Common use of Construction of Tenant Improvements Clause in Contracts

Construction of Tenant Improvements. Lessee understands and agrees that Lessor is currently in the process of constructing the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfied.

Construction of Tenant Improvements. Lessee understands Landlord shall obtain all state and agrees that Lessor is currently in local licenses, permits and approvals (whether governmental or non‑governmental) required to construct the process Tenant Improvements and for Tenant's occupancy of constructing the improvements which shall comprise the Premises. In Landlord shall provide access to the course General Contractor for Construction of the Tenant Improvements and to the extent such constructionaccess requires entry through space occupied by other tenants, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all Landlord shall provide for such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be access at Lessee's its sole cost and expense. The Landlord shall engage, including subject to Tenant’s reasonable approval, a ten percent general contractor to construct the Tenant Improvements (10%) administrative payment to Lessorthe “General Contractor”). Such additional payments The General Contractor shall construct and install the Tenant Improvements in accordance with the Plans which expense shall be deducted from the Tenant Improvement Allowance. The Tenant Improvements shall be delivered via Associated General Contractors (AGC) Guaranteed Maximum Price Contract (the "Contract") with Liquidated Damages of $500.00 per day for each day of delay in achieving in substantial completion beyond the date specified in the Contract, which date shall be no later than October 1, 2010, and a payment and performance bond. Any Liquidated Damages (less cost of collection) paid to Landlord shall accrue to the Tenant; provided, however, any paid Liquidated Damages for any Tenant Delay shall accrue to Landlord. The General Contractor shall obtain at least three (3) bids for all major trade work at the Premises. Landlord will work with the General Contractor to complete the Tenant Improvements by Lessee the Commencement Date. All contracts with vendors and subcontractors for construction of the Tenant Improvements will be negotiated by the General Contractor. All work performed in connection with the construction of the Premises shall be performed in a good and workmanlike manner, in accordance with all Applicable Laws and the final approved Plans. If materials are not readily available, require quick ship charges, or require substitution, the Tenant will be given notice and the opportunity to Lessor select alternate materials. Landlord shall insure that the Architect conducts a periodic review (a minimum of once every two weeks) of the progress of construction to ensure compliance with the Plans. Tenant may from time to time request in writing changes to the Plans (a “Change Order”), subject to Landlord’s consent, which shall not be unreasonably withheld. Landlord shall cause Contractor to provide an estimate of any change in the Construction Cost and/or Schedule. Tenant shall have the right to elect whether or not to proceed with the Change Order within five (5) business days after receipt of such estimate. Upon such approval by Tenant, or confirmation by Landlord that the Change Order will not result in any change in cost and/or Schedule, Landlord shall implement the Change Order as follows: part of the Tenant Improvements. Tenant acknowledges that the following items may result in changes to the Budget and/or Schedule: (i) fifty percent (50%) upon approval Municipal or other governmental inspectors require changes to the Premises such as code compliance changes. In such event, Landlord will notify Tenant of the required changes, but the increased cost of such change by Lessor; changes, if any, and any delay associated with such changes shall be the responsibility of Tenant. (ii) fifty percent (50%) prior Change Orders approved by Tenant. Any increased costs and delays due to occupancy such approved Change Orders shall be the responsibility of Tenant. Any delays caused by such approved Change Orders shall not delay the Commencement Date of the Premises Lease. Landlord shall not charge Tenant any administrative fees in respect of any Change Orders. Tenant shall have five (5) business days to review and approve all Change Orders and any additional review time by Lessee. All tenant improvements Tenant shall be deemed substantially completed when the City a Tenant Delay. (iii) If materials are not readily available, require quick ship charges, or require substitution, provided Landlord shall identify any such materials within ten (10) days of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement final approval of the lease termPlans, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty case, Tenant will be given notice and the opportunity to select alternate materials. (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiediv) Any Tenant Delay.

