AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE—NET (DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)

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Exhibit 10.13

AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE—NET
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)

1. Basic Provisions ("Basic Provisions").

1.1 Parties: This Lease ("Lease"), dated for reference purposes on March 21 2001, is made by and between Parkway Centre Five Investors, LLC, a Delaware limited liability company ("Lessor") and REMEC, Inc., a California corporation ("Lessee"), (collectively the "Parties," of individually a "Party").

1.2 Premises: That certain real property, including all improvements therein of to be provided by Lessor under the terms of this Lease, and commonly Known as Parkway Centre Five located in the County of San Diego, State of California, and generally described as (describe briefly the nature of the property and, if applicable, the "Project", if the property is located within a Project) The approximately 80,878 square foot building, of which approx. 13,000 square feet is mezzanine ("Building") located in the Parkway Business Centre (Phase 2) in Poway, CA. The Premises includes the Building and the Land described in Ex. A. including all parking areas. ("Premises"). (See also Paragraph 2)

1.3 Term: Ten (10) years and months ("Original Term") commencing See Xxxxxxxx, Xxx, 0. 3 ("Commencement Date") and ending ten (10) years thereafter (Expiration Date"). (See also Paragraph 3)

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

1.5 Base Rent: $See Addendum. Par. 1.5 per month ("Base Rent"). payable on the first day of each month commencing on the Commencement Date. (See also Paragraph 4)

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

l.6 Bass Rent Paid Upon Execution: $81,687 as Base Rent for the first month (estimated)

1.7 Security Deposit: $ 81,687 ("Security Deposit"). (See also Paragraph 5)

1.8 Agreed Use: light manufacturing, light manufacturing, warehouse, office use and related uses consistent with Applicable Requirements (See also Paragraph 6)

1.9 Insuring Party: Lessor is the "Insuring Party" unless otherwise stated herein. (See also Paragraph 8)

1.10 Real Estate Brokers: (See also Paragraph 15)

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

ý Xxxxxxx Real Estate Services represents Lessor exclusively ("Lessor's Broker");

ý CB Xxxxxxx Xxxxx represents Lessee exclusively ("Lessee's Broker"); or

N/A represents both Lessor and Lessee ("Dual Agency").

(b) Payment to Brokers: Lessor shall pay to the Broker the fee agreed to in their separate written agreement. See Addendum, Par. 15.

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

1.12 Addends and Exhibits. Attached hereto is an Addendum and Exhibits A, B and Work Letter, all of which constitute a pan of this Lease.

2. Premises.

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

2.2 Condition. Lessor shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first occurs ("Start Date), warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems ("HVAC"), loading doors, if any. and all other such elements in the Premises, other than those constructed by Lessee, shall be in good operating condition on said date and that the structural elements of the roof, bearing walls arid foundation of any buildings on the Premises (the "Building") shall be free of material defects. If a non-compliance with said warranty exists as of the Start Date, Lessor shall, as Lessor's sole obligation with respect to such matter, except as otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify same at Lessor's expense. If, after the Start Date, Lessee does not give Lessor written notice of any non-compliance with this warranty within: (i) one year as to the surface of the roof and the structural portions of the roof, foundations and bearing walls, (ii) six (6) months as to the HVAC systems, (iii) thirty (30) days as to the remaining systems and other elements of the Building, correction of such non-compliance shall be the obligation of Lessee at Lessee's sole cost and expense. Lessor shall also cooperate with Lessee in enforcing all warranties of every kind and nature received by Lessor from Lessor's contractors and assign to Lessee (on a non-exclusive basis) the benefit of such warranties.

2.3 Compliance. Lessor warrants that the improvements on the Premises and to be constructed by Lessor pursuant to the Work Letter comply with all applicable laws, covenants or restrictions of record, building codes. regulations and ordinances, including the Americans With Disabilities Act, ("Applicable Requirements") in effect on the Start Date. Said warranty does not apply to the use to which Lessee will put the Premises or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee is responsible for determining whether or not the zoning is appropriate for Lessee's intended use, and acknowledges that past uses of the Premises may no longer be allowed. If the Premises do not comply with said warranty, Lessor shall, except as otherwise provided, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify the same at Lessor's expense. Lessee shall give Lessor prompt written notice of any non-compliance with this warranty of which Lessee becomes aware. If the Applicable Requirements are hereafter changed (as opposed to being in existence at the Start Date, which is addressed in Paragraph 6.2(e) below) so as to require during the term of this Lease the construction of an addition to or an alteration of the Building. the remediation of any Hazardous Substance, or the reinforcement at other physical modification of the Building ("Capital Expenditure"), Lessor and Lessee shall allocate the cost of such work as follows:

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

(b) If such Capital Expenditure is not the result of the specific arid unique use of the Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor and Lessee shall allocate the obligation to pay for such costs pursuant to the provisions of Paragraph 7.1(c); provided, however, that if such Capital Expenditure is required during the last two years of this Lease or if Lessor reasonably determines that it is not economically feasible to pay its share thereof, Lessor shall have the option to terminate this Lease upon ninety (90) days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within ten (10) days after receipt of Lessor's termination notice that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and fails to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest, from Rent until Lessor's share of such costs have been fully paid. If Lessee is unable to finance Lessor's share, or if the balance of the Rent due and payable for the remainder of this Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon thirty (30) days written notice to Lessor.

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

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

2.5 [Reserved]

3. Term.

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

3.2 Early Possession. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent and Real Property Taxes, shall be abated for the period of such early possession. All other terms of this Lease (including, but not limited to, the obligations to pay insurance premiums and to maintain the Premises) shall, however, be in effect during such period. Any such early possession shall not affect the Expiration Date. See Par. 3.2 of Addendum.

3.3 [Reserved]

3.4 Lessee Compliance. Lessor shall not be required to tender possession of the Premises to Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of its obligations under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor's election to withhold possession pending receipt of such evidence of insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied.

4. Rent.

4.1. Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be rent ("Rent").

4.2 Payment. Lessee shaft cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction (except as specifically permitted in this Lease), on or before the day on which it is due. Rent for any period during the term hereof which is for less than one (1) full calendar month shall be prorated based upon ft actual number of days of said month. Payment of Rent shall be made to Lessor at its address stated herein or to such other persons or place as Lessor may from time to time designate in writing. Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor's rights to the balance of such Rent, regardless of Lessor's endorsement of any check so stating.

5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee's faithful performance of its obligations under this Lease. If Lessee falls to pay Rent, or otherwise Defaults under this Lease, Lessor may use or apply any portion of said Security Deposit for the payment of any amount due Lessor or to reimburse or compensate Lessor for any liability, expense, loss of damage which Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or any portion of said Security Deposit, Lessee shall within ten (10) days after written request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent increases during the term of this Lease, Lessee shall. upon written request from Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to the increased Base Rent as the initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be amended to accommodate a material change in the business of Lessee or to accommodate a subleases or assignee, Lessor shall have the right to increase the Security Deposit to the extent necessary, in Lessor's reasonable judgment, to account for any increased wear and tear that the Premises may suffer as a result thereof. If a change in control of Lessee occurs during this Lease and following such Change the financial condition of Lessee is, in Lessor's reasonable judgment, significantly reduced, Lessee shall deposit such additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a commercially reasonable level based on said change in financial condition. Lessor shall not be required to keep the Security Deposit separate from its general accounts. Within fourteen (14) days after the expiration of termination of this Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and otherwise within thirty (30) days after the Premises have been vacated pursuant to Paragraph 7.4(c) below, Lessor shall return that portion of the Security Deposit not used or applied by Lessor. No part of the Security Deposit shall be considered to be held in trust, to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease,

6. Use.

6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which is reasonably comparable thereto, and for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs owners and/or occupants of, or causes damage to neighboring properties. Lessor shall not unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use, so long as the same will not impair the structural integrity of the improvements on the Premises or the mechanical or electrical systems therein, is not significantly more burdensome to the Premises, and will comply with Applicable Requirements. Such request shall set forth the proposed modification of the Agreed Use with reasonable specificity and shall contain the following sentence in capital letters: "THE FAILURE OF LESSOR TO RESPOND TO THIS REQUEST FOR MODIFICATION OF THE AGREED USE WITHIN FIVE (5) BUSINESS DAYS SHALL DE DEEMED APPROVAL OF SUCH MODIFICATION PURSUANT TO PARAGRAPH 6.1 OF THE LEASE" If Lessor elects to withhold consent, Lessor shall within five (5) business days after such request give written notification

of same, which notice shall include an explanation of Lessor's objections to the change in use. Failure of Lessor to respond to written request for such modification within five (5) business days shall be deemed approval of such modification of Agreed Use.

