EXODUS SUBLEASE

 

                                                           EXHIBIT 10.50

 


                                  EXODUS SUBLEASE

        THIS EXODUS SUBLEASE ("Sublease"), is made and effective this 1st 
day of February, 1999 (if and only if it is executed below where 
indicated by Sublessor, Sublessee and Lessor), by and between TALUS 
CORPORATION, a California corporation, c/o Electronic Manufacturing 
Systems, Inc., 000 Xxxxx Xxxxxx, Xxxxxxxx, XX 00000 ("Sublessor"), and 
EXODUS COMMUNICATIONS, INC., a Delaware corporation, 0000 Xxxxxxx Xxxxxxx 
Xxxx., Xxxxx Xxxxx, XX 00000 ("Sublessee").  Talus Corporation and Exodus 
Communications, Inc. are referred to collectively as the "Parties" and 
individually as a "Party").


RECITALS

A.      Sublessor, formerly known as Scientific Custom Metal Products 
International, Inc., as Lessee, entered into a Standard 
Industrial/Commercial Single-Tenant Lease - Net including Exhibit 
{A} with Mopar, LLC as lessor, dated as of March 1, 1996, as 
amended by that certain Lease Amendment, identical counterparts of 
which have been dated as of November 14, 1997, and November 20, 
1997 (as so amended, the "Original Lease"), for the lease of a 
portion of an industrial building of approximately 95,700 square 
feet (the "Building") located at 0000 Xxxxx Xxxxxx, Xxxxx Xxxxx, 
Xxxxxxxxxx.  G&I Xxxxx LLC, a Delaware limited liability company 
("Lessor") has purchased the Building from Mopar, LLC, and is 
the present Lessor under the Lease.  Except as provided herein, 
terms shall have the same meanings in this Sublease as in the 
Lease (as that term is hereinafter defined).

A.      The Original Lease has been or is about to be amended by a further 
Lease Amendment dated as of January 29, 1999 (the "January Lease 
Amendment").

A.      The Original Lease as amended by the January Lease Amendment, all 
of which are attached hereto, are hereinafter collectively 
referred to as the "Lease."  From the Commencement Date through 
April 30, 2002, the premises leased to Sublessor under the Lease 
(i.e. 0000 Xxxxx Xxxxxx), less the premises leased to ACC (as 
generally described below), is hereinafter referred to as the 
"Premises."  On and after May 1, 2002, and as to any references 
which relate to this time period (when Sublessee also rents the 
ACC Sublease Premises (as defined below), and as to any time when 
Sublessee also rents the ACC Sublease Premises, the term 
"Premises" herein shall refer to the entire "Premises" leased 
to Sublessor under the Original Lease (regardless of whether the 
ACC Sublease Premises is also expressly mentioned).

A.      On April 25, 1997, Sublessor agreed to lease to ACC 
Microelectronics Corporation, a California corporation, dba Auctor 
Corporation ("ACC"), approximately 10,500 rentable feet in the 
Building, more or less ("ACC Sublease Premises"), as well as 
other terms and conditions pursuant to the Standard Office Lease - 
Gross dated April 25, 1997, with attached First Addendum to Lease 
Agreement and Rules and Regulations for Standard Office Lease 
("Existing ACC Sublease"), also attached hereto.

A.      Sublessee's signature below evidences its receipt and careful 
review of the terms and conditions contained in all of the above-
mentioned documents.

A.      Sublessor desires to sublease to Sublessee and Sublessee desires 
to sublease from Sublessor the Premises on the terms and 
conditions set forth in this Sublease.

        For and in consideration of the foregoing recitals, the mutual 
promises and covenants of the parties, and other good and valuable 
consideration, the receipt and sufficiency of which are hereby 
acknowledged, Sublessor and Sublessee hereby covenant and agree as 
follows:


                                       ARTICLE I
                            BASIC SUBLEASE PROVISIONS

        1.1     Subleased Premises.  Sublessor hereby subleases to Sublessee
 and Sublessee hereby rents from Sublessor the Premises.  On and after May 1, 
2002 (or such earlier date as provided herein or otherwise agreed to in 
writing by the Parties), Sublessee also rents from Sublessor the ACC 
Sublease Premises which shall also be included in the Premises.  
Sublessor shall not be responsible for any delays in delivering 
possession of the ACC Sublease Premises to Sublessee so long as it uses 
reasonable steps to deliver possession to Sublessee as soon as possible 
after May 1, 2002.  In the event that Sublessor is unable, 
notwithstanding its reasonable steps, to deliver possession of the ACC 
Sublease Premises to Sublessee on May 1, 2002, Sublessee's obligations to 
pay Base Rent (as set forth below) and other Rent (as defined below) 
which is attributable to the ACC Sublease Premises shall be suspended 
until Sublessor is able to deliver possession of the ACC Sublease 
Premises.  In other words, until Sublessor is able to deliver possession 
of the ACC Sublease Premises, Sublessee shall pay only Eighty-Nine and 
03/100 percent (89.03%) of the Base Rent for the applicable period(s) set 
forth below in section 2.1 plus those costs for Additional Rent set forth 
in section 2.2 (in lieu of section 2.3) below, in addition to its other 
obligations under the Sublease.  None of the Existing ACC Sublease 
provisions shall apply to this Sublease.  Notwithstanding the provisions 
of this section 1.1 above, in the event that the Existing ACC Sublease is 
terminated prior to May 1, 2002, then so long as Sublessee is not then in 
default under the terms of this Sublease, and no event shall have 
occurred and be continuing which, under the terms of this Sublease would 
constitute a default under the Sublease after the giving of notice or 
passage of time, or both, Sublessee shall begin renting the ACC Sublease 
Premises immediately following the termination of the Existing ACC 
Sublease and the vacancy by ACC of the ACC Sublease Premises.  In the 
event of such early renting by Sublessee of the ACC Sublease Premises, 
then from and after the date of such early renting, in addition to all of 
Sublessee's obligations under the Sublease, the Additional Rent shall be 
payable by Sublessee in accordance with section 2.3 below, and the 
monthly Base Rent set forth in section 2.1 shall be modified in 
accordance with the following schedule:




 Starting     Ending      Monthly
   Date        Date      Base Rent
----------- ----------- ------------
                  
  02/01/99  01/31/2000   $90,915.00
02/01/2000  01/31/2001   $95,700.00
02/01/2001  01/31/2002  $100,485.00
02/01/2002  01/31/2003  $105,270.00
02/01/2003  01/31/2004  $110,055.00
02/01/2004  05/31/2004  $115,797.00


        1.2   Use.  Sublessee shall use the Premises as data center processing
and other lawful related uses (restricted, however, for non-hazardous 
purposes) only ("Agreed Use").  With respect to the foregoing 
restrictions on the use of the Premises, Sublessee agrees to abide by 
such restrictions unless Sublessor gives its advance written consent to 
another use.  Sublessee agrees to comply with all zoning and land use 
laws and requirements imposed on the Premises.

      1.3     Term.  The Term of this Sublease shall commence on the first day
of February, 1999 (hereinafter called the "Commencement Date") and 
shall end at twelve o'clock midnight on May 31, 2004 (hereinafter called 
the "Expiration Date"), or shall end on such earlier date pursuant to any 
of the terms and conditions of this Sublease (which in this and other 
provisions herein includes, unless expressly indicated otherwise, the 
incorporated Lease).

      1.4     Condition of Subleased Premises.  Sublessee represents that it 
has inspected the Premises (including the ACC Sublease Premises) and is 
familiar with the condition of every part thereof including, without 
limitation, the occupancy and operation of ACC.  Sublessee agrees that it 
enters into this Sublease without any representations, promises, 
agreements or warranties by Sublessor, its officers, employees, agents, 
or representatives, as to the condition or fitness for a particular 
purpose or use of the Premises (including the ACC Sublease Premises) or 
any part, element or component thereof, including, but not limited to, 
electrical, plumbing, fire sprinkler, life safety, lighting, or heating 
ventilating and air conditioning ("HVAC") systems, loading doors, roof, 
exterior walls, foundations or other structural elements, except as 
provided in section 4.1(c) below.  Sublessee agrees to accept the 
Premises on an "AS-IS, WITH ALL FAULTS" basis, without requiring any 
alteration, addition, installation, repair, decoration or other 
improvement to be made by Sublessor or at Sublessor's expense.

        1.5     Services.  Without limiting the effect of the provisions of the
incorporated Lease relating thereto, Sublessor shall not be obligated to 
provide any services to Sublessee.  Sublessor makes no representations or 
warranties as to the availability or adequacy of services.

        1.6     Vehicle Parking.  So long as Sublessee is not in default, and
subject to the rules and regulations promulgated from time to time by 
Sublessor and/or Lessor, Sublessee shall be entitled to use 50.3 % of the 
parking spaces for the 0000/0000 Xxxxx Xxxxxx building project (less, 
until Sublessee's rental of the ACC Lease Premises, 42 spaces), for use 
by its agents', servants', employees' and invitees' (individually and 
collectively referred to as "Sublessee's Agents") passenger vehicles 
with 8 or less capacity only.  If Sublessor in its sole discretion agrees 
in writing to permit Sublessee to use any parking spaces for any other 
purpose (e.g., temporary storage of materials, satellite dish 
installation, etc.), Sublessee's then current number of parking spaces 
will automatically be reduced by the number of spaces utilized for such 
purpose plus any spaces which cannot be reasonably used for normal 
parking as a result thereof.  Sublessee agrees that overnight parking is 
prohibited.  Sublessee also agrees that under no circumstances shall 
Sublessee's Agents in any manner interfere with occupancy and/or access 
to the property known as 0000 Xxxxx Xxxxxx, including, without 
limitation, interference with the ingress or egress to the building, 
parking lot or shipping and receiving areas.  If Sublessee commits, 
permits or allows any of the prohibited activities described in the 
Sublease (including the incorporated Lease) or the rules and regulations 
then in effect, then Sublessor shall have the right, without notice, in 
addition to such other rights and remedies that it may have, to remove or 
tow away the vehicle(s) involved and charge the cost to Sublessee, which 
cost shall be immediately payable upon demand by Lessor.  Sublessee 
agrees that Sublessor may "re-stripe" so as to reconfigure the existing 
parking lots, so long as such does not reduce the number of parking 
spaces that Sublessee is otherwise entitled.  Subject to the prior 
written approval of Sublessor and Lessor which shall not be unreasonably 
withheld or delayed, Sublessee may also "re-stripe" so as to 
reconfigure the existing parking lots, so long as such does not reduce 
the number of total parking spaces or unreasonably interfere with the use 
or occupancy of 0000 Xxxxx Xxxxxx or its marketability to prospective 
subtenants.

        1.7   Sublessee Compliance.  Sublessor shall not be required to tender
possession of the Premises to Sublessee until Sublessee provides 
satisfactory evidence of insurance pursuant to paragraph 8.5 of the 
Lease, delivers the original Letter of Credit (hereinafter defined) 
pursuant to section 2.5 below of this Sublease, and delivers the initial 
monthly Base Rent payment in the amount of $11,076.00 and a payment of 
$7,875.00 (which represents Lessor's fee it is requiring of Sublessor 
pursuant to paragraph 12.2(e)).  Pending delivery of such evidence of 
insurance, Letter of Credit and initial Base Rent payment and paragraph 
12.2(e) fee, Sublessee shall be required to perform all of its 
obligations under the Sublease from and after the Commencement Date, 
including the payment of Rent (as hereinafter defined), notwithstanding 
Sublessor's election to withhold possession pending receipt of such 
evidence of insurance and Letter of Credit.

                                   ARTICLE II
                           RENT AND OTHER CHARGES

        2.1    Base Rent.  Notwithstanding anything contained in this Sublease
(including the incorporated Lease) and regardless of the Commencement 
Date, Sublessee agrees to pay Sublessor Base Rent commencing on February 
1, 1999, and on the first day of each month thereafter, in accordance 
with the schedule set forth below:




 Starting     Ending      Monthly
   Date        Date      Base Rent
----------- ----------- ------------
                  
  02/01/99    02/28/99   $11,076.00
  03/01/99    03/31/99   $58,403.21
  04/01/99  01/31/2000   $80,940.00
02/01/2000  01/31/2001   $85,200.00
02/01/2001  01/31/2002   $89,460.00
02/01/2002  04/30/2002   $93,720.00
05/01/2002  01/31/2003  $105,270.00
02/01/2003  01/31/2004  $110,055.00
02/01/2004  05/31/2004  $115,797.00


        2.2     Additional Rent.  For the period from March 1, 1999 through 
April 30, 2002, Sublessee shall also pay to Sublessor (or such other 
party(s) as may be designated in writing by Sublessor) as and when due 
under the Lease any and all additional rent and other charges which are 
due and payable by Lessee under the Lease, without any deduction or 
offset of any kind or nature, including, but not limited to, the costs 
associated with:

  (a)     All maintenance and repair obligations of Lessee 
          which concern the Premises and/or are caused in 
          whole or in part, directly or indirectly, by 
          Sublessee's Agents, as generally set forth in 
          paragraph 7 of the Lease (without regard to 
          deduction or offset in this and the following 
          provisions of this section 2.2 for any payments 
          by ACC).  With respect to other maintenance 
          and/or repairs which do not only concern the 
          Premises or are not caused in whole or in part, 
          directly or indirectly, by Sublessee's Agents, 
          Sublessee shall pay its pro rata share (as 
          hereinafter defined) of  all such obligations, 

  (b)     All non-Building exterior repairs of the office 
          building project (i.e., 2401 and 0000 Xxxxx 
          Xxxxxx) including, without limitation, repairs 
          of the landscaping, walkways, lawns, parking 
          lots and exterior lighting (individually and 
          collectively referred to hereinafter as the 
          "Exterior Grounds") which are caused in whole 
          or in part, directly or indirectly, by 
          Sublessee's Agents, as generally set forth in 
          paragraph 7 of the Lease.  With respect to other 
          Exterior Grounds repairs which are not caused in 
          whole or in part, directly or indirectly, by 
          Sublessee's Agents, as well as maintenance of 
          the Exterior Grounds, Sublessee shall pay Forty-
          Four and 52/100 percent (44.52%) of all such 
          obligations,

  (c)     All insurance obligations of Lessee (for which 
          Sublessor shall pay to Sublessee for the period 
          March 1, 1999 through April 30, 2002, Ten and 
          97/100 percent (10.97%) of the reasonable cost 
          of such insurance directly attributable to the 
          Premises, except for the cost for insurance 
          which is attributable to earthquake and flood 
          coverage which shall be solely borne by 
          Sublessee, as set forth in section 5.1 below), 
          generally set forth in paragraph 8 of the Lease,

  (d)     Sublessee's pro rata share of all Real Property 
          Taxes obligations of Lessee,  and 100% of 
          Personal Property Taxes obligations of Lessee 
          for property on the Premises (including any 
          exterior areas around the Building), generally 
          set forth in paragraph 10 of the Lease,

  (e)     All utility obligations of Lessee, generally set 
          forth in paragraph 11 of the Lease, less the 
          agreed upon sum of $1,180.00 per month, until 
          such time as Sublessor installs a meter or 
          meters to separately monitor the utility 
          obligations of Sublessee and/or ACC (which are 
          capable of monitoring) when Sublessee shall then 
          pay the amounts represented by such meter(s) in 
          addition to any other utility obligations which 
          are not capable of monitoring.

 (f)     All Alterations and improvements made to the 
          Premises by reason of the laws and requirements of 
          any public authorities and any application, permit, 
          inspection or license fees required in connection 
          therewith or for the operation, use or occupancy of 
          the Premises.

Sublessee's "pro rata share" shall refer to Eighty-Nine and 03/100 
percent (89.03%) of the total costs of the subject item(s). 



        2.3     Additional Rent.  For the period from May 1, 2002 (or such 
earlier date as provided herein when Sublessee occupies the ACC Sublease 
Premises or otherwise agreed to in writing by the Parties), through the 
Expiration Date, Sublessee shall also pay to Sublessor (or such other 
party(s) as may be designated in writing by Sublessor) as and when due 
under the Lease any and all additional rent and other charges which are 
due and payable by Lessee under the Lease, without any deduction or 
offset of any kind or nature, including, but not limited to, the costs 
associated with:

  (a)     All maintenance and repair obligations of Lessee 
          generally set forth in paragraph 7 of the Lease,

  (b)     All non-Building exterior repairs of the office 
          building project (i.e., 2401 and 0000 Xxxxx 
          Xxxxxx) including, without limitation, repairs 
          of the landscaping, walkways, lawns, parking 
          lots and exterior lighting (individually and 
          collectively referred to as "Exterior 
          Grounds") which are caused in whole or in part, 
          directly or indirectly, by Sublessee's Agents, 
          as generally set forth in paragraph 7 of the 
          Lease.  With respect to other Exterior Grounds 
          repairs which are not caused in whole or in 
          part, directly or indirectly, by Sublessee's 
          Agents, as well as maintenance of the Exterior 
          Grounds, Sublessee shall pay Fifty percent (50%) 
          of all such obligations,

  (c)     All insurance obligations of Lessee, generally 
          set forth in paragraph 8 of the Lease,

  (d)     All Real Property Taxes obligations of Lessee, 
          and all Personal Property Taxes obligations of 
          Lessee for property on the Premises (including 
          any exterior areas around the Building), 
          generally set forth in paragraph 10 of the 
          Lease,

  (e)     All utilities obligations of Lessee, generally 
          set forth in paragraph 11 of the Lease, and

  (f)     All Alterations and improvements made to the 
          Premises by reason of the laws and requirements of 
          any public authorities and any application, permit, 
          inspection or license fees required in connection 
          therewith or for the operation, use or occupancy of 
          the Premises.

Notwithstanding anything contained in the Lease, except as expressly 
provided to the contrary in this Sublease (e.g., with respect to the ACC 
Sublease Premises prior to rental by Sublessee), the Parties agree that 
it is the intent of this Sublease that Sublessee perform and pay all 
obligations of Lessee under the Lease.

        2.4     Payment.  The Base Rent, and any additional rent and the other 
charges payable herein in the Sublease (and in the Lease incorporated 
herein) reserved or payable, shall be paid to Sublessor at its address 
first-above stated (directed to the attention of: Controller) or at such 
other place as Sublessor may designate in writing, in lawful money of the 
United States of America, as and when the same become due and payable, 
without demand therefor and without any deduction, notice, offset, 
counterclaim or abatement whatsoever, except as otherwise expressly 
provided in this Sublease.  All monetary obligations of Sublessee to 
Sublessor under the terms of the Sublease (except for the Security 
Deposit) are deemed to be rent ("Rent").  Rent for any period during 
the Term hereof which is for less than one (1) full calendar month shall 
be prorated based upon the actual number of days of said month. 
Acceptance of a payment which is less than the amount then due shall not 
be a waiver of Sublessor's rights to the balance of such Rent, regardless 
of Sublessor's endorsement of any check so stating.

        2.5     Security Deposit. 

        (a)     Upon execution of this Sublease, Sublessee shall deliver to
Sublessor the Letter of Credit described below as security for 
Sublessee's performance of all of Sublessee's covenants and obligations 
under this Sublease; provided, however, that neither the Letter of Credit 
nor any Letter of Credit Proceeds (as defined below) shall be deemed an 
advance rent deposit or an advance payment of any other kind, or a 
measure of Sublessor's damages upon Sublessee's Default or Breach.  The 
Letter of Credit shall be maintained in effect from the date hereof 
through the date which is one hundred twenty (120) days after the 
Expiration Date, provided that upon Sublessee's surrender of the Premises 
at the expiration of the Term, Sublessor and Sublessee shall endeavor to 
determine as soon as practicable any amounts owing by Sublessee, and 
within five (5) Business Days after payment of such amount and 
Sublessee's fulfillment of any other obligations to Sublessor, Sublessor 
shall return to Sublessee the Letter of Credit and any Letter of Credit 
Proceeds then held by Sublessor (other than those held for application by 
Sublessor as provided below).  Sublessor shall not be required to 
segregate the Letter of Credit Proceeds from its other funds, and in no 
event shall Letter of Credit Proceeds or any portion thereof be deemed to 
be held in trust for Sublessee.  No interest shall accrue or be payable 
to Sublessee with respect to the Letter of Credit Proceeds.  Sublessor 
may (but shall not be required to) draw upon the Letter of Credit and use 
the proceeds therefrom (the "Letter of Credit Proceeds") or any portion 
thereof to cure any Default or Breach under this Sublease or to 
compensate Sublessor for any damage Sublessor incurs as a result of 
Sublessee's failure to perform any of its obligations hereunder, it being 
understood that any use of the Letter of Credit Proceeds shall not 
constitute a bar or defense to any of Sublessor's remedies set forth 
herein.  In such event and upon written notice from Sublessor to 
Sublessee specifying the amount of the Letter of Credit Proceeds so 
utilized by Sublessor and the particular purpose for which such amount 
was applied, Sublessee shall immediately deliver to Sublessor an 
amendment letter of Credit or a replacement Letter of Credit in an amount 
equal to one hundred percent (100%) of the amount specified below.  
Sublessee's failure to deliver such replacement Letter of Credit to 
Sublessor within five (5) business days of Lessor's notice shall 
constitute a Breach hereunder.  If Sublessee is not in default at the 
expiration or termination of this Sublease, within one hundred twenty 
(120) days after such expiration or termination, or such earlier date as 
provided above, Sublessor shall return to Sublessee the Letter of Credit 
or the balance of the Letter of Credit Proceeds then held by Sublessor; 
provided, however, that in no event shall any such return be construed as 
an admission by Sublessor that Sublessee has performed all of its 
obligations hereunder.  Under no circumstances shall Sublessor be 
required to return the Letter of Credit or Letter of Credit proceeds 
before receiving written acknowledgment by Lessor that Sublessor has 
fulfilled all of its Sublessor's obligations and is completely released 
from liability under the Lease.

                (b)     As used herein, Letter of Credit shall mean an 
unconditional, irrevocable letter of credit (hereinafter referred to as 
the "Letter of Credit") issued by a major "money center" bank 
satisfactory to Sublessor in its sole and absolute discretion (the 
"Bank"), drawings under which may be made at an office of the Bank 
located in Denver or Boulder, Colorado, naming Sublessor as beneficiary, 
in the amounts set forth below, and otherwise in form and substance 
satisfactory to Sublessor.  The initial amount of the Letter of Credit 
shall be Four Hundred Thousand Dollars ($400,000.00) during the period 
from the execution of this Sublease through May 31, 2003, after which the 
amount of the Letter of Credit shall be reduced to Three Hundred Thousand 
Dollars ($300,000.00) for so long as the Letter of Credit is required to 
be maintained pursuant to subsection (a) above.  In addition, should the 
Agreed Use be amended to accommodate a material change in the business of 
Sublessee or to accommodate a sublessee or assignee of Sublessee, 
Sublessee shall, upon thirty (30) days' written notice from Sublessor, 
cause the amount of the Letter of Credit to be increased to an amount 
necessary, in Sublessor's reasonable judgment, to account for any 
increased wear and tear that the Premises may suffer as a result thereof.  
Furthermore, if a change in control of Sublessee occurs during the term 
of this Sublease, and following such change in control, (1) Sublessee is 
not a publicly traded company, and (2) the financial condition of 
Sublessee is, in Sublessor's reasonable judgment, significantly reduced, 
Sublessee shall, upon thirty days' written notice from Sublessor, cause 
the amount of the Letter of Credit to be increased, effective on the 
later to occur of the expiration of thirty (30) days after Sublessor 
gives such notice, or the thirtieth (30th) day prior to the Commencement 
Date, to an amount, which, in Sublessor's reasonable judgment, is 
commercially reasonable based on such change in financial condition.  The 
Letter of Credit shall be for an initial term of not less than one year 
and shall provide: (i) that Sublessor may make partial and multiple draws 
thereunder, up to the face amount thereof, (ii) that Sublessor may draw 
upon the Letter of Credit up to the full amount thereof, as determined by 
Sublessor, and the Bank will pay to Sublessor the amount of such draw 
upon receipt by the Bank of a sight draft signed by Sublessor and 
accompanied by a written certification from Sublessor to the Bank stating 
either: (A) that a Breach has occurred and is continuing under this Lease 
or (B) that Sublessor has not received notice from the Bank that the 
Letter of Credit will be renewed by the Bank for at least one (1) year 
beyond the then applicable expiration date and Sublessee has not 
furnished Sublessor with a replacement Letter of Credit as hereinafter 
provided; and (iii) that, in the event of Sublessor's assignment or other 
transfer of its interest in this Sublease, the Letter of Credit shall be 
freely transferable by Sublessor, without charge and without recourse, to 
the assignee or transferee of such interest and the Bank shall confirm 
the same to Sublessor and such assignee or transferee.  The Letter of 
Credit shall further provide that a draw thereon pursuant to clause 
(ii)(B) above may only be made during the thirty (30) day period 
preceding the then applicable expiration date of the Letter of Credit.  
In the event that no later than thirty (30) days prior to the then 
applicable expiration date of the Letter of Credit, neither (1) the Bank 
shall have notified Sublessor that the Letter of Credit will be renewed 
for at least one (1) year beyond the then applicable expiration date, nor 
(2) Sublessee shall have delivered to Sublessor a replacement Letter of 
Credit in the amount required hereunder and otherwise meeting the 
requirements set forth above, then Sublessor shall be entitled to draw on 
the Letter of Credit as provided above, and shall hold the proceeds of 
such draw as Letter of Credit Proceeds pursuant to subsection (a) above 
and Paragraph 5 of the Lease, provided that such drawing shall not 
constitute a waiver of Sublessor's right to declare a Breach of the 
Sublease pursuant to paragraph 13.1(c) of the Lease.