Construction of Tenant Improvements. Lessee understands Tenant shall install the Tenant Improvements (as described in Paragraph 2(a) below) in accordance with the terms and agrees conditions of this Work Letter. The quantities, character and manner of installation of all of the work related to the Tenant Improvements shall be subject to the limitations imposed by any applicable governmental regulations, laws, ordinances, codes and rules. Notwithstanding the foregoing, Landlord may at Landlord’s sole election itself (with Landlord’s contractor) construct the portion of the Tenant Improvements that Lessor consist of the restrooms and related improvements that will service Building 2 (the “Restroom Improvements”), at Tenant’s cost up to a maximum amount of $322,764 (subject to Section 9(b) below), provided that (a) Landlord notifies Tenant in writing of such election prior to Tenant’s commencement of construction of the Tenant Improvements, and (b) Landlord shall use commercially reasonable efforts to not unreasonably interfere with or delay Tenant’s installation of the Tenant Improvements. If a certificate of occupancy or equivalent permit sign-off for the Premises is currently delayed beyond the Building 2 Scheduled Commencement Date solely as a result of Landlord’s failure to substantially complete the Restroom Improvements prior to such date, which failure does not result from Tenant Delays (as defined below) or Force Majeure, then the Building 2 Commencement Date shall be extended day for day by the number of days after the Building 2 Scheduled Commencement Date until the issuance of a certificate of occupancy or equivalent permit sign-off (but in no event shall the Building 2 Commencement Date be delayed beyond the date Tenant commences business in the process Premises), provided, however, that Tenant delivers written notice to Landlord at such time as Tenant becomes aware that Landlord is in danger of constructing the improvements which causing such delay. “Tenant Delays” shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: mean (i) fifty percent (50%) upon approval Tenant’s delay in submittal of such change by Lessor; and Tenant’s Plans and/or responses to Landlord’s comments to Tenant’s Plans beyond the time periods provided in this Work Letter, (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy Tenant’s delay in any submittals for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided permits or other governmental approvals with a punch list of such tenant improvements prior respect to the commencement of Tenant Improvements (including without limitation the lease termRestroom Improvements), (iii) changes in Tenant’s Plans as they relate to the Restroom Improvements after they have been submitted to governmental authorities for permits, (iv) delay in obtaining materials for reasons outside Landlord’s reasonable control, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that (v) Tenant’s failure to provide reasonable access to the Premises to do not conform Landlord’s contractors to install the plans and specifications attached hereto as Exhibit "B"Restroom Improvements, as reasonably measured or unreasonable interference with such installation by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedTenant or its contractors or agents.

Construction of Tenant Improvements. Lessee understands and agrees that Lessor is currently in the process of constructing the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBITEXHIBIT "B". Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfied.

Construction of Tenant Improvements. Lessee understands and agrees that Lessor is currently 5.1 Landlord shall cause the Tenant Improvements to be substantially completed sufficient for the issuance of a temporary certificate of occupancy for the Premises on or before the Commencement Date of the Lease in accordance with the process of constructing the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements provisions set forth in this Work Letter. Landlord shall supervise the plans completion of such work and specifications attached hereto shall use diligent efforts to secure substantial completion of the work in accordance with the Work Schedule. The cost of such work shall be paid as Exhibit provided in Section 6. 5.2 In connection with the construction of the Tenant Improvements, Landlord and Tenant shall arrange for Tenant to have access to the Premises commencing approximately ten (10) days prior to the estimated date for substantial completion shown on the Work Schedule, in order to allow Tenant to install systems furniture/workstations, telephone lines and telephone systems, fiber optics, computer cabling, and related similar matters, and, on a "B"space ready" basis only, to commence installation of Tenant's trade fixtures. Such plans Tenant shall schedule installation of such items with Landlord and specifications are hereby clarified Landlord's contractor so as follows: SEE EXHIBITnot to unreasonably impede, interfere with or delay the progress of construction of the Tenant Improvements; and Tenant shall perform such installation in accordance with guidelines promulgated by Landlord's contractor. Lessee has reviewed and approved all Delay, interference or damage arising out of Tenant's installation of such plans and specificationsitems shall constitute a Tenant Delay under Section 7. Any changes or additions made by Lessee to and all costs of installation of such plans and specifications items shall be at LesseeTenant's sole cost and expense. 5.3 During the period of construction of the Tenant Improvements, including a ten percent (10%) administrative payment Landlord shall consult with Tenant from time to Lessortime as necessary to achieve approval of certain matters and installations related to the Tenant Improvements. Such additional payments approvals shall be paid forthcoming from Tenant within a reasonable time period as requested by Lessee Landlord, which time period shall enable Landlord to Lessor as follows: (i) fifty percent (50%) upon maintain the schedule for substantial completion of the Tenant Improvements stated in the Work Schedule. Failure of Tenant to respond within such requested time period shall constitute a Tenant Delay. EXHIBIT B TENANT IMPROVEMENTS WORK LETTER AGREEMENT 5.4 During the period of construction of the Tenant Improvements, Landlord and Tenant shall meet at regular meetings occurring at least once monthly regarding the status of the construction and occurring at least once weekly during the final month of construction. If timely, matters requiring Tenant's approval may be determined at such meetings and decisions shall be reflected in the minutes of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedmeetings.

