaused by such sale; and (v) the purpose of such sale is to permit employees \nof Tenant to purchase or to receive free of charge property of Tenant.\n\n                                 ARTICLE 5.\n\n                 TRADE FIXTURES AND LEASEHOLD IMPROVEMENTS\n\n     5.1.   TRADE FIXTURES:  Throughout the Lease Term, Tenant shall provide, \ninstall, and maintain in good condition all Trade Fixtures required in the \nconduct of its business in the Premises.  All Trade Fixtures shall remain \nTenant's property.\n\n     5.2.   LEASEHOLD IMPROVEMENTS:  The following provisions govern \nLeasehold Improvements constructed by Tenant:\n\n            A.   Tenant shall not construct any Leasehold Improvements or \notherwise alter the Premises without Landlord's prior approval if such action \nresults in the demolition, removal, or material alteration of existing \nImprovements (including partitions, wall and floor coverings, ceilings, \nlighting fixtures or other utility installations) and if the cost of such \nconstruction or alteration exceeds Fifteen Thousand Dollars ($15,000) per \nwork of improvement or if the cost of Leasehold Improvements done, under \nconstruction, or for which approval is sought during any calendar quarter \nexceeds Twenty-Five Thousand Dollars ($25,000).  With respect to any \nLeasehold Improvements which must be approved by Landlord pursuant to the \nimmediately\n\n                                     -9-\n\n\npreceding sentence, Tenant shall not commence construction of such Leasehold \nImprovements until Landlord shall have first approved the plans and \nspecifications therefor, which approval shall be deemed given if not denied \nin writing within ten (10) working days after Landlord shall have received \nTenant's request for such approval.  In no event shall Tenant make any \nalterations to the Premises which could significantly affect the structural \nintegrity or the exterior design of the Premises without Landlord's prior \napproval.\n\n            B.   All Leasehold Improvements requiring Landlord's approval \nshall be installed by Tenant in substantial compliance with the approved \nplans and specifications therefor.  All construction undertaken by Tenant \nshall be done in accordance with all Laws and in a good and workmanlike \nmanner using materials of good quality.  Tenant shall not commence \nconstruction of any Leasehold Improvements until (i) all required \ngovernmental approvals and pe-rmits shall have been obtained, (ii) all \nrequirements regarding insurance imposed by this Lease have been satisfied, \nand (iii) if reasonably requested by Landlord, Tenant shall have obtained \ncontingent liability and broad form builders risk insurance in an amount \nreasonably satisfactory to Landlord if there are any perils relating to the \nproposed construction not covered by insurance carried pursuant to Article 9. \n If Landlord so requests in writing with respect to Leasehold Improvements \nrequiring Landlord's prior approval, Tenant shall inform Landlord of Tenant's \nscheduled date for commencement of construction at least five (5) days prior \nto such date of commencement.\n\n            C.   At all times during the Lease Term, (i) Tenant shall \nmaintain all plans and change orders prepared in connection with the \nconstruction of any Leasehold Improvements which required a building permit \nor other governmental approval, and (ii) Tenant shall provide to Landlord \ncopies of such plans and change orders (and, to the extent Tenant causes such \nto be prepared for its own use, \"As-Built\" plans) at any time that Landlord \nrequests copies thereof.\n\n            D.   All Leasehold Improvements shall remain the property of \nTenant during the Lease Term.  Tenant shall have the right to remove only the \nfollowing kinds of Leasehold Improvements so long as it repairs all damage \ncaused by the installation thereof and returns the Premises to the condition \nexisting prior to the installation of such Leasehold Improvements:  (i) \nbuilt-in cabinets, file drawers and bookcases; (ii) computer room air \nconditioning; (iii) canteen equipment; (iv) office cubicle systems; and (v) \nornamental statues.  At the expiration or sooner termination of the Lease \nTerm, all Leasehold Improvements that Tenant does not remove shall be \nsurrendered to Landlord as a part of the realty and shall then become \nLandlord's property, and Landlord shall have no obligation to reimburse \nTenant for all or any portion of the value or cost thereof.  However, if \nLandlord so requires, at the expiration or earlier termination of the Lease \nTerm, Tenant shall remove any Leasehold Improvements designated for removal \nby Landlord and shall restore the Premises to the condition existing prior to \nthe installation of such Leasehold Improvements to the extent necessary to \nreturn the Premises to substantially the same condition that existed on the \ncompletion of the Interior Improvements constructed pursuant to EXHIBIT \"C\", \nordinary wear and tear excepted.  Notwithstanding the foregoing:\n\n                 (1)  Tenant shall only be required to remove Leasehold \nImprovements for which either of the following is true:  (i) such Leasehold \nImprovements were not approved in writing by Landlord; or (ii) at the time \napproval was given by Landlord, Landlord informed Tenant in writing that \nLandlord would require that such Leasehold Improvements be removed at the \ntermination of the Lease Term.\n\n                 (2)  Tenant may cause interior partitions to be moved, \nreconfigured, or removed altogether, or cause interior offices to be deleted \nor added, all without the obligation to restore such partitions or interior \noffices to any prior condition upon expiration or termination of the Lease.\n\n     5.3.   ALTERATIONS REQUIRED BY LAW:  Tenant shall make any alteration, \naddition or change of any sort, whether structural or otherwise, to the \nPremises that is required by any Law because of (i) a specific use or change \nof use made of the Premises by Tenant (which alteration, addition or change \nis not generally required to be made by owners or Tenants of other properties \nsimilar to the Premises), (ii) Tenant's application for any permit or \ngovernmental approval, or (iii) Tenant's construction or installation of any \nLeasehold Improvements or Trade Fixtures.\n\n                                     -10-\n\n\n     5.4.   LANDLORD'S IMPROVEMENTS:  All fixtures, improvements or equipment \nwhich are installed, constructed on or attached to the Property by Landlord \nat its expense shall become a part of the realty and belong to Landlord.  \nTenant shall pay additional rent in the event Landlord, in its sole \ndiscretion, elects to make any of the following kinds of capital improvements \nto the Property:  (i) capital improvements required to be constructed in \norder to comply with any Law not in effect or applicable to the Property as \nof the Commencement Date; (ii) modification of existing or construction of \nadditional capital improvements or building service equipment for the purpose \nof reducing the consumption of utility services or Common Operating Expenses \nof the Property; (iii) replacement of capital improvements or building \nservice equipment existing as of the Commencement Date when required because \nof normal wear and tear; and (iv) the amount of \"deductibles\" paid by \nLandlord for the restoration of any part of the Property that has been \ndamaged to the extent such \"deductible\" is not included within Common \nOperating Expenses.  With respect to any expenditure in excess of Fifty \nThousand Dollars ($50,000) for which Landlord seeks contribution pursuant to \nthis paragraph 5.4 from Tenant, prior to incurring such expense, Landlord \nshall notify Tenant of the nature and estimated amount of such expenditure \nand, if Tenant so requests, shall provide Tenant with such information upon \nwhich such cost estimate is based for Tenant's approval. The amount of \nadditional rent Tenant is to pay with respect to each such capital \nimprovement shall be determined as follows:\n\n                 A.   Tenant shall have the option to pay in cash an amount \nequal to Tenant's Allocated Share of all costs paid by Landlord to construct \nthe improvements in question fairly allocable to the Premises (including \nfinancing costs) in cash within thirty (30) days after the improvement has \nbeen substantially completed and Landlord has notified Tenant of the cost of \nsuch improvement and the amount of Tenant's required contribution.  If Tenant \ndoes not exercise such option to pay such amount in cash, then the provisions \nof subparagraph 5.4B shall apply.\n\n                 B.   All costs paid by Landlord to construct such \nimprovement (including financing costs) shall be amortized on a straight line \nbasis over the useful life of such improvement (determined in accordance with \ngenerally accepted accounting principles) with interest on the unamortized \nbalance at the then prevailing market rate Landlord would pay if it borrowed \nfunds to construct such improvement from an institutional lender, and \nLandlord shall inform Tenant of the monthly amortization payment required to \nso amortize such costs, and shall also provide Tenant with the information \nupon which such determination is made. As additional rent, Tenant shall pay \nan amount equal to Tenant's Allocated Share of that portion of such monthly \namortization payment fairly allocable to the Premises (as reasonably \ndetermined by Landlord) for each month after such improvement is completed \nuntil the first to occur of (i) the expiration of the Lease Term (as the same \nmay be extended), or (ii) the end of the term over which such costs were \namortized, which amount shall be due at the same time the Base Monthly Rent \nis due.\n\n                 C.   Notwithstanding anything contained in this paragraph \n5.4, the additional rent Tenant is to pay with respect to any modification of \nexisting or construction of additional capital improvements or building \nservice equipment for the purpose of reducing the consumption of utility \nexpenses or Common Operating Expenses of the Property shall not for any \nperiod exceed the actual amount of savings in Additional Rent realized by \nTenant as a result of such modification or construction.\n\n     5.5.   LIENS:  Tenant shall keep the Premises and the Property free from \nany liens and shall pay when due all bills arising out of any work performed, \nmaterials furnished, or obligations incurred by Tenant, its agents, employees \nor contractors relating to the Premises.  If any claim of lien is recorded, \nTenant shall bond against or discharge the same within thirty (30) days after \nthe same has been recorded against the Premises and\/or the Property. Should \nany lien be filed against the Premises or any action commenced affecting \ntitle to the Premises, the party receiving notice of such lien or action \nshall immediately give the other party written notice thereof.\n\n     5.6.   MODIFICATIONS TO THE PREMISES:  Subject to Landlord's prior \nwritten approval, and the provisions of paragraphs 5.2 and 5.3 hereof, Tenant \nshall have the right to:\n\n            A.   Modify the parking area behind the Premises, which area is \nhighlighted on the attached EXHIBIT \"A\", to construct a patio;\n\n                                     -11-\n\n\n            B.   Install a datalink approximately twenty (20) inches wide \nbetween the Premises and Building A;\n\n            C.   Install up to a total of four (4) flagpoles allocated \nbetween the front of the Premises and the front of the premises leased \npursuant to the Building A Lease; and\n\n             D.   Fill in existing loading docks so long as (i) existing \ndrainage systems serving such loading docks are appropriately capped; (ii) \nsuch fill is accomplished in a manner that the loading docks may be restored \nto their condition existing as of the Commencement Date upon expiration of \nthe Lease Term, and (iii) Tenant agrees to restore such loading docks to the \ncondition existing as of the Commencement Date upon the expiration of the \nLease Term.\n\n             E.   Trim or relocate on the Property to a new location approved \nby Landlord any trees, shrubs or other landscaping that obscures any sign \ninstalled on the Property by Tenant.\n\n                              ARTICLE 6.\n\n                       REPAIR AND MAINTENANCE\n\n     6.1.   TENANT'S OBLIGATION TO MAINTAIN:  Except as otherwise provided in \nparagraph 6.2 and in Article 11 regarding the restoration of damage caused by \nfire and other perils, Tenant shall, at all times during the Lease Term, \nclean, keep, and maintain in good order, condition, and repair the Premises \nand every part thereof, through regular inspections and servicing, including, \nbut not limited to, (i) all plumbing and sewage facilities (including all \nsinks, toilets, faucets and drains), and all ducts, pipes, vents or other \nparts of the HVAC or plumbing system, (ii) all fixtures, interior walls, \nfloors, carpets and ceilings, (iii) all windows, doors, entrances, plate \nglass, showcases and skylights (including cleaning both interior and exterior \nsurfaces), (iv) all electrical facilities and all HVAC equipment and other \nmechanical systems (including all lighting fixtures, lamps, bulbs, tubes, \nfans, vents, exhaust equipment and systems), (v) any automatic fire \nextinguisher equipment in the Premises, and (vi) the roof membrane (including \nany necessary resurfacing or patching to preserve the membrane or to repair \nleaks except that Tenant shall not be required to make any repair to the \nextent such repair is required because of Landlord's repair or maintenance of \nthe structural roof system).  Tenant shall replace any damaged or broken \nglass in the Premises (including all interior and exterior doors and windows) \nwith glass of the same kind, size and quality.  Tenant shall repair any \ndamage to the Premises (including exterior doors and windows) caused by \nvandalism or any unauthorized entry.  Tenant shall maintain continuously \nthroughout the Lease Term a service contract for the maintenance of all HVAC \nequipment serving the Premises with a licensed HVAC repair and maintenance \ncontractor, which contract provides for the periodic inspection and servicing \nof the HVAC equipment at least once every sixty (60) days during the Lease \nTerm.  Tenant shall also maintain continuously throughout the Lease Term a \nservice contract for the washing of all windows (both interior and exterior \nsurfaces) in the Premises with a contractor, which contract provides for the \nperiodic washing of all such windows on such basis as shall keep the exterior \nappearance of the Premises in first class condition, but no less frequently \nthan once every calendar year.  If and when Landlord so requests in writing, \nTenant shall furnish Landlord with copies of all such service contracts.  All \nrepairs and replacements required of Tenant shall be promptly made with \nmaterials of good quality.  If the work affects the structural parts of the \nPremises or if the estimated cost of any item of repair or replacement is in \nexcess of Fifteen Thousand Dollars ($15,000), then Tenant shall first obtain \nLandlord's written approval of the scope of work, plans therefor, and \nmaterials to be used, except in the case of emergency in which event Tenant \nshall within a reasonable period of time after performing the work, notify \nLandlord of the scope of the work performed and the materials used, and shall \nfurnish Landlord with the plans therefor.\n\n     6.2.   LANDLORD'S OBLIGATION TO MAINTAIN:  Landlord, at its cost\nwithout right of reimbursement from Tenant, shall be responsible for the\nmaintenance, repair, and replacement of the structural parts of the Premises\n(I.E., foundation, first and second story floor slab and second story floor\ndeck, load-bearing walls, and structural roof system, but excluding roof\nmembrane) except to the extent that (i) the same is necessitated by the wrongful\nor negligent act or omission\n\n                                     -12-\n\n\nof Tenant, its subTenants, or their respective agents, employees, \ncontractors, or invitees, or (ii) reimbursement is permitted pursuant to \nparagraph 5.4 hereof.  Landlord at its cost without right of reimbursement \nfrom Tenant, shall repair damage to interior improvements and Leasehold \nImprovements that have been approved by Landlord pursuant to the terms \nhereof, or damage to the roof membrane of the Premises if caused by the \nmaintenance work required to be performed by Landlord pursuant to the \nprovisions of this paragraph.  Landlord shall repair, maintain, operate and \nreplace when necessary the Common Area, with such right of reimbursement from \nTenant as is specified in paragraphs 5.4 and 6.3.  The parties acknowledge \nthat the air-conditioning units located on the roof of the Premises were \ninstalled when the Building was constructed and subsequently have not \noperated.  Landlord agrees to make any repairs necessary to put such units in \ngood operating condition, if within the six month period following the \nCommencement Date, Tenant notifies Landlord in writing of the need for such \nrepairs.  Landlord shall not be responsible for repairs required by an \naccident, fire or other peril except as otherwise required by Article 11, or \nfor damage caused to any part of the Property by any act, negligence or \nomission of Tenant or its agents, contractors, employees or invitees.  \nLandlord may engage contractors of its choice to perform the obligations \nrequired of it by this Article, and the necessity of any expenditure to \nperform such obligations shall be at the sole discretion of Landlord.\n\n     6.3.   TENANT'S OBLIGATION TO REIMBURSE:  As additional rent, commencing \non the Rent Start Date and continuing throughout the remainder of the Lease \nTerm, Tenant shall pay Tenant's Allocated Share of all Common Operating \nExpenses fairly allocable to the Premises including (i) all Common Operating \nExpenses paid with respect to the maintenance, repair, replacement and use of \nthe Premises and (ii) a proportionate share (based on the Premises Gross \nLeasable Area as a percentage of the Property Gross Leasable Area) of all \nCommon Area Expenses which relate to the Property in general and are not \nfairly allocable to any one building on the Property.  Landlord agrees that \nit shall not recover from all Tenants of the Property more than one hundred \npercent (100%) of the actual Common Operating Expenses incurred by Landlord \nfor the period in question.  As provided in paragraph 3.3, Tenant's \nobligation to pay Tenant's Allocated Share of Common Operating Expenses \nfairly allocable to the Premises shall be prorated as of the Rent Start Date \nand at the expiration or earlier termination of the Lease Term, and if Tenant \nhas paid any amount on account of Common Operating Expenses relating to a \nperiod that is not within the Lease Term (E.G., prepayment of insurance \npremiums for one year), such amount shall be reimbursed to Tenant in \nconnection with such proration.  Payment shall be made by whichever of the \nfollowing methods is from time to time designated by Landlord, and Landlord \nmay change the method of payment at any time so long as (i) Landlord gives \nTenant at least sixty (60) days prior written notice, and (ii) the method is \nnot changed more than once in any calendar year.  Tenant shall pay such share \nof the actual Common Operating Expenses incurred or paid by Landlord but not \ntheretofore billed to Tenant within thirty (30) days after receipt of a \nwritten bill therefor from Landlord, on such periodic basis as Landlord shall \ndesignate, but in no event more frequently than once a month. Alternatively, \n(i) Landlord shall deliver to Tenant Landlord's reasonable estimate of the \nCommon Operating Expenses it anticipates will be paid or incurred for the \ncalendar year in question, (ii) during such calendar year, Tenant shall pay \nsuch share of the estimated Common Operating Expenses in advance in monthly \ninstallments as required by Landlord due with the installments of Base \nMonthly Rent, and (iii) within ninety (90) days after the end of each \ncalendar year, Landlord shall furnish to Tenant a statement in reasonable \ndetail of the actual Common Operating Expenses paid or incurred by Landlord \nduring the just ending calendar year and thereupon there shall be an \nadjustment between Landlord and Tenant, with payment to Landlord or credit by \nLandlord against the next installment of Base Monthly Rent, as the case may \nrequire, within thirty (30) days after delivery by Landlord to Tenant of said \nstatement, so that Landlord shall receive the entire amount of Tenant's share \nof all Common Operating Expenses for such calendar year and no more.  Tenant \nand its agents (including accountants) shall have the right at its expense, \nexercisable upon reasonable prior written notice to Landlord, to inspect at \nLandlord's office during normal business hours Landlord's books and records \nas they relate to Common Operating Expenses.  Such inspection must be made \nwithin one hundred eighty (180) days of Tenant's receipt of Landlord's annual \nstatement for the same, and shall be limited to verification of the charges \ncontained in such statement.  Tenant may not withhold payment of such bill \npending completion of such inspection.\n\n                                     -13-\n\n\n     6.4.   COMMON OPERATING EXPENSES DEFINED:  The term \"Common Operating \nExpenses\" shall mean the sum of the following:\n\n            A.   All costs and expenses paid or incurred by Landlord in doing \nthe following (including payments to independent contractors providing \nservices related to the performance of the following):  (i) maintaining, \ncleaning, and repairing the exterior surfaces (including painting of exterior \nsurfaces of buildings not more than once every 5 years) of all buildings \nlocated on the Property; (ii) maintenance of the liability, fire and property \ndamage insurance covering the Property carried by Landlord pursuant to \nparagraph 9.2 (including the payment of commercially reasonable \"deductibles\" \nand the prepayment of premiums for coverage of up to one year); (iii) \nmaintaining, repairing, operating and replacing when necessary HVAC \nequipment, utility facilities and other building service equipment; (iv) \nproviding utilities to the Common Area (including lighting, trash removal and \nwater for landscaping irrigation); (v) complying with all applicable Laws and \nPrivate Restrictions; (vi) operating, maintaining, repairing, cleaning, \npainting, restripping and resurfacing the Common Area; (vii) replacement or \ninstallation of lighting fixtures, directional or other signs and signals, \nirrigation systems, trees, shrubs, ground cover and other plant materials, \nand all landscaping in the Common Area; and (viii) depreciation and financing \ncosts on maintenance and operating machinery and equipment (if owned) and \nrental paid for such machinery and equipment (if rented);\n\n            B.   All additional costs and expenses incurred by Landlord with \nrespect to the operation, protection, maintenance, repair and replacement of \nthe Property which pursuant to generally accepted accounting principles would \nbe considered a current expense and not a capital expenditure;\n\n            C.   That portion of all compensation (including benefits and \npremiums for workers' compensation and other insurance) paid to or on behalf \nof employees of Landlord but only to the extent they are involved in the \nperformance of the work described by subparagraphs A and B above and that is \nfairly allocable to the Property;\n\n            D.   An additional amount equal to a commercially reasonable and \ncompetitive management fee that would be charged by an independent third \nparty property manager for the management of the Property (except that \nTenant's Allocated Share of such management fee for any period shall not \nexceed two percent (2%) of the Base Monthly Rent and Additional Rent payable \nby Tenant for the same period); and\n\n            E.   Notwithstanding anything contained herein, the term \"Common \nOperating Expenses\" shall not include any of the following:  (i) mortgage \nprinciple payments; (ii) ground rent and other payments made pursuant to any \nground lease affecting the Property; (iii) the cost of refinancing any loan \nsecured by the Property; (iv) interest and penalties imposed against Landlord \nfor late payments by Landlord; (v) legal fees incurred by Landlord in \nconnection with the negotiation or enforcement of, or litigation in \nconnection with, any lease affecting the Property; (vi) the cost of any \npaintings, sculptures, or other art objects installed on the Property; (vii) \nany costs reimbursed to Landlord by insurance or other third party payments \nthat are not reimbursements by Tenants for their share of Common Operating \nExpenses; (viii) brokerage commissions or other costs related to the leasing \nof space within the Property; (ix) the cost of any Tenant improvements \ninstalled for the exclusive use of any other Tenant of the Property.\n\n     6.5.   CONTROL OF COMMON AREA:  Landlord shall at all times have \nexclusive control of the Common Area.  Landlord shall have the right, without \nthe same constituting an actual or constructive eviction and without \nentitling Tenant to any abatement of rent, to:  (i) close any part of the \nCommon Area to the minimum extent reasonably necessary in the reasonable \nopinion of Landlord's counsel to prevent a dedication thereof or the accrual \nof any prescriptive rights therein; (ii) temporarily close the Common Area to \nperform maintenance or for any other reason deemed sufficient by Landlord; \n(iii) designate other property outside the boundaries of the Property to \nbecome part of the Property; (iv) construct multi-deck parking structures in \nany part of the Common Area; (v) change the shape, size, location, number and \nextent of improvements on the Common Area; (vi) select a third party to \nmaintain and operate any of the Common Area at any time Landlord determines \nthat the best interests of the Property will be served by having the Common \nArea maintained and operated by that third party so long as the fees and \ncharges of such third party are reasonable and competitive with the fees of \nothers in the marketplace\n\n                                     -14-\n\n\nproviding the same services; (vii) make changes to the Common Area including, \nwithout limitation, changes in the location of driveways, parking spaces, \nparking areas, sidewalks or the direction of the flow of traffic and the site \nof the Common Area; and\/or (viii) voluntarily change the address of the \nProperty.  Landlord agrees not to change the name of Airport Technology Park \nwithout the prior consent of Tenant. The use of the Common Area shall be \nsubject to such reasonable regulation and changes therein as Landlord shall \nmake from time to time.  Landlord shall not exercise its rights to control \nthe Common Area in a manner that would materially interfere with Tenant's use \nof the Premises without first obtaining Tenant's approval.  Tenant shall keep \nthe Common Area free and clear of all obstructions created or permitted by \nTenant.  If in the opinion of Landlord unauthorized persons are using any of \nthe Common Area by reason of the presence of Tenant in the Premises, Tenant, \nupon demand of Landlord, shall restrain such unauthorized use by appropriate \nproceedings.  Nothing herein shall affect the right of Landlord at any time \nto remove such unauthorized person from the Common Area nor to prohibit the \nuse of the Common Area by unauthorized persons.  In exercising any such \nrights described in this paragraph 6.5 regarding the Common Area, Landlord \nshall make a reasonable effort to minimize any disruption to Tenant's \nbusiness.\n\n     6.6.   TENANT'S NEGLIGENCE:  Anything in this Lease to the contrary \nnotwithstanding, Tenant shall pay for all damage to the Premises or the \nProperty caused by the negligent act or omission of Tenant, its employees, \ncontractors, or invitees, or by the failure of Tenant to discharge promptly \nits obligations under this Lease or to comply with the terms of this Lease, \nbut only to the extent such damage is not covered by insurance proceeds \nactually recovered by Landlord.  Tenant shall make payment within thirty (30) \ndays after demand therefor by Landlord.\n\n                              ARTICLE 7.\n\n                     WASTE DISPOSAL AND UTILITIES\n\n     7.1.   WASTE DISPOSAL:  Tenant shall store its waste either inside the \nPremises or within outside trash enclosures that are (i) fully fenced and \nscreened in compliance with all Private Restrictions, (ii) designed for such \npurpose to be used either exclusively by Tenant or in common with other \noccupants of the Property, as designated by Landlord, and (iii) first \napproved by Landlord.  All entrances to such outside trash enclosures shall \nbe kept closed, and waste shall be stored in such manner as not to be visible \nfrom the exterior of such outside enclosures.  Tenant shall cause all of its \nwaste to be regularly removed from the Property at Tenant's sole cost.  \nTenant shall keep all fire corridors and mechanical equipment rooms in the \nPremises free and clear of all obstructions at all times.\n\n     7.2.   HAZARDOUS MATERIALS:  Landlord and Tenant agree as follows with \nrespect to the existence or use of Hazardous Materials on the Property:\n\n            A.   Landlord hereby makes the following representations to \nTenant, each of which is made to the best of Landlord's knowledge as of the \nCommencement Date:\n\n                  (1)  The soil and ground water on or under the Property \ndoes not contain Hazardous Materials in amounts which violate any Hazardous \nMaterials Laws to the extent that any governmental entity could require \neither Landlord or Tenant to take any remedial action or impose any penalties \nwith respect to such Hazardous Materials.\n\n                  (2)  During Landlord's period of ownership, no litigation \nor any administrative proceeding has been brought or threatened, nor any \nsettlements reached with any governmental or private party, concerning the \nactual or alleged presence of Hazardous Materials on or about the Property or \nany disposal, release or threatened release of Hazardous Materials in or \nabout the Property.\n\n                  (3)  During the time that Landlord has owned the Property, \nLandlord has received no notice of (i) any violation, or alleged violation, \nof any Hazardous Material Law that has not been corrected to the satisfaction \nof the appropriate authority, (ii) any pending claims relating to the \npresence of Hazardous Material on the Property, or (iii) any pending \ninvestigation\n\n                                     -15-\n\n\nby any governmental agency concerning the Property relating to Hazardous \nMaterials.\n\n                  (4)  The Property does not contain any (i) equipment \ncontaining PCBs, or (ii) underground storage tanks.\n\n            B.   Any handling, transportation, storage, treatment, disposal \nor use of Hazardous Materials by Tenant and Tenant's agents, employees, \ncontractors, invitees or subTenants after the Commencement Date in or about \nthe Property shall strictly comply with all applicable Hazardous Materials \nLaws.  Tenant shall indemnify, defend upon demand with counsel reasonably \nacceptable to Landlord, and hold harmless Landlord from and against any and \nall liabilities, losses, claims, damages, interest, penalties, fines, \nmonetary sanctions, attorneys' fees, experts' fees, court costs, remediation \ncosts, investigation costs, and other expenses which result from or arise in \nany manner whatsoever out of the use, storage, treatment, transportation, \nrelease, or disposal of Hazardous Materials on or about the Property by \nTenant or Tenant's agents, employees, contractors, invitees or subTenants \nafter the Commencement Date.\n\n            C.   If the presence of Hazardous Materials on the Property \ncaused or permitted by Tenant or Tenant's agents, employees, contractors, \ninvitees or subTenants after the Commencement Date results in contamination \nor deterioration of water or soil resulting in a level of contamination \ngreater than the levels established as acceptable by any governmental agency \nhaving jurisdiction over such contamination, then Tenant shall promptly take \nany and all action necessary to clean up such contamination if required by \nLaw or as a condition to the issuance or continuing effectiveness of any \ngovernmental approval which relates to the use of the Property or any part \nthereof.  Tenant shall further be solely responsible for, and shall defend, \nindemnify and hold Landlord and its agents harmless from and against, all \nclaims, costs and liabilities, including attorneys' fees and costs, arising \nout of or in connection with any removal, clean-up and restoration work and \nmaterials required hereunder to return the Property to its condition existing \nprior to the appearance of such Hazardous Materials.\n\n            D.   Landlord and Tenant shall each give written notice to the \nother as soon as reasonably practicable of (i) any communication received \nfrom any governmental authority concerning Hazardous Materials which relates \nto the Property, and (ii) any contamination of the Property by Hazardous \nMaterials which constitutes a violation of any Hazardous Materials Law.  \nLandlord and Tenant agree to keep such information confidential, except for \n(i) disclosures that are approved by the other party, (ii) disclosures \nrequired by Law or (iii) disclosures to any environmental consultant, lender, \npurchaser, prospective purchaser, attorneys for either Landlord or Tenant, or \nbrokers for either Landlord or Tenant, so long as an agreement of \nconfidentiality is obtained from a party to whom the disclosure is to be \nmade, and (iv) disclosures in connection with any litigation or \nadministrative proceeding in which either Landlord or Tenant is involved.  \nTenant and Tenant's agents, employees, contractors, invitees or subTenants \nshall not bring Hazardous Materials onto the Property without first obtaining \nthe written consent of Landlord; provided, however, Tenant may, without being \nrequired to obtain the prior written consent of Landlord, use at the Premises \nin small quantities office supplies, cleaning materials and other maintenance \nmaterials that are customarily used in business offices, even though such \nsupplies and materials may fall within the definition of Hazardous Materials. \n At any time during the Lease Term, Tenant shall, within five days after \nwritten request therefor received from Landlord, disclose in writing all \nHazardous Materials that are being used by Tenant on the Property, the nature \nof such use, and the manner of storage and disposal.\n\n            E.   Landlord may cause testing wells to be installed on the \nProperty, and may cause the ground water to be tested to detect the presence \nof Hazardous Material by the use of such tests as are then customarily used \nfor such purposes.  Any such installation of wells or tests shall be done in \na manner which minimizes the interference with Tenant's use of the Premises.  \nIf Tenant so requests, Landlord shall supply Tenant with copies of such test \nresults.  The cost of such tests and of the installation, maintenance, repair \nand replacement of such wells shall be paid by Tenant if such tests disclose \nthe existence of facts which give rise to liability of Tenant pursuant to its \nindemnity given in subparagraph 7.2B or 7.2C, and Tenant's liability is \nestablished in a judicial or administrative proceeding, or in an action for \ndeclaratory relief brought by Landlord.\n\n                                     -16-\n\n\n          F.   Landlord, at its sole cost, shall comply with all Hazardous \nMaterials Laws affecting the Property (without right of reimbursement from \nTenant) to the extent that (i) Landlord is legally obligated to do so by such \nLaws, and (ii) such compliance (or the cost of such compliance) is not made \nthe responsibility of Tenant pursuant to subparagraph 7.2B or subparagraph \n7.2C.  Landlord shall indemnify, defend upon demand with competent counsel, \nand hold harmless Tenant from and against any and all liability for response \ncosts imposed upon Tenant by any governmental agency pursuant to the Federal \nLaw known as \"CERCLA\" (more particularly identified in subparagraph 7.2G) and \nthe comparable California statute (commonly known as the \nCarpenter-Presley-Tanner Hazardous Substances Account Act, California Health \nand Safety Code Section 25300 et. seq.) that results from the presence of \nHazardous Materials on the Property not caused or contributed to by the use, \nstorage, treatment, release or disposal of Hazardous Materials on or about \nthe Property by Tenant, its subTenants, or their respective agents, \nemployees, contractors, or invitees.  Notwithstanding the foregoing, the \nindemnity given by Landlord in the immediately preceding sentence shall not \napply with respect to liability caused by any contamination of the Property \nby a Hazardous Material that is or has been used, stored, treated, released \nor disposed of on the Property by Tenant, its subTenants, or their respective \nagents, employees, contractors, or invitees unless Tenant can prove such \ncontamination was not caused or contributed to by any of such parties.\n\n          G.   As used herein, the term \"Hazardous Material,\" means any \nhazardous or toxic substance, material or waste which is or becomes regulated \nby any local governmental authority, the State of California or the United \nStates Government. The term \"Hazardous Material,\" includes, without \nlimitation, asbestos, PCBs, petroleum and petroleum products, and any \nmaterial or substance which is (i) listed under Article 9 or defined as \nhazardous or extremely hazardous pursuant to Article 11 of Title 22 of the \nCalifornia Administrative Code, Division 4, Chapter 20, (ii) defined as a \n\"hazardous waste\" pursuant to Section 1004 of the Federal Resource \nConservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. \nSection 6903), or (iii) defined as a \"hazardous substance\" pursuant to \nSection 101 of the Comprehensive Environmental Response, Compensation and \nLiability Act (\"CERCLA\"), 42 U.S.C. Section 9601 et seq.  (42 U.S.C. Section \n9601).  As used herein, the term \"Hazardous Material Law\" shall mean any \nstatute, law, ordinance, or regulation of any governmental body or agency \n(including the U.S. Environmental Protection Agency, the California Regional \nWater Quality Control Board, and the California Department of Health \nServices) which regulates the use, storage, release or disposal of any \nHazardous Material.\n\n          H.   The obligations of Landlord and Tenant under this paragraph \n7.2 shall survive the expiration or earlier termination of the Lease Term.  \nThe rights and obligations of Landlord and Tenant with respect to issues \nrelating to Hazardous Materials are exclusively established by this paragraph \n7.2.  In the event of any inconsistency between any other part of this Lease \nand this paragraph 7.2, the terms of this paragraph 7.2 shall control.\n\n     7.3  UTILITIES:  Tenant shall promptly pay, as the same become due,\nall charges for water, gas, electricity, telephone, sewer service, waste pick-up\nand any other utilities, materials or services furnished directly to or used by\nTenant on or about the Premises during the Lease Term, including, without\nlimitation, (i) meter, use and\/or connection fees, hook-up fees, standby fees,\nand (ii) penalties for discontinued or interrupted service.\n\n     7.4  COMPLIANCE WITH GOVERNMENTAL REGULATIONS:  Landlord and Tenant \nshall comply with all rules, regulations and requirements promulgated by \nnational, state or local governmental agencies or utility suppliers \nconcerning the use of utility services, including any rationing, limitation \nor other control.  Landlord may voluntarily cooperate in a reasonable manner \nwith the efforts of all governmental agencies or utility suppliers in \nreducing energy or other resource consumption.  Tenant shall not be entitled \nto terminate this Lease nor to any abatement in rent by reason of such \ncompliance or cooperation. Tenant agrees at all times to cooperate fully with \nLandlord and to abide by all rules, regulations and requirements which \nLandlord may prescribe in order to maximize the efficient operation of the \nHVAC system and all other utility systems.\n\n\n                                      -17-\n\n\n\n\n                                    ARTICLE 8.\n                                    ----------\n\n                               REAL PROPERTY TAXES\n\n\n     8.1.  REAL PROPERTY TAXES DEFINED:  The term \"Real Property Taxes\" as \nused herein shall mean (i) all taxes, assessments, levies, and other charges \nof any kind or nature whatsoever, general and special, foreseen and \nunforeseen (including all installments of principal and interest required to \npay any existing or future general or special assessments for public \nimprovements, services or benefits, and any increases resulting from \nreassessments or resulting from a change in ownership or any other cause), \nnow or hereafter imposed by any governmental or quasi-governmental authority \nor special district having the direct or indirect power to tax or levy \nassessments, which are levied or assessed against, or with respect to the \nvalue, occupancy or use of, all or any portion of the Property (as now \nconstructed or as may at any time hereafter be constructed, altered, or \notherwise changed) or Landlord's interest therein, the fixtures, equipment \nand other property of Landlord, real or personal, that are an integral part \nof and located on the Property, the gross receipts, income, or rentals from \nthe Property, or the use of parking areas, public utilities, or energy within \nthe Property, (ii) all charges, levies or fees imposed by reason of \nenvironmental regulation or other governmental control of the Property \n(excluding costs and expenses for which Landlord is responsible pursuant to \nsubparagraph 7.2F), and (iii) all costs and fees (including attorneys' fees) \nincurred by Landlord in contesting any Real Property Tax and in negotiating \nwith public authorities as to any Real Property Tax.  If at any time during \nthe Lease Term the method of taxation or assessment of the Property \nprevailing as of the Commencement Date shall be altered so that in lieu of or \nin addition to any Real Property Tax described above there shall be levied, \nassessed or imposed (whether by reason of a change in the method of taxation \nor assessment, creation of a new tax or charge, or any other cause) an \nalternate or additional tax or charge (i) on the value, use or occupancy of \nthe Property, (ii) on or measured by the gross receipts, income, or rentals \nfrom the Property, (iii) on Landlord's business of leasing the Property, or \n(iv) computed in any manner with respect to the operation of the Property, \nthen any such tax or charge, however designated, shall be included within the \nmeaning of the term \"Real Property Taxes\" for purposes of this Lease.  If any \nReal Property Tax is based upon property or rents unrelated to the Property, \nthen only that part of such Real Property Tax that is fairly allocable to the \nProperty shall be included within the meaning of the term \"Real Property \nTaxes\".  Notwithstanding the foregoing, the term \"Real Property Taxes\" shall \nnot include estate, inheritance, transfer, gift or franchise taxes of \nLandlord or the federal or state net income tax imposed on Landlord's income \nfrom all sources.\n\n     8.2. TENANT'S OBLIGATION TO REIMBURSE:  As Additional Rent, Tenant shall \npay to Landlord Tenant's Allocated Share of all Real Property Taxes which \nbecome due after the Rent Start Date and during the Lease Term which are \nfairly allocable to the Premises, which include (i) all Real Property Taxes \nassessed with respect to the value, use or occupancy of the Premises and the \nland beneath it, and (ii) a proportionate share (based on the Premises Gross \nLeasable Area as a percentage of the Property Gross Leasable Area) of all \nReal Property Taxes assessed with respect to the Common Area or with respect \nto the Property in general which are not fairly allocable to any one building \non the Property. Tenant shall pay its share of Real Property Taxes (i) within \nthirty (30) days after being billed for the same by Landlord, or (ii) no \nlater than ten (10) days before such Real Property Tax becomes delinquent, \nwhichever last occurs.  If requested by Tenant in writing within one year \nfrom receipt of a bill for Tenant's Allocated Share of Real Property Taxes, \nLandlord shall furnish Tenant with such evidence as is reasonably available \nto Landlord with respect to the amount of any Real Property Tax which is part \nof such bill.  Tenant may not withhold payment of such bill pending receipt \nand\/or review of such evidence. Upon Landlord's election or if any Lender \nrequires Landlord to impound Real Property Taxes on a periodic basis during \nthe Lease Term, then Tenant, on notice from Landlord indicating this \nrequirement, shall pay a sum of money toward its liability under this Article \nto Landlord on the same periodic basis in accordance with the Lender's \nrequirements (if any).  Landlord shall impound the Real Property Tax payments \nreceived from Tenant in accordance with the requirements of the Lender (if \nany).  If any assessments are levied against the Property, Landlord may elect \neither to pay the assessment in full or to allow the assessment to go to \nbond.  If Landlord pays the assessment in full, Tenant shall pay to Landlord \neach time payment of Real Property Taxes is made a sum equal to that which \nwould have been payable (as both principal \n\n\n                                      -18-\n\n\n\n\nand interest) had Landlord allowed the assessment to go to bond.  \nNotwithstanding anything to the contrary contained in paragraphs 8.1 and 8.2, \nif there is an increase in Real Property Taxes resulting from a \"change in \nownership\" (as that term is defined in California Revenue and Taxation Code \nSection 60, et. seq.) which occurs prior to the fourth (4th) anniversary of \nthe Commencement Date, then Tenant shall not be obligated to pay any such \nincrease that results from such \"change of ownership\".\n\n      8.3.  TAXES ON TENANT'S PROPERTY:  Tenant shall pay before delinquency \nany and all taxes, assessments, license fees and public charges levied, \nassessed or imposed against Tenant or Tenant's estate in this Lease or the \nproperty of Tenant situated within the Premises which become due during the \nLease Term.  Tenant shall furnish Landlord with satisfactory evidence of \nthese payments within thirty (30) days after receipt of written request \ntherefor from Landlord.\n\n\n\n                                     ARTICLE 9\n                                     ---------\n\n                                     INSURANCE\n\n\n     9.1. TENANT'S INSURANCE:  Tenant shall maintain insurance complying\nwith all of the following:\n\n          A.   Tenant shall procure, pay for and keep in full force and \neffect the following:\n\n               (1)  Commercial general liability insurance, including \nproperty damage, against liability for personal injury, bodily injury, death \nand damage to property occurring in or about, or resulting from an occurrence \nin or about, the Premises with combined single limit coverage of not less \nthan the amount of Tenant's Minimum Liability Insurance Coverage set forth in \nparagraph 1.8, which insurance shall contain a \"contractual liability\" \nendorsement insuring Tenant's performance of Tenant's obligation to indemnify \nLandlord contained in paragraph 10.3;\n\n               (2)  Plate-glass insurance, at actual replacement cost; and\n\n               (3)  Fire and property damage insurance against loss caused by \nfire, extended coverage perils including steam boiler insurance, sprinkler \nleakage, if applicable, vandalism, malicious mischief and such other \nadditional perils as now are or hereafter may be included in a standard \nextended coverage endorsement from time to time in general use in the county \nin which the Property is located, insuring Tenant's personal property, \ninventory, Trade Fixtures and Leasehold Improvements within the Premises for \nthe full actual replacement cost thereof.\n\n          B.   Where applicable and required by Landlord, each policy of \ninsurance required to be carried by Tenant pursuant to this paragraph \n(i) shall name Landlord and such other parties in interest as Landlord \ndesignates as additional insureds; (ii) shall be primary insurance which \nprovides that the insurer shall be liable for the full amount of the loss up \nto and including the total amount of liability set forth in the declarations \nwithout the right of contribution from any other insurance coverage of \nLandlord; (iii) shall be in a form satisfactory to Landlord; (iv) shall be \ncarried with companies reasonably acceptable to Landlord; (v) shall provide \nthat such policy shall not be subject to cancellation, lapse or change except \nafter at least thirty (30) days prior written notice to Landlord; (vi) shall \nnot have a \"deductible\" in excess of $500,000 or such greater amount as is \napproved by Landlord; (vii) shall (to the extent available) contain a waiver \nby the insurer of any right to subrogation against Landlord, its agents, \nemployees and contractors which might arise by reason of any payment under \nsuch policy or by reason of any act or omission of Landlord, its agents, \nemployees or contractors; and (viii) shall contain a \"severability\" clause.  \nIf Tenant has in force and effect a blanket policy of liability insurance \nwith the same coverage for the Premises as described above, as well as other \ncoverage of other premises and properties of Tenant, or in which Tenant has \nsome interest, such blanket insurance shall satisfy the requirements hereof.\n\n\n                                      -19-\n\n\n\n\n          C.   