              (c)     At any time during the Term, Sublessee may replace any
Letter of Credit provided hereunder with another Letter of Credit meeting 
the requirements hereunder, and Sublessor shall cooperate in arranging a 
simultaneous exchange of such Letters of Credit.


                                  ARTICLE III
                      SUBLESSEE'S AFFIRMATIVE OBLIGATIONS

        Without limiting Sublessee's obligations pursuant to the Lease, 
including those set forth in paragraph 7, Sublessee also agrees to the 
following:

        3.1     Alterations.  Sublessee agrees that any Alteration, Utility 
Installation, addition, improvement, installation of Trade Fixtures, 
and/or other installation or decoration after the Commencement Date shall 
be made only (a) with the prior written consent of Sublessor which shall 
not be unreasonably withheld or delayed (and the Lessor, if required by 
the terms of the Lease), (b) by workmen or contractors approved by 
Sublessor which shall not be unreasonably withheld or delayed; (c) in 
full compliance with all laws, ordinances and regulations of applicable 
authorities (including any fire insurance rating organizations having 
jurisdiction over the Premises); (d) in accordance with the provisions of 
the Lease, and (e) after receipt by Sublessor of such insurance policies 
as are reasonably required by Sublessor and Lessor.  Notwithstanding 
anything to the contrary and without limiting in any manner Sublessee's 
obligations under this Sublease, Sublessee shall also be responsible for 
all restoration obligations of Lessee under the Lease including, without 
limitation, the restoration obligations relating to the items mentioned 
in paragraph 10 of the January Lease Amendment.

        3.2     Sublessor's Consent.  Sublessor hereby consents to Sublessee 
making and/or installing the Alterations, Utility Installations and Trade 
Fixtures specifically shown and identified with specificity on the plans 
and specifications described in Exhibit A attached hereto, which plans 
and specifications and Exhibit A are incorporated herein by reference, so 
long as prior to any construction whatsoever, Sublessee shall first 
furnish to Sublessor a lien and completion bond satisfactory to Sublessor 
in an amount equal to the estimated cost of such Alteration(s) or Utility 
Installation(s).  Notwithstanding anything contained in the Sublease, 
Sublessor hereby affirmatively states that it does not approve of or 
consent to any Alterations, Utility Installations or Trade Fixtures which 
are mentioned or described in the plans and specifications but do not 
include specifics as to their location, size, mechanical, architectural 
or electrical detail or specifications.  Without limiting the foregoing 
or Sublessee's obligations under this Sublease, notwithstanding the 
January Lease Amendment, Sublessee also agrees to the following 
modifications to the January Lease Amendment:

      (a)     Sublessor hereby consents to the installation by Sublessee
of two (2) above-ground diesel fuel tanks and five (5) 
diesel generators at the Premises, provided that such 
installation shall be in compliance with all Applicable Law, 
and Sublessee shall obtain Sublessor's prior written 
approval of the precise location thereof, and of the 
protective enclosures or encasements thereof, which approval 
shall not be unreasonably withheld or delayed.  Sublessee 
agrees that reasonable considerations in determining such 
approval shall include without limitation whether such 
tanks, enclosures, encasements and/or generators 
unreasonably interfere with the use or occupancy (including 
parking, ingress and egress) of the ACC Space, or the use or 
occupancy (including parking, ingress and egress) of 0000 
Xxxxx Xxxxxx or its marketability to prospective subtenants.

(b)     Sublessor hereby consents to the installation by Sublessee 
satellite dishes not to exceed two (2) feet in diameter, on 
the roof of the Building only, so long as prior notice is 
provided to Sublessor and Lessor and provided that they are 
installed behind a roof screen, are not visible from the 
street, and are installed in compliance with Applicable Law.  
If Sublessee wishes to use other satellite dishes and/or 
install satellite dishes in any other manner or location, 
such installation shall be in compliance with all Applicable 
Law, and shall not be made without Sublessor's and Lessor's 
prior written approval of such installation, which approval 
shall not be unreasonably withheld or delayed.  Sublessee 
agrees that reasonable considerations in determining such 
approval shall include without limitation whether such 
satellite dishes unreasonably interfere with the use or 
occupancy (including parking, ingress and egress) of the ACC 
Space, or the use or occupancy (including parking, ingress 
and egress) of 0000 Xxxxx Xxxxxx or its marketability to 
prospective subtenants, or increase the restoration 
obligations pursuant to paragraph 7.4 of the Lease without 
the provision of additional security or payment to 
Sublessor.

     (c)     Sublessor shall not unreasonably withhold or delay the 
granting of its consent to Alterations, Utility 
Installations or Trade Fixtures which are consistent with 
the Alterations, Utility Installations or Trade Fixtures 
shown on the plans and specifications (Exhibit A).  
Sublessee agrees that reasonable considerations in 
determining such approval shall include without limitation 
whether such Alterations, Utility Installations and/or Trade 
Fixtures unreasonably interfere with the use or occupancy 
(including parking, ingress and egress) of the ACC Space, or 
the use or occupancy (including parking, ingress and egress) 
of 0000 Xxxxx Xxxxxx or its marketability to prospective 
subtenants, or increase the restoration obligations pursuant 
to paragraph 7.4 of the Lease without the provision of 
additional security or payment to Sublessor.

     (d)     Sublessor hereby agrees not to unreasonably withhold its 
consent to the installation by Sublessee of security fencing 
which will in part enclose the Building, provided that such 
installation shall be in compliance with all Applicable Law, 
and Sublessee shall obtain Sublessor's prior written 
approval of the precise location, height and type thereof.  
Sublessee agrees that reasonable considerations in 
determining such approval shall include without limitation 
whether such security fencing unreasonably interferes with 
the use or occupancy (including parking, ingress and egress) 
of the ACC Space, or the use or occupancy (including 
parking, ingress and egress) of 0000 Xxxxx Xxxxxx or its 
marketability to prospective subtenants.

        3.3     Maintenance and Repair.  Sublessee shall take good care of, 
repair and maintain the Premises and the fixtures, equipment and other 
improvements and appurtenances therein.  All damage or injury to the 
Premises and to its fixtures, glass, appurtenances and equipment caused 
by the moving of property by Sublessee's Agents in or out of the 
Premises, or by the installation or removal by Sublessee's Agents of 
furniture, fixtures or other property, or resulting from carelessness, 
omission, neglect or improper conduct of Sublessee's Agents, shall be 
repaired, restored or replaced promptly by Sublessee, at its sole cost 
and expense, to the reasonable satisfaction of Sublessor and Lessor.  All 
of said repairs and replacements required to be made by Sublessee shall 
be in quality and class equal to the original work or installation and 
shall be done in a good and workmanlike manner.

        3.4     Financial Information.  On the first day of February of each 
calendar year during the term of this Sublease, Sublessee shall provide 
Sublessor, upon request, with copies of all of the most recent financial 
statements of Sublessee, and all of its parent and/or subsidiary 
company(s).  Upon request, Sublessee also agrees to provide any 
supplemental financial information as may be from time to time requested 
by Sublessor.

        3.5     Non-Interference.  Sublessee agrees that it will in no manner 
disrupt or otherwise interfere with ACC's tenancy and use of the Building 
pursuant to the Existing ACC Sublease.


                                    ARTICLE IV
                   SUBLESSOR'S COVENANTS AND REPRESENTATIONS

        4.1     Covenants and Representations.  Sublessor covenants and 
represents to Sublessee as follows that:

        (a)     The Lease is in full force and effect, Sublessor has 
received no notice of default and, to the best of 
Sublessor's knowledge, no default exists thereunder;

        (b)     During the term of this Sublease, Sublessor will fully and 
faithfully perform the terms and conditions of the Lease on 
its part to be performed; and

        (c)     Sublessor has no knowledge or information that the Premises 
contain Hazardous Substances.

        4.2     Sublessor Indemnity.  Notwithstanding any provisions to the 
contrary, and in particular paragraph 6 of the Lease, Sublessor shall 
defend, indemnify and hold Sublessee harmless from and against any and 
all claims, response or remediation costs, losses, damages, penalties, 
other costs, actions, judgments, expenses and other liability (including, 
without limitation, attorney's fees and expenses of investigation, 
remediation or defense) due to Hazardous Substances which were brought 
onto the Premises by Sublessor after November 14, 1997 and before the 
Commencement Date, and Hazardous Substances brought onto the Premises by 
Sublessor during the Term of this Sublease.


                                   ARTICLE V
                                   INSURANCE

        5.1     Insurance.  Notwithstanding anything to the contrary except as
is expressly provided herein below in this section 5.1, Sublessee shall 
procure and maintain at its own cost and expense, throughout the Term of 
this Sublease, such policy or policies of insurance with respect to the 
entire Premises as Sublessor is required (as Lessee) to maintain pursuant 
to the Lease (i.e., including the ACC Sublease Premises) including, but 
not limited to, the policies required pursuant to paragraph 8 of the 
Lease.  Sublessee shall also pay for any insurance policy(s) which Lessor 
is required or otherwise permitted to maintain pursuant to the Lease.  
All insurance policies must maintain during the policy term a "General 
Policyholders Rating" of at least A, IX.  Notwithstanding the preceding, 
for the period February 1, 1999 through February 28, 1999, Sublessor 
shall reimburse Sublessee for the reasonable cost of such insurance 
directly attributable to the entire Premises within thirty (30) days of 
receipt of invoice(s) and other documentation evidencing such cost 
(except for the cost for insurance which is attributable to earthquake 
and flood coverage which shall be solely borne by Sublessee).  
Notwithstanding the preceding, for the period March 1, 1999 through April 
30, 2002, Sublessor shall pay to Sublessee Ten and 97/100 percent 
(10.97%) of the reasonable cost of such insurance directly attributable 
to the Premises within thirty (30) days of receipt of invoice(s) and 
other documentation evidencing such cost (except for the cost for 
insurance which is attributable to earthquake and flood coverage which 
shall be solely borne by Sublessee).  The policies shall also name 
Sublessor, Lessor and their respective officers, directors and employees, 
as additional insureds, shall insure performance of the indemnities of 
Sublessee contained in the Sublease and shall be primary coverage in the 
instance of Sublessee's indemnities, so that any insurance coverage 
obtained by Lessor or Sublessor shall be in excess thereto.  All policies 
required under the Sublease shall be endorsed to provide a waiver of 
subrogation as to Sublessor and Lessor.  Sublessee shall from time to 
time upon written request promptly deliver to Sublessor evidence that all 
premiums have been paid and all policies are in full force and effect, 
all in such form as Sublessor may reasonably request.  All policies 
required under this Sublease shall include an unconditional agreement by 
the insurer that the policy shall not be canceled, terminated, modified 
or allowed to expire without 90 days' advance written notice to Sublessor 
and Lessor.  When Sublessee has any reason to believe that any insurance 
policy required under the Lease may be cancelled, modified, expire or 
terminate, Sublessee agrees to immediately provide written notice 
detailing the same to Sublessor.  All policy(s) required of Sublessee 
pursuant to the Lease shall be tendered to Sublessee, upon renewal and 
modification without request, and at any other time upon Sublessor's 
request.  Sublessor shall be under no obligation to maintain any 
insurance, and if in its sole discretion it elects to do so, Sublessee 
shall not be named as an additional insured therein.


                                  ARTICLE VI
                           LOSS OF SUBLEASED PREMISES

      6.1     Casualty.  If the Subleased Premises shall be damaged by fire or
other casualty, or be condemned or taken in any manner for a public or 
quasi-public use (and if this Sublease shall not have been terminated as 
provided in the Lease), Sublessee agrees that Sublessor's obligation, if 
any,  to repair, restore or rebuild the Premises shall be determined in 
accordance with the Lease.  If the Premises or any part thereof shall be 
damaged by fire or other casualty, Sublessee shall give prompt written 
notice to Sublessor.

      6.2     Condemnation.  In the event of any condemnation or taking of the
Premises, or any portion thereof, Sublessee's rights are limited by the 
Lease.  Sublessee agrees that under no circumstances is Sublessor 
responsible for any payment whatsoever to Sublessee arising from or in 
any manner related to any condemnation involving the Premises.  In the 
event of a taking of all or a portion of the Premises, Sublessee shall 
also not be entitled to receive any part of any award made in the 
condemnation proceeding; provided, however, that nothing contained herein 
shall be deemed to preclude Sublessee from intervening for Sublessee's 
own interest in such proceedings to claim or receive from the condemning 
authority any compensation to which Sublessee may otherwise be lawfully 
entitled, and Sublessee shall be entitled to the benefit of any 
diminution in rent granted to Sublessor under the Lease which is 
applicable to the portion of the Premises so condemned or taken.


                                   ARTICLE VII
                               DEFAULT AND BREACH

        7.1   Sublessor's Remedies.  In the event of any Default and/or Breach
on the part of Sublessee under any of the terms, provisions, covenants or 
agreements of the Lease or of this Sublease, Sublessor shall have the 
same rights and remedies against Sublessee under this Sublease as are 
available to the Lessor against Lessee under the provisions of the Lease 
including, but not limited to, those under paragraph 13 of the Lease.  
Without limiting the foregoing, the occurrence of any of the following 
events shall also constitute a Breach under this Sublease, and Sublessor 
shall have all rights and remedies available under the Lease to Lessor in 
the event of a Breach as a result of:

           (a)     The failure of Sublessee to cause the amount of the Letter 
of Credit to be increased as and when required in accordance 
with the requirements of section 2.5(b) above, where such 
failure continues for a period of three (3) business days 
following written notice to Sublessee, or 

         (b)     Upon the election of Sublessor, in the event that no later 
than thirty (30) days prior to the then applicable 
expiration date of the Letter of Credit, neither (1) the 
Bank shall have notified Sublessor that the Letter of Credit 
will be renewed for at least one (1) year beyond the then 
applicable expiration date, nor (2) Sublessee shall have 
delivered to Sublessor a replacement Letter of Credit in the 
amount required hereunder and otherwise meeting the 
requirements set forth in section 2.5 above.

      7.2     Sublessee's Remedies.  In the event of any Default and/or Breach
on the part of Sublessor under any of the terms, provisions, covenants or 
agreements of this Sublease, Sublessee shall have the right to seek 
monetary damages or specific performance, but shall not have the right to 
terminate this Sublease, except as otherwise expressly provided herein in 
this Sublease.  Notwithstanding anything contained in this Sublease, 
Sublessor shall not be deemed in breach of any obligation under this 
Sublease if it is reasonably unable to perform such obligation due to its 
status as a Lessee (and not the Lessor) under the Lease.  By way of 
example but not limitation, if Lessor were required under the Lease to 
make certain repairs but refused to do so, and Sublessor (as Lessee under 
the Lease) was not permitted under the terms of the Lease to make such 
repairs, Sublessor would be reasonably unable to perform such repairs and 
therefore, not be deemed in Breach of the Sublease.  As to obligations 
under the Sublease that Sublessor is reasonably able to perform, 
Sublessor shall not be deemed in breach of this Sublease unless Sublessor 
fails within a reasonable time to perform an obligation required to be 
performed by Sublessor.  For purposes of the preceding sentence, a 
reasonable time shall in no event be more than thirty (30) days after 
receipt by Sublessor of written notice specifying wherein such obligation 
of Sublessor has not been performed; provided, however, that if the 
nature of Sublessor's obligation is such that more than thirty (30) days 
are reasonably required for its performance, then Sublessor shall not be 
in breach if performance is commenced within such thirty (30) day period 
and thereafter diligently pursued to completion.


                                  ARTICLE VIII
                                     SUBLEASE


      8.1     Incorporation of the Lease.  Except as set forth herein in this
Sublease, the terms, covenants, conditions and agreements of the Lease, 
are incorporated herein and made part of this Sublease as though fully 
set forth herein (and references to the Sublease herein shall refer to 
both this Sublease and the incorporated Lease regardless of whether the 
Lease is expressly mentioned) and are applicable to this Sublease with 
the same force and effect as though Sublessor was Lessor under the Lease, 
Sublessee was Lessee under the Lease, and the Premises herein were the 
Premises under the Lease.  In the incorporation of such terms, covenants, 
provisions, conditions and agreements, if there is a conflict between the 
terms of the Lease and this Sublease, the terms of this Sublease shall 
control.  By way of example but not limitation, the terms "Breach" and 
"Default" shall have the same meanings as those contained in the Lease 
and entitle Sublessor to invoke against Sublessee those remedies enjoyed 
by Lessor when Lessee causes a Breach and/or Default under the Lease; 
however, Sublessee's obligations to pay Base Rent are based on the 
amounts set forth in section 2.1 above and not those contained in the 
Lease.  Without limiting the generality of the foregoing, regardless of 
whether certain provisions of the January Lease Amendment refer to 
"Exodus" specifically or simply "Lessee," such provisions shall 
nonetheless apply to Sublessee (except as set forth below in section 
8.2).  Sublessor and Sublessee acknowledge and agree that as between them 
with respect to the interpretation of provisions of the January Lease 
Amendment which is incorporated into this Sublease by reference, the sole 
purpose of using the term "Exodus" instead of "Lessee" in the January 
Lease Amendment is to clarify certain distinctions being made in the 
January Lease Amendment.  Additionally, by way of example but not 
limitation, when a particular provision in the Lease requires Lessor's 
consent, Lessor's approval, Lessor's judgment or comparable language, 
such consent,  approval, etc.,  will be required of both Talus 
Corporation (which stands in the shoes of the Lessor in the Lease 
pursuant to section 8.1 of the Sublease), and G&I Xxxxx LLC (which is the 
actual Lessor under the Lease).  This Sublease is subject and subordinate 
to, and Sublessee accepts this Sublease subject and subordinate to, all 
of the terms, covenants, provisions, conditions and agreements contained 
in the Lease, Existing ACC Sublease and the matters to which the Lease is 
subject and subordinate.  This Sublease shall also be subject to any 
amendments and supplements to the Lease hereafter made between Lessor and 
Sublessor, provided that any such amendment or supplement to the Lease 
will not prevent or adversely affect the use by Sublessee of the Premises 
in accordance with the terms of this Sublease or additionally increase 
the Base Rent, additional rent or other charges required to be paid by 
Sublessee under the terms of this Sublease.  Sublessee acknowledges and 
agrees that it shall not be permitted to exercise any options granted to 
Lessee under the Lease.

        8.2   Exclusions.  Notwithstanding anything contained in the Sublease,
the following provisions of the Lease are expressly excluded from 
incorporation herein (as are any references to the following provisions 
which are contained in a non-excluded provision):  paragraphs 1.1 through 
1.12; paragraphs 2.2, 2.3, 2.5, 3.1, 3.2, 4.1, 5, 8.2(b), 13.1(g), 15.1 
through 15.6, 37.1, 37.2, 38, 39.1 through 39.4, 48, paragraphs 1, 3 and 
4 (and the first sentence of paragraph 2) of Exhibit {A}, the Guaranties, 
the Lease Amendment dated November 14, 1997 and November 20, 1997, and 
paragraphs 2, 30, 31, 32 and 33 of the January Lease Amendment. 

        8.3     Sublessee's Additional Duties Regarding the Lease.  Without
limiting Sublessee's obligations pursuant to the Sublease relating to the 
below matters, Sublessee also covenants and agrees as follows:

(a)     To perform and observe all of the terms, covenants, 
conditions and agreements of the Lease to be performed on 
the part of Sublessor with respect to the Premises to the 
extent the same are not expressly modified or inconsistent 
with the terms of this Sublease;

(b)     That Sublessee will not do or cause to be done or suffer or 
permit any act or thing to be done which would or might 
cause any Default and/or Breach under this Sublease or the 
Lease, or cause the rights of Sublessor as Lessee thereunder 
to be canceled, terminated or forfeited, or which would make 
Sublessor liable for any damages, claim or penalty;

(c)     Except as provided in the Sublease with respect to diesel 
fuel, Sublessee shall not cause or permit any Hazardous 
Substances to be used, stored, generated or disposed of on 
the Premises;

(d)     Sublessor shall also have the right to enter the Premises at 
any time, in the case of an emergency, and otherwise with 24 
hours' advance notice for the purpose of inspecting the 
Premises.  Sublessor acknowledges that Sublessee intends to 
operate a secure internet data center facility at the 
Premises.  Accordingly, except in the case of an emergency, 
Sublessor or its agents shall give Sublessee 24 hours' 
advance notice prior to entering the Premises, and Sublessee 
shall have the right to require that a representative of 
Sublessee accompany any parties entering the Premises.  In 
the case of an emergency, Sublessor or its agents shall make 
such effort as is deemed appropriate by Sublessor or its 
agents under the circumstances to contact an on-site 
representative of Sublessee, if one is present at the 
Premises, prior to entering the Premises; provided, however, 
that if an on-site representative cannot be located after 
such effort is made or if immediately entry to the Premises 
without attempting to locate an on-site representative of 
Sublessee is deemed appropriate by Sublessor or its agents 
due to the nature of the emergency, Sublessor or its agents 
may enter the Premises unaccompanied by a representative of 
Sublessee; and

(e)     Sublessee acknowledges and agrees that paragraph 40 of the 
Lease is applicable to this Sublease since the Premises are 
part of a group of buildings  controlled by Lessor.


                                     ARTICLE IX
                                   NONDISTURBANCE

        9.1     Quiet Possession.  If, and so long as Sublessee pays the Base
Rent, additional rent and other charges due and payable described herein 
and keeps, observes and performs all of the other covenants, agreements, 
terms, provisions and conditions herein contained on the part of 
Sublessee to be kept, observed and performed, Sublessee shall have quiet 
possession of the Premises, subject, however, to the covenants, 
agreements, terms, provisions and conditions of this Sublease, the Lease, 
the Existing ACC Sublease, and to the matters to which the Lease is or 
becomes subject and/or subordinate.

        9.2     Notice of Default and Right to Cure.  Sublessor shall provide 
Sublessee with copies of any written notice to or from Lessor specifying 
a Default by Sublessor under the terms of the Lease within seventy-two 
(72) hours of Sublessor's receipt from or delivery of the notice to 
Lessor.  Upon demand from Sublessee and so long as Sublessee has not 
defaulted under the terms of this Sublease, Sublessor shall take all 
action reasonably necessary to avoid termination of the Lease or 
disturbance of Sublessee's use and occupancy of the Premises as a result 
of such Default.  Sublessor shall keep Sublessee fully advised as to 
Sublessor's efforts to cure or resolve any allegation of a Default and 
shall provide Sublessee, at Sublessor's expense, with copies of all non-
privileged correspondence, and documentation, including but not limited 
to, any pleadings filed by or on behalf of Sublessor or Lessor in the 
course of any litigation which involves an alleged Default  relating 
thereto.  If Sublessor fails to timely cure a Default or contests the 
same by appropriate legal proceedings, and Lessor has threatened to 
disturb Sublessee's use or occupancy of the Premises or any party 
thereof, Sublessee shall have the right so long as it is not in default 
under this Sublease, but not the duty, to take whatever action is 
reasonably necessary to cure the Default.  All reasonable and necessary 
costs, expenses and fees (including reasonable attorneys' fees) incurred 
by Sublessee in the course of curing a Default shall be fully recoverable 
from all payments (including Base Rent and additional rent) that come due 
to Sublessor under this Sublease.






                                     ARTICLE X
                                       NOTICE

        10.1    Notice.  Paragraph 23 of the Lease shall govern notices except
the designated addresses shall be those provided in the initial paragraph 
of this Sublease.  All notices to Sublessor shall be sent to Sublessor's 
address, to the attention of the Controller.  All notices to Sublessee 
shall be sent to the attention of Xxxxxxx Xxxxxx, CFO, COO.