Construction of Tenant Improvements. Lessee understands and agrees that Lessor is currently 5.1 Landlord shall cause the Tenant Improvements to be substantially completed sufficient for the issuance of a temporary certificate of occupancy for the Premises on or before the Commencement Date of the Lease in accordance with the process of constructing the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements provisions set forth in this Work Letter. Landlord shall supervise the plans completion of such work and specifications attached hereto shall use diligent efforts to secure substantial completion of the work in accordance with the Work Schedule. The cost of such work shall be paid as Exhibit provided in Section 6. 5.2 In connection with the construction of the Tenant Improvements, Landlord and Tenant shall arrange for Tenant to have access to the Premises commencing approximately ten (10) days prior to the estimated date for substantial completion shown on the Work Schedule, in order to allow Tenant to install systems furniture/workstations, telephone lines and telephone systems, fiber optics, computer cabling, and related similar matters, and, on a "B"space ready" basis only, to commence installation of Tenant's trade fixtures. Such plans Tenant shall schedule installation of such items with Landlord and specifications are hereby clarified Landlord's contractor so as follows: SEE EXHIBITnot to unreasonably impede, interfere with or delay the progress of construction of the Tenant Improvements; and Tenant shall perform such installation in accordance with guidelines promulgated by Landlord's contractor. Lessee has reviewed and approved all Delay, interference or damage arising out of Tenant's installation of such plans and specificationsitems shall constitute a Tenant Delay under Section 7. Any changes or additions made by Lessee to and all costs of installation of such plans and specifications items shall be at LesseeTenant's sole cost and expense. 5.3 During the period of construction of the Tenant Improvements, including a ten percent (10%) administrative payment Landlord shall consult with Tenant from time to Lessortime as necessary to achieve approval of certain matters and installations related to the Tenant Improvements. Such additional payments approvals shall be paid forthcoming from Tenant within a reasonable time period as requested by Lessee Landlord, which time period shall enable Landlord to Lessor as follows: (i) fifty percent (50%) upon maintain the schedule for substantial completion of the Tenant Improvements stated in the Work Schedule. Failure of Tenant to respond within such requested time period shall constitute a Tenant Delay. EXHIBIT B TENANT IMPROVEMENTS 5.4 During the period of construction of the Tenant Improvements, Landlord and Tenant shall meet at regular meetings occurring at least once monthly regarding the status of the construction and occurring at least once weekly during the final month of construction. If timely, matters requiring Tenant's approval may be determined at such meetings and decisions shall be reflected in the minutes of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedmeetings.

Construction of Tenant Improvements. All improvements not included within the scope of the Building Shell shall be deemed “Tenant Improvements.” Lessor, using the General Contractor, shall construct the Tenant Improvements and shall contribute the Tenant Improvement Allowance towards the payment of same and Lessee understands shall pay all costs associated with same in excess of the Tenant Improvement Allowance. Notwithstanding the foregoing, Lessee may select a general contractor other than Lessor’s General Contractor to construct the Tenant Improvements by giving written notice to Lessor on or before April 1, 2000, provided that (i) such general contractor has sufficient financial strength and agrees that Lessor is currently experience in constructing first class quality improvements of the type to be constructed in the process Premises to reasonably satisfy Lessor and any lender whose loan is secured by the Project or any part thereof and, (ii) Lessee agrees in such notice that the Tenant Improvements identified on Exhibit N hereto as “Early Construction Improvements” shall be constructed by Lessor’s General Contractor to facilitate construction of constructing the improvements balance of the Tenant Improvements by the Lessee selected general contractor (that the Early Construction Improvements shall retain concurrent status as Tenant Improvements, the cost of which shall comprise is to be charged to the Premises. In the course of Tenant Improvement Allowance), and (iii) such constructiongeneral contractor is ready, Lessor hereby willing and able and agrees to construct the tenant improvements set forth Tenant Improvements in accordance with Lessor’s General Contractor’s construction schedule, and (iv) any failure by such Lessee selected general contractor to construct the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications Tenant Improvements in accordance with Lessor’s General Contractor’s construction schedule shall be at Lessee's sole cost and expenseLessee Delay. If Lessor’s General Contractor constructs the Tenant Improvements, including or if Lessee selects a ten percent (10%) administrative payment general contractor other than Lessor’s General Contractor, but Lessor’s General Contractor nonetheless contracts with Lessor to Lessor. Such additional payments construct the “Early Construction Improvements,” in each case the contract shall be paid by Lessee a guaranteed maximum price contract based upon the successful bids of subcontractors and/or negotiated prices as provided in Section 2.04(f). The total compensation to Lessor as follows: (i) fifty percent (50%) upon approval of the General Contractor under such change by Lessor; and (ii) fifty percent (50%) prior contract shall be equal to occupancy a contractor’s fee not to exceed an amount equal to 2.5% of the Premises contract (provided that a contractor’s fee shall not be payable for change orders required due to coordination errors caused by Lessee. All tenant improvements shall be deemed substantially completed when the City General Contractor or any of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior its subcontractors) and an amount not to the commencement exceed an amount equal to 2 1/2% of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises contract for general conditions plus an amount equal to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement .75% of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedcontract for insurance.