A certificate of each paid-up policy evidencing the insurance \nrequired to be carried by Tenant pursuant to this paragraph (appropriately \nauthenticated by the insurer), certifying that such policy has been issued, \nproviding the coverage required by this paragraph, and containing the \nprovisions specified herein, shall be delivered to Landlord prior to the time \nTenant or any of its contractors enters the Premises and upon renewal of such \npolicies, but not less than five (5) days prior to the expiration of the term \nof such coverage.  If Landlord's insurance advisor reasonably determines at \nany time that the amount of coverage required for any policy of insurance \nTenant is to obtain pursuant to this paragraph is not adequate, then Tenant \nshall increase such coverage for such insurance to such amount as Landlord's \ninsurance advisor reasonably deems adequate, not to exceed the level of \ncoverage commonly carried by comparable businesses similarly situated for \nsuch insurance; provided, however, that Landlord may not require an \nadjustment pursuant to this sentence more frequently than once every two (2) \nyears during the Lease Term.\n\n     9.2. LANDLORD'S INSURANCE:  Landlord shall have the following \nobligations and options regarding insurance:\n\n          A.   Landlord shall maintain a policy or policies of fire and \nproperty damage insurance in so-called \"all risk\" form insuring Landlord (and \nsuch others as Landlord may designate) against loss of rents for a period of \nnot less than six (6) months and from physical damage to the Premises with \ncoverage of not less than the full replacement cost of (i) the building of \nwhich the Premises are a part, including the structural elements thereof and \nall electrical, mechanical, plumbing, and other systems, and (ii) all \nInterior Improvements constructed pursuant to the Interior Improvement \nAgreement attached as Exhibit \"C\".  Landlord may so insure the Premises \nseparately, or may insure the Premises with other buildings and improvements \nwithin the Property and\/or other property owned by Landlord which Landlord \nelects to insure together under the same policy or policies.  Such fire and \nproperty damage insurance, at Landlord's election, (i) may be endorsed to \ncover loss caused by such additional perils against which Landlord may elect \nto insure, including earthquake and\/or flood, (ii) shall contain commercially \nreasonable \"deductibles\" which, in the case of earthquake and flood \ninsurance, may be up to ten percent (10%) of the replacement value of the \nproperty insured or such higher amount as is then commercially reasonable, \n(iii) may provide coverage for loss of rents for a period of up to twelve \n(12) months, and (iv) may contain additional endorsements or coverage \nreasonably required by Landlord or any Lender, including an \"agreed amount\" \nendorsement, demolition insurance (covering the cost of demolishing damaged \nimprovements or improvements required by Law to be demolished), and \ndifference in condition coverage.  Landlord shall not be required to cause \nsuch insurance to cover any Trade Fixtures, Leasehold Improvements or any \ninventory or other personal property of Tenant.\n\n          B.   Landlord may maintain a policy or policies of commercial \ngeneral liability insurance insuring Landlord (and such others as are \ndesignated by Landlord) against liability for personal injury, bodily injury, \ndeath and damage to property occurring or resulting from an occurrence in, on \nabout the Property, with combined single limit coverage in such amount as \nLandlord may from time to time determine is reasonably necessary for its \nprotection and with commercially reasonable deductibles.\n\n     9.3.  TENANT'S OBLIGATION TO REIMBURSE:  The cost of the insurance \ncarried by Landlord pursuant to paragraph 9.2 (and any commercially \nreasonable \"deductible\" amount paid by Landlord in connection with the \nrestoration of any loss and excluded from the coverage of such insurance) \nshall be a Common Operating Expense and Tenant shall pay its share thereof as \nprovided in paragraph 6.3.  However, if Landlord's insurance rates for the \nPremises are increased at any time during the Lease Term as a result of the \nnature of Tenant's use of the Premises, Tenant shall reimburse Landlord for \nthe full amount of such increase immediately upon receipt of a bill from \nLandlord therefor.\n\n     9.4.  RELEASE AND WAIVER OF SUBROGATION:  The parties hereto release \neach other, and their respective agents and employees, from any liability for \ninjury to any person or damage to property that is caused by or results from \nany risk insured against under any valid and collectible insurance policy \ncarried by either of the parties which contains a waiver of subrogation by \nthe insurer and is in force at the time of such injury or damage, subject to \nthe following limitations:  \n\n\n                                      -20-\n\n\n\n(i) the foregoing provisions shall not apply to the commercial general \nliability insurance described by subparagraph 9.1A and 9.1B; and (ii) such \nrelease shall apply to liability resulting from any risk insured against or \ncovered by self-insurance maintained or provided by Tenant to satisfy the \nrequirements of paragraph 9.1.  This release shall be in effect only so long \nas the applicable insurance policy contains a clause to the effect that this \nrelease shall not affect the right of the insured to recover under such \npolicy. Each party shall use reasonable efforts to cause each insurance \npolicy obtained by it to provide that the insurer waives all right of \nrecovery by way of subrogation against the other party and its agents and \nemployees in connection with any injury or damage covered by such policy.  \nHowever, if any insurance policy cannot be obtained with such a waiver of \nsubrogation, or if such waiver of subrogation is only available at additional \ncost and the party for whose benefit the waiver is to be obtained does not \npay such additional cost, then the party obtaining such insurance shall \nnotify the other party of that fact and thereupon shall be relieved of the \nobligation to obtain such waiver of subrogation rights from the insurer with \nrespect to the particular insurance involved.\n\n\n                                    ARTICLE 10.\n\n                             LIMITATION ON LANDLORD'S\n                              LIABILITY AND INDEMNITY\n\n\n     10.1.  LIMITATION ON LANDLORD'S LIABILITY:  Landlord shall not be liable \nto Tenant, nor shall Tenant be entitled to terminate this Lease or to any \nabatement of rent, for any injury to Tenant, its agents, employees, \ncontractors or invitees, damage to Tenant's property, or loss to Tenant's \nbusiness resulting from any cause, including without limitation any (i) \nfailure, interruption or installation of any HVAC or other utility system or \nservice; (ii) failure to furnish or delay in furnishing any utilities or \nservices when such failure or delay is caused by Acts of God or the elements, \nlabor disturbances of any character, any other accidents or other conditions \nbeyond the reasonable control of Landlord; (iii) limitation, curtailment, \nrationing or restriction on the use of water or electricity, gas or any other \nform of energy or any services or utility serving the Premises; (iv) \nvandalism or forcible entry by unauthorized persons; or (v) penetration of \nwater into or onto any portion of the Premises or the Common Area through \nroof leaks or otherwise.  Notwithstanding the foregoing:\n\n            A.   Subject to paragraph 9.4, Landlord shall be liable for any \nsuch injury, damage or loss which is proximately caused by Landlord's gross \nnegligence or willful misconduct, of which Landlord has actual notice and a \nreasonable opportunity to cure but which it fails to so cure.\n\n            B.   Tenant shall have the option to terminate this Lease upon \nthe occurrence of the following:  (i) water, electricity, or other utility \nservice essential to the conduct of Tenant's business in the Premises is \ninterrupted or substantially impaired for a period of more than two hundred \nseventy (270) consecutive days during which time the Premises are rendered \nsubstantially unusable for the conduct of Tenant's business (a \"Material \nInterruption\"); and (ii) the Material Interruption is not caused by the act \nor omission of Tenant, its agents, employees or contractors.\n\n    10.2.  LIMITATION ON TENANT'S RECOURSE:  So long as the Landlord is a \ncorporation, trust, partnership, joint venture, unincorporated association or \nother form of business entity, (i) the obligations of Landlord shall not \nconstitute personal obligations of the officers, directors, trustees, \npartners, joint venturers, members, owners, stockholders, or other principals \nor representatives of such business entity, and (ii) Tenant shall have \nrecourse only to the assets of such business entity for the satisfaction of \nsuch obligations and not against the assets of such officers, directors, \ntrustees, partners, joint venturers, members, owners, stockholders, \nprincipals or representatives, except to the extent of their interests in the \nentity that is Landlord.  If Landlord is a natural person or persons, Tenant \nshall have recourse only to the interest of such natural persons in the \nProperty for the satisfaction of the obligations of Landlord and shall not \nhave recourse to any other assets of such natural persons for the \nsatisfaction of such obligations.\n\n\n                                      -21-\n\n\n\n\n     10.3.  INDEMNIFICATION OF LANDLORD:  Tenant shall hold harmless, \nindemnify and defend Landlord, and its employees, agents and contractors, \nwith competent counsel, from all liability, penalties, losses, damages, \ncosts, expenses, causes of action, claims and\/or judgments arising by reason \nof any death, bodily injury, personal injury or property damage (i) resulting \nfrom any cause or causes whatsoever (other than the negligence or willful \nmisconduct of Landlord of which Landlord has had notice and a reasonable time \nto cure, but which Landlord has failed to cure) occurring in or about or \nresulting from an occurrence in or about the Premises, or (ii) resulting from \nthe negligence or willful misconduct of Tenant, its agents, employees and \ncontractors, wherever the same may occur, or (iii) resulting from an Event of \nTenant's Default.  The provisions of this paragraph shall survive the \nexpiration or sooner termination of this Lease.\n\n\n                                     ARTICLE 11.\n\n                                DAMAGE TO PREMISES\n\n\n     11.1.  LANDLORD'S DUTY TO RESTORE:  If the Premises are damaged by any \nperil after the Commencement Date of this Lease, Landlord shall restore the \nPremises unless the Lease is terminated by Landlord pursuant to paragraph \n11.2 or by Tenant pursuant to paragraph 11.3.  All insurance proceeds \navailable from the fire and property damage insurance carried by Landlord \npursuant to paragraph 9.2 shall be paid to and become the property of \nLandlord.  If this Lease is terminated pursuant to either paragraphs 11.2 or \n11.3, then all insurance proceeds available from insurance carried by Tenant \nwhich covers loss to property that is Landlord's property or would become \nLandlord's property on termination of this Lease shall be paid to and become \nthe property of Landlord. If this Lease is not so terminated, then upon \nreceipt of the insurance proceeds (if the loss is covered by insurance) and \nthe issuance of all necessary governmental permits, Landlord shall commence \nand diligently prosecute to completion the restoration of the Premises, to \nthe extent then allowed by Law, to substantially the same condition in which \nthe Premises were immediately prior to such damage.  Landlord's obligation to \nrestore shall be limited to the Premises and interior improvements \nconstructed by Tenant but financed by Landlord pursuant to the Interior \nImprovement Agreement as such improvements existed upon completion thereof \nexcluding any Leasehold Improvements, Trade Fixtures and\/or personal property \nconstructed or installed by Tenant in the Premises.  To the extent that \ninsurance proceeds recovered by Landlord from the insurance carried pursuant \nto paragraph 9.2A exceed the amount needed by Landlord to discharge its \nrestoration obligation pursuant to the immediately preceding sentence, \nLandlord shall make such excess insurance proceeds available to Tenant for \nthe purpose of restoring interior improvements that were constructed by \nTenant and financed by Tenant pursuant to the Interior Improvement Agreement, \nso that such improvements may be restored to substantially the same condition \nexisting as of the date such improvements were initially completed.\n\n     11.2.  LANDLORD'S RIGHT TO TERMINATE:  Landlord shall have the right to \nterminate this Lease in the event any of the following occurs, which right \nmay be exercised only by delivery to Tenant of a written notice of election \nto terminate within thirty (30) days after the date of such damage:\n\n            A.   Either the Property or the Premises is damaged by an Insured \nPeril to such an extent that the estimated cost to restore equals or exceeds \neighty percent (80%) of the then actual replacement cost thereof and there \nremains less than three (3) years in the Lease Term; provided, however, that \nLandlord may not terminate this Lease pursuant to this subparagraph 11.2A if \nTenant at the time of such damage has a then valid written option to extend \nthe Lease Term and Tenant exercises such option to extend the Lease Term \nwithin fifteen (15) days after Tenant receives Landlord's notice of election \nto terminate and such action results in there being more than three (3) years \nremaining in the Lease Term (as it has been extended by the Exercise of such \noption);\n\n            B.   Either the Property or the Premises is damaged by an \nUninsured Peril to such an extent that the estimated cost to restore exceeds \ntwo percent (2%) of the actual replacement cost thereof; provided, however, \nthat Landlord may not terminate this Lease \n\n                                      -22-\n\n\n\n\npursuant to this paragraph 11.2B if one or more Tenants of the Property agree \nin writing to pay the amount by which the cost to restore the damage exceeds \nsuch amount and subsequently deposit such amount with Landlord within thirty \n(30) days after Landlord has notified Tenant of its election to terminate \nthis Lease;\n\n            C.   The Premises are damaged by any peril within twelve (12) \nmonths of the last day of the Lease Term to such an extent that the estimated \ncost to restore equals or exceeds an amount equal to six (6) times the Base \nMonthly Rent then due; provided, however, that Landlord may not terminate \nthis Lease pursuant to this subparagraph 11.2C if Tenant, at the time of such \ndamage, has a then valid express written option to extend the Lease Term and \nTenant exercises such option to extend the Lease Term within fifteen (15) \ndays following the date of such damage; or\n\n            D.   As used herein, the following terms shall have the following \nmeanings: (i) the term \"Insured Peril\" shall mean a peril actually insured \nagainst for which the insurance proceeds paid or made available to Landlord \nare sufficient (except for any \"deductible\" amount specified by such \ninsurance) to restore the Property under the then existing building codes to \nthe condition existing immediately prior to the damage; and (ii) the term \n\"Uninsured Peril\" shall mean and include any peril not actually insured \nagainst, any peril actually insured against but for which the insurance \nproceeds paid or made available to Landlord are for any reason (except for \nany \"deductible\" amount specified by such insurance) insufficient to restore \nthe Property under then existing building codes to the condition existing \nimmediately prior to the damage, and any peril actually insured against but \nfor which the insurance proceeds are not paid or made available to Landlord.\n\n     11.3.  TENANT'S RIGHT TO TERMINATE:  If the Premises are damaged by any \nperil and Landlord does not elect to terminate this Lease or is not entitled \nto terminate this Lease pursuant to paragraph 11.2, then as soon as \nreasonably practicable, Landlord shall furnish Tenant with the written \nopinion of Landlord's architect or construction consultant as to when the \nrestoration work required of Landlord may be completed.  Tenant shall have \nthe right to terminate this Lease in the event any of the following occurs, \nwhich right may be exercised only by delivery to Landlord of a written notice \nof election to terminate within thirty (30) days after Tenant receives from \nLandlord the estimate of the time needed to complete such restoration:\n\n            A.   The Premises are damaged by any peril and, in the reasonable \nopinion of Landlord's architect or construction consultant, the restoration \nof the Premises cannot be substantially completed within two hundred seventy \n(270) days after the date of such damage; or\n\n            B.   The Premises are damaged by any peril within twelve (12) \nmonths of the last day of the Lease Term and in the reasonable opinion of \nLandlord's architect or construction consultant the restoration of the \nPremises cannot be substantially completed within ninety (90) days after the \ndate of such damage; or\n\n            C.   The Premises are not restored within eighteen (18) months \nfollowing the date of such damage; provided, however, that if at the time \nrestoration of the \"shell\" of the building in which the Premises are located \nis substantially completed (excluding Interior Improvements) Landlord \nreasonably estimates that Landlord will not be able to complete restoration \nof the Premises within such eighteen (18) month period, then at that time \nLandlord may offer in writing to Tenant the option to terminate this Lease, \nand if Tenant does not exercise such option to terminate the Lease so offered \nto Tenant by Landlord, then Tenant may not thereafter elect to terminate this \nLease pursuant to this subparagraph 11.3C.\n\n     11.4.  ABATEMENT OF RENT:  In the event of damage to the Premises which \ndoes not result in the termination of this Lease, the Base Monthly Rent and \nthe Additional Rent shall be temporarily abated commencing on the date of \ndamage and continuing through the Period of restoration in proportion to the \ndegree to which Tenant's use of the Premises is impaired by such damage.  \nTenant shall not be entitled to any compensation or damages from Landlord for \nloss of Tenant's business or property or for any inconvenience or annoyance \ncaused by such damage or restoration.  Tenant hereby waives the provisions of \nSection 1932, Subdivision 2, and Section 1933, Subdivision 4, of the \nCalifornia Civil Code, and the provisions of any similar law hereinafter \nenacted.\n\n\n                                      -23-\n\n\n\n\n                                    ARTICLE 12.\n\n                                   CONDEMNATION\n\n\n     12.1.  TENANT'S TERMINATION RIGHT:  Tenant shall have the right to \nterminate this Lease if, as a result of any taking by means of the exercise \nof the power of eminent domain (including any voluntary sale or transfer by \nLandlord to any condemnor under threat of condemnation), (i) ten percent \n(10%) or more of the Premises is so taken, or (ii) there is a taking \naffecting the Common Area and, as a result of such taking, Landlord cannot \nprovide parking spaces within reasonable walking distance of the Premises \nequal in number to at least ninety percent (90%) of the number of spaces \nallocated to Tenant by paragraph 2.1, whether by rearrangement of the \nremaining parking areas in the Common Area (including construction of \nmulti-deck parking structures or restripping for compact cars where permitted \nby Law) or by alternative parking facilities on other land.  Tenant must \nexercise such right within a reasonable period of time, to be effective on \nthe date that possession of that portion of the Premises or Common Area that \nis condemned is taken by the condemnor.\n\n     12.2   RESTORATION AND ABATEMENT OF RENT:  If any part of the Premises \nor the Common Area is taken by condemnation and this Lease is not terminated, \nthen Landlord shall restore the remaining portion of the Premises and Common \nArea to substantially the same condition in which the Premises and Common \nArea were immediately prior to such taking, excluding any Leasehold \nImprovements, Trade Fixtures and\/or personal property constructed or \ninstalled by Tenant; provided, however, that Landlord shall not be obligated \nto spend more for such restoration than the amount of any condemnation award \nrecovered by or pursuant to paragraph 12.3.  Thereafter, except in the case \nof a temporary taking, (i) as of the date possession is taken the Base \nMonthly Rent (but not any Additional Rent) shall be reduced in the same \nproportion that the floor area of that part of the Premises so taken (less \nany addition thereto by reason of any reconstruction) bears to the original \nfloor area of the Premises, and (ii) to the extent that Landlord is obligated \nto undertake any restoration work as a result of such condemnation, the Base \nMonthly Rent shall be further abated in proportion to the extent to which \nsuch restoration work interferes with Tenant's ability to use that part of \nthe Premises which remains after the condemnation.\n\n     12.3   TEMPORARY TAKING:  If any portion of the Premises is temporarily \ntaken for six (6) months or less, this Lease shall remain in effect and \nTenant shall be entitled to recover any condemnation award that is made for \nsuch taking and shall be responsible for restoring the Premises to the \ncondition existing immediately prior to such temporary taking.  If any \nportion of the Premises is temporarily taken by condemnation for a period \nwhich exceeds six (6) months or which extends beyond the natural expiration \nof the Lease Term, and such taking materially and adversely affects Tenant's \nability to use the Premises for the Permitted Use, then Tenant shall have the \nright to terminate this Lease, effective on the date possession is taken by \nthe condemnor.\n\n     12.4.  DIVISION OF CONDEMNATION AWARD:  Any award made as a result of \nany condemnation of the Premises or the Common Area shall belong to and be \npaid to Landlord, and Tenant hereby assigns to Landlord all of its right, \ntitle and interest in any such award; provided, however, that Tenant shall be \nentitled to recover out of any condemnation award made for a taking of all or \npart of the Premises an amount equal to the unamortized cost of all interior \nimprovements paid for by Tenant constructed pursuant to the Interior \nImprovement Agreement and all Leasehold Improvements constructed by Tenant \n(amortized on a straight line basis over the initial Lease Term for Interior \nImprovements, and over the period from completion of construction until \nexpiration of the Lease Term for Leasehold Improvements); and provided \nfurther that Tenant shall be entitled to receive any condemnation award that \nis made directly to Tenant for the following so long as the award made to \nLandlord is not thereby reduced:  (i) for the taking of personal property or \nTrade Fixtures belonging to Tenant, (ii) for the interruption of Tenant's \nbusiness or its moving costs, (iii) for loss of Tenant's goodwill, or \n(iv) for any temporary taking where this Lease is not terminated as a result of \nsuch taking.  The rights of Landlord and Tenant regarding any condemnation \nshall be determined as provided in this Article, \n\n\n                                      -24-\n\n\n\nand each party hereby waives the provisions of Section 1265.130 of the \nCalifornia Code of Civil Procedure and the provisions of any similar law \nhereinafter enacted allowing either party to petition the Superior Court to \nterminate this Lease in the event of a partial taking of the Premises.\n\n\n                                   ARTICLE 13.\n\n                               DEFAULT AND REMEDIES\n\n\n     13.1.  EVENTS OF TENANT'S DEFAULT:  Tenant shall be in default of its \nobligations under this Lease if any of the following events occurs (an \"Event \nof Tenant's Default\"):\n\n            A.   Tenant shall have failed to pay Base Monthly Rent or any \nAdditional Rent when due and such failure is not cured within ten (10) days \nafter delivery of written notice from Landlord specifying such failure to \npay; or\n\n            B.   Tenant shall have failed to perform any term, covenant, or \ncondition of this Lease except those requiring the payment of Base Monthly \nRent or Additional Rent, and Tenant shall have failed to cure such breach \nwithin thirty (30) days after written notice from Landlord specifying the \nnature of such breach, or if such breach could not reasonably be cured within \nsaid thirty (30) day period, Tenant shall have failed to commence such cure \nwithin said thirty (30) day period and thereafter continue with due diligence \nto prosecute such cure to completion within such time period as is reasonably \nneeded; or \n\n            C.   Tenant shall have made a general assignment of its assets \nfor the benefit of its creditors; or\n\n            D.   Tenant shall have sublet the Premises or assigned its \ninterest in the Lease in violation of the provisions contained in Article 14, \nwhether voluntarily or by operation of law; Landlord shall have notified \nTenant in writing that such Transfer constitutes a violation of the \nprovisions contained in Article 14, and Tenant does not cause such Transfer \nto be rescinded or terminated and possession of the Premises affected by the \nTransfer recovered from the Transferee within ninety (90) days after receipt \nof such notice; or\n\n            E.   Tenant shall have permitted the sequestration or attachment \nof, or execution on, or the appointment of a custodian or receiver with \nrespect to, all or any substantial part of the property of Tenant or any \nproperty essential to the conduct of Tenant's business, and Tenant shall have \nfailed to obtain a return or release of such property within ninety (90) days \nthereafter or prior to sale pursuant to such sequestration, attachment or \nlevy, whichever is earlier; or\n\n            F.   A court shall have made or entered any decree or order with \nrespect to Tenant, or Tenant shall have submitted to or sought a decree or \norder (or a petition or pleading shall have been filed in connection \ntherewith) which:  (i) grants or constitutes (or seeks) an order for relief, \nappointment of a trustee, or confirmation of a reorganization plan under the \nbankruptcy laws of the United States; (ii) approves as properly filed (or \nseeks such approval of) a petition seeking liquidation or reorganization \nunder said bankruptcy laws or any other debtor's relief law or statute of the \nUnited States or any state thereof; or (iii) otherwise directs (or seeks) the \nwinding up or liquidation of Tenant; and such petition, decree or order shall \nhave continued in effect for a period of ninety (90) or more days; or\n\n            G.   Tenant shall have failed to deliver documents as required of \nit pursuant to paragraph 15.4 or 15.7 within the time periods specified \ntherein and Tenant shall have failed to cure such default within ten (10) \ndays after Landlord has delivered to Tenant written notice that Tenant is in \ndefault of its obligations to deliver such documents pursuant to either \nparagraph 15.4 or 15.7; or\n\n            H.   An Event of Tenant's Default has occurred under the Building \nC Lease (unless caused by subTenant or assignee of the original Tenant under \nthis Lease and such original Tenant is using reasonable efforts to cause such \ndefault to be cured) and, at the time \n\n\n                                      -25-\n\n\n\nTenant is so in default, the Premises and the real property leased to Tenant \npursuant to the Building C Lease are both owned of record by the same person \nor entity.\n\n     13.2.  LANDLORD'S REMEDIES:  If an Event of Tenant's Default occurs, \nLandlord shall have the following remedies, in addition to all other rights \nand remedies provided by any Law or otherwise provided in this Lease, to \nwhich Landlord may resort cumulatively or in the alternative:\n\n            A.   Landlord may, at Landlord's election, keep this Lease in \neffect and enforce by an action at law or in equity all of its rights and \nremedies under this Lease, including (i) the right to recover the rent and \nother sums as they become due by appropriate legal action, (ii) the right to \nmake payments required of Tenant or perform Tenant's obligations and be \nreimbursed by Tenant for the cost thereof with interest at the Agreed \nInterest Rate from the date the sum is paid by Landlord until Landlord is \nreimbursed by Tenant, and (iii) the remedies of injunctive relief and \nspecific performance to compel Tenant to perform its obligations under this \nLease.\n\n            B.   Landlord may, at Landlord's election, terminate this Lease \nby giving Tenant written notice of termination, in which event this Lease \nshall terminate on the date set forth for termination in such notice.  Any \ntermination under this subparagraph shall not relieve Tenant from its \nobligation to pay sums then due Landlord or from any claim against Tenant for \ndamages or rent previously accrued or then accruing.  In no event shall any \none or more of the following actions by Landlord, in the absence of a written \nelection by Landlord to terminate this Lease, constitute a termination of \nthis Lease:\n\n                 (1)  Appointment of a receiver or keeper in order to protect \nLandlord's interest hereunder;\n\n                 (2)  Consent to any subletting of the Premises or assignment \nof this Lease by Tenant, whether pursuant to the provisions hereof or \notherwise; or\n\n                 (3)  Any other action by Landlord or Landlord's agents \nintended to mitigate the adverse effects of any breach of this Lease by \nTenant, including without limitation any action taken to maintain and \npreserve the Premises or any action taken to relet the Premises or any \nportions thereof, for the account of Tenant and in the name of Tenant.\n\n            C.   In the event Tenant breaches this Lease and abandons the \nPremises, this Lease shall not terminate unless Landlord gives Tenant written \nnotice of its election to so terminate this Lease.  No act by or on behalf of \nLandlord intended to mitigate the adverse effect of such breach, including \nthose described by subparagraphs 13.2B(1), (2) and (3) immediately preceding, \nshall constitute a termination of Tenant's right to possession unless \nLandlord gives Tenant written notice of termination.  Should Landlord not \nterminate this Lease by giving Tenant written notice, Landlord may enforce \nall its rights and remedies under this Lease, including the right to recover \nthe rent as it becomes due under the Lease as provided in California Civil \nCode Section 1951.4 as in effect on the Commencement Date of this Lease.\n\n            D.   In the event Landlord terminates this Lease, Landlord shall \nbe entitled, at Landlord's election, to damages in an amount as set forth in \nCalifornia Civil Code Section 1951.2 as in effect on the Commencement Date of \nthis Lease.  For purposes of computing damages pursuant to Section 1951.2, \n(i) an interest rate equal to the Agreed Interest Rate shall be used where \npermitted, and (ii) the term \"rent\" includes Base Monthly Rent and Additional \nRent.  Such damages shall include without limitation:\n\n                 (1)  The worth at the time of award of the amount by which \nthe unpaid rent for the balance of the term after the time of award exceeds \nthe amount of such rental loss that Tenant proves could be reasonably \navoided, computed by discounting such amount at the discount rate of the \nFederal Reserve Bank of San Francisco at the time of award plus one percent \n(1%); and\n\n                 (2)  Any other amount necessary to compensate Landlord for \nall detriment proximately caused by Tenant's failure to perform Tenant's \nobligations under this Lease, or which in the ordinary course of things would \nbe likely to result therefrom, including, \n\n                                      -26-\n\n\n\nwithout limitation, the following: (i) expenses for cleaning, repairing or \nrestoring the Premises; (ii) expenses for altering, remodeling or otherwise \nimproving the Premises for the purpose of reletting, including installation \nof leasehold improvements (whether such installation be funded by a reduction \nof rent, direct payment or allowance to a new Tenant, or otherwise); (iii) \nbroker's fees, advertising costs and other expenses of reletting the \nPremises; (iv) costs of carrying the Premises, such as taxes, insurance \npremiums, utilities and security precautions; (v) expenses in retaking \npossession of the Premises; and (vi) attorneys' fees and court costs incurred \nby Landlord in retaking possession of the Premises and in releasing the \nPremises or otherwise incurred as a result of Tenant's default.\n\n            E.   Nothing in this paragraph shall limit Landlord's right to \nindemnification from Tenant as provided in paragraph 7.2 and paragraph 10.3. \nAny notice given by Landlord in order to satisfy the requirements of \nsubparagraphs 13.1A or B above shall also satisfy the notice requirements of \nCalifornia Code of Civil Procedure Section 1161 regarding unlawful detainer \nproceedings.\n\n     13.3.  WAIVER BY TENANT OF CERTAIN REMEDIES:  Tenant waives the \nprovisions of Sections 1932(1), 1941 and 1942 of the California Civil Code \nand\/or any similar or successor law regarding Tenant's right to terminate \nthis Lease or to make repairs and deduct the expenses of such repairs from \nthe rent due under the Lease.\n\n     13.4.  WAIVER:  One party's consent to or approval of any act by the \nother party requiring the first party's consent or approval shall not be \ndeemed to waive or render unnecessary the first party's consent to or \napproval of any subsequent similar act by the other party.  The receipt by \nLandlord of any rent or payment with or without knowledge of the breach of \nany other provision hereof shall not be deemed a waiver of any such breach \nunless such waiver is in writing and signed by Landlord.  No delay or \nomission in the exercise of any right or remedy accruing to either party upon \nany breach by the other party under this Lease shall impair such right or \nremedy or be construed as a waiver of any such breach theretofore or \nthereafter occurring.  The waiver by either party of any breach of any \nprovision of this Lease shall not be deemed to be a waiver of any subsequent \nbreach of the same or of any other provisions herein contained.\n\n     13.5.  LIMITATION ON EXERCISE OF RIGHTS:  At any time that an Event of \nTenant's Default has occurred and remains uncured, (i) it shall not be \nunreasonable for Landlord to deny or withhold any consent or approval \nrequested of it by Tenant which Landlord would otherwise be obligated to \ngive, and (ii) Tenant may not exercise any option to extend, right to \nterminate this Lease, or other right granted to it by this Lease which would \notherwise be available to it.\n\n\n                                 ARTICLE 14.\n\n                           ASSIGNMENT AND SUBLETTING\n\n\n     14.1.  BY TENANT:  The following provisions shall apply to any \nassignment, subletting or other transfer by Tenant or any subTenant or \nassignee or other successor in interest of the original Tenant (collectively \nreferred to in this paragraph as \"Tenant\"):\n\n            A.  Tenant shall not do any of the following (collectively \nreferred to herein as a \"Transfer\"), whether voluntarily, involuntarily or by \noperation of laws, without the prior written consent of Landlord, which \nconsent shall not be unreasonably withheld or delayed:  (i) sublet all or any \npart of the Premises or allow it to be sublet, occupied or used by any person \nor entity other than Tenant; (ii) assign its interest in this Lease; (iii) \ntransfer any right appurTenant to this Lease or the Premises; (iv) mortgage \nor encumber the Lease (or otherwise use the Lease as a security device) in \nany manner; or (v) terminate or materially amend or modify an assignment, \nsublease or other transfer that has been previously approved by Landlord.  \nAny Transfer so approved by Landlord shall not be effective until Tenant has \ndelivered to Landlord an executed counterpart of the document evidencing the \nTransfer which (i) is in form approved by Landlord, (ii) contains the same \nterms and conditions as stated in Tenant's notice given to Landlord pursuant \nto subparagraph 14.1B, and (iii) contains the agreement of the proposed \n\n\n                                      -27-\n\n\n\ntransferee to assume all obligations of Tenant related to the Transfer \narising after the effective date of such Transfer and to remain jointly and \nseverally liable therefor with Tenant.  Any attempted Transfer without \nLandlord's consent shall be voidable at Landlord's option.  Landlord's \nconsent to any one Transfer shall not constitute a waiver of the provisions \nof this paragraph 14.1 as to any subsequent Transfer nor a consent to any \nsubsequent Transfer.  No Transfer, even with the consent of Landlord, shall \nrelieve Tenant of its personal and primary obligation to pay the rent and to \nperform all of the other obligations to be performed by Tenant hereunder.  \nThe acceptance of rent by Landlord from any person shall not be deemed to be \na waiver by Landlord of any provision of this Lease nor to be a consent to \nany Transfer.\n\n            B.   Tenant shall give Landlord at least fifteen (15) days prior \nwritten notice of any desired Transfer and of the proposed terms of such \nTransfer including but not limited to (i) the name and legal composition of \nthe proposed transferee; (ii) a current financial statement of the \ntransferee, financial statements of the transferee covering the preceding \nthree years if the same exist, and (if available) an audited financial \nstatement of the transferee for a period ending not more than one year prior \nto the proposed effective date of the Transfer, all of which statements are \nprepared in accordance with generally accepted accounting principles; \n(iii) the nature of the proposed transferee's business to be carried on in \nthe Premises; (iv) all consideration to be given on account of the Transfer; \n(v) a current financial statement of Tenant; and (vi) such other information \nas may be reasonably requested by Landlord.  Tenant's notice shall not be \ndeemed to have been served or given until such time as Tenant has provided \nLandlord with all information reasonably requested by Landlord pursuant to \nthis subparagraph 14.1B.  Tenant shall immediately notify Landlord of any \nmodification to the proposed terms of such Transfer.\n\n            C.   In the event that Tenant seeks to make any Transfer, then \nLandlord, by giving Tenant written notice of its election within fifteen (15) \ndays after Tenant's notice of intent to Transfer has been deemed given to \nLandlord, shall have the right to elect (i) to withhold its consent to such \nTransfer, as permitted pursuant to subparagraph 14.1A, or (ii) to permit \nTenant to so assign the Lease or sublease such part of the Premises, in which \nevent Tenant may do so, but without being released of its liability for the \nperformance of all of its obligations under the Lease, and the following \nshall apply:\n\n                 (1)  Subject to subparagraph 14.1C(5), if Tenant assigns its \ninterest in this Lease in accordance with this subparagraph 14.1C, then \nTenant shall pay to Landlord fifty percent (50%) of all consideration \nreceived by Tenant over and above (i) the assignee's agreement to assume the \nobligations of Tenant under this Lease and (ii) all Permitted Transfer Costs \nrelated to such assignment.\n\n                 (2)  Subject to subparagraph 14.1C(5), if Tenant sublets all \nor part of the Premises, then Tenant shall pay to Landlord fifty percent \n(50%) of the positive difference, if any, between (i) all rent and other \nconsideration paid by the subTenant to Tenant, less (ii) all rent paid by \nTenant to Landlord pursuant to this Lease which is allocable to the area so \nsublet and all Permitted Transfer Costs related to such sublease.  Such \namount shall be paid to Landlord on the same basis, whether periodic or in \nlump sum, that such rent and other consideration is paid to Tenant by its \nsubTenant, within seven (7) days after it is received by Tenant.\n\n                 (3)  Tenant's obligations under this subparagraph shall \nsurvive any assignment or sublease.  At the time Tenant makes any payment to \nLandlord required by this subparagraph, Tenant shall deliver an itemized \nstatement of the method by which the amount to which Landlord is entitled was \ncalculated, certified by Tenant as true and correct.  Landlord shall have the \nright to inspect Tenant's books and records relating to the payments due \npursuant to this subparagraph.  Upon request therefor, Tenant shall deliver \nto Landlord copies of all bills, invoices or other documents upon which its \ncalculations are based. Landlord may condition its approval of any Transfer \nupon obtaining a certification from both Tenant and the proposed transferee \nof all amounts that are to be paid to Tenant in connection with such Transfer.\n\n                 (4)  As used herein, the term \"consideration\" shall mean any \nconsideration of any kind received, or to be received, by Tenant as a result \nof the Transfer, if such sums are related to Tenant's interest in this Lease \nor in the Premises, including payments (in excess of the fair market value \nthereof) for Tenant's assets, fixtures, leasehold improvements, \n\n                                      -28-\n\n\n\ninventory, accounts, goodwill, equipment, furniture, general intangibles and \nany capital stock or other equity ownership interest in Tenant.  As used in \nthis subparagraph, the term \"Permitted Transfer Costs\" shall mean (i) all \nreasonable leasing commissions paid to third parties not affiliated with \nTenant in order to obtain the Transfer in question, (ii) all reasonable \nattorneys' fees incurred by Tenant with respect to the Transfer in question, \n(iii) the cost of Tenant improvements installed for the use of the subTenant \nor assignee to the extent required by such party as a condition to the \nTransfer, and (iv) any payments made by Tenant to the transferee to induce it \nto enter into the Transfer (e.g., payment of moving expenses).\n\n                 (5)  Notwithstanding anything to the contrary contained in \nthe foregoing, Landlord shall not participate in excess consideration \nreceived by Tenant from an assignee or subTenant as provided for in \nsubparagraphs 14.1C(1) and 14.1C(2) unless such assignment or sublease occurs \nduring an Option Term or, in the case of a sublease, extends into an Option \nTerm (in which latter event Landlord shall be entitled to its share of the \nexcess consideration paid during the Option Term).\n\n            D.   If Tenant is a corporation, any dissolution, merger, \nconsolidation or other reorganization of Tenant, or the sale or transfer in \nthe aggregate over the Lease Term of a controlling percentage of the capital \nstock of Tenant, shall be deemed a voluntary assignment of Tenant's interest \nin this Lease; provided, however, that the foregoing shall not apply to \ncorporations, the capital stock of which is publicly traded.  The phrase \n\"controlling percentage\" means the ownership of and the right to vote stock \npossessing more than fifty percent (50%) of the total combined voting power \nof all classes of Tenant's capital stock issued, outstanding and entitled to \nvote for the election of directors. If Tenant is a partnership, any \nwithdrawal or substitution (whether voluntary, involuntary or by operation of \nlaw, and whether occurring at one time or over a period of time) of any \npartner(s) owning twenty-five percent (25%) or more (cumulatively) of any \ninterest in the capital or profits of the partnership, or the dissolution of \nthe partnership, shall be deemed a voluntary assignment of Tenant's interest \nin this Lease.\n\n            E.   Notwithstanding anything contained in this paragraph 14.1, \nso long as Tenant otherwise complies with the provisions of paragraph 14.1 \nTenant may enter into any one of the following transfers (a \"Permitted \nTransfer\") without Landlord's prior written consent, and Landlord shall not \nbe entitled to receive any part of any excess rentals or other consideration \nresulting therefrom that would otherwise be due to it pursuant to paragraph \n14.1C:\n\n                (1)  Tenant may sublease all or part of the Premises or \nassign its interest in this Lease to any corporation which controls, is \ncontrolled by, or is under common control with the original Tenant to this \nLease by means of an ownership interest of more than fifty percent (50%);\n\n                (2)  Tenant may assign its interest in the Lease to a \ncorporation which results from a merger, consolidation or other \nreorganization in which Tenant is not the surviving corporation, so long as \n(i) Tenant demonstrates to Landlord's reasonable satisfaction that the \nsurviving corporation will have sufficient creditworthiness to provide \nadequate assurance of future performance of all of Tenant's obligations under \nthis Lease, or (ii) the surviving corporation has a net worth at the time of \nsuch assignment that is equal to or greater than the net worth of Tenant \nimmediately prior to such transaction; and\n\n                (3)  Tenant may assign this Lease to a corporation which \npurchases or otherwise acquires all or substantially all of the assets of \nTenant, so long as (i) Tenant demonstrates to Landlord's reasonable \nsatisfaction that the acquiring corporation will have sufficient \ncreditworthiness to provide adequate assurance of future performance of all \nof Tenant's obligations under this Lease, or (ii) such acquiring corporation \nhas a net worth at the time of such assignment that is equal to or greater \nthan the net worth of Tenant immediately prior to such transaction.\n\n     14.2.  BY LANDLORD:  Landlord and its successors in interest shall have \nthe right to transfer their interest in the Premises and the Property at any \ntime and to any person or entity.  In the event of any such transfer, the \nLandlord originally named herein (and, in the case of any subsequent \ntransfer, the transferor) from the date of such transfer, (i) shall be \nautomatically relieved, without any further act by any person or entity, of \nall liability for the performance of the \n\n                                      -29-\n\n\n\nobligations of the Landlord hereunder which may accrue after the date of such \ntransfer, and (ii) shall be relieved of all liability for the performance of \nthe obligations of the Landlord hereunder which have accrued before the date \nof transfer if its transferee agrees to assume and perform all such \nobligations of the Landlord hereunder.  After the date of any such transfer, \nthe term \"Landlord\" as used herein shall mean the transferee of such interest \nin the Premises and the Property.\n\n                                   ARTICLE 15.\n\n                                GENERAL PROVISIONS\n\n     15.1.  LANDLORD'S RIGHT TO ENTER:  Landlord and its agents may enter the \nPremises immediately in case of emergency and otherwise only at such time as \nis approved by Tenant which time of Entry shall be within seven (7) days \nafter Landlord delivers written notice to Tenant requesting approval of a \ntime to enter, and Landlord may thereafter continue such entry for such \nreasonable period of time as is necessary to accomplish Landlord's permitted \npurpose for such entry.  Landlord may so enter the Premises for the following \npurposes:  (i) inspecting the same, (ii) posting notices of \nnon-responsibility, (iii) supplying any service to be provided by Landlord to \nTenant, (iv) showing the Premises to prospective purchasers or mortgagees, \n(v) making necessary alterations, additions or repairs, (vi) performing \nTenant's obligations when Tenant has failed to do so after written notice \nfrom Landlord, (vii) placing upon the Premises ordinary \"for sale\" signs, \n(viii) responding to an emergency, and\/or (ix) during the last six (6) months \nof the Lease Term or at any time when there is a Continuing Tenant Default, \nshowing the Premises to prospective Tenants and placing upon the Premises \nordinary \"for lease\" signs.  For each of the aforesaid purposes, Landlord may \nenter the Premises by means of a master key, and Landlord shall have the \nright to use any and all means Landlord may deem necessary and proper to open \nthe doors of the Premises in an emergency.  Any entry into the Premises or \nportions thereof obtained by Landlord by any of said means or otherwise shall \nnot under any circumstances be construed or deemed to be a forcible or \nunlawful entry into, or a detainer of, the Premises, or an eviction, actual \nor constructive, of Tenant from the Premises or any portion thereof.\n\n     15.2.  SURRENDER OF THE PREMISES:  Immediately prior to the expiration \nor upon the sooner termination of this Lease, Tenant shall remove all \nTenant's Trade Fixtures and other personal property, and shall vacate and \nsurrender the Premises to Landlord in the same condition as existed at the \nCommencement Date, except for (i) reasonable wear and tear, (ii) damage \ncaused by any peril or condemnation, and (iii) contamination by Hazardous \nMaterials for which Tenant is not responsible pursuant to subparagraphs 7.2B \nor 7.2C.  In this regard reasonable wear and tear shall be construed to mean \nwear and tear caused to the Premises by the natural aging process which \noccurs in spite of prudent application of reasonable standards for \nmaintenance, repair and janitorial practices, and does not include items of \nneglected or deferred maintenance.  If Landlord so requests, Tenant shall, \nprior to the expiration or sooner termination of this Lease, remove any \nLeasehold Improvements designated by Landlord and repair all damage caused by \nsuch removal if such removal is required pursuant to paragraph 5.2.  