        10.2    Courtesy Copies.  Whenever notice is delivered pursuant to this
Sublease, copies shall also be delivered to the following:

                        To Sublessor:

                        Xxxxxx X. Xxxxxxxx, Esq.
                        Pearson, Xxxxxxxx & Xxxxxxxx, P.C. 
                        0000 Xxxxxxxx, Xxxxx 0000
                        Xxxxxx, XX   00000
                        Fax:  (000) 000-0000


                        To Sublessee:

                        Xxxx Xxxxxxxx, IDC Manager
                        Exodus Communications, Inc.
                        0000 Xxxxx Xxxxxx
                        Xxxxx Xxxxx, XX   00000
                        Fax:  (000) 000-0000


                                     ARTICLE XI
                     SUBLEASING AND ASSIGNMENT BY SUBLESSEE

        11.1    No Future Assignment or Sublease.

        (a)     Except as provided herein in this section 11.1, Sublessee 
shall not assign or otherwise transfer, mortgage, pledge, 
hypothecate or encumber this Sublease or the Premises, or 
any interest therein, and shall not sublet (which term 
herein shall also include "sub-subletting") the Premises or 
any part thereof, or any right or privilege appurtenant 
thereof, or permit any other party to occupy the Premises, 
or any portion thereof, except in accordance with the 
provisions of paragraph 12 of the Lease.  The foregoing 
shall also require the written consent of both Sublessor and 
Lessor in accordance with the criteria set forth in 
paragraph 12 of the Lease.  Sublessor's consent to any 
assignment, transfer or subletting by Sublessee shall not 
relieve Sublessee from any of its obligations under this 
Sublease.  As a condition to providing such written consent, 
Sublessor reserves the right to make such changes in the 
Sublease as Sublessor and/or Lessor may require to be made 
to the Lease pursuant to paragraph 12 thereof.  If Sublessee 
violates any of the terms contained in this section 11.1, 
such shall constitute a Breach under the terms of this 
Sublease.

(b)     Notwithstanding anything to the contrary, Sublessee agrees 
that Sublessor, as a condition to giving its consent to any 
proposed sublease or assignment, in addition to any other 
obligations of or amounts due from Sublessee pursuant to the 
Lease, shall require that Sublessee pay to Sublessor, as 
additional Rent under the Sublease, before execution of any 
proposed assignment or sublease (i) any and all amounts 
required by Lessor to be paid by Sublessor pursuant to 
paragraph 12.2(e) of the Original Lease, (ii) any and all 
other amounts which Lessor requires to be paid or delivered 
by Sublessor in connection with or in any manner related to 
the proposed assignment or sublease, and (iii) all other 
reasonable out-of-pocket expenses incurred by Sublessor in 
connection with the proposed assignment or sublease, 
including, without limitation, attorneys' and consultants' 
fees and expenses.  The amounts described in subsection 
(iii) above shall be referred to (if at all) in the January 
Lease Amendment as the "Talus Amounts," and such amounts 
shall be paid regardless of and in addition to any amounts 
set forth in section 11.1(c) below.  The Parties agree that 
it is the express intent of this section 11.1(b) to make 
Sublessor "whole" by not requiring Sublessor to incur any 
expense whatsoever in connection or relating to Sublessee's 
subletting(s) or assignment(s), proposed or otherwise, all 
such expense to be immediately reimbursed by Sublessee to 
Sublessor.

    (c)     Notwithstanding any provision of paragraph 12 of the Lease, 
Sublessor, as a condition to giving its consent to any 
proposed sublease or assignment, may also (i.e, in addition 
to Sublessee's obligations under the Sublease including 
without limitation those set forth in section 11.1(b) above) 
require that Sublessee pay to Sublessor, as additional Rent 
under the Sublease,

        (i)     In the case of an assignment where the Sublease is the 
only asset assigned by Sublessee to the assignee, 
promptly after receipt by Sublessee (or any affiliate 
thereof or other person or entity designated by 
Sublessee) seventy-five percent (75%) of the amount, if 
any, by which (A) any consideration (including, without 
limitation, payment for leasehold improvements) paid by 
the assignee to Sublessee or such affiliate or other 
designated person or entity for the assignment or 
otherwise attributable to the value of Sublessee's 
interest in the Sublease exceeds (B) the Assignment or 
Subletting Costs (as defined below);

        (ii)    In the case of an assignment where the Sublease is not 
the only asset assigned by Sublessee to the assignee 
(e.g., an assignment in connection with a sale of 
Sublessee's operations at the Premises or an assignment 
resulting from a change in control of Sublessee where 
Sublessee is not a publicly traded company immediately 
following such change in control), on a monthly basis, 
seventy-five percent (75%) of the amount, if any, by 
which (A) the Prevailing Market Rent (as defined below) 
for the Premises for each month of the term of the 
Sublease after the date of the assignment exceeds (B) 
the total amount of Rent payable hereunder for each such 
month; as used herein, the term "Prevailing Market Rent" 
for the Premises shall mean the total monthly Rent that 
Sublessor could obtain for each month of term of the 
Sublease remaining after the date of the assignment from 
a third party desiring to lease the Premises for the 
remaining term of the Sublease after the date of the 
assignment, taking into account the age of the Building, 
the size of the Premises, the quality of construction of 
the Building, the other terms of this Sublease, the 
rental and any other consideration then being obtained 
for new leases of space comparable to the Premises in 
the locality of the Building and all other factors that 
would be relevant to a third party desiring to lease the 
Premises for such term in determining the rental such 
party would be willing to pay therefor, but excluding 
any rental value attributable to any items Sublessee is 
permitted to remove from the Premises upon expiration of 
the term of this Sublease pursuant to paragraph 7.4 of 
the Lease; provided that if Sublessee and Sublessor are 
unable to agree upon the Prevailing Market Rent within 
thirty (30) days after the date of the assignment, then 
the Prevailing Market Rent for the remaining term of 
this Sublease shall be determined by appraisal following 
the same procedures as set forth in paragraph 39(c) of 
the Addendum to the Direct Lease between Exodus 
Communications, Inc. and G&I Xxxxx LLC dated January 
_____, 1999 (which provision is incorporated herein by 
reference solely for purposes of such appraisal 
procedures), for the determination of "Fair Market Rent" 
for the first year of a Renewal Option Term; and

        (iii)   in the case of a sublease, on a monthly basis, 
seventy-five percent (75%) of the amount, if any, by 
which (A) the rent paid to Sublessee (or any affiliate 
thereof or other person or entity designated by 
Sublessee) for the sublet space by the sublessee (such 
rent to include all consideration paid for the sublet 
space) for each month exceeds (B) the total amount of 
Rent payable under the Sublease attributable to the 
sublet space for such month; provided, however, that in 
the case of a sublease, prior to paying any amounts to 
Sublessor pursuant to this section 11.1(c)(iii), 
Sublessee may recover out of the rent or other 
consideration payable by the sublessee to Sublessee (or 
any affiliate thereof or other person or entity 
designated by Sublessee), and use such recovery to 
reimburse itself for, a pro rata share of the Assignment 
or Subletting Costs incurred in connection with such 
sublease, such pro rata share to be determined by 
allocating an equal portion of the total amount of 
Assignment or Subletting Costs incurred in connection 
with such sublease to each month of the term of such 
sublease; if there is more than one sublease under this 
Sublease, the amounts (if any) to be paid by Sublessee 
to Sublessor pursuant to this section 11.1(c)(iii) shall 
be separately calculated for each sublease and amounts 
due Sublessor with regard to any one sublease may not be 
offset against rental and other consideration pertaining 
to or due under any other sublease.

As used herein, the term "Assignment or Subletting Costs" means the total 
amount of any brokerage commissions paid by Sublessee in connection with 
a specific subletting or assignment (not to exceed commissions typically 
paid in the market at the time of such subletting or assignment), 
Sublessee's reasonable costs of advertising the space for sublease or 
assignment, Sublessee's reasonable legal fees and expenses in connection 
with such assignment or sublease, and any improvement allowance or other 
inducement (such as moving expenses and lease takeover obligations), paid 
by Sublessee to the sublessee or assignee; provided that, as a condition 
to Sublessee recovering Assignment or Subletting Costs pursuant to 
section (i) or (iii) of this section 11.1(c), Sublessee shall provide to 
Sublessor, within sixty (60) days of Sublessor's execution of Sublessor's 
consent to the assignment or subletting, a detailed accounting of the 
Assignment or Subletting Costs and supporting documents, such as receipts 
and invoices, except that if any Assignment or Subletting Costs are not 
determinable by such date, Sublessee shall so state in its accounting, 
identifying with reasonable specificity the costs not determinable, and 
promptly after such costs are determinable, but in no event later than 
thirty (30) days after effective date of the assignment or ninety (90) 
days after the commencement of the term of such sublease, as applicable, 
a supplemental accounting shall be delivered to Sublessor setting forth 
all Assignment or Subletting Costs and supporting documents (if not 
previously delivered).


                                   ARTICLE XII
                                  MISCELLANEOUS

        12.1    Binding Effect.  The covenants, agreements, terms, provisions
and conditions of this Sublease shall bind and inure to the benefit of 
the respective successors and assigns of the parties with the same effect 
as if mentioned in each instance where a party is named or referred to, 
except that no violation of the provisions of section 11.1 above shall 
operate to vest any rights in any successor, assignee or legal 
representative of Sublessee.

        12.2  Broker.  Sublessee warrants and represents that the only person,
firm, brokers or finders  with whom it had any dealings in connection 
with this transaction are CPS.  Sublessee hereby agrees to indemnify, 
protect, defend and hold harmless from and against liability for 
compensation or charges which may be claimed by any unnamed  broker, 
finder or other similar party by reason of any dealings or actions of 
Sublessee, including any costs, expenses, attorneys' fees reasonably 
incurred with respect thereto.

        12.3    Sole Agreement.  This Sublease with attachments sets forth the 
entire agreement between the parties.  This Sublease supersedes all prior 
negotiations and agreements between Sublessor and Sublessee with respect 
to the subject matter of this Sublease.  No modification or alteration of 
this Sublease shall be effective unless reduced to writing and executed 
by Sublessor or Sublessee, together with any necessary consent by Lessor.

        12.4    Sublessor's Consent.  Whenever the consent and/or approval of 
Sublessor is required to be given under the provisions of this Sublease, 
Sublessor shall be conclusively deemed not to have unreasonably withheld 
its consent and/or approval if the Lessor has refused or withheld its 
consent and/or approval thereto for any reason.

        12.5    Severability.  Should any of the provisions of the Sublease to 
any extent be held to be invalid or unenforceable, the remainder of this 
Sublease shall continue in full force and effect.
        12.6    Headings.  The subject headings used in this Sublease are 
included for purposes of reference only, and shall not affect the 
construction or interpretation of any of its provisions.

        12.7    Construction.  The Rule of Construction which provides that 
ambiguities in a contract shall be construed against the drafter shall 
not apply to this Sublease and the Parties waive any such claim or 
defense to the terms of this Sublease.

        12.8  Further Acts.  Upon reasonable request by Sublessor from time to
time, Sublessee shall execute and deliver such additional documents and 
instruments and take such other actions as may be reasonably necessary to 
give effect to the intents and purposes of this Sublease.

        12.9    Non-modification of obligations under the Lease.  Nothing 
hereinabove in this Sublease is intended to reduce or increase Talus 
Corporation's obligations or reduce or increase G & I Xxxxx LLC's 
obligations under the Lease.

        12.10  Facsimile Signature.  The parties hereto agree that a facsimile
signature may substitute for and have the same legal effect as the 
original signature.

        IN WITNESS WHEREOF, Sublessor and Sublessee have duly executed this 
Sublease as of the day and year first above written.

                                 SUBLESSOR:

                                 TALUS CORPORATION 



                                 By: _______________________________________

                                 Name: _____________________________________

                                 Title:  ___________________________________



                                 SUBLESSEE:

                                 EXODUS COMMUNICATIONS, INC.



                                 By: _______________________________________

                                 Name: _____________________________________

                                 Title:  ___________________________________



                         APPROVAL AND CONSENT OF LESSOR

        Lessor's signature below evidences its approval of and consent to the 
foregoing Sublease.  Lessor's approval of and consent to the foregoing 
Sublease does not constitute Lessor's approval of or consent to any 
future or further assignment of or subletting under the Lease or the 
foregoing Sublease, which shall require the future consent of the Lessor 
subject to the conditions set forth in paragraph 12 of the Lease.  
Lessor's approval of and consent to the foregoing Sublease shall not 
constitute the waiver of any other terms or provisions of the Lease, and 
Sublessor and Sublessee shall at all times comply with the terms and 
provisions thereof.

                          LESSOR:

                          G&I XXXXX LLC, a Delaware limited liability company


                          By: G&I Investment Xxxxx LLC, a Delaware 
                          limited liability company, its managing member


                          By: G&I Investment Xxxxx Corp., a 
                          Delaware corporation, its managing member



                                 By: _______________________________________

                                 Name: _____________________________________

                                 Title:  ___________________________________




                                   EXHIBIT A

Plans and Specifications for Exodus New Data Center-SC4, prepared by
Datasphere, Project No. 65098.00, Permit & Bid Set, dated 1/7/99,
consisting of the drawings listed below:

                              INDEX OF DRAWINGS

SHEET NO.   SHEET TITLE
CS-1        COVERSHEET

CIVIL
C101        SITE PLAN - NEW WORK

ARCHITECTURAL
A001        GENERAL NOTES, LEGEND AND ABBREVIATIONS
AD101       DEMOLITION PLAN - FIRST FLOOR
AD102       DEMOLITION PLAN - SECOND FLOOR
AD103       REFLECTED CEILING PLAN - DEMOLITION FIRST FLOOR
AD104       REFLECTED CEILING PLAN - DEMOLITION SECOND FLOOR
A101        NEW WORK PLAN - FIRST FLOOR AND WALL SCHEDULE
A102        NEW WORK PLAN - SECOND FLOOR
A103        PARTIAL PLAN - NEW WORK FIRST FLOOR
A104        PARTIAL PLAN - NEW WORK FIRST FLOOR
A105        ROOF PLAN - NEW WORK
A201        BUILDING ELEVATIONS AND DETAILS
A401        DETAILS
A402        DETAILS
A403        DETAILS
A801        REFLECTED CEILING PLAN - NEW WORK FIRST FLOOR
A901        DOOR AND LOUVER SCHEDULE AND DETAILS
A902        WINDOW SCHEDULE
A903        FINISHES PLAN AND SCHEDULE

STRUCTURAL
S0.1        GENERAL NOTES AND TYPICAL DETAILS
S2.1        FOUNDATION PLAN
S2.2        INTERSTITIAL LEVEL FRAMING PLAN
S2.3        MEZZANINE FRAMING PLAN
S2.4        ROOF FRAMING PLAN
S6.1        CONCRETE AND MASONRY DETAILS
S7.1        STEEL DETAILS
S7.3        METAL STUD DETAILS
S8.1        WOOD DETAILS


MECHANICAL
M001        TITLE 24, NOTES AND LEGEND
M002        SPECIFICATIONS
M101        ROOF AND WAREHOUSE DEMOLITION PLAN
M102        PARTIAL PLAN - DEMOLITION FIRST FLOOR
M103        ROOF PLAN - NEW WORK
M104        PARTIAL PLAN - NEW WORK FIRST FLOOR
M105        PARTIAL COMPUTER ROOM PLAN - FIRST FLOOR
M106        SMOKE DAMPER AND PLENUM PLAN
M201        COMPUTER ROOM SECTION AND SCHEDULES
M301        DETAILS AND CONTROL WORK

ELECTRICAL
E101        SITE ELECTRICAL PLAN
E101        ELECTRICAL SYMBOLS AND NOTES
E201        SINGLE LINE DIAGRAM
E202        SINGLE LINE DIAGRAM
E203        SINGLE LINE DIAGRAM
E204        EPO AND SWITCHBOARD ELEVATIONS
E301        PANEL SCHEDULES
E302        PANEL SCHEDULES
E303        PANEL SCHEDULES
E400        TITLE 24 FORMS, LIGHTING FIXTURE SCHEDULE AND DETAILS
E401        PARTIAL FIRST FLOOR LIGHTING PLAN
E402        PARTIAL FIRST FLOOR LIGHTING PLAN
E501        PARTIAL FIRST FLOOR POWER PLAN
E502        PARTIAL FIRST FLOOR POWER PLAN
E503        ROOF ELECTRICAL PLAN
E601        FIRST FLOOR GOUNDING PLAN
E602        GROUNDING DETAILS AND NOTES



                      SECOND AMENDMENT TO LEASE

THIS SECOND AMENDMENT TO LEASE (this "Amendment") is made as of 
January 29, 1999, by and between G&I XXXXX LLC, a Delaware limited 
liability company ("Lessor"), and TALUS CORPORATION, a California 
corporation, formerly known as Scientific Custom Metal Products 
International, Inc. ("Lessee").

RECITALS

A. Mopar, LLC, Lessor's predecessor-in-interest, and Lessee 
have previously entered into that certain Standard 
Industrial/Commercial Single-Tenant Lease-Net, dated as of March 1, 
1996, as amended by that certain Lease Amendment, identical 
counterparts of which have been dated as of November 14, 1997, and 
November 20, 1997 (as so amended, the "Original Lease"), covering 
certain premises commonly known as 0000 Xxxxx Xxxxxx, Xxxxx Xxxxx, 
Xxxxxxxxxx (the "Premises"); and
B. Lessee has previously entered into a sublease with ACC 
Microelectronics Corporation ("ACC"), dated April 25, 1997 (the 
"Existing ACC Sublease"), pursuant to which ACC has subleased a 
portion of the Premises consisting of an agreed area of 10,500 
rentable square feet (the "ACC Sublease Premises").
X. Xxxxxx and Lessee desire to amend the Original Lease in 
connection with the proposed subletting by Lessee to Exodus 
Communications, Inc., a Delaware corporation ("Exodus") of, 
initially, that portion of the Premises other than the ACC Sublease 
Premises, and, eventually, the entire Premises, pursuant to that 
certain sublease entered into or to be entered into on or about the 
date hereof, between Lessee, as sublessor, and Exodus, as sublessee 
(the "Exodus Sublease"), upon and subject to the terms, covenants 
and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the agreements of Lessor and 
Lessee herein contained and other valuable consideration, the 
receipt and adequacy of which are hereby acknowledged, Lessor and 
Lessee hereby agree as follows:
1. Use of Terms.  As used herein, terms shall have the same 
meanings as in the Original Lease.  The term "Lease" as used in 
the Original Lease and in this Amendment shall mean the Original 
Lease as modified by this Amendment.  As used herein, the term 
"Talus Corporation" shall mean Talus Corporation, a California 
corporation, formerly known as Scientific Custom Metal Products 
International, Inc., the present Lessee under the Lease, any 
successor-in-interest thereto, or any assignee of its interest 
under the Lease.  As between Lessor and Talus Corporation, the 
terms "Lessee" and "Talus Corporation" are interchangeable.  
Lessee and Lessor acknowledge that the sole purpose of using the 
term "Talus Corporation" herein instead of "Lessee" is to 
facilitate certain distinctions being made in the Exodus Sublease 
with respect to provisions of the Lease which are being 
incorporated by reference in the Exodus Sublease.  
2. Modification of Base Rent.  
(a) Effective as of February 1, 1999, the Base Rent payable 
under the Lease shall be adjusted as follows:

Starting Date     Ending Date            Monthly Base Rent 

2/1/1999            2/28/1999               $89,580.00

3/1/1999            1/31/2000               $90,012.00

2/1/2000            2/29/2000               $94,272.00

3/1/2000            1/31/2001               $94,726.00

2/1/2001            2/28/2001               $98,986.00

3/1/2001            1/31/2002               $99,462.00

2/1/2002            2/28/2002              $103,722.00

3/1/2002            4/30/2002              $104,222.00

5/1/2002            1/31/2003              $105,270.00

2/1/2003            1/31/2004              $110,055.00

2/1/2004            5/31/2004              $115,797.00

Notwithstanding the foregoing, in the event that pursuant to the 
terms of the Exodus Sublease, Exodus begins renting the ACC 
Sublease Premises prior to May 1, 2002, then from and after the 
date of such early renting, the rent schedule set forth above shall 
be replaced with the following rent schedule:


Starting Date     Ending Date            Monthly Base Rent 

2/1/1999           1/31/2000                 $90,915.00

2/1/2000           1/31/2001                 $95,700.00

2/1/2001           1/31/2002                $100,485.00

2/1/2002           1/31/2003                $105,270.00

2/1/2003           1/31/2004                $110,055.00

2/1/2004           5/31/2004                $115,797.00

(b) Notwithstanding the provisions of Paragraph 2(a), above, 
if the Exodus Sublease is terminated as a result of Exodus' 
default, then from and after the date of termination of the Exodus 
Sublease (the "Exodus Termination Date"), the provisions of 
Paragraph 2(a) shall be null and void, and Lessee shall thereafter 
pay Base Rent in the amount set forth in the Original Lease without 
regard to the adjustment of Base Rent pursuant to Paragraph 2(a) of 
this Amendment, but subject to any future adjustment of Base Rent 
applicable under the terms of the Lease (other than an adjustment 
arising or relating to the subleasing of the Premises to Exodus).  
After the Exodus Termination Date, if and when Lessee recovers any 
amounts payable by Exodus under the Exodus Sublease from time to 
time, including, but not limited to, any recovery from any letter 
of credit or other security deposit held by Lessee (an "Exodus 
Recovery"), such amounts shall be applied by Lessee in the 
following order of priority:
(i) first, whether or not the Lease has terminated prior 
to the date Lessee receives the Exodus Recovery, Lessee shall 
retain an amount from the Exodus Recovery not to exceed the amount 
of Lessee's reasonable attorneys' fees and costs incurred in 
obtaining the Exodus Recovery; 
(ii) second, whether or not the Lease has terminated 
prior to the date Lessee receives the Exodus Recovery, Lessee shall 
retain an amount from the Exodus Recovery not to exceed the amount 
of any unpaid Base Rent and Additional Rent under the Exodus 
Sublease through the Exodus Termination Date;
(iii) third, whether or not the Lease has terminated 
prior to the date Lessee receives the Exodus Recovery, Lessee shall 
retain from the Exodus Recovery an amount not to exceed the amount 
of Allocated Rent (as defined below) payable by Lessee under the 
Lease for any period of time from and after the Exodus Termination 
Date through and including the earlier of the date Lessee receives 
the Exodus Recovery or the date of termination of the Lease, for 
which no sublessee (other than ACC under the Existing ACC Sublease, 
if the Existing ACC Sublease is in effect) is paying sublease rent 
to Lessee;
(iv) fourth, whether or not the Lease has terminated 
prior to the date Lessee receives the Exodus Recovery, if Lessee 
subsequently subleases the Premises or any portion thereof to one 
or more sublessees (other than ACC under the Existing ACC 
Sublease), then, only with respect to any period of time from and 
after the Exodus Termination Date through and including the earlier 
of the date Lessee receives the Exodus Recovery or the date of 
termination of the Lease, during which period of time the total 
sublease rent payable by the sublessee(s) (other than ACC under the 
Existing ACC Sublease, if the Existing ACC Sublease is in effect) 
to Lessee is less than the total amount of Allocated Rent payable 
by Lessee under the Lease for the same period of time, Lessee shall 
retain from the Exodus Recovery an amount not to exceed: (A) the 
total amount of Allocated Rent payable by Lessee under the Lease 
for the same period of time, minus (B) the total amount of sublease 
rent received by Lessee from sublessee(s) (other than ACC under the 
Existing ACC Sublease, if the Existing ACC Sublease is in effect) 
for the same period of time; and 
(v) fifth, whether or not the Lease has terminated prior 
to the date Lessee receives the Exodus Recovery, Lessee shall 
retain from the Exodus Recovery an amount not to exceed the total 
amount of any non-contingent obligations owing from Exodus to 
Lessee in connection with the Exodus Sublease as of the date Lessee 
receives the Exodus Recovery, which obligations have not been 
satisfied by the amounts retained by Lessee pursuant to clauses 
(ii), (iii) and (iv), above, 
(vi) sixth, provided that the Exodus Recovery has not 
been exhausted by the operation of subparagraphs (i) through (v), 
above,
(A) if the Lease has terminated prior to the date 
Lessee receives the Exodus Recovery, and such termination occurred 
prior to the scheduled Expiration Date (i.e., May 31, 2004) as a 
result of Lessee's default under the Lease, then, if Lessee has 
paid to Lessor any amounts owing to Lessor as a result of such 
default, Lessee may retain from the Exodus Recovery an amount not 
to exceed the total amount paid by Lessee to Lessor as a result of 
such default, and Lessee shall pay the remainder of the Exodus 
Recovery, if any, to Lessor within three (3) business days after 
receipt thereof, as additional rent under this Lease, in addition 
to Base Rent and Additional Rent previously received by Lessor; 
provided that any amounts paid to Lessor pursuant to this clause 
(A) shall first be credited against any amounts owing from Lessee 
to Lessor, or 
(B) if the Lease has terminated prior to the date 
Lessee receives the Exodus Recovery under any circumstances other 
than as describe in clause (A), above, Lessee shall pay the 
remainder of the Exodus Recovery, if any, to Lessor within 
three (3) business days after receipt thereof, as additional rent 
under this Lease, in addition to Base Rent and Additional Rent 
previously received by Lessor; provided that any amounts paid to 
Lessor pursuant to this clause (B) shall first be credited against 
any amounts owing from Lessee to Lessor, or 
(C) if the Lease has not terminated prior to the 
date Lessee receives the Exodus Recovery, Lessee shall deposit the 
remainder of the Exodus Recovery, if any, within three (3) business 
days after receipt thereof, into a deposit account opened jointly 
in the name of Lessee and Lessor, at a bank located in California, 
mutually agreeable to Lessee and Lessor (the "Exodus Recovery 
Account"), for disbursement pursuant to Paragraph 2(c), below.  All 
interest earned on the funds deposited in the Exodus Recovery 
Account shall belong to Lessee and shall be disbursed to Lessee as 
and when paid by the depository.  
As used in this Paragraph 2(b) and in Paragraph 2(c), below, the 
term "Additional Rent" means all regular recurring monetary 
obligations payable by Lessee under the Lease other than Base Rent, 
for items such as Real Property Taxes, insurance, utilities and 
other items paid by Lessee a part of the "triple net" arrangement 
under the Lease; "Additional Rent" shall not, however, include 
items such as obligations under indemnity provisions or other non-
recurring items.  As used in this Paragraph 2(b) and in 
Paragraph 2(c), below, the term "Allocated Rent" shall mean:  
(1) for any period of time during which Lessee, itself, does not 
occupy any portion of the Premises, and during which ACC occupies 
the ACC Sublease Premises, an amount equal to eighty-nine percent 
(89%) of the total amount of Base Rent and Additional Rent payable 
by Lessee under the Lease for the relevant period of time, or 
(2) for any period of time during which Lessee, itself, does not 
occupy any portion of the Premises, and during which ACC does not 
occupy the ACC Sublease Premises, an amount equal to the total 
amount of Base Rent and Additional Rent payable by Lessee under the 
Lease for the relevant period of time, or (3) for any period of 
time during which Lessee, itself, occupies any portion of the 
Premises, and during which ACC occupies the ACC Sublease Premises, 
an amount equal to the total amount of Base Rent and Additional 
Rent payable by Lessee under the Lease for the relevant period of 
time which is applicable to that portion (only) of the Premises 
which neither Lessee, itself, nor ACC occupies, determined by 
apportioning the Base Rent and Additional Rent on an equal per-
square-foot basis over the Premises, or (4) for any period of time 
during which Lessee, itself, occupies any portion of the Premises, 
and during which ACC does not occupy the ACC Sublease Premises, an 
amount equal to the total amount of Base Rent and Additional Rent  
payable by Lessee under the Lease for the relevant period of time 
which is applicable to that portion (only) of the Premises which 
Lessee, itself, does not occupy, determined by apportioning the 
Base Rent and Additional Rent on an equal per-square-foot basis 
over the Premises.  
(c) On the first day of each month, Lessee and Lessor shall 
arrange for disbursement of funds from the Exodus Recovery Account 
in an amount which will reimburse Lessee for the following amounts 
actually paid by Lessee to Lessor with respect to the immediately 
preceding month:
(i) for any portion of the immediately preceding month 
for which no sublessee (other than ACC under the Existing ACC 
Sublease, if the Existing ACC Sublease is in effect) is paying 
sublease rent to Lessee, an amount not to exceed the amount of 
Allocated Rent for such portion of the month payable by Lessee 
under the Lease; and 
(ii) if Lessee subsequently subleases the Premises or 
any portion thereof to one or more sublessees (other than ACC under 
the Existing ACC Sublease), then, only with respect to any portion 
of the immediately preceding month during which the total sublease 
rent payable by the sublessee(s) (other than ACC under the Existing 
ACC Sublease, if the Existing ACC Sublease is in effect) to Lessee 
is less than the total amount of Allocated Rent payable by Lessee 
under the Lease for the same period of time, an amount not to 
exceed: (A) the total amount of Allocated Rent payable by Lessee 
under the Lease for said period of time, minus (B) the total amount 
of sublease rent received by Lessee from sublessee(s) (other than 
ACC under the Existing ACC Sublease, if the Existing ACC Sublease 
is in effect) for the same period of time.  
If, upon termination of the Lease, any funds remain on deposit in 
the Exodus Recovery Account, after payment of all sums Lessee is 
entitled to receive pursuant to Paragraph 2(b), above, and this 
Paragraph 2(c) through the termination of the Lease, Lessee and 
Lessor shall arrange for disbursement of all remaining funds on 
deposit in the Exodus Recovery Account to Lessor, within three (3) 
business days after termination of the Lease, as additional rent 
under the Lease, in addition to Base Rent and Additional Rent 
previously received by Lessor; provided that any amounts paid to 
Lessor pursuant to this sentence shall first be credited against 
any amounts owing from Lessee to Lessor.  
(d) Notwithstanding the provisions of Paragraphs 2(b) and 
2(c), above, if Lessee subsequently subleases the Premises or any 
portion thereof to one or more sublessees, Lessor reserves the 
right to adjust the Base Rent payable under the Lease in accordance 
with the provisions of Paragraph 12.2(h) thereof.  
3. Termination of Options to Extend.  All options for Lessee to 
extend the term of the Lease beyond May 31, 2004, are hereby 
terminated, and shall be of no further force or effect.  
4. Permitted Use.  Paragraph 1.8 of the Original Lease is 
modified to add data center processing and other lawful related 
uses as additional permitted uses.  
5. Modification of Paragraph 6.2; Consent to Diesel Fuel 
Tank(s).  In the fourth and fifth lines of Paragraph 6.2(a) the 
words: ", or (iii) a basis for liability . common law theory" are 
hereby deleted.  Pursuant to Paragraph 6.2(a) of the Original 
Lease, Lessor hereby consents to the installation by Exodus of one 
or more above-ground diesel fuel tanks at the Premises, provided 
that such installation shall be in compliance with all Applicable 
Law, and Exodus shall obtain Lessor's prior approval of the precise 
location thereof, and of the protective enclosures or encasements 
thereof, which approval shall not be unreasonably withheld or 
delayed.  
6. Modification of Paragraph 6.3.  In the fourth line of 
Paragraph 6.3, following the word "consultants" and preceding the 
comma which follows the word "consultants" the following shall be 
added:  "as the same pertain to interpretation of the foregoing".  
7. Modification of Paragraph 6.4.  In the second line of 
Paragraph 6.4, following the word "times" and preceding the comma 
which follows the word "times" the following shall be added:  "in 
accordance with Paragraph 26 of the Second Amendment to this 
Lease".  In the seventh line of Paragraph 6.4, the words "or be 
imminent" (which follow the words "to exist") are deleted.  In 
the seventh and eighth lines of Paragraph 6.4, the words "as the 
result of any such existing or imminent violation or contamination" 
are deleted.  In the eighth and ninth lines of Paragraph 6.4, the 
words "or Lessor's Lender, as the case may be, for the costs and 
expenses of such inspections." are deleted and replaced with the 
following:  "for the reasonable cost of such inspections, so long 
as such inspection is reasonably related to the violation or 
contamination."  
8. Modification of Paragraph 7.1.  The last sentence of 
Paragraph 7.1 is hereby deleted and replaced with the following:  
"Lessee shall, during the term of this Lease, keep the exterior 
appearance of the Building in good and tenantable 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."  
9. Modification of Paragraph 7.3.  In the first line of 
Paragraph 7.3(a), the word "carpeting," is deleted and replaced 
with "floor and".  In the third line of Paragraph 7.3(a), the 
words "in, on or about" are deleted and replaced with "in or 
on".  In the fourth and fifth lines of Paragraph 7.3(a), the words 
"on the Premises from that which are provided by Lessor under the 
terms of this Lease" are hereby deleted.  In the sixth and seventh 
lines of Paragraph 7.3(a), the words "as defined in 
Paragraph 7.4(a)" are deleted and replaced with "pursuant to 
Paragraph 7.4(a) or that Exodus is permitted to remove pursuant to 
Paragraph 10 of the Second Amendment to this Lease".  In the eighth 
line of Paragraph 7.3(a), the words "(excluding the roof)" are 
hereby deleted.   In the ninth line of Paragraph 7.3(a), the words 
"the roof or" are hereby deleted.  In the tenth line of 
Paragraph 7.3(a), the word "$25,000." is hereby deleted and 
replaced with "$100,000 in any one year."  The following sentences 
are added to the end of Paragraph 7.3(a) of the Lease:  "In 
addition, Lessee may install satellite dishes, not to exceed two 
(2) feet in diameter, on the roof of the Building only, without 
Lessor's consent, but upon notice to Lessor, provided that such 
satellite dishes are installed behind a roof screen, are not 
visible from the street, and are installed in compliance with 
Applicable Law.  If Lessee wishes to use other satellite dishes 
and/or install satellite dishes in any other manner or location, 
such installation shall be in compliance with Applicable Law, and 
shall not be made without Lessor's prior written approval of such 
installation, which approval shall not be unreasonably withheld or 
delayed."  In the seventh line of Paragraph 7.3(b), following the 
word "therefor" and preceding the period which follows the word 
"therefor" the following shall be added:  "whether or not such 
Alterations or Utility Installations require Lessor's consent".  In 
the ninth line of Paragraph 7.3(b), the words "under Paragraph 36 
hereof" are deleted.  Lessor hereby consents to Exodus making 
and/or installing upon commencement of the term of the Exodus 
Sublease, the Alterations, Utility Installations and Trade Fixtures 
shown on the plans and specifications set forth on Exhibit A to 
this Amendment.  In addition, Lessor shall not unreasonably 
withhold or delay the granting of its consent to future 
Alterations, Utility Installations or Trade Fixtures which are 
consistent with the Alterations, Utility Installations or Trade 
Fixtures shown on the plans and specifications set forth on 
Exhibit A to this Amendment.  Lessor hereby consents to the 
installation of separate meters for monitoring utilities for the 
ACC Sublease Premises and/or the portion of the Premises to be 
subleased by Exodus.  Lessor shall not unreasonably withhold or 
delay the granting of its consent to the installation by Exodus of 
security fencing which will in part enclose the Building, provided 
that such installation shall be in compliance with Applicable Law, 
and Lessee shall obtain Lessor's prior written approval of the 
precise location, height and type thereof.  Lessee agrees that 
reasonable considerations in determining such approval shall 
include, but not be limited to, whether such security fencing 
unreasonably interferes with the use or occupancy (including 
parking, ingress and egress) of 0000 Xxxxx Xxxxxx or its 
marketability to prospective tenants or subtenants.  
10. Modification of Paragraph 7.4.  In the second line of 
Paragraph 7.4(c), following the word "thereof" and preceding the 
word "clean" the following is added:  "(except for those which 
Lessee is permitted to remove pursuant to Paragraph 10 of the 
Second Amendment to this Lease or required to remove pursuant to 
subparagraph 7.4(b) above) broom".  In the third through the fifth 
lines of Paragraph 7.4(c) the words "or by Lessee performing . 
include the Utility Installations." are deleted.  In the sixth line 
of Paragraph 7.4(c), following the word "and" and preceding the 
word "Alterations" the following is added:  "Lessee Owned".  
Notwithstanding any provision of the Lease to the contrary, so long 
as Exodus remains in possession of the Premises following the 
termination of the Lease, pursuant to a direct lease between Lessor 
and Exodus (the "Exodus Direct Lease"), Lessee shall have no 
obligations to remove any Lessee Owned Alterations or Utility 
Installations or to restore the Premises upon the termination of 
the Lease, and thereafter Lessor shall look solely to Exodus with 
respect to any damage caused to the Premises by Exodus, whether 
during the term of the Exodus Sublease or during the term of the 
Exodus Direct Lease.  Notwithstanding any provisions of 
Paragraph 7.4(a) to the contrary, Lessor acknowledges that the 
following items installed at the Premises by Exodus shall at all 
times during the term of this Lease be and remain the Property of 
Exodus, and Exodus shall have the right to remove the same upon the 
expiration of the term of the Lease, subject to Lessee's 
obligations under Paragraph 7.4(c): 
(a) Raised Flooring, Racking, Cage materials, cabinets 
and patch panels.
(b) UPS Battery Systems including electrical switch 
gear.
(c) FM200 fire suppression canisters, piping and 
nozzles.
(d) VESDA or smoke sensor stations in ceiling or floor 
area.
(e) Inside or outside security cameras, access card 
reader stations, VCR, multiplexer, monitors and 
computers.
(f) Partition and conference room furniture systems and 
freestanding, cabinets, storage units.
(g) Telephone and voice mail system with desk stations 
and receptionist, computers, servers, printers, 
phone sets.
(h) Fiber Muxes or other Telco equipment installed in 
MPOE rooms.
(i) Emergency distribution board and telephone 
backboard with connectors.
(j) Maintenance bypass electronic and manual switch 
gear.
(k) Kitchen appliances like microwaves, refrigerators 
and vending machines.
(l) Console monitors, screen projection and screens in 
command center.
(m) Bulletproof/resistant glass, provided that removal 
of the same shall be conditioned upon replacement 
of the openings with other glazing suitable in 
Lessor's reasonable judgment.
(n) Satellite dishes or other communications equipment, 
provided that removal of the same from the roof 
shall be conditioned upon Lessee's or Exodus' 
repair of all roof penetrations so that the 
integrity of the roof is not compromised in any 
manner, as determined by Lessor in its reasonable 
judgment.  
(o) Customer and vendor equipment and related materials 
of the type listed above in this Paragraph 10.
(p) Exodus, Exodus Customer and Exodus Vendor personal 
property which is not attached to the Premises.
(q) Any Trade Fixtures similar or related to the 
foregoing items that were installed by or for 
Exodus pursuant to the terms of the Lease.
Notwithstanding anything in the Lease to the contrary, under no 
circumstances shall Talus Corporation be obligated to restore the 
Premises with respect to, or to remove, any Alterations, Utility 
Installations or other improvements to be installed by Exodus 
pursuant to the plans and specifications described in Exhibit A 
other than removal of the items listed in subparagraphs (a) through 
(q) above (excluding any raised flooring), and any restoration 
related to such removal.  Without limiting the generality of the 
foregoing, Talus Corporation shall have no obligation or right to 
remove the following Alterations, Utility Installations or other 
improvements to be installed by Exodus pursuant to the plans and 
specifications described in Exhibit A:
(r) Permanent and temporary generator systems including 
enclosures and fuel tanks with the associated 
electronic and manual switch gear.
(s) Independent, stand-alone air-conditioning units or 
any other components of the HVAC system at the 
Premises.  
(t) Electrical distribution equipment consisting of an 
automatic transfer switch, parallel switch and 
bypass unit, parallel UPS Units and several power 
distribution units installed inside the Building by 
Lessee, inward from the most inward point(s) of 
connection to all transformers, switches, meters 
and other electrical distribution equipment 
installed by the public utility providing power to 
the Building, or any electrical distribution 
equipment installed by the City of Santa Xxxxx 
Power and Electric Company to add two new 3000 AMP 
services to the Building, including two 
transformers placed on the exterior of the Building 
(one for each 3000 AMP service), and one or more 
power switches and metering boxes inside the 
Building.  
(u) The mezzanine floor.
(v) Any raised flooring.  
(w) Security fencing.
11. Modification of Paragraph 8.1.  Notwithstanding the 
provisions of Paragraph 8.1, Lessor, and not Lessee shall pay any 
increase in the premiums for the property insurance covering the 
Premises carried by Lessor pursuant to Paragraph 8.3 to the extent 
such increase results from any acts or omissions occurring on, or 
the use or occupancy of, any building(s) owned by Lessor which are 
adjacent to the Building, and which are not occupied by Lessee, 
either as a direct tenant of Lessor, or as a subtenant.  
12. Insuring Party.  The first sentence of Paragraph 2 of 
Exhibit {A} of the Original Lease is hereby deleted.  Lessor shall 
be the "Insuring Party" under the Lease.  
13. Deletion of Paragraph 8.2(b).  Paragraph 8.2(b) of the Lease 
is hereby deleted in its entirety.  
14. Modification of Paragraph 8.3.  Notwithstanding the 
provisions of Paragraph 8.3(a), the deductible for earthquake 
insurance (if applicable) may exceed $5,000, but shall not exceed 
the greater of $100,000 or 20% of the replacement cost of the 
building at the Premises, as determined by the insurer issuing the 
earthquake insurance policy.  
15. Modification of Paragraph 8.4.  Paragraph 8.4 is hereby 
deleted in its entirety and replaced with the following:  "8.4  
Lessee's Property Insurance.  Lessee shall obtain and maintain 
insurance coverage on all of Lessee's personal property, Trade 
Fixtures, and Lessee Owned Alterations and Utility Installations.  
Such insurance shall be full replacement cost coverage with a 
deductible of not to exceed $5,000 per occurrence.  The proceeds of 
any such insurance shall be used by Lessee for the replacement of 
personal property, Trade Fixtures and Lessee Owned Alterations and 
Utility Installations, except in the case of a casualty occurring 
during the final year of the term of this Lease.  Lessee shall 
provide Lessor with written evidence that such insurance is in 
force.  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."  
16. Modification of Paragraph 8.5.  In the fourth line of 
Paragraph 8.5, the words "If Lessee is the Insuring Party," are 
deleted.  The following sentence is added to Paragraph 8.5, 
immediately preceding the final sentence thereof:  "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."  In the next to 
the last line of Paragraph 8.5, the words "the Insuring Party" are 
deleted both places where they appear, and in the first such place, 
they are replaced with the words "either Party", and in the second 
such place they are replaced with the words "it".  
17. Additional Matter Pertaining to Insurance.  During the term 
of the Exodus Sublease, any insurance required to be provided by 
Lessee under the terms of the Lease may be provided by either Talus 
Corporation or Exodus, and Lessor shall not require Talus 
Corporation and Exodus to carry duplicative insurance, provided 
that all insurance required under the terms of the Lease shall be 
maintained by one or the other of them in accordance with the 
requirements of the Lease.  
18. Modification of Paragraph 9.2.  The following is added to 
the end of the last sentence of Paragraph 9.2:  "; provided, 
however, that if Lessor actually receives proceeds sufficient to 
cover the fully amount of the loss, excluding any deductible, this 
Paragraph 9.2 shall govern."  
19. Modification of Paragraph 9.5.  Notwithstanding the 
provisions of Paragraph 9.5, in the event Exodus confirms in 
writing to Talus Corporation and Lessor within twenty (20) days 
after the occurrence of any damage which would entitle Lessor to 
terminate the Lease pursuant to Paragraph 9.5, that Exodus shall 
not terminate either the Exodus Sublease or the direct lease 
between Exodus and Lessor which commences immediately following the 
termination of this Lease, on account of such damage, then Lessor 
shall have no right to terminate the Lease pursuant to 
Paragraph 9.5.  
20. Modification of Paragraph 9.6.  The last sentence of 
Paragraph 9.6(b) is deleted and replaced with the following:  
"`Commence' as used in this Paragraph shall mean the beginning of 
actual work on the Premises."  If Lessor shall be obligated to 
repair or restore the Premises pursuant to any provision of 
Article 9, and it is possible, at additional cost, to commence such 
repair or restoration earlier than ninety (90) days after such 
obligation shall accrue and/or to accelerate the work so that the 
same shall be completed prior to the deadline for Lessor to 
complete the same pursuant to the applicable provision of this 
Article 9, then upon Lessee's written request, and subject to the 
conditions set forth below, Lessor shall use its best efforts to 
commence such repair or restoration as soon as is possible, subject 
to availability of labor and materials; provided that (1) prior to 
incurring any additional costs to commence such repair or 
restoration earlier than Lessor is obligated to do so or to 
accelerate the work, Lessee shall have agreed, in writing, to pay 
all such additional costs, and shall have deposited with Lessor, 
funds equal to the amount reasonably estimated by Lessor as the 
total amount of such additional costs to be incurred (provided that 
the amount of such deposit shall not limit Lessee's liability to 
pay such additional costs, and Lessor shall refund to Lessee upon 
completion of the repair and restoration, the amount of such 
deposit, if any, in excess of the additional costs incurred); and 
(2) in no event will Lessor be obligated to commence any repair or 
restoration prior to obtaining all necessary governmental permits 
and approvals therefor.  
21. Modification of Paragraph 9.7.  Notwithstanding any 
provision of Paragraph 9.7, Lessor shall not be permitted to 
exercise the termination option under clause (ii) of Paragraph 9.7, 
(1) if Lessor is subject to an order of a governmental agency with 
jurisdiction over the Hazardous Substance Condition requiring 
Lessor to remediate the same, unless such remediation cannot 
practicably be accomplished with Lessee remaining in possession of 
the Premises, or (2) unless in Lessor's reasonable judgment, 
continued occupancy of the Premises by Lessee without remediation 
of the Hazardous Substance Condition poses a risk of potential 
liability to Lessor.  Furthermore, and notwithstanding any 
provision of Paragraph 9.7, Lessor shall be under no duty to 
remediate any Hazardous Substance Condition except to the extent 
Lessor is subject to an order of a governmental agency with 
jurisdiction over the Hazardous Substance Condition requiring 
Lessor to remediate the same.  To the extent Lessor is subject to 
an order of a governmental agency with jurisdiction over the 
Hazardous Substance Condition requiring Lessor to remediate the 
same, Lessor shall diligently proceed with such remediation, in 
accordance with any remedial action plan approved by the 
appropriate governmental agency(ies).  In the event that in the 
opinion of the environmental consultant hired by Lessor to oversee 
the remediation, the remediation cannot practicably be completed 
without Lessee vacating the Premises for a period which will exceed 
six (6) months, Lessee shall have the option to terminate this 
Lease by giving notice to Lessor within thirty (30) days after 
Lessee is notified by Lessor that the remediation cannot 
practicably be completed without Lessee vacating the Premises for a 
period which will exceed six (6) months (which notification shall 
include notice of the date Lessor requires Lessee to vacate the 
Premises for such remediation, which date shall not be earlier than 
six(6) months after the date of such notification, except to the 
extent it is reasonably necessary for Lessor to commence such 
remediation on an earlier date in order to comply with any order of 
a governmental agency requiring Lessor to remediate the same, 
including any remedial action plan approved by the appropriate 
governmental agency(ies)), such termination to be effective upon 
the date set forth in Lessor's notice that Lessor requires Lessee 
to vacate the Premises.  
22. Modification of Paragraph 10.1.  In the first line of 
Paragraph 10.1(b), the words "In order to assure payment . Real 
Property Taxes," are deleted and replaced with the following:  "In 
the event Lessee incurs a late charge on any Rent payment two (2) 
times during any twelve (12) month period,".  Lessee may contest 
the amount of Real Property Taxes assessed against the Premises, at 
its sole cost and expense, including, but not limited to, any 
penalties or fees associated with an unsuccessful contest.  In the 
event Lessee elects to contest the amount of Real Property Taxes, 
Lessee must pay the contested Real Property Taxes under protest, 
and apply for a refund, or provide such security as Lessor may 
require to prevent such taxes from becoming a delinquent lien upon 
the Premises.  Any refund of Real Property Taxes paid by Lessee 
with respect to the term of this Lease shall belong to Lessee, 
whether received as a result of a contest by Lessee or otherwise, 
and regardless of when received.  Lessee shall have no right to any 
refund of Property Taxes applicable to any period of time other 
than the term of this Lease, even if such refund is received during 
the term of this Lease.  
23. Modification of Paragraph 10.2.  On the fifth line of 
Paragraph 10.2, the words "other income therefrom" are deleted and 
replaced with "gross revenues therefrom (but not any tax on 
Lessor's net income from all sources)".  
24. Modification of Paragraph 10.3.  On the second line of 
Paragraph 10.3, following the word "be", and prior to the word 
"determined", the word "reasonably" shall be inserted.  
25. Modification of Article 12 With Respect to Subletting or 
Assignment by Exodus.  Notwithstanding any provision of Article 12 
of the Lease, (i) in the event of any change in the control of 
Exodus, such change in control shall not constitute an assignment 
of the Lease or the Exodus Sublease so long as Exodus is a publicly 
traded company immediately following such change in control, and 
(ii) the granting of a security interest in the Exodus Sublease by 
Exodus in connection with a senior secured credit facility provided 
by Xxxxxxx, Xxxxx & Co. ("GS"), shall not constitute an assignment 
of the Lease or the Exodus Sublease, and shall not require Lessor's 
consent under the Lease; provided that GS shall not be entitled to 
foreclose such security interest or otherwise take any possessory 
interest in the Premises or any portion thereof, unless GS assumes 
all of Exodus' obligations under the Exodus Sublease and the Exodus 
Direct Lease, and cures all then uncured defaults (if any) under 
the Exodus Sublease and the Exodus Direct Lease.  Any other 
assignment of, or subletting under, the Exodus Sublease shall 
require Lessor's prior written consent, in accordance with the 
provisions of Article 12 of the Lease, provided that Lessor agrees 
that it shall not unreasonably withhold or delay its consent to any 
proposed assignment of the Exodus Sublease by Exodus or any 
proposed subletting thereunder by Exodus.  In the event Talus 
Corporation receives any consideration from Exodus in connection 
with any assignment of, or subletting under, the Exodus Sublease, 
in excess of the rent and other consideration payable by Exodus to 
Talus Corporation under the Exodus Sublease in the absence of such 
assignment or subletting, Talus Corporation shall pay to Lessor, 
the entire amount of such excess consideration, excluding the Talus 
Amounts (as defined below) which shall be retained by Talus 
Corporation, as additional rent under the Lease, as and when 
received by Talus Corporation, in lieu of any adjustment of the 
rent payable under the Lease pursuant to Paragraph 12.2(h) on 
account of such assignment of, or subletting under, the Exodus 
Sublease.  As used in this Paragraph 25, the term "Talus Amounts" 
shall mean any amounts which Talus Corporation collects from 
Exodus, which amounts are expressly designated between Talus 
Corporation and Exodus as reimbursement of reasonable out-of pocket 
expenses incurred by Talus Corporation in connection with any 
assignment or subletting (or proposed assignment or subletting) by 
Exodus under the Exodus Sublease, including, but not limited to, 
attorneys' and consultants' fees and expenses.  Notwithstanding the 
foregoing, in the event that the Exodus Sublease provides that any 
amounts to be paid to Talus Corporation in connection with any 
assignment or subletting by Exodus are to be determined based on 
"market rent," "fair market rent," "prevailing market rent," or 
other similar concept, (a) Talus Corporation shall not agree with 
Exodus as to the determination of the same without obtaining 
Lessor's prior written consent, which consent may be granted or 
withheld in Lessor's sole and absolute discretion, (b) if an 
appraisal procedure is used to determine "market rent," "fair 
market rent," "prevailing market rent," or other similar concept, 
Talus Corporation shall obtain Lessor's prior written approval of 
any appraiser to be appointed by it, which approval may be withheld 
or granted in Lessor's sole and absolute discretion, (c) Talus 
Corporation agrees to notify Lessor of the initiation of any 
appraisal procedure by Talus Corporation or Exodus within three (3) 
business day after such initiation by Talus Corporation or after 
Talus Corporation receives notice of such initiation by Exodus, 
whichever is applicable, and (d) Lessor may, if it elects to do so, 
participate in all negotiations and appraisal procedures between 
Talus Corporation and Exodus with regard to the determination of 
"market rent," "fair market rent," "prevailing market rent," or 
other similar concept.  
26. Modification of Paragraph 32.  In the first line of 
Paragraph 32, following the words "Lessor's agents" and preceding 
the words "shall have the right", the words "and any Lender and 
its agents" shall be inserted.  In the second line of Paragraph 32, 
following the words "or lessees," and preceding the words "and 
making such", the words "inspecting the Premises," shall be 
inserted.  Lessor acknowledges that Exodus intends to operate a 
secure internet data center facility at the Premises.  Accordingly, 
except in the case of an emergency, Lessor, its agents, any Lender 
or its agents shall give Exodus twenty-four (24) hours' advance 
notice prior to entering the Premises, and Exodus shall have the 
right to require that a representative of Exodus accompany any 
parties entering the Premises.  In the case of an emergency, Lessor 
or its agents shall make such effort as is deemed appropriate by 
Lessor or its agents under the circumstances to contact an on-site 
representative of Exodus, if one is present at the Premises, prior 
to entering the Premises; provided, however, that if an on-site 
representative cannot be located after such effort is made, or if 
immediate entry to the Premises without attempting to locate an on-
site representative of Exodus is deemed appropriate by Lessor or 
its agents due to the nature of the emergency, Lessor or its agents 
may enter the Premises unaccompanied by a representative of Exodus.  
27. Modification of Paragraph 34.  Paragraph 34 is deleted in 
its entirety and replaced with the following:  "34.  Signs.  Except 
for ordinary `For Sublease' signs, Lessee shall not place any sign 
upon the Premises without Lessor's prior written consent, which 
consent shall not be unreasonably withheld or delayed.  All signs 
must comply with all Applicable Law."  
28. Modification of Paragraph 41.  The following words are added 
to the end of the last sentence of Paragraph 41:  ", except those 
resulting from Lessor's willful misconduct or gross negligence."  
29. Parking.  
(a) Subject to the rules and regulations promulgated from 
time to time by Lessor, Lessee shall be entitled to use 50.3% of 
the parking spaces for the 0000/0000 Xxxxx Xxxxxx complex for use 
by its agents, servants, employees and invitees (individually and 
collectively referred to as "Lessee's Invitees").  If Lessor in 
its sole discretion agrees in writing to permit Lessee to use any 
parking spaces or areas which could be used for parking spaces for 
any other purpose (e.g., temporary storage of materials, satellite 
dish installation, etc.), Lessee's then current number of parking 
spaces will automatically be reduced by the number of spaces 
utilized for such purpose plus any spaces which cannot be 
reasonably used for normal parking as a result thereof.  Lessee 
also agrees that under no circumstances shall Lessee's Invitees in 
any manner interfere with occupancy and/or access to the property 
known as 0000 Xxxxx Xxxxxx, including, without limitation, 
interference with the ingress or egress to the building, parking 
lot or shipping and receiving areas.  Lessee agrees that Lessor may 
re-stripe the existing parking lots so as to reconfigure the same, 
so long as such re-striping or reconfiguration does not reduce the 
number of parking spaces that Lessee is otherwise entitled to use 
under the Lease.  Subject to the prior written approval of Lessor, 
which approval shall not be unreasonably withheld or delayed, 
Lessee may re-stripe the existing parking lots so as to reconfigure 
the same, so long as such re-striping or reconfiguration does not 
reduce the number of total parking spaces for the 0000/0000 Xxxxx 
Xxxxxx complex or unreasonably interfere with the use or occupancy 
of 0000 Xxxxx Xxxxxx or its marketability to prospective tenants 
and subtenants.  
(b) Provided that Lessee shall have obtained Lessor's 
approval of such restriping as required under this Paragraph 29, 
then notwithstanding anything contained in the Lease, Lessee shall 
not have any obligation to change the striping or configuration of 
the parking lots back to the original configuration at the 
termination of the Lease.  
30. Consent to Assignment and Subletting Required.  Execution of 
this Second Amendment does not constitute Lessor's consent to Talus 
Corporation's subletting of the Premises to Exodus; such consent 
shall be indicated only by Lessor's specific written consent on a 
copy of the proposed Exodus Sublease which has been fully executed 
by both Talus Corporation and Exodus.  Except as provided in 
Paragraph 25 hereof, nothing in this Second Amendment shall 
constitute Lessor's consent to any future assignment or subletting 
by Talus Corporation or Exodus, should it become a sublessee of the 
Premises, which consent shall be granted only in accordance with 
the provisions of Paragraph 12 of the Lease.  
31. Reservation of Rights.  By executing this Amendment, Lessor 
is not waiving any rights with respect to any transaction (other 
than the Exodus Sublease, upon execution of Lessor's consent 
thereto) which occurred during the term of the Lease, and which 
under terms of Paragraph 12 of the Lease constitutes an assignment 
or subletting by Talus Corporation, or otherwise requires Lessor's 
consent pursuant to Paragraph 11, including, but not limited to, 
any change in control of Talus Corporation, and to which Lessor (or 
its predecessor-in-interest) has not previously granted its 
consent.  By executing this Amendment, Talus Corporation is not 
waiving any rights to contend that no transaction occurred during 
the term of the Lease without Lessor's (or its predecessor-in-
interest's) consent pursuant to Paragraph 12 of the Lease, which 
under terms of Paragraph 12 of the Lease constitutes an assignment 
or subletting by Talus Corporation, or otherwise requires Lessor's 
consent (or otherwise required Lessor's predecessor-in-interest's 
consent) pursuant to Paragraph 12, including, but not limited to 
any change in control of Talus Corporation.  Talus Corporation also 
reserves all of its rights under the Original Lease, including all 
rights in connection with defending any such claim(s) or 
contention(s) by Lessor.  Notwithstanding anything contained in 
this Amendment, Lessor agrees that it shall not seek to modify the 
provisions of Paragraph 2(a) for any period of time prior to the 
Exodus Termination Date; provided that the foregoing shall not 
preclude Lessor from receiving any amounts Lessor is entitled to 
receive pursuant to Paragraph 25 of this Amendment.  
32. Return of Security Deposit.  Provided that Exodus remains in 
possession of the Premises following the termination of the Lease 
pursuant to the Exodus Direct Lease, Lessor shall return the 
Security Deposit, less any deductions Lessor is entitled to make 
therefrom, to Lessee, within thirty (30) days after the termination 
of the Lease.  
33. Lessee's Right to Extend Term Under Limited Circumstances.  
If the Exodus Sublease is terminated as a result of Exodus' 
default, and the Exodus Termination Date occurs after April 1, 
2004, and provided that the Lease has not otherwise terminated, 
then Lessee shall have the right to extend the term of the Lease to 
a date which is not later than sixty (60) days after the Exodus 
Termination Date, by giving notice of such extension to Lessor 
within five (5) business days after the Exodus Termination Date; 
provided that the Monthly Base Rent payable during the term of such 
extension shall be $115,797.00, prorated for any partial month.  
34. Payment of Processing Fee.  Within five (5) business days 
after the execution by Lessor of this Amendment and of Lessor's 
consent to the Exodus Sublease, Lessee shall pay to Lessor the sum 
of Seven Thousand Eight Hundred Seventy-Five Dollars ($7,875.00), 
as payment in full of all amounts owing by Lessee to Lessor under 
Paragraph 12.2(e) of the Lease, as consideration for Lessor's 
considering and processing of its consent to the Exodus Sublease.  
35. Counterparts; Facsimile Signatures.  This Amendment may be 
signed in counterparts, and delivered by facsimile, and such 
facsimile counterparts shall be valid and binding on Lessor and 
Lessee (subject to Paragraph 38, below) with the same effect as if 
original signatures had been exchanged.  
36. Ratification.  The Original Lease, as modified hereby, is 
hereby ratified and confirmed in all respects.
37. Successors and Assigns.  This Amendment shall bind and inure 
to the benefit of Lessor and Lessee and their respective legal 
representatives and successors and assigns.
38. Effectiveness of This Amendment.  Notwithstanding any 
provision of this Amendment to the contrary, (1) this Amendment 
shall not be come effective unless and until Talus Corporation and 
Exodus shall have both fully executed and delivered the Exodus 
Sublease, and Lessor shall have given its specific written consent 
thereto on a copy thereof; and (2) in the event that termination of 
the Exodus Sublease does not occur concurrently with the 
termination of the Lease, then from and after the date of 
termination of the Exodus Sublease, Paragraphs 3 through 9, 
inclusive, 11, 15 through 28, inclusive, and 29(a) of this 
Amendment shall become null and void, but said provisions shall 
continue to govern with respect to the period of time during which 
the Exodus Sublease was in effect.  
IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment 
as of the date first above written.
Lessee:
TALUS CORPORATION,
a California corporation,
formerly known as Scientific Custom 
Metal Products International, Inc.