6.2 Hazardous Substances.

(a) Reportable Uses Require Consent. The term "Hazardous Substance" as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials expected to be on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated of monitored by any governmental authority, or (iii) a basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons. petroleum, gasoline, and/or crude oil or any products, by-products or fractions thereof. Lessee shall not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable Requirements. "Reportable Use" shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession. storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neighboring properties. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use, so long as such use is in compliance with all Applicable Requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, contamination, injury and/or liability, including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements) and/or increasing the Security Deposit. Lessor hereby agrees that notwithstanding anything in this Paragraph 6.2(a) of the Lease to the contrary, Lessee is hereby authorized to handle, store, and use the Hazardous Materials listed on Exhibit B. attached hereto and incorporated herein by this reference, provided that Lessee shall at all times comply with all Applicable Requirements. All other Hazardous Materials which are proposed to be used by the Lessee require the prior written consent of Lessor as set forth in this Paragraph 6.2(a).

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

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

(d) Lessee Indemnification. Lessee shall indemnity, defend and hold Lessor, its agents, employees, lenders and ground lessor, if any, harmless from and against any and all loss of rents

and/or damages, liabilities. judgments, claims, expenses, penalties, and attorneys' and consultants' fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or Lessee's agents, employees, contractors or invitees (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from adjacent properties). Lessee's obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, removal, remediation. restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of such agreement.

(e) Lessor Indemnification. Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its shareholders, directors, officers, employees, agents, contractors and lenders, harmless from and against any and all environmental damages, liabilities, judgments, claims, costs, expenses, penalties, loss of permits, and attorneys and consultants' fees, including the cost of remediation, arising out of (a) any Hazardous Substances brought onto the Premises by Lessor, or prior owners of the Land on which the Premises are located and (b) Lessor's failure to comply with any Applicable Requirements with respect to my Hazardous Substances brought onto the Premises by Lessor. Lessor's obligations hereunder shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessor and the cost of investigation (including consultants' and attorneys' fees and testing). removal, remediation and/or abatement thereof, or any contamination therein involved, and (subject to Section 17 of the Addendum) shall survive the expiration or earlier termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessor from its obligations under this Lease with respect to Hazardous Substances, unless specifically, agreed by Lessee in writing at the time of such agreement.

(f) Investigations and Remediations. Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to the Start Date, unless such remediation measure is requited as a result of Lessee's use (including "Alterations", as defined in Paragraph 7.3(a) below) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities at the request of Lessor, including allowing Lessor and Lessor's agents to have reasonable access to the Premises at reasonable times in order to carry out Lessor's investigative and remedial responsibilities.

(g) Lessor Termination Option. If a Hazardous Substance Condition occurs during the term of this Lease, unless Lessee is legally responsible therefor (in which case Lessee shall make the investigation and remediation thereof required by the Applicable Requirements and this Lease shall continue in full force and effect, but subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13). Lessor may, at Lessor's option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to remediate such condition exceeds twelve (12) times the then monthly Bass Rent or $100.000, whichever is greater, give written notice to Lessee, within thirty (30) days after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor's desire to terminate this Lease as of the date sixty (60) days following the date of such notice. In the event Lessor elects to give a termination notice, Lessee may, within ten (10) days thereafter, give written notice to Lessor of Lessee's commitment to pay the amount by which the Cost Of the remediation of such Hazardous Substance Condition exceeds an amount equal to twelve (12) times the then monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within thirty (30) days following such commitment. In such event,

this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation as soon as reasonably possible after the required funds are available. If Lessee does not give such notice and provide the required funds or assurance thereof within the time provided, this Lease shall terminate as of the date specified in Lessor's notice of termination.

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

6.4 Inspection; Compliance. Lessor and Lessor's "Lender" (as defined in Paragraph 30 below) and consultants shall have the light to enter into Premises at any time, in the case of an emergency, and otherwise at reasonable times upon reasonable prior notice to Lessee, for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or the inspection is requested or ordered by a governmental authority with respect to the activities of Lessee, or its agents, employees. contractors or invitees, on or about the Premises. In such case, Lessee shall upon request reimburse Lessor for the cost of such inspections, so long as such inspection is reasonably related to the violation or contamination resulting from the activities of Lessee, or its agents. employees, contractors or invitees on or about the Premises.

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

7.1 Lessee's Obligations.

(a) In General. Subject to Paragraph 7.2 of Addendum and any applicable provisions of the Work Letter And to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises, Utility Installations, and Alterations in good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, the elements or the age of such portion of the Premises), including, but not limited to, all equipment or facilities, such as plumbing, heating, ventilating, air-conditioning, electrical, lighting facilities, boilers, pressure vessels, fire protection system, fixtures, walls (interior and exterior), foundations, ceilings, roofs, floors, windows, doors, plate glass, skylights, landscaping, driveways, parking lots, fences, retaining walls, signs, sidewalks and parkways located in, on, or adjacent to the Premises. Lessee, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices. Lessee's obligations shall include restorations. replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair. Lessee shall, during the term of this Lease, keep the exterior appearance of the Building in a first-class condition consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including, when necessary, the exterior repainting of the Building.

(b) Maintenance. Subject to Par. 7.2 of the Addendum and any applicable provisions of the Work Letter, Lessee shall, at Lessee's sole expense, maintain in good order, condition and repair, and perform regular maintenance on (in accordance with good management practices and applicable warranty requirements) the following equipment and improvements, if any, if and when

installed on the Premises: (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof covering and drains, (vi) driveways and parking lots, (vii) clarifiers (viii) basic utility feed to the perimeter of the Building, and (ix) any other equipment.

(c) Limitation. With regard to subparagraphs 7.1(a) or 7.1(b) of this Lease, Lessee shall not be required to perform any repairs or maintenance to the Premises necessitated by reason of the negligence of Lessor or by reason of the failure of Lessor to perform obligations of this Lease and Addendum which are required to be performed by Lessor.

(d) Replacement. Subject to Lessee's indemnification of Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of liability resulting from Lessee's failure to exercise and perform good maintenance practices, if the Basic Elements described in Paragraph 7.1(b) cannot be repaired other than at a cost which is in excess of 50% of the cost of replacing such Basic Elements, then such Basic Elements shall be replaced by Lessor, and the cost thereof shall be prorated between the Parties and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost of such replacement by a fraction, the numerator of which is one, and the denominator of which is the number of months of the useful life of such replacement as such useful life is specified pursuant to Federal income tax regulations or guidelines for depreciation thereof (including interest on the unamortized balance as is then commercially reasonable in the judgment of Lessor's accountants), with Lessee reserving the right to prepay its obligation at any time.

7.2 Lessor's Obligations. Subject to the provisions of the Addendum and Work Letter, Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation), it is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or the equipment therein, all of which obligations are intended to be that of the Lessee. It is the intention of the Parties that the terms of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises, and they expressly waive the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease.