If the \nPremises are not so surrendered at the termination of this Lease, Tenant \nshall be liable to Landlord for all costs incurred by Landlord in returning \nthe Premises to the required condition, plus interest on all costs incurred \nat the Agreed Interest Rate.\n\n     15.3.  HOLDING OVER:  This Lease shall terminate without further notice \nat the expiration of the Lease Term.  Any holding over by Tenant after \nexpiration of the Lease Term shall not constitute a renewal or extension of \nthe Lease or give Tenant any rights in or to the Premises except as expressly \nprovided in this Lease.  Any holding over after such expiration with the \nconsent of Landlord shall be construed to be a tenancy from month to month on \nthe same terms and conditions herein specified insofar as applicable except \nthat Base Monthly Rent shall be increased to an amount equal to one hundred \ntwenty-five percent (125%) of the Base Monthly Rent required during the last \nmonth of the Lease Term.\n\n\n                                      -30-\n\n\n\n\n     15.4.  SUBORDINATION:  The following provisions shall govern the\nrelationship of this Lease to any underlying lease, mortgage or deed of trust\nwhich now or hereafter affects the Property, and any renewal, modification,\nconsolidation, replacement or extension thereof (a \"Security Instrument\"):\n\n            A.   This Lease is subject and subordinate to all Security \nInstruments existing as of the Commencement Date.  However, if any Lender so \nrequires, this Lease shall become prior and superior to any such Security \nInstrument.\n\n            B.   At Landlord's election, this Lease shall become subject and \nsubordinate to any Security Instrument created after the Commencement Date. \nNotwithstanding such subordination, Tenant's right to quiet possession of the \nPremises shall not be disturbed and the terms of this Lease shall not be \nmodified so long as Tenant is not in default and performs all of its \nobligations under this Lease, unless this Lease is otherwise terminated \npursuant to its terms.\n\n           C.   No subordination of this Lease to a Security Instrument \npursuant to subparagraphs 15.4A or 15.4B shall be effective until the holder \nof a Security Instrument executes a subordination and non-disturbance \nagreement in favor of Tenant by which the Lender agrees to be bound by the \nimmediately preceding sentence.\n\n           D.   Tenant shall execute any document or instrument required by \nLandlord or any Lender to make this Lease either prior or subordinate to a \nSecurity Instrument, which may include such other matters as the Lender \ncustomarily requires in connection with such agreements, including provisions \nthat (i) the Lender not be liable for any defaults on the part of Landlord \noccurring prior to the time the Lender takes possession of the Premises in \nconnection with the enforcement of its Security Instrument; (ii) the Lender \nnot be liable for the performance of any obligations contained in the \nInterior Improvement Agreement, for the completion of any improvements under \nconstruction or required to be constructed by Landlord; (iii) recourse \nagainst the Lender is limited to its interest in the Premises; (iv) any \nnotices given by Tenant to Landlord should also be delivered to the Lender; \n(v) Tenant shall attorn to any purchaser at a foreclosure sale or a grantee \ndesignated in a deed in lieu of foreclosure; (vi) the Lender shall not be \nbound by any rent which Tenant might have paid in advance to any prior \nLandlord for a period in excess of one month; (vii) the Lender shall not be \nbound by any agreement or modification of the Lease made without the written \nconsent of the Lender; and (viii) upon request, Tenant shall enter into a new \nlease with Lender of the Premises upon the same terms and conditions as the \nLease between Landlord and Tenant, which lease shall cover any unexpired term \nof the Lease existing prior to a foreclosure, trustee's sale, or conveyance \nin lieu of foreclosure.  Tenant's failure to execute any such document or \ninstrument within ten (10) days after written demand therefor shall \nconstitute a default by Tenant.  Tenant approves as reasonable the form of \nsubordination and non-disturbance agreement attached to this Lease as \nEXHIBIT \"D\".\n\n     15.5.  TENANT'S ATTORNMENT:  Tenant shall attorn (i) to any purchaser of \nthe Premises or Property at any foreclosure sale or private sale conducted \npursuant to any security instrument encumbering the Premises and\/or the \nProperty, (ii) to any grantee or transferee designated in any deed given in \nlieu of foreclosure, or (iii) to the lessor under any underlying ground lease \nshould such ground lease be terminated.\n\n     15.6.  MORTGAGEE PROTECTION:  In the event of any default on the part of \nthe Landlord, Tenant will give notice by registered mail to any Lender or \nlessor under any underlying ground lease whose name has been provided to \nTenant and shall offer such Lender or lessor a reasonable opportunity to cure \nthe default, not to exceed thirty (30) days from the expiration of the time \nperiod granted to Landlord to cure such default; provided, however, that if \nsuch Lender requires additional time to cure a default on the part of \nLandlord or to obtain possession of the Premises by power of sale or judicial \nforeclosure or other appropriate legal proceedings if obtaining possession is \nnecessary to effect a cure, the Lender shall be granted such opportunity, \nprovided that the Lender gives reasonable assurances to Tenant that such \ndefault will be cured.\n\n     15.7   ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS:  At all times \nduring the Lease Term, Tenant agrees, following any request by Landlord, \npromptly to execute and deliver to Landlord an estoppel certificate, (i) \ncertifying that this Lease is unmodified and in full force and effect or, if \nmodified, stating the nature of such modification and certifying that this \nLease, as so \n\n                                      -31-\n\n\n\nmodified, is in full force and effect, (ii) stating the date to which the \nrent and other charges are paid in advance, if any, (iii) acknowledging that \nthere are not, to Tenant's knowledge, any uncured defaults on the part of \nLandlord hereunder or, if there are uncured defaults, specifying the nature \nof such defaults and (iv) certifying such other information about the Lease \nas may be reasonably required by Landlord.  Tenant's failure to deliver an \nestoppel certificate within ten (10) days after delivery of Landlord's \nrequest therefor shall be a conclusive admission by Tenant that, as of the \ndate of the request for such statement, (i) this Lease is unmodified except \nas may be represented by Landlord in said request and is in full force and \neffect, (ii) there are no uncured defaults in Landlord's performance, and \n(iii) no rent has been paid in advance.  At any time during the Lease Term \nTenant shall, upon ten (10) days' prior written notice from Landlord, provide \nTenant's most recent financial statement and financial statements covering \nthe twenty-four (24) month period prior to the date of such most recent \nfinancial statement to any existing Lender or to any potential Lender or \nbuyer of the Property; provided, however, that if Tenant is a corporation \nwhose stock is publicly traded, Tenant may satisfy the foregoing requirement \nby delivering to the appropriate parties copies of its most recent annual \nreport prepared to satisfy requirements of the federal securities laws.  Such \nstatements shall be prepared in accordance with generally accepted accounting \nprinciples and, if such is the normal practice of Tenant, shall be audited by \nan independent certified public accountant.\n\n     15.8.  FORCE MAJEURE:  Any prevention, delay or stoppage due to strikes, \nlockouts, inclement weather, labor disputes, inability to obtain labor, \nmaterials, fuels or reasonable substitutes therefor, governmental \nrestrictions, regulations, controls, action or inaction, civil commotion, \nfire or other acts of God, and other causes beyond the reasonable control of \nthe party obligated to perform (except financial inability) shall excuse the \nperformance, for a period equal to the period of any said prevention, delay, \nor stoppage, of any obligation hereunder except the obligation of Tenant to \npay rent or any other sums due hereunder.\n\n     15.9   NOTICES:  Any notice required or desired to be given regarding \nthis Lease shall be in writing and may be given by personal delivery, by \nfacsimile telecopy, by courier service, or by mail.  A notice shall be deemed \nto have been given (i) on the third (3rd) business day after mailing if such \nnotice was deposited in the United States mail, certified or registered, \npostage prepaid, addressed to the party to be served at its address first \nabove set forth, (ii) when delivered if given by personal delivery, and (iii) \nin all other cases when actually received.  Either party may change its \naddress by giving notice of same in accordance with this paragraph.\n\n     15.10. OBLIGATION TO ACT REASONABLY:  Whenever the consent or approval \nof a party to this Lease is required to be obtained before the other party to \nthis Lease may take an action, such consent or approval shall not be \nunreasonably withheld or delayed.\n\n     15.11. CORPORATE AUTHORITY:  If Tenant is a corporation (or a \npartnership), each individual executing this Lease on behalf of said \ncorporation (or partnership) represents and warrants that he is duly \nauthorized to execute and deliver this Lease on behalf of said corporation in \naccordance with the by-laws of said corporation (or partnership in accordance \nwith the partnership agreement of said partnership) and that this Lease is \nbinding upon said corporation (or partnership) in accordance with its terms.  \nIf Tenant is a corporation, each of the persons executing this Lease on \nbehalf of Tenant does hereby covenant and warrant that Tenant is a duly \nauthorized and existing corporation, that Tenant is qualified to do business \nin California and that the corporation has full right and authority to enter \ninto this Lease.\n\n     15.12. ADDITIONAL DEFINITIONS:  Any term that is given a special meaning \nby a provision in this Lease shall have such meaning when used in this Lease \nor any addendum or amendment hereto.  As used herein, the following terms \nshall have the following meanings:\n\n            A.   AGREED INTEREST RATE:  The term \"Agreed Interest Rate\" shall \nmean that interest rate determined as of the time it is to be applied that is \nequal to the lesser of (i) two percent (2%) in excess of the \"prime rate\", \n\"reference rate\", or \"base rate\" established by Bank of America (or if Bank \nof America shall cease to exist, by the commercial bank with its headquarters \nin California that has the greatest net worth among commercial banks \nheadquartered in California) as it may be adjusted from time to time, or (ii) \nthe maximum interest rate permitted by law.\n\n                                      -32-\n\n\n\n            B.   COMMON AREA:  The term \"Common Area\" shall mean all areas \nand facilities within the Property that are not designated by Landlord for \nthe exclusive use of Tenant or any other lessee or other occupant of the \nProperty, including the parking areas, access and perimeter roads, pedestrian \nsidewalk, landscaped areas, trash enclosures, recreation areas and the like.\n\n            C.   LAW:  The term \"Law\" shall mean any judicial decision, \nstatute, constitution, ordinance, resolution, regulation, rule, \nadministrative order, or other requirement of any municipal, counting, state, \nfederal or other government agency or authority having jurisdiction over the \nparties to this Lease or the Premises, or both, in effect either at the \nCommencement Date of this Lease or any time during the Lease Term, including, \nwithout limitation, any regulation, order or policy of any quasi-official \nentity or body (e.g., board of fire examiners, public utilities or special \ndistrict).\n\n            D.   LEASEHOLD IMPROVEMENTS:  The term \"Leasehold Improvements\" \nshall mean all improvement, additions, alterations and fixtures installed in \nthe Premises by Tenant at its expense which are not Trade Fixtures.\n\n            E.   LENDER:  The term \"Lender\" shall mean any beneficiary, \nmortgagee, secured party, lessor, or other holder of any Security Instrument.\n\n            F.   PRIVATE RESTRICTIONS:  The term \"Private Restrictions\" shall \nmean all recorded covenants, conditions and restrictions, reciprocal easement \nagreements, and any other recorded instruments affecting the use of the \nPremises as they may exist from time to time.\n\n            G.   TRADE FIXTURES:  The term \"Trade Fixtures\" shall mean \nanything affixed to the Premises by Tenant at its expense for purposes of \ntrade, manufacture, ornament or domestic use (except replacement of similar \nwork or material originally installed by Landlord) which can be removed \nwithout injury to the Premises unless such thing has, by the manner in which \nit is affixed, become an integral part of the Premises; provided, however, \nthat all of Tenant's signs shall be Trade Fixtures regardless of how affixed \nto the Premises.\n\n     15.13. MISCELLANEOUS:  Should any provision of this Lease prove to be \ninvalid or illegal, such invalidity or illegality shall in no way affect, \nimpair or invalidate any other provision hereof, and such remaining \nprovisions shall remain in full force and effect.  Time is of the essence \nwith respect to the performance of every provision of this Lease in which \ntime of performance is a factor.  The captions used in this Lease are for \nconvenience only and shall not be considered in the construction or \ninterpretation of any provision hereof. Any executed copy of this Lease shall \nbe deemed an original for all purposes. This Lease shall, subject to the \nprovisions regarding assignment, apply to and bind the respective heirs, \nsuccessors, executors, administrators and assigns of Landlord and Tenant.  \n\"Party\" shall mean Landlord or Tenant, as the context implies.  If Tenant \nconsists of more than one person or entity, then all members of Tenant shall \nbe jointly and severally liable hereunder.  This Lease shall be construed and \nenforced in accordance with the laws of the State of California. The language \nin all parts of this Lease shall in all cases be construed as a whole \naccording to its fair meaning, and not strictly for or against either \nLandlord or Tenant.  When the context of this Lease requires, the neuter \ngender includes the masculine, the feminine, a partnership or corporation or \njoint venture, and the singular includes the plural.  The terms \"shall\", \n\"will\" and \"agree\" are mandatory.  The term \"may\" is permissive.  When a \nparty is required to do something by this Lease, it shall do so at its sole \ncost and expense without right of reimbursement from the other party unless \nspecific provision is made therefor.  Where Tenant is obligated not to \nperform any act, Tenant is also obligated to use reasonable efforts to \nrestrain any others within its control from performing said act, including \nagents, invitees, contractors, and subcontractors.  Landlord shall not become \nor be deemed a partner nor a joint venturer with Tenant by reason of the \nprovisions of this Lease.\n\n     15.14. TERMINATION BY EXERCISE OF RIGHT:  If this Lease is terminated \npursuant to its terms by the proper exercise of a right to terminate \nspecifically granted to Landlord or Tenant by this Lease, then this Lease \nshall terminate thirty (30) days after the date the right to terminate is \nproperly exercised (unless another date is specified in that part of the \nLease creating the right, in which event the date so specified for \ntermination shall prevail), the rent and all other charges due hereunder \nshall be prorated as of the date of termination, and neither Landlord nor \nTenant shall \n\n                                      -33-\n\n\nhave any further rights or obligations under this Lease except for those that \nhave accrued prior to the date of termination.  This paragraph does not apply \nto a termination of this Lease by Landlord as a result of a default by Tenant.\n\n     15.15. BROKERAGE COMMISSIONS:  Tenant warrants that it has not had any \ndealings with any real estate brokers, leasing agents or salesmen, or \nincurred any obligations for the payment of real estate brokerage commissions \nor finder's fees which would be earned or due and payable by reason of the \nexecution of this Lease other than to the Retained Real Estate Brokers. \nLandlord shall be responsible for the payment of any commission owed pursuant \nto a separate written commission agreement between Landlord and J.R. Parrish, \nInc. for the payment of the commission as a result of the execution of this \nLease.\n\n     15.16. ENTIRE AGREEMENT:  This Lease constitutes the entire agreement \nbetween the parties, and there are no binding agreements or representations \nbetween the parties except as expressed herein.  Tenant acknowledges that \nneither Landlord nor Landlord's agent(s) has made any representation or \nwarranty as to (i) whether the Premises may be used for Tenant's intended use \nunder existing Law or (ii) the suitability of the Premises or the Common Area \nfor the conduct of Tenant's business or the condition of any improvements \nlocated thereon.  Tenant expressly waives all claims for damage by reason of \nany statement, representation, warranty, promise or other agreement of \nLandlord or Landlord's agent(s), if any, not contained in this Lease or in \nany addendum or amendment hereto.  No subsequent change or addition to this \nLease shall be binding unless in writing and signed by the parties hereto.\n\n     15.17. RIGHT OF FIRST OFFER TO LEASE:  If at any time and from time to \ntime during the Lease Term Landlord desires to lease all or any portion of \nany buildings located on the Property, Landlord shall first give written \nnotice of such fact to Tenant (an \"Offer to Lease\"), which shall be \naccompanied by the form of lease that Landlord intends to use for the \ntransaction and the following information regarding the basic business terms \nof the transaction (the \"Basic Business Terms\"):  (i) a description of the \npremises to be leased; (ii) the term of the proposed lease; (iii) the \nimprovements Landlord is willing to construct or that it will require to be \nconstructed; (iv) the method of payment for such improvements; (v) the base \nmonthly rent for the term; (vi) additional rent to be paid by the Tenant to \nthe extent not reflected in the form lease; (vii) the estimated commencement \ndate for the lease term; (viii) any options to extend the lease term and the \nrent to be charged during any such extension periods; and (ix) any other \nmaterial business terms Landlord elects to specify.\n\n            A.   Landlord shall lease to Tenant and Tenant shall lease form \nLandlord the Premises identified in the Offer to Lease on the Basic Business \nTerms stated in the Offer to Lease if:  (i) the Premises offered for Lease in \nthe Offer to Lease consist of an area that is less than 14,000 square feet of \ngross leasable area and Tenant notifies Landlord in writing of Tenant's \nagreement to lease such Premises on the terms stated in the Offer to Lease \nwithin thirty (30) days after receipt of the Offer to Lease in question; or \n(ii)  the Premises described in the Offer to Lease consist of an area that is \nmore than 14,000 square feet and Tenant notifies Landlord in writing of \nTenant's agreement to Lease such premises on the terms stated in the Offer to \nLease within fifteen (15) days after receipt of the Offer to Lease in \nquestion.  If Tenant so timely elects to lease the space so offered, Landlord \nshall lease to Tenant and Tenant shall lease from Landlord such space on the \nfollowing terms:\n\n                 (1)  The Lease of such space shall be on the Basic Business \nTerms stated in the Offer to Lease; provided, however, that Tenant's \nobligation to pay rent shall not commence until the earlier of:  (i) the date \nany improvements that Landlord is to construct as set forth in the Basic \nBusiness Terms have been substantially completed, subject to punchlist items; \nor (ii) ninety (90) days after the space has been delivered to Tenant vacant \nand ready for improvement work, if such improvement work is not to be \nperformed by Landlord.\n\n                 (2)  The lease of such premises shall be consummated by the \npreparation and execution of a written lease, in the form and content of the \nform of lease accompanying the Offer to Lease, except as modified to \nincorporate the Basic Business Terms set forth in the Offer to Lease and as \nexpressly provided herein. The lease shall be executed by Landlord and Tenant \nas soon as reasonably practicable after Tenant has made its election to \naccept the Offer to Lease, but in no event later than forty-five (45) days \nthereafter.\n\n                                      -34-\n\n\n          B.   If Tenant does not indicate in writing its agreement to lease \nthe premises offered on the terms contained in the Offer to Lease within the \ntime period specified in subparagraph 15.17A, then the following shall apply:\n\n               (1)  Landlord shall have the right to lease such premises to \nany third party on the same Basic Business Terms set forth in the Offer to \nLease and such other terms as are contained in the form of lease included \nwith the Offer to Lease; provided, however, that Landlord may make any \nchanges to such form of Lease at the request of a prospective Tenant to \ninduce it to lease such space from Landlord so long as such changes are \ncommercially reasonable and do not materially change the Basic Business Terms \nset forth in the Offer to Lease, and such lease is executed within one \nhundred twenty (120) days after the Offer to Lease is delivered to Tenant.\n\n               (2)  If within one hundred twenty (120) days after the Offer \nto Lease is delivered to Tenant, Landlord elects to lease the premises in \nquestion on terms different than the Basic Business Terms stated in the Offer \nto Lease, then Landlord shall give notice to Tenant of such election setting \nforth the new terms upon which Landlord is willing to so lease the premises \nin question (the \"Amended Offer to Lease\").  Tenant shall have the right to \nlease the premises in question upon the terms stated in the Offer to Lease, \nas modified by the Amended Offer to Lease, which right may be exercised by \ndelivering written notice of such election to exercise to Landlord within \nfive (5) days following delivery to Tenant of the Amended Offer to Lease.  If \nTenant does not send written notice to Landlord of its election to lease the \npremises in question upon the terms set forth in the Offer to Lease, as \nmodified by the Amended Offer to Lease, within said five (5) day period, then \nLandlord may lease the premises in question to any third party in accordance \nwith the terms and conditions set forth in the Offer to Lease, as modified by \nthe Amended Offer to Lease; provided, however, that Landlord may make any \nchanges to the form of lease included in the Offer to Lease or the Amended \nOffer to Lease at the request of a prospective Tenant to induce it to lease \nsuch space from Landlord so long as such changes are commercially reasonable \nand do not materially change the Basic Business Terms set forth in the Offer \nto Lease, as modified by the Amended Offer to Lease and the lease is executed \nwithin sixty (60) days after the Amended Offer to Lease is delivered to \nTenant.\n\n          C.   If Tenant is offered the opportunity to lease all or a portion \nof any building on the Property and declines to exercise such right, and if \nLandlord subsequently enters into a lease with a third party affecting the \nspace so offered to Tenant, the right of first offer contained in this \nparagraph shall thereafter be subject and subordinate to any rights granted \nto such third party Tenant with respect to such space, or any other space in \nthe Property, including rights of first refusal, options to extend, and \noptions to expand.\n\n          D.   If Landlord has delivered to Tenant a Offer to Lease and \nTenant has not elected to lease the premises offered on the terms contained \nin the Offer to Lease, then if Landlord so requests, Tenant shall deliver to \nLandlord or any prospective Tenant a certificate or certificates stating \nthat:  (i) Landlord has complied with the provisions of this paragraph 15.17 \nand may lease the premises in question pursuant to the Offer to Lease free of \nany rights or claims of Tenant; or (ii) Landlord has not complied with the \nprovisions of this paragraph 15.17 and specifying the manner in which \nLandlord has failed to so comply.  Such certificate shall be delivered \npromptly after request therefor but in no event not more than five (5) days \nafter request has been delivered to Tenant. Tenant's failure to deliver such \ncertificate within the required time period shall be deemed an admission upon \nwhich any party may rely that Landlord has complied with the provisions of \nthis paragraph 15.17 and may lease the premises in question pursuant to the \nterms of the Offer to Lease free of any rights or claims by Tenant.\n\n          E.   Notwithstanding anything to the contrary contained in the \nforegoing, Tenant may not exercise its right to lease the space described in \nthe Offer to Lease, nor, at the option of Landlord, shall a new lease for \nsuch space commence, unless Tenant demonstrates to Landlord's reasonable \nsatisfaction that Tenant has sufficient creditworthiness to provide adequate \nassurance of future performance of all of Tenant's obligations under the new \nlease.\n\n          F.   Within ten (10) days after receipt of written request therefor \nfrom Tenant, Landlord shall inform Tenant in writing of the following with \nrespect to all leases affecting the Property:  (i) the scheduled lease term \nexpiration date; (ii) any options to extend (including the \n\n                                      -35-\n\n\ncommencement and termination date of such options to extend); and (iii) such \nother information as is reasonably requested by Tenant concerning the status \nof leases then affecting the Property as it relates to determining when such \nleases will terminate and space become available.  In addition, Landlord \nshall use reasonable efforts to promptly notify Tenant of the availability of \nspace within the Property that results from events other than the natural \nexpiration of a lease term (e.g., termination of a lease resulting from a \nTenant's default or negotiations regarding the rescission of a lease by \nmutual consent).\n\n          G.   The parties acknowledge that (i) paragraph 15.17 of the \nBuilding C Lease contains substantially the same provisions as those set \nforth in this paragraph 15.17, and (ii) it is their intention that there be \nonly one right of first offer to lease that is held and may be exercised by \nonly one person or entity.  If Landlord complies with the provisions of \nparagraph 15.17 of this Lease or paragraph 15.17 of the Building C Lease with \nrespect to a lease of space within the Property to a third party, Landlord \nshall be deemed to have satisfied the requirements of both Leases with \nrespect to this subject.  The parties further agree that the right of first \noffer to lease set forth in this paragraph 15.17 and in paragraph 15.17 of \nthe Building C Lease may only be held by one entity who is FMC Corporation or \nits successor.  If Tenant concurrently assigns its interest in this Lease and \nthe Building C Lease to the same person or entity pursuant to an assignment \ndescribed by subparagraphs 14.1E(2) or (3), such assignment shall not affect \nthe provisions of this paragraph 15.17. However, if Tenant assigns its \ninterest in this Lease without concurrently also assignment its interest in \nthe Building C Lease to the same person or entity pursuant to an assignment \ndescribed by subparagraphs 14.1E(2) or (3), then effective upon such \nassignment the provisions of this paragraph 15.17 shall terminate and be of \nno further force or effect.  Notwithstanding the foregoing sentence, if the \nBuilding C Lease has been terminated or if the provisions of paragraph 15.17 \nof the Building C Lease have terminated because of an assignment of the \nTenant's interest in the Building C Lease, then any subsequent assignment by \nTenant of its interest in this Lease pursuant to an assignment described by \nsubparagraphs 14.1E(2) or (3) shall not cause the right of first offer to \nlease created by this paragraph 15.17 to terminate.  The rights created by \nthis paragraph 15.17 may not be assigned or otherwise transferred to any \nthird party except in connection with an assignment of all of Tenant's right, \ntitle and interest in this Lease made in compliance with paragraph 14.1 \nhereof.  A sublease shall not affect the rights granted by this paragraph \n15.17; provided, however, that no subTenant of Tenant shall have the right to \ndirectly lease the Offered Space from Landlord (although Tenant may exercise \nthe right of first offer to lease and then sublease to any existing subTenant \npursuant to the terms of the new lease).\n\n     IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease with the\nintent to be legally bound thereby, to be effective as of the Commencement Date\nof this Lease.\n\n     \n\nLANDLORD:                                    TENANT:\n\n\n\nTHE EQUITABLE LIFE ASSURANCE SOCIETY         FMC CORPORATION,\nOF THE UNITED STATES, a New York             a Delaware corporation\ncorporation\n\n\nBy:   \/s\/ James Piane                        By:   \/s\/ Charles Fink             \n    --------------------------------             ------------------------------\n\n\nPrinted                                      Printed\nName:   James Piane                          Name:     Charles Fink         \n      ------------------------------               ----------------------------\n\n\nTitle:   Attorney in Fact                    Title:    V.P. &amp; Group Manager \n       -----------------------------                ---------------------------\n\n\nBy:                                          By: \n       -----------------------------                ---------------------------\n\n\nPrinted                                      Printed\nName:                                        Name:                         \n       -----------------------------                ---------------------------\n\n\nTitle:                                       Title:                        \n       -----------------------------                ---------------------------\n\n\nDated:                                       Dated:                        \n       -----------------------------                ---------------------------\n\n                                      -36-\n\n\n\n\nIf Tenant is a CORPORATION, the authorized officers must sign on behalf of \nthe corporation and indicate the capacity in which they are signing.  The \nLease must be executed by the chairman of the board, president or \nvice-president AND the secretary, assistant secretary, the chief financial \nofficer or assistant treasurer, UNLESS the Bylaws or resolution of the Board \nof Directors shall otherwise provide, in which event the Bylaws or a \ncertified copy of the resolution, as the case may be, must be attached to \nthis Lease.\n\n\n\n\n                                     EXHIBIT \"A\"\n\n\n\n                                        [MAP]\n\n\n\n                                        [MAP]\n\n\n\n\n\n\n\n\n                                     EXHIBIT \"B\"\n                                          \n                                          \n                              PLANS AND SPECIFICATIONS\n                                          \n                                          \n                                  FOR BUILDING \"A\"\n                                          \n\n\nPLANS AND SPECIFICATIONS PREPARED BY DES\n\n\nSHEET          TITLE                                               CURRENT DATE\n-----          -----                                               ------------\n\nA-1            Title Sheet                                         6-9-89\n\nA-2            Bldg. \"A\" - First Floor Plan                        6-9-89\n\nA-3            Bldg. \"A\" - Second Floor Plan                       6-5-89\n\nA-4            Bldg. \"A\" - First Floor Plan \n                     Reflected Ceiling Plan                        6-9-89\n\nA-5            Bldg. \"A\" - Second Floor Plan\n                     Reflected Ceiling Plan                        6-9-89\n\nA-6            Bldg. \"A\" - First Floor \n                     Finish Plan                                   6-9-89\n\nA-7            Bldg. \"A\" - Second Floor\n                      Finish Plan                                  6-9-89\n\nA-8            Bldg. \"A\" - First Floor\n                     Electrical\/Telephone Plan                     6-9-89\n\nA-9            Bldg. \"A\" - Second Floor\n                     Electrical\/Telephone Plan                     6-9-89\n\nA-10           Details, Interior Elevantions,\n                     Enlarged Shower Plan, Door\/Window Schedule    6-9-89\n\nA-11           Details                                            5-15-89\n\nA-12           Architectural Details\n                    Structural Details                             6-9-89\n\n\n\nPLANS AND SPECIFICATIONS PREPARED BY HAUGE-RICHARDS ASSOCIATES, LTD.\n\n\nSHEET          TITLE                                               CURRENT DATE\n-----          -----                                               ------------\n\nD-1            Lobby - Bldgs. \"A\" &amp; \"C\"\n                       Plans, Elevations, Details                  6-9-89\n\n\n\n\n\n                                   EXHIBIT C\n\n                         INTERIOR IMPROVEMENT AGREEMENT\n\n                                  (Building A)\n\n\n\n     This Interior Improvement Agreement is made part of that Lease dated for\nreference purposes only June 1, 1989 (the \"Lease\"), by and between THE EQUITABLE\nLIFE ASSURANCE SOCIETY OF THE UNITED STATES, a New York corporation (\"Landlord\")\nand FMC Corporation, a Delaware corporation (\"Tenant\") of approximately 68,708\nsquare feet of gross leasable area located in that building commonly known as\nBuilding A of Airport Technology Park, 2890 De La Cruz Boulevard, Santa Clara,\nCalifornia.\n\n     Landlord and Tenant agree that the following terms are hereby added to the\nLease:\n\n          1.   DEFINITIONS:  As used herein and in the Lease, the following\nterms shall have the following meanings:\n\n          A.   APPROVED PLANS:  The term \"Approved Plans\" shall mean those \nfinal plans, specifications and working drawings described by EXHIBIT \"B\" to \nthe Lease.\n\n          B.   INTERIOR IMPROVEMENTS:  The term \"Interior Improvements\" shall \nmean those improvements described by the Approved Plans that Tenant has the \nright to construct in the Premises pursuant to paragraph 2 hereof.\n\n          C.   INTERIOR IMPROVEMENT COSTS:  The term \"Interior Improvement \nCosts\" shall mean the following:  (i) the total amount due pursuant to the \nconstruction contract entered into by Tenant pursuant to subparagraph 2B \nhereof to construct the Interior Improvements; (ii) the cost of all \ngovernmental approvals, permits and fees required as a condition to the \nconstruction of the Interior Improvements; (iii) all utility connection or \nuse fees; (iv) fees of architects, designers, or engineers for services \nrendered in connection with the design and construction of the Interior \nImprovements; (v) the cost of payment and performance bonds obtained to \nassure completion of the Interior Improvements; and (vi) relocation and \nmoving expenses incurred by Tenant in connection with Tenant's move to the \nPremises.  There shall be excluded from Interior Improvement Costs the \nfollowing, to the extent not included in the construction contract with the \nPrime Contractor referred to in subparagraph 2B hereof:  (i) any fee for \nLandlord's review of Tenant's plans for the Interior Improvements; (ii) \ntemporary electricity used during the construction period in connection with \nthe construction of the Interior Improvements; and (iii) any fees charged by \nTenant or its agents or employees for supervising\/reviewing the construction \nof the Interior Improvements (excluding overhead and profits of prime \ncontractor).\n\n          D.   LANDLORD'S INTERIOR IMPROVEMENT ALLOWANCE:  The term \"Landlord's\nInterior Improvement Allowance\" shall mean the maximum amount Landlord is\nrequired to spend toward the payment of the Interior Improvement Costs, which\namount is equal to the product obtained by multiplying (i) Twenty-One Dollars\n($21.00) per square foot by (ii) the Premises Gross Leasable Area (expressed in\nsquare feet) of 68,708 square feet, for a total of One Million Four Hundred\nForty-Two Thousand Eight Hundred Eighty-Five Dollars ($1,442,885).\n\n          E.   SUBSTANTIALLY COMPLETED:  The Interior Improvements shall be \ndeemed to be \"Substantially Completed\" when (i) Prime Contractor has issued \nits written certificate stating that such improvements have been \nsubstantially completed in accordance with the Approved Plans therefor, (ii) \nelectrified office partitions are installed, and (iii) the Building \nDepartment of the City of Santa Clara has completed its final inspection of \nsuch improvements and has \"signed off\" the building inspection card approving \nsuch work as complete.\n\n          F.   PRIME CONTRACTOR:  The term \"Prime Contractor\" shall mean Alacon\nConstruction, Inc.\n\n                           \n\n\n\n     2.   CONSTRUCTION OF INTERIOR IMPROVEMENTS:  Tenant shall have the right to\nconstruct the Interior Improvements in accordance with the following: \n\n          A.   Tenant warrants that the Interior Improvements shall be \nconstructed in a good and workmanlike manner substantially in accordance with \nthe Approved Plans (as modified by any change orders approved by Landlord and \nTenant pursuant to paragraph 3 hereof) and all Laws.  All materials and \nequipment furnished shall be fully paid for and be free of liens, chattel \nmortgages, and security interests of any kind.\n\n          B.   The Interior Improvements shall be constructed by Prime \nContractor pursuant to a construction contract between Tenant and Prime \nContractor. Landlord shall have the right to review such form of construction \ncontract before it is executed.  Once the construction contract between Prime \nContractor and Tenant has been executed, Tenant shall not materially amend, \nmodify or alter the responsibilities of Prime Contractor thereunder without \nLandlord's written consent, except for change orders approved pursuant to \nparagraph 3 hereof.  In purposes connection with the execution of such \nconstruction contract, Tenant shall use reasonable efforts to provide that \nall construction or equipment warranties or guarantees obtained by Tenant \nshall, to the extent obtainable, provide that such warranties and guarantees \nobtained by Tenant shall, to the extent obtainable, provide that such \nwarranties and guaranties shall also run for the benefit of Landlord.  Upon \nreasonable written advance request of Landlord, Tenant shall inform Landlord \nof all written construction and equipment warranties existing in favor of \nTenant which affect the Interior Improvements. Tenant shall cooperate with \nLandlord in enforcing such warranties and in bringing any suit that may be \nnecessary to enforce liability with regard to any defects.\n\n          C.   Tenant shall use reasonable efforts to commence construction \nof the Interior Improvements as soon as reasonably practicable, and shall \nthereafter continuously prosecute such construction to completion.\n\n          D.   Tenant shall properly obtain, comply with and keep in effect \nall permits, licenses and other governmental approvals which are required to \nbe obtained form governmental bodies in order to construct the Interior \nImprovements.  Upon reasonable written advance request, Tenant shall promptly \ndeliver copies of all such permits, licenses and approvals to Landlord.\n\n          E.   Tenant shall be solely responsible for all aspects of the \nconstruction of the Interior Improvements, including the development and \ndesign thereof as set forth in the Approved Plans, the supervision of the \nwork of construction, the qualification, financial condition, and performance \nof all architects, engineers, contractors, material suppliers, consultants, \nand the accuracy of all applications for payment and the proper application \nof all disbursement. Landlord is not obligated to supervise, inspect or \ninform Tenant or any third party of any aspect of the construction of the \nInterior Improvements.  Any inspection or review by Landlord is to determine \nwhether Tenant is properly discharging its obligations to Landlord and may \nnot be relied upon by Tenant or any third party.  Landlord owes no duty of \ncare to Tenant or any third party to protect against or to inform Tenant or \nany third party of, any negligence, faulty, inadequate or defective design or \nconstruction of the Interior Improvements.\n\n     3.   CHANGES TO APPROVED PLANS FOR INTERIOR IMPROVEMENTS:  Neither \nLandlord nor Tenant shall have the right to order extra work or change orders \nwith respect to the Approved Plans or the construction of the Interior \nImprovements without the prior written consent of the other.  All extra work \nor change orders requested by either Landlord or Tenant shall be made in \nwriting, shall specify the amount of delay or the time saved resulting \ntherefrom, shall specify any added or reduced cost resulting therefrom, and \nshall become effective and a part of the Approved Plans once approved in \nwriting by both parties.  Notwithstanding the foregoing, Tenant's failure to \nobtain Landlord's consent to an extra work or change order shall not be an \nEvent of Tenant's Default if Landlord would have been required to consent to \nthe change pursuant to the terms hereof.\n\n                                      -2-\n\n\n\n\n     4.   PAYMENT OF INTERIOR IMPROVEMENT COSTS:  The Interior Improvement Costs\nand certain noise attenuating improvement costs shall be paid as follows:\n\n          A.   Landlord and Tenant desire to improve the Premises so that the \nfollowing maximum interior noise levels are achieved for the types of office \nspace identified:  55 dBA for executive offices and conference rooms; 60 dBA \nfor staff offices; and 65 dBA for sales and secretarial offices.  To achieve \nthese goals Landlord and Tenant agree to contribute to the cost of \nimprovements as follows.  Tenant at its sole cost and expense shall install \n(i) extra sheetrock in the roof and sound attenuating ceiling tiles in second \nfloor ceilings, and (ii) sheetrock beneath the structural ceiling and above \nthe suspended ceilings of all the second floor offices, and sprinklers as \nrequired by the City of Santa Clara, along with caulking required in \nconnection therewith.  Landlord at its sole cost and expense shall cause the \nsliding glass doors on the second floor to be removed and replaced with \ndouble pane sound attenuating glass windows.  In the event upon completion of \nall of the work described above in this subparagraph A, the desired noise \nlevels are not achieved, Landlord agrees to pay for the cost of additional \nimprovements designed to reduce noise levels; provided Landlord shall not be \nrequired to contribute more than One Hundred Fifty Thousand Dollars \n($150,000) for such additional improvements.\n\n          B.   In addition to those contributions of Landlord described in \nsubparagraph A above, Landlord shall contribute to the payment of all \nInterior Improvement Costs up to an amount equal to Landlord's Interior \nImprovement Allowance.  If any part of the Landlord's Interior Improvement \nAllowance is not used by Tenant, or Tenant does not qualify for a \ndisbursement pursuant to the provisions of this paragraph 4 with the result \nthat the entire allowance is not disbursed, there shall nonetheless be no \nadjustment in the Base Monthly Rent due from Tenant pursuant to the Lease.  \nIf the Interior Improvement Costs exceed the maximum amount of Landlord's \nrequired contribution, then Tenant shall pay the entire amount of such excess.\n\n          C.   Landlord and Tenant acknowledge that the construction contract \nTenant will enter into for the construction of the Interior Improvements will \nprovide for progress payments to Prime Contractor in stages as the work is \ncompleted. Landlord shall pay the full amount of each such progress payment \nuntil all of Landlord's Interior Improvement Allowance is expended.  \nThereafter, if the cost of the Interior Improvements exceeds the amount of \nLandlord's required contribution for such improvements, then Tenant shall pay \nthe rest of the progress payments due to Prime Contractor.  Landlord shall \npay any progress payment due from Landlord to Prime Contractor within thirty \n(30) days after satisfaction of all of the conditions precedent to such \nprogress payment by Landlord that has been requested by Tenant which are set \nforth in subparagraph 4D and 4E hereof.  If Landlord fails to pay any such \namount when due, then Tenant may (but without the obligation to do so) \nadvance such funds on Landlord's behalf, and Landlord shall be obligated to \nreimburse Tenant for the amount of funds so advanced on its behalf and all \ncosts incurred by Tenant in so doing, including all interest at the Agreed \nInterest Rate.\n\n          D.   If Tenant desires to obtain a disbursement from Landlord from \nthe Landlord's Interior Improvement Allowance for the purpose of paying \nInterior Improvement Costs, Tenant shall submit to Landlord a written \nitemized statement, signed by Tenant (an \"Application for Payment\") setting \nforth the following: (i) a description of the construction work performed, \nmaterials supplied and\/or costs incurred or due for which disbursement is \nrequested; and (ii) the total amount incurred, expended and\/or due for each \nrequested item less prior disbursements; and (iii) the amount due to be paid \nby Landlord from Landlord's Interior Improvement Allowance.\n\n          E.   Landlord shall have no obligation to make any disbursement \nfrom Landlord's Interior Improvement Allowance at any time that there is a \nContinuing Tenant Default (as defined in paragraph 1.14 of the Lease), or \nthere has occurred an event, omission or failure of conditions which would \nconstitute an Event of Tenant's Default (as defined in paragraph 13.1 of the \nLease) after notice or lapse of time, or both.  In addition, Landlord shall \nhave the right to condition any disbursement from Landlord's Interior \nImprovement Allowance upon Landlord's receipt and approval of the following \nwith respect to each Application for Payment:\n\n                                      -3-\n\n\n\n\n               (1)  The form of Application for Payment and the sufficiency \nof the information contained therein;\n\n               (2)  Bills and invoices and any other documents evidencing the \ntotal amount expended, incurred, or due for any requested contribution to \nInterior Improvement Costs;\n\n               (3)  Evidence of Tenant's use of lien releases acceptable to \nLandlord for payments or disbursements to any contractor, subcontractor, \nmaterialmen, supplier, or lien claimant:\n\n               (4)  Architects, inspectors and\/or engineer's periodic \ncertification and the stage of construction that has been completed and its \nconformance to the Approved Plans based upon any such architects, inspectors \nand\/or engineers periodic, physical inspections of the Premises and Interior \nImprovements;\n\n               (5)  Waivers and releases of mechanics' lien, stop notice \nclaim, equitable lien claim or other lien claim rights or lien bonds in form \nand amount reasonably satisfactory to Landlord;\n\n               (6)  Evidence of Tenant's compliance with its obligations \npursuant to paragraph 2 hereof;\n\n               (7)  Any other document, requirement, evidence or information \nthat Landlord may reasonably request pursuant to any provision of this \nInterior Improvement Agreement.\n\n          F.   Tenant agrees that all disbursements made to Tenant by \nLandlord from Landlord's Interior Improvement Allowance shall be used only \nfor the payment of Interior Improvement Costs and shall be applied as set \nforth, and for the purposes described in, the relevant Application for \nPayment based upon which the disbursement is made.\n\n     5.   PUNCHLIST:     Within a reasonable period of time after the \nInterior Improvements are Substantially Completed, Landlord, Tenant and \nTenant's architect shall together walk through and inspect such improvements \nso completed, using reasonable efforts to discover all uncompleted or \ndefective construction.  After such inspection has been completed.  Tenant \nshall use reasonable efforts to complete and\/or repair all \"punch list\" items \nwithin thirty (30) days thereafter.\n\n     6.   CONSTRUCTION WARRANTY FOR THE INTERIOR IMPROVEMENTS:  Tenant \nwarrants that the construction of the Interior Improvements will be performed \nin accordance with the Approved Plans therefor and all Laws in a good and \nworkmanlike manner, and that all materials and equipment furnished will \nconform to said plans and shall be new and otherwise of good quality.  Tenant \nshall promptly commence the cure of any breach of such warranty and complete \nsuch cure with diligence at Tenant's cost and expense.\n\n     7.   OWNERSHIP OF THE INTERIOR IMPROVEMENTS:  All of the Interior \nImprovements which are constructed with funds of Landlord shall become the \nproperty of Landlord upon installation and shall not be removed or altered by \nTenant.  