By:     
Print Name:     
Title:  

Lessor:
G&I XXXXX LLC,
a Delaware limited liability company
By:     G&I Investment Xxxxx LLC,
a Delaware limited liability 
company,
its managing member
By:     G&I Investment Xxxxx Corp.,
a Delaware corporation,
its managing member
By:     
Name:   
Title:          


                             CONSENT OF GUARANTOR
WHEREAS, ELECTRONIC MANUFACTURING SYSTEMS, INC., a Delaware corporation 
("EMS"), did execute that certain Lease Guaranty, dated as of 
November 20, 1997 (the "Lease Guaranty") whereby EMS did guaranty 
Lessee's obligations under the Original Lease (as defined in the 
foregoing Second Amendment to Lease);
NOW, THEREFORE, EMS hereby consents to the terms and conditions of 
the foregoing Second Amendment to Lease, and hereby ratifies and 
confirms that the Lease Guaranty, remains in full force and effect 
as a valid and binding obligation of EMS, with respect to Lessee's 
obligations under the Original Lease as modified by the foregoing 
Second Amendment to Lease (whether such obligations are stated as 
being obligations of "Lessee" or obligations of "Talus 
Corporation").
Dated:  January 29, 1999

ELECTRONIC MANUFACTURING SYSTEMS, INC.,
a Delaware corporation


By:     
Print Name:     
Title:  



             [LOGO] AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION 

            STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE--NET
               (Do not use this form for Multi-Tenant Property)

1.      BASIC PROVISIONS ("BASIC PROVISIONS"). 

1.1  PARTIES: This Lease ("LEASE"), dated for reference purposes only, 
March 1, 1996, is made by and between MOPAR, LLC ("LESSOR") and 
Scientific Custom Metal Products International, Inc. ("LESSEE"), 
(collectively the "PARTIES," or individually a "PARTY").

1.2  PREMISES: That certain real property, including all improvements 
therein or to be provided by Lessor under the terms of this Lease, 
commonly known by the street address of 0000 Xxxxx Xxxxxx, Santa Xxxxx, 
located in the County of Santa Xxxxx, State of California, and generally 
described as (describe briefly the nature of the property) Industrial 
Building, approximately 95,700 square feet; APN 000-00-000 (parcel #2) 
("PREMISES"). (See Paragraph 2 for further provisions.)

1.3  TERM: 19 years and 0 months ("ORIGINAL TERM") commencing March 1, 
1997 ("COMMENCEMENT DATE") and ending February 28, 2016 ("EXPIRATION 
DATE"). (See Paragraph 3 for further provisions.)

1.4  EARLY POSSESSION: N/A ("EARLY POSSESSION DATE"). (See Paragraphs 
3.2 and 3.3 for further provisions.)

1.5  BASE RENT: $40,000 per month ("BASE RENT"), payable on the 1st 
day of each month commencing March 1, 1997, and thereafter according to 
the rent schedule as set forth on Exhibit (A) to this agreement. See 
Paragraph 4 for further provisions.)

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

1.6  BASE RENT PAID UPON EXECUTION: $40,000 as Base Rent for the 
period March 1, 1997 through March 31, 1997, and thereafter as set forth 
in Exhibit (A) to this agreement.

1.7  SECURITY DEPOSIT: $ 10,000 ("SECURITY DEPOSIT"). (See Paragraph 5 
for further provisions.)

1.8  PERMITTED USE: Light manufacturing, Office, and R&D. (See 
Paragraph 6 for further provisions.)

1.9  INSURING PARTY. Lessor is the "INSURING PARTY" unless otherwise 
stated herein. (See Paragraph 8 for further provisions.)

1.10 REAL ESTATE BROKERS. The following real estate broker(s) 
(collectively, the "BROKERS") and brokerage relationships exist in this 
transaction and are consented to by the Parties (check applicable boxes):

None represents [ ] Lessor exclusively ("LESSOR'S BROKER"); [ ] both 
Lessor and Lessee, and None represents [ ] Lessee exclusively ("LESSEE'S 
BROKER"); [ ] both Lessee and Lessor. (See Paragraph 15 for further 
provisions.)

1.11 GUARANTOR. The obligations of the Lessee under this Lease are to 
be guaranteed by Scientific Custom Metal Products International, Inc. 
("GUARANTOR"). (See Paragraph 37 for further provisions.)

1.12 ADDENDA. Attached hereto is an Addendum or Addenda consisting of 
Paragraphs __ through __ and Exhibits A and the Guarantee Agreement all 
of which constitute a part of this Lease.

2.      PREMISES. 

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

2.2  CONDITION. Lessor shall deliver the Premises to Lessee clean and 
free of debris on the Commencement Date and warrants to Lessee that the 
existing plumbing, fire sprinkler system, lighting, air conditioning 
heating, and loading doors, if any, in the Premises, other than those 
constructed by Lessee, shall be in good operating condition on the 
Commencement Date. If a non-compliance with said warranty exists as of 
the Commencement Date, Lessor shall, 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 Lessee does not give Lessor written notice 
of a non-compliance with this warranty within thirty (30) days after the 
Commencement Date, correction of that non-compliance shall be the 
obligation of Lessee at Lessee's sole cost and expense.

2.3  COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING CODE. Lessor 
warrants to Lessee that the improvements on the Premises comply with all 
applicable covenants or restrictions of record and applicable building 
codes, regulations and ordinances in effect on the Commencement 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. If the Premises do not 
comply with said warranty, Lessor shall, 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 the same at Lessor's expense. If Lessee does not give Lessor 
written notice of a non-compliance with this warranty within six (6) 
months following the Commencement Date, correction of that non-compliance 
shall be the obligation of Lessee at Lessee's sole cost and expense.

2.4  ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that it 
has been advised by the Brokers to satisfy itself with respect to the 
condition of the Premises, (including but not limited to the electrical 
and fire sprinkler systems, security, environmental aspects, compliance 
with Applicable Law, as defined in Paragraph 6.3) and the present and 
future suitability of the Premises for Lessee's intended use, (b) that 
Lessee has made such investigation as it deems necessary with reference 
to such matters and assumes all responsibility therefor as the same 
relate to Lessee's occupancy of the Premises and/or the terms of this 
Lease, and (c) that neither Lessor, nor any of Lessor's agents, has made 
any oral or written representations or warranties with respect to the 
said matters other than as set forth in this Lease.

2.5  LESSEE AS PRIOR OWNER/OCCUPANT. The warranties made by Lessor in 
this Paragraph 2 shall be of no force or effect if immediately prior to 
the date set forth in Paragraph 1.1 Lessee was the owner or occupant of 
the Premises. In such event, Lessee shall, at Lessee's sole cost and 
expense, correct any non-compliance of the Premises with said warranties.

3.      TERM. 

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

3.2  EARLY POSSESSION. If Lessee totally or partially occupies the 
Premises prior to the Commencement Date, the obligation to pay Base Rent 
shall be abated for the period of such early possession. All other terms 
of this Lease, however, (including but not limited to the obligations to 
pay Real Property Taxes and insurance premiums and to maintain the 
Premises) shall be in effect during such period. Any such early 
possession shall not affect nor advance the Expiration Date of the 
Original Term.

3.3  DELAY IN POSSESSION. If for any reason Lessor cannot deliver 
possession of the Premises to Lessee as agreed herein by the Early 
Possession Date, if one is specified in Paragraph 1,4, or, if no Early 
Possession Date is specified, by the Commencement Date, Lessor shall not 
be subject to any liability therefor, nor shall such failure affect the 
validity of this Lease, or the obligations of Lessee hereunder, or extend 
the term hereof, but in such case, Lessee shall not, except as otherwise 
provided herein, be obligated to pay rent or perform any other obligation 
of Lessee under the terms of this Lease until Lessee Date delivers 
possession of the Premises to Lessee. If possession of the Premises is 
not delivered to Lessee within sixty (60) days after the Commencement 
Date, Lessee may, at its option, by notice in writing to Lessor within 
ten (10) days thereafter, cancel this Lease, in which event the Parties 
shall be discharged from all obligations hereunder; provided, however, 
that if such written notice by Lessee is not received by Lessor within 
said ten (10) day period, Lessee's right to cancel the Lease shall 
terminate and be of no further force or effect. Except as may be 
otherwise provided, and regardless of when the term actually commences, 
if possession is not tendered to Lessee when required by this Lease and 
Lessee does not terminate this Lease, as aforesaid, the period free of 
obligation to pay Base Rent, if any, that Lessee would otherwise have 
enjoyed shall run from the date of delivery of possession and continue 
for a period equal to what Lessee would otherwise have enjoyed under the 
terms hereof, but minus any days of delay caused by the acts, changes or 
omissions of Lessee.

4.      RENT. 

4.1  BASE RENT.  Lessee shall cause payment of Base Rent and other 
rent or charges, as the same may be adjusted from time to time, to be 
received by Lessor in lawful money of the United States, without offset 
or deduction, on or before the day on which it is due under the terms of 
this Lease. Base Rent and all other rent and charges for any period 
during the term hereof which is for less than one (1) full calendar month 
shall be prorated based upon the actual number of days of the calendar 
month involved. Payment of Base Rent and other charges shall be made to 
Lessor at its address stated herein or to such other persons or at such 
other addresses as Lessor may from time to time designate in writing to 
Lessee.

5.   SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution 
hereof the Security Deposit set forth in Paragraph 1.7 as security for 
Lessee's faithful performance of Lessee's obligations under this Lease. 
If Lessee fails to pay Base Rent or other rent or charges due hereunder, 
or otherwise Defaults under this Lease (as defined in Paragraph 13.1), 
Lessor may use, apply or retain all or any portion of said Security 
Deposit for the payment of any amount due Lessor or to reimburse or 
compensate Lessor for any liability, cost, expense, loss or damage 
(including attorneys' fees) which Lessor may suffer or incur by reason 
hereof. If Lessor uses or applies all or any portion of said Security 
Deposit, Lessee shall within ten (10) days after written request therefor 
deposit moneys with Lessor sufficient to restore said Security Deposit to 
the full amount required by this Lease. Any time the Base Rent increases 
during the term of this Lease, Lessee shall, upon written request from 
Lessor, deposit additional moneys with Lessor sufficient to maintain the 
same ratio between the Security Deposit and the Base Rent as those 
amounts are specified in the Basic Provisions. Lessor shall not be 
required to keep all or any part of the Security Deposit separate from 
its general accounts. Lessor shall, at the expiration or earlier 
termination of the term hereof and after Lessee has vacated the Premises, 
return to Lessee (or, at Lessor's option, to the last assignee, if any, 
of Lessee's interest herein), that portion of the Security Deposit not 
used or applied by Lessor. Unless otherwise expressly agreed in writing 
by Lessor, no part of the Security Deposit shall be considered to be held 
in trust, to bear interest or other increment for its use, or to be 
prepayment for any moneys to be paid by Lessee under this Lease.

6.      USE. 

6.1  USE.  Lessee shall use and occupy the Premises only for the 
purposes set forth in Paragraph 1.8, or any other use which is comparable 
thereto, and for no other purpose. Lessee shall not use or permit the use 
of the Premises in a manner that creates waste or a nuisance, or that 
disturbs owners and/or occupants of, or causes damage to, neighboring 
premises or properties. Lessor hereby agrees to not unreasonably withhold 
or delay its consent to any written request by Lessee, Lessees assignees 
or subtenants, and by prospective assignees and subtenants of the Lessee, 
its assignees and subtenants, for a modification of said permitted 
purpose for which the premises may be used or occupied, so long as the 
same will not impair the structural integrity of the improvements on the 
Premises, the mechanical or electrical systems therein, is not 
significantly more burdensome to the Premises and the improvements 
thereon, and is otherwise permissible pursuant to this Paragraph 6. If 
Lessor elects to withhold such consent, Lessor shall within five (5) 
business days give a written notification of same, which notice shall 
include an explanation of Lessor's reasonable objections to the change in 
use.

6.2  HAZARDOUS SUBSTANCES. 

(a)  REPORTABLE USES REQUIRE CONSENT. The term "Hazardous Substance" 
as used in this Lease shall mean any product, substance, chemical, 
material or waste whose presence, nature, quantity and/or intensity of 
existence, use, manufacture, disposal, transportation, spill, release or 
effect, either by itself or in combination with other materials expected 
to be on the Premises, is either: (i) potentially injurious to the public 
health, safety or welfare, the environment or the Premises, (ii) 
regulated or monitored by any governmental authority, or (iii) a basis 
for liability of Lessor to any governmental agency or third party under 
any applicable statute or common law theory. Hazardous Substance shall 
include, but not be limited to, hydrocarbons, petroleum, gasoline, crude 
oil or any products, by-products or fractions thereof. Lessee shall not 
engage in any activity in, on or about the Premises which constitutes a 
Reportable Use (as hereinafter defined) of Hazardous Substances without 
the express prior written consent of Lessor and compliance in a timely 
manner (at Lessee's sole cost and expense) with all Applicable Law (as 
defined in Paragraph 6.3). "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. Reportable Use shall also include 
Lessee's being responsible for the presence in, on or about the Premises 
of a Hazardous Substance with respect to which any Applicable Law 
requires that a notice be given to persons entering or occupying the 
Premises or neighboring properties. Notwithstanding the foregoing, Lessee 
may, without Lessor's prior consent, but in compliance with all 
Applicable Law, use any ordinary and customary materials reasonably 
required to be used by Lessee in the normal course of Lessee's business 
permitted on the Premises, so long as such use is not a Reportable Use 
and does not expose the Premises or neighboring properties to any 
meaningful risk of contamination or damage or expose Lessor to any 
liability therefor. In addition, Lessor may (but without any obligation 
to do so) condition its consent to the use or presence of any Hazardous 
Substance, activity or storage tank by Lessee upon Lessee's giving Lessor 
such additional assurances as Lessor, in its reasonable discretion, deems 
necessary to protect itself, the public, the Premises and the environment 
against damage, contamination or injury and/or liability therefrom or 
therefor, including, but not limited to, the installation (and removal on 
or before Lease expiration or earlier termination) or reasonably 
necessary protective modifications to the Premises (such as concrete 
encasements) and/or the deposit of an additional Security Deposit under 
Paragraph 6 hereof.