7.3 Utility Installations; Trade Fixtures; Alterations.

(a) Definitions; Consent Required. The term "Utility Installations" refers to all floor and window coverings, air lines, power panels, electrical distribution, security and fire protection systems, communication systems, lighting fixtures, HVAC equipment. plumbing, and fencing in or on the Premises. The term "Trade Fixtures" shall mean Lessee's machinery and equipment that can be removed without doing material damage to the Premises. The term "Alterations" shall mean any material modification of the improvements. other than Utility Installations or Trade Fixtures, whether by addition or deletion. "Lessee Owned Alterations and/or Utility Installations" are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a). Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor's prior written consent. Lessee may, however, make non-structural Utility Installations to the interior of the Premises (excluding the roof) without such consent but upon notice to Lessor, as long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof or any existing walls, and the cumulative cost thereof does not exceed $20,000 in any 365-day period. An alteration shall be deemed "material' if it affects the exterior appearance of the Building or adversely affects the bearing walls, foundation or other structural elements of the Building, or affects the roof in any manner, or costs in excess of $10,000.

(b) Consent. Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans. Consent shall be deemed conditioned upon Lessee's: (i) acquiring all applicable governmental permits, (i) furnishing Lessor with copies of both the permits and the plans and

specifications prior to commencement of the work, and (iii) compliance with all conditions of said permits and other Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as-built plans and specifications. For work which costs an amount equal to the greater of one month's Base Rent, or $10,000, Lessor may condition its consent upon Lessee providing a lien and completion bond in an amount equal to one and one-half times the estimated cost of such Alteration of Utility Installation and/or upon Lessee's posting an additional Security Deposit with Lessor.

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

7.4 Ownership; Removal; Surrender; and Restoration.

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

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

(c) Surrender/Restoration. Lessee shall surrender the Premises by the Expiration Date or any earlier termination date, with all of the improvements, parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted. "Ordinary wear and tear" shall not include any damage or deterioration that would have been prevented by good maintenance practice. Lessee shall repair any damage occasioned by the installation. maintenance or removal of Trade Fixtures. Lessee Owned Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any storage tank installed by or for Lessee, and the removal, replacement, or remediation of any soil, material or groundwater contaminated by Lessee. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below.

8. Insurance; Indemnity.

8.1 Payment For Insurance. Lessee shall pay for all insurance required under Paragraph 8 except liability insurance carried by Lessor under Paragraph 8.2(b). Premiums for policy periods commencing

prior to or extending beyond the Lease term shall be prorated to correspond to the Lease term. Payment shall be made by Lessee to Lessor within ten (10) days following receipt of an invoice.

8.2 Liability Insurance.

(a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability Policy of Insurance protecting Lessee and Lessor against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership. use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $2.000.000 per occurrence and shall name Lessor as an additional insured. The Policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an "insured contract' for the performance of Lessee's indemnity obligations under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. All insurance carried by Lessee shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be considered excess insurance only. See Addendum. Par. 8.2(a).

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

8.3 Property Insurance—Building, Improvements and Rental Value.

(a) Building and Improvements. The Insuring Party shall obtain and keep in force a policy of policies in the name of Lessor, with loss payable to Lessor, any groundlessor. and to any Lender(s) insuring loss or damage to the Premises. The amount of such insurance shall be equal to the full replacement cost of the Premises, as the same shall exist from time to time, or the amount required by any Lenders. but in no event more than the commercially reasonable and available insurable value thereof. If Lessor is the Insuring Party, however, Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee's personal property shall be insured by Lessee under Paragraph 8.4 rather than by Lessor. If the coverage is available and commercially appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by a Lender), including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located. If such insurance coverage has a deductible clause. the deductible amount shall not exceed $10,000 per occurrence, and Lessee shall be liable for such deductible amount in the event of an Insured Loss. See Par. 8.3(a) of Addendum.

(b) Rental Value. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and any Lender. insuring the loss of the full Rent for one (1) year. Said insurance shall provide that in the event the Lease is terminated by reason of an insured loss, the period of indemnity for such coverage shall be extended beyond the date of the completion of repairs or replacement of the Premises, to provide for one full year's loss of Rent from the date of any such loss. Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next twelve (12) month period. Lessee shall be liable for any deductible amount in the event of such loss.

8.4 Lessee's Property/Business Interruption Insurance.

(a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations in such amounts as Lessee deems appropriate. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee shall provide Lessor with written evidence that such insurance is in force.

(b) Business Interruption. Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as Lessee deems appropriate.

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

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

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

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

8.8 Exemption of Lessor from Liability. Except to the extent of Lessor's negligence or willful misconduct, Lessor shall not be liable for injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage or injury is caused by or results from fire, steam, electricity. gas, water or rain, or from the breakage, leakage. obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the Building of which the Premises are a part, or from other sources or places. Lessor shall not be liable for any damages arising from any act or neglect of any other tenant of Lessor. Notwithstanding Lessee's negligence or breach of this Lease, Lessor shall under no circumstances be liable for injury to Lessee's business or for any loss of income or profit therefrom

9.: Damage or Destruction.

9.1 Definitions.

(a) "Premises Partial Damage" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which Lessor reasonably determines can be repaired in six (6) months or less from the date of the damage or destruction. Lessor shall notify Lessee in writing within thirty (30) days from the date of the damage or destruction as to whether or not the damage is Partial or Total.

(b) "Premises Total Destruction" shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which Lessor reasonably determines cannot be repaired in six (6) months or less from the date of the damage or destruction. Lessor shall notify Lessee in writing within thirty (30) days from the date of the damage or destruction as to whether or not the damage is Partial or Total.

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

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

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

9.2 Partial Damage—Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at Lessee's expense, repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this Lease shall continue in full force and effect: provided, however, that Lessee shall, at Lessor's election, make the repair of any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage in proceeds (except as to the deductible which is Lessee's responsibility) as and when required to complete said repairs. In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor

with the funds to cover same, or adequate assurance thereof, within ten (10) days following receipt of written notice of such shortage and request therefor. If Lessor receives said funds or adequate assurance thereof within said ten (10) day period. the party responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shall remain in full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within ten (10) days thereafter to: (i) make such restoration and repair as is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, of have this Lease terminate thirty (30) days thereafter. Lessee shall not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but the net proceeds of any such insurance shall be made available for the repairs if made by either Party.

9.3 Partial Damage—Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lessor may either: (i) repair such damage as soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in full force and effect, or (ii) terminate this Lease by giving written notice to Lessee within thirty (30) days after receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall be effective sixty (60) days following the date of such notice. In the event Lessor elects to terminate this Lease, Lessee shall have the right within ten (10) days after receipt of the termination notice to give written notice to Lessor of Lessee's commitment to pay for the repair of such damage without reimbursement from Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within thirty (30) days after making such commitment. In such event this Lease shall continue in full force and effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the required funds are available. If Lessee does not make the required commitment, this Lease shall terminate as of the date specified in the termination notice.

9.4 Total Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate sixty (60) days following such Destruction. If the damage or destruction was caused by Lessee and is not covered by insurance, Lessor shall have the right to recover Lessor's damages (to the extent not covered by insurance) from Lessee, except as provided in Paragraph 8.6.

9.5 Damage Near End of Term. If at any time during the last six (6) months of this Lease there is Premises Partial Damage for which the cost to repair exceeds one (1) month's Base Rent, whether or not an Insured Loss, Lessor or Lessee may terminate this Lease effective sixty (60) days following the date of occurrence of such damage by giving a written termination notice to the other party within thirty (30) days after the date of occurrence of such damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a) exercising such option and (b) Providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date which is ten days after Lessee's receipt of Lessor's written notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises such option during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor's commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall continue in full force and effect. If Lessee fails to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and Lessee's option shall be extinguished. Notwithstanding anything in this section to the contrary, if Lessee elects to exercise its option to extend the Lease and the loss is an Insured Loss, Lessee shall not be obligated to

contribute funds for repair or rebuilding in excess of the amount Lessee is obligated to contribute under Section 9.2.

