LEASE

5.2 Surrender. On the last day of the term hereof, or any earlier termination, Lessee shall surrender the Premises to the Lessor in the same condition as when received, ordinary wear and tear excepted, clean and free of debris. Lessee shall repair any damage to the Premises occasioned by the installation or removal of Lessee's trade fixtures, furnishings and equipment.

5.3 Lessor's Rights and Obligations. If Lessee fails to perform Lessee's obligations under this Paragraph 5, or under any other provision of this Lease, Lessor may, at its option but not as its sole remedy, enter, or cause another person or entity to enter, upon the Premises after ten (10) days prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee's behalf and put the same in good order, condition and repair, and the cost thereof, together with interest thereon at the maximum rate then allowed by law, shall become due and payable by Lessee to Lessor together with Lessee's next rental installment. It is intended by the parties hereto that Lessor have no obligation, in any manner whatsoever, to repair or maintain the Premises or any building or improvement thereon or the equipment therein, whether structural or non-structural, all of which obligations are intended to be that of the Lessee. Lessee expressly waives the benefit of any statute now or hereinafter in effect which would otherwise afford Lessee the right to make repairs at Lessor's expense or to terminate this Lease because of Lessor's failure to keep the Premises in good order, condition and repair.

(a) Lessee shall not make any material alterations, improvements, or additions in, on or about the Premises without Lessor's prior written consent. Lessor may condition its consent on such work being completed by contractors or mechanics approved by Lessor. Should Lessee make any alterations, improvements, or additions without the prior written approval of Lessor, Lessor may require that Lessee remove any or all of the same. Lessee shall in no event make any alterations, improvements, or additions of any kind to the Premises or any building or improvement thereon that will decrease the value of such building or improvement, or that will adversely affect the structural integrity of such building or improvement. Prior to commencing any work that will cost in excess of $10,000.00, Lessee shall furnish Lessor, on demand, with a good and sufficient surety bond insuring the completion of such work and the payment of all bills therefor and naming Lessor as additional obligee. 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 in the Premises, which claims are or may be secured by any mechanics' or materialmen's lien against the Premises or any interest therein.

(b) Unless Lessor requires their removal, all alterations, improvements, or additions on or about the Premises, shall become property of the Lessor and remain upon and surrendered with the Premises at the expiration of the term hereof. Notwithstanding the foregoing, Lessee's machinery and equipment, other than that which is fixed to the Premises such that it cannot be removed without material damage to the Premises, shall remain property of the Lessee.

6.   INSURANCE.

6.1 Liability Insurance. Lessee shall, at Lessee's expense, obtain and keep in force throughout the term of this Lease combined single limit insurance for bodily injury and property damage in an amount not less than $2 million per occurrence. Such insurance shall name Lessor as an additional insured and specifically insure Lessee against all liability assumed by it hereunder, as well as all liability imposed by law, including but not limited to any liability arising out of the ownership , use, occupancy or maintenance of the Premises and all areas appurtenant thereto, and shall insure both Lessor and Lessee, but shall be so endorsed as to create the same liability on the part of the insurer as though separate policies had been written for Lessor and Lessee. The policy shall insure performance by Lessee of the indemnity provisions herein. The limits of said insurance shall not, however, limit the liability of the Lessee hereunder.

6.2 Property Insurance. Lessee shall, at all times during the term of this Lease and at Lessee's sole expense, obtain a policy or policies of insurance covering loss or damage to the Premises, in the amount of the full replacement value thereof, as the same may exist from time to time, but in no event less than the total amount required by lenders having liens on the Premises, against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief , flood (in the event same is required by a lender having a lien on the Premises), and special extended perils ("all risk" as such term is used in the insurance industry). Said insurance shall provide for a payment of loss thereunder to Lessor or to the holders of mortgages or deeds of trust on the Premises granted by Lessor as their interest may appear. If the Lessee shall fail to procure and maintain said insurance, Lessor may, but shall not be required to, procure and maintain the same, at the expense of the Lessee. If such insurance coverage has a deductible clause, Lessee shall be liable for such deductible amount. In addition, Lessee shall insure its fixtures, equipment and tenant improvements.