(b)  DUTY TO INFORM LESSOR.  If Lessee knows, or has reasonable 
cause to believe, that a Hazardous Substance, or a condition involving or 
resulting from same, 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. Lessee shall also 
immediately give Lessor a copy of any statement, report, notice, 
registration, application, permit, business plan, license, claim, action 
or proceeding given to, or received from, any governmental authority or 
private party, or persons entering or occupying the Premises, concerning 
the presence, spill, release, discharge of, or exposure to, any Hazardous 
Substance or contamination in, on, or about the Premises, including but 
not limited to all such documents as may be involving in any Reportable 
Uses Involving the Premises.

(c)  INDEMNIFICATION.  Lessee shall indemnify, protect, defend and 
hold Lessor, its agents, employees, lenders and ground lessor, if any, 
and the Premises, harmless from and against any and all loss of rents 
and/or damages, liabilities, judgments, costs, claims, liens, expenses, 
penalties, permits and attorney's and consultant's fees arising out of or 
involving any Hazardous Substance or storage tank brought onto the 
Premises by or for Lessee or under Lessee's control, Lessee's obligations 
under this Paragraph 6 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 (including 
consultant's and attorney's fees and testing), removal, remediation, 
restoration and/or abatement thereof, or of any contamination therein 
involved, and shall survive the expiration or earlier 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 or storage tanks, unless 
specifically so agreed by Lessor in writing at the time of such 
agreement.

6.3  LESSEE'S COMPLIANCE WITH LAW.  Except as otherwise provided in 
this Lease, Lessee, shall, at Lessee's sole cost and expense, fully, 
diligently and in a timely manner, comply with all "Applicable Law," 
which term is used in this Lease to include all laws, rules, regulations, 
ordinances, directives, covenants, easements and restrictions of record, 
permits, the requirements of any applicable fire insurance underwriter or 
rating bureau, and the recommendations of Lessor's engineers and/or 
consultants, relating in any manner to the Premises (including but not 
limited to matters pertaining to (i) industrial hygiene, (ii) 
environmental conditions on, in, under or about the Premises, including 
soil and groundwater conditions, and (ii) the use, generation, 
manufacture, production, installation, maintenance, removal, 
transportation, storage, spill or release of any Hazardous Substance or 
storage tank), now in effect or which may hereafter come into effect, and 
whether or not reflecting a change in policy from any previously existing 
policy. Lessee shall, within five (5) days after receipt of Lessor's 
written request, provide Lessor with copies of all documents and 
information, including, but not limited to, permits, registrations, 
manifests, applications, reports and certificates, evidencing Lessee's 
compliance with any Applicable Law 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 failure by Lessee 
or the Premises to comply with any Applicable Law.

6.4  INSPECTION; COMPLIANCE.  Lessor and Lessor's Lender(s) (as 
defined in Paragraph 8.3(a)) shall have the right to enter the Premises 
at any time, in the case of an emergency, and otherwise at reasonable 
times, for the purpose of inspecting the condition of the Premises and 
for verifying compliance by Lessee with this Lease and all Applicable 
Laws (as defined in Paragraph 6.3), and to employ experts and/or 
consultants in connection therewith and/or to advise Lessor with respect 
to Lessee's activities, including but not limited to the installation, 
operation, use, monitoring, maintenance, or removal of any Hazardous 
Substance or storage tank on or from the Premises. The costs and expenses 
of any such inspections shall be paid by the party requesting same, 
unless a Default or Breach of this Lease, violation of Applicable Law, or 
a contamination, caused or materially contributed to by Lessee is found 
to exist or be imminent, or unless the inspection is requested or ordered 
by a governmental authority as the result of any such existing or 
imminent violation or contamination, in any such case, Lessee shall upon 
request reimburse Lessor or Lessor's Lender, as the case may be, for the 
costs and expenses of such inspections.

7.   MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND 
     ALTERATIONS.

7.1  LESSEE'S OBLIGATIONS. 

(a)  Subject to the provisions of Paragraph 2.2 (Lessor's warranty 
as to condition), 2.3 (Lessor's warranty as to compliance with covenants, 
etc), 7.2 (Lessor's obligations to repair), -- (damage and destruction), 
and 14 (condemnation), Lessee shall, at Lessee's sole cost and expense 
and at all times, keep the Premises and every part thereof in good order, 
condition and repair, structural and non-structural (whether or not such 
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, 
without limiting the generality of the foregoing, all equipment or 
facilities serving the Premises, such as plumbing, heating, air 
conditioning, ventilating, electrical, lighting facilities, boilers, 
fired or unfired pressure vessels, fire sprinkler and/or standpipe and 
hose or other automatic fire extinguishing system, including fire alarm 
and/or smoke detection systems and equipment, fire hydrants, 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, about, or adjacent to the Premises. 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 
or required, for the cleanup of any contamination of, and for the 
maintenance, security and/or monitoring of the Premises, the elements 
surrounding same, or neighboring properties, that was caused or 
materially contributed to by Lessee, or pertaining to or involving any 
Hazardous Substance and/or storage tank brought onto the Premises by or 
for Lessee or under its control, 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. 
If Lessee occupies the Premises for seven (7) years or more, Lessor may 
require Lessee to repaint the exterior of the buildings on the Premises 
as reasonably required, but not more frequently than once every seven (7) 
years.

(b)  Lessee shall, at Lessee's sole cost and expense, procure and 
maintain contracts, with copies to Lessor, in customary form and 
substance for, and with contractors specializing and experienced in, the 
inspection, maintenance and service of the following equipment and 
improvements, if any, located on the Premises: (i) heating, air 
conditioning and ventilation equipment, (ii) boiler, fired or unfired 
pressure vessels, (iii) fire sprinkler and/or standpipe and hose or other 
automatic fire extinguishing systems, including fire alarm and/or smoke 
detection, (iv) landscaping and irrigation systems, (v) roof covering and 
drain maintenance and (vi) asphalt and parking lot maintenance.

7.2  LESSOR'S OBLIGATIONS. Except for the warranties and agreements of 
Lessor contained in Paragraphs 2.2 (relating to condition of the 
Premises), 2.3 (relating to compliance with covenants, restrictions and 
building code), 9 (relating to destruction of the Premises) and 14 
(relating to condemnation of the Premises), it is intended by the Parties 
hereto that Lessor have no obligation, in any manner whatsoever, to 
repair and maintain the Premises, the improvements located thereon, or 
the equipment therein, whether structural or nonstructural, all of which 
obligations are intended to be that of the Lessee under Paragraph 7.1 
hereof. 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. Lessee and Lessor expressly waive the benefit of 
any statute now or hereafter in effect to the extent it is inconsistent 
with the terms of this Lease with respect to, or which affords Lessee the 
right to make repairs at the expense of Lessor or to terminate this Lease 
by reason of any needed repairs.

7.3  UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS. 

(a)  DEFINITIONS; CONSENT REQUIRED. The term "Utility Installations" 
is used in this Lease to refer to all carpeting, window coverings, air 
lines, power panels, electrical distribution, security, fire protection 
systems, communication systems, lighting fixtures, heating, ventilating, 
and air conditioning equipment, plumbing, and fencing in, on or about the 
Premises. The term "TRADE FIXTURES" shall mean Lessee's machinery and 
equipment that can be removed without doing material damage to the 
Premises. The term "ALTERATIONS" shall mean any modification of the 
improvements on the Premises from that which are provided by Lessor under 
the terms of this Lease, 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 as defined 
in Paragraph 7.4(a). Lessee shall not make any Alterations or Utility 
Installations in, on, under or about 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), 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 during the term of this Lease as extended does not exceed 
$25.000.

(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 proposed detailed plans. All 
consents given by Lessor, whether by virtue of Paragraph 7.3(a) or by 
subsequent specific consent, shall be deemed conditioned upon; (i) 
Lessee's acquiring all applicable permits required by governmental 
authorities, (ii) the furnishing of copies of such permits together with 
a copy of the plans and specifications for the Alteration or Utility 
Installation to Lessor prior to commencement of the work thereon, and 
(iii) the compliance by Lessee with all conditions of said permits in a 
prompt and expeditious manner. Any Alterations or Utility Installations 
by Lessee during the term of this Lease shall be done in a good and 
workmanlike manner, with good and sufficient materials, and in compliance 
with all Applicable Law. Lessee shall promptly upon completion thereof 
furnish Lessor with as-built plans and specifications therefor. Lessor 
may (but without obligation to do so) condition its consent to any 
requested Alteration or Utility Installation that costs $10,000 or more 
upon Lessee's providing Lessor with a lien and completion bond in an 
amount equal to one and one-half times the estimated cost of such 
Alteration or Utility Installation and/or upon Lessee's posting an 
additional Security Deposit with Lessor under Paragraph 36 hereof.

(c)  INDEMNIFICATION. 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 mechanics' or materialmen's lien against the Premises or any 
interest therein. Lessee shall give Lessor not less than ten (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 in or on the Premises as provided by law. If Lessee shall, 
in good faith, 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 against the Lessor or the Premises. If Lessor shall require, 
Lessee shall furnish to Lessor a surety bond satisfactory to Lessor 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, as 
required by law for the holding of the Premises free from the effect of 
such lien or claim. In addition, Lessor may require Lessee to pay 
Lessor's attorney's fees and costs in participating in such action if 
Lessor shall decide it is to its best interest to do so.

7.4  OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION. 

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

(b)  REMOVAL. Unless otherwise agreed in writing, Lessor may require 
that any or all Lessee Owned Alterations or Utility Installations be 
removed by the expiration or earlier termination of this Lease, 
notwithstanding their installation may have been consented to by Lessor. 
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 of Lessor.

(c)  SURRENDER/RESTORATION. Lessee shall surrender the Premises by 
the end of the last day of the Lease term or any earlier termination 
date, with all of the improvements, parts and surfaces thereof clean and 
free of debris and in good operating order, condition and state of 
repair, ordinary wear and tear excepted. "Ordinary Wear and Tear" shall 
not include any damage or deterioration that would have been prevented by 
good maintenance practice or by Lessee performing all of its obligations 
under this Lease. Except as otherwise agreed or specified in writing by 
Lessor, the Premises, as surrendered, shall include the Utility 
Installations. The obligation of Lessee shall include the repair of any 
damage occasioned by the installation, maintenance or removal of Lessee's 
Trade Fixtures, furnishings, equipment, and Alterations and/or Utility 
Installations, 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 ground water contaminated by Lessee, all as may then be 
required by Applicable Law and/or good service practice. Lessee's Trade 
Fixtures shall remain the property of Lessee and shall be removed by 
Lessee subject to its obligation to repair and restore the Premises per 
this Lease.

8.      INSURANCE; INDEMNITY. 

8.1  PAYMENT FOR INSURANCE. Regardless of whether the Lessor or Lessee 
is the Insuring Party, Lessee shall pay for all insurance required under 
this Paragraph 8 except to the extent of the cost attributable to 
liability insurance carried by Lessor in excess of $1,000,000 per 
occurrence. 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 for any amount due.

8.2  LIABILITY INSURANCE. 

(a)  CARRIED BY LESSEE. Lessee shall obtain and keep in force during 
the term of this Lease a Commercial General Liability policy of insurance 
protecting Lessee and Lessor (as an additional insured) against claims 
for bodily injury, personal injury and property damage based upon, 
involving or arising out of the ownership, use, occupancy or maintenance 
of the Premises and all areas appurtenant thereto. Such insurance shall 
be on an occurrence basis providing single limit coverage in an amount 
not less than $1,000,000 per occurrence with an "Additional Insured-
Managers or Lessors of Premises" Endorsement and contain the "Amendment 
of the Pollution Exclusion" for damage caused by heat, smoke or fumes 
from a hostile fire. The policy shall not contain any intra-insured 
exclusions as between insured persons or organizations, but shall include 
coverage for liability assumed under this Lease as an "insured contract" 
for the performance of Lessee's indemnity obligations under this Lease. 
The limits of said insurance required by this Lease or as carried by 
Lessee shall not, however, limit the liability of Lessee nor relieve 
Lessee of any obligation hereunder. All insurance to be carried by Lessee 
shall be primary to and not contributory with any similar insurance 
carried by Lessor, whose insurance shall be considered excess insurance 
only.

(b)  CARRIED BY LESSOR. In the event Lessor is the Insuring Party, 
Lessor shall also maintain liability insurance described in Paragraph 
8.2(a), above, 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 during the term of this Lease a policy or policies in the 
name of Lessor, with loss payable to Lessor and to the holders of any 
mortgages, deeds of trust or ground leases on the Premises ("LENDER(S)"), 
insuring loss of 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 Lenders, but in 
no event more than the commercially reasonable and available insurable 
value thereof if, by reason of the unique nature or age of the 
improvements involved, such latter amount is less than full replacement 
cost. If Lessor is the Insuring Party, however, Lessee Owned Alterations 
and Utility Installations 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 any 
additional costs resulting from debris removal and reasonable amounts of 
coverage for the enforcement of any ordinance or law regulating the 
reconstruction or replacement of any undamaged sections of the Premises 
required to be demolished or removed by reason of the enforcement of any 
building, zoning, safety or land use laws as the result of a covered 
cause of loss. Said policy or policies shall also contain an agreed 
valuation provision in lieu of any coinsurance clause, waiver of 
subrogation, and inflation guard protection causing an increase in the 
annual property insurance coverage amount by a factor of not less than 
the adjusted U.S. Department of Labor Consumer Price Index for All Urban 
Consumers for the city nearest to where the Premises are located. If such 
insurance coverage has a deductible clause, the deductible amount shall 
not exceed $1,000 per occurrence, and Lessee shall be liable for such 
deductible amount in the event of an Insured Loss, as defined in 
Paragraph 9.1(c).

(b) RENTAL VALUE. The Insuring Party shall, in addition, obtain and 
keep in force during the term of this Lease a policy or policies in the 
name of Lessor, with loss payable to Lessor and Lender(s), insuring the 
loss of the full rental and other charges payable by Lessee to Lessor 
under this Lease for one (1) year (including all real estate taxes, 
insurance costs, and any scheduled rental increases). 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 rental revenues 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 rental income, 
property taxes, insurance premium costs and other expenses, if any, 
otherwise payable by Lessee, for the next twelve (12) month period. 
Lessee shall be liable for any deductible amount in the event of such 
loss.

(c) ADJACENT PREMISES. If the Premises are part of a larger 
building, or if the Premises are part of a group of buildings owned by 
Lessor which are adjacent to the Premises, the Lessee shall pay for any 
increase in the premiums for the property insurance of such building or 
buildings if said increase is caused by Lessee's acts, omissions, use or 
occupancy of the Premises.

(d) TENANT'S IMPROVEMENTS. If the Lessor is the Insuring Party, the 
Lessor shall not be required to insure Lessee Owned Alterations and 
Utility Installations unless the item in question has become the property 
of Lessor under the terms of this Lease. If Lessee is the Insuring Party, 
the policy carried by Lessee under this Paragraph 8.3 shall insure Lessee 
Owned Alterations and Utility Installations.

8.4  LESSEE'S PROPERTY INSURANCE. Subject to the requirements of 
Paragraph 8.5, Lessee at its cost shall either by separate policy or, at 
Lessor's option, by endorsement to a policy already carried, maintain 
insurance coverage on all of Lessee's personal property, Lessee Owned 
Alterations and Utility Installations in, on, or about the Premises 
similar in coverage to that carried by the Insuring Party under Paragraph 
8.3. Such insurance shall be full replacement cost coverage with a 
deductible of not to exceed $1,000 per occurrence. The proceeds from any 
such insurance shall be used by Lessee for the replacement of personal 
property or the restoration of Lessee Owned Alterations and Utility 
Installations. Lessee shall be the Insuring Party with respect to the 
insurance required by this Paragraph 8.4 and shall provide Lessor with 
written evidence that such insurance is in force.

8.5  INSURANCE POLICIES. Insurance required hereunder shall be in 
companies duly licensed 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, or such other rating as may be 
required by a Lender having a lien on the Premises, as set forth in the 
most current issue of "Best's Insurance Guide." Lessee shall not do or 
permit to be done anything which shall invalidate the insurance policies 
referred to in this Paragraph 8. If Lessee is the Insuring Party, Lessee 
shall cause to be delivered to Lessor certified copies of policies of 
such insurance or certificates evidencing the existence and amounts of 
such insurance with the insureds and loss payable clauses as required by 
this Lease. No such policy shall be cancellable or subject to 
modification except after thirty (30) days prior written notice to 
Lessor. Lessee shall at least thirty (30) days prior to the expiration of 
such policies, furnish Lessor with evidence of renewals or "Insurance 
binders" evidencing renewal thereof, or Lessor may order such insurance 
and charge the cost thereof to Lessee, which amount shall be payable by 
Lessee to Lessor upon demand. If the Insuring Party shall fail to procure 
and maintain the insurance required to be carried by the Insuring Party 
under this Paragraph 8, the other Party may, but shall not be required 
to, procure and maintain the same, but at Lessee's expense.

8.6  WAIVER OF SUBROGRATION. Without affecting any other rights or 
remedies, Lessee and Lessor ("WAIVING PARTY") each hereby release and 
relieve the other, and waive their entire right to recover damages 
(whether in contract or in tort) against the other, for loss of or damage 
to the Waiving Party's property arising out of or incident to the perils 
required to be insured against under Paragraph 8. The effect of such 
releases and waivers of the right to recover damages shall not be limited 
by the amount of insurance carried or required, or by any deductibles 
applicable thereto.

8.7  INDEMNITY. Except for Lessor's negligence and/or breach of 
express warranties, Lessee shall indemnify, protect, defend and hold 
harmless the Premises, Lessor and its agents, Lessor's master or ground 
lessor, partners and Lenders, from and against any and all claims, loss 
of rents and/or damages, costs, liens, judgments, penalties, permits, 
attorney's and consultant's fees, expenses and/or liabilities arising out 
of, involving, or in dealing with, the occupancy of the Premises by 
Lessee, the conduct of Lessee's business, any act, omission or neglect of 
Lessee, its agents, contractors, employees or invitees, and out of any 
Default or Breach by Lessee in the performance in a timely manner of any 
obligation on Lessee's part to be performed under this Lease. The 
foregoing shall include, but not be limited to, the defense or pursuit of 
any claim or any action or proceeding involved therein, and whether or 
not (in the case of claims made against Lessor) litigated and/or reduced 
to judgment, and whether well founded or not. In case any action or 
proceeding be brought against Lessor by reason of any of the foregoing 
matters, Lessee upon notice from Lessor shall 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 so indemnified.

8.8  EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable 
for injury or damage to the person or goods, wares, merchandise or other 
property of Lessee, 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, air conditioning 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, and regardless of whether the cause of such damage or 
injury or the means of repairing the same is accessible or not. Lessor 
shall not be liable for any damages arising from any act or neglect of 
any other tenant of Lessor. Notwithstanding Lessor'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, the repair cost of which damage or destruction is 
less than 50% of the then Replacement Cost of the Premises immediately 
prior to such damage or destruction, excluding from such calculation the 
value of the land and Lessee Owned Alterations and Utility Installations.

(b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to 
the Premises, other than Lessee Owned Alterations and Utility 
Installations the repair cost of which damage or destruction is 50% or 
more of the then Replacement Cost of the Premises immediately prior to 
such damage or destruction, excluding from such calculation the value of 
the land and Lessee Owned Alterations and Utility Installations.

(c) "INSURED LOSS" shall mean damage or destruction to improvements 
on the Premises, other than Lessee Owned Alterations and Utility 
Installations, 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 
building codes, ordinances or laws, 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 8.2(a), in, on, or 
under the Premises.

9.2  PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that 
is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair 
such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations 
and Utility Installations) as soon as reasonably possible and this Lease 
shall continue in full force and effect; provided, however, that Lessee 
shall, at Lessor's election, make the repair of any damage or destruction 
the total cost to repair of which is $10,000 or less, and, in such event, 
Lessor shall make the 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, the shortage in proceeds 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 Lessor does not 
receive such funds or assurance within said period, Lessor may 
nevertheless elect by written notice to Lessee within ten (10) days 
thereafter to 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. If in such case Lessor 
does not so elect, then this Lease shall terminate sixty (60) days 
following the occurrence of the damage or destruction. Unless otherwise 
agreed, Lessee shall in no event have any right to reimbursement from 
Lessor for [TEXT ILLEGIBLE] to repair any such damage or destruction. 
Premises Partial Damage due to flood or earthquake shall be subject to 
Paragraph 9.3 rather than Paragraph 9.2, 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 and this Lease shall continue in full force and effect, 
but subject to Lessor's rights under Paragraph 13), Lessor may at 
Lessor's option, 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) give written notice to Lessee within 
thirty (30) days after receipt by Lessor of knowledge of the occurrence 
of such damage of Lessor's desire to terminate this Lease as of the date 
sixty (60) days following the giving of such notice. In the event Lessor 
elects to give such notice of Lessor's intention to terminate this Lease, 
Lessee shall have the right within ten (10) days after the receipt of 
such notice to give written notice to Lessor of Lessee's commitment to 
pay for the repair of such damage totally at Lessee's expense and without 
reimbursement from Lessor. Lessee shall provide Lessor with the required 
funds or satisfactory assurance thereof within thirty (30) days following 
Lessee's said 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 and the required funds are available. If Lessee 
does not give such notice and provide the funds or assurance thereof 
within the times specified above, this Lease shall terminate as of the 
date specified in Lessor's notice of termination.

9.4  TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if 
a Premises Total Destruction occurs (including any destruction required 
by any authorized public authority), this Lease shall terminate sixty 
(60) days following the date of such Premises Total Destruction, whether 
or not the damage or destruction is an Insured Loss or was caused by a 
negligent or willful act of Lessee. In the event, however, that the 
damage or destruction was caused by Lessee, Lessor shall have the right 
to recover Lessor's damages from Lessee except as released and waived in 
Paragraph 8.6.

9.5  DAMAGE NEAR END OF TERM. If at any time during the last six (6) 
months of the term of this Lease there is damage for which the cost to 
repair exceeds one (1) month's Base Rent, whether or not an Insured Loss, 
Lessor may, at Lessor's option, terminate this Lease effective sixty (60) 
days following the date of occurrence of such damage by giving written 
notice to Lessee of Lessor's election to do so within thirty (30) days 
after the date of occurrence of such damage. Provided, however, 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, within 
twenty (20) days following the occurrence of the damage, or before the 
expiration of the time provided in such option for its exercise, 
whichever is earlier ("Exercise Period"), (i) exercising such option and 
(ii) providing Lessor with any shortage in insurance proceeds (or 
adequate assurance thereof) needed to make the repairs. If Lessee duly 
exercises such option during said Exercise Period and provides Lessor 
with funds (or adequate assurance thereof) to cover any shortage in 
insurance proceeds, Lessor shall, at Lessor's 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 said Exercise Period, then Lessor may at 
Lessor's option terminate this Lease as of the expiration of said sixty 
(60) day period following the occurrence of such damage by giving written 
notice to Lessee of Lessor's election to do so within ten (10) days after 
the expiration of the Exercise Period, notwithstanding any term or 
provision in the grant of option to the contrary.

9.6  ABATEMENT OF RENT; LESSEE'S REMEDIES. 

(a) In the event of damage described in Paragraph 9.2 (Partial 
Damage - Insured), whether or not Lessor or Lessee repairs or restores 
the Premises, the Base Rent, Real Property Taxes, insurance premiums, and 
other charges, if any, payable by Lessee hereunder for the period during 
which such damage, its repair or the restoration continues (not to exceed 
the period for which rental value insurance is required under Paragraph 
8.3(b)), shall be abated in proportion to the degree to which Lessee's 
use of the Premises is impaired. Except for abatement of Base Rent, Real 
Property Taxes, insurance premiums, and other charges, if any, as 
aforesaid, all other obligations of Lessee hereunder shall be performed 
by Lessee, and Lessee shall have no claim against Lessor for any damage 
suffered by reason of any such repair or restoration.