9.6 Abatement of Rent; Lessee's Remedies.

(a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in proportion to the degree to which Lessee's use of the Premises is impaired, but not to exceed the proceeds received from the Rental Value insurance (which Lessor shall maintain pursuant to Section 8.3(b)). All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein. Any repair/restoration which Lessor is required to make shall be accomplished with due diligence.

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

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

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

9.9 Completion of Repairs By Lessor. The provisions of Paragraphs 9.2 and 9.3 to the contrary notwithstanding, in the event the Lessor fails to substantially complete restoration of damage or destruction to the Premises which Lessor is required or elects to perform pursuant to said paragraphs within one hundred twenty (120) days of the occurrence of such damage or destruction, Lessee may at any time after such 120-day period has elapsed terminate this Lease, effective on not less than ninety (90) days prior written notice, provided, however, that if Lessor substantially completes the restoration within sixty (60) days after receipt; of such notice. this Lease shall not terminate and shall continue in full force and effect.

10.: Real Property Taxes.

10.1 Definition of "Real Property Taxes." As used herein, the term "Real Property Taxes" shall include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than inheritance, personal income or estate taxes); improvement bond; and/or license fee imposed upon or levied against any legal or equitable interest of Lessor in the Premises, Lessor's right to other income therefrom, and/or Lessor's business of leasing, by any authority having the direct or indirect power to tax and where the funds are generated with reference to the Building address and where the proceeds so generated are to be applied by the city, county of other local taxing authority of a jurisdiction within which the Premises are located. The term "Real Property Taxes" shall also include

any tax, fee, levy, assessment or charge, or any increase therein. imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership of the Premises.

10.2

(a) Payment of Taxes. Lessee shall pay the Real Property Taxes applicable to the Premises during the term of this Lease. Subject to Paragraph 10.2(b), all such payments shall be made at least ten (10) days prior to any delinquency date. Upon Lessor's request, Lessee shall promptly furnish Lessor with satisfactory evidence that such taxes have been paid. It any such taxes shall cover any period of time prior to of after the expiration or termination of this Lease. Lessee's share of such taxes shall be prorated to cover only that portion of the tax xxxx applicable to the period that this Lease is in effect, and Lessor shall reimburse Lessee for any overpayment. If Lessee shall fail to pay any required Real Property Taxes, Lessor shall have the right to pay the same, and Lessee shall reimburse Lessor therefor upon demand, including any penalties incurred as a result thereof.

(b) Advance Payment. In the event Lessee incurs a late charge on any Rent payment, Lessor may, at Lessor's option, estimate the current Real Property Taxes, and require that such taxes be paid in advance to Lessor by Lessee, either: (i) in a lump sum amount equal to the installment due, at least twenty (20) days prior to the applicable delinquency date, or (ii) monthly in advance with the payment of the Base Rent. If Lessor elects to require payment monthly in advance, the monthly payment shall be an amount equal to the amount of the estimated installment of taxes divided by the number of months remaining before the month in which said installment becomes delinquent. When the actual amount of the applicable tax xxxx is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds needed to pay the applicable taxes. If the amount collected by Lessor is insufficient to pay such Real Property Taxes when due, Lessee shall pay Lessor, upon demand, such additional sums as are necessary to pay such obligations. All monies paid to Lessor under this Paragraph may be intermingled with other monies of Lessor and shall not bear interest. In the event of a Breach by Lessee in the performance of its obligations under this Lease, then any balance of funds paid to Lessor under the provisions of this Paragraph may, at the option of Lessor, be treated as an additional Security Deposit.

10.3 Joint Assessment. If the Premises are not separately assessed, Lessee's liability shall be an equitable proportion of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be conclusively determined by Lessor from the respective valuations assigned in the assessor's work sheets or such other information as may be reasonably available. Lessor represents that the Premises are separately assessed of the date this Lease is signed.

10.4 Personal Property Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility Installations, Trade Fixtures, furnishings. equipment and all personal property of Lessee. When possible, Lessee shall cause such property to be assessed and billed separately from the real property of Lessor. If any of Lessee's said personal property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee's property within ten (10) days after receipt of a written statement.

11. Utilities. Lessee shall pay for all water, gas, heat, light, power. telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon. Lessor shall cause such services (where applicable) to be separately metered.

12.: Assignment and Subletting.

12.1 Lessor's Consent Required.

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

(b) [Intentionally deleted.]

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

(d) Except as expressly permitted by this Lease, An assignment or subletting without consent shall, at Lessor's option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a noncurable Breach, Lessor may either, (i) terminate this Lease and/or (ii) pursue any other available remedies.

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

12.2 Terms and Conditions Applicable to Assignment and Subletting.

(a) Regardless of Lessor's consent, any assignment or subletting shall not: (i) be effective without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease; (ii) release Lessee of any obligations hereunder, or (iii) after the Primary liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lease.

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

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

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

(e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor's, determination as to the financial and operational responsibility and appropriateness of the proposed assignee or subleases, including but not limited to the intended use and/or required modification of the Premises, if any, together with a fee of $500 or one percent (1%) of the current monthly Base Rent applicable to the portion of the Premises

which is the subject of the proposed assignment or sublease, whichever is greater, as consideration for Lessor's considering and processing said request. Lessee agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably requested.

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

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

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

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

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

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

13.: Default; Breach; Remedies.

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

(a) The abandonment of the Premises; or the vacating of the Premises without providing a commercially reasonable level of security, or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof, or without providing reasonable assurances to minimize potential vandalism, which continues for ten (10) or more days after written notice from Lessor.

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

(c) The failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirements, (ii) [reserved] (iii) the rescission of an unauthorized assignment or subletting, (iv) a Estoppel certificate, (v) a requested subordination, (iv) [reserved], (vii) any document requested under Paragraph 42 (easements), or (viii) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues for a period of ten (10) days following written notice to Lessee.

(d) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, other than those described in subparagraphs 13.1(a), (b) or (c), above, where such Default continues for a period of thirty (30) days after written notice; provided, however, that if the nature of Lessee's Default is such that more than thirty (30) days are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said thirty (30) day period and thereafter diligently prosecutes such Cure to completion.

(e) The occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (ii) becoming a "debtor" as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition filed against Lessee. the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where possession is not restored to Lessee within thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where such seizure is not discharged within thirty (30) days; provided, however, in the event that any provision of this subparagraph 13.1(e) is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions.

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

(g) [Reserved]

13.2 Remedies. If Lessee fails to perform any of its affirmative duties or obligations, encompassed by Paragraph 13.1(d) above after notice from Lessor and within the cure period provided for in said paragraph (or in case of an emergency or failure to maintain insurance pursuant to Paragraph 8.2(a), without notice), Lessor may, at its option, perform such duty or obligation on Lessee's behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits of approvals. The reasonable costs and expenses of any such performance by Lessor shall be due and payable by Lessee upon receipt of invoice therefor. If any check given to Lessor by Lessee shall not be honored by the bank upon which it is drawn, Lessor, at its option. may require all future payments to be made by Lessee to be by cashier's check. In the event of a Breach, Lessor may, with of without further notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach:

(a) Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at

the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys' fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding Sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent (1%). Efforts by Lessor to mitigate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover damages under Paragraph 12. If termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover all or any part thereof in a separate suit. If a notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13. 1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this Lease and/or by said statute.

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

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

13.3 Inducement Recapture. Any agreement for free or abated rent or other charges, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration for Lessee's entering into this Lease, all of which concessions are hereinafter referred to as "Inducement Provisions," shall be deemed conditioned upon Lessee's full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee and an election by Lessor to terminate this Lease and recover damages from Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under such an Inducement Provision (including any Improvement allowance credited toward rent) shall be immediately due and payable by Lessee to Lessor.