Any part of the Interior Improvements which are constructed by \nLandlord with funds of Tenant shall become the property of Tenant upon \ninstallation and Tenant shall have the right to depreciate and claim and \ncollect investment tax credits in such improvements; provided, however, that \n(i) Tenant shall not remove or alter such improvements during the term of the \nLease; (ii) such improvements shall be surrendered to Landlord, and title to \nsuch improvements shall best in Landlord, at the expiration or earlier \ntermination of the Lease Term; and (iii) in no event shall Landlord have any \nobligation to pay Tenant for the cost or value of such improvements.  \nNotwithstanding the foregoing, Tenant shall have the right to remove only the \nfollowing kinds of Interior Improvements so long as it repairs all damage \ncaused by the installation thereof and returns the Premises to the condition \nexisting prior to the installation of such Interior Improvements:  (i) \nbuilt-in cabinets, file drawers and bookcases; (ii) computer room air \nconditioning; (iii) canteen equipment; (iv) office cubicle systems; and (v) \nornamental statutes.  If both Landlord and Tenant contribute to the cost of\n\n                                      -4-\n\n\n\nconstructing the Interior Improvements, Landlord and Tenant shall agree in \nwriting which of such improvements are to be constructed using Landlord's \nfunds (and therefore are Landlord's property) and which of them are to be \ninstalled with Tenant's funds (and therefore are Tenant's property during the \nLease Term).\n\n     8.   DOCUMENTS:  Within fifteen (15) days after receiving a written \nrequest from Landlord, Tenant shall deliver to Landlord the most current \nversion of the following:  (i) a complete and correct list showing the name, \naddress and telephone number of each contractor, subcontractor and principal \nmaterials supplier engaged in connection with the construction of the \nInterior Improvements, and the total dollar amount of each contract and \nsubcontract (including any changes) together with the amounts paid through \nthe date of the list; (ii) true and correct copies of all executed contracts \nand subcontracts identified in the list described in the immediately \npreceding clause, including any changes; (iii) a construction progress \nschedule; and (iv) any update to any item described in the preceding clauses \nwhich Tenant may have previously delivered to Landlord.  Tenant expressly \nauthorizes Landlord to contact any contractor, subcontractor or materials \nsupplier to verify any information disclosed in accordance with this \nparagraph.  Within sixty (60) days after the Interior Improvements have been \nSubstantially Completed, Tenant shall cause the following to be delivered to \nLandlord:\n\n          A.   Statements from Tenant's architect in form reasonably \nsatisfactory to Landlord certifying that the Interior Improvements have been \ncompleted substantially in accordance with the Approved Plans and all Laws;\n\n          B.   A copy of all permanent certificates of occupancy and other \ngovernmental approvals which may be received by Tenant with respect to the \nconstruction of the Interior Improvements;\n\n          C.   One (1) copy of the Approved Plans, one (1) copy of each extra \nwork or change order, and one (1) copy of any \"As-Built\" plans and \nspecifications for the Interior Improvements, which Tenant may have elected \nto cause to be prepared;\n\n          D.   One (1) copy of all warranties, guaranties, and operational \nmanuals relating to the Interior Improvements;\n\n          E.   A copy of a recorded notice of completion relating to the \nconstruction of the Interior Improvements.\n\n      9.  INDEMNITY:  Tenant agrees to indemnify and hold Landlord harmless \nfrom and against all liabilities, claims, actions, damages, costs and \nexpenses (including attorneys' fees incurred by Landlord in protecting its \ninterest from the following) arising out of or resulting from construction of \nthe Interior Improvements, including any mechanics' liens, defective \nworkmanship or materials and any claim or cause of action of any kind by any \nparty that Landlord is liable for any act or omission committed or made by \nTenant, its agents, employees, or contractors in connection with the \nconstruction of the Interior Improvements.\n\n     10.  ROOF AND OTHER WORK:  Landlord agrees to cause the structural support\nof the roof mounted mechanical units on the Premises to be inspected by Cabak\nRandall Jasper Griffiths Associates.  If as a result of such inspection,\nremedial work is recommended, Landlord shall cause the same to be performed by\nPrime Contractor at Landlord's expense, as soon as reasonably practicable.\n\n     Landlord agrees to replace, at Landlord's expense, the broken window on the\neast side, south end of the second floor of the Premises.\n\n     11.  EFFECT OF AGREEMENT:  In the event of any inconsistency between this\nAgreement and the Lease, the terms of this Agreement shall prevail.\n\n                                      -5-\n\n\n\n\nAS TENANT:                              AS LANDLORD:\n---------                               -----------\n\nFMC CORPORATION,                        THE EQUITABLE LIFE ASSURANCE\na Delaware corporation                  SOCIETY OF THE UNITED STATES,\n                                        a New York corporation\n\nBy:  \/s\/ Charles Fink                   By:  \/s\/ James Piane               \n    ----------------------                  -----------------------------\n\n\nIts:  V.P. &amp; Group Manager              Its:   Attorney in Fact  \n    ----------------------                   ----------------------------\n\n\nDated: June 23, 1989                    Dated:  6-23-89                  \n       -------------------                      -------------------------\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n                                      -6-\n\n\n\n\n                                    EXHIBIT D\n                                          \n\n\nRECORDING REQUESTED BY:\n\nThe Equitable Life Assurance\n     Society of the Untied States\n\nWHEN RECORDED RETURN TO:\n\nMorrison &amp; Foerster\n345 California Street\nSan Francisco, CA  94104-2105\n\nAtt'n: Leslie M. Browne\n\n-------------------------------------------------------------------------------\n                                          \n                     (Space above this lien for Recorder's use)\n                                          \n                           SUBORDINATION, NON-DISTURBANCE\n                              AND ATTORNMENT AGREEMENT\n                                          \n                                          \nNOTICE:   THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT RESULTS\n          IN YOUR LEASEHOLD ESTATE IN THE PROPERTY BECOMING SUBJECT TO AND OF \n          LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY \n          INSTRUMENT.\n\n          THIS AGREEMENT is entered into as of the ______ day of _____________,\n1986, by and between THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNTIED STATES,\na New York corporation (the \"Beneficiary\"), TELEDYNE INDUSTRIES, INC., a\nCalifornia corporation (the \"Lessee\") and AIRPORT TECHNOLOGY ASSOCIATES, a\nCalifornia general partnership (collectively the \"Lessor\").\n\n                                W I T N E S S E T H\n\n          WHEREAS, Lessee has entered into a certain lease dated June 30, 1986\n(the \"Lease\"), with Lessor covering certain space (the \"Premises\") located in\nand upon the real property described in Exhibit A attached hereto (the\n\"Property\");\n\n          WHEREAS, Beneficiary is the holder of a first mortgage loan (the\n\"Loan\") to Lessor in the amount of Thirty One Million Two Hundred Thousand\nand\/no 100 Dollars ($31,200,000.00) which is secured by a first lien\nConstruction and Permanent Deed of Trust, Security Agreement and Fixture Filing\nwith Assignment of Rents (the \"Deed of Trust\") covering the Property;\n\n          WHEREAS, the parties hereto desire expressly to confirm the\nsubordination of the Lease to the lien of the Deed of Trust, it being a\nrequirement by Beneficiary that the lien and charge of the Deed of Trust be\nunconditionally and at all times prior and superior to the leasehold interests\nand estates created by the Lease; and\n\n          WHEREAS, Lessee has requested that Beneficiary agree not to disturb\nLessee's possessory rights in the Premises in the event beneficiary should\nforeclose the Deed of Trust, provided that Lessee is not in default under the\nLease and provided that Lessee attorns to beneficiary or the purchaser at any\nforeclosure or Trustee's sale of the Property.\n\n          NOW, THEREFORE, in consideration of the mutual covenants contained\nherein and of other good and valuable consideration the receipt and sufficiency\nof which is hereby acknowledged, the parties hereby agree as follows:\n\n\n          \n\n\n          1.   Notwithstanding anything to the contrary set forth in the Lease,\nthe Lease and the leasehold estate created thereby and all of Lessee's rights\nthereunder shall be and shall at all times remain subject, subordinate and\ninferior to the Deed of Trust and the lien thereof and all rights of Beneficiary\nthereunder and to any and all renewals, modifications, consolidations,\nreplacements and extensions thereof.\n\n          2.   Lessee hereby declares, agrees and acknowledges that:\n\n               a.   Beneficiary would not have agreed to recognize the Lease\nwithout this Agreement; and\n\n               b.   Beneficiary, in making disbursements pursuant to the\nagreements evidencing and securing the Loan, is under no obligation or duty to\noversee or direct the application of the proceeds of such disbursements and such\nproceeds may be used by Lessor for purposes other than improvement of the\npremises.\n\n          3.   In the event of foreclosure of the Deed of Trust, or upon a \nsale of the property encumbered thereby pursuant to the Trustee's power of \nsale contained therein, or upon a transfer of said property by deed in lieu \nof foreclosure, then so long as Lessee is not in default under any of the \nterms, covenants, or conditions of the Lease, the Lease shall continue in \nfull force and effect as a direct lease between the succeeding owner of the \nProperty and Lessee, upon and subject to all of the terms, covenants and \nconditions of the Lease for the balance of the term of the Lease.  Lessee \nhereby agrees to attorn to and accept any such successor owner as landlord \nunder the Lease, and to be bound by and perform all of the obligations \nimposed by the Lease, and Beneficiary or any such successor owner of the \nProperty will not disturb the possession of Lessee, and will be bound by all \nof the obligations imposed by the Lease upon the landlord thereunder; \nprovided, however, that the Beneficiary, or any purchaser at a trustee's or \nsheriff's sale or any successor owner of the Property shall not be:\n\n               a.   liable for any act or omission of a prior landlord\n(including the Lessor); or\n\n               b.   subject to any offsets or defenses which the Lessee might\nhave against any prior landlord (including the Lessor); or\n\n               c.   bound by any rent or additional rent which the Lessee might\nhave paid in advance to any prior landlord (including the Lessor) for a period\nin excess of one month; or\n\n               d.   bound by any agreement or modification of the Lease made\nwithout the written consent of the Beneficiary; or\n\n               e.   liable or responsible for or with respect to the retention,\napplication and\/or return to Lessee of any security deposit paid to any prior\nlessor (including the Lessor), whether or not still held by such prior lessor,\nunless and until beneficiary or such other purchaser has actually received for\nits own account as lessor the full amount of such security deposit.\n\n          Beneficiary acknowledges that it is presently a general partner in\nLessor and that the provisions of this Agreement shall not affect any\nobligations it may have under the Lease in its capacity as general partner of\nLessor.\n\n          4.   Upon the written request of either Beneficiary or Lessee to the\nother given at the time of a foreclosure, trustee's sale or deed in lieu\nthereof, the parties agree to execute a lease of the Premises upon the same\nterms and conditions as the Lease between the Lessor and Lessee, which lease\nshall cover any unexpired term of the Lease existing prior to such foreclosure,\ntrustee' sale or conveyance in lieu of foreclosure.\n\n          5.   Lessee from and after the date hereof, in the event of any act or\nomission by Lessor which would give Lessee the right, either immediately or\nafter the lapse of time, to terminate the Lease or to claim a partial or total\neviction or to offset against the rental due under the Lease any amount due\nLessee as a result of a breach by Lessor, will not exercise any such \n\n\n                                      -2-\n\n\n\n\nright:  (a) until it has given written notice of such act to Beneficiary; and \n(b) until the same period of time as is given to Lessor under the Lease to \ncure such act or omission shall have elapsed following such giving of notice \nto beneficiary and following the time when Beneficiary shall have become \nentitled under the Deed of Trust to remedy the same.\n\n          6.   Lessor, as landlord under the Lease and trustor under the Deed \nof Trust, agrees for itself and its heirs, successors and assigns, that:  \n(a) this Agreement does not (i) constitute a waiver by Beneficiary of any of \nits rights under the Deed of Trust, and\/or (ii) in any way release Lessor \nfrom its obligation to comply with the terms, provisions, conditions, \ncovenants, agreements and clauses of the Deed of Trust; (b) the provisions of \nthe Deed of Trust remain in full force and effect and must be complied with \nby Lessor; and (c) in the event of a default under the Deed of Trust, Lessee \nmay pay all rent and all other sums due under the Lease to beneficiary as \nprovided in this Agreement.\n\n          7.   Lessee acknowledges that it has notice that the Lease and the \nrent and all other sums due thereunder have been assigned or are to be \nassigned to Beneficiary as security for the Loan secured by the Deed of \nTrust.  In the event that Beneficiary notifies Lessee in writing of a default \nunder the Deed of Trust and demands that Lessee pay its rent and all other \nsums due under the Lease to Beneficiary, Lessee agrees that it will honor \nsuch demand and pay its rent and all other sums due under the Lease directly \nto the Beneficiary or as otherwise required pursuant to such notice.\n\n          8.   Any provision of this Agreement to the contrary \nnotwithstanding, beneficiary shall have no obligation or incur any liability \nwith respect to the erection and completion of the building in which the \nPremises are located or for completion of the Premises or any improvements \nfor Lessee's use and occupancy.\n\n          9.   Lessee from and after the date hereof shall send a copy of any \nnotice or statement under the Lease to Beneficiary at the same time such \nnotice or statement is sent to the Lessor under the Lease.\n\n         10.   All notices hereunder shall be deemed to have been duly given if\nmailed by United States registered or certified mail, with return receipt\nrequested, postage prepaid to beneficiary at the following address (or at such\nother address as shall be given in writing by Beneficiary to the Lessee) and\nshall be deemed complete upon any such mailing:\n\n          THE EQUITABLE LIFE ASSURANCE\n               SOCIETY OF THE UNITED STATES\n          c\/o Equitable Real Estate Management, Inc.\n          1 Market Plaza, 1900 Steuart Street Tower\n          San Francisco, CA  94105\n\n          Attention:  Senior Vice President\n\n          with a copy to: Mr. Richard Dolson, Senior Vice President\n                          EQUITABLE REAL ESTATE INVESTMENT MANAGEMENT, INC.\n                          3414 PEACHTREE ROAD NE, SUITE 1405 \n                          ATLANTA, GEORGIA  30326-1162\n\n          11.  This Agreement supersedes any inconsistent provisions of the \nLease.\n\n          12.  Nothing contained in this Agreement shall be construed to \nderogate from or in any way impair or affect the lien and charge or \nprovisions of the Deed of Trust, except as specifically set forth herein.\n\n          13.  This Agreement shall inure to the benefit of the parties \nhereto, their successors and permitted assigns; provided however, that in the \nevent of the assignment or transfer of the interest of Beneficiary, all \nobligations and liabilities of Beneficiary under this Agreement shall \nterminate, and thereupon all such obligations and liabilities shall be the \nresponsibility of the party to whom beneficiary's interest is assigned or \ntransferred; and provided \n\n                                      -3-\n\n\n\nfurther that the interest of Lessee under this Agreement may not be assigned \nor transferred without the prior written consent of Beneficiary.\n\n          14.  Lessee agrees that this Agreement satisfies any condition or\nrequirement in the Lease relating to the granting of a non-disturbance\nagreement.\n\n          15.  This Agreement shall be governed by and construed in accordance\nwith the laws of the State of California.\n\n          IN WITNESS WHEREOF, the parties have executed this Agreement on the\ndate and year first set forth above.\n\n\nNOTICE:   THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT CONTAINS\n          A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON THE LEASE TO OBTAIN \n          A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN \n          IMPROVEMENT OF THE PROPERTY.\n\nTHE EQUITABLE LIFE ASSURANCE\n     SOCIETY OF THE UNITED STATES\n     a New York corporation\n     \"Beneficiary\"\n\n\n\nBy                            \n   ------------------------------\nPrinted\nName:     Richard B. Duffy         \n      ---------------------------\n\nTitle    Assistant Secretary      \n      ---------------------------\n\n\nTELEDYNE INDUSTRIES, INC.\n    a California corporation\n    \"Lessee\"\n\n\nBy                            \n   ------------------------------\nPrinted\nName                               \n     ----------------------------\n\nTitle                              \n      ---------------------------\n\n\nAIRPORT TECHNOLOGY PARK ASSOCIATES,\n     a California general partnership\n     \"Lessor\"\n\nBy   Birstaf II,\n     a California partnership,\n     General Partner\n\n     By                                 \n        ------------------------------\n        Hudson R. Staffield,\n        a general partner of\n        Birstaf II\n\n\n                                      -4-\n\n\n\n\n     By   Birtcher Pacific II\n          a California general partnership,\n          a general partner of\n          Birstaf  II\n\n\n     By                                 \n         ------------------------------------\n     Printed\n     Name:                         \n           ----------------------------------\n\n     Title                              \n           ----------------------------------\n\nBy  The Equitable Life Assurance\n     Society of the United States,\n     a New York corporation,\n     General Partner\n\n\n     By                                 \n        -------------------------------------\n     Printed\n     Name           Richard B. Duffy         \n          -----------------------------------\n\n     Title          Assistant Secretary      \n          -----------------------------------\n\n\n\n          IT IS RECOMMENDED THAT PRIOR TO THE EXECUTION OF THIS \nSUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT, THE PARTIES CONSULT \nWITH THEIR ATTORNEYS WITH RESPECT THERETO.\n\n\n                                      -5-\n\n\n\n\n\nSTATE OF            )\n                    ) ss.\nCOUNTY OF           )\n\n\n\n     On this ____ day of ____________, in the year 1986, before me, the \nundersigned, a Notary Public in and for said State, personally appeared \nRichard B. Duffy, personally known to me, or proved to me on the basis of \nsatisfactory evidence, to be the person who executed the within instrument as \nAssistant Secretary, on behalf of The Equitable Life Assurance Society of the \nUnited States, a New York corporation, the corporation therein named, and \nacknowledge to me that such corporation executed the within instrument \npursuant to its by-laws or to a resolution of its board of directors.\n\n     WITNESS my hand and official seal.\n\n\n\n                                                                      \n                                       ----------------------------------------\n                                       NOTARY PUBLIC\n\n\n\n\n\n\nSTATE OF            )\n                    ) ss.\nCOUNTY OF           )\n\n\n\n     On this ____ day of ____________, in the year 1986, before me, the \nundersigned, a Notary Public in and for said State, personally appeared \n______________________, personally known to me, or proved to me on the basis \nof satisfactory evidence, to be the person who executed the within instrument \nas ____________________, on behalf of Teledyne Industries, Inc., a California \ncorporation, the corporation therein named, and acknowledge to me that such \ncorporation executed the within instrument pursuant to its by-laws or to a \nresolution of its board of directors.\n\n     WITNESS my hand and official seal.\n\n\n\n\n\n                                   ------------------------------------------\n                                   NOTARY PUBLIC\n\n\n\n\n\n\n\nSTATE OF            )\n                    ) ss.\nCOUNTY OF           )\n\n\n\n     On this ____ day of ____________, in the year 1986, before me, the \nundersigned, a Notary Public in and for said State, personally appeared \nHudson R. Staffield, personally known to me, or proved to me on the basis of \nsatisfactory evidence, to be the person who executed the within instrument as \na general partner of Birstaf II, a California partnership, and acknowledged \nto me that Birstaf II is a general partner of Airport Technology Park \nAssociates, the California general partnership that executed the within \ninstrument, and that Birstaf II executed the same as a general partner of \nAirport Technology Park Associates.\n\n     WITNESS my hand and official seal.\n\n\n\n\n\n\n                                       ----------------------------------------\n                                       NOTARY PUBLIC\n\n\n\n\nSTATE OF            )\n                    ) ss.\nCOUNTY OF           )\n\n\n\n\n     On this ____ day of ____________, in the year 1986, before me, the \nundersigned, a Notary Public in and for said State, personally appeared \n___________________, personally known to me, or proved to me on the basis of \nsatisfactory evidence, to be the person who executed the within instrument as \nthe ______________________ of Birtcher Pacific II, a California general \npartnership, and acknowledged to me that Birtcher Pacific II is a general \npartner of Birstaf II, a California partnership, that Birstaf II is a general \npartner of Airport Technology Park Associates, the California general \npartnership that executed the within instrument, that Birtcher Pacific II \nexecuted the same as a general partner of Birstaf II, that Birstaf II \nexecuted the same as a general partner of Airport Technology Park Associates, \nand that Airport Technology Park Associates executed the same.\n\n     WITNESS my hand and official seal.\n\n\n\n\n\n\n                                       ----------------------------------------\n                                       NOTARY PUBLIC\n\n                                     -2-\n\n\n\n\n\nSTATE OF            )\n                    ) ss.\nCOUNTY OF           )\n\n\n\n     On this ____ day of ____________, in the year 1986, before me, the \nundersigned, a Notary Public in and for said State, personally appeared \nRichard B. Duffy, personally known to me, or proved to me on the basis of \nsatisfactory evidence, to be the person who executed the within instrument as \nthe Assistant Secretary of The Equitable Life Assurance Society of the United \nStates, a New York corporation, and acknowledge to me that The Equitable Life \nAssurance Society of the United States is a general partner of Airport \nTechnology Park Associates, the California general partnership that executed \nthe within instrument, and that The Equitable Life Assurance Society of the \nUnited States executed the same as a general partner of Airport Technology \nPark Associates.\n\n     WITNESS my hand and official seal.\n\n\n\n\n\n\n                                       ----------------------------------------\n                                       NOTARY PUBLIC\n\n                                     -3-\n\n\n\n\n                                       LEASE\n                                          \n                                          \n                                   BY AND BETWEEN\n                                          \n                                          \n             THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES,\n                                          \n                        a New York corporation, as Landlord\n                                          \n    \n                                      \n                                        and\n                                          \n                                          \n                                  FMC CORPORATION,\n                                          \n                                          \n                              a Delaware corporation,\n                                          \n                                          \n                                     as Tenant\n                                          \n                                          \n                                        for\n                                          \n                                          \n                                     BUILDING C\n                                          \n                                          \n\n\n\n\n\n\n\n                                    TABLE OF CONTENTS\n\n\n\nARTICLE 1.  DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .  1\n\n   1.1. Commencement Date. . . . . . . . . . . . . . . . . . . . . . . . . .  1\n\n   1.2. Rent Start Date. . . . . . . . . . . . . . . . . . . . . . . . . . .  1\n\n   1.3. Lease Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1\n\n   1.4. Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1\n\n   1.5. Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2\n\n   1.6. Permitted Use. . . . . . . . . . . . . . . . . . . . . . . . . . . .  2\n\n   1.7. Tenant's Minimum Liability Insurance Coverage. . . . . . . . . . . .  2\n\n   1.8. Tenant's Allocated Parking Stalls. . . . . . . . . . . . . . . . . .  2\n\n   1.9. Retained Real Estate Brokers . . . . . . . . . . . . . . . . . . . .  2\n\n   1.10. Address for Notices . . . . . . . . . . . . . . . . . . . . . . . .  2\n\n   1.11. Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2\n\n   1.12. Building A Lease. . . . . . . . . . . . . . . . . . . . . . . . . .  2\n\n   1.13. Tenant's Allocated Share. . . . . . . . . . . . . . . . . . . . . .  2\n\n   1.14. Continuing Tenant Default . . . . . . . . . . . . . . . . . . . . .  3\n\n   1.15. Additional Definitions. . . . . . . . . . . . . . . . . . . . . . .  3\n\n\n\nARTICLE 2.  DEMISE AND ACCEPTANCE. . . . . . . . . . . . . . . . . . . . . .  3\n\n   2.1. Demise of Premises . . . . . . . . . . . . . . . . . . . . . . . . .  3\n\n   2.2. Delivery and Acceptance of Possession. . . . . . . . . . . . . . . .  3\n\n   2.3. Construction of Interior Improvements. . . . . . . . . . . . . . . .  3\n\n   2.4. Options to Extend Lease Term . . . . . . . . . . . . . . . . . . . .  3\n\n\n\nARTICLE 3.  RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5\n\n   3.1. Base Monthly Rent. . . . . . . . . . . . . . . . . . . . . . . . . .  5\n\n   3.2. Additional Rent. . . . . . . . . . . . . . . . . . . . . . . . . . .  6\n\n   3.3. Payment of Rent. . . . . . . . . . . . . . . . . . . . . . . . . . .  6\n\n   3.4. Late Charge and Interest on Rent in Default. . . . . . . . . . . . .  6\n\n   \n\nARTICLE 4.  USE OF PREMISES. . . . . . . . . . . . . . . . . . . . . . . . .  7\n\n   4.1. Limitation on Type . . . . . . . . . . . . . . . . . . . . . . . . .  7\n\n   4.2. Compliance with Laws and Private Restrictions. . . . . . . . . . . .  7\n\n   4.3. Insurance Requirements . . . . . . . . . . . . . . . . . . . . . . .  7\n\n   4.4. Outside Areas. . . . . . . . . . . . . . . . . . . . . . . . . . . .  8\n\n   4.5. Signs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8\n\n   4.6. Rules and Regulations. . . . . . . . . . . . . . . . . . . . . . . .  8\n\n   4.7. Parking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8\n\n\n                                      -i-\n\n\n\n\n\n   4.8. Window Coverings . . . . . . . . . . . . . . . . . . . . . . . . . .  9\n\n   4.9. Outside Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . .  9\n\n\nARTICLE 5.  TRADE FIXTURES AND LEASEHOLD IMPROVEMENTS. . . . . . . . . . . .  9\n\n   5.1. Trade Fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . .  9\n\n   5.2. Leasehold Improvements . . . . . . . . . . . . . . . . . . . . . . .  9\n\n   5.3. Alterations Required by Law. . . . . . . . . . . . . . . . . . . . .  10\n \n   5.4. Landlord's Improvements. . . . . . . . . . . . . . . . . . . . . . .  11\n \n   5.5. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11\n\n   5.6. Modifications to the Premises. . . . . . . . . . . . . . . . . . . .  11\n\n\nARTICLE 6.  REPAIR AND MAINTENANCE . . . . . . . . . . . . . . . . . . . . .  12\n\n   6.1. Tenant's Obligation to Maintain. . . . . . . . . . . . . . . . . . .  12\n\n   6.2. Landlord's Obligation to Maintain. . . . . . . . . . . . . . . . . .  12\n\n   6.3. Tenant's Obligation to Reimburse . . . . . . . . . . . . . . . . . .  13\n\n   6.4. Common Operating Expenses Defined. . . . . . . . . . . . . . . . . .  13\n\n   6.5. Control of Common Area . . . . . . . . . . . . . . . . . . . . . . .  14\n\n   6.6. Tenant's Negligence. . . . . . . . . . . . . . . . . . . . . . . . .  15\n\n\nARTICLE 7.  WASTE DISPOSAL AND UTILITIES . . . . . . . . . . . . . . . . . .  15\n\n   7.1. Waste Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . .  15\n\n   7.2. Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . . .  15\n\n   7.3. Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17\n\n   7.4. Compliance with Governmental Regulations . . . . . . . . . . . . . .  17\n\n\nARTICLE 8.  REAL PROPERTY TAXES. . . . . . . . . . . . . . . . . . . . . . .  17\n\n   8.1. Real Property Taxes Defined. . . . . . . . . . . . . . . . . . . . .  17\n\n   8.2. Tenant's Obligation to Reimburse . . . . . . . . . . . . . . . . . .  18\n\n   8.3. Taxes on Tenant's Property . . . . . . . . . . . . . . . . . . . . .  19\n\n\nARTICLE 9.  INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . .  19\n\n   9.1. Tenant's Insurance . . . . . . . . . . . . . . . . . . . . . . . . .  19\n\n   9.2. Landlord's Insurance . . . . . . . . . . . . . . . . . . . . . . . .  20\n\n   9.3. Tenant's Obligation to Reimburse . . . . . . . . . . . . . . . . . .  20\n\n   9.4. Release and Waiver of Subrogation. . . . . . . . . . . . . . . . . .  20\n\n\nARTICLE 10.  LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY. . . . . . . .  21\n\n   10.1. Limitation on Landlord's Liability. . . . . . . . . . . . . . . . .  21\n\n   10.2. Limitation on Tenant's Recourse . . . . . . . . . . . . . . . . . .  21\n\n\n\n\n\n\n   10.3. Indemnification of Landlord . . . . . . . . . . . . . . . . . . . .  21\n\n\nARTICLE 11.  DAMAGE TO PREMISES. . . . . . . . . . . . . . . . . . . . . . .  22\n\n   11.1. Landlord's Duty to Restore. . . . . . . . . . . . . . . . . . . . .  22\n\n   11.2. Landlord's Right to Terminate . . . . . . . . . . . . . . . . . . .  22\n\n   11.3. Tenant's Right to Terminate . . . . . . . . . . . . . . . . . . . .  23\n\n   11.4. Abatement of Rent . . . . . . . . . . . . . . . . . . . . . . . . .  23\n\n\nARTICLE 12.  CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . . . .  24\n\n   12.1. Tenant's Termination Right. . . . . . . . . . . . . . . . . . . . .  24\n\n   12.2. Restoration and Abatement of Rent . . . . . . . . . . . . . . . . .  24\n\n   12.3. Temporary Taking. . . . . . . . . . . . . . . . . . . . . . . . . .  24\n\n   12.4. Division of Condemnation Award. . . . . . . . . . . . . . . . . . .  24\n\n\nARTICLE 13.  DEFAULT AND REMEDIES. . . . . . . . . . . . . . . . . . . . . .  25\n\n   13.1. Events of Tenant's Default. . . . . . . . . . . . . . . . . . . . .  25\n\n   13.2. Landlord's Remedies . . . . . . . . . . . . . . . . . . . . . . . .  26\n\n   13.3. Waiver by Tenant of Certain Remedies. . . . . . . . . . . . . . . .  27\n\n   13.4. Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27\n\n   13.5. Limitation on Exercise of Rights. . . . . . . . . . . . . . . . . .  27\n\n\nARTICLE 14.  ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . .  27\n\n   14.1. By Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27\n\n   14.2. By Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29\n\n\nARTICLE 15.  GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . .  30\n\n   15.1. Landlord's Right to Enter . . . . . . . . . . . . . . . . . . . . .  30\n\n   15.2. Surrender of the Premises . . . . . . . . . . . . . . . . . . . . .  30\n\n   15.3. Holding Over  . . . . . . . . . . . . . . . . . . . . . . . . . . .  30\n\n   15.4. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . .  31\n\n   15.5. Tenant's Attornment . . . . . . . . . . . . . . . . . . . . . . . .  31\n\n   15.6. Mortgagee Protection  . . . . . . . . . . . . . . . . . . . . . . .  31\n\n   15.7. Estoppel Certificates and Financial Statements  . . . . . . . . . .  31\n\n   15.8. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . .  32\n\n   15.9. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32\n\n   15.10. Obligation to Act Reasonably . . . . . . . . . . . . . . . . . . .  32\n\n   15.11. Corporate Authority  . . . . . . . . . . . . . . . . . . . . . . .  32\n\n   15.12. Additional Definitions . . . . . . . . . . . . . . . . . . . . . .  32\n\n   15.13. Miscellaneous  . . . . . . . . . . . . . . . . . . . . . . . . . .  33\n\n\n\n\n   15.14. Termination by Exercise of Right . . . . . . . . . . . . . . . . .  33\n\n   15.15. Brokerage Commissions  . . . . . . . . . . . . . . . . . . . . . .  34\n\n   15.16. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . .  34\n\n   15.17. Right of First Offer to Lease  . . . . . . . . . . . . . . . . . .  34\n\n\nSCHEDULE OF EXHIBITS\n\nEXHIBIT A - SITE PLAN OF PROPERTY\nEXHIBIT B - APPROVED PLANS FOR INTERIOR IMPROVEMENTS\nEXHIBIT C - INTERIOR IMPROVEMENT AGREEMENT\nEXHIBIT D - FORM OF SUBORDINATION AGREEMENT\n\n\n\n\n\n\n\n\n\n\n                                        LEASE\n\n                                     (Building C)\n\n     THIS LEASE, dated June 1, 1989 for reference purposes only, is made by \nand between THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, a New \nYork corporation (\"Landlord\"), and FMC CORPORATION, a Delaware corporation \n(\"Tenant\").\n\n                                   ARTICLE 1.\n\n                                  DEFINITIONS\n\n     1.1.  COMMENCEMENT DATE: The term \"Commencement Date\" shall mean the \ndate the last signatory to this Lease whose execution is required to make it \nbinding on Landlord and Tenant shall have executed this Lease.\n\n     1.2.  RENT START DATE: The term \"Rent Start Date\" shall mean November 1, \n1989; provided, however, that if the Interior Improvements to be constructed \npursuant to the Interior Improvement Agreement attached as EXHIBIT \"C\" are \nnot \"Substantially Completed\" (as defined in EXHIBIT \"C\") by November 1, 1989 \nbecause of delays in construction resulting from \"Force Majeure\" (as defined \nin this paragraph 1.2), then the Rent Start Date shall be extended for one \nday for each such day of delay experienced by Tenant in constructing the \nInterior Improvements pursuant to EXHIBIT \"C\".  For purposes of this \nparagraph, the following shall apply:\n\n           A. The term \"Force Majeure\" shall mean (i) any material default by \nLandlord of its obligations under this Lease which delays construction; (ii) \nstrikes, labor disputes or work stoppages which are not directed solely at \nthe construction of the Interior Improvements or only because of job \nconditions at the Premises but which also affect other construction projects; \n(iii) damage to the Interior Improvements or the Premises caused by fire, \nearthquake, vandalism or other peril; and (iv) civil commotion, civil unrest, \nor acts of war.  The term \"Force Majeure\" shall not include any of the \nfollowing:  (i) delays caused by the Prime Contractor or any subcontractor, \nincluding delays resulting from contractor default; (ii) inability to obtain \nlabor, materials, equipment, or reasonable substitutes therefor when ordered; \nor (iii) inability to obtain any governmental approval required in connection \nwith the construction of the Interior Improvements.\n\n           B. Tenant shall notify Landlord promptly of the occurrence of any \nevent of Force Majeure.  If Tenant does not notify Landlord in writing of the \noccurrence of an event of Force Majeure within five (5) days after such event \nhas commenced to occur, then the Rent Start Date shall only be extended by \nthe amount of delay that occurs after Tenant actually gives written notice to \nLandlord of the occurrence of the event of Force Majeure in question.\n\n     1.3.  LEASE TERM: The Lease Term shall commence on the Commencement Date \nand shall continue until the tenth (10th) anniversary of the Rent Start Date \n(unless the Lease Term is extended pursuant to paragraph 2.4 hereof).\n\n     1.4.  PROPERTY: The term \"Property\" shall mean that real property shown \non the site plan attached hereto as EXHIBIT \"A\" and all improvements now or \nhereafter located thereon, including, without limitation, the five (5) \nbuildings presently located thereon, including, without limitation, the five \n(5) buildings presently located thereon, the aggregate gross leasable area of \nwhich is approximately 295,271 square feet (the \"Property Gross Leasable \nArea\"), allocated among the five buildings as shown on the attached EXHIBIT \n\"A\"; provided, however, that Landlord may change the boundaries and \ncomposition of the Property by removing or adding land and\/or buildings and \nthereafter the term \"Property\" shall refer to such real property so enlarged \nor reduced and the amount of the \"Property Gross Leasable Area\" shall be \nappropriately adjusted.\n\n\n\n     1.5.  PREMISES: The term \"Premises\" shall mean the building structure \nsituated on the Property commonly known as Building C of Airport Technology \nPark, 2830 De La Cruz Boulevard, Santa Clara, California, containing \napproximately 86,785 square feet of gross leasable area (the \"Premises Gross \nLeasable Area\") located as shown on EXHIBIT \"A\".  Landlord and Tenant agree \nthat (i) all measurements of gross leasable area contained in this Lease are \nconclusively agreed to be correct and binding upon the parties, even if a \nsubsequent measurement of any one of these areas determines that it is more \nor less than the amount of area reflected in this Lease; and (ii) any such \nsubsequent determination that the area is more or less than shown in this \nLease shall not result in a change in any of the computations of rent, \nimprovement allowances, or other matters described in this Lease where gross \nleasable area is a factor.\n\n     1.6.  PERMITTED USE: The term \"Permitted Use\" shall mean the use of the \nPremises for (i) research and development, production, sales, and general \nadministrative offices and other legal uses incidental thereto, and (ii) any \nother legal use first approved in writing by Landlord.\n\n     1.7.  TENANT'S MINIMUM LIABILITY INSURANCE COVERAGE: The term \"Tenant's \nMinimum Liability Insurance Coverage\" shall mean Two Million Five Hundred \nThousand Dollars ($2,500,000).\n\n     1.8.  TENANT'S ALLOCATED PARKING STALLS: The term \"Tenant's Allocated \nParking Stalls\" shall mean 347 parking stalls for the non-exclusive use of \nTenant, subject to reduction as set forth in paragraph 5.6A. Notwithstanding \nthe foregoing, or any other provision of this Lease, the parties acknowledge \nthat although Tenant is allocated a combined total of 620 parking spaces \npursuant to this Lease and the Building A Lease, after a restripping of the \nparking areas on the Property to increase to 1,155 the number of spaces \navailable, only a total of 603 spaces shall be available for Tenant's use.  \nIn this regard the parties agree that the total number of parking spaces \nallocated for Tenant's use under this Lease and under the Building A Lease \nshall be reduced by 17; such spaces shall be proportionately allocated \nbetween the Premises and the premises leased pursuant to the Building A \nLease.  Landlord agrees, at the written request of Tenant, to construct at \nLandlord's expense 17 additional parking spaces on the Property, if Landlord \ncan do so at a reasonable cost by relocating or removing landscaped area or \ndriveways, and the construction of such additional parking spaces is \npermitted by all applicable Laws.\n\n     1.9.  RETAINED REAL ESTATE BROKERS: The term \"Retained Real Estate \nBrokers\" shall mean LaSalle Partners Limited and J.R. Parrish, Inc.\n\n     1.10. ADDRESS FOR NOTICES: The term \"Address for Notices\" shall mean the \nfollowing:\n\n           A. In the case of Landlord, such term shall mean The Equitable \nLife Assurance Society of the United States, One Market Plaza, 1900 Steuart \nTower, San Francisco, California  94105, Attention:  Property Management \nDepartment.\n\n           B. In the case of Tenant, such term shall mean (i) before the \nCommencement Date, its present address which is 881 Martin Avenue, Box 58123, \nSanta Clara, California  95052; and (ii) after the Commencement Date, the \naddress of the Premises which is 2830 De La Cruz Boulevard, Santa Clara, \nCalifornia  95050.\n\n     1.11. LEASE: The term \"Lease\" shall mean this printed lease, Exhibits \n\"A\" (site plan), \"B\" (Approved Plans for Interior Improvements), \"C\" \n(Interior Improvement Agreement), \"D\" (form of subordination agreement), all \nof which are attached hereto and incorporated herein by this reference.\n\n     1.12. BUILDING A LEASE: The term \"Building A Lease\" shall mean that \nlease dated as of June 1, 1989 between Landlord and Tenant, pursuant to which \nTenant leases from Landlord that certain building identified as Building A on \nthe site plan attached hereto as EXHIBIT \"A\" and which contains approximately \n68,708 square feet, the address of which is 2890 De La Cruz Boulevard, Santa \nClara, California.\n\n     1.13. TENANT'S ALLOCATED SHARE: The term \"Tenant's Allocated Share\" \nshall mean one hundred percent (100%).\n\n                                     -2-\n\n\n\n     1.14. CONTINUING TENANT DEFAULT: A \"Continuing Tenant Default\" shall be \ndeemed to exist when an \"Event of Tenant's Default\" (as defined in paragraph \n13.1) has occurred, and the underlying default or breach by Tenant of its \nobligations which resulted in such Event of Tenant's Default has not been \ncompletely cured.\n\n     1.15. ADDITIONAL DEFINITIONS: As used in this Lease or any addendum or \namendment thereto, the following terms shall have the meanings set forth in \nparagraph 15.12: \"Agreed Interest Rate\", \"Common Area\", \"Law\", \"Leasehold \nImprovements\", \"Lender\", \"Private Restrictions\" and \"Trade Fixtures\".\n\n                                 ARTICLE 2.\n\n                           DEMISE AND ACCEPTANCE\n\n     2.1.  DEMISE OF PREMISES: Landlord hereby leases to Tenant, and Tenant \nleases from Landlord, for the Lease Term upon the terms and conditions of \nthis Lease, the Premises together with (i) the non-exclusive right to use no \nmore than the number of Tenant's Allocated Parking Stalls within the Common \nArea (subject to the limitations set forth in paragraph 4.7), and (ii) the \nnon-exclusive right to use the Common Area for ingress to and egress from the \nPremises.  Tenant's lease of the Premises shall be subject to (i) all Laws, \n(ii) all Private Restrictions, easements, and other matters of public record, \nand (iii) the reasonable and non-discriminatory rules and regulations from \ntime to time promulgated by Landlord pursuant to paragraph 4.6.\n\n     2.2.  DELIVERY AND ACCEPTANCE OF POSSESSION: Landlord shall deliver to \nTenant possession of the Premises on the Commencement Date in their presently \nexisting condition, broom clean.  Tenant shall accept possession of the \nPremises in its presently existing condition, \"as-is\" (except for latent \ndefects in the structural elements of the Premises), acknowledging that (i) \nTenant intends to do substantial renovation work and construct completely new \ninterior improvements pursuant to paragraph 2.3 hereof and the Interior \nImprovement Agreement attached as EXHIBIT \"C\", and (ii) Landlord is obligated \nto make certain repairs as set forth in the Interior Improvement Agreement.\n\n     2.3.  CONSTRUCTION OF INTERIOR IMPROVEMENTS: Tenant shall construct \ncertain improvements for Tenant's use in the Premises pursuant to the terms \nof the Interior Improvement Agreement executed concurrently with this Lease \nby Landlord and Tenant and attached hereto as EXHIBIT \"C\".\n\n     2.4.  OPTIONS TO EXTEND LEASE TERM: Landlord hereby grants to Tenant two \n(2) options (each referred to as the \"Option\") to extend the Lease Term each \nfor a five (5) year period (the \"Option Term\"), on the following terms and \nconditions:\n\n           A. Tenant must give Landlord notice in writing of its exercise of \nthe Option before the later to occur of (i) the two hundred fortieth (240th) \nday before the date the initial Lease Term (or then extended Lease Term as \nthe case may be) would end but for said exercise, or (ii) the seventh (7th) \nday following the establishment of the fair market rent for the Premises by \nappraisal pursuant to subparagraph 2.4F if such appraisal process is \ncommenced pursuant to subparagraphs 2.4E and 2.4F.\n\n           B. Tenant may not exercise the Option at any time that either of \nthe following is true:  (i) a Continuing Tenant Default exists under this \nLease (unless caused by a subtenant of the  original Tenant under this Lease \nand such original Tenant is using reasonable efforts to cause such default to \nbe cured) or (ii) a Continuing Tenant Default exists under the Building A \nLease (unless caused by a subtenant or assignee of the original Tenant under \nthis Lease and such original Tenant is using reasonable efforts to cause such \ndefault to be cured) and the same person or entity is the owner of record of \nboth the Premises and the real property leased pursuant to the Building A \nLease.\n\n                                     -3-\n\n\n\n           C. All the terms and conditions of this Lease shall apply during \nthe Option Term, except that the Base Monthly Rent for the Option Term shall \nbe determined as provided in subparagraph 2.4D below.\n\n           D. The Base Monthly Rent for the Option Term with respect to the \nPremises shall be the ninety-five percent (95%) of the fair market rent for \nthe Premises for the Option Term on the terms contained in this Lease as of \nthe commencement of the Option Term, determined pursuant to subparagraphs \n2.4E and 2.4F.  For purposes of this Lease, the term \"fair market rent for \nthe Premises\" shall mean the projected going market rent for the Premises as \nof the commencement of the Option Term in question, including a provision for \nperiodic increases of such rent during the Option Term (which increases shall \nbe established as part of such fair market rent), taking into account the \nvalue of all improvements in the Premises, regardless of whether made by \nLandlord or Tenant (except for those Leasehold Improvements that Tenant has \nthe right to remove at the expiration of the Lease Term).\n\n           E. Tenant may not exercise the Option in question unless Tenant \nhas delivered to Landlord a written request (a \"Rent Quote Request\") that \nLandlord state in writing Landlord's opinion of the fair market rent for the \nPremises for the upcoming Option Term in question, which Rent Quote Request \nmay only be delivered and shall only be effective if delivered (i) no sooner \nthan fifteen (15) months before the expiration of the Lease Term, and (ii) no \nlater than thirteen (13) months prior to the expiration of the Lease Term.  \nAfter receipt of a Rent Quote Request and no later than twelve (12) months \nprior to the expiration of the Lease Term, Landlord shall deliver to Tenant a \nwritten statement setting forth Landlord's opinion of the fair market rent \nfor the Premises for the Option Term in question (a \"Landlord's Rent Quote\"). \nFor a period of thirty (30) days following delivery to Tenant of Landlord's \nRent Quote (the \"Negotiation Period\"), Landlord and Tenant shall confer to \nattempt to reach agreement upon the fair market rent for the Premises for the \nOption Term in question.  If Landlord and Tenant are unable to reach \nagreement in writing within the Negotiation Period, for purposes of \nestablishing the Base Monthly Rent for the Option Term in question, the fair \nmarket rent for the Premises shall be deemed to be the amount stated in \nLandlord's Rent Quote unless Tenant delivers to Landlord during the \nNegotiation Period a written notice which states the following:  (i) Tenant \nrequires that the fair market rent for the Premises for the Option Term in \nquestion be established by the appraisal process described in subparagraph \n2.4F; and (ii) the name, address, and qualifications of the appraiser \nselected by Tenant for purposes of the appraisal process described in \nsubparagraph 2.4F (\"Tenant's Appraisal Demand\").  If Tenant so timely \ndelivers to Landlord a Tenant's Appraisal Demand, the Base Monthly Rent for \nthe Option Term in question shall be established based on the result of the \nappraisal process described in subparagraph 2.4F.