6.3 Insurance Policies. Insurance required hereunder shall be in companies holding a "General Policyholders Rating" of at least B+ 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 deliver to Lessor copies of policies of such insurance or certificates evidencing the existence and amounts of such insurance with loss payable clauses as required by this Paragraph 6. No such policy shall be cancelable or modified 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 renewals thereof, or Lessor may, at Lessor's sole option, order such insurance and charge the cost thereof to Lessee. Lessee shall not do or permit to be done anything which shall invalidate the insurance policies referred to herein. If Lessee does or permits to be done anything which shall increase the cost of the insurance policies referred to herein, then Lessee shall solely bear the expense of such cost or, at Lessor's sole option, forthwith reimburse Lessor for any additional premiums paid by Lessor attributable to any act or omission or operation of Lessee causing such increase in the cost of insurance.

7.   INDEMNIFICATION AND NON-LIABILITY OF LESSOR.

7.1 Indemnity. Lessee shall indemnify, protect, defend, and hold completely harmless Lessor from and against any and all liabilities, losses, suits, claims, judgments, fines, fees, expenses, or demands, of whatsoever kind or character, including all reasonable costs for investigation in defense thereof (including but not limited to attorneys' fees, court costs, and expert fees), of any nature whatsoever arising out of or incident to this Lease and/or the use or occupancy of the Leased P remises or relating to the Leased Premises, including the injury or death of any person or damage to any property, any environmental matter (including but not limited to expert, investigation and/or remediation costs and expenses of any site remediation required or requested under RCRA, CERCLA or any other state or federal law or regulation), or any acts or omissions of Lessee's officers, agents, employees, contractors, subcontractors, licensees, or invitees, regardless of where the injury, death, damage, or other liability may occur, unless such injury, death, damage, or other liability is caused by the sole negligence of Lessor, its agents, employees, or contractors. Lessee, upon notice from Lessor, shall defend all claims, actions, or proceedings brought against Lessor at Lessee's expense by counsel satisfactory to Lessor. Lessee, as a material part of the consideration to Lessor, hereby assumes all risk of damage to property or injury to persons, in, upon or about the Premises arising from any cause and Lessee hereby waives all claims in respect thereof against Lessor.

7.2 Exemption of Lessor from Liability. Lessee hereby agrees that Lessor shall not be liable for injury to Lessee's business or any loss of income therefrom or for damage to the goods, wares, merchandise or other property of Lessee, Lessee's employees, invitees, customers or any other person in or about the Premises, nor shall Lessor be liable for injury to Lessee, Lessee's employees, agents or contractors regardless of the cause of such damage or injury and regardless of whether such d amage or injury results from conditions arising upon the Premises, 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 inaccessible to Lessee, nor shall Lessor be liable for any damages arising from any act or neglect of any other tenant, if any, of the building in which the Premises are located.

7.3 Survivability. This Paragraph 7 shall survive the expiration or early termination of this Lease.

8.   DAMAGE OR DESTRUCTION.

8.1 Damage to and Destruction of Premises. Except as provided for herein, the substantial or catastrophic damage, less than substantial or catastrophic damage, total destruction, or partial destruction of any building or other improvement which is a part of the Premises shall not release Lessee from any obligation hereunder, including Lessee's obligation to pay rent, and in case of such damage to or destruction of any such building or improvement, Lessee shall, at its own expense, promp tly repair and restore the same to a condition as good or better than that which existed prior to such damage or destruction. Without limiting such obligations of Lessee, it is agreed that the proceeds of any insurance covering such damage or destruction shall be made available for such repair or replacement. However, in the event of substantial or catastrophic damage to the Premises, caused by the act or neglect of Lessor, a reasonable portion of the obligations under the Lease based upon the extent of the damage shall be abated until the Premises are restored to a useable condition.

8.2 Waiver. Lessor and Lessee waive the provisions of any statutes which relate to termination of leases when leased property is destroyed and agree that such event shall be governed by the terms of this Lease.