(b) If Lessor shall be obligated to repair or restore the Premises 
under the provisions of this Paragraph 9 and shall not commence, in a 
substantial and meaningful way, the repair or restoration of the Premises 
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 to Lessor and such Lenders and such repair or restoration is 
not commenced within thirty (30) days after receipt of such notice, this 
Lease shall terminate as of the date specified in said notice. If Lessor 
or a Lender commences the repair or restoration of the Premises within 
thirty (30) days after receipt of such notice, this Lease shall continue 
in full force and effect. "Commence" as used in this Paragraph 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  HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance 
Condition occurs, unless Lessee is legally responsible therefor (in which 
case Lessee shall make the investigation and remediation thereof required 
by Applicable Law and this Lease shall continue in full force and effect, 
but subject to Lessor's rights under 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 investigate and remediate 
such condition exceeds twelve (12) times the then monthly Base 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 giving of such 
notice. In the event Lessor elects to give such notice of Lessor's 
intention to terminate this Lease, Lessee shall have the right within ten 
(10) days after the receipt of such notice to give written notice to 
Lessor of Lessee's commitment to pay for the investigation and 
remediation of such Hazardous Substance Condition totally at Lessee's 
expense and without reimbursement from Lessor except to the extent of an 
amount equal to twelve (12) times the then monthly Base Rent or $100,000, 
whichever is greater. Lessee shall provide Lessor with the funds required 
of Lessee or satisfactory assurance thereof within thirty (30) days 
following Lessee's said commitment. In such event this Lease shall 
continue in full force and effect, and Lessor shall proceed to make such 
investigation and remediation as soon as reasonably possible and the 
required funds are available. If Lessee does not give such notice and 
provide the required funds or assurance thereof within the times 
specified above, this Lease shall terminate as of the date specified in 
Lessor's notice of termination. If a Hazardous Substance Condition occurs 
for which Lessee is not legally responsible, there shall be abatement of 
Lessee's obligations under this Lease to the same extent as provided in 
Paragraph 9.6(a) for a period of not to exceed twelve (12) months.

9.8  TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease 
pursuant to this 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 under the terms of this Lease.

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

10.     REAL PROPERTY TAXES. 

10.1 (a) PAYMENT OF TAXES. Lessee shall pay the Real Property Taxes, 
as defined in Paragraph 10.2, applicable to the Premises during the term 
of this Lease. Subject to Paragraph 10.1(b), all such payments shall be 
made at least ten (10) days prior to the delinquency date of the 
applicable installment. Lessee shall promptly furnish Lessor with 
satisfactory evidence that such taxes have been paid. If any such taxes 
to be paid by Lessee shall cover any period of time prior to or after the 
expiration or earlier termination of the term hereof, Lessee's share of 
such taxes shall be equitably prorated to cover only the period of time 
within the tax fiscal year this Lease is in effect, and Lessor shall 
reimburse Lessee for any overpayment after such proration. If Lessee 
shall fail to pay any Real Property Taxes required by this Lease to be 
paid by Lessee, Lessor shall have the right to pay the same, and Lessee 
shall reimburse Lessor therefor upon demand.

(b) ADVANCE PAYMENT. In order to insure payment when due and before 
delinquency of any or all Real Property Taxes, Lessor reserves the right, 
at Lessor's option, to estimate the current Real Property Taxes 
applicable to the Premises, and to require such current year's Real 
Property Taxes to 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 that equal monthly amount which, 
over the number of months remaining before the month in which the 
applicable tax installment would become delinquent (and without interest 
thereon), would provide a fund large enough to fully discharge before 
delinquency the estimated installment of taxes to be paid. When the 
actual amount of the applicable tax xxxx is known, the amount of such 
equal monthly advance payment shall be adjusted as required to provide 
the fund needed to pay the applicable taxes before delinquency. If the 
amounts paid to Lessor by Lessee under the provisions of this Paragraph 
are insufficient to discharge the obligations of Lessee to pay such Real 
Property Taxes as the same become due, Lessee shall pay to Lessor, upon 
Lessor's demand, such additional sums as are necessary to pay such 
obligations. All moneys paid to Lessor under this Paragraph may be 
intermingled with other moneys of Lessor and shall not bear interest. In 
the event of a Breach by Lessee in the performance of the obligations of 
Lessee under this Lease, then any balance of funds paid to Lessor under 
the provisions of this Paragraph may, subject to proration as provided in 
Paragraph 10.1(a), at the option of Lessor, be treated as an additional 
Security Deposit under Paragraph 5.

10.2 DEFINITION OF "REAL PROPERTY TAXES." As used herein, the term 
"Real Property Taxes" shall include any form of real estate tax or 
assessment, general, special, ordinary or extraordinary, and any license 
fee, commercial rental tax, improvement bond or bonds, levy or tax (other 
than inheritance, personal income or estate taxes) imposed upon the 
Premises by any authority having the direct or indirect power to tax, 
including any city, state or federal government, or any school, 
agricultural, sanitary, fire, street, drainage or other improvement 
district thereof, levied against any legal or equitable interest of 
Lessor in the Premises or in the real property of which the Premises are 
a part, Lessor's right to rent or other income therefrom, and/or Lessor's 
business of leasing the Premises. 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, or changes in applicable 
law taking effect, during the term of this Lease, including but not 
limited to a change in the ownership of the Premises or in the 
improvements thereon, the execution of this Lease, or any modification, 
amendment or transfer thereof, and whether or not contemplated by the 
Parties.

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 determined by Lessor from the respective 
valuations assigned in the assessor's work sheets or such other 
information as may be reasonably available. Lessor's reasonable 
determination thereof, in good faith, shall be conclusive.

10.4  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 contained in the Premises or elsewhere. When 
possible, Lessee shall cause its Trade Fixtures, furnishings, equipment 
and all other personal property to be assessed and billed separately from 
the real property of Lessor. If any of Lessee's said personal property 
shall be assessed with Lessor's real property, Lessee shall pay Lessor 
the taxes attributable to Lessee within ten (10) days after receipt of a 
written statement setting forth the taxes applicable to Lessee's property 
or, at Lessor's option, as provided in Paragraph 10.1(b).

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. If any such services are 
not separately metered to Lessee, Lessee shall pay a reasonable 
proportion, to be determined by Lessor, of all charges jointly metered 
with other premises.

12.     ASSIGNMENT AND SUBLETTING. 

12.1  LESSOR'S CONSENT REQUIRED. 

(a)   Lessee shall not voluntarily or by operation of law assign, 
transfer, mortgage or otherwise transfer or encumber (collectively, 
"ASSIGNMENT") or sublet all or any part of Lessee's interest in this 
Lease or in the Premises without Lessor's prior written consent given 
under and subject to the terms of Paragraph 36.

(b)   A change in the control of Lessee shall constitute an 
assignment requiring Lessor's consent. The transfer, on a cumulative 
basis, of twenty-five percent (25%) or more of the voting control of 
Lessee shall constitute a change in control for this purpose.

(c)   The involvement of Lessee or its assets in any transaction, or 
series of transactions (by way of merger, sale, acquisition, financing, 
refinancing, 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, as hereinafter defined, by an amount equal to or greater than 
twenty-five percent (25%) of such Net Worth of Lessee as it was 
represented to Lessor at the time of the execution by Lessor of this 
Lease or at the time of the most recent assignment to which Lessor has 
consented, or as it still exists immediately prior to said transaction or 
transactions constituting such reduction, at whichever time said Net 
Worth of Lessee was or is greater, shall be considered an assignment of 
this Lease by Lessee to which Lessor may reasonably withhold its consent. 
"NET WORTH OF LESSEE" for purposes of this Lease shall be the net worth 
of Lessee (excluding any guarantors) established under generally accepted 
accounting principles consistently applied.

(d)   An assignment or subletting of Lessee's interest in this Lease 
without Lessor's specific prior written 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 unconsented to assignment or subletting as 
a noncurable Breach, Lessor shall have the right to either: (i) terminate 
this Lease, or (ii) upon thirty (30) days written notice ("LESSOR'S 
NOTICE"), increase the monthly Base Rent to fair market rental value or 
one hundred ten percent (110%) of the Base Rent then in effect, whichever 
is greater. Pending determination of the new fair market rental value, if 
disputed by Lessee, Lessee shall pay the amount set forth in Lessor's 
Notice, with any overpayment credited against the next installment(s) of 
Base Rent coming due, and any underpayment for the period retroactively 
to the effective date of the adjustment being due and payable immediately 
upon the determination thereof. Further, in the event of such Breach and 
market value adjustment, (i) the purchase price of any option to purchase 
the Premises held by Lessee shall be subject to similar adjustment to the 
then fair market value (without the Lease being considered an encumbrance 
or any deduction for depreciation or obsolescence, and considering the 
Premises at its highest and best use and in good condition), or one 
hundred ten percent (110%) of the price previously in effect, whichever 
is greater, (ii) any index-oriented rental or price adjustment formulas 
contained in this Lease shall be adjusted to require that the base index 
be determined with reference to the index applicable to the time of such 
adjustment, and (iii) any fixed rental adjustments scheduled during the 
remainder of the Lease term shall be increased in the same ratio as the 
new market rental bears to the Base Rent in effect immediately prior to 
the market value adjustment.

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

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) alter the 
primary liability of Lessee for the payment of Base Rent and other sums 
due Lessor hereunder or for the performance of any other obligations to 
be performed by Lessee under this Lease.

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

(c)   The consent of Lessor to any assignment or subletting shall 
not constitute a consent to any subsequent assignment or subletting by 
Lessee or to any subsequent or successive assignment or subletting by the 
sublessee. However, Lessor may consent to subsequent sublettings and 
assignments of the sublease or any amendments or modifications thereto 
without notifying Lessee or anyone else liable on the Lease or sublease 
and without obtaining their consent, and such action shall not relieve 
such persons from liability under this Lease or sublease.

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

(e)   Each request for consent to an assignment or subletting shall 
be in writing, accompanied by information relevant to Lessor's 
determination as to the financial and operational responsibility and 
appropriateness of the proposed assignee or sublessee, including but not 
limited to the intended use and/or required modification of the Premises, 
if any, together with a non-refundable deposit of $1,000 or ten percent 
(10%) of the current monthly Base Rent, whichever is greater, as 
reasonable consideration for Lessor's considering and processing the 
request for consent. Lessee agrees to provide Lessor with such other or 
additional information and/or documentation as may be reasonably 
requested by Lessor.

(f)   Any assignee of, or sublessee under, this Lease shall, by 
reason of accepting such assignment or entering into such sublease, be 
deemed, for the benefit of Lessor, 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 in writing.

(g)   The occurrence of a transaction described in Paragraph 12.1(c) 
shall give Lessor the right (but not the obligation) to require that the 
Security Deposit be increased to an amount equal to six (6) times the 
then monthly Base Rent, and Lessor may make the actual receipt by Lessor 
of the amount required to establish such Security Deposit a condition to 
Lessor's consent to such transaction.

(h)   Lessor, as a condition to giving its consent to any assignment 
or subletting, may require that the amount and adjustment structure of 
the rent payable under this Lease be adjusted to what is then the market 
value and/or adjustment structure for property similar to the Premises as 
then constituted.

12.3  ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The 
following terms and conditions shall apply to any subletting by Lessee of 
all or any part of the Premises and shall be deemed included in all 
subleases under this Lease whether or not expressly incorporated therein:

(a)   Lessee hereby assigns and transfers to Lessor all of Lessee's 
interest in all rentals and income arising from any sublease of all or a 
portion of the Premises heretofore or hereafter made by Lessee, and 
Lessor may collect such rent and income and apply same toward Lessee's 
obligations under this Lease; provided, however, that until a Breach (as 
defined in Paragraph 13.1) shall occur in the performance of Lessee's 
obligations under this Lease, Lessee may, except as otherwise provided in 
this Lease, receive, collect and enjoy the rents accruing under such 
sublease. Lessor shall not, by reason of this or any other assignment of 
such sublease to Lessor, nor by reason of the collection of the rents 
from a sublessee, be deemed liable to the sublessee for any failure of 
Lessee to perform and comply with any of Lessee's obligations to such 
sublessee under such sublease. Lessee hereby irrevocably authorizes and 
directs any such sublessee, upon receipt of a written notice from Lessor 
stating that a Breach exists in the performance of Lessee's obligations 
under this Lease, to pay to Lessor the rents and other charges due and to 
become due under the sublease. Sublessee shall rely upon any such 
statement and request from Lessor and shall pay such rents and other 
charges to Lessor without any obligation or right to inquire as to 
whether such Breach exists and notwithstanding any notice from or claim 
from Lessee to the contrary. Lessee shall have no right or claim against 
said sublessee, or, until the Breach has been cured, against Lessor, for 
any such rents and other charges so paid by said sublessee to Lessor.

(b)   In the event of a Breach by Lessee in the performance of its 
obligations under this Lease, Lessor, at its option and without any 
obligation to do so, may require any sublessee to attorn to Lessor, in 
which event Lessor shall undertake the obligations of the sublessor under 
such sublease from the time of the exercise of said option to the 
expiration of such sublease; provided, however, Lessor shall not be 
liable for any prepaid rents or security deposit paid by such sublessee 
to such sublessor or for any other prior Defaults or Breaches of such 
sublessor under such sublease.

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

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

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

13.     DEFAULT; BREACH; REMEDIES. 

13.1  DEFAULT; BREACH. Lessor and Lessee agree that if an attorney is 
consulted by Lessor in connection with a Lessee Default or Breach (as 
hereinafter defined), $350.00 is a reasonable minimum sum per such 
occurrence for legal services and costs in the preparation and service of 
a notice of Default, and that Lessor may include the cost of such 
services and costs in said notice as rent due and payable to cure said 
Default. A "Default" is defined as a failure by the Lessee to observe, 
comply with or perform any of the terms, covenants, conditions or rules 
applicable to Lessee under this Lease. A "Breach" is defined as the 
occurrence of any one or more of the following Defaults, and, where a 
grace period for cure after notice is specified herein, the failure by 
Lessee to cure such Default prior to the expiration of the applicable 
grace period, shall entitle Lessor to pursue the remedies set forth in 
Paragraphs 13.2 and/or 13.3:

(a) The vacating of the Premises without the intention to reoccupy 
same, or the abandonment of the Premises.

(b) Except as expressly otherwise provided in this Lease, the 
failure by Lessee to make any payment of Base Rent or any other or 
monetary payment required to be made by Lessee hereunder, whether to 
Lessor or to a third party, as and when due, the failure by Lessee to 
provide Lessor with reasonable evidence of insurance or surety bond 
required under this Lease, or the failure of Lessee to fulfill any 
obligation under this Lease which endangers or threatens life or 
property, where such failure continues for a period of three (3) days 
following written notice thereof by or on behalf of Lessor to Lessee.

(c) Except as expressly otherwise provided in this Lease, the 
failure by Lessee to provide Lessor with reasonable written evidence (in 
duly executed original form, if applicable) of (i) compliance with 
Applicable Law per Paragraph 6.3, (ii) the inspection, maintenance and 
service contracts required under Paragraph 7.1(b), (iii) the recission of 
an unauthorized assignment or subletting per Paragraph 12.1(b), (iv) a 
Tenancy Statement per Paragraphs 16 or 37, (v) the subordination or non-
subordination of this Lease per Paragraph 30, (vi) the guaranty of the 
performance of Lessee's obligations under this Lease if required under 
Paragraphs 1.11 and 37, (vii) the execution of 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 by or on behalf of Lessor to Lessee.

(d) A Default by Lessee as to the terms, covenants, conditions or 
provisions of this Lease, or of the rules adopted under Paragraph 40 
hereof, that are to be observed, complied with or performed by Lessee, 
other than those described in subparagraphs (a), (b) or (c), above, where 
such Default continues for a period of thirty (30) days after written 
notice thereof by or on behalf of Lessor to Lessee; 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 of this Lease by Lessee 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 by 
lessee of any general arrangement or assignment for the benefit of 
creditors; (ii) Lessee's becoming a "debtor" as defined in 11 U.S.C. 
Section 101 or any successor statute thereto (unless, in the case of a 
petition filed against Lessee, the same is dismissed with 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 (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 by Lessor that any financial statement given to 
Lessor by Lessee or any Guarantor of Lessee's obligations hereunder was 
materially false.

(g) If the performance of Lessee's obligations under this Lease is 
guaranteed: (i) the death of a guarantor, (ii) the termination of a 
guarantor's liability with respect to this Lease other than in accordance 
with the terms of such guaranty, (iii) a guarantor's becoming insolvent 
or the subject of a bankruptcy filing, (iv) a guarantor's refusal to 
honor the guaranty, or (v) a guarantor's breach of its guaranty 
obligation on an anticipatory breach basis, and Lessee's failure, within 
sixty (60) days following written notice by or on behalf of Lessor to 
Lessee of any such event, to provide Lessor with written alternative 
assurance or security, which, when coupled with the then existing 
resources of Lessee, equals or exceeds the combined financial resources 
of Lessee and the guarantors that existed at the time of execution of 
this Lease.

13.2 REMEDIES. If Lessee fails to perform any affirmative duty or 
obligation of Lessee under this Lease, within ten (10) days after written 
notice to Lessee (or in case of an emergency, without notice), Lessor may 
at its option (but without obligation to do so), perform such duty or 
obligation on Lessee's behalf, including but not limited to the obtaining 
of reasonably required bonds, insurance policies, or governmental 
licenses, permits or approvals. The costs and expenses of any such 
performance by Lessor shall be due and payable by Lessee to Lessor upon 
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 under this Lease by Lessee to be 
made only by cashier's check. In the event of a Breach of this Lease by 
Lessee, as defined in Paragraph 13.1, with or without further notice or 
demand, and without limiting Lessor in the exercise of any right or 
remedy which Lessor may have by reason of such Breach, Lessor may:

(a) Terminate Lessee's right to possession of the Premises by any 
lawful means, in which case this Lease and the term hereof shall 
terminate and Lessee shall immediately surrender possession of the 
Premises to Lessor. In such event Lessor shall be entitled to recover 
from Lessee: (i) the worth at the time of the award of 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 the leasing commission paid by 
Lessor 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 prior 
sentence shall be computed by discounting such amount at the discount 
rate of the Federal Reserve Bank of San Francisco at the time of award 
plus one percent (1%). Efforts by Lessor to mitigate damages caused by 
Lessee's Default or Breach of this Lease shall not waive Lessor's right 
to recover damages under this Paragraph. If termination of this Lease is 
obtained through the provisional remedy of unlawful detainer, Lessor 
shall have the right to recover in such proceeding the unpaid rent and 
damages as are recoverable therein, or Lessor may reserve therein the 
right to recover all or any part thereof in a separate suit for such rent 
and/or damages. If a notice and grace period required under subparagraphs 
13.1(b), (c) or (d) was not previously given, a notice to pay rent or 
quit, or to perform or quit, as the case may be, given to Lessee under 
any statute authorizing the forfeiture of leases for unlawful detainer 
shall also constitute the applicable notice for grace period purposes 
required by subparagraphs 13.1(b), (c) or (d). In such case, the 
applicable grace period under subparagraphs 13.1(b), (c) or (d) and under 
the unlawful detainer statute shall run concurrently after the one such 
statutory notice, and the failure of Lessee to cure the Default within 
the greater of the two such grace periods shall constitute both an 
unlawful detainer and a Breach of this Lease entitling Lessor to the 
remedies provided for in this Lease and/or by said statute.

(b) Continue the Lease and Lessee's right to possession in effect 
(in California under California Civil Code Section 1951.4) after Lessee's 
Breach and abandonment and recover the rent as it becomes due, provided 
Lessee has the right to sublet or assign, subject only to reasonable 
limitations. See Paragraphs 12 and 36 for the limitations on assignment 
and subletting which limitations Lessee and Lessor agree are reasonable. 
Acts of maintenance or preservation, efforts to relet the Premises, or 
the appointment of a receiver to protect the Lessor's interest under the 
Lease, shall not constitute a termination of the Lessee's right to 
possession.

(c) Pursue any other remedy now or hereafter available to Lessor 
under the laws or judicial decisions of the state wherein the Premises 
are located.

(d) 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 IN EVENT OF BREACH. Any agreement by Lessor 
for free or abated rent or other charges applicable to the Premises, 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 
to be performed or observed by Lessee during the term hereof as the same 
may be extended. Upon the occurrence of a Breach of this Lease by Lessee, 
as defined in Paragraph 13.1, any such Inducement Provision shall 
automatically be deemed deleted from this Lease and of no further force 
or effect, and any rent, other charge, bonus, inducement or consideration 
theretofore abated, given or paid by Lessor under such an Inducement 
Provision shall be immediately due and payable by Lessee to Lessor, and 
recoverable by Lessor as additional rent due under this Lease, 
notwithstanding any subsequent cure of said Breach by Lessee. The 
acceptance by Lessor of rent or the cure of the Breach which initiated 
the operation of this Paragraph shall not be deemed a waiver by Lessor of 
the provisions of this Paragraph unless specifically so stated in writing 
by Lessor at the time of such acceptance.

13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by 
Lessee to Lessor of rent and other sums due hereunder 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 the terms of any ground lease, mortgage or 
trust deed covering the Premises. Accordingly, if any installment of rent 
or any other sum due from Lessee shall not be received by Lessor or 
Lessor's designee within five (5) days after such amount shall be due, 
then, without any requirement for notice to Lessee, Lessee shall pay to 
Lessor a late charge equal to six percent (6%) of 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 late 
payment by Lessee. 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 Lessor from exercising 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 Paragraph 4.1 or any 
other provision of this Lease to the contrary. Base Rent shall, at 
Lessor's option, become due and payable quarterly in advance.

13.5 BREACH BY LESSOR. 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 13.5, a reasonable time shall in no event be less than thirty 
(30) days after receipt by Lessor, and by the holders of any ground 
lease, mortgage or deed of trust covering the Premises 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 after such notice are reasonably 
required for its performance, then Lessor shall not be in breach of this 
Lease if performance is commenced within such thirty (30) day period and 
thereafter diligently pursued to completion.

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 (all of which are herein called "condemnation"), this Lease 
shall terminate as to the part so taken as of the date the condemning 
authority takes title or possession, whichever first occurs. If more than 
ten percent (10%) of the floor area of the Premises, or more than twenty-
five percent (25%) of the land area 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 the same proportion as the rentable floor area of the Premises 
taken bears to the total rentable floor area of the building located on 
the Premises. No reduction of Base Rent shall occur if the only portion 
of the Premises taken is land on which the there is no building. Any 
award for the taking of all or any part of the Premises under the power 
of eminent domain or any payment made under threat of the exercise of 
such power shall be the property of Lessor, whether such award shall be 
made as compensation for diminution in value of the leasehold or for the 
taking of the fee, or as severance damages; provided, however, that 
Lessee shall be entitled to any compensation separately awarded to Lessee 
for Lessee's relocation expenses and/or loss of Lessee's Trade Fixtures. 
In the event that this Lease is not terminated by reason of such 
condemnation, Lessor shall to the extent of its net severance damages 
received, over and above the legal and other expenses incurred by Lessor 
in the condemnation matter, repair any damage to the Premises caused by 
such condemnation, except to the extent that Lessee has been reimbursed 
therefor by the condemning authority. Lessee shall be responsible for the 
payment of any amount in excess of such net severance damages required to 
complete such repair.

15.     BROKER'S FEES. 

15.1 The Brokers named in Paragraph 1.10 are the procuring causes of 
this Lease. 15.2 Upon execution of this Lease by both Parties, Lessor 
shall pay to said Brokers jointly, or in such separate shares as they may 
mutually designate in writing, a fee as set forth in a separate written 
agreement between Lessor and said Brokers (or in the event there is no 
separate written agreement between Lessor and said Brokers, the sum of $ 
None) for brokerage services rendered by said Brokers to Lessor in this 
transaction. 15.3 Unless Lessor and Brokers have otherwise agreed in 
writing, Lessor further agrees that: (a) if Lessee exercises any Option 
(as defined in Paragraph 39.1) or any Option subsequently granted which 
is substantially similar to an Option granted to Lessee in this Lease, or 
(b) if Lessee acquires any rights to the Premises or other premises 
described in this Lease which are substantially similar to what Lessee 
would have acquired had an Option herein granted to Lessee been 
exercised, or (c) if Lessee remains in possession of the Premises, with 
the consent of Lessor, after the expiration of the term of this Lease 
after having failed to exercise an Option, or (d) if said Brokers are the 
procuring cause of any other lease or sale entered into between the 
Parties pertaining to the Premises and/or any adjacent property in which 
Lessor has an interest, or (e) if Base Rent is increased, whether by 
agreement or operation of an escalation clause herein, then as to any of 
said transactions, Lessor shall pay said Brokers a fee in accordance with 
the schedule of said Brokers in effect at the time of the execution of 
this Lease. 15.4 Any buyer of transferee of Lessor's interest in this 
Lease, whether such transfer is by agreement or by operation of law, 
shall be deemed to have assumed Lessor's obligation under this Paragraph 
15. Each Broker shall be a third party beneficiary of the provisions of 
this Paragraph 15 to the extent of its interest in any commission arising 
from this Lease and may enforce that right directly against Lessor and 
its successors. 15.5 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 named in Paragraph 1.10) in connection 
with the negotiation of this Lease and/or the consummation of the 
transaction contemplated hereby, and that no broker or other person, firm 
or entity other than said named Brokers is entitled to any commission or 
finder's fee in connection with said transaction,. 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, attorney's fees reasonably incurred with respect 
thereto. 15.6 Lessor and Lessee hereby consent to and approve all agency 
relationships, including any dual agencies, indicated in Paragraph 1.10.