\n\n           F. If Tenant delivers to Landlord a Tenant's Appraisal Demand \nduring the Negotiation Period, then the fair market rent for the Premises \nshall be determined by three (3) real estate appraisers, all of whom shall be \nmembers of the American Institute of Real Estate Appraisers with not less \nthan five (5) years experience appraising real property (other than \nresidential or agricultural property) located in Santa Clara County, \nCalifornia, in accordance with the following procedures:\n\n              (1) One of the appraisers shall be the appraiser identified in \nTenant's Appraisal Demand.  Within ten (10) days of receipt of Tenant's \nAppraisal Demand, Landlord shall select its appraiser and notify Tenant, in \nwriting, of the name, address and qualifications of an appraiser selected by \nit.  Failure by Landlord to select a qualified appraiser within said ten (10) \nday period shall be deemed a waiver of its right to select a second appraiser \non its own behalf and Tenant shall select a second appraiser on behalf of \nLandlord within five (5) days after the expiration of said ten (10) day \nperiod.  Within ten (10) days from the date the second appraiser shall have \nbeen appointed, the two (2) appraisers selected by the parties shall appoint \na third appraiser.  If the two appraisers fail to select a third qualified \nappraiser, the third appraiser shall be selected by the American Arbitration \nAssociation at the request of either party or, if there is then no American \nArbitration Association or if it refuses to perform this function, then at \nthe request of either Landlord or Tenant, the third appraiser shall be \nappointed by the then Presiding Judge of the Superior Court of the State of \nCalifornia for the County of Santa Clara.\n\n              (2) The three (3) appraisers so selected shall meet in San \nJose, \n\n                                     -4-\n\n\n\nCalifornia, not later than twenty (20) days following the selection of the \nthird appraiser.  At said meeting the appraisers shall attempt to determine \nthe fair market rent for the Premises for the Option Term in question.\n\n              (3) If the appraisers are unable to complete their \ndeterminations in one meeting, they may continue to consult at such times as \nthey deem necessary for a fifteen (15) day period from the date of their \nfirst meeting, in an attempt to have at least two (2) of them agree.  If, at \nthe initial meeting or at any time during said fifteen (15) day period, two \n(2) or more of the appraisers agree on the fair market rent for the Premises, \nsuch agreement shall be determinative and binding on the parties hereto, and \nthe agreeing appraisers shall, in simple letter form executed by the agreeing \nappraisers, forthwith notify both Landlord and Tenant of the amount set by \nsuch agreement.\n\n              (4) If two (2) or more appraisers do not agree within said \nfifteen (15) day period as set forth above, then each appraiser shall, within \nfive (5) days after the expiration of said fifteen (15) day period, submit \nhis independent appraisal in simple letter form to Landlord and Tenant \nstating his determination of the fair market rent for the Premises for the \nOption Term in question. Landlord and Tenant shall then determine the fair \nmarket rent for the Premises for the Option Term by determining the average \nof the fair market rent set by each of the appraisers; provided, however, if \nthe lowest appraisal is less than eighty-five percent (85%) of the middle \nappraisal then such lowest appraisal shall be disregarded, and\/or if the \nhighest appraisal is greater than one hundred fifteen percent (115%) of the \nmiddle appraisal then such highest appraisal shall be disregarded.  If any \nappraisal is disregarded, then the average shall be determined by computing \nthe average set by the other appraisals that have not been disregarded.  For \npurposes of determining the relative amount of the appraisals to implement \nthe provisions of this subparagraph requiring that an appraisal be \ndisregarded if it is too high or too low, the amount of an appraisal that \ncalls for periodic rent increases based upon an index (E.G., the Consumer \nPrice Index) shall be determined by assuming that such index will increase at \nthe same average annual rate during the option period in question that such \nindex increased on an average annual basis during the five (5) year period \npreceding the commencement of the option period in question.\n\n              (5) Each party shall bear the fees and expenses of the \nappraisers selected by or for it, and the fees and expenses of the third \nappraiser shall be borne fifty percent (50%) by Landlord and fifty percent \n(50%) by Tenant.\n\n                               ARTICLE 3.\n\n                                 RENT\n\n     3.1.  BASE MONTHLY RENT: Commencing on the Rent Start Date and \ncontinuing thereafter throughout the initial Lease Term, Tenant shall pay to \nLandlord a monthly rent (which rent is referred to as the \"Base Monthly \nRent\"), which shall be the following:\n\n           A. No Base Monthly Rent shall be payable for the period beginning \non the Rent Start Date and ending on the last day of the sixth (6th) month of \nthe Lease Term.\n\n           B. The Base Monthly Rent for the period beginning on the first day \nof the seventh (7th) month of the Lease Term and ending on the last day of \nthe twenty-fourth (24th) month of the Lease Term is Sixty-Thousand Seven \nHundred Fifty Dollars ($60,750) (I.E., $0.70 per square foot per month).\n\n           C. The Base Monthly Rent for the period beginning on the first day \nof the twenty-fifth (25th) month of the Lease Term and ending on the last day \nof the forty-eighth (48th) month of the Lease Term is Seventy-Three Thousand \nSeven Hundred Sixty-Seven Dollars ($73,767) (I.E., $0.85 per square foot per \nmonth).\n\n           D. The Base Monthly Rent for the period beginning on the first day \nof the forty-ninth (49th) month of the Lease Term and ending on the last day \nof the seventy-second \n\n                                     -5-\n\n\n\n(72nd) month of the Lease Term is Seventy-Eight Thousand One Hundred Six \nDollars ($78,106) (I.E., $0.90 per square foot per month).\n\n           E. The Base Monthly Rent for the period beginning on the first day \nof the seventy-third (73rd) month of the Lease Term and ending on the last \nday of the one hundred twentieth (120th) month of the Lease Term is \nEighty-Two Thousand Four Hundred Forty-Six Dollars ($82,446) (I.E., $0.95 per \nsquare foot per month).\n\n           F. For purposes of applying the provisions of this paragraph 3.1, \nthe term \"month of the Lease Term\" shall mean that period which begins on \nthat day of the calendar month in question which corresponds to the Rent \nStart Date and which continues for thirty (30) or thirty-one (31) days until \nthe day of the next calendar month which precedes the day in that calendar \nmonth which corresponds to the Rent Start Date.  By way of example only, if \nit is assumed that the Rent Start Date is September 15, 1989, then for \npurposes of this paragraph 3.1 (i) the first month of the Lease Term would \ncommence September 15 and end on October 14, 1989; and (ii) the seventh (7th) \nmonth of the Lease Term would commence on March 15 and end on April 14, 1990.\n\n     3.2.  ADDITIONAL RENT: Commencing on the Rent Start Date and continuing \nthereafter throughout the Lease Term, Tenant shall pay, as additional rent \n(the \"Additional Rent\"), (i) Tenant's share of Common Operating Expenses as \nrequired by paragraph 6.3, (ii) Tenant's share of Real Property Taxes as \nrequired by paragraph 8.2, (iii) Landlord's share of the net consideration \nreceived by Tenant upon certain assignments and sublettings as required by \nparagraph 14.1, (iv) any late charges or interest due Landlord pursuant to \nparagraph 3.4, (v) Tenant's share of the amortized cost of certain additional \nimprovements as provided in paragraph 5.4, and (vi) any other charges due \nLandlord pursuant to this Lease.\n\n     3.3.  PAYMENT OF RENT: All rent required to be paid in monthly \ninstallments shall be paid in advance on the first day of each calendar month \nduring the Lease Term.  All rent shall be paid in lawful money of the United \nStates, without any abatement, deduction or offset whatsoever (except as \npermitted by paragraphs 11.4 and 12.2), and without any prior demand \ntherefor, to Landlord at its address set forth above or at such other place \nas Landlord may designate from time to time.  Tenant's obligation to pay rent \nshall be prorated as of the Rent Start Date and at expiration or earlier \ntermination of the Lease Term such that Tenant shall not be required to pay \nBase Monthly Rent or Additional Rent for any period preceding the Rent Start \nDate or following the expiration or earlier termination of the Lease Term \n(except in the case of a termination of this Lease as a result of an Event of \nTenant's Default).\n\n     3.4.  LATE CHARGE AND INTEREST ON RENT IN DEFAULT: Tenant acknowledges \nthat the late payment by Tenant of any monthly installment of Base Monthly \nRent or any Additional Rent will cause Landlord to incur certain costs and \nexpenses not contemplated under this Lease, the exact amount of which are \nextremely difficult or impractical to fix.  Such costs and expenses will \ninclude, without limitation, administration and collection costs and \nprocessing and accounting expenses.  Therefore, if any such Base Monthly Rent \nor Additional Rent is not received by Landlord from Tenant within five (5) \ndays after Landlord delivers written notice to Tenant that such amount is \ndelinquent, Tenant shall immediately pay to Landlord a late charge equal to \nfive percent (5%) of such delinquent rent.  Landlord and Tenant agree that \nthis late charge represents a reasonable estimate of such costs and expenses \nand is fair compensation to Landlord for its loss suffered by Tenant's \nfailure to make timely payment.  In no event shall this provision for a late \ncharge be deemed to grant to Tenant a grace period or extension of time \nwithin which to pay any rent or prevent Landlord from exercising any right or \nremedy available to Landlord upon Tenant's failure to pay any rent due under \nthis Lease in a timely fashion, including the right to terminate this Lease.  \nIf any rent remains delinquent for a period in excess of thirty (30) days \nafter Landlord delivers written notice to Tenant that such amount is \ndelinquent, in addition to such late charge, Tenant shall pay to Landlord \ninterest on any rent that is not paid when due at the Agreed Interest Rate \nfollowing the date such amount became due until paid.\n\n                                     -6-\n\n\n\n                                  ARTICLE 4.\n\n                               USE OF PREMISES\n\n     4.1.  LIMITATION ON TYPE: Tenant shall use the Premises solely for the \nPermitted Use (as described in paragraph 1.6).  Tenant shall not do or permit \nanything to be done in or about the Premises or Common Area which will (i) \ninterfere with the rights of other occupants of the Property, (ii) cause \nstructural damage to the Premises and Tenant fails to promptly commence and \ndiligently pursue to completion the repair of such damage, or (iii) cause \ndamage to any part of the Premises or Property except to the extent \nreasonably necessary for the installation of Tenant's equipment and trade \nfixtures and Tenant fails to promptly commence and diligently pursue to \ncompletion the repair of such damage.  Tenant shall not operate any equipment \nwithin the Premises which will (i) injure, vibrate or shake the Premises, \n(ii) overload existing electrical systems or other mechanical equipment \nservicing the Premises, or (iii) impair the efficient operation of the \nsprinkler system or the heating, ventilating or air conditioning (\"HVAC\") \nequipment servicing the Premises, or (iv) damage, overload or corrode the \nsanitary sewer system.  Tenant shall not attach, hang or suspend anything \nfrom the ceiling, roof, walls or columns of the Premises or set any load on \nthe floor in excess of approved structural limits as defined by Landlord's \narchitect.  Any dust, fumes, or waste products generated by Tenant's use of \nthe Premises shall be contained and disposed so that they do not (i) create a \nfire or health hazard, (ii) damage the Premises, or (iii) interfere with the \nbusinesses of other tenants of the Property.  All noise or odors generated by \nTenant's use of the Premises shall be contained or muffled so that they do \nnot interfere with the businesses of other tenants of the Property. Tenant \nshall not (i) change the exterior of the Premises (subject to Tenant's right \nto install signs pursuant to paragraph 4.5), or (ii) install any equipment or \nantennas on or make any penetrations of the exterior or roof of the Premises \nwithout the prior written consent of Landlord.  Tenant shall not commit nor \npermit to be committed any waste in or about the Premises, and Tenant shall \nkeep the Premises in a neat, clean, attractive and orderly condition, free of \nany objectionable noises, odors, dust or nuisances which may disturb the \nquiet enjoyment of other tenants or occupants of the Property.  \nNotwithstanding the foregoing restrictions, the parties agree as follows:\n\n           A. Tenant may bring military fighting vehicles onto the first \nfloor of the Premises so long as (i) Tenant puts into place such reinforcing \nas is reasonably necessary to upgrade the floor load capacity so that it will \naccept such fighting vehicles; and (ii) Tenant repairs any damage to the \nPremises caused by the entry of such vehicles.\n\n           B. Tenant may install antennas, radio \"dishes\" or other electronic \nequipment reasonably necessary for the conduct of Tenant's business upon the \nroof of the Premises so long as (i) such installations are done in compliance \nwith all Laws and Private Restrictions; (ii) such installations are \naccomplished in a manner which does not compromise the watertight integrity \nof the roof; (iii) all damage to the Premises caused by such installation is \nrepaired by Tenant; and (iv) any such equipment is properly and effectively \nscreened from view in a manner reasonably acceptable to Landlord.\n\n           C. In the event Tenant desires to operate equipment within the \nPremises that will or may overload existing mechanical, electrical, or other \nsystems, Tenant may do so only if it first installs, at its sole cost, all \nnecessary modifications, repairs or upgrades of existing systems so that such \nequipment may be operated without overloading such systems as so modified by \nTenant.\n\n     4.2.  COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS: Tenant shall not \nuse or permit any person to use the Premises in any manner which violates any \nLaws or Private Restrictions.  Tenant shall abide by and promptly observe and \ncomply with all Laws and Private Restrictions and shall indemnify and hold \nLandlord harmless from any liability resulting from Tenant's failure to do so.\n\n     4.3.  INSURANCE REQUIREMENTS: Tenant shall not use or permit any person \nto use the Premises or Common Area in any manner which will cause a \ncancellation of any insurance policy covering the Premises.  Tenant shall not \nsell, or permit to be kept, used, or sold in or about \n\n                                     -7-\n\n\n\nthe Premises any article which may be prohibited by the standard form of fire \ninsurance policy; provided, however, that Tenant may bring military fighting \nvehicles onto the first floor of the Premises as permitted pursuant to \nsubparagraph 4.1A.  Tenant shall comply with all reasonable requirements of \nany insurance company, insurance underwriter, or Board of Fire Underwriters \nwhich are necessary to maintain, at reasonable rates, the insurance coverage \ncarried by Landlord pursuant to this Lease.\n\n     4.4.  OUTSIDE AREAS: No materials, supplies, storage tanks or \ncontainers, equipment, finished products or semi-finished products, raw \nmaterials, inoperable vehicles or articles of any nature shall be stored upon \nor permitted to remain outside of the Premises except in fully fenced and \nscreened areas outside the Premises which have been designed for such purpose \nand have been approved in writing by Landlord for such use by Tenant; \nprovided, however, that Tenant may bring military fighting vehicles onto the \nfirst floor of the Premises as permitted pursuant to subparagraph 4.1A.\n\n     4.5.  SIGNS: Tenant shall not place on any portion of the Premises or \nthe Property any sign, placard, lettering in or on windows, banner, displays \nor other advertising or communicative material which is visible from the \nexterior of the Premises without the prior written approval of Landlord. All \nsuch approved signs shall strictly conform to all Laws and Private \nRestrictions and shall be installed at the expense of Tenant.  If Landlord so \nelects, Tenant shall, at the expiration or sooner termination of this Lease, \nremove all signs installed by it and repair any damage caused by such \nremoval. Tenant shall at all times maintain such signs in good condition and \nrepair. Upon Tenant's written request and at Tenant's cost and expense, \nLandlord shall remove both of the Airport Technology Park monument signs \nlocated on De La Cruz Boulevard.  Subject to Landlord's prior written \napproval of Tenant's specific design plan, (i) Tenant shall have the right to \ninstall a monument sign at the entrance to the Premises, and at the two \nentrances to Airport Technology Park, and (ii) Tenant shall have the right to \ninstall signs on the exterior of the Premises.  Approved signs installed by \nTenant may be illuminated in compliance with the provisions of applicable \nlaws and Private Restrictions.\n\n     4.6.  RULES AND REGULATIONS: Landlord may from time to time promulgate \nreasonable and nondiscriminatory rules and regulations applicable to all \noccupants of the Property for the care and orderly management of the Property \nand the safety of its tenants and invitees.  Such rules and regulations shall \nbe binding upon Tenant upon delivery of a copy thereof to Tenant, and Tenant \nagrees to abide by such rules and regulations.  If there is a conflict \nbetween the rules and regulations and any of the provisions of this Lease, \nthe provisions of this Lease shall prevail.  Landlord shall not be \nresponsible for the violation by any other tenant of the Property of any such \nrules and regulations.\n\n     4.7.  PARKING: Tenant is allocated and shall have the non-exclusive \nright to use (without charge in addition to the Base Monthly Rent) no more \nthan the number of parking spaces contained within the Property described in \nparagraph 2.1 for its use and the use of its employees and invitees, the \nlocation of which may be designated from time to time by Landlord but shall \nbe on the Property and within reasonable proximity to the Premises.  Tenant \nshall not at any time use or permit its employees or invitees to use more \nparking spaces than the number so allocated to Tenant or to park or permit \nthe parking of its vehicles or the vehicles of others in any portion of the \nProperty not designated by Landlord as a non-exclusive parking area.  \nLandlord shall not oversubscribe the parking within the Property, and shall \nassure that the total number of spaces committed to the non-exclusive use of \nall tenants of the Property shall not exceed the total number of spaces \nwithin the Common Area.  Of the parking spaces allotted to Tenant pursuant to \nparagraph 2.1, Tenant shall have the right to designate a reasonable number \nof such spaces as reserved spaces for its executives, which shall not exceed \nten percent (10%) of the total of spaces and which shall be in immediate \nproximity to the Premises.  In the event Tenant elects to install a patio as \nset forth in subparagraph 5.6A, the number of parking spaces allocated to \nTenant shall be reduced based upon the square footage of said patio, which at \nthe time this Lease is executed is anticipated to be a reduction in eight (8) \nparking spaces.  If Landlord grants to any other tenant the exclusive right \nto use any particular parking space(s), neither Tenant nor its employees or \ninvitees shall use such spaces.  Within ten (10) business days after written \nrequest therefor from Landlord, Tenant shall furnish Landlord with a list of \nits and its employees vehicle license numbers and Tenant shall thereafter \nnotify Landlord of any change in such list within five (5) \n\n                                     -8-\n\n\n\ndays after each such change occurs.  Tenant shall have the right, at Tenant's \noption, to provide its employees with stickers or other identification \nmarkers or tags to be affixed to or on the employees' automobiles or other \nvehicles, evidencing the right of such employees to use the parking area.  \nSuch stickers shall be subject to prior review and approval by Landlord, \nwhich shall not be unreasonably withheld or delayed.  Tenant shall furnish to \nLandlord a list of identifying numbers for the stickers distributed from time \nto time by Tenant to its employees.  If Tenant elects to use such stickers as \nprovided herein, Tenant shall not be obligated to furnish Landlord with a \nlist of vehicle license numbers for its employees, for as long as Tenant \nmaintains such sticker system of identification.  Landlord reserves the \nright, after having given Tenant reasonable notice, to have any vehicles \nowned by Tenant or its employees or invitees utilizing parking spaces in \nexcess of the parking spaces allowed by Tenant's use to be towed away at \nTenant's cost.  All trucks and delivery vehicles shall be (i) parked at the \nrear of the Premises, (ii) loaded and unloaded in a manner which does not \ninterfere with the businesses of other occupants of the Property, and (iii) \npermitted to remain on the Property only so long as is reasonably necessary \nto complete loading and unloading.  In the event Landlord elects or is \nrequired by any Law to limit or control parking in the Property, whether by \nvalidation of parking tickets or any other method of assessment, Tenant \nagrees to participate in such validation or assessment program under such \nreasonable rules and regulations as are from time to time established by \nLandlord, so long as such participation does not result in any increase in \ncosts to Tenant.\n\n     4.8.  WINDOW COVERINGS: To the extent Tenant elects to use window \ncoverings visible from the exterior of the Premises, Tenant shall use the \nsame window covering to cover all windows Tenant so elects to cover in the \nPremises to maintain a consistent and uniform exterior appearance.\n\n     4.9.  OUTSIDE SALES: Tenant shall not conduct or permit to be conducted \non any portion of the Common Area any sale of any kind, including (i) any \npublic or private auction, fire sale, going-out-of-business sale, distress \nsale or other liquidation sale, or (ii) any so-called \"flea market\", open-air \nmarket or any other similar activity.  Notwithstanding the foregoing, Tenant \nshall be allowed to conduct occasional sales outside of the Premises on that \npart of the Common Area that is in close proximity to the Premises so long as \neach of the following conditions is satisfied with respect to each such sale: \n(i) Landlord is given at least two (2) business days prior written notice of \nthe date of any such sale; (ii) such sale does not violate any Laws; (iii) \nsuch sale is conducted in a manner that does not interfere with the rights of \nother occupants of the Property; (iv) Tenant provides all necessary security, \ncleans up all debris and repairs any damage caused by such sale; and (v) the \npurpose of such sale is to permit employees of Tenant to purchase or to \nreceive free of charge property of Tenant.\n\n                               ARTICLE 5.\n\n                TRADE FIXTURES AND LEASEHOLD IMPROVEMENTS\n\n     5.1.  TRADE FIXTURES: Throughout the Lease Term, Tenant shall provide, \ninstall, and maintain in good condition all Trade Fixtures required in the \nconduct of its business in the Premises.  All Trade Fixtures shall remain \nTenant's property.\n\n     5.2.  LEASEHOLD IMPROVEMENTS: The following provisions govern Leasehold \nImprovements constructed by Tenant:\n\n           A. Tenant shall not construct any Leasehold Improvements or \notherwise alter the Premises without Landlord's prior approval if such action \nresults in the demolition, removal, or material alteration of existing \nImprovements (including partitions, wall and floor coverings, ceilings, \nlighting fixtures or other utility installations) and if the cost of such \nconstruction or alteration exceeds Fifteen Thousand Dollars ($15,000) per \nwork of improvement or if the cost of Leasehold Improvements done, under \nconstruction, or for which approval is sought during any calendar quarter \nexceeds Twenty-Five Thousand Dollars ($25,000).  With respect to any \nLeasehold Improvements which must be approved by Landlord pursuant to the \nimmediately \n\n                                     -9-\n\n\n\npreceding sentence, Tenant shall not commence construction of such Leasehold \nImprovements until Landlord shall have first approved the plans and \nspecifications therefor, which approval shall be deemed given if not denied \nin writing within ten (10) working days after Landlord shall have received \nTenant's request for such approval.  In no event shall Tenant make any \nalterations to the Premises which could significantly affect the structural \nintegrity or the exterior design of the Premises without Landlord's prior \napproval.\n\n           B. All Leasehold Improvements requiring Landlord's approval shall \nbe installed by Tenant in substantial compliance with the approved plans and \nspecifications therefor.  All construction undertaken by Tenant shall be done \nin accordance with all Laws and in a good and workmanlike manner using \nmaterials of good quality.  Tenant shall not commence construction of any \nLeasehold Improvements until (i) all required governmental approvals and \npermits shall have been obtained, (ii) all requirements regarding insurance \nimposed by this Lease have been satisfied, and (iii) if reasonably requested \nby Landlord, Tenant shall have obtained contingent liability and broad form \nbuilders risk insurance in an amount reasonably satisfactory to Landlord if \nthere are any perils relating to the proposed construction not covered by \ninsurance carried pursuant to Article 9.  If Landlord so requests in writing \nwith respect to Leasehold Improvements requiring Landlord's prior approval, \nTenant shall inform Landlord of Tenant's scheduled date for commencement of \nconstruction at least five (5) days prior to such date of commencement.\n\n           C. At all times during the Lease Term, (i) Tenant shall maintain \nall plans and change orders prepared in connection with the construction of \nany Leasehold Improvements which required a building permit or other \ngovernmental approval, and (ii) Tenant shall provide to Landlord copies of \nsuch plans and change orders (and, to the extent Tenant causes such to be \nprepared for its own use, \"As-Built\" plans) at any time that Landlord \nrequests copies thereof.\n\n           D. All Leasehold Improvements shall remain the property of Tenant \nduring the Lease Term.  Tenant shall have the right to remove only the \nfollowing kinds of Leasehold Improvements so long as it repairs all damage \ncaused by the installation thereof and returns the Premises to the condition \nexisting prior to the installation of such Leasehold Improvements: (i) \nbuilt-in cabinets, file drawers and bookcases; (ii) computer room air \nconditioning; (iii) canteen equipment; (iv) office cubicle systems; and (v) \nornamental statues.  At the expiration or sooner termination of the Lease \nTerm, all Leasehold Improvements that Tenant does not remove shall be \nsurrendered to Landlord as a part of the realty and shall then become \nLandlord's property, and Landlord shall have no obligation to reimburse \nTenant for all or any portion of the value or cost thereof.  However, if \nLandlord so requires, at the expiration or earlier termination of the Lease \nTerm, Tenant shall remove any Leasehold Improvements designated for removal \nby Landlord and shall restore the Premises to the condition existing prior to \nthe installation of such Leasehold Improvements to the extent necessary to \nreturn the Premises to substantially the same condition that existed on the \ncompletion of the Interior Improvements constructed pursuant to EXHIBIT \"C\", \nordinary wear and tear excepted.  Notwithstanding the foregoing:\n\n              (1) Tenant shall only be required to remove Leasehold \nImprovements for which either of the following is true: (i) such Leasehold \nImprovements were not approved in writing by Landlord; or (ii) at the time \napproval was given by Landlord, Landlord informed Tenant in writing that \nLandlord would require that such Leasehold Improvements be removed at the \ntermination of the Lease Term.\n\n              (2) Tenant may cause interior partitions to be moved, \nreconfigured, or removed altogether, or cause interior offices to be deleted \nor added, all without the obligation to restore such partitions or interior \noffices to any prior condition upon expiration or termination of the Lease.\n\n     5.3.  ALTERATIONS REQUIRED BY LAW: Tenant shall make any alteration, \naddition or change of any sort, whether structural or otherwise, to the \nPremises that is required by any Law because of (i) a specific use or change \nof use made of the Premises by Tenant (which alteration, addition or change \nis not generally required to be made by owners or Tenants of other properties \nsimilar to the Premises), (ii) Tenant's application for any permit or \ngovernmental approval, or (iii) Tenant's construction or installation of any \nLeasehold Improvements or Trade Fixtures.\n\n                                    -10-\n\n\n\n     5.4.  LANDLORD'S IMPROVEMENTS: All fixtures, improvements or equipment \nwhich are installed, constructed on or attached to the Property by Landlord \nat its expense shall become a part of the realty and belong to Landlord.  \nTenant shall pay additional rent in the event Landlord, in its sole \ndiscretion, elects to make any of the following kinds of capital improvements \nto the Property: (i) capital improvements required to be constructed in \norder to comply with any Law not in effect or applicable to the Property as \nof the Commencement Date; (ii) modification of existing or construction of \nadditional capital improvements or building service equipment for the purpose \nof reducing the consumption of utility services or Common Operating Expenses \nof the Property; (iii) replacement of capital improvements or building \nservice equipment existing as of the Commencement Date when required because \nof normal wear and tear; and (iv) the amount of \"deductibles\" paid by \nLandlord for the restoration of any part of the Property that has been \ndamaged to the extent such \"deductible\" is not included within Common \nOperating Expenses.  With respect to any expenditure in excess of Fifty \nThousand Dollars ($50,000) for which Landlord seeks contribution pursuant to \nthis paragraph 5.4 from Tenant, prior to incurring such expense, Landlord \nshall notify Tenant of the nature and estimated amount of such expenditure \nand, if Tenant so requests, shall provide Tenant with such information upon \nwhich such cost estimate is based for Tenant's approval. The amount of \nadditional rent Tenant is to pay with respect to each such capital \nimprovement shall be determined as follows:\n\n           A. Tenant shall have the option to pay in cash an amount equal to \nTenant's Allocated Share of all costs paid by Landlord to construct the \nimprovements in question fairly allocable to the Premises (including \nfinancing costs) in cash within thirty (30) days after the improvement has \nbeen substantially completed and Landlord has notified Tenant of the cost of \nsuch improvement and the amount of Tenant's required contribution.  If Tenant \ndoes not exercise such option to pay such amount in cash, then the provisions \nof subparagraph 5.4B shall apply.\n\n           B. All costs paid by Landlord to construct such improvement \n(including financing costs) shall be amortized on a straight line basis over \nthe useful life of such improvement (determined in accordance with generally \naccepted accounting principles) with interest on the unamortized balance at \nthe then prevailing market rate Landlord would pay if it borrowed funds to \nconstruct such improvement from an institutional lender, and Landlord shall \ninform Tenant of the monthly amortization payment required to so amortize \nsuch costs, and shall also provide Tenant with the information upon which \nsuch determination is made. As additional rent, Tenant shall pay an amount \nequal to Tenant's Allocated Share of that portion of such monthly \namortization payment fairly allocable to the Premises (as reasonably \ndetermined by Landlord) for each month after such improvement is completed \nuntil the first to occur of (i) the expiration of the Lease Term (as the same \nmay be extended), or (ii) the end of the term over which such costs were \namortized, which amount shall be due at the same time the Base Monthly Rate \nis due.\n\n           C. Notwithstanding anything contained in this paragraph 5.4, the \nadditional rent Tenant is to pay with respect to any modification of existing \nor construction of additional capital improvements or building service \nequipment for the purpose of reducing the consumption of utility expenses or \nCommon Operating Expenses of the Property shall not for any period exceed the \nactual amount of savings in Additional Rent realized by Tenant as a result of \nsuch modification or construction.\n\n     5.5.  LIENS: Tenant shall keep the Premises and the Property free from \nany liens and shall pay when due all bills arising out of any work performed, \nmaterials furnished, or obligations incurred by Tenant, its agents, employees \nor contractors relating to the Premises.  If any claim of lien is recorded, \nTenant shall bond against or discharge the same within thirty (30) days after \nthe same has been recorded against the Premises and\/or the Property. Should \nany lien be filed against the Premises or any action commenced affecting \ntitle to the Premises, the party receiving notice of such lien or action \nshall immediately give the other party written notice thereof.\n\n     5.6.  MODIFICATIONS TO THE PREMISES: Subject to Landlord's prior written \napproval, and the provisions of paragraphs 5.2 and 5.3 hereof, Tenant shall \nhave the right to:\n\n           A. Modify the parking area behind the Premises, which area is \nhighlighted on the attached EXHIBIT \"A\", to construct a patio;\n\n                                    -11-\n\n\n\n           B. Install a datalink approximately twenty (20) inches wide \nbetween the Premises and Building A;\n\n           C. Install up to a total of four (4) flagpoles allocated between \nthe front of the Premises and the front of the premises leased pursuant to \nthe Building A Lease; and\n\n           D. Fill in existing loading docks so long as (i) existing drainage \nsystems serving such loading docks are appropriately capped; (ii) such fill \nis accomplished in a manner that the loading docks may be restored to their \ncondition existing as of the Commencement Date upon expiration of the Lease \nTerm, and (iii) Tenant agrees to restore such loading docks to the condition \nexisting as of the Commencement Date upon the expiration of the Lease Term.\n\n           E. Trim or relocate on the Property to a new location approved by \nLandlord any trees, shrubs or other landscaping that obscures any sign \ninstalled on the Property by Tenant.\n\n                                 ARTICLE 6.\n\n                          REPAIR AND MAINTENANCE\n\n     6.1.  TENANT'S OBLIGATION TO MAINTAIN: Except as otherwise provided in \nparagraph 6.2 and in Article 11 regarding the restoration of damage caused by \nfire and other perils, Tenant shall, at all times during the Lease Term, \nclean, keep, and maintain in good order, condition, and repair the Premises \nand every part thereof, through regular inspections and servicing, including, \nbut not limited to, (i) all plumbing and sewage facilities (including all \nsinks, toilets, faucets and drains), and all ducts, pipes, vents or other \nparts of the HVAC or plumbing system, (ii) all fixtures, interior walls, \nfloors, carpets and ceilings, (iii) all windows, doors, entrances, plate \nglass, showcases and skylights (including cleaning both interior and exterior \nsurfaces), (iv) all electrical facilities and all HVAC equipment and other \nmechanical systems (including all lighting fixtures, lamps, bulbs, tubes, \nfans, vents, exhaust equipment and systems), (v) any automatic fire \nextinguisher equipment in the Premises, and (vi) the roof membrane (including \nany necessary resurfacing or patching to preserve the membrane or to repair \nleaks except that Tenant shall not be required to make any repair to the \nextent such repair is required because of Landlord's repair or maintenance of \nthe structural roof system).  Tenant shall replace any damaged or broken \nglass in the Premises (including all interior and exterior doors and windows) \nwith glass of the same kind, size and quality.  Tenant shall repair any \ndamage to the Premises (including exterior doors and windows) caused by \nvandalism or any unauthorized entry.  Tenant shall maintain continuously \nthroughout the Lease Term a service contract for the maintenance of all HVAC \nequipment serving the Premises with a licensed HVAC repair and maintenance \ncontractor, which contract provides for the periodic inspection and servicing \nof the HVAC equipment at least once every sixty (60) days during the Lease \nTerm.  Tenant shall also maintain continuously throughout the Lease Term a \nservice contract for the washing of all windows (both interior and exterior \nsurfaces) in the Premises with a contractor, which contract provides for the \nperiodic washing of all such windows on such basis as shall keep the exterior \nappearance of the Premises in first class condition, but no less frequently \nthan once every calendar year.  If and when Landlord so requests in writing, \nTenant shall furnish Landlord with copies of all such service contracts.  All \nrepairs and replacements required of Tenant shall be promptly made with \nmaterials of good quality.  If the work affects the structural parts of the \nPremises or if the estimated cost of any item of repair or replacement is in \nexcess of Fifteen Thousand Dollars ($15,000), then Tenant shall first obtain \nLandlord's written approval of the scope of work, plans therefor, and \nmaterials to be used, except in the case of emergency in which event Tenant \nshall within a reasonable period of time after performing the work, notify \nLandlord of the scope of the work performed and the materials used, and shall \nfurnish Landlord with the plans therefor.\n\n     6.2.  LANDLORD'S OBLIGATION TO MAINTAIN: Landlord, at its cost without \nright of reimbursement from Tenant, shall be responsible for the maintenance, \nrepair, and replacement of the structural parts of the Premises (i.e., \nfoundation, first and second story floor slab and second story floor deck, \nload-bearing walls, and structural roof system, but excluding roof membrane) \nexcept to the extent that (i) the same is necessitated by the wrongful or \nnegligent act or omission \n\n                                    -12-\n\n\n\nof Tenant, its subtenants, or their respective agents, employees, \ncontractors, or invitees, or (ii) reimbursement is permitted pursuant to \nparagraph 5.4 hereof.  Landlord at its cost without right of reimbursement \nfrom Tenant, shall repair damage to interior improvements and Leasehold \nImprovements that have been approved by Landlord pursuant to the term hereof, \nor damage to the roof membrane of the Premises if caused by the maintenance \nwork required to be performed by Landlord pursuant to the provisions of this \nparagraph.  Landlord shall repair, maintain, operate and replace when \nnecessary the Common Area, with such right of reimbursement from Tenant as is \nspecified in paragraphs 5.4 and 6.3.  Landlord shall not be responsible for \nrepairs required by an accident, fire or other peril except as otherwise \nrequired by Article 11, or for damage caused to any part of the Property by \nany act, negligence or omission of Tenant or its agents, contractors, \nemployees or invitees.  Landlord may engage contractors of its choice to \nperform the obligations required of it by this Article, and the necessity of \nany expenditure to perform such obligations shall be at the sole discretion \nof Landlord.\n\n     6.3.  TENANT'S OBLIGATION TO REIMBURSE: As additional rent, commencing \non the Rent Start Date and continuing throughout the remainder of the Lease \nTerm, Tenant shall pay Tenant's Allocated Share of all Common Operating \nExpenses fairly allocable to the Premises including (i) all Common Operating \nExpenses paid with respect to the maintenance, repair, replacement and use of \nthe Premises and (ii) a proportionate share (based on the Premises Gross \nLeasable Area as a percentage of the Property Gross Leasable Area) of all \nCommon Area Expenses which relate to the Property in general and are not \nfairly allocable to any one building on the Property.  Landlord agrees that \nit shall not recover from all tenants of the Property more than one hundred \npercent (100%) of the actual Common Operating Expenses incurred by Landlord \nfor the period in question.  As provided in paragraph 3.3, Tenant's \nobligation to pay Tenant's Allocated Share of Common Operating Expenses \nfairly allocable to the Premises shall be prorated as of the Rent Start Date \nand at the expiration or earlier termination of the Lease Term, and if Tenant \nhas paid any amount on account of Common Operating Expenses relating to a \nperiod that is not within the Lease Term (e.g., prepayment of insurance \npremiums for one year), such amount shall be reimbursed to Tenant in \nconnection with such proration.  Payment shall be made by whichever of the \nfollowing methods is from time to time designated by Landlord, and Landlord \nmay change the method of payment at any time so long as (i) Landlord gives \nTenant at least sixty (60) days prior written notice, and (ii) the method is \nnot changed more than once in any calendar year.  Tenant shall pay such share \nof the actual Common Operating Expenses incurred or paid by Landlord but not \ntheretofore billed to Tenant within thirty (30) days after receipt of a \nwritten bill therefor from Landlord, on such periodic basis as Landlord shall \ndesignate, but in no event more frequently than once a month. Alternatively, \n(i) Landlord shall deliver to Tenant Landlord's reasonable estimate of the \nCommon Operating Expenses it anticipates will be paid or incurred for the \ncalendar year in question, (ii) during such calendar year, Tenant shall pay \nsuch share of the estimated Common Operating Expenses in advance in monthly \ninstallments as required by Landlord due with the installments of Base \nMonthly Rent, and (iii) within ninety (90) days after the end of each \ncalendar year, Landlord shall furnish to Tenant a statement in reasonable \ndetail of the actual Common Operating Expenses paid or incurred by Landlord \nduring the just ending calendar year and thereupon there shall be an \nadjustment between Landlord and Tenant, with payment to Landlord or credit by \nLandlord against the next installment of Base Monthly Rent, as the case may \nrequire, within thirty (30) days after delivery by Landlord to Tenant of said \nstatement, so that Landlord shall receive the entire amount of Tenant's share \nof all Common Operating Expenses for such calendar year and no more.  Tenant \nand its agents (including accountants) shall have the right at its expense, \nexercisable upon reasonable prior written notice to Landlord, to inspect at \nLandlord's office during normal business hours Landlord's books and records \nas they relate to Common Operating Expenses.  Such inspection must be made \nwithin one hundred eighty (180) days of Tenant's receipt of Landlord's annual \nstatement for the same, and shall be limited to verification of the charges \ncontained in such statement.  Tenant may not withhold payment of such bill \npending completion of such inspection.\n\n     6.4.  COMMON OPERATING EXPENSES DEFINED: The term \"Common Operating \nExpenses\" shall mean the sum of the following:\n\n           A. All costs and expenses paid or incurred by Landlord in doing \nthe following (including payments to independent contractors providing \nservices related to the \n\n                                    -13-\n\n\n\nperformance of the following):  (i) maintaining, cleaning, and repairing the \nexterior surfaces (including painting of exterior surfaces of buildings not \nmore than once every 5 years) of all buildings located on the Property; (ii) \nmaintenance of the liability, fire and property damage insurance covering the \nProperty carried by Landlord pursuant to paragraph 9.2 (including the payment \nof commercially reasonable \"deductibles\" and the prepayment of premiums for \ncoverage of up to one year); (iii) maintaining, repairing, operating and \nreplacing when necessary HVAC equipment, utility facilities and other \nbuilding service equipment; (iv) providing utilities to the Common Area \n(including lighting, trash removal and water for landscaping irrigation); (v) \ncomplying with all applicable Laws and Private Restrictions; (vi) operating, \nmaintaining, repairing, cleaning, painting, restripping and resurfacing the \nCommon Area; (vii) replacement or installation of lighting fixtures, \ndirectional or other signs and signals, irrigation systems, trees, shrubs, \nground cover and other plant materials, and all landscaping in the Common \nArea; and (viii) depreciation and financing costs on maintenance and \noperating machinery and equipment (if owned) and rental paid for such \nmachinery and equipment (if rented);\n\n           B. All additional costs and expenses incurred by Landlord with \nrespect to the operation, protection, maintenance, repair and replacement of \nthe Property which pursuant to generally accepted accounting principles would \nbe considered a current expense and not a capital expenditure;\n\n           C. That portion of all compensation (including benefits and \npremiums for workers' compensation and other insurance) paid to or on behalf \nof employees of Landlord but only to the extent they are involved in the \nperformance of the work described by subparagraphs A and B above and that is \nfairly allocable to the Property;\n\n           D. An additional amount equal to a commercially reasonable and \ncompetitive management fee that would be charged by an independent third \nparty property manager for the management of the Property (except that \nTenant's Allocated Share of such management fee for any period shall not \nexceed two percent (2%) of the Base Monthly Rent and Additional Rent payable \nby Tenant for the same period); and\n\n           E. Notwithstanding anything contained herein, the term \"Common \nOperating Expenses\" shall not include any of the following:  (i) mortgage \nprinciple payments; (ii) ground rent and other payments made pursuant to any \nground lease affecting the Property; (iii) the cost of refinancing any loan \nsecured by the Property; (iv) interest and penalties imposed against Landlord \nfor late payments by Landlord; (v) legal fees incurred by Landlord in \nconnection with the negotiation or enforcement of, or litigation in \nconnection with, any lease affecting the Property; (vi) the cost of any \npaintings, sculptures, or other art objects installed on the Property; (vii) \nany costs reimbursed to Landlord by insurance or other third party payments \nthat are not reimbursements by tenants for their share of Common Operating \nExpenses; (viii) brokerage commissions or other costs related to the leasing \nof space within the Property; (ix) the cost of any tenant improvements \ninstalled for the exclusive use of any other tenant of the Property.\n\n     6.5.  CONTROL OF COMMON AREA: Landlord shall at all times have exclusive \ncontrol of the Common Area.  Landlord shall have the right, without the same \nconstituting an actual or constructive eviction and without entitling Tenant \nto any abatement of rent, to:  (i) close any part of the Common Area to the \nminimum extent reasonably necessary in the reasonable opinion required in the \nopinion of Landlord's counsel to prevent a dedication thereof or the accrual \nof any prescriptive rights therein; (ii) temporarily close the Common Area to \nperform maintenance or for any other reason deemed sufficient by Landlord; \n(iii) designate other property outside the boundaries of the Property to \nbecome part of the Property; (iv) construct multi-deck parking structures in \nany part of the Common Area; (v) change the shape, size, location, number and \nextent of improvements on the Common Area; (vi) select a third party to \nmaintain and operate any of the Common Area at any time Landlord determines \nthat the best interests of the Property will be served by having the Common \nArea maintained and operated by that third party so long as the fees and \ncharges of such third party are reasonable and competitive with the fees of \nothers in the marketplace providing the same services; (vii) make changes to \nthe Common Area including, without limitation, changes in the location of \ndriveways, parking spaces, parking areas, sidewalks or the direction of the \nflow of traffic and the site of the Common Area; and\/or (viii) voluntarily \nchange the address of the Property. Landlord agrees not to change the name of \n\n                                    -14-\n\n\n\nAirport Technology Park without the prior consent of Tenant.  The use of the \nCommon Area shall be subject to such reasonable regulation and changes \ntherein as Landlord shall make from time to time.  Landlord shall not \nexercise its rights to control the Common Area in a manner that would \nmaterially interfere with Tenant's use of the Premises without first \nobtaining Tenant's approval.  Tenant shall keep the Common Area free and \nclear of all obstructions created or permitted by Tenant.  