13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by Lessor within ten (10) days after such amount shall be due more than once in any 12-month period, then, Lessee shall pay to Lessor a one-time late charge equal to five percent (5%) of each such overdue amount. The Parties hereby agree that such late charge represents a fair and

reasonable estimate of the costs Lessor will incur by reason of such late payment. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for three (3) consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor's option, become due and payable quarterly in advance.

13.5 Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor within ten (10) days after the due data as to scheduled payments (such as Base Rent) or within thirty (30) days following the date on which it was due for non-scheduled payment, shall bear interest from the date when due, as to scheduled payments, or the thirty-first (31st) day after it was due as to non-scheduled payments. The interest ("Interest") charged shall be equal to the prime rate reported in the Wall Street Journal as published closest prior to the date when due plus four percent (4%), but shall not exceed the maximum rate allowed by law. Interest is payable in addition to the potential late charge provided for in Paragraph 13.4.

13.6 Breach by Lessor.

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

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

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

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

15. Brokers' Fee. Lessor shall pay a commission to Lessor's Broker and Lessee's Broker pursuant to Paragraph 15 of the Addendum.

15.1 [Reserved]

15.2 [Reserved]

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

16. Estoppel Certificates.

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

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

(c) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee shall deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, including, but not limited to, Lessee's financial statements for the past three (3) years. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth. Notwithstanding the foregoing, if Lessee is a publicly traded corporation subject to ongoing periodic SEC financial reporting requirements, Lessee may provide Lessor copies of its SEC financial filings in lieu of such financial statements.

17. Definition of Lessor. The term "Lessor" as used herein shall mean the owner or owners at the time in question of the fee title to the Premises, or, if this is a sublease, of the Lessee's interest in the prior lease. In the event of a transfer of Lessor's title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined. Notwithstanding the above, and subject to the provisions of Paragraph 20 below, the original Lessor under this Lease, and all subsequent holders of the Lessor's interest in this Lease shall remain liable and responsible with regard to the potential duties and liabilities of Lessor pertaining to Hazardous Substances as outlined in Paragraph 6 above. See Addendum. Par. 17.

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

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

20. Limitation on Liability. Subject to the provisions of Paragraph 17 above, the obligations of Lessor under this Lease shall not constitute personal obligations of Lessor, the individual partners of Lessor or its or their individual partners, directors, officers or shareholders, and Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any liability of Lessor with respect to this Lease, and shall not seek recourse against the individual partners of Lessor, or its or their individual partners, directors, officers or shareholders, or any of their personal assets for such satisfaction.

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

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

23. Notices.

23.1 Notice Requirements. All notices required or permitted by this Lease shall be in writing and may be delivered in person (by hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease shall be that Party's address for delivery or mailing of notices. A copy of all notices to Lessee shall be sent to: Xxxxxxx X. Circuit, Esq., Circuit, McKellogg, Xxxxxx & Xxxx, LLP, 0000 Xxxxxxxx Xxxxxx, #000, Xx Xxxxx, XX 00000, Facsimile No. (000) 000-0000. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee's taking possession of the Premises, the Premises shall constitute Lessee's address for notice. A copy of all notices to Lessor (or Lessee) shall be concurrently transmitted to such party or parties at such addresses as Lessor (or Lessee) may from time to time hereafter designate in writing.

23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or it no delivery date is

shown. the postmark thereon. If sent by regular mail the notice shall be deemed given forty-eight (48) hours after the same is addressed as required herein arid mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed given twenty-four (24) hours after delivery of the same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt, provided a copy is also delivered via delivery or mail. If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.

24. Waivers. No waiver by Lessor or Lessee of the Default or Breach of any term, covenant or condition hereof shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach of the same or of any other term, covenant or condition hereof. Lessor's or Lessee's consent to, or approval of. any act shall not be deemed to render unnecessary the obtaining of consent to, or approval of, any subsequent or similar act or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor on account of monies or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment.

25. Recording. Either Lessor or Lessee shall, upon request of the other, execute, acknowledge and deliver to the other a short form memorandum of this Lease for recording purposes. The Party requesting recordation shall be responsible for payment of any fees applicable thereto.

26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration of termination of this Lease. In the event that Lessee holds over, then the Bass Rent shall be increased to one hundred twenty percent (120%) of the Base Rent applicable during the month immediately preceding the expiration of termination. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee.

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

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

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

30. Subordination; Attornment; Non-Disturbance.

30.1 Subordination. Subject to Par. 30.4 of the Addendum. This Lease and any option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, "Security Device"), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security Devices (in this Lease together referred to as "Lessor's Lender") shall have no liability or obligation to perform any of the obligations of Lessor under this Lease. Any Lender may elect to have this Lease and/or any Option granted hereby superior to the lien of its Security Device by giving written notice thereof to Lessee, whereupon this

Lease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof.

30.2 Attornment. Subject to the non-disturbance Provisions of Paragraph 30.3, Lessee agrees to attorn to a Lender or any other party who acquires ownership of the Premises by reason of a foreclosure of a Security Device, and that in the event of such foreclosure, such new owner shall not: (i) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of ownership; (ii) be subject to any offsets or defenses which Lessee might have against any prior lessor; or (iii) be bound by prepayment of more than one (1) month's rent.

30.3 Non-Disturbance. With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee's subordination of this Lease shall be subject to receiving a commercially reasonable non-disturbance agreement (a "Non-Disturbance Agreement) from the Lender which Non-Disturbance Agreement provides that Lessee's possession of the Premises, and this Lease, including any options to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof (beyond any applicable cure period) and attorns to the record owner of the Premises. Further, within twenty (20) days after the execution of this Lease, Lessor shall use its commercially reasonable efforts to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event that Lessor is unable to provide the Non-Disturbance Agreement within said twenty (20) days, then Lessee may, or Lessor may terminate this Agreement without liability to either party by giving written notice of termination within ten (10) days after the expiration of such 20-day period.

30.4 Self-Executing. Except as provided o Paragraph 30.3. the agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non-Disturbance Agreement provided for herein.

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

32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times upon reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders. or lessees, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary. All such activities shall be without abatement of rent or liability to Lessee. Lessor may at any time place on the Premises any ordinary "For Sale" signs and Lessor may during the last six (6) months of the term hereof place on the Premises any ordinary "For Lease" signs provided such signs do not unreasonably interfere with Lessee's operation of the Premises. Lessee may at any time place on or about the Premises any ordinary "For Sublease" sign.

33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor's prior written consent. Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.

34. Signs. Except for ordinary "For Sublease" signs, Lessee shall not place any sign upon the Premises without Lessor's prior written consent. All signs must comply with all Applicable Requirements. Lessee shall have exclusive signage rights for the Premises.

35. Termination; Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor's failure within ten (10) days following any such event to elect to the contrary by written notice to the holder of any such lesser interest, shall constitute Lessor's election to have such event constitute the termination of such interest.

36. Consents. Except as otherwise provided herein, wherever in this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor's consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor's consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given. In the event that either Party disagrees with any determination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its reasons in writing and in reasonable detail within ten (10) business days following such request.

37. [Reserved]

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

39. Options. See Addendum. Par. 39.

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

39.2 Options. Each Option granted to Lessee in this Lease is appurtenant to the Lease and cannot be separately assigned or transferred.

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

39.4 Effect of Default on Options.

(a) Lessee shall have no right to exercise an Option during the period that Lessee is in breach of any obligation hereunder to pay rent or any other monetary payment after receipt of written notice of breach from Lessor or if Lessee is in breach (beyond any applicable grace or cure period) of any other term of this Lease after receipt of written notice of breach from Lessor.