16.     TENANCY STATEMENT. 16.1 Each Party (as "Responding Party") shall 
within ten (10) days after written notice from the other Party (the 
"Requesting Party") execute, acknowledge and deliver to the Requesting 
Party a statement in writing in form similar to the then most current 
"Tenancy Statement" 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. 16.2 If Lessor desires to finance, refinance, or sell the 
Premises, any part thereof, or the building of which the Premises are 
a part, Lessee and all Guarantors of Lessee's performance hereunder 
shall deliver to any potential lender or purchaser designated by 
Lessor such financial statements of Lessee and such Guarantors 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.

17.    LESSOR'S LIABILITY. 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 in this Lease, Lessor shall deliver to the transferee or 
assignee (in cash or by credit) any unused Security Deposit held by 
Lessor at the time of such transfer or assignment. 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.

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.   INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due Lessor 
hereunder, other than late charges, not received by Lessor within thirty 
(30) days following the date on which it was due, shall bear interest 
from the thirty-first (31st) day after it was due at the rate of 12% per 
annum, but not exceeding the maximum rate allowed by law, in addition to 
the late charge provided for in Paragraph 13.4.

20.   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.

21.   RENT DEFINED. All monetary obligations of Lessee to Lessor under 
the terms of this Lease are deemed to be rent.

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. Brokers have no responsibility 
with respect thereto or with respect to any default or breach hereof by 
either Party.

23.     NOTICES. 23.1 All notices required or permitted by this Lease shall 
be writing and may be delivered in person (by hand or by messenger or 
courier service) 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 notice purposes. Either Party may 
by written notice to the other specify a different address for notice 
purposes, except that upon Lessee's taking possession of the Premises, 
the Premises shall constitute Lessee's address for the purpose of 
mailing or delivering notices to Lessee. A copy of all notices 
required or permitted to be given to Lessor hereunder shall be 
concurrently transmitted to such party or parties at such addresses as 
Lessor may from time to time hereafter designate by written notice to 
Lessee. 23.2 Any notice sent by registered or certified mail, return 
receipt requested, shall be deemed given on the date of delivery shown 
on the receipt card, or if no delivery date is shown, the postmark 
thereon. If sent by regular mail the notice shall be deemed given 
forty-eight (48) hours after the same is addressed as required herein 
and mailed with postage prepaid. Notices delivered by United States 
Express Mail or overnight courier that guarantees next day delivery 
shall be deemed given twenty-four (24) hours after delivery of the 
same to the United States Postal Service or courier. If any notice is 
transmitted by facsimile transmission or similar means, the same shall 
be deemed served or delivered upon telephone confirmation of receipt 
of the transmission thereof, provided a copy is also delivered via 
delivery or mail. If notice is received on a Sunday or legal holiday, 
it shall be deemed received on the next business day.

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

25.   RECORDING. 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 or taxes 
applicable thereto.

26.   NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of 
the Premises or any part thereof beyond the expiration or earlier 
termination of this Lease.

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

28. COVENANTS AND CONDITIONS. All provisions of this Lease to be observed 
or performed by Lessee are both covenants and conditions.

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

30.     SUBORDINATION; ATTORNMENT; NON-DISTURBANCE. 

30.1. SUBORDINATION. This Lease and any Option granted hereby shall be 
subject and subordinate to any ground lease, mortgage, deed of trust, or 
other hypothecation or security device (collectively, "SECURITY DEVICE"), 
now or hereafter placed by Lessor upon the real property of which the 
Premises are a part, to any and all advances made on the security 
thereof, and to all renewals, modifications, consolidations, replacements 
and extensions thereof. Lessee agrees that the Lenders holding any such 
Security Device shall have no duty, liability or obligation to perform 
any of the obligations of Lessor under this Lease, but that in the event 
of Lessor's default with respect to any such obligation, Lessee will give 
any Lender whose name and address have been furnished Lessee in writing 
for such purpose notice of Lessor's default and allow such Lender thirty 
(30) days following receipt of such notice for the cure of said default 
before invoking any remedies Lessee may have by reason thereof. If any 
Lender shall elect to have this Lease and/or any Option granted hereby 
superior to the lien of its Security Device and shall give written notice 
thereof to Lessee, 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 assurance (a "NON-DISTURBANCE 
AGREEMENT") from the Lender that Lessee's possession and this Lease, 
including any options to extend the term hereof, will not be disturbed so 
long as Lessee is not in Breach hereof and attorns to the record owner of 
the Premises.

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

31. ATTORNEY'S FEES. If any Party or Broker brings an action or 
proceeding to enforce the terms hereof or declare rights hereunder, the 
Prevailing Party (as hereafter defined) or Broker in any such proceeding, 
action, or appeal thereon, shall be entitled to reasonable attorney's 
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 
defenses. The attorney's fees award shall not be computed in accordance 
with any court fee schedule, but shall be such as to fully reimburse all 
attorney's fees reasonably incurred. Lessor shall be entitled to 
attorney's 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 for the purpose 
of showing the same to prospective purchasers, lenders, or lessees, and 
making such alterations, repairs, improvements or additions to the 
Premises or to the building of which they are a part, as Lessor may 
reasonably deem necessary. Lessor may at any time place on or about the 
Premises or building any ordinary "For Sale" signs and Lessor may at any 
time during the last one hundred twenty (120) days of the term hereof 
place on or about the Premises any ordinary "For Lease" signs. All such 
activities of Lessor shall be without abatement of rent or liability to 
Lessee.

33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, 
either voluntarily or involuntarily, any auction upon the Premises 
without first having obtained Lessor's prior written consent. 
Notwithstanding anything to the contrary in this Lease, Lessor shall not 
be obligated to exercise any standard of reasonableness in determining 
whether to grant such consent.

34. SIGNS. Lessee shall not place any sign upon the Premises, except that 
Lessee may, with Lessor's prior written consent, install (but not on the 
roof) such signs as are reasonably required to advertise Lessee's own 
business.  The installation of any sign on the Premises by or for Lessee 
shall be subject to the provisions of Paragraph 7 (Maintenance, Repairs, 
Utility Installations, Trade Fixtures and Alterations). Unless otherwise 
expressly agreed herein, Lessor reserves all rights to the use of the 
roof and the right to install, and all revenues from the installation of, 
such advertising signs on the Premises, including the roof, as do not 
unreasonably interfere with the conduct of Lessee's business.

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 lessor estate in the Premises; provided, however, Lessor shall, in the 
event of any such surrender, termination or cancellation, have the option 
to continue any one or all of any existing subtenancies. Lessor's failure 
within ten (10) days following any such event to make a written election 
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. 

(a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided 
herein, wherever in this Lease the consent of a Party is required to an 
act by or for the other Party, such consent shall not be unreasonably 
withheld or delayed. Lessor's actual reasonable costs and expenses 
(including but not limited to architects', attorneys', engineers' or 
other consultants' fees) incurred in the consideration of, or response 
to, a request by Lessee for any Lessor consent pertaining to this Lease 
or the Premises, including but not limited to consents to an assignment, 
a subletting or the presence or use of a Hazardous Substance, practice or 
storage tank, shall be paid by Lessee to Lessor upon receipt of an 
invoice and supporting documentation therefor. Subject to Paragraph 
12.2(a) (applicable to assignment or subletting), Lessor may, as a 
condition to considering any such request by Lessee, require that Lessee 
deposit with Lessor an amount of money (in addition to the Security 
Deposit held under Paragraph 5) reasonably calculated by Lessor to 
represent the cost Lessor will incur in considering and responding to 
Lessee's request. Except as otherwise provided, any unused portion of 
said deposit shall be refunded to Lessee without interest. Lessor's 
consent to any act, assignment of this Lease or subletting of the 
Premises by Lessee shall not constitute an acknowledgement 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.

(b) All conditions to Lessor's consent authorized by this Lease are 
acknowledged by Lessee as being reasonable. 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.

37.     GUARANTOR. 

37.1 If  there are to be any Guarantors of this Lease per Paragraph 
1.11, the form of the guaranty to be executed by each such Guarantor 
shall be in the form most recently published by the American Industrial 
Real Estate Association, and each said Guarantor shall have the same 
obligations as Lessee under this Lease, including but not limited to the 
obligation to provide the Tenancy Statement and information called for by 
Paragraph 18.

37.2 It shall constitute a Default of the Lessee under this Lease if 
any such Guarantor fails or refuses, upon reasonable request by Lessor to 
give: (a) evidence of the due execution of the guaranty called for by 
this Lease, including the authority of the Guarantor (and of the party 
signing on Guarantor's behalf) to obligate such Guarantor on said 
guaranty, and including in the case of a corporate Guarantor, a certified 
copy of a resolution of its board of directors authorizing the making of 
such guaranty, together with a certificate of incumbency showing the 
signature of the persons authorized to sign on its behalf, (b) current 
financial statements of Guarantor as may from time to time be requested 
by Lessor, (c) a Tenancy Statement, or (d) written confirmation that the 
guaranty is still in effect.

38. QUIET POSSESSION. Upon payment by Lessee of the rent for the Premises 
and the observance and performance of all of the covenants, conditions 
and provisions of Lessee's part to be observed and performed under this 
Lease, Lessee shall have quiet possession of the Premises for the entire 
term hereof subject to all of the provisions of this Lease.

39.     OPTIONS. 

39.1 DEFINITION. As used in this Paragraph 39 the word "Option" has 
the following meaning: (a) the right to extend the term of this Lease or 
to renew this Lease or to extend or renew any lease that Lessee has on 
other property of Lessor; (b) the right of first refusal to lease the 
Premises or the right of first offer to lease the Premises or the right 
of first refusal to lease other property of Lessor or the right of first 
offer to lease other property of Lessor; (c) the right to purchase the 
Premises, or the right of first refusal to purchase the Premises, or the 
right of first offer to purchase the Premises, or the right to purchase 
other property of Lessor, or the right of first refusal to purchase other 
property of Lessor, or the right of first offer to purchase other 
property of Lessor.

39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to 
Lessee in this Lease is personal to the original Lessee named in 
Paragraph 1.1 hereof, and cannot be voluntarily or involuntarily assigned 
or exercised by any person or entity other than said original Lessee 
while the original Lessee is in full and actual possession of the 
Premises and without the intention of thereafter assigning or subletting. 
The Options, if any, herein granted to Lessee are not assignable, either 
as a part of an assignment of this Lease or separately or apart 
therefrom, and no Option may be separated from this Lease in any manner, 
by reservation or otherwise.

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 to extend or renew this Lease have been validly 
exercised.

39.4 EFFECT OF DEFAULT ON OPTIONS. 

(a)  Lessee shall have no right to exercise an Option, 
notwithstanding any provision in the grant of Option to the contrary; (i) 
during the period commencing with the giving of any notice of Default 
under Paragraph 13.1 and continuing until the noticed Default is cured, 
or (ii) during the period of time any monetary obligation due Lessor from 
Lessee is unpaid (without regard to whether notice thereof is given 
Lessee), or (iii) during the time Lessee is in Breach of this Lease, or 
(iv) in the event that Lessor has given to Lessee three (3) or more 
notices of Default under Paragraph 13.1, whether or not the Defaults are 
cured, during the twelve (12) month period immediately preceding the 
exercise of the Option.

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

(c)  All rights of Lessee under the provisions of 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 during 
the term of this Lease, (i) Lessee fails to pay to Lessor a monetary 
obligation of Lessee for a period of thirty (30) days after such 
obligation becomes due (without any necessity of Lessor to give notice 
thereof to Lessee), or (ii) Lessor gives to Lessee three (3) or more 
notices of Default under Paragraph 13.1 during any twelve (12) month 
period, whether or not the Defaults are cured, or (iii) if Lessee commits 
a Breach of this Lease.

40.  MULTIPLE BUILDINGS. If the Premises are part of a group of buildings 
controlled by Lessor, Lessee agrees that it will abide by, keep and 
observe all reasonable rules and regulations which Lessor may make from 
time to time for the management, safety, care, and cleanliness of the 
grounds, the parking and unloading of vehicles and the preservation of 
good order, as well as for the convenience of other occupants or tenants 
of such other buildings and their invitees, and that Lessee will pay its 
fair share of common expenses incurred in connection therewith.

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 under the provisions of this Lease.

44.  AUTHORITY. If either Party hereto is a corporation, trust, or 
general or limited partnership, 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. If Lessee is 
a corporation, trust or partnership, Lessee shall, within thirty (30) 
days after request by Lessor, deliver to Lessor evidence satisfactory to 
Lessor 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 Lessor or Lessor's agent and 
submission of same to Lessee shall not be deemed an offer to lease to 
Lessee. This Lease is not intended to be binding until executed 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. The parties 
shall amend this Lease from time to time to reflect any adjustments that 
are made to the Base Rent or other rent payable under this Lease. As long 
as they do not materially change Lessee's obligations hereunder, Lessee 
agrees to make such reasonable non-monetary modifications to this Lease 
as may be reasonably required by an institutional, insurance company, or 
pension plan Lender in connection with the obtaining of normal financing 
or refinancing of the property of which the Premises are a part.

48.  MULTIPLE PARTIES. Except as otherwise expressly provided herein, if 
more than one person or entity is named herein as either Lessor or 
Lessee, the obligations of such Multiple Parties shall be the joint and 
several responsibility of all persons or entities named herein as such 
Lessor or Lessee.

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.

IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION 
TO YOUR ATTORNEY FOR HIS APPROVAL FURTHER, EXPERTS SHOULD BE CONSULTED 
TO EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE PRESENCE 
OF ASBESTOS, STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION 
OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE 
ASSOCIATION OR BY THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR 
EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX 
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES; THE 
PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN COUNSEL AS TO 
THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE SUBJECT PROPERTY 
IS LOCATED IN A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM THE 
STATE WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.

THE PARTIES HERETO HAVE EXECUTED THIS LEASE AT THE PLACE ON THE DATES 
SPECIFIED ABOVE TO THEIR RESPECTIVE SIGNATURES.

EXECUTED AT Santa Clara, CA             EXECUTED AT Santa Clara, CA
on March 1, 1996                        on March 1, 1996

by LESSOR:                              by LESSEE:
MOPAR, LLC                              Scientific Custom Metal         
                                        Products International, Inc.

By /s/ XXXXXXX X. XXXXXXX               By /s/ XXXXXX X. XXXXXXX                
Name Printed: Xxxxxxx X. Xxxxxxx        Name Printed: Xxxxxx X.  Xxxxxxx

Title: CEO                              Title: President

By                                      By                      
Name Printed:                           Name Printed:
Title:                                  Title:
Address:                                Address:                

Tel. No. (   )      Fax No.(   )        Tel. No. (   )      Fax No.(   )



                                   EXHIBIT (A) 

This Exhibit is part of that certain real property lease dated March 
1, 1996, between MOPAR, LLC, Lessor, and Scientific Custom Metal Products 
International Inc., Lessee. The following additional terms and conditions 
are part of said lease, and are hereby incorporated therein, and made a 
part thereof:

1.   RENT INDEXING. The base rent as set forth in paragraph 1.5 of the 
lease agreement, shall be adjusted annually at each anniversary by an 
amount equal to the CPI as published in the Wall Street Journal, or the 
Rent Schedule shown on page two of this Exhibit, whichever is greater.

2.   INSURANCE. The 'Insuring Party' as set forth in paragraph 1.9 of 
the lease agreement shall be changed from the Lessor, to the Lessee. The 
amount of insurance coverage set forth in paragraphs 8.1 and 8.2 of the 
lease agreement shall be changed from $1,000,000 to $10,000,000. The 
insurance deductible amounts set forth in paragraphs 8.3 and 8.4 of the 
lease agreement shall be changed from $1,000 to $5,000.

3.   OPTION TO EXTEND. In the event that Lessee is not in default in 
the performance of any term or condition of this lease, then upon the 
expiration of the lease term as set forth in paragraph 1.3 of the 
original lease agreement, Lessee shall have the option to renew the lease 
for an additional term of 10 years. During such renewal period, all of 
the terms and conditions of the lease shall remain in effect, except that 
the new base rent shall be equal to the rent payable during the last year 
of the original lease, or adjusted to the then current market rent 
determined by appraisal, whichever is greater. Lessee shall provide 
Lessor with not less than eighteen (18) months advance written notice of 
its intention to exercise this option, or this option will become null 
and void.

4.   SUBLETTING. Notwithstanding the provisions of paragraphs 12.1, 
12.2 and 12.3 of the lease agreement, and if Lessee is not in default of 
any other terms or conditions of the lease agreement, then Lessee shall 
have the right to sublet portions of the leased spaces to a sub-
tenant(s), however it shall be Lessee's responsibility to ensure that 
such sub-tenancy complies with the spirit and intention of the lease 
agreement between Lessor and Lessee. If in Lessor's sole discretion such 
sub-tenancy does not comply, then paragraphs 12.1, 12.2 and 12.3 of the 
lease agreement shall fully apply.

LESSEE                           LESSOR

/s/ Xxxxxx X. Xxxxxxx           /s/ Xxxxxxx X. Xxxxxxx          
 ________________________       _____________________________
By: Xxxxxx X. Xxxxxxx           By: Xxxxxxx X. Xxxxxxx
President                       CEO
Scientific Custom Metal         MOPAR, LLC
Products Int., Inc.             

Date:    3/1/96                 Date:    3/1/96         







                           RENT SCHEDULE-2401 LEASE 

                   MOPAR, LLC - SCMPINTERNATIONAL LEASE 
                         RENT SCHEDULE: XXXX. 0000 
                 LEASE COMMENCEMENT DATE: MARCH 1, 1997 



               YEAR
   LEASE      ENDING    STARTING     MONTHLY   NUMBER OF
  YEAR #    (FEBRUARY)    DATE       RENTAL      MONTHS
----------- ---------- ----------- ----------- ----------
                                   
         1       1998   01-Mar-97     $40,000          2
                 1998   01-May-97     $75,000         10
         2       1999   01-Mar-98     $78,750         12
         3       2000   01-Mar-99     $82,688         12
         4       2001   01-Mar-00     $86,822         12
         5       2002   01-Mar-01     $91,163         12
         6       2003   01-Mar-02     $95,721         12
         7       2004   01-Mar-03    $100,507         12
         8       2005   01-Mar-04    $105,533         12
         9       2006   01-Mar-05    $110,809         12
        10       2007   01-Mar-06    $116,350         12
        11       2008   01-Mar-07    $122,167         12
        12       2009   01-Mar-08    $128,275         12
        13       2010   01-Mar-09    $134,689         12
        14       2011   01-Mar-10    $141,424         12
        15       2012   01-Mar-11    $148,495         12
        16       2013   01-Mar-12    $155,920         12
        17       2014   01-Mar-13    $163,716         12
        18       2015   01-Mar-14    $171,901         12
        19       2016   01-Mar-15    $180,496         12


[GUARANTY OF LEASE LOGO] 

AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION 

WHEREAS, MOPAR, LLC referred to as "Lessor", and Scientific Custom 
Metal Products International, Inc. hereinafter referred to as "Lessee", 
are about to execute a document entitled "Lease" dated March 1, 1996 
concerning the premises commonly known as 0000 Xxxxx Xxxxxx, Xxxxx Xxxxx, 
XX wherein Lessor will lease the premises to Lessee and

WHEREAS, Scientific Custom Metal Products International, Inc. 
hereinafter referred to as "Guarantors" have a financial interest in 
Lessee and

WHEREAS, Lessor would not execute the Lease if Guarantor did not 
execute and deliver to Lessor this Guarantee of Lease.

NOW THEREFORE, for and in consideration of the execution of the 
foregoing Lease by Lessor and as a material inducement to Lessor to 
execute said Lease, Guarantors hereby jointly, severally, unconditionally 
and irrevocably guarantee the prompt payment by Lessee of all rentals and 
all other sums payable by Lessee under said Lease and the faithful and 
prompt performance by Lessee of each and every one of the terms, 
conditions and covenants of said Lease to be kept and performed by 
Lessee.

It is specifically agreed and understood that the terms of the 
foregoing Lease may be altered, affected, modified or changed by 
agreement between Lessor and Lessee, or by a course of conduct, and said 
Lease may be assigned by Lessor or any assignee of Lessor without consent 
or notice to Guarantors and that this Guaranty shall thereupon and 
thereafter guarantee the performance of said Lease as so changed, 
modified, altered or assigned.

This Guaranty shall not be released, modified or affected by failure 
or delay on the part of Lessor to enforce any of the rights or remedies 
of the Lessor under said Lease, whether pursuant to the terms thereof or 
at law or in equity.

No notice of default need be given to Guarantors, it being 
specifically agreed and understood that the guarantee of the undersigned 
is a continuing guarantee under which Lessor may proceed forthwith and 
immediately against Lessee or against Guarantors following any breach or 
default by Lessee or for the enforcement of any rights which Lessor may 
have as against Lessee pursuant to or under the terms of the within Lease 
or at law or in equity.

Lessor shall have the right to proceed against Guarantors hereunder 
following any breach or default by Lessee without first proceeding 
against Lessee and without previous notice to or demand upon either 
Lessee or Guarantors.

Guarantors hereby waive(s) notice of acceptance of this Guaranty. (b) 
demand of payment, presentation and protest, (c) all right to assert or 
plead any statute of limitations as to or relating to this Guaranty and 
the Lease, (d) any right to require the Lessor to proceed against the 
Lessee or any other Guarantor or any other person or entity liable to 
Lessor. (e) any right to require Lessor to apply to any default any 
security deposit or other security it may hold under the Lease. (f) any 
right to require Lessor to proceed under any other remedy Lessor may have 
before proceeding against Guarantors. (g) any right of subrogation.

Guarantors do hereby subrogate all existing or future indebtedness of 
Lessee to Guarantors to the obligations owed to Lessor under the Lease 
and this Guaranty.

Any married woman who signs this Guaranty expressly agrees that 
recourse may be had against her separate property for all of her 
obligations hereunder.

The obligations of Lessee under the Lease to execute and deliver 
estoppel statements and financial statements, as therein provided, shall 
be deemed to also require the Guarantors hereunder to do and provide the 
same relative to Guarantors.

The term "Lessor" whenever hereinabove used refers to and means the 
Lessor in the foregoing Lease specifically named and also any assignee of 
said Lessor, whether by outright assignment or by assignment for 
security, and also any successor to the interest of said Lessor or of any 
assignee in such Lease or any part thereof, whether by assignment or 
otherwise. So long as the Lessor's interest in or to the leased premises 
or the rents, issues and profits therefrom, or in, to or under said 
Lease, are subject to any mortgage or deed of trust or assignment for 
security, no acquisition by Guarantors of the Lessor's interest in the 
leased premises or under said Lease shall affect the continuing 
obligation of Guarantors under this Guaranty which shall nevertheless 
continue in full force and effect for the benefit of the mortgagee, 
beneficiary, trustee or assignee under such mortgage, deed of trust or 
assignment, of any purchase at sale by judicial foreclosure or under 
private power of sale, and of the successors and assigns of any such 
mortgagee, beneficiary, trustee, assignee or purchaser.

The term "Lessee" whenever hereinabove used refers to and means the 
Lessee in the forgoing Lease specifically named and also any assignee or 
sublessee of said Lease and also any successor to the interests of said 
Lessee, assignee or sublessee of such Lease or any part thereof, whether 
by assignment, sublease or otherwise.

In the event any action be brought by said Lessor against Guarantor 
hereunder to enforce the obligation of Guarantors hereunder, the 
unsuccessful party in such action shall pay to the prevailing party 
therein a reasonable attorney's fee which shall be fixed by the court.

IF THIS FORM HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION TO 
YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS 
MADE BY THE REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL 
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS FORM OR THE 
TRANSACTION RELATING THERETO.

Executed at Santa Clara, CA                 /s/ XXXXXX X. XXXXXXX           
on March 1, 1996                             By: Xxxxxx X. Xxxxxxx, 
                                             President

Address 0000 Xxxxx Xxxxxx                    Scientific Custom Metal Products
                                             International, Inc.
                                             "GUARANTORS"