If in the opinion \nof Landlord unauthorized persons are using any of the Common Area by reason \nof the presence of Tenant in the Premises, Tenant, upon demand of Landlord, \nshall restrain such unauthorized use by appropriate proceedings.  Nothing \nherein shall affect the right of Landlord at any time to remove such \nunauthorized person from the Common Area nor to prohibit the use of the \nCommon Area by unauthorized persons.  In exercising any such rights described \nin this paragraph 6.5 regarding the Common Area, Landlord shall make a \nreasonable effort to minimize any disruption to Tenant's business.\n\n     6.6.  TENANT'S NEGLIGENCE: Anything in this Lease to the contrary \nnotwithstanding, Tenant shall pay for all damage to the Premises or the \nProperty caused by the negligent act or omission of Tenant, its employees, \ncontractors, or invitees, or by the failure of Tenant to discharge promptly \nits obligations under this Lease or to comply with the terms of this Lease, \nbut only to the extent such damage is not covered by insurance proceeds \nactually recovered by Landlord.  Tenant shall make payment within thirty (30) \ndays after demand therefor by Landlord.\n\n                            ARTICLE 7.\n\n                  WASTE DISPOSAL AND UTILITIES\n\n     7.1.  WASTE DISPOSAL: Tenant shall store its waste either inside the \nPremises or within outside trash enclosures that are (i) fully fenced and \nscreened in compliance with all Private Restrictions, (ii) designed for such \npurpose to be used either exclusively by Tenant or in common with other \noccupants of the Property, as designated by Landlord, and (iii) first \napproved by Landlord.  All entrances to such outside trash enclosures shall \nbe kept closed, and waste shall be stored in such manner as not to be visible \nfrom the exterior of such outside enclosures.  Tenant shall cause all of its \nwaste to be regularly removed from the Property at Tenant's sole cost.  \nTenant shall keep all fire corridors and mechanical equipment rooms in the \nPremises free and clear of all obstructions at all times.\n\n     7.2.  HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with \nrespect to the existence or use of Hazardous Materials on the Property:\n\n           A. Landlord hereby makes the following representations to Tenant, \neach of which is made to the best of Landlord's knowledge as of the \nCommencement Date:\n\n              (1) The soil and ground water on or under the Property does not \ncontain Hazardous Materials in amounts which violate any Hazardous Materials \nLaws to the extent that any governmental entity could require either Landlord \nor Tenant to take any remedial action or impose any penalties with respect to \nsuch Hazardous Materials.\n\n              (2) During Landlord's period of ownership, no litigation or any \nadministrative proceeding has been brought or threatened, nor any settlements \nreached with any governmental or private party, concerning the actual or \nalleged presence of Hazardous Materials on or about the Property or any \ndisposal, release or threatened release of Hazardous Materials in or about \nthe Property.\n\n              (3) During the time that Landlord has owned the Property, \nLandlord has received no notice of (i) any violation, or alleged violation, \nof any Hazardous Material Law that has not been corrected to the satisfaction \nof the appropriate authority, (ii) any pending claims relating to the \npresence of Hazardous Material on the Property, or (iii) any pending \ninvestigation by any governmental agency concerning the Property relating to \nHazardous Materials.\n\n              (4) The Property does not contain any (i) equipment containing \nPCBs, or (ii) underground storage tanks.\n\n                                    -15-\n\n\n\n           B. Any handling, transportation, storage, treatment, disposal or \nuse of Hazardous Materials by Tenant and Tenant's agents, employees, \ncontractors, invitees or subtenants after the Commencement Date in or about \nthe Property shall strictly comply with all applicable Hazardous Materials \nLaws.  Tenant shall indemnify, defend upon demand with counsel reasonably \nacceptable to Landlord, and hold harmless Landlord from and against any and \nall liabilities, losses, claims, damages, interest, penalties, fines, \nmonetary sanctions, attorneys' fees, experts' fees, court costs, remediation \ncosts, investigation costs, and other expenses which result from or arise in \nany manner whatsoever out of the use, storage, treatment, transportation, \nrelease, or disposal of Hazardous Materials on or about the Property by \nTenant or Tenant's agents, employees, contractors, invitees or subtenants \nafter the Commencement Date.\n\n           C. If the presence of Hazardous Materials on the Property caused \nor permitted by Tenant or Tenant's agents, employees, contractors, invitees \nor subtenants after the Commencement Date results in contamination or \ndeterioration of water or soil resulting in a level of contamination greater \nthan the levels established as acceptable by any governmental agency having \njurisdiction over such contamination, then Tenant shall promptly take any and \nall action necessary to clean up such contamination if required by Law or as \na condition to the issuance or continuing effectiveness of any governmental \napproval which relates to the use of the Property or any part thereof.  \nTenant shall further be solely responsible for, and shall defend, indemnify \nand hold Landlord and its agents harmless from and against, all claims, costs \nand liabilities, including attorneys' fees and costs, arising out of or in \nconnection with any removal, clean-up and restoration work and materials \nrequired hereunder to return the Property to its condition existing prior to \nthe appearance of such Hazardous Materials.\n\n           D. Landlord and Tenant shall each give written notice to the other \nas soon as reasonably practicable of (i) any communication received from any \ngovernmental authority concerning Hazardous Materials which relates to the \nProperty, and (ii) any contamination of the Property by Hazardous Materials \nwhich constitutes a violation of any Hazardous Materials Law.  Landlord and \nTenant agree to keep such information confidential, except for (i) \ndisclosures that are approved by the other party, (ii) disclosures required \nby Law or (iii) disclosures to any environmental consultant, lender, \npurchaser, prospective purchaser, attorneys for either Landlord or Tenant, or \nbrokers for either Landlord or Tenant, so long as an agreement of \nconfidentiality is obtained from a party to whom the disclosure is to be \nmade, and (iv) disclosures in connection with any litigation or \nadministrative proceeding in which either Landlord or Tenant is involved.  \nTenant and Tenant's agents, employees, contractors, invitees or subtenants \nshall not bring Hazardous Materials onto the Property without first obtaining \nthe written consent of Landlord; provided, however, Tenant may, without being \nrequired to obtain the prior written consent of Landlord, use at the Premises \nin small quantities office supplies, cleaning materials and other maintenance \nmaterials that are customarily used in business offices, even though such \nsupplies and materials may fall within the definition of Hazardous Materials. \n At any time during the Lease Term, Tenant shall, within five days after \nwritten request therefor received from Landlord, disclose in writing all \nHazardous Materials that are being used by Tenant on the Property, the nature \nof such use, and the manner of storage and disposal.\n\n           E. Landlord may cause testing wells to be installed on the \nProperty, and may cause the ground water to be tested to detect the presence \nof Hazardous Material by the use of such tests as are then customarily used \nfor such purposes.  Any such installation of wells or tests shall be done in \na manner which minimizes the interference with Tenant's use of the Premises.  \nIf Tenant so requests, Landlord shall supply Tenant with copies of such test \nresults.  The cost of such tests and of the installation, maintenance, repair \nand replacement of such wells shall be paid by Tenant if such tests disclose \nthe existence of facts which give rise to liability of Tenant pursuant to its \nindemnity given in subparagraph 7.2B or 7.2C, and Tenant's liability is \nestablished in a judicial or administrative proceeding, or in an action for \ndeclaratory relief brought by Landlord.\n\n           F. Landlord, at its sole cost, shall comply with all Hazardous \nMaterials Laws affecting the Property (without right of reimbursement from \nTenant) to the extent that (i) Landlord is legally obligated to do so by such \nLaws, and (ii) such compliance (or the cost of such compliance) is not made \nthe responsibility of Tenant pursuant to subparagraph 7.2B or subparagraph \n7.2C.  Landlord shall indemnify, defend upon demand with competent counsel, \nand \n\n                                    -16-\n\n\n\nhold harmless Tenant from and against any and all liability for response \ncosts imposed upon Tenant by any governmental agency pursuant to the Federal \nLaw known as \"CERCLA\" (more particularly identified in subparagraph 7.2G) and \nthe comparable California statute (commonly known as the \nCarpenter-Presley-Tanner Hazardous Substances Account Act, California Health \nand Safety Code Section 25300 ET. SEQ.) that results from the presence of \nHazardous Materials on the Property not caused or contributed to by the use, \nstorage, treatment, release or disposal of Hazardous Materials on or about \nthe Property by Tenant, its subtenants, or their respective agents, \nemployees, contractors, or invitees.  Notwithstanding the foregoing, the \nindemnity given by Landlord in the immediately preceding sentence shall not \napply with respect to liability caused by any contamination of the Property \nby a Hazardous Material that is or has been used, stored, treated, released \nor disposed of on the Property by Tenant, its subtenants, or their respective \nagents, employees, contractors, or invitees unless Tenant can prove such \ncontamination was not caused or contributed to by any of such parties.\n\n           G. As used herein, the term \"Hazardous Material,\" means any \nhazardous or toxic substance, material or waste which is or becomes regulated \nby any local governmental authority, the State of California or the United \nStates Government. The term \"Hazardous Material,\" includes, without \nlimitation, asbestos, PCB's, petroleum and petroleum products, and any \nmaterial or substance which is (i) listed under Article 9 or defined as \nhazardous or extremely hazardous pursuant to Article 11 of Title 22 of the \nCalifornia Administrative Code, Division 4, Chapter 20, (ii) defined as a \n\"hazardous waste\" pursuant to Section 1004 of the Federal Resource \nConservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. \nSection 6903), or (iii) defined as a \"hazardous substance\" pursuant to \nSection 101 of the Comprehensive Environmental Response, Compensation and \nLiability Act (\"CERCLA\"), 42 U.S.C. Section 9601 et seq.  (42 U.S.C. Section \n9601).  As used herein, the term \"Hazardous Material Law\" shall mean any \nstatute, law, ordinance, or regulation of any governmental body or agency \n(including the U.S. Environmental Protection Agency, the California Regional \nWater Quality Control Board, and the California Department of Health \nServices) which regulates the use, storage, release or disposal of any \nHazardous Material.\n\n           H. The obligations of Landlord and Tenant under this paragraph 7.2 \nshall survive the expiration or earlier termination of the Lease Term.  The \nrights and obligations of Landlord and Tenant with respect to issues relating \nto Hazardous Materials are exclusively established by this paragraph 7.2.  In \nthe event of any inconsistency between any other part of this Lease and this \nparagraph 7.2, the terms of this paragraph 7.2 shall control.\n\n     7.3.  UTILITIES: Tenant shall promptly pay, as the same become due, all \ncharges for water, gas, electricity, telephone, sewer service, waste pick-up \nand any other utilities, materials or services furnished directly to or used \nby Tenant on or about the Premises during the Lease Term, including, without \nlimitation, (i) meter, use and\/or connection fees, hook-up fees, standby \nfees, and (ii) penalties for discontinued or interrupted service.\n\n     7.4.  COMPLIANCE WITH GOVERNMENTAL REGULATIONS: Landlord and Tenant \nshall comply with all rules, regulations and requirements promulgated by \nnational, state or local governmental agencies or utility suppliers \nconcerning the use of utility services, including any rationing, limitation \nor other control.  Landlord may voluntarily cooperate in a reasonable manner \nwith the efforts of all governmental agencies or utility suppliers in \nreducing energy or other resource consumption.  Tenant shall not be entitled \nto terminate this Lease nor to any abatement in rent by reason of such \ncompliance or cooperation. Tenant agrees at all times to cooperate fully with \nLandlord and to abide by all rules, regulations and requirements which \nLandlord may prescribe in order to maximize the efficient operation of the \nHVAC system and all other utility systems.\n\n                              ARTICLE 8.\n\n                         REAL PROPERTY TAXES\n\n     8.1.  REAL PROPERTY TAXES DEFINED: The term \"Real Property Taxes\" as \nused herein shall mean (i) all taxes, assessments, levies, and other charges \nof any kind or nature whatsoever, general and special, foreseen and \nunforeseen (including all installments of principal and interest \n\n                                    -17-\n\n\n\nrequired to pay any existing or future general or special assessments for \npublic improvements, services or benefits, and any increases resulting from \nreassessments or resulting from a change in ownership or any other cause), \nnow or hereafter imposed by any governmental or quasi-governmental authority \nor special district having the direct or indirect power to tax or levy \nassessments, which are levied or assessed against, or with respect to the \nvalue, occupancy or use of, all or any portion of the Property (as now \nconstructed or as may at any time hereafter be constructed, altered, or \notherwise changed) or Landlord's interest therein, the fixtures, equipment \nand other property of Landlord, real or personal, that are an integral part \nof and located on the Property, the gross receipts, income, or rentals from \nthe Property, or the use of parking areas, public utilities, or energy within \nthe Property, (ii) all charges, levies or fees imposed by reason of \nenvironmental regulation or other governmental control of the Property \n(excluding costs and expenses for which Landlord is responsible pursuant to \nsubparagraph 7.2F), and (iii) all costs and fees (including attorneys' fees) \nincurred by Landlord in contesting any Real Property Tax and in negotiating \nwith public authorities as to any Real Property Tax.  If at any time during \nthe Lease Term the method of taxation or assessment of the Property \nprevailing as of the Commencement Date shall be altered so that in lieu of or \nin addition to any Real Property Tax described above there shall be levied, \nassessed or imposed (whether by reason of a change in the method of taxation \nor assessment, creation of a new tax or charge, or any other cause) an \nalternate or additional tax or charge (i) on the value, use or occupancy of \nthe Property, (ii) on or measured by the gross receipts, income, or rentals \nfrom the Property, (iii) on Landlord's business of leasing the Property, or \n(iv) computed in any manner with respect to the operation of the Property, \nthen any such tax or charge, however designated, shall be included within the \nmeaning of the term \"Real Property Taxes\" for purposes of this Lease.  If any \nReal Property Tax is based upon property or rents unrelated to the Property, \nthen only that part of such Real Property Tax that is fairly allocable to the \nProperty shall be included within the meaning of the term \"Real Property \nTaxes\".  Notwithstanding the foregoing, the term \"Real Property Taxes\" shall \nnot include estate, inheritance, transfer, gift or franchise taxes of \nLandlord or the federal or state net income tax imposed on Landlord's income \nfrom all sources.\n\n     8.2.  TENANT'S OBLIGATION TO REIMBURSE: As Additional Rent, Tenant shall \npay to Landlord Tenant's Allocated Share of all Real Property Taxes which \nbecome due after the Rent Start Date and during the Lease Term which are \nfairly allocable to the Premises, which include (i) all Real Property Taxes \nassessed with respect to the value, use or occupancy of the Premises and the \nland beneath it, and (ii) a proportionate share (based on the Premises Gross \nLeasable Area as a percentage of the Property Gross Leasable Area) of all \nReal Property Taxes assessed with respect to the Common Area or with respect \nto the Property in general which are not fairly allocable to any one building \non the Property. Tenant shall pay its share of Real Property Taxes (i) within \nthirty (30) days after being billed for the same by Landlord, or (ii) no \nlater than ten (10) days before such Real Property Tax becomes delinquent, \nwhichever last occurs.  If requested by Tenant in writing within one year \nfrom receipt of a bill for Tenant's Allocated Share of Real Property Taxes, \nLandlord shall furnish Tenant with such evidence as is reasonably available \nto Landlord with respect to the amount of any Real Property Tax which is part \nof such bill.  Tenant may not withhold payment of such bill pending receipt \nand\/or review of such evidence. Upon Landlord's election or if any Lender \nrequires Landlord to impound Real Property Taxes on a periodic basis during \nthe Lease Term, then Tenant, on notice from Landlord indicating this \nrequirement, shall pay a sum of money toward its liability under this Article \nto Landlord on the same periodic basis in accordance with the Lender's \nrequirements (if any).  Landlord shall impound the Real Property Tax payments \nreceived from Tenant in accordance with the requirements of the Lender (if \nany).  If any assessments are levied against the Property, Landlord may elect \neither to pay the assessment in full or to allow the assessment to go to \nbond.  If Landlord pays the assessment in full, Tenant shall pay to Landlord \neach time payment of Real Property Taxes is made a sum equal to that which \nwould have been payable (as both principal and interest) had Landlord allowed \nthe assessment to go to bond.  Notwithstanding anything to the contrary \ncontained in paragraphs 8.1 and 8.2, if there is an increase in Real Property \nTaxes resulting from a \"change in ownership\" (as that term is defined in \nCalifornia Revenue and Taxation Code Section 60, ET. SEQ.) which occurs prior \nto the fourth (4th) anniversary of the Commencement Date, then Tenant shall \nnot be obligated to pay any such increase that results from such \"change of \nownership\".\n\n                                    -18-\n\n\n\n     8.3.  TAXES ON TENANT'S PROPERTY: Tenant shall pay before delinquency \nany and all taxes, assessments, license fees and public charges levied, \nassessed or imposed against Tenant or Tenant's estate in this Lease or the \nproperty of Tenant situated within the Premises which become due during the \nLease Term.  Tenant shall furnish Landlord with satisfactory evidence of \nthese payments within thirty (30) days after receipt of written request \ntherefor from Landlord.\n\n                                ARTICLE 9.\n\n                                INSURANCE\n\n     9.1.  TENANT'S INSURANCE: Tenant shall maintain insurance complying with \nall of the following:\n\n           A. Tenant shall procure, pay for and keep in full force and effect \nthe following:\n\n              (1) Commercial general liability insurance, including property \ndamage, against liability for personal injury, bodily injury, death and \ndamage to property occurring in or about, or resulting from an occurrence in \nor about, the Premises with combined single limit coverage of not less than \nthe amount of Tenant's Minimum Liability Insurance Coverage set forth in \nparagraph 1.8, which insurance shall contain a \"contractual liability\" \nendorsement insuring Tenant's performance of Tenant's obligation to indemnify \nLandlord contained in paragraph 10.3;\n\n              (2) Plate-glass insurance, at actual replacement cost; and\n\n              (3) Fire and property damage insurance against loss caused by \nfire, extended coverage perils including steam boiler insurance, sprinkler \nleakage, if applicable, vandalism, malicious mischief and such other \nadditional perils as now are or hereafter may be included in a standard \nextended coverage endorsement from time to time in general use in the county \nin which the Property is located, insuring Tenant's personal property, \ninventory, Trade Fixtures and Leasehold Improvements within the Premises for \nthe full actual replacement cost thereof.\n\n           B. Where applicable and required by Landlord, each policy of \ninsurance required to be carried by Tenant pursuant to this paragraph (i) \nshall name Landlord and such other parties in interest as Landlord designates \nas additional insureds; (ii) shall be primary insurance which provides that \nthe insurer shall be liable for the full amount of the loss up to and \nincluding the total amount of liability set forth in the declarations without \nthe right of contribution from any other insurance coverage of Landlord; \n(iii) shall be in a form satisfactory to Landlord; (iv) shall be carried with \ncompanies reasonably acceptable to Landlord; (v) shall provide that such \npolicy shall not be subject to cancellation, lapse or change except after at \nleast thirty (30) days prior written notice to Landlord; (vi) shall not have \na \"deductible\" in excess of $500,000 or such greater amount as is approved by \nLandlord; (vii) shall (to the extent available) contain a waiver by the \ninsurer of any right to subrogation against Landlord, its agents, employees \nand contractors which might arise by reason of any payment under such policy \nor by reason of any act or omission of Landlord, its agents, employees or \ncontractors; and (viii) shall contain a \"severability\" clause.  If Tenant has \nin force and effect a blanket policy of liability insurance with the same \ncoverage for the Premises as described above, as well as other coverage of \nother premises and properties of Tenant, or in which Tenant has some \ninterest, such blanket insurance shall satisfy the requirements hereof.\n\n           C. A certificate of each paid-up policy evidencing the insurance \nrequired to be carried by Tenant pursuant to this paragraph (appropriately \nauthenticated by the insurer), certifying that such policy has been issued, \nproviding the coverage required by this paragraph, and containing the \nprovisions specified herein, shall be delivered to Landlord prior to the time \nTenant or any of its contractors enters the Premises and upon renewal of such \npolicies, but not less than five (5) days prior to the expiration of the term \nof such coverage.  If Landlord's insurance advisor reasonably determines at \nany time that the amount of coverage required for any \n\n                                    -19-\n\n\n\npolicy of insurance Tenant is to obtain pursuant to this paragraph is not \nadequate, then Tenant shall increase such coverage for such insurance to such \namount as Landlord's insurance advisory reasonably deems adequate, not to \nexceed the level of coverage commonly carried by comparable businesses \nsimilarly situated for such insurance; provided, however, that Landlord may \nnot require an adjustment pursuant to this sentence more frequently than once \nevery two (2) years during the Lease Term.\n\n     9.2.  LANDLORD'S INSURANCE: Landlord shall have the following \nobligations and options regarding insurance:\n\n           A. Landlord shall maintain a policy or policies of fire and \nproperty damage insurance in so-called \"all risk\" form insuring Landlord (and \nsuch others as Landlord may designate) against loss of rents for a period of \nnot less than six (6) months and from physical damage to the Premises with \ncoverage of not less than the full replacement cost of (i) the building of \nwhich the Premises are a part, including the structural elements thereof and \nall electrical, mechanical, plumbing, and other systems, and (ii) all \nInterior Improvements constructed pursuant to the Interior Improvement \nAgreement attached as EXHIBIT \"C\".  Landlord may so insure the Premises \nseparately, or may insure the Premises with other buildings and improvements \nwithin the Property and\/or other property owned by Landlord which Landlord \nelects to insure together under the same policy or policies.  Such fire and \nproperty damage insurance, at Landlord's election, (i) may be endorsed to \ncover loss caused by such additional perils against which Landlord may elect \nto insure, including earthquake and\/or flood, (ii) shall contain commercially \nreasonable \"deductibles\" which, in the case of earthquake and flood \ninsurance, may be up to ten percent (10%) of the replacement value of the \nproperty insured or such higher amount as is then commercially reasonable, \n(iii) may provide coverage for loss of rents for a period of up to twelve \n(12) months, and (iv) may contain additional endorsements or coverage \nreasonably required by Landlord or any Lender, including an \"agreed amount\" \nendorsement, demolition insurance (covering the cost of demolishing damaged \nimprovements or improvements required by Law to be demolished), and \ndifference in condition coverage.  Landlord shall not be required to cause \nsuch insurance to cover any Trade Fixtures, Leasehold Improvements or any \ninventory or other personal property of Tenant.\n\n           B. Landlord may maintain a policy or policies of commercial \ngeneral liability insurance insuring Landlord (and such others as are \ndesignated by Landlord) against liability for personal injury, bodily injury, \ndeath and damage to property occurring or resulting from an occurrence in, or \nabout the Property, with combined single limit coverage in such amount as \nLandlord may from time to time determine is reasonably necessary for its \nprotection and with commercially reasonable deductibles.\n\n     9.3.  TENANT'S OBLIGATION TO REIMBURSE: The cost of the insurance \ncarried by Landlord pursuant to paragraph 9.2 (and any commercially \nreasonable \"deductible\" amount paid by Landlord in connection with the \nrestoration of any loss and excluded from the coverage of such insurance) \nshall be a Common Operating Expense and Tenant shall pay its share thereof as \nprovided in paragraph 6.3.  However, if Landlord's insurance rates for the \nPremises are increased at any time during the Lease Term as a result of the \nnature of Tenant's use of the Premises, Tenant shall reimburse Landlord for \nthe full amount of such increase immediately upon receipt of a bill from \nLandlord therefor.\n\n     9.4.  RELEASE AND WAIVER OF SUBROGATION: The parties hereto release each \nother, and their respective agents and employees, from any liability for \ninjury to any person or damage to property that is caused by or results from \nany risk insured against under any valid and collectible insurance policy \ncarried by either of the parties which contains a waiver of subrogation by \nthe insurer and is in force at the time of such injury or damage, subject to \nthe following limitations:  (i) the foregoing provisions shall not apply to \nthe commercial general liability insurance described by subparagraph 9.1A and \n9.1B; and (ii) such release shall apply to liability resulting from any risk \ninsured against or covered by self-insurance maintained or provided by Tenant \nto satisfy the requirements of paragraph 9.1.  This release shall be in \neffect only so long as the applicable insurance policy contains a clause to \nthe effect that this release shall not affect the right of the insured to \nrecover under such policy. Each party shall use reasonable efforts to cause \neach insurance policy obtained by it to provide that the insurer waives all \nright of recovery by \n\n\n                                    -20-\n\n\nway of subrogation against the other party and its agents and employees in \nconnection with any injury or damage covered by such policy.  However, if any \ninsurance policy cannot be obtained with such a waiver of subrogation, or if \nsuch waiver of subrogation is only available at additional cost and the party \nfor whose benefit the waiver is to be obtained does not pay such additional \ncost, then the party obtaining such insurance shall notify the other party of \nthat fact and thereupon shall be relieved of the obligation to obtain such \nwaiver of subrogation rights from the insurer with respect to the particular \ninsurance involved.\n\n                             ARTICLE 10.\n\n                     LIMITATION ON LANDLORD'S\n                     LIABILITY AND INDEMNITY\n\n     10.1. LIMITATION ON LANDLORD'S LIABILITY: Landlord shall not be liable \nto Tenant, nor shall Tenant be entitled to terminate this Lease or to any \nabatement of rent, for any injury to Tenant, its agents, employees, \ncontractors or invitees, damage to Tenant's property, or loss to Tenant's \nbusiness resulting from any cause, including without limitation any (i) \nfailure, interruption or installation of any HVAC or other utility system or \nservice; (ii) failure to furnish or delay in furnishing any utilities or \nservices when such failure or delay is caused by Acts of God or the elements, \nlabor disturbances of any character, any other accidents or other conditions \nbeyond the reasonable control of Landlord; (iii) limitation, curtailment, \nrationing or restriction on the use of water or electricity, gas or any other \nform of energy or any services or utility serving the Premises; (iv) \nvandalism or forcible entry by unauthorized persons; or (v) penetration of \nwater into or onto any portion of the Premises or the Common Area through \nroof leaks or otherwise.  Notwithstanding the foregoing:\n\n           A. Subject to paragraph 9.4, Landlord shall be liable for any such \ninjury, damage or loss which is proximately caused by Landlord's gross \nnegligence or willful misconduct, of which Landlord has actual notice and a \nreasonable opportunity to cure but which it fails to so cure.\n\n           B. Tenant shall have the option to terminate this Lease upon the \noccurrence of the following:  (i) water, electricity, or other utility \nservice essential to the conduct of Tenant's business in the Premises is \ninterrupted or substantially impaired for a period of more than two hundred \nseventy (270) consecutive days during which time the Premises are rendered \nsubstantially unusable for the conduct of Tenant's business (a \"Material \nInterruption\"); and (ii) the Material Interruption is not caused by the act \nor omission of Tenant, its agents, employees or contractors.\n\n     10.2. LIMITATION ON TENANT'S RECOURSE: So long as the Landlord is a \ncorporation, trust, partnership, joint venture, unincorporated association or \nother form of business entity, (i) the obligations of Landlord shall not \nconstitute personal obligations of the officers, directors, trustees, \npartners, joint venturers, members, owners, stockholders, or other principals \nor representatives of such business entity, and (ii) Tenant shall have \nrecourse only to the assets of such business entity for the satisfaction of \nsuch obligations and not against the assets of such officers, directors, \ntrustees, partners, joint venturers, members, owners, stockholders, \nprincipals or representatives, except to the extent of their interests in the \nentity that is Landlord.  If Landlord is a natural person or persons, Tenant \nshall have recourse only to the interest of such natural persons in the \nProperty for the satisfaction of the obligations of Landlord and shall not \nhave recourse to any other assets of such natural persons for the \nsatisfaction of such obligations.\n\n     10.3. INDEMNIFICATION OF LANDLORD: Tenant shall hold harmless, indemnify \nand defend Landlord, and its employees, agents and contractors, with \ncompetent counsel, from all liability, penalties, losses, damages, costs, \nexpenses, causes of action, claims and\/or judgments arising by reason of any \ndeath, bodily injury, personal injury or property damage (i) resulting from \nany cause or causes whatsoever (other than the negligence or willful \nmisconduct of Landlord of which Landlord has had notice and a reasonable time \nto cure, but which Landlord has failed to cure) occurring in or about or \nresulting from an occurrence in or about the Premises, or\n\n                                    -21-\n\n\n\n(ii) resulting from the negligence or willful misconduct of Tenant, its \nagents, employees and contractors, wherever the same may occur, or (iii) \nresulting from an Event of Tenant's Default.  The provisions of this \nparagraph shall survive the expiration or sooner termination of this Lease.\n\n\n                                  ARTICLE 11.\n                                  ----------\n\n                              DAMAGE TO PREMISES\n\n\n      11.1.  LANDLORD'S DUTY TO RESTORE:  If the Premises are damaged by any \nperil after the Commencement Date of this Lease, Landlord shall restore the \nPremises unless the Lease is terminated by Landlord pursuant to paragraph \n11.2 or by Tenant pursuant to paragraph 11.3.  All insurance proceeds \navailable from the fire and property damage insurance carried by Landlord \npursuant to paragraph 9.2 shall be paid to and become the property of \nLandlord.  If this Lease is terminated pursuant to either paragraphs 11.2 or \n11.3, then all insurance proceeds available from insurance carried by Tenant \nwhich covers loss to property that is Landlord's property or would become \nLandlord's property on termination of this Lease shall be paid to and become \nthe property of Landlord. If this Lease is not so terminated, then upon \nreceipt of the insurance proceeds (if the loss is covered by insurance) and \nthe issuance of all necessary governmental permits, Landlord shall commence \nand diligently prosecute to completion the restoration of the Premises, to \nthe extent then allowed by Law, to substantially the same condition in which \nthe Premises were immediately prior to such damage.  Landlord's obligation to \nrestore shall be limited to the Premises and interior improvements \nconstructed by Tenant but financed by Landlord pursuant to the Interior \nImprovement Agreement as such improvements existed upon completion thereof \nexcluding any Leasehold Improvements, Trade Fixtures and\/or personal property \nconstructed or installed by Tenant in the Premises.  To the extent that \ninsurance proceeds recovered by Landlord from the insurance carried pursuant \nto paragraph 9.2A exceed the amount needed by Landlord to discharge its \nrestoration obligation pursuant to the immediately preceding sentence, \nLandlord shall make such excess insurance proceeds available to Tenant for \nthe purpose of restoring interior improvements that were constructed by \nTenant and financed by Tenant pursuant to the Interior Improvement Agreement, \nso that such improvements may be restored to substantially the same condition \nexisting as of the date such improvements were initially completed.\n\n      11.2.  LANDLORD'S RIGHT TO TERMINATE:  Landlord shall have the right to \nterminate this Lease in the event any of the following occurs, which right \nmay be exercised only by delivery to Tenant of a written notice of election \nto terminate within thirty (30) days after the date of such damage:\n\n             A.   Either the Property or the Premises is damaged by an \nInsured Peril to such an extent that the estimated cost to restore equals or \nexceeds eighty percent (80%) of the then actual replacement cost thereof and \nthere remains less than three (3) years in the Lease Term; provided, however, \nthat Landlord may not terminate this Lease pursuant to this subparagraph \n11.2A if Tenant at the time of such damage has a then valid written option to \nextend the Lease Term and Tenant exercises such option to extend the Lease \nTerm within fifteen (15) days after Tenant receives Landlord's notice of \nelection to terminate and such action results in there being more than three \n(3) years remaining in the Lease Term (as it has been extended by the \nExercise of such option);\n\n             B.   Either the Property or the Premises is damaged by an \nUninsured Peril to such an extent that the estimated cost to restore exceeds \ntwo percent (2%) of the actual replacement cost thereof; provided, however, \nthat Landlord may not terminate this Lease pursuant to this paragraph 11.2B \nif one or more tenants of the Property agree in writing to pay the amount by \nwhich the cost to restore the damage exceeds such amount and subsequently \ndeposit such amount with Landlord within thirty (30) days after Landlord has \nnotified Tenant of its election to terminate this Lease;\n\n             C.   The Premises are damaged by any peril within twelve (12) \nmonths of the last day of the Lease Term to such an extent that the estimated \ncost to restore equals or exceeds \n\n                                       -22-\n\n\n\nan amount equal to six (6) times the Base Monthly Rent then due; provided, \nhowever, that Landlord may not terminate this Lease pursuant to this \nsubparagraph 11.2C if Tenant, at the time of such damage, has a then valid \nexpress written option to extend the Lease Term and Tenant exercises such \noption to extend the Lease Term within fifteen (15) days following the date \nof such damage; or\n\n             D.   As used herein, the following terms shall have the \nfollowing meanings: (i) the term \"Insured Peril\" shall mean a peril actually \ninsured against for which the insurance proceeds paid or made available to \nLandlord are sufficient (except for any \"deductible\" amount specified by such \ninsurance) to restore the Property under the then existing building codes to \nthe condition existing immediately prior to the damage; and (ii) the term \n\"Uninsured Peril\" shall mean and include any peril not actually insured \nagainst, any peril actually insured against but for which the insurance \nproceeds paid or made available to Landlord are for any reason (except for \nany \"deductible\" amount specified by such insurance) insufficient to restore \nthe Property under then existing building codes to the condition existing \nimmediately prior to the damage, and any peril actually insured against but \nfor which the insurance proceeds are not paid or made available to Landlord.\n\n      11.3.  TENANT'S RIGHT TO TERMINATE:  If the Premises are damaged by any \nperil and Landlord does not elect to terminate this Lease or is not entitled \nto terminate this Lease pursuant to paragraph 11.2, then as soon as \nreasonably practicable, Landlord shall furnish Tenant with the written \nopinion of Landlord's architect or construction consultant as to when the \nrestoration work required of Landlord may be completed.  Tenant shall have \nthe right to terminate this Lease in the event any of the following occurs, \nwhich right may be exercised only by delivery to Landlord of a written notice \nof election to terminate within thirty (30) days after Tenant receives from \nLandlord the estimate of the time needed to complete such restoration:\n\n             A.   The Premises are damaged by any peril and, in the \nreasonable opinion of Landlord's architect or construction consultant, the \nrestoration of the Premises cannot be substantially completed within two \nhundred seventy (270) days after the date of such damage; or\n\n             B.   The Premises are damaged by any peril within twelve (12) \nmonths of the last day of the Lease Term and in the reasonable opinion of \nLandlord's architect or construction consultant the restoration of the \nPremises cannot be substantially completed within ninety (90) days after the \ndate of such damage; or\n\n     C.   The Premises are not restored within eighteen (18) months following \nthe date of such damage; provided, however, that if at the time restoration \nof the \"shell\" of the building in which the Premises are located is \nsubstantially completed (excluding Interior Improvements) Landlord reasonably \nestimates that Landlord will not be able to complete restoration of the \nPremises within such eighteen (18) month period, then at that time Landlord \nmay offer in writing to Tenant the option to terminate this Lease, and if \nTenant does not exercise such option to terminate the Lease so offered to \nTenant by Landlord, then Tenant may not thereafter elect to terminate this \nLease pursuant to this subparagraph 11.3C.\n\n      11.4.  ABATEMENT OF RENT:  In the event of damage to the Premises which \ndoes not result in the termination of this Lease, the Base Monthly Rent and \nthe Additional Rent shall be temporarily abated commencing on the date of \ndamage and continuing through the Period of restoration in proportion to the \ndegree to which Tenant's use of the Premises is impaired by such damage.  \nTenant shall not be entitled to any compensation or damages from Landlord for \nloss of Tenant's business or property or for any inconvenience or annoyance \ncaused by such damage or restoration.  Tenant hereby waives the provisions of \nSection 1932, Subdivision 2, and Section 1933, Subdivision 4, of the \nCalifornia Civil Code, and the provisions of any similar law hereinafter \nenacted.\n\n                                       -23-\n\n\n\n\n                                     ARTICLE 12.\n                                     -----------\n\n                                     CONDEMNATION\n\n\n      12.1  TENANT'S TERMINATION RIGHT:  Tenant shall have the right to \nterminate this Lease if, as a result of any taking by means of the exercise \nof the power of eminent domain (including any voluntary sale or transfer by \nLandlord to any condemnor under threat of condemnation), (i) ten percent \n(10%) or more of the Premises is so taken, or (ii) there is a taking \naffecting the Common Area and, as a result of such taking, Landlord cannot \nprovide parking spaces within reasonable walking distance of the Premises \nequal in number to at least ninety percent (90%) of the number of spaces \nallocated to Tenant by paragraph 2.1, whether by rearrangement of the \nremaining parking areas in the Common Area (including construction of \nmulti-deck parking structures or restripping for compact cars where permitted \nby Law) or by alternative parking facilities on other land.  Tenant must \nexercise such right within a reasonable period of time, to be effective on \nthe date that possession of that portion of the Premises or Common Area that \nis condemned is taken by the condemnor.\n\n      12.2  RESTORATION AND ABATEMENT OF RENT:  If any part of the Premises \nor the Common Area is taken by condemnation and this Lease is not terminated, \nthen Landlord shall restore the remaining portion of the Premises and Common \nArea to substantially the same condition in which the Premises and Common \nArea were immediately prior to such taking, excluding any Leasehold \nImprovements, Trade Fixtures and\/or personal property constructed or \ninstalled by Tenant; provided, however, that Landlord shall not be obligated \nto spend more for such restoration than the amount of any condemnation award \nrecovered by or pursuant to paragraph 12.3.  Thereafter, except in the case \nof a temporary taking, (i) as of the date possession is taken the Base \nMonthly Rent (but not any Additional Rent) shall be reduced in the same \nproportion that the floor area of that part of the Premises so taken (less \nany addition thereto by reason of any reconstruction) bears to the original \nfloor area of the Premises, and (ii) to the extent that Landlord is obligated \nto undertake any restoration work as a result of such condemnation, the Base \nMonthly Rent shall be further abated in proportion to the extent to which \nsuch restoration work interferes with Tenant's ability to use that part of \nthe Premises which remains after the condemnation.\n\n      12.3.  TEMPORARY TAKING:  If any portion of the Premises is temporarily \ntaken for six (6) months or less, this Lease shall remain in effect and \nTenant shall be entitled to recover any condemnation award that is made for \nsuch taking and shall be responsible for restoring the Premises to the \ncondition existing immediately prior to such temporary taking.  If any \nportion of the Premises is temporarily taken by condemnation for a period \nwhich exceeds six (6) months or which extends beyond the natural expiration \nof the Lease Term, and such taking materially and adversely affects Tenant's \nability to use the Premises for the Permitted Use, then Tenant shall have the \nright to terminate this Lease, effective on the date possession is taken by \nthe condemnor.\n\n      12.4.  DIVISION OF CONDEMNATION AWARD:  Any award made as a result of \nany condemnation of the Premises or the Common Area shall belong to and be \npaid to Landlord, and Tenant hereby assigns to Landlord all of its right, \ntitle and interest in any such award; provided, however, that Tenant shall be \nentitled to recover out of any condemnation award made for a taking of all or \npart of the Premises an amount equal to the unamortized cost of all interior \nimprovements paid for by Tenant constructed pursuant to the Interior \nImprovement Agreement and all Leasehold Improvements constructed by Tenant \n(amortized on a straight line basis over the initial Lease Term for Interior \nImprovements, and over the period from completion of construction until \nexpiration of the Lease Term for Leasehold Improvements); and provided \nfurther that Tenant shall be entitled to receive any condemnation award that \nis made directly to Tenant for the following so long as the award made to \nLandlord is not thereby reduced:  (i) for the taking of personal property or \nTrade Fixtures belonging to Tenant, (ii) for the interruption of Tenant's \nbusiness or its moving costs, (iii) for loss of Tenant's goodwill, or (iv) \nfor any temporary taking where this Lease is not terminated as a result of \nsuch taking.  The rights of Landlord and Tenant regarding any condemnation \nshall be determined as provided in this Article, and each party hereby waives \nthe provisions of Section 1265.130 of the California Code of Civil \n\n                                       -24-\n\n\n\n\nProcedure and the provisions of any similar law hereinafter enacted allowing \neither party to petition the Superior Court to terminate this Lease in the \nevent of a partial taking of the Premises.\n\n                                      ARTICLE 13.\n                                      -----------\n\n                                  DEFAULT AND REMEDIES\n\n\n\n       13.1  EVENTS OF TENANT'S DEFAULT:  Tenant shall be in default of its \nobligations under this Lease if any of the following events occurs (an \"Event \nof Tenant's Default\"):\n\n             A.   Tenant shall have failed to pay Base Monthly Rent or any \nAdditional Rent when due and such failure is not cured within ten (10) days \nafter delivery of written notice from Landlord specifying such failure to \npay; or\n\n             B.   Tenant shall have failed to perform any term, covenant, or \ncondition of this Lease except those requiring the payment of Base Monthly \nRent or Additional Rent, and Tenant shall have failed to cure such breach \nwithin thirty (30) days after written notice from Landlord specifying the \nnature of such breach, or if such breach could not reasonably be cured within \nsaid thirty (30) day period, Tenant shall have failed to commence such cure \nwithin said thirty (30) day period and thereafter continue with due diligence \nto prosecute such cure to completion within such time period as is reasonably \nneeded; or \n\n             C.   Tenant shall have made a general assignment of its assets \nfor the benefit of its creditors; or\n\n             D.   Tenant shall have sublet the Premises or assigned its \ninterest in the Lease in violation of the provisions contained in Article 14, \nwhether voluntarily or by operation of law; Landlord shall have notified \nTenant in writing that such Transfer constitutes a violation of the \nprovisions contained in Article 14, and Tenant does not cause such Transfer \nto be rescinded or terminated and possession of the Premises affected by the \nTransfer recovered from the Transferee within ninety (90) days after receipt \nof such notice; or\n\n             E.   Tenant shall have permitted the sequestration or attachment \nof, or execution on, or the appointment of a custodian or receiver with \nrespect to, all or any substantial part of the property of Tenant or any \nproperty essential to the conduct of Tenant's business, and Tenant shall have \nfailed to obtain a return or release of such property within ninety (90) days \nthereafter or prior to sale pursuant to such sequestration, attachment or \nlevy, whichever is earlier; or\n\n             F.   A court shall have made or entered any decree or order with \nrespect to Tenant, or Tenant shall have submitted to or sought a decree or \norder (or a petition or pleading shall have been filed in connection \ntherewith) which:  (i) grants or constitutes (or seeks) an order for relief, \nappointment of a trustee, or confirmation of a reorganization plan under the \nbankruptcy laws of the United States; (ii) approves as properly filed (or \nseeks such approval of) a petition seeking liquidation or reorganization \nunder said bankruptcy laws or any other debtor's relief law or statute of the \nUnited States or any state thereof; or (iii) otherwise directs (or seeks) the \nwinding up or liquidation of Tenant; and such petition, decree or order shall \nhave continued in effect for a period of ninety (90) or more days; or\n\n             G.   Tenant shall have failed to deliver documents as required \nof it pursuant to paragraph 15.4 or 15.7 within the time periods specified \ntherein and Tenant shall have failed to cure such default within ten (10) \ndays after Landlord has delivered to Tenant written notice that Tenant is in \ndefault of its obligations to deliver such documents pursuant to either \nparagraph 15.4 or 15.7; or\n\n             H.   