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

(c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee's due and timely exercise of the Option, if, after such exercise and prior to the commencement of the extended term, (i) Lessee fails to pay Rent for a period of thirty (30) days after notice from Lessor, (ii) Lessor gives to Lessee three (3) or more notices of separate Default during any twelve (12) month period, whether or not the Defaults are cured, or (iii) if Lessee commits a Breach of this Lease.

40. [Reserved]

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

42. Reservations. Lessor reserves to itself the right, from time to time, to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions.

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

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

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

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

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

48. Multiple Parties. If more than one person or entity is named herein as either Lessor or Lessee, such multiple Parties shall have joint and several responsibility to comply with the terms of this Lease..

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

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE

SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.

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

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

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

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

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

Executed at:		Executed at:

on:		on:

by LESSOR:		by LESSEE:



By:		By:

Name Printed:		Name Printed:

Title:		Title:

By:		By:

Name Printed:		Name Printed:

Title:		Title:

Address:		Address:


Telephone:	( )	Telephone:	( )
Facsimile:	( )	Facsimile:	( )
Federal ID No.		Federal ID No.

NOTE: These forms are often modified to meet the changing requirements of law and industry needs. Always write or call to make sure you are utilizing the most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 000 Xx. Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000. (000) 000-0000. Fax No. (000) 000-0000

ATTACHMENT TO STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-NET

SIGNATURE PAGE:

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

Executed at: San Diego, California
on: March 30, 2001

Executed at: San Diego, California
on: 3/28/01, 2001

BY LESSOR:

BY LESSEE:

PARKWAY CENTRE FIVE
INVESTORS, LLC,
a Delaware limited liability company

REMEC, INC.
a California corporation

By:

XXXXXXXX MANAGEMENT

By:

/s/ XXXXX XXXXXXX

SERVICES, LP., a California

limited partnership, its Manager

Name:

Xxxxx Xxxxxxx

Title:

Senior V.P., CAO

By:

XXXXX XXXXXXXX

By:

/s/ XXXXX XXXXXXX

CONSTRUCTION SERVICES,

INC., a California corporation,

Name:

Xxxxx Xxxxxxx

its General Partner

Title:

President/C.O.O. REMEC

By:

/s/ XXXXXXX X. XXXXXX

Name:

Xxxxxxx X. Xxxxxx

Title:

Pres. Comm. Div.

By:

/s/ E. XXX XXXXX III

Name:

E. Xxx Xxxxx III

Title:

SVP

Address:

0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000

Address:

0000 Xxxxxxxxxx Xxxxx Xxx Xxxxx, XX 00000

Telephone:

(000) 000-0000

Telephone:

(000) 000-0000

Facsimile:

(000) 000-0000

Facsimile:

(000) 000-0000

Federal ID No.:

EXHIBIT A

(Legal Description)

THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF SAN DIEGO, AND IS DESCRIBED AS FOLLOWS:

PARCEL I OF PARCEL MAP XX. 00000, XX XXX XXXX XX XXXXX, XXXXXX OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY ON MARCH 4,1998 AS FILE NO. 1998-0116033 OF OFFICIAL RECORDS.

A-1

EXHIBIT B

(Hazardous Materials)

REMEC Microwave Chemical Inventory

Chemical Name
2216 A/B Stalking Adhesive		Zirshot
Ablebond 5025E		Formula 409
Ablebond 789-3		Envi-Ro-Tech Anti-Static Freeze Spay
Ablebond 84-1 LMIT		Aerosol Acrylic Enamel
Ablebond 985-11		Ablebond 8175A
Ablebond 958-7		Alloy Steel HR & CR Leaded Steel
Acetone		Aluminum
Bio-T 200A		Aluminum Alloys Containing Lead
Chemask		Anodized Aluminum Alloys
Conductive Cleaner		High Vacum Oils, Greases & Waxes
Eccofoam 00-0X Xxxxxxxx		Bronze
Eccofoam FPH		Brass
EPK-9340		Steel
Eye Saline Solution		Leaded Carbon
Indalloy 1E		Copper
Indalloy Flux 40A		751190 Endust Aerosol
Ionox FCR		Epoxy Resin 9340
Isopopy Alcohol		Epoxy Resin 0608 Hardener
Xxxxxx 1544 Flux		AA0151 Hysol
Xxxxxx 197 Flux		Xxxxxx 186 Flux
ME-8456		Xxxxxx 951 Low Residue Flux
Methanol		Xxxxxx 922 Cx Flux
Nitrogen		Poco Graphite
RTV 3140 Silicon		Xxxxx alloy 42
RTV 3145 Silicon		Kerosene
RTV 6-1104 CV		Loctite 3900
Solder -10/90 Sn/Pb		Protec Class
Solder -62/36/2 Sn/Pb/Ag		NS 242 N
Solder -63/67 Sn/Pb		Solder Paste 43 Sn/43Pb/14Bi
Solder -96/4 Sn/Pb		Kryptonol K9200
Sylgard 527 Silicone Gel		Alodine 1200
Uralane 5750 Part A		Isoprep 40
Uralane 5750 Part B		Vigon SC 200
Uralane 5750 Stripper		Scotch Weld 2215
Uralane 5750 Thinner		MS-465/Co2 Acrylic conformal coat
Uralane 5753 Part A		A-4100 Arosol Acrylic Enamel
Uralane 5753 Part B

B-1

ADDENDUM TO
STANDARD INDUSTRIAL/COMMERCIAL
SINGLE-TENANT LEASE-NET

(Parkway Centre Five Investors, LLC/Remec, Inc.)

The provisions of this Addendum are part of the Standard Industrial/Commercial Single-Tenant Lease-Net ("Lease") dated March 21, 2001 to which it is attached and shall prevail over any contrary or inconsistent provisions in said printed form Lease.

1.3 Term; Commencement Date; Completion of Lessor's Work. The Original Term shall commence (the "Commencement Date"), and Base Rent shall commence to accrue (subject to Section 6.1 of the Work Letter) and be payable, on the later of (a) July 1, 2001 or (b) fifty-four (54) days after the date Lessor Substantially Completes construction of the Building Shell (as defined in Section 1.18 of the Work Letter) and so notifies Lessee. At the request of either party, Lessor and Lessee shall sign a memorandum confirming the Commencement Date.

Subject to possible extension as provided in the Work Letter, Lessor agrees to Substantially Complete construction of the Building Shell on or before May 7, 2001.

1.5 Base Rent. The initial monthly Base Rent shall be One Dollar and One Cent ($1.01) multiplied by the gross square footage of the Building, including the mezzanine. The first full month's estimated Base Rent shall be paid on signing this Lease. Before the Commencement Date, Lessor shall determine the gross square footage of the Building in accordance with BOMA standards for industrial buildings, calculate the Base Rent, and notify Lessee thereof. Any dispute between Lessor and Lessee regarding calculation of the gross square footage shall be resolved by binding arbitration pursuant to the Work Letter. Pending resolution of the dispute, Lessee shall pay Base Rent based on the gross square footage as determined by Lessor.

The Base Rent then in effect shall be increased by three percent (3%) on the annual anniversary of the Commencement Date each Lease Year during the Original Term and any extended term.

As used herein, the term "Lease Year" means a 1-year period commencing with the Commencement Date.

1.7 Security Deposit. Provided that Lessor has not used any part of the Security Deposit to cure any Default by Lessee and that Lessee is not then in Default under this Lease, Lessor agrees to refund one-third (¹/3) of the original Security Deposit to Lessee at the end of the third (3rd) Lease Year and an additional one-third (¹/3) of the original Security Deposit at the end of the sixth (6th) Lease Year.