9.   REAL PROPERTY TAXES AND ASSESSMENTS.

9.1 Taxes. Lessee shall pay and discharge as they become due, promptly and before delinquency, all taxes, assessments, rates, charges, license fees, municipal liens, levies, excises, or imposts, whether general or special, or ordinary or extraordinary, of every name, nature and kind whatsoever, including all governmental charges of whatsoever name, nature, or kind, which may be levied, assessed, charged, or imposed, or which may become a lien or charge on or against the land hereby demi sed, or any part thereof, the leasehold of Lessee herein, the Premises described herein, any building or buildings, or any other improvements now or hereafter hereon, or on or against Lessee's estate improvements now or hereafter thereon, or on or against Lessee's estate hereby created which may be a subject of taxation, or on or against Lessor by reason of its ownership of the fee underlying this Lease during the entire term hereof. Lessee shall promptly furnish Lessor with satisfactory evidence that such taxes have been paid. If any taxes paid by Lessee under this subparagraph 9.1 and subparagraph 9.2 shall cover any period of time pri or to or after the expiration of the term hereof, Lessee's share of such taxes shall be equitably prorated. If Lessee shall fail to pay any such taxes, Lessor shall have the right to pay the same, in which case Lessee shall repay such amount to Lessor with Lessee's next rental installment together with interest at the maximum rate allowed by law.

9.2 Assessments Affecting Improvements. Specifically and without in any way limiting the generality of the foregoing, Lessee shall pay all special assessments and levies or charges made by any municipal or political subdivision for local improvements, and shall pay the same in cash as t hey fall due and before they become delinquent and as required by the act and proceedings under which any such assessments or levies or charges are made by any municipal or political subdivision.

9.3 Personal Property Taxes. Lessee shall pay and discharge as they become due, promptly and before delinquency, all taxes assessed against and levied upon trade fixtures, furnishings, equipment and all other personal property of Lessee contained in the Premises or elsewhere. When possible, Lessee shall cause such trade fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor.

10.   UTILITIES. Lessee shall fully and promptly pay for all water, gas, heat, light, power, telephone service, and other public utilities of every kind furnished to the premises throughout the term hereof, together with any taxes thereon, and all other costs and expenses of every kind whatsoever of or in connection with the use, operation, and maintenance of the Premises and all activities conducted thereon, and Lessor shall have no responsibility of any kind for any thereof. Lessee agrees to assume responsibility for all utility extensions, installations, and connections serving Lessee's Premises during the term hereof. Lessor shall not be required to provide any utilities for the Premises, and shall not be liable to the Lessee for any disconnection of any utility, or any damage resulting therefrom.

11.   ASSIGNMENT AND SUBLETTING.

11.1 Lessor's Consent Required. Lessee shall not voluntarily or by operation of law, assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any part of Lessee's interest in this Lease or in the Premises, without Lessor's prior written consent, and a consent to an assignment, transfer, mortgage, encumbrance, or subletting shall not be deemed to be a consent to any subsequent assignment, mortgage, encumbrance or subletting. Any such assignment, transfer, mortgage, en cumbrance or subletting without such consent shall be void, and shall constitute a breach of this Lease and shall, at the option of Lessor, terminate this Lease.

11.2 No Release of Lessee. Regardless of Lessor's consent, no subletting, assignment or other transfer shall release Lessee of Lessee's obligations or alter the primary liability of Lessee to pay the rent and to perform all other obligations to be performed by Lessee hereunder. The acceptance of rent by Lessor from any person or entity other than Lessee shall not be deemed to be a waiver by Lessor of the provision hereof. In the event of default by any sublessee or assignee or successor of Lessee, in the performance of any of the terms hereof, Lessor may proceed directly against Lessee without the necessity of exhausting remedies against said assignee, successor, or sublessee.

12.   DEFAULT AND REMEDIES.

12.1 Default. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee:

(a) The vacating or abandonment of the Premises by Lessee;

(b) The failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as and when due, where such failure shall continue for a period of seven (7) days after written notice thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit, pursuant to applicable unlawful detainer or like statutes, such Notice shall also constitute the notice required by this subparagraph 12.1(b);

(c) The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be performed by Lessee, other than described in subparagraph 12.1(b) above, where such failure shall continue for a period of thirty (30) days after written notice thereof from Lessor to Lessee; provided, however, that if the default is of such a nature that it cannot be reasonably cured within thirty (30) days, then Lessee shall not be deemed to be in default if Lessee commences such cure during such period of thirty (30) days and thereafter prosecutes such cure to completion with all possible diligence;

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