An Event of Tenant's Default has occurred under the \nBuilding A Lease (unless caused by subtenant or assignee of the original \nTenant under this Lease and such original Tenant is using reasonable efforts \nto cause such default to be cured) and, at the time Tenant is so \n\n                                       -25-\n\n\n\n\nin default, the Premises and the real property leased to Tenant pursuant to \nthe Building A Lease are both owned of record by the same person or entity.\n\n      13.2.  LANDLORD'S REMEDIES:  If an event of Tenant's Default occurs, \nLandlord shall have the following remedies, in addition to all other rights \nand remedies provided by any Law or otherwise provided in this Lease, to \nwhich Landlord may resort cumulatively or in the alternative:\n\n             A.   Landlord may, at Landlord's election, keep this Lease in \neffect and enforce by an action at law or in equity all of its rights and \nremedies under this Lease, including (i) the right to recover the rent and \nother sums as they become due by appropriate legal action, (ii) the right to \nmake payments required of Tenant or perform Tenant's obligations and be \nreimbursed by Tenant for the cost thereof with interest at the Agreed \nInterest Rate from the date the sum is paid by Landlord until Landlord is \nreimbursed by Tenant, and (iii) the remedies of injunctive relief and \nspecific performance to compel Tenant to perform its obligations under this \nLease.\n\n             B.   Landlord may, at Landlord's election, terminate this Lease \nby giving Tenant written notice of termination, in which event this Lease \nshall terminate on the date set forth for termination in such notice.  Any \ntermination under this subparagraph shall not relieve Tenant from its \nobligation to pay sums then due Landlord or from any claim against Tenant for \ndamages or rent previously accured or then accruing.  In no event shall any \none or more of the following actions by Landlord, in the absence of a written \nelection by Landlord to terminate this Lease, constitute a termination of \nthis Lease:\n\n                  (1)  Appointment of a receiver or keeper in order to \nprotect Landlord's interest hereunder;\n\n                  (2)  Consent to any subletting of the Premises or \nassignment of this Lease by Tenant, whether pursuant to the provisions hereof \nor otherwise; or\n\n                  (3)  Any other action by Landlord or Landlord's agents \nintended to mitigate the adverse effects of any breach of this Lease by \nTenant, including without limitation any action taken to maintain and \npreserve the Premises or any action taken to relet the Premises or any \nportions thereof, for the account of Tenant and in the name of Tenant.\n\n             C.   In the event Tenant breaches this Lease and abandons the \nPremises, this Lease shall not terminate unless Landlord gives Tenant written \nnotice of its election to so terminate this Lease.  No act by or on behalf of \nLandlord intended to mitigate the adverse effect of such breach, including \nthose described by subparagraphs 13.2B(1), (2) and (3) immediately preceding, \nshall constitute a termination of Tenant's right to possession unless \nLandlord gives Tenant written notice of termination.  Should Landlord not \nterminate this Lease by giving Tenant written notice, Landlord may enforce \nall its rights and remedies under this Lease, including the right to recover \nthe rent as it becomes due under the Lease as provided in California Civil \nCode Section 1951.4 as in effect on the Commencement Date of this Lease.\n\n             D.   In the event Landlord terminates this Lease, Landlord shall \nbe entitled, at Landlord's election, to damages in an amount as set forth in \nCalifornia Civil Code Section 1951.2 as in effect on the Commencement Date of \nthis Lease.  For purposes of computing damages pursuant to Section 1951.2, \n(i) an interest rate equal to the Agreed Interest Rate shall be used where \npermitted, and (ii) the term \"rent\" includes Base Monthly Rent and Additional \nRent.  Such damages shall include without limitation:\n\n                  (1)  The worth at the time of award of the amount by which \nthe unpaid rent for the balance of the term after the time of award exceeds \nthe amount of such rental loss that Tenant proves could be reasonably \navoided, computed by discounting such amount at the discount rate of the \nFederal Reserve Bank of San Francisco at the time of award plus one percent \n(1%); and\n\n                  (2)  Any other amount necessary to compensate Landlord for \nall detriment proximately caused by Tenant's failure to perform Tenant's \nobligations under this Lease, or which in the ordinary course of things would \nbe likely to result therefrom, including, \n\n                                       -26-\n\n\n\nwithout limitation, the following:  (i) expenses for cleaning, repairing or \nrestoring the Premises; (ii) expenses for altering, remodeling or otherwise \nimproving the Premises for the purpose of reletting, including installation \nof leasehold improvements (whether such installation be funded by a reduction \nof rent, direct payment or allowance to a new tenant, or otherwise); (iii) \nbroker's fees, advertising costs and other expenses of reletting the \nPremises; (iv) costs of carrying the Premises, such as taxes, insurance \npremiums, utilities and security precautions; (v) expenses in retaking \npossession of the Premises; and (vi) attorneys' fees and court costs incurred \nby Landlord in retaking possession of the Premises and in releasing the \nPremises or otherwise incurred as a result of Tenant's default.\n\n             E.   Nothing in this paragraph shall limit Landlord's right to \nindemnification from Tenant as provided in paragraph 7.2 and paragraph 10.3. \nAny notice given by Landlord in order to satisfy the requirements of \nsubparagraphs 13.1A or B above shall also satisfy the notice requirements of \nCalifornia Code of Civil Procedure Section 1161 regarding unlawful detainer \nproceedings.\n\n      13.3.  WAIVER BY TENANT OF CERTAIN REMEDIES:  Tenant waives the \nprovisions of Sections 1932(1), 1941 and 1942 of the California Civil Code \nand\/or any similar or successor law regarding Tenant's right to terminate \nthis Lease or to make repairs and deduct the expenses of such repairs from \nthe rent due under the Lease.\n\n      13.4.  WAIVER:  One party's consent to or approval of any act by the \nother party requiring the first party's consent or approval shall not be \ndeemed to waive or render unnecessary the first party's consent to or \napproval of any subsequent similar act by the other party.  The receipt by \nLandlord of any rent or payment with or without knowledge of the breach of \nany other provision hereof shall not be deemed a waiver of any such breach \nunless such waiver is in writing and signed by Landlord.  No delay or \nomission in the exercise of any right or remedy accruing to either party upon \nany breach by the other party under this Lease shall impair such right or \nremedy or be construed as a waiver of any such breach theretofore or \nthereafter occurring.  The waiver by either party of any breach of any \nprovision of this Lease shall not be deemed to be a waiver of any subsequent \nbreach of the same or of any other provisions herein contained.\n\n      13.5.  LIMITATION ON EXERCISE OF RIGHTS:  At any time that an Event of \nTenant's Default has occurred and remains uncured, (i) it shall not be \nunreasonable for Landlord to deny or withhold any consent or approval \nrequested of it by Tenant which Landlord would otherwise be obligated to \ngive, and (ii) Tenant may not exercise any option to extend, right to \nterminate this Lease, or other right granted to it by this Lease which would \notherwise be available to it.\n                                       \n\n                                    ARTICLE 14.\n                                    -----------\n\n                            ASSIGNMENT AND SUBLETTING\n\n\n      14.1.  BY TENANT:  The following provisions shall apply to any \nassignment, subletting or other transfer by Tenant or any subtenant or \nassignee or other successor in interest of the original Tenant (collectively \nreferred to in this paragraph as \"Tenant\"):\n\n             A.   Tenant shall not do any of the following (collectively \nreferred to herein as a \"Transfer\"), whether voluntarily, involuntarily or by \noperation of laws, without the prior written consent of Landlord, which \nconsent shall not be unreasonably withheld or delayed:  (i) sublet all or any \npart of the Premises or allow it to be sublet, occupied or used by any person \nor entity other than Tenant; (ii) assign its interest in this Lease; (iii) \ntransfer any right appurtenant to this Lease or the Premises; (iv) mortgage \nor encumber the Lease (or otherwise use the Lease as a security device) in \nany manner; or (v) terminate or materially amend or modify an assignment, \nsublease or other transfer that has been previously approved by Landlord.  \nAny Transfer so approved by Landlord shall not be effective until Tenant has \ndelivered to Landlord an executed counterpart of the document evidencing the \nTransfer which (i) is in form approved by Landlord, (ii) contains the same \nterms and conditions as stated in Tenant's notice given to Landlord pursuant \nto subparagraph 14.1B, and (iii) contains the agreement of the proposed \ntransferee to \n\n                                       -27-\n\n\nassume all obligations of Tenant related to the Transfer arising after the \neffective date of such Transfer and to remain jointly and severally liable \ntherefor with Tenant.  Any attempted Transfer without Landlord's consent \nshall be voidable at Landlord's option.  Landlord's consent to any one \nTransfer shall not constitute a waiver of the provisions of this paragraph \n14.1 as to any subsequent Transfer nor a consent to any subsequent Transfer.  \nNo Transfer, even with the consent of Landlord, shall relieve Tenant of its \npersonal and primary obligation to pay the rent and to perform all of the \nother obligations to be performed by Tenant hereunder.  The acceptance of \nrent by Landlord from any person shall not be deemed to be a waiver by \nLandlord of any provision of this Lease nor to be a consent to any Transfer.\n\n             B.   Tenant shall give Landlord at least fifteen (15) days prior \nwritten notice of any desired Transfer and of the proposed terms of such \nTransfer including but not limited to (i) the name and legal composition of \nthe proposed transferee; (ii) a current financial statement of the \ntransferee, financial statements of the transferee covering the preceding \nthree years if the same exist, and (if available) an audited financial \nstatement of the transferee for a period ending not more than one year prior \nto the proposed effective date of the Transfer, all of which statements are \nprepared in accordance with generally accepted accounting principles; (iii) \nthe nature of the proposed transferee's business to be carried on in the \nPremises; (iv) all consideration to be given on account of the Transfer; (v) \na current financial statement of Tenant; and (vi) such other information as \nmay be reasonably requested by Landlord.  Tenant's notice shall not be deemed \nto have been served or given until such time as Tenant has provided Landlord \nwith all information reasonably requested by Landlord pursuant to this \nsubparagraph 14.1B.  Tenant shall immediately notify Landlord of any \nmodification to the proposed terms of such Transfer.\n\n             C.   In the event that Tenant seeks to make any Transfer, then \nLandlord, by giving Tenant written notice of its election within fifteen (15) \ndays after Tenant's notice of intent to Transfer has been deemed given to \nLandlord, shall have the right to elect (i) to withhold its consent to such \nTransfer, as permitted pursuant to subparagraph 14.1A, or (ii) to permit \nTenant to so assign the Lease or sublease such part of the Premises, in which \nevent Tenant may do so, but without being released of its liability for the \nperformance of all of its obligations under the Lease, and the following \nshall apply:\n\n                  (1)  Subject to subparagraph 14.1C(5), if Tenant assigns \nits interest in this Lease in accordance with this subparagraph 14.1C, then \nTenant shall pay to Landlord fifty percent (50%) of all consideration \nreceived by Tenant over and above (i) the assignee's agreement to assume the \nobligations of Tenant under this Lease and (ii) all Permitted Transfer Costs \nrelated to such assignment.\n\n                  (2)  Subject to subparagraph 14.1C(5), if Tenant sublets \nall or part of the Premises, then Tenant shall pay to Landlord fifty percent \n(50%) of the positive difference, if any, between (i) all rent and other \nconsideration paid by the subtenant to Tenant, less (ii) all rent paid by \nTenant to Landlord pursuant to this Lease which is allocable to the area so \nsublet and all Permitted Transfer Costs related to such sublease.  Such \namount shall be paid to Landlord on the same basis, whether periodic or in \nlump sum, that such rent and other consideration is paid to Tenant by its \nsubtenant, within seven (7) days after it is received by Tenant.\n\n                  (3)  Tenant's obligations under this subparagraph shall \nsurvive any assignment or sublease.  At the time Tenant makes any payment to \nLandlord required by this subparagraph, Tenant shall deliver an itemized \nstatement of the method by which the amount to which Landlord is entitled was \ncalculated, certified by Tenant as true and correct.  Landlord shall have the \nright to inspect Tenant's books and records relating to the payments due \npursuant to this subparagraph.  Upon request therefor, Tenant shall deliver \nto Landlord copies of all bills, invoices or other documents upon which its \ncalculations are based. Landlord may condition its approval of any Transfer \nupon obtaining a certification from both Tenant and the proposed transferee \nof all amounts that are to be paid to Tenant in connection with such Transfer.\n\n                  (4)  As used herein, the term \"consideration\" shall mean \nany consideration of any kind received, or to be received, by Tenant as a \nresult of the Transfer, if such sums are related to Tenant's interest in this \nLease or in the Premises, including payments (in excess of the fair market \nvalue thereof) for Tenant's assets, fixtures, leasehold improvements, \n\n                                       -28-\n\n\n\ninventory accounts, goodwill, equipment, furniture, general intangibles and \nany capital stock or other equity ownership interest in Tenant.  As used in \nthis subparagraph, the term \"Permitted Transfer Costs\" shall mean (i) all \nreasonable leasing commissions paid to third parties not affiliated with \nTenant in order to obtain the Transfer in question, (ii) all reasonable \nattorneys' fees incurred by Tenant with respect to the Transfer in question, \n(iii) the cost of tenant improvements installed for the use of the subtenant \nor assignee to the extent required by such party as a condition to the \nTransfer, and (iv) any payments made by Tenant to the transferee to induce it \nto enter into the Transfer (E.G., payment of moving expenses).\n\n                  (5)  Notwithstanding anything to the contrary contained in \nthe foregoing, Landlord shall not participate in excess consideration \nreceived by Tenant from an assignee or subtenant as provided for in \nsubparagraphs 14.1C(1) and 14.1C(2) unless such assignment or sublease occurs \nduring an Option Term or, in the case of a sublease, extends into an Option \nTerm (in which latter event Landlord shall be entitled to its share of the \nexcess consideration paid during the Option Term).\n\n             D.   If Tenant is a corporation, any dissolution, merger, \nconsolidation or other reorganization of Tenant, or the sale or transfer in \nthe aggregate over the Lease Term of a controlling percentage of the capital \nstock of Tenant, shall be deemed a voluntary assignment of Tenant's interest \nin this Lease; provided, however, that the foregoing shall not apply to \ncorporations the capital stock of which is publicly traded.  The phrase \n\"controlling percentage\" means the ownership of and the right to vote stock \npossessing more than fifty percent (50%) of the total combined voting power \nof all classes of Tenant's capital stock issued, outstanding and entitled to \nvote for the election of directors. If Tenant is a partnership, any \nwithdrawal or substitution (whether voluntary, involuntary or by operation of \nlaw, and whether occurring at one time or over a period of time) of any \npartner(s) owning twenty-five percent (25%) or more (cumulatively) of any \ninterest in the capital or profits of the partnership, or the dissolution of \nthe partnership, shall be deemed a voluntary assignment of Tenant's interest \nin this Lease.\n\n             E.   Notwithstanding anything contained in this paragraph 14.1, \nso long as Tenant otherwise complies with the provisions of paragraph 14.1 \nTenant may enter into any one of the following transfers (a \"Permitted \nTransfer\") without Landlord's prior written consent, and Landlord shall not \nbe entitled to receive any part of any excess rentals or other consideration \nresulting therefrom that would otherwise be due to it pursuant to paragraph \n14.1C:\n\n                  (1)  Tenant may sublease all or part of the Premises or \nassign its interest in this Lease to any corporation which controls, is \ncontrolled by, or is under common control with the original Tenant to this \nLease by means of an ownership interest of more than fifty percent (50%);\n\n                  (2)  Tenant may assign its interest in the Lease to a \ncorporation which results from a merger, consolidation or other \nreorganization in which Tenant is not the surviving corporation, so long as \n(i) Tenant demonstrates to Landlord's reasonable satisfaction that the \nsurviving corporation will have sufficient creditworthiness to provide \nadequate assurance of future performance of all of Tenant's obligations under \nthis Lease, or (ii) the surviving corporation has a net worth at the time of \nsuch assignment that is equal to or greater than the net worth of Tenant \nimmediately prior to such transaction; and\n\n                  (3)  Tenant may assign this Lease to a corporation which \npurchases or otherwise acquires all or substantially all of the assets of \nTenant, so long as (i) Tenant demonstrates to Landlord's reasonable \nsatisfaction that the acquiring corporation will have sufficient \ncreditworthiness to provide adequate assurance of future performance of all \nof Tenant's obligations under this Lease, or (ii) such acquiring corporation \nhas a net worth at the time of such assignment that is equal to or greater \nthan the net worth of Tenant immediately prior to such transaction.\n\n      14.2.  BY LANDLORD:  Landlord and its successors in interest shall have \nthe right to transfer their interest in the Premises and the Property at any \ntime and to any person or entity.  In the event of any such transfer, the \nLandlord originally named herein (and, in the case of any subsequent \ntransfer, the transferor) from the date of such transfer, (i) shall be \nautomatically relieved, without any further act by any person or entity, of \nall liability for the performance of the \n\n                                       -29-\n\n\n\nobligations of the Landlord hereunder which may accrue after the date of such \ntransfer, and (ii) shall be relieved of all liability for the performance of \nthe obligations of the Landlord hereunder which have accrued before the date \nof transfer if its transferee agrees to assume and perform all such \nobligations of the Landlord hereunder.  After the date of any such transfer, \nthe term \"Landlord\" as used herein shall mean the transferee of such interest \nin the Premises and the Property.\n\n                                     ARTICLE 15.\n                                     -----------\n\n                                  GENERAL PROVISIONS\n\n\n\n      15.1.  LANDLORD'S RIGHT TO ENTER:  Landlord and its agents may enter \nthe Premises immediately in case of emergency and otherwise only at such time \nas is approved by Tenant which time of Entry shall be within seven (7) days \nafter Landlord delivers written notice to Tenant requesting approval of a \ntime to enter, and Landlord may thereafter continue such entry for such \nreasonable period of time as is necessary to accomplish Landlord's permitted \npurpose for such entry.  Landlord may so enter the Premises for the following \npurposes:  (i) inspecting the same, (ii) posting notices of \nnon-responsibility, (iii) supplying any service to be provided by Landlord to \nTenant, (iv) showing the Premises to prospective purchasers or mortgagees, \n(v) making necessary alterations, additions or repairs, (vi) performing \nTenant's obligations when Tenant has failed to do so after written notice \nfrom Landlord, (vii) placing upon the Premises ordinary \"for sale\" signs, \n(viii) responding to an emergency, and\/or (ix) during the last six (6) months \nof the Lease Term or at any time when there is a Continuing Tenant Default, \nshowing the Premises to prospective tenants and placing upon the Premises \nordinary \"for lease\" signs.  For each of the aforesaid purposes, Landlord may \nenter the Premises by means of a master key, and Landlord shall have the \nright to use any and all means Landlord may deem necessary and proper to open \nthe doors of the Premises in an emergency.  Any entry into the Premises or \nportions thereof obtained by Landlord by any of said means or otherwise shall \nnot under any circumstances be construed or deemed to be a forcible or \nunlawful entry into, or a detainer of, the Premises, or an eviction, actual \nor constructive, of Tenant from the Premises or any portion thereof.\n\n      15.2.  SURRENDER OF THE PREMISES:  Immediately prior to the expiration \nor upon the sooner termination of this Lease, Tenant shall remove all \nTenant's Trade Fixtures and other personal property, and shall vacate and \nsurrender the Premises to Landlord in the same condition as existed at the \nCommencement Date, except for (i) reasonable wear and tear, (ii) damage \ncaused by any peril or condemnation, and (iii) contamination by Hazardous \nMaterials for which Tenant is not responsible pursuant to subparagraphs 7.2B \nor 7.2C.  In this regard reasonable wear and tear shall be construed to mean \nwear and tear caused to the Premises by the natural aging process which \noccurs in spite of prudent application of reasonable standards for \nmaintenance, repair and janitorial practices, and does not include items of \nneglected or deferred maintenance.  If Landlord so requests, Tenant shall, \nprior to the expiration or sooner termination of this Lease, remove any \nLeasehold Improvements designated by Landlord and repair all damage caused by \nsuch removal if such removal is required pursuant to paragraph 5.2.  If the \nPremises are not so surrendered at the termination of this Lease, Tenant \nshall be liable to Landlord for all costs incurred by Landlord in returning \nthe Premises to the required condition, plus interest on all costs incurred \nat the Agreed Interest Rate.\n\n      15.3.  HOLDING OVER:  This Lease shall terminate without further notice \nat the expiration of the Lease Term.  Any holding over by Tenant after \nexpiration of the Lease Term shall not constitute a renewal or extension of \nthe Lease or give Tenant any rights in or to the Premises except as expressly \nprovided in this Lease.  Any holding over after such expiration with the \nconsent of Landlord shall be construed to be a tenancy from month to month on \nthe same terms and conditions herein specified insofar as applicable except \nthat Base Monthly Rent shall be increased to an amount equal to one hundred \ntwenty-five percent (125%) of the Base Monthly Rent required during the last \nmonth of the Lease Term.\n\n                                       -30-\n\n\n      15.4.  SUBORDINATION:  The following provisions shall govern the \nrelationship of this Lease to any underlying lease, mortgage or deed of trust \nwhich now or hereafter affects the Property, and any renewal, modification, \nconsolidation, replacement or extension thereof (a \"Security Instrument\"):\n\n             A.   This Lease is subject and subordinate to all Security \nInstruments existing as of the Commencement Date.  However, if any Lender so \nrequires, this Lease shall become prior and superior to any such Security \nInstrument.\n\n             B.   At Landlord's election, this Lease shall become subject and \nsubordinate to any Security Instrument created after the Commencement Date. \nNotwithstanding such subordination, Tenant's right to quiet possession of the \nPremises shall not be disturbed and the terms of this Lease shall not be \nmodified so long as Tenant is not in default and performs all of its \nobligations under this Lease, unless this Lease is otherwise terminated \npursuant to its terms.\n\n             C.   No subordination of this Lease to a Security Instrument \npursuant to subparagraphs 15.4A or 15.4B shall be effective until the holder \nof a Security Instrument executes a subordination and non-disturbance \nagreement in favor of Tenant by which the Lender agrees to be bound by the \nimmediately preceding sentence.\n\n             D.   Tenant shall execute any document or instrument required by \nLandlord or any Lender to make this Lease either prior or subordinate to a \nSecurity Instrument, which may include such other matters as the Lender \ncustomarily requires in connection with such agreements, including provisions \nthat (i) the Lender not be liable for any defaults on the part of Landlord \noccurring prior to the time the Lender takes possession of the Premises in \nconnection with the enforcement of its Security Instrument; (ii) the Lender \nnot be liable for the performance of any obligations contained in the \nInterior Improvement Agreement, for the completion of any improvements under \nconstruction or required to be constructed by Landlord; (iii) recourse \nagainst the Lender is limited to its interest in the Premises; (iv) any \nnotices given by Tenant to Landlord should also be delivered to the Lender; \n(v) Tenant shall attorn to any purchaser at a foreclosure sale or a grantee \ndesignated in a deed in lieu of foreclosure; (vi) the Lender shall not be \nbound by any rent which Tenant might have paid in advance to any prior \nLandlord for a period in excess of one month; (vii) the Lender shall not be \nbound by any agreement or modification of the Lease made without the written \nconsent of the Lender; and (viii) upon request, Tenant shall enter into a new \nlease with Lender of the Premises upon the same terms and conditions as the \nLease between Landlord and Tenant, which lease shall cover any unexpired term \nof the Lease existing prior to a foreclosure, trustee's sale, or conveyance \nin lieu of foreclosure.  Tenant's failure to execute any such document or \ninstrument within ten (10) days after written demand therefor shall \nconstitute a default by Tenant.  Tenant approves as reasonable the form of \nsubordination and non-disturbance agreement attached to this Lease as Exhibit \n\"D\".\n\n      15.5.   TENANT'S ATTORNMENT:  Tenant shall attorn (i) to any purchaser \nof the Premises or Property at any foreclosure sale or private sale conducted \npursuant to any security instrument encumbering the Premises and\/or the \nProperty, (ii) to any grantee or transferee designated in any deed given in \nlieu of foreclosure, or (iii) to the lessor under any underlying ground lease \nshould such ground lease be terminated.\n\n      15.6.   MORTGAGEE PROTECTION:  In the event of any default on the part \nof the Landlord, Tenant will give notice by registered mail to any Lender or \nlessor under any underlying ground lease whose name has been provided by \nTenant and shall offer such Lender or lessor a reasonable opportunity to cure \nthe default, not to exceed thirty (30) days from the expiration of the time \nperiod granted to Landlord to cure such default; provided, however, that if \nsuch Lender requires additional time to cure a default on the part of \nLandlord or to obtain possession of the Premises by power of sale or judicial \nforeclosure or other appropriate legal proceedings if obtaining possession is \nnecessary to effect a cure, the Lender shall be granted such opportunity, \nprovided that the Lender gives reasonable assurances to Tenant that such \ndefault will be cured.\n\n      15.7.  ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS:  At all times \nduring the Lease Term, Tenant agrees, following any request by Landlord, \npromptly to execute and deliver to Landlord an estoppel certificate, (i) \ncertifying that this Lease is unmodified and in full force and effect or, if \nmodified, stating the nature of such modification and certifying that this \nLease, as so \n\n                                       -31-\n\nmodified, is in full force and effect, (ii) stating the date to which the \nrent and other charges are paid in advance, if any, (iii) acknowledging that \nthere are not, to Tenant's knowledge, any uncured defaults on the part of \nLandlord hereunder or, if there are uncured defaults, specifying the nature \nof such defaults and (iv) certifying such other information about the Lease \nas may be reasonably required by Landlord.  Tenant's failure to deliver an \nestoppel certificate within ten (10) days after delivery of Landlord's \nrequest therefor shall be a conclusive admission by Tenant that, as of the \ndate of the request for such statement, (i) this Lease is unmodified except \nas may be represented by Landlord in said request and is in full force and \neffect, (ii) there are no uncured defaults in Landlord's performance, and \n(iii) no rent has been paid in advance.  At any time during the Lease Term \nTenant shall, upon ten (10) days' prior written notice from Landlord, provide \nTenant's most recent financial statement and financial statements covering \nthe twenty-four (24) month period prior to the date of such most recent \nfinancial statement to any existing Lender or to any potential Lender or \nbuyer of the Property; provided, however, that if Tenant is a corporation \nwhose stock is publicly traded, Tenant may satisfy the foregoing requirement \nby delivering to the appropriate parties copies of its most recent annual \nreport prepared to satisfy requirements of the federal securities laws.  Such \nstatements shall be prepared in accordance with generally accepted accounting \nprinciples and, if such is the normal practice of Tenant shall be audited by \nan independent certified public accountant.\n\n      15.8.  FORCE MAJEURE:  Any prevention, delay or stoppage due to \nstrikes, lockouts, inclement weather, labor disputes, inability to obtain \nlabor, materials, fuels or reasonable substitutes therefor, governmental \nrestrictions, regulations, controls, action or inaction, civil commotion, \nfire or other acts of God, and other causes beyond the reasonable control of \nthe party obligated to perform (except financial inability) shall excuse the \nperformance, for a period equal to the period of any said prevention, delay, \nor stoppage, of any obligation hereunder except the obligation of Tenant to \npay rent or any other sums due hereunder.\n\n      15.9.  NOTICES:  Any notice required or desired to be given regarding \nthis Lease shall be in writing and may be given by personal delivery, by \nfacsimile telecopy, by courier service, or by mail.  A notice shall be deemed \nto have been given (i) on the third (3rd) business day after mailing if such \nnotice was deposited in the United States mail, certified or registered, \npostage prepaid, addressed to the party to be served at its address first \nabove set forth, (ii) when delivered if given by personal delivery, and (iii) \nin all other cases when actually received.  Either party may change its \naddress by giving notice of same in accordance with this paragraph.\n\n      15.10.  OBLIGATION TO ACT REASONABLY:  Whenever the consent or approval \nof a party to this Lease is required to be obtained before the other party to \nthis Lease may take an action, such consent or approval shall not be \nunreasonably withheld or delayed.\n\n      15.11.  CORPORATE AUTHORITY:  If Tenant is a corporation (or a \npartnership), each individual executing this Lease on behalf of said \ncorporation (or partnership) represents and warrants that he is duly \nauthorized to execute and deliver this Lease on behalf of said corporation in \naccordance with the by-laws of said corporation (or partnership in accordance \nwith the partnership agreement of said partnership) and that this Lease is \nbinding upon said corporation (or partnership) in accordance with its terms.  \nIf Tenant is a corporation, each of the persons executing this Lease on \nbehalf of Tenant does hereby covenant and warrant that Tenant is a duly \nauthorized and existing corporation, that Tenant is qualified to do business \nin California and that the corporation has full right and authority to enter \ninto this Lease.\n\n      15.12.  ADDITIONAL DEFINITIONS:  Any term that is given a special \nmeaning by a provision in this Lease shall have such meaning when used in \nthis Lease or any addendum or amendment hereto.  As used herein, the \nfollowing terms shall have the following meanings:\n\n              A.  AGREED INTEREST RATE:  The term \"Agreed Interest Rate\" \nshall mean that interest rate determined as of the time it is to be applied \nthat is equal to the lesser of (i) two percent (2%) in excess of the \"prime \nrate\", \"reference rate\", or \"base rate\" established by Bank of America (or if \nBank of America shall cease to exist, by the commercial bank with its \nheadquarters in California that has the greatest net worth among commercial \nbanks headquartered in California) as it may be adjusted from time to time, \nor (ii) the maximum interest rate permitted by law.\n\n                                       -32-\n\n              B.   COMMON AREA:  The term \"Common Area\" shall mean all areas \nand facilities within the Property that are not designated by Landlord for \nthe exclusive use of Tenant or any other lessee or other occupant of the \nProperty, including the parking areas, access and perimeter roads, pedestrian \nsidewalk, landscaped areas, trash enclosures, recreation areas and the like.\n\n              C.   LAW:  The term \"Law\" shall mean any judicial decision, \nstatute, constitution, ordinance, resolution, regulation, rule, \nadministrative order, or other requirement of any municipal, counting, state, \nfederal or other government agency or authority having jurisdiction over the \nparties to this Lease or the Premises, or both, in effect either at the \nCommencement Date of this Lease or any time during the Lease Term, including, \nwithout limitation, any regulation, order or policy of any quasi-official \nentity or body (e.g., board of fire examiners, public utilities or special \ndistrict).\n\n              D.   LEASEHOLD IMPROVEMENTS:  The term \"Leasehold Improvements\" \nshall mean all improvement, additions, alterations and fixtures installed in \nthe Premises by Tenant at its expense which are not Trade Fixtures.\n\n              E.   LENDER:  The term \"Lender\" shall mean any beneficiary, \nmortgagee, secured party, lessor, or other holder of any Security Instrument.\n\n              F.   PRIVATE RESTRICTIONS:  The term \"Private Restrictions\" \nshall mean all recorded covenants, conditions and restrictions, reciprocal \neasement agreements, and any other recorded instruments affecting the use of \nthe Premises as they may exist from time to time.\n\n              G.   TRADE FIXTURES:  The term \"Trade Fixtures\" shall mean \nanything affixed to the Premises by Tenant at its expense for purposes of \ntrade, manufacture, ornament or domestic use (except replacement of similar \nwork or material originally installed by Landlord) which can be removed \nwithout injury to the Premises unless such thing has, by the manner in which \nit is affixed, become an integral part of the Premises; provided, however, \nthat all of Tenant's signs shall be Trade Fixtures regardless of how affixed \nto the Premises.\n\n      15.13.  MISCELLANEOUS:  Should any provision of this Lease prove to be \ninvalid or illegal, such invalidity or illegality shall in no way affect, \nimpair or invalidate any other provision hereof, and such remaining \nprovisions shall remain in full force and effect.  Time is of the essence \nwith respect to the performance of every provision of this Lease in which \ntime of performance is a factor.  The captions used in this Lease are for \nconvenience only and shall not be considered in the construction or \ninterpretation of any provision hereof. Any executed copy of this Lease shall \nbe deemed an original for all purposes. This Lease shall, subject to the \nprovisions regarding assignment, apply to and bind the respective heirs, \nsuccessors, executors, administrators and assigns of Landlord and Tenant.  \n\"Party\" shall mean Landlord or Tenant, as the context implies.  If Tenant \nconsists of more than one person or entity, then all members of Tenant shall \nbe jointly and severally liable hereunder.  This Lease shall be construed and \nenforced in accordance with the laws of the State of California. The language \nin all parts of this Lease shall in all cases be construed as a whole \naccording to its fair meaning, and not strictly for or against either \nLandlord or Tenant.  When the context of this Lease requires, the neuter \ngender includes the masculine, the feminine, a partnership or corporation or \njoint venture, and the singular includes the plural.  The terms \"shall\", \n\"will\" and \"agree\" are mandatory.  The term \"may\" is permissive.  When a \nparty is required to do something by this Lease, it shall do so at its sole \ncost and expense without right of reimbursement from the other party unless \nspecific provision is made therefor.  Where Tenant is obligated not to \nperform any act, Tenant is also obligated to use reasonable efforts to \nrestrain any others within its control from performing said act, including \nagents, invitees, contractors, and subcontractors.  Landlord shall not become \nor be deemed a partner nor a joint venturer with Tenant by reason of the \nprovisions of this Lease.\n\n      15.14.  TERMINATION BY EXERCISE OF RIGHT:  If this Lease is terminated \npursuant to its terms by the proper exercise of a right to terminate \nspecifically granted to Landlord or Tenant by this Lease, then this Lease \nshall terminate thirty (30) days after the date the right to terminate is \nproperly exercised (unless another date is specified in that part of the \nLease creating the right, in which event the date so specified for \ntermination shall prevail), the rent and all other charges due hereunder \nshall be prorated as of the date of termination, and neither Landlord nor \nTenant shall \n\n                                       -33-\n\nhave any further rights or obligations under this Lease except for those that \nhave accrued prior to the date of termination.  This paragraph does not apply \nto a termination of this Lease by Landlord as a result of a default by Tenant.\n\n      15.15.  BROKERAGE COMMISSIONS:  Tenant warrants that it has not had any \ndealings with any real estate brokers, leasing agents or salesmen, or \nincurred any obligations for the payment of real estate brokerage commissions \nor finder's fees which would be earned or due and payable by reason of the \nexecution of this Lease other than to the Retained Real Estate Brokers. \nLandlord shall be responsible for the payment of any commission owed pursuant \nto a separate written commission agreement between Landlord and J.R. Parrish, \nInc. for the payment of the commission as a result of the execution of this \nLease.\n\n      15.16.  ENTIRE AGREEMENT:  This Lease constitutes the entire agreement \nbetween the parties, and there are no binding agreements or representations \nbetween the parties except as expressed herein.  Tenant acknowledges that \nneither Landlord nor Landlord's agent(s) has made any representation or \nwarranty as to (i) whether the Premises may be used for tenant's intended use \nunder existing Law or (ii) the suitability of the Premises or the Common Area \nfor the conduct of Tenant's business or the condition of any improvements \nlocated thereon.  Tenant expressly waives all claims for damage by reason of \nany statement, representation, warranty, promise or other agreement of \nLandlord or Landlord's agent(s), if any, not contained in this Lease or in \nany addendum or amendment hereto.  No subsequent change or addition to this \nLease shall be binding unless in writing and signed by the parties hereto.\n\n      15.17.  RIGHT OF FIRST OFFER TO LEASE:  If at any time and from time to \ntime during the Lease Term Landlord desires to lease all or any portion of \nany buildings located on the Property, Landlord shall first give written \nnotice of such fact to Tenant (an \"Offer to Lease\"), which shall be \naccompanied by the form of lease that Landlord intends to use for the \ntransaction and the following information regarding the basic business terms \nof the transaction (the \"Basic Business Terms\"):  (i) a description of the \npremises to be leased; (ii) the term of the proposed lease; (iii) the \nimprovements Landlord is willing to construct or that it will require to be \nconstructed; (iv) the method of payment for such improvements; (v) the base \nmonthly rent for the term; (vi) additional rent to be paid by the tenant to \nthe extent not reflected in the form lease; (vii) the estimated commencement \ndate for the lease term; (viii) any options to extend the lease term and the \nrent to be charged during any such extension periods; and (ix) any other \nmaterial business terms Landlord elects to specify.\n\n              A.   Landlord shall lease to Tenant and Tenant shall lease form \nLandlord the Premises identified in the Offer to Lease on the Basic Business \nTerms stated in the Offer to Lease if:  (i) the Premises offered for Lease in \nthe Offer to Lease consist of an area that is less than 14,000 square feet of \ngross leasable area and Tenant notifies Landlord in writing of Tenant's \nagreement to lease such Premises on the terms stated in the Offer to Lease \nwithin thirty (30) days after receipt of the Offer to Lease in question; or \n(ii)  the Premises described in the Offer to Lease consist of an area that is \nmore than 14,000 square feet and Tenant notifies Landlord in writing of \nTenant's agreement to Lease such premises on the terms stated in the Offer to \nLease within fifteen (15) days after receipt of the Offer to Lease in \nquestion.  If Tenant so timely elects to lease the space so offered, Landlord \nshall lease to Tenant and Tenant shall lease from Landlord such space on the \nfollowing terms:\n\n                   (1)  The Lease of such space shall be on the Basic \nBusiness Terms stated in the Offer to Lease; provided, however, that Tenant's \nobligation to pay rent shall not commence until the earlier of:  (i) the date \nany improvements that Landlord is to construct as set forth in the Basic \nBusiness Terms have been substantially completed, subject to punchlist items; \nor (ii) ninety (90) days after the space has been delivered to Tenant vacant \nand ready for improvement work, if such improvement work is not to be \nperformed by Landlord.\n\n                   (2)  The lease of such premises shall be consummated by \nthe preparation and execution of a written lease, in the form and content of \nthe form of lease accompanying the Offer to Lease, except as modified to \nincorporate the Basic Business Terms set forth in the Offer to Lease and as \nexpressly provided herein. The lease shall be executed by Landlord and Tenant \nas soon as reasonably practicable after Tenant has made its election to \naccept the Offer to Lease, but in no event later than forty-five (45) days \nthereafter.\n\n                                       -34-\n\n              B.   If Tenant does not indicate in writing its agreement to \nlease the premises offered on the terms contained in the Offer to Lease \nwithin the time period specified in subparagraph 15.17A, then the following \nshall apply:\n\n                   (1)  Landlord shall have the right to lease such premises \nto any third party on the same Basic Business Terms set forth in the Offer to \nLease and such other terms as are contained in the form of lease included \nwith the Offer to Lease; provided, however, that Landlord may make any \nchanges to such form of Lease at the request of a prospective tenant to \ninduce it to lease such space from Landlord so long as such changes are \ncommercially reasonable and do not materially change the Basic Business Terms \nset forth in the Offer to Lease, and such lease is executed within one \nhundred twenty (120) days after the Offer to Lease is delivered to Tenant.\n\n                   (2)  If within one hundred twenty (120) days after the \nOffer to Lease is delivered to Tenant, Landlord elects to lease the premises \nin question on terms different than the Basic Business Terms stated in the \nOffer to Lease, then Landlord shall give notice to Tenant of such election \nsetting forth the new terms upon which Landlord is willing to so lease the \npremises in question (the \"Amended Offer to Lease\").  Tenant shall have the \nright to lease the premises in question upon the terms stated in the Offer to \nLease, as modified by the Amended Offer to Lease, which right may be \nexercised by delivering written notice of such election to exercise to \nLandlord within five (5) days following delivery to Tenant of the Amended \nOffer to Lease.  If Tenant does not send written notice to Landlord of its \nelection to lease the premises in question upon the terms set forth in the \nOffer to Lease, as modified by the Amended Offer to Lease, within said five \n(5) day period, then Landlord may lease the premises in question to any third \nparty in accordance with the terms and conditions set forth in the Offer to \nLease, as modified by the Amended Offer to Lease; provided, however, that \nLandlord may make any changes to the form of lease included in the Offer to \nLease or the Amended Offer to Lease at the request of a prospective tenant to \ninduce it to lease such space from Landlord so long as such changes are \ncommercially reasonable and do not materially change the Basic Business Terms \nset forth in the Offer to Lease, as modified by the Amended Offer to Lease \nand the lease is executed within sixty (60) days after the Amended Offer to \nLease is delivered to Tenant.\n\n              C.   If Tenant is offered the opportunity to lease all or a \nportion of any building on the Property and declines to exercise such right, \nand if Landlord subsequently enters into a lease with a third party affecting \nthe space so offered to Tenant, the right of first offer contained in this \nparagraph shall thereafter be subject and subordinate to any rights granted \nto such third party tenant with respect to such space, or any other space in \nthe Property, including rights of first refusal, options to extend, and \noptions to expand.\n\n              D.   If Landlord has delivered to Tenant a Offer to Lease and \nTenant has not elected to lease the premises offered on the terms contained \nin the Offer to Lease, then if Landlord so requests, Tenant shall deliver to \nLandlord or any prospective tenant a certificate or certificates stating \nthat:  (i) Landlord has complied with the provisions of this paragraph 15.17 \nand may lease the premises in question pursuant to the Offer to Lease free of \nany rights or claims of Tenant; or (ii) Landlord has not complied with the \nprovisions of this paragraph 15.17 and specifying the manner in which \nLandlord has failed to so comply.  Such certificate shall be delivered \npromptly after request therefor but in no event not more than five (5) days \nafter request has been delivered to Tenant. Tenant's failure to deliver such \ncertificate within the required time period shall be deemed an admission upon \nwhich any party may rely that Landlord has complied with the provisions of \nthis paragraph 15.17 and may lease the premises in question pursuant to the \nterms of the Offer to Lease free of any rights or claims by Tenant.\n\n              E.   Notwithstanding anything to the contrary contained in the \nforegoing, tenant may not exercise its right to lease the space described in \nthe Offer to Lease, nor, at the option of Landlord, shall a new lease for \nsuch space commence, unless Tenant demonstrates to Landlord's reasonable \nsatisfaction that tenant has sufficient creditworthiness to provide adequate \nassurance of future performance of all of Tenant's obligations under the new \nlease.\n\n              F.   Within ten (10) days after receipt of written request \ntherefor from tenant, Landlord shall inform Tenant in writing of the \nfollowing with respect to all leases affecting the Property:  (i) the \nscheduled lease term expiration date; (ii) any options to extend (including \nthe \n                                       -35-\n\ncommencement and termination date of such options to extend); and (iii) such \nother information as is reasonably requested by Tenant concerning the status \nof leases then affecting the Property as it relates to determining when such \nleases will terminate and space become available.  In addition, Landlord \nshall use reasonable efforts to promptly notify tenant of the availability of \nspace within the Property that results from events other than the natural \nexpiration of a lease term (E.G., termination of a lease resulting from a \ntenant's default or negotiations regarding the rescission of a lease by \nmutual consent).\n\n              G.   The parties acknowledge that (i) paragraph 15.17 of the \nBuilding A Lease contains substantially the same provisions as those set \nforth in this paragraph 15.17, and (ii) it is their intention that there be \nonly one right of first offer to lease that is held and may be exercised by \nonly one person or entity.  