3.2 Early Possession; Completion of Lessee Improvements. At such time as Lessor has sufficiently completed construction of the Building Shell such that, in Lessor's good faith opinion, Lessee can commence construction of the Lessee Improvements, Lessor shall so notify Lessee and Lessee may then commence the Lessee Improvements, provided, however, that until Lessor has Substantially Completed the Building Shell, Lessor's Work (as defined in the Work Letter) shall have priority over the Lessee Improvements and Lessee shall not allow the Lessee Improvement Work to delay completion of Lessor's Work. The provisions of Section 3.2 (Early Possession) shall apply at all times from the commencement of the Lessee Improvements until the Commencement Date; provided, however, that Lessee's maintenance obligations shall be subject to Lessor's obligation to complete Lessor's Work. Lessee shall diligently pursue the completion of the Lessee Improvements and shall complete the same within the time specified in the Project Schedule attached to the Work Letter.

7.2 Lessor's Obligations. Notwithstanding anything to the contrary in Paragraph 7.1(a) or (b) of the Lease, provided and on condition that the roofing subcontractor(s) which performed the original roof work is (are) used to perform all Lessee Improvement Work and other work by Lessee related to the roof (including telecommunications and satellite equipment installation), Lessor shall maintain in good condition and repair all structural elements of the Building (i.e., roof structure, foundation and bearing walls; and window frames and structure) and the roof covering during the Original Term; Lessor shall have no obligation to maintain or repair the foregoing items during any extended term. All

costs for repairs and replacements of the elements required to be maintained by Lessor shall be paid by Lessor without reimbursement from Lessee; provided, however, that Lessee shall be responsible for any maintenance or repair costs resulting from the misuse, negligence or willful misconduct of Lessee, its employees, agents and contractors. Lessor's maintenance and repair obligations with respect to the windows shall be limited to defects or deficiencies in the window frames or structure; Lessor shall not be required to replace broken window glass or for recaulking. Lessee agrees to promptly notify Lessor of the need for any maintenance or repairs of which Lessee is aware and for which Lessor is responsible. In no event shall Lessor be liable for any consequential damages (such as loss of profits) due to any deficits or deficiencies in the design or construction of the Building or Premises.

8.2(a) Lessee's Insurance. The $2,000,000 minimum liability coverage shall be subject to increase from time to time (not more frequently than once in any 5-year period) commensurate with liability insurance maintained by similar tenants with similar credit standing with respect to similar premises in the San Diego area.

8.3(a) Earthquake Insurance. Lessor does not presently intend to carry earthquake insurance unless required by Lessor's lender. If Lessor voluntarily decides to carry earthquake insurance or if Lessor is required to do so by Lessor's lender, Lessor shall pay the cost of such coverage without expense to Lessee.

12.1(f) Permitted Transfers. Notwithstanding anything to the contrary above, but subject to the Net Worth requirement of Paragraph 12. 1(c), Lessee shall have the right, without the consent of Lessor, but upon not less than 15 days' prior notice to Lessor, to assign this Lease or sublet the Premises (i) to any parent, subsidiary or affiliate corporation or entity, or (ii) to any corporation resulting from the consolidation or merger of Lessee into or within any other entity, or (iii) to any firm, entity or corporation acquiring in one contemporaneous transaction all or substantially all of the stock or assets of Lessee or the division of Lessee occupying the Premises. Any transfer pursuant to (i), (ii) or (iii) above shall be subject to the following conditions: that any such assignment, sublease or transfer shall be subject to all of the terms, covenants and conditions of this Lease; any assignee shall expressly assume for the benefit of Lessor the obligations of Lessee under the Lease by a document reasonably satisfactory to Lessor; and Lessee shall provide to Lessor copies of documents sufficient to verify that the transfer qualifies under this paragraph. No such transfer shall release Lessee from liability. As used herein, the expression "affiliate corporation or entity" means a business entity, corporate or otherwise, that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with Lessee or its guarantor. The word "control" means the right and power, direct or indirect, to direct or cause the direction of the management and policies of a person or business entity, corporation or otherwise, through ownership of more than fifty percent (50%) of the voting stock (or other relevant ownership interests) of the entity in question.

15. Commissions. Lessor agrees to pay a brokerage commission with respect to this Lease pursuant to its separate written agreement with Lessor's Broker, which commission shall be split equally between Lessor's Broker and Lessee's Broker. Said commission shall be payable, as to each broker, one-half (¹/2) on the signing of the Lease by Lessor and Lessee, and the balance on the Commencement Date; provided, however, that if this Lease is terminated for any reason other than Lessor's default before the Commencement Date occurs, then all commissions previously paid shall be refunded to Lessor on demand.

17. Lessor's Liability. Notwithstanding anything to the contrary in this Lease, Addendum or Work Letter, Lessor's liability for any money judgment based on or arising out of this Lease (including the Addendum and Work Letter) shall be limited to Lessor's interest in the Premises, and no other assets of Lessor or Lessor's partners, members, trustees, beneficiaries, officers, shareholders or directors shall be subject to any lien, judgment or liability arising out of this Lease.

30.4 Subordination. Lessee agrees to execute, acknowledge and deliver Lessor's lender's standard subordination, non-disturbance and attornment agreement ("SNDA") provided that such SNDA does not materially adversely affect Lessee's rights under this Lease and on condition that the Lender provides a "non-disturbance" clause as required by Paragraph 30.3 of the Lease. The SNDA

may provide, among other things, that Lessee shall give the lender notice of and an opportunity to cure any breach or default by Lessor under this Lease, that the Lease may not be modified, surrendered or terminated without the tender's consent, and that if the lender (or third party) acquires the Lessor's interest by foreclosure or conveyance in lieu thereof, the tender shall not be liable for any previous breach or default by the Lessor, but that the lender (or third party) shall be liable only for those obligations of Lessor which arise during the time the lender or other third party holds the Lessor's interest under this Lease.

39. Extension Options. Lessee is granted the right to extend the term of this Lease for two (2) consecutive periods of five (5) years each. Each right to extend must be exercised, if at all, by written notice delivered to Lessor not less than one hundred eighty (180) days before the Expiration Date of the Term which is then in effect. Lessee's failure to timely exercise an extension right shall automatically void all subsequent extension rights.

The Base Rent for the first year of each extension term shall be equal to ninety-five percent (95%) of the fair market base rent for similar Premises similarly improved pursuant to similar leases for premises located within the market area of the Premises. The "market area" of the Premises shall be deemed the Interstate 15 corridor in the sub-markets of Scripps Ranch, Carmel Mountain Ranch, 4S Ranch, Poway and Miramar.

If Lessor and Lessee are unable to agree upon the first year's Base Rent within thirty (30) days after Lessee has exercised a right to extend, then within ten (10) days after demand by either Party, each Party shall designate an MAI appraiser to determine the fair market base rent for similar properties. If either Party fails or refuses to timely designate an appraiser, the opinion of the appraiser designated by the other Party shall be conclusive and binding.

If the two appraisers so appointed do not reach agreement as to the fair market Base Rent within ninety (90) days after the expiration of the above-referenced 30-day period, then the two designated appraisers shall designate a third MAI appraiser to provide an appraisal of the fair market base rent. The Base Rent for the first year of the applicable extension period shall be ninety-five percent (95%) of the full fair market base rent of whichever appraisal (that of either Lessor's appraiser or Lessee's appraiser) is closest to the third appraiser's appraisal. The Base Rent so determined shall be binding and conclusive. Lessor and Lessee shall each pay the fees of their own designated appraiser and shall each pay one-half (¹/2) of the fee of the third appraiser. If the two designated appraisers do not designate a third appraiser within one hundred twenty (120) days after the expiration of the above-referenced 30-day period, the third appraiser shall be designated upon application by either Party to any judge of the Superior Court of San Diego County. Pending a determination pursuant to this paragraph, Lessee shall pay Base Rent equal to the Base Rent for the last month of the preceding Term, and an appropriate cash adjustment and payment shall be made when the Base Rent for the extended Term is determined.