If Landlord complies with the provisions of \nparagraph 15.17 of this Lease or paragraph 15.17 of the Building A Lease with \nrespect to a lease of space within the Property to a third party, Landlord \nshall be deemed to have satisfied the requirements of both Leases with \nrespect to this subject.  The parties further agree that the right of first \noffer to lease set forth in this paragraph 15.17 and in paragraph 15.17 of \nthe Building A Lease may only be held by one entity who is FMC Corporation or \nits successor.  If Tenant concurrently assigns its interest in this Lease and \nthe Building A Lease to the same person or entity pursuant to an assignment \ndescribed by subparagraphs 14.1E(2) or (3), such assignment shall not affect \nthe provisions of this paragraph 15.17. However, if tenant assigns its \ninterest in this Lease without concurrently also assignment its interest in \nthe Building A Lease to the same person or entity pursuant to an assignment \ndescribed by subparagraphs 14.1E(2) or (3), then effective upon such \nassignment the provisions of this paragraph 15.17 shall terminate and be of \nno further force or effect.  Notwithstanding the foregoing sentence, if the \nBuilding A Lease has been terminated or if the provisions of paragraph 15.17 \nof the Building A Lease have terminated because of an assignment of the \ntenant's interest in the Building A Lease, then any subsequent assignment by \nTenant of its interest in this Lease pursuant to an assignment described by \nsubparagraphs 14.1E(2) or (3) shall not cause the right of first offer to \nlease created by this paragraph 15.17 to terminate.  The rights created by \nthis paragraph 15.17 may not be assigned or otherwise transferred to any \nthird party except in connection with an assignment of all of Tenant's right, \ntitle and interest in this Lease made in compliance with paragraph 14.1 \nhereof.  A sublease shall not affect the rights granted by this paragraph \n15.17; provided, however, that no subtenant of Tenant shall have the right to \ndirectly lease the Offered Space from Landlord (although Tenant may exercise \nthe right of first offer to lease and then sublease to any existing subtenant \npursuant to the terms of the new lease).\n\n      IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease with \nthe intent to be legally bound thereby, to be effective as of the \nCommencement Date of this Lease.\n\nLANDLORD:                                   TENANT:\n\nTHE EQUITABLE LIFE ASSURANCE SOCIETY         FMC CORPORATION,\nOF THE UNITED STATES, a New York             a Delaware corporation\ncorporation\n\nBy:   \/s\/ James Piane                        By:   \/s\/ Charles Fink  \n    ------------------------------               -----------------------------\n\nPrinted                                      Printed\nName:   James Piane                          Name:   Charles Fink            \n      ----------------------------                 ---------------------------\n\nTitle:   Attorney in Fact                    Title:   V.P. &amp; Group Manager\n        --------------------------                  --------------------------\n\nBy:                                          By:                      \n    ------------------------------               -----------------------------\n\n\nPrinted                                      Printed\nName:                                        Name:                         \n      ------------------------------               ---------------------------\n\n\nTitle:                                       Title:                        \n      ------------------------------               ---------------------------\n\n\nDated:                                       Dated:                        \n      ------------------------------                --------------------------\n\n\n                                       -36-\n\n\n\n\nIf Tenant is a CORPORATION, the authorized officers must sign on behalf of the\ncorporation and indicate the capacity in which they are signing.  The Lease must\nbe executed by the chairman of the board, president or vice-president AND the\nsecretary, assistant secretary, the chief financial officer or assistant\ntreasurer, UNLESS the Bylaws or resolution of the Board of Directors shall\notherwise provide, in which event the Bylaws or a certified copy of the\nresolution, as the case may be, must be attached to this Lease.\n\n\n\n\n\n\n\n\n                                     EXHIBIT \"A\"\n                                     -----------\n                                          \n                                          \n                                          \n                                          \n                                          \n                                          \n                                       [MAP]\n                                          \n                                          \n                                          \n                                       [MAP]\n                                          \n                                          \n                                          \n\n\n\n\n\n\n\n                                     EXHIBIT \"B\"\n\n                              PLANS AND SPECIFICATIONS\n\n                                  FOR BUILDING \"C\"\n\n\nPlans and Specifications Prepared by DES\n----------------------------------------\nSheet                             Title                             Current Date\n-----                            -------                            ------------\n\nA-1            Title Sheet                                             6-9-89\n\nA-2            Bldg. \"C\" - First Floor Demolition Plan                 6-9-89\n\nA-3            Bldg. \"C\" - Second Floor Demolition Plan                6-5-89\n\nA-4            Bldg. \"C\" - First Floor Plan                            6-9-89\n\nA-5            Bldg. \"C\" - Second Floor Plan                           6-9-89\n\nA-6            Bldg. \"C\" - Third Floor Plan                            6-9-89\n\nA-7            Bldg. \"C\" - First Floor\n                  Reflected Ceiling Plan                               6-9-89\nA-8            Bldg. \"C\" - Second Floor\n                  Reflected Ceiling Plan                               6-9-89\nA-9            Bldg. \"C\" - Third Floor\n                  Reflected Ceiling Plan                               6-9-89\nA-10           Bldg. \"C\" - First Floor Finish Plan                     6-9-89\n\nA-11           Bldg. \"C\" - Second Floor Finish Plan                    6-9-89\n\nA-12           Bldg. \"C\" - Third Floor Finish Plan                     6-9-89\n\nA-13           Bldg. \"C\" - First Floor\n                  Electrical\/Telephone Plan                            6-9-89\nA-14           Bldg. \"C\" - Second Floor\n                 Electrical\/Telephone Plan                             6-9-89\nA-15           Bldg. \"C\" - Third Floor\n                 Electrical\/Telephone Plan                             6-9-89\nA-16           Details, Interior Elevations, Enlarged\n                 Shower Plan, Door &amp; Window Schedule                   6-5-89\n\nA-17           Details                                                 6-5-89\n\nA-18           Structural Details, Architectural Details               6-9-89\n\n\n\n\n\nPlans and Specifications Prepared by Hague-Richards Associates, Ltd.\n--------------------------------------------------------------------\n\nSheet                             Title                            Current Date\n-----                            -------                           ------------\n\nDA-1          Lobby Plans\n                Reflected Ceiling Plans, Elevations, Details          6-9-89\n\nD-1           Third Floor - Architectural Plan Elevations             6-9-89\n\nD-2           Third Floor - Reflected Ceiling Plan                    6-9-89\n\nD-3           Third Floor - Elevations                                6-9-89\n\nD-4           Third Floor - Details                                   6-9-89\n\nD-5           Third Floor - Details                                   6-9-89\n\nD-6           Third Floor - Details                                   6-9-89\n\nD-9           Third Floor - Finish Legend\n                Room Finish Schedule                                  6-9-89\n\nPlans\/Specs\n\n\n\n\n                                       -2-\n\n\n\n\n                                     EXHIBIT C\n                                          \n                           INTERIOR IMPROVEMENT AGREEMENT\n                                    (Building C)\n\n\n\n\n\n      This Interior Improvement Agreement is made part of that Lease dated \nfor reference purposes only June 1, 1989 (the \"Lease\"), by and between THE \nEQUITABLE LIFE ASSURANCE SOCIETY OF THE UNTIED STATES, a New York corporation \n(\"Landlord\") and FMC Corporation, a Delaware corporation (\"Tenant\") of \napproximately 86,785 square feet of gross leasable area located in that \nbuilding commonly known as Building C of Airport Technology Park, 2830 De La \nCruz Boulevard, Santa Clara, California.\n\n      Landlord and Tenant agree that the following terms are hereby added to \nthe Lease:\n\n             1.   DEFINITIONS:  As used herein and in the Lease, the \nfollowing terms shall have the following meanings:\n\n             A.   APPROVED PLANS:  The term \"Approved Plans\" shall mean those \nfinal plans, specifications and working drawings described by Exhibit \"B\" to \nthe Lease.\n\n             B.   INTERIOR IMPROVEMENTS:  The term \"Interior Improvements\" \nshall mean those improvements described by the Approved Plans that Tenant has \nthe right to construct in the Premises pursuant to paragraph 2 hereof.\n\n             C.   INTERIOR IMPROVEMENT COSTS:  The term \"Interior Improvement \nCosts\" shall mean the following:  (i) the total amount due pursuant to the \nconstruction contract entered into by Tenant pursuant to subparagraph 2B \nhereof to construct the Interior Improvements; (ii) the cost of all \ngovernmental approvals, permits and fees required as a condition to the \nconstruction of the Interior Improvements; (iii) all utility connection or \nuse fees; (iv) fees of architects, designers, or engineers for services \nrendered in connection with the design and construction of the Interior \nImprovements; (v) the cost of payment and performance bonds obtained to \nassure completion of the Interior Improvements; and (vi) relocation and \nmoving expenses incurred by Tenant in connection with Tenant's move to the \nPremises.  There shall be excluded from Interior Improvement Costs the \nfollowing, to the extent not included in the construction contract with the \nPrime Contractor referred to in subparagraph 2B hereof:  (i) any fee for \nLandlord's review of Tenant's plans for the Interior Improvements; (ii) \ntemporary electricity used during the construction period in connection with \nthe construction of the Interior Improvements; and (iii) any fees charged by \nTenant or its agents or employees for supervising\/reviewing the construction \nof the Interior Improvements (excluding overhead and profits of prime \ncontractor).\n\n             D.   LANDLORD'S INTERIOR IMPROVEMENT ALLOWANCE:  The term \n\"Landlord's Interior Improvement Allowance\" shall mean the maximum amount \nLandlord is required to spend toward the payment of the Interior Improvement \nCosts, which amount is equal to the product obtained by multiplying (i) \nTwenty-One Dollars ($21.00) per square foot by (ii) the Premises Gross \nLeasable Area (expressed in square feet) of 86,785 square feet, for a total \nof One Million Eight Hundred Twenty-Two Thousand Four Hundred Eighty-Five \nDollars ($1,822,485).\n\n             E.   SUBSTANTIALLY COMPLETED:  The Interior Improvements shall \nbe deemed to be \"Substantially Completed\" when (i) Prime Contractor has \nissued its written certificate stating that such improvements have been \nsubstantially completed in accordance with the Approved Plans therefor, (ii) \nelectrified office partitions are installed, and (iii) the Building \nDepartment of the City of Santa Clara has completed its final inspection of \nsuch improvements and has \"signed off\" the building inspection card approving \nsuch work as complete.\n\n             F.   PRIME CONTRACTOR:  The term \"Prime Contractor\" shall mean \nAlacon Construction, Inc.\n\n                                       \n\n\n      2.   CONSTRUCTION OF INTERIOR IMPROVEMENTS:  Tenant shall have the \nright to construct the Interior Improvements in accordance with the \nfollowing: \n\n             A.   Tenant warrants that the Interior Improvements shall be \nconstructed in a good and workmanlike manner substantially in accordance with \nthe Approved Plans (as modified by any change orders approved by Landlord and \nTenant pursuant to paragraph 3 hereof) and all Laws.  All materials and \nequipment furnished shall be fully paid for and be free of liens, chattel \nmortgages, and security interests of any kind.\n\n             B.   The Interior Improvements shall be constructed by Prime \nContractor pursuant to a construction contract between Tenant and Prime \nContractor. Landlord shall have the right to review such form of construction \ncontract before it is executed.  Once the construction contract between Prime \nContractor and Tenant has been executed, Tenant shall not materially amend, \nmodify or alter the responsibilities of Prime Contractor thereunder without \nLandlord's written consent, except for change orders approved pursuant to \nparagraph 3 hereof.  In purposes connection with the execution of such \nconstruction contract, Tenant shall use reasonable efforts to provide that \nall construction or equipment warranties or guarantees obtained by Tenant \nshall, to the extent obtainable, provide that such warranties and guarantees \nobtained by tenant shall, to the extent obtainable, provide that such \nwarranties and guaranties shall also run for the benefit of Landlord.  Upon \nreasonable written advance request of Landlord, Tenant shall inform Landlord \nof all written construction and equipment warranties existing in favor of \nTenant which affect the Interior Improvements. Tenant shall cooperate with \nLandlord in enforcing such warranties and in bringing any suit that may be \nnecessary to enforce liability with regard to any defects.\n\n             C.   Tenant shall use reasonable efforts to commence \nconstruction of the Interior Improvements as soon as reasonably practicable, \nand shall thereafter continuously prosecute such construction to completion.\n\n             D.   Tenant shall properly obtain, comply with and keep in \neffect all permits, licenses and other governmental approvals which are \nrequired to be obtained form governmental bodies in order to construct the \nInterior Improvements.  Upon reasonable written advance request, Tenant shall \npromptly deliver copies of all such permits, licenses and approvals to \nLandlord.\n\n             E.   Tenant shall be solely responsible for all aspects of the \nconstruction of the Interior Improvements, including the development and \ndesign thereof as set forth in the Approved Plans, the supervision of the \nwork of construction, the qualification, financial condition, and performance \nof all architects, engineers, contractors, material suppliers, consultants, \nand the accuracy of all applications for payment and the proper application \nof all disbursement. Landlord is not obligated to supervise, inspect or \ninform Tenant or any third party of any aspect of the construction of the \nInterior Improvements.  Any inspection or review by Landlord is to determine \nwhether Tenant is properly discharging its obligations to Landlord and may \nnot be relied upon by tenant or any third party.  Landlord owes no duty of \ncare to Tenant or any third party to protect against or to inform Tenant or \nany third party of, any negligence, faulty, inadequate or defective design or \nconstruction of the Interior Improvements.\n\n        3.   CHANGES TO APPROVED PLANS FOR INTERIOR IMPROVEMENTS:  Neither \nLandlord nor Tenant shall have the right to order extra work or change orders \nwith respect to the Approved Plans or the construction of the Interior \nImprovements without the prior written consent of the other.  All extra work \nor change orders requested by either Landlord or Tenant shall be made in \nwriting, shall specify the amount of delay or the time saved resulting \ntherefrom, shall specify any added or reduced cost resulting therefrom, and \nshall become effective and a part of the Approved Plans once approved in \nwriting by both parties.  Notwithstanding the foregoing, tenant's failure to \nobtain Landlord's consent to an extra work or change order shall not be an \nEvent of Tenant's Default if Landlord would have been required to consent to \nthe change pursuant to the terms hereof.\n\n                                       -2-\n\n\n\n        4.   PAYMENT OF INTERIOR IMPROVEMENT COSTS:  The Interior Improvement \nCosts and certain noise attenuating improvement costs shall be paid as \nfollows:\n\n             A.   Landlord and Tenant desire to improve the Premises so that \nthe following maximum interior noise levels are achieved for the types of \noffice space identified:  55 dBA for executive offices and conference rooms; \n60 dBA for staff offices; and 65 dBA for sales and secretarial offices.  To \nachieve these goals Landlord and Tenant agree to contribute to the cost of \nimprovements as follows.  Tenant at its sole cost and expense shall install \n(i) extra sheetrock in the roof and sound attenuating ceiling tiles in third \nfloor ceilings, and (ii) sheetrock beneath the structural ceiling and above \nthe suspended ceilings of all the second and third floor offices, and \nsprinklers as required by the City of Santa Clara, along with caulking \nrequired in connection therewith. Landlord at its sole cost and expense shall \ncause the sliding glass doors on the second and third floor to be removed and \nreplaced with double pane sound attenuating glass windows.  In the event upon \ncompletion of all of the work described above in this subparagraph A, the \ndesired noise levels are not achieved, Landlord agrees to pay for the cost of \nadditional improvements designed to reduce noise levels; provided Landlord \nshall not be required to contribute more than One Hundred Fifty Thousand \nDollars ($150,000) for such additional improvements.\n\n             B.   In addition to those contributions of Landlord described in \nsubparagraph A above, Landlord shall contribute to the payment of all \nInterior Improvement Costs up to an amount equal to Landlord's Interior \nImprovement Allowance.  If any part of the Landlord's Interior Improvement \nAllowance is not used by tenant, or Tenant does not qualify for a \ndisbursement pursuant to the provisions of this paragraph 4 with the result \nthat the entire allowance is not disbursed, there shall nonetheless be no \nadjustment in the Base Monthly Rent due from tenant pursuant to the Lease.  \nIf the Interior Improvement Costs exceed the maximum amount of Landlord's \nrequired contribution, then Tenant shall pay the entire amount of such excess.\n\n             C.   Landlord and Tenant acknowledge that the construction \ncontract Tenant will enter into for the construction of the Interior \nImprovements will provide for progress payments to Prime Contractor in stages \nas the work is completed. Landlord shall pay the full amount of each such \nprogress payment until all of Landlord's Interior Improvement Allowance is \nexpended.  Thereafter, if the cost of the Interior Improvements exceeds the \namount of Landlord's required contribution for such improvements, then Tenant \nshall pay the rest of the progress payments due to Prime Contractor.  \nLandlord shall pay any progress payment due from Landlord to Prime Contractor \nwithin thirty (30) days after satisfaction of all of the conditions precedent \nto such progress payment by Landlord that has been requested by tenant which \nare set forth in subparagraph 4D and 4E hereof.  If Landlord fails to pay any \nsuch amount when due, then Tenant may (but without the obligation to do so) \nadvance such funds on Landlord's behalf, and Landlord shall be obligated to \nreimburse Tenant for the amount of funds so advanced on its behalf and all \ncosts incurred by Tenant in so doing, including all interest at the Agreed \nInterest Rate.\n\n             D.   If Tenant desires to obtain a disbursement from Landlord \nfrom the Landlord's Interior Improvement Allowance for the purpose of paying \nInterior Improvement Costs, Tenant shall submit to Landlord a written \nitemized statement, signed by Tenant (an \"Application for Payment\") setting \nforth the following: (i) a description of the construction work performed, \nmaterials supplied and\/or costs incurred or due for which disbursement is \nrequested; and (ii) the total amount incurred, expended and\/or due for each \nrequested item less prior disbursements; and (iii) the amount due to be paid \nby Landlord from Landlord's Interior Improvement Allowance.\n\n             E.   Landlord shall have no obligation to make any disbursement \nfrom Landlord's Interior Improvement Allowance at any time that there is a \nContinuing Tenant Default (as defined in paragraph 1.14 of the Lease), or \nthere has occurred an event, omission or failure of conditions which would \nconstitute an Event of Tenant's Default (as defined in paragraph 13.1 of the \nLease) after notice or lapse of time, or both.  In addition, Landlord shall \nhave the right to condition any disbursement from Landlord's Interior \nImprovement Allowance \n\n                                       -3-\n\n\n\nupon Landlord's receipt and approval of the following with respect to each \nApplication for Payment:\n\n                  (1)  The form of Application for Payment and the \nsufficiency of the information contained therein;\n\n                  (2)  Bills and invoices and any other documents evidencing \nthe total amount expended, incurred, or due for any requested contribution to \nInterior Improvement Costs;\n\n                  (3)  Evidence of Tenant's use of lien releases acceptable \nto Landlord for payments or disbursements to any contractor, subcontractor, \nmaterialmen, supplier, or lien claimant\n\n                  (4)  Architects, inspectors and\/or engineer's periodic \ncertification and the stage of construction that has been completed and its \nconformance to the Approved Plans based upon any such architects, inspectors \nand\/or engineers periodic, physical inspections of the Premises and Interior \nImprovements;\n\n                  (5)  Waivers and releases of mechanics' lien, stop notice \nclaim, equitable lien claim or other lien claim rights or lien bonds in form \nand amount reasonably satisfactory to Landlord;\n\n                  (6)  Evidence of Tenant's compliance with its obligations \npursuant to paragraph 2 hereof;\n\n                  (7)  Any other document, requirement, evidence or \ninformation that Landlord may reasonably request pursuant to any provision of \nthis Interior Improvement Agreement.\n\n             F.   Tenant agrees that all disbursements made to Tenant by \nLandlord from Landlord's Interior Improvement Allowance shall be used only \nfor the payment of Interior Improvement Costs and shall be applied as set \nforth, and for the purposes described in, the relevant Application for \nPayment based upon which the disbursement is made.\n\n     5.   PUNCHLIST:     Within a reasonable period of time after the \nInterior Improvements are Substantially Completed, Landlord, Tenant and \nTenant's architect shall together walk through and inspect such improvements \nso completed, using reasonable efforts to discover all uncompleted or \ndefective construction.  After such inspection has been completed.  Tenant \nshall use reasonable efforts to complete and\/or repair all \"punch list\" items \nwithin thirty (30) days thereafter.\n\n     6.   CONSTRUCTION WARRANTY FOR THE INTERIOR IMPROVEMENTS:  Tenant \nwarrants that the construction of the Interior Improvements will be performed \nin accordance with the Approved Plans therefor and all Laws in a good and \nworkmanlike manner, and that all materials and equipment furnished will \nconform to said plans and shall be new and otherwise of good quality.  Tenant \nshall promptly commence the cure of any breach of such warranty and complete \nsuch cure with diligence at Tenant's cost and expense.\n\n     7.   OWNERSHIP OF THE INTERIOR IMPROVEMENTS:  All of the Interior \nImprovements which are constructed with funds of Landlord shall become the \nproperty of Landlord upon installation and shall not be removed or altered by \nTenant.  Any part of the Interior Improvements which are constructed by \nLandlord with funds of Tenant shall become the property of Tenant upon \ninstallation and Tenant shall have the right to depreciate and claim and \ncollect investment tax credits in such improvements; provided, however, that \n(i) Tenant shall not remove or alter such improvements during the term of the \nLease; (ii) such improvements shall be surrendered to Landlord, and title to \nsuch improvements shall best in Landlord, at the expiration or earlier \ntermination of the Lease Term; and (iii) in no event shall Landlord have any \nobligation to pay Tenant for the cost or value of such improvements.  \nNotwithstanding the foregoing, Tenant shall have the right to remove only the \nfollowing kinds of Interior Improvements so long as it repairs all damage \ncaused by the installation thereof and returns the Premises to the condition \nexisting \n\n                                       -4-\n\n\n\nprior to the installation of such Interior Improvements:  (i) built-in \ncabinets, file drawers and bookcases; (ii) computer room air conditioning; \n(iii) canteen equipment; (iv) office cubicle systems; and (v) ornamental \nstatutes.  If both Landlord and Tenant contribute to the cost of constructing \nthe Interior Improvements, Landlord and Tenant shall agree in writing which \nof such improvements are to be constructed using Landlord's funds (and \ntherefore are Landlord's property) and which of them are to be installed with \nTenant's funds (and therefore are Tenant's property during the Lease Term).\n\n     8.   DOCUMENTS:  Within fifteen (15) days after receiving a written \nrequest from Landlord, Tenant shall deliver to Landlord the most current \nversion of the following:  (i) a complete and correct list showing the name, \naddress and telephone number of each contractor, subcontractor and principal \nmaterials supplier engaged in connection with the construction of the \nInterior Improvements, and the total dollar amount of each contract and \nsubcontract (including any changes) together with the amounts paid through \nthe date of the list; (ii) true and correct copies of all executed contracts \nand subcontracts identified in the list described in the immediately \npreceding clause, including any changes; (iii) a construction progress \nschedule; and (iv) any update to any item described in the preceding clauses \nwhich Tenant may have previously delivered to Landlord.  Tenant expressly \nauthorizes Landlord to contact any contractor, subcontractor or materials \nsupplier to verify any information disclosed in accordance with this \nparagraph.  Within sixty (60) days after the Interior Improvements have been \nSubstantially Completed, Tenant shall cause the following to be delivered to \nLandlord:\n\n          A.   Statements from Tenant's architect in form reasonably \nsatisfactory to Landlord certifying that the Interior Improvements have been \ncompleted substantially in accordance with the Approved Plans and all Laws;\n\n          B.   A copy of all permanent certificates of occupancy and other \ngovernmental approvals which may be received by Tenant with respect to the \nconstruction of the Interior Improvements;\n\n          C.   One (1) copy of the Approved Plans, one (1) copy of each extra \nwork or change order, and one (1) copy of any \"As-Built\" plans and \nspecifications for the Interior Improvements, which Tenant may have elected \nto cause to be prepared;\n\n          D.   One (1) copy of all warranties, guaranties, and operational \nmanuals relating to the Interior Improvements;\n\n          E.   A copy of a recorded notice of completion relating to the \nconstruction of the Interior Improvements.\n\n     9.   INDEMNITY:  Tenant agrees to indemnify and hold Landlord harmless \nfrom and against all liabilities, claims, actions, damages, costs and \nexpenses (including attorneys' fees incurred by Landlord in protecting its \ninterest from the following) arising out of or resulting from construction of \nthe Interior Improvements, including any mechanics' liens, defective \nworkmanship or materials and any claim or cause of action of any kind by any \nparty that Landlord is liable for any act or omission committed or made by \nTenant, its agents, employees, or contractors in connection with the \nconstruction of the Interior Improvements.\n\n     10.  ROOF AND OTHER WORK:  Landlord agrees to cause the structural \nsupport of the roof mounted mechanical units on the Premises to be inspected \nby Cabak Randall Jasper Griffiths Associates.  If as a result of such \ninspection, remedial work is recommended, Landlord shall cause the same to be \nperformed by Prime Contractor at Landlord's expense, as soon as reasonably \npracticable.\n\n     Landlord agrees to replace, at Landlord's expense, the broken window on \nthe east side, south end of the second floor of the Premises.\n\n     11.  EFFECT OF AGREEMENT:  In the event of any inconsistency between \nthis Agreement and the Lease, the terms of this Agreement shall prevail.\n\n                                       -5-\n\n\n\nAS TENANT:                              AS LANDLORD:\n----------                              ------------\n\n\nFMC CORPORATION,                        THE EQUITABLE LIFE ASSURANCE\na Delaware corporation                  SOCIETY OF THE UNITED STATES,\n                                        a New York corporation\n\n\n\nBy:  \/s\/ Charles Fink                   By:  \/s\/ James Piane     \n    ---------------------------             ---------------------------\n\n\nIts: V.P. &amp; Group Manager               Its: Attorney in Fact    \n    ---------------------------             ---------------------------\n\n\nDated:    June 23, 1989                 Dated:    6-23-89             \n        -----------------------                ------------------------\n\n\n\n\n\n                                       -6-\n\n\n\n\n\n                                     EXHIBIT D\n\n                                          \nRECORDING REQUESTED BY:\n\n\nThe Equitable Life Assurance\n   Society of the Untied States\n\nWHEN RECORDED RETURN TO:\n\nMorrison &amp; Foerster\n345 California Street\nSan Francisco, CA  94104-2105\nAtt'n:    Leslie M. Browne\n\n   --------------------------------------------------------------------------\n                     (Space above this lien for Recorder's use)\n                                          \n\n                           SUBORDINATION, NON-DISTURBANCE\n                              AND ATTORNMENT AGREEMENT\n                                          \n                                          \n                                          \nNOTICE:      THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT\n             RESULTS IN YOUR LEASEHOLD ESTATE IN THE PROPERTY BECOMING \n             SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER \n             OR LATER SECURITY INSTRUMENT.\n\n\n\n             THIS AGREEMENT is entered into as of the ______ day of \n_____________, 1986, by and between THE EQUITABLE LIFE ASSURANCE SOCIETY OF \nTHE UNTIED STATES, a New York corporation (the \"Beneficiary\"), TELEDYNE \nINDUSTRIES, INC., a California corporation (the \"Lessee\") and AIRPORT \nTECHNOLOGY ASSOCIATES, a California general partnership (collectively the \n\"Lessor\").\n\n                                W I T N E S S E T H\n\n          WHEREAS, Lessee has entered into a certain lease dated June 30, \n1986 (the \"Lease\"), with Lessor covering certain space (the \"Premises\") \nlocated in and upon the real property described in Exhibit A attached hereto \n(the \"Property\");\n\n          WHEREAS, Beneficiary is the holder of a first mortgage loan (the \n\"Loan\") to Lessor in the amount of Thirty One Million Two Hundred Thousand \nand\/no 100 Dollars ($31,200,000.00) which is secured by a first lien \nConstruction and Permanent Deed of Trust, Security Agreement and Fixture \nFiling with Assignment of Rents (the \"Deed of Trust\") covering the Property;\n\n          WHEREAS, the parties hereto desire expressly to confirm the \nsubordination of the Lease to the lien of the Deed of Trust, it being a \nrequirement by Beneficiary that the lien and charge of the Deed of Trust be \nunconditionally and at all times prior and superior to the leasehold \ninterests and estates created by the Lease; and\n\n          WHEREAS, Lessee has requested that Beneficiary agree not to disturb \nLessee's possessory rights in the Premises in the event beneficiary should \nforeclose the Deed of Trust, provided that Lessee is not in default under the \nLease and provided that Lessee attorns to beneficiary or the purchaser at any \nforeclosure or Trustee's sale of the Property.\n\n          NOW, THEREFORE, in consideration of the mutual covenants contained \nherein and of other good and valuable consideration the receipt and \nsufficiency of which is hereby acknowledged, the parties hereby agree as \nfollows:\n\n                                       \n\n\n          1.   Notwithstanding anything to the contrary set forth in the \nLease, the Lease and the leasehold estate created thereby and all of Lessee's \nrights thereunder shall be and shall at all times remain subject, subordinate \nand inferior to the Deed of Trust and the lien thereof and all rights of \nBeneficiary thereunder and to any and all renewals, modifications, \nconsolidations, replacements and extensions thereof.\n\n          2.   Lessee hereby declares, agrees and acknowledges that:\n\n               a.   Beneficiary would not have agreed to recognize the Lease \nwithout this Agreement; and\n\n               b.   Beneficiary, in making disbursements pursuant to the \nagreements evidencing and securing the Loan, is under no obligation or duty \nto oversee or direct the application of the proceeds of such disbursements \nand such proceeds may be used by Lessor for purposes other than improvement \nof the premises.\n\n          3.   In the event of foreclosure of the Deed of Trust, or upon a \nsale of the property encumbered thereby pursuant to the Trustee's power of \nsale contained therein, or upon a transfer of said property by deed in lieu \nof foreclosure, then so long as Lessee is not in default under any of the \nterms, covenants, or conditions of the Lease, the Lease shall continue in \nfull force and effect as a direct lease between the succeeding owner of the \nProperty and Lessee, upon and subject to all of the terms, covenants and \nconditions of the Lease for the balance of the term of the Lease.  Lessee \nhereby agrees to attorn to and accept any such successor owner as landlord \nunder the Lease, and to be bound by and perform all of the obligations \nimposed by the Lease, and Beneficiary or any such successor owner of the \nProperty will not disturb the possession of Lessee, and will be bound by all \nof the obligations imposed by the Lease upon the landlord thereunder; \nprovided, however, that the Beneficiary, or any purchaser at a trustee's or \nsheriff's sale or any successor owner of the Property shall not be:\n\n               a.   liable for any act or omission of a prior landlord \n(including the Lessor); or\n\n               b.   subject to any offsets or defenses which the Lessee might \nhave against any prior landlord (including the Lessor); or\n\n               c.   bound by any rent or additional rent which the Lessee \nmight have paid in advance to any prior landlord (including the Lessor) for a \nperiod in excess of one month; or\n\n               d.   bound by any agreement or modification of the Lease made \nwithout the written consent of the Beneficiary; or\n\n               e.   liable or responsible for or with respect to the \nretention, application and\/or return to Lessee of any security deposit paid \nto any prior lessor (including the Lessor), whether or not still held by such \nprior lessor, unless and until beneficiary or such other purchaser has \nactually received for its own account as lessor the full amount of such \nsecurity deposit.\n\n          Beneficiary acknowledges that it is presently a general partner in \nLessor and that the provisions of this Agreement shall not affect any \nobligations it may have under the Lease in its capacity as general partner of \nLessor.\n\n          4.   Upon the written request of either Beneficiary or Lessee to \nthe other given at the time of a foreclosure, trustee's sale or deed in lieu \nthereof, the parties agree to execute a lease of the Premises upon the same \nterms and conditions as the Lease between the Lessor and Lessee, which lease \nshall cover any unexpired term of the Lease existing prior to such \nforeclosure, trustee' sale or conveyance in lieu of foreclosure.\n\n          5.   Lessee from and after the date hereof, in the event of any act \nor omission by Lessor which would give Lessee the right, either immediately \nor after the lapse of time, to terminate the Lease or to claim a partial or \ntotal eviction or to offset against the rental due under the Lease any amount \ndue Lessee as a result of a breach by Lessor, will not exercise any such \n\n                                       -2-\n\n\n\nright:  (a) until it has given written notice of such act to Beneficiary; and \n(b) until the same period of time as is given to Lessor under the Lease to \ncure such act or omission shall have elapsed following such giving of notice \nto beneficiary and following the time when Beneficiary shall have become \nentitled under the Deed of Trust to remedy the same.\n\n          6.   Lessor, as landlord under the Lease and trustor under the Deed \nof Trust, agrees for itself and its heirs, successors and assigns, that:  (a) \nthis Agreement does not (i) constitute a waiver by Beneficiary of any of its \nrights under the Deed of Trust, and\/or (ii) in any way release Lessor from \nits obligation to comply with the terms, provisions, conditions, covenants, \nagreements and clauses of the Deed of Trust; (b) the provisions of the Deed \nof Trust remain in full force and effect and must be complied with by Lessor; \nand (c) in the event of a default under the Deed of Trust, Lessee may pay all \nrent and all other sums due under the Lease to beneficiary as provided in \nthis Agreement.\n\n          7.   Lessee acknowledges that it has notice that the Lease and the \nrent and all other sums due thereunder have been assigned or are to be \nassigned to Beneficiary as security for the Loan secured by the Deed of \nTrust.  In the event that Beneficiary notifies Lessee in writing of a default \nunder the Deed of Trust and demands that Lessee pay its rent and all other \nsums due under the Lease to Beneficiary, Lessee agrees that it will honor \nsuch demand and pay its rent and all other sums due under the Lease directly \nto the Beneficiary or as otherwise required pursuant to such notice.\n\n          8.   Any provision of this Agreement to the contrary \nnotwithstanding, beneficiary shall have no obligation or incur any liability \nwith respect to the erection and completion of the building in which the \nPremises are located or for completion of the Premises or any improvements \nfor Lessee's use and occupancy.\n\n          9.   Lessee from and after the date hereof shall send a copy of any \nnotice or statement under the Lease to Beneficiary at the same time such \nnotice or statement is sent to the Lessor under the Lease.\n\n          10.  All notices hereunder shall be deemed to have been duly given \nif mailed by United States registered or certified mail, with return receipt \nrequested, postage prepaid to beneficiary at the following address (or at \nsuch other address as shall be given in writing by Beneficiary to the Lessee) \nand shall be deemed complete upon any such mailing:\n\n          THE EQUITABLE LIFE ASSURANCE\n            SOCIETY OF THE UNITED STATES\n          c\/o Equitable Real Estate Management, Inc.\n          1 Market Plaza, 1900 Steuart Street Tower\n          San Francisco, CA  94105\n\n\n          Attention:  Senior Vice President\n\n\n          with a copy to:   Mr. Richard Dolson, Senior Vice President\n                            EQUITABLE REAL ESTATE INVESTMENT MANAGEMENT, INC.\n                            3414 PEACHTREE ROAD NE, SUITE 1405 \n                            ATLANTA, GEORGIA  30326-1162\n\n          11.  This Agreement supersedes any inconsistent provisions of the \nLease.\n\n          12.  Nothing contained in this Agreement shall be construed to \nderogate from or in any way impair or affect the lien and charge or \nprovisions of the Deed of Trust, except as specifically set forth herein.\n\n          13.  This Agreement shall inure to the benefit of the parties \nhereto, their successors and permitted assigns; provided however, that in the \nevent of the assignment or transfer of the interest of Beneficiary, all \nobligations and liabilities of Beneficiary under this Agreement shall \nterminate, and thereupon all such obligations and liabilities shall be the \nresponsibility of the party to whom beneficiary's interest is assigned or \ntransferred; and provided \n\n                                       -3-\n\n\n\nfurther that the interest of Lessee under this Agreement may not be assigned \nor transferred without the prior written consent of Beneficiary.\n\n          14.  Lessee agrees that this Agreement satisfies any condition or \nrequirement in the Lease relating to the granting of a non-disturbance \nagreement.\n\n          15.  This Agreement shall be governed by and construed in \naccordance with the laws of the State of California.\n\n          IN WITNESS WHEREOF, the parties have executed this Agreement on the \ndate and year first set forth above.\n\nNOTICE:   THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT \n          CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON THE LEASE \n          TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER \n          PURPOSES THAN IMPROVEMENT OF THE PROPERTY.\n\nTHE EQUITABLE LIFE ASSURANCE\n     SOCIETY OF THE UNITED STATES\n     a New York corporation\n     \"Beneficiary\"\n\n\nBy                            \n  ------------------------------\nPrinted\nName:     Richard B. Duffy       \n     ----------------------------\n\nTitle     Assistant Secretary      \n     ----------------------------\n\n\nTELEDYNE INDUSTRIES, INC.\n     a California corporation\n     \"Lessee\"\n\n\nBy                            \n  -------------------------------\nPrinted\nName                             \n    -----------------------------\n\nTitle                             \n     ----------------------------\n\n\nAIRPORT TECHNOLOGY PARK ASSOCIATES,\n     a California general partnership\n     \"Lessor\"\n\n\n\nBy   Birstaf II,\n     a California partnership,\n     General Partner\n\n     By                              \n       ------------------------------\n          Hudson R. Staffield,\n          a general partner of\n          Birstaf II\n\n                                       -4-\n\n\n\n\n     By   Birtcher Pacific II\n          a California general partnership,\n          a general partner of\n          Birstaf  II\n\n\n     By                                 \n       --------------------------------\n     Printed\n     Name:                         \n          -----------------------------\n\n     Title                              \n          -----------------------------\n\n\nBy  The Equitable Life Assurance\n     Society of the United States,\n     a New York corporation,\n     General Partner\n\n\n     By                                 \n        --------------------------------\n     Printed\n     Name       Richard B. Duffy         \n          ------------------------------\n\n     Title      Assistant Secretary      \n          ------------------------------\n \n\n\n\n               IT IS RECOMMENDED THAT PRIOR TO THE EXECUTION OF THIS \nSUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT, THE PARTIES CONSULT \nWITH THEIR ATTORNEYS WITH RESPECT THERETO.\n\n\n\n\n                                       -5-\n\n\n\n\nSTATE OF            )\n                    )ss.\nCOUNTY OF           )\n\n\n\n     On this ____ day of ____________, in the year 1986, before me, the \nundersigned, a Notary Public in and for said State, personally appeared \nRichard B. Duffy, personally known to me, or proved to me on the basis of \nsatisfactory evidence, to be the person who executed the within instrument as \nAssistant Secretary, on behalf of The Equitable Life Assurance Society of the \nUnited States, a New York corporation, the corporation therein named, and \nacknowledge to me that such corporation executed the within instrument \npursuant to its by-laws or to a resolution of its board of directors.\n\n     WITNESS my hand and official seal.\n\n\n\n\n\n                                   -------------------------------------------\n                                   NOTARY PUBLIC\n\n\n\nSTATE OF            )\n                    )ss.\nCOUNTY OF           )\n\n\n     On this ____ day of ____________, in the year 1986, before me, the \nundersigned, a Notary Public in and for said State, personally appeared \n_________________, personally known to me, or proved to me on the basis of \nsatisfactory evidence, to be the person who executed the within instrument as \n_____________________, on behalf of Teledyne Industries, Inc., a California \ncorporation, the corporation therein named, and acknowledge to me that such \ncorporation executed the within instrument pursuant to its by-laws or to a \nresolution of its board of directors.\n\n     WITNESS my hand and official seal.\n\n\n\n\n\n                                   -------------------------------------------\n                                   NOTARY PUBLIC\n\n\n\n\n\n\n\n\nSTATE OF            )\n                    )ss.\nCOUNTY OF           )\n\n\n     On this ____ day of ____________, in the year 1986, before me, the \nundersigned, a Notary Public in and for said State, personally appeared \nHudson R. Staffield, personally known to me, or proved to me on the basis of \nsatisfactory evidence, to be the person who executed the within instrument as \na general partner of Birstaf II, a California partnership, and acknowledged \nto me that Birstaf II is a general partner of Airport Technology Park \nAssociates, the California general partnership that executed the within \ninstrument, and that Birstaf II executed the same as a general partner of \nAirport Technology Park Associates.\n\n     WITNESS my hand and official seal.\n\n\n\n\n\n                                   -------------------------------------------\n                                   NOTARY PUBLIC\n\n\n\n\nSTATE OF            )\n                    )ss.\nCOUNTY OF           )\n\n\n     On this ____ day of ____________, in the year 1986, before me, the \nundersigned, a Notary Public in and for said State, personally appeared \n_____________________________, personally known to me, or proved to me on the \nbasis of satisfactory evidence, to be the person who executed the within \ninstrument as the __________________ of Birtcher Pacific II, a California \ngeneral partnership, and acknowledged to me that Birtcher Pacific II is a \ngeneral partner of Birstaf II, a California partnership, that Birstaf II is a \ngeneral partner of Airport Technology Park Associates, the California general \npartnership that executed the within instrument, that Birtcher Pacific II \nexecuted the same as a general partner of Birstaf II, that Birstaf II \nexecuted the same as a general partner of Airport Technology Park Associates, \nand that Airport Technology Park Associates executed the same.\n\n     WITNESS my hand and official seal.\n\n\n\n\n\n                                   -------------------------------------------\n                                   NOTARY PUBLIC\n\n\n\n\n                                       -2-\n\n\n\n\nSTATE OF            )\n                    )ss.\nCOUNTY OF           )\n\n\n\n     On this ____ day of ____________, in the year 1986, before me, the \nundersigned, a Notary Public in and for said State, personally appeared \nRichard B. Duffy, personally known to me, or proved to me on the basis of \nsatisfactory evidence, to be the person who executed the within instrument as \nthe Assistant Secretary of The Equitable Life Assurance Society of the United \nStates, a New York corporation, and acknowledge to me that The Equitable Life \nAssurance Society of the United States is a general partner of Airport \nTechnology Park Associates, the California general partnership that executed \nthe within instrument, and that The Equitable Life Assurance Society of the \nUnited States executed the same as a general partner of Airport Technology \nPark Associates.\n\n     WITNESS my hand and official seal.\n\n\n\n\n\n                                   -------------------------------------------\n                                   NOTARY PUBLIC\n\n\n\n\n\n\n                                       -3-\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6826,7558,9167],"corporate_contracts_industries":[9451,9477,9445],"corporate_contracts_types":[9583,9579],"class_list":["post-41813","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-axa-financial-inc","corporate_contracts_companies-fmc-corp","corporate_contracts_companies-united-defense-industries-inc","corporate_contracts_industries-manufacturing__chemicals","corporate_contracts_industries-aerospace__vehicles","corporate_contracts_industries-insurance__life","corporate_contracts_types-land__ca","corporate_contracts_types-land"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41813","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41813"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41813"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41813"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}