50. Lessee's Approvals. Prior to the execution of this Lease, Lessor has provided to Lessee copies of the existing Phase 1 environmental report regarding the Premises, the declaration of restrictions and South Poway Planning Area restrictions affecting the Premises, and the plans and specifications for the Building and other improvements to be made by Lessor, and Lessee has approved the same.

51. Satellite Dish. Lessee shall have the right at its sole expense to install, maintain and remove (as a Trade Fixture) one or more satellite signal reception dishes and other telecommunications equipment (in reasonable sizes and quantities) on the roof of the Building subject to the following conditions: (a) Lessee shall comply with all Applicable Requirements and the requirements of Paragraph 7.3 of the Lease; (b) Lessee shall obtain Lessor's prior written consent to the exact location and manner of installation and hook-up; (c) if required by Lessor, the dish(es) and equipment shall be screened from view from nearby streets and buildings; (d) installation, maintenance and removal of the dish(es) and related equipment shall be done at Lessee's cost and in a manner which does not void or abrogate the roof warranty; (e) Lessee shall be responsible for any damage caused by such installation,

maintenance and/or removal; and (f) Lessee shall not allow any third party (other than a sublessee or assignee permitted by this Lease) to use such equipment or the roof

52. Access to Premises, Parking Lot and Building. Subject to the terms of this Lease, Lessee shall have fall access to and right to use the Premises, including the Building and parking area, and shall have control of the HVAC system, at all times during the Term.

53. Operating Expenses. Lessor has provided Lessee with an estimate of the first year's operating expenses. Lessee acknowledges that such estimate is not a guarantee, that the Premises has no operating history, and that actual expenses could be more or less. Lessor shall keep and maintain at its principal office, for at least two (2) years, all books and records covering the operating expenses, maintenance charges and real property taxes. Lessee, at its sole cost and expense, and upon reasonable advance notice, shall have the right to inspect such books and records for the sole purpose of confirming the accuracy of the operating expenses, maintenance charges and real property taxes. During the Original Term and any extension term, Lessee shall pay to Lessor monthly, along with the Base Rent, a lease administration fee equal to one and one-half percent (1¹/2%) of the monthly Base Rent. Said fee shall be in lieu of any other management or administration fee payable to Lessor.

54. Signage. Subject to Applicable Requirements, Lessee shall have the right to install signs on the Building and a monument sign near the main entrance to the Premises. The size, location and general appearance of such signs shall be subject to Lessor's prior written approval, which shall not be unreasonably withheld. Lessee shall pay all costs in connection with the fabrication, installation, permitting, maintenance and removal of such signs.

55. Option to Purchase. Lessor grants Lessee an option to purchase the Premises subject to the following terms and conditions:

(a) The option must be exercised, if at all, on or before August 1, 2001, by written notice from Lessee to Lessor, accompanied by a bank cashier's check of $100,000 payable to Lessor as a deposit on account of the purchase price. Said $100,000 deposit shall be applied to the purchase price at the close of escrow. The option shall automatically terminate if not timely exercised.

(b) The purchase price shall be equal to the annualized Base Rent capitalized at nine percent (9%) and shall be payable in cash upon closing.

(c) The closing shall occur through an escrow at First American Title Insurance Company in San Diego, California, within thirty (30) days after exercise of the option. The parties agree to sign and deliver the escrow holder's standard instructions consistent with this paragraph to effectuate the sale.

(d) The closing shall be subject to no contingencies. Lessee shall inspect and evaluate the Premises and obtain and approve a title report, a Natural Hazards Disclosure Statement, any information regarding Xxxxx-Xxxx assessments, and any other information Lessee desires before exercising the option. Lessor shall pay and discharge upon closing (or bond to the satisfaction of the title insurer) all trust deeds, mechanics' liens resulting from Landlord's Work, and other monetary liens except liens caused by Lessee. Rent under this Lease (including taxes and other expenses payable by Lessee under this Lease) shall be prorated as of the closing. Lessor shall pay any taxes and other expenses of owning and operating the Premises attributable to the period before Lessee became obligated to pay the same under this Lease. Lessee shall assume all Xxxxx-Xxxx and other assessments which become payable after the closing. Lessee's security deposit shall be credited against the purchase price on closing.

(e) Lessor shall pay the cost of a standard owner's ALTA (with Western Regional Exceptions) title insurance policy in the amount of the purchase price. Lessee and Lessor shall each pay one-half (¹/2) of the escrow holder's fee and other closing costs shall be borne in accordance with escrow's customary practice.

(f) If the option is exercised, Lessor makes no representations or warranties about the Premises, the condition of the Building or other improvements, or otherwise, and Lessee agrees

that it will be purchasing the Premises "AS IS." Lessor disclaims any express or implied warranties with respect to the Premises, and (as of the closing) Lessee waives any claims against Lessor (whether as Lessor or seller) based on breach of warranty, strict liability, active or passive negligence, or otherwise with respect to the Premises and the construction of the Building and other improvements. Lessor shall assign to Lessee on the closing any warranties which Lessor may have from third parties. All representations, warranties and other obligations of the parties under this Lease shall terminate as of the closing of the sale.

(g) This option to purchase is personal to Lessee and is not assignable.

(h) Time is the essence of this purchase option. Lessee understands that if Lessee does not purchase the Premises, Lessor intends to sell the same to a third party as soon as possible. If Lessee exercises this option and thereafter breaches its obligations under this paragraph, Lessor may (without affording Lessee any opportunity to cure) terminate the escrow immediately and sell the Premises to a third party or exercise any other remedy at law or in equity for breach of a real estate purchase contract, or Lessor may, at its option, treat such breach as a Default by Lessee under this Lease pursuant to Paragraph 13.1. If Lessor breaches its obligations under this paragraph, Lessee may (without affording Lessor any opportunity to cure) terminate the escrow immediately or exercise any other remedy available at law or in equity for breach of a real estate sales contract, or Lessee may, at its option, treat such breach as a breach of this Lease by Lessor pursuant to Paragraph 13.6.

56. Lessor's Insurance or Equity Requirement. Lessor agrees that at any time after the Commencement Date that Lessor obtains any financing (or refinancing) secured by the Premises, the fair market value of the Premises shall exceed the principal amount of the loan (and all other loans secured by the Premises) by at least $1 million and Lessor agrees to supply documentation to Lessee to verify that such requirement has been met; provided, however, that in lieu of complying with the foregoing requirement, Lessor shall maintain (at Lessor's expense) a policy of commercial general liability insurance naming Lessor as insured with single limit coverage in the amount of not less than $2 million per occurrence and Lessor shall provide evidence of such coverage to Lessee. Such insurance

shall cover liability in excess of that covered by the insurance carried by Lessee pursuant to Paragraph 8.2(a) and may be in the form of so-called "umbrella" insurance.

LESSOR:				LESSEE:
PARKWAY CENTRE FIVE INVESTORS, LLC, a Delaware limited liability company				REMEC, INC. a California corporation
By:	XXXXXXXX MANAGEMENT			By:	/s/ XXXXX XXXXXXX
	SERVICES, LP., a California			Name:	Xxxxx Xxxxxxx
	limited partnership, its Manager			Title:	Senior V.P., CAO
	By:	XXXXX XXXXXXXX		By:	/s/ XXXXX XXXXXXX
		CONSTRUCTION SERVICES,		Name:	Xxxxx Xxxxxxx
		INC., a California corporation,		Title:	President/C.O.O. REMEC
		its General Partner
		By:	/s/ XXXXXXX X. XXXXXX
		Name:	Xxxxxxx X. Xxxxxx
		Title:	Pres. Comm. Div.
		By:	/s/ E. XXX XXXXX III
		Name:	E. Xxx Xxxxx III
		Title:	SVP