Construction of Tenant Improvements. Lessee understands Tenant shall substantially complete any and agrees that Lessor is currently all alterations of, or improvements to, the Premises (the "Tenant Improvements"), in accordance with the Final Plans (as defined below) submitted to and approved by Landlord. The Tenant Improvements shall be made and performed in a safe and workmanlike manner, using only first-class materials, in compliance with the minimum Building standard specification for interior tenant improvements developed by Landlord for uniform application in the process Building, and in accordance with the provisions of constructing the following provisions of this EXHIBIT C: (a) No work with respect to the Tenant Improvements shall proceed without Landlord's reasonable prior written approval of: (1) Tenant's contractor(s) and subcontractor(s) selected from a list of contractors and subcontractors approved by Landlord; (2) certificates of insurance furnished to Landlord from a company or companies approved by Landlord (i) by Tenant's general contractor, evidencing commercial general liability insurance (with contractual liability and products and completed operations coverages) with a minimum combined single limit for bodily injury and property damage in an amount not less than Two Million Five Hundred Thousand Dollars ($2,500,000) per occurrence, endorsed to name Landlord, Landlord's managing agent and any other party designated by Landlord as an additional insured, and workers' compensation insurance, as required by law; (ii) by any and all subcontractors, evidencing commercial general liability insurance (with contractual liability and products and completed operations coverages) with a minimum combined single limit for bodily injury and property damage in an amount not less than One Million Dollars ($1,000,000) per occurrence, endorsed name Landlord, Landlord's managing agent and any other party designated by Landlord as an additional insured, and workers' compensation insurance, as required by law; and (iii) by Tenant evidencing builder's risk insurance with respect to the Tenant Improvements, in such amounts as are deemed reasonable by Landlord, and workers' compensation insurance, as required by law; and (3) detailed plans and specifications for such work, prepared by a licensed architect approved in writing by Landlord (the "Tenant's Architect"), which indicate that such work will not exceed the design load capacities and performance criteria of the Building, including, without limitation, its electrical, HVAC and weight capacities, and construction means and methods. (b) Except as otherwise expressly provided herein, the Tenant Improvements shall be undertaken at Tenant's sole cost and expense and in strict conformance with all applicable laws, regulations, building codes and the requirements of any building permit and all other applicable permits or licenses issued with respect to such work. Tenant shall be solely responsible for obtaining all such permits and licenses from the appropriate governmental authorities, and any delay in obtaining such permits or licenses shall not be deemed to extend the commencement date or the expiration date of the term of the Lease or to waive or toll Tenant's rental and other obligations with respect to the Premises. Copies of all permits and licenses shall be furnished to Landlord before any work is commenced, and any work not acceptable to any governmental authority or agency having or exercising jurisdiction over such work, or not reasonably satisfactory to Landlord, shall be promptly replaced and corrected at Tenant's expense. (c) Tenant shall provide Landlord with a construction schedule and all revisions thereto. All work by Tenant shall be scheduled through Landlord and shall be diligently and continuously pursued from the date of its commencement through its completion. Landlord hereby agrees to use its reasonable efforts to facilitate such work and to ensure access by Tenant to and availability to Tenant of all freight elevators and all such similar facilities necessary to facilitate such work, subject, however, to the rules and regulations established by Landlord for construction work in the Building. All work shall be conducted in a manner that maintains harmonious labor relations and does not unreasonably interfere with or delay any other work or activities being carried out by Landlord in the Building. Landlord or Landlord's agent shall have the right to enter the Premises and inspect the Premises and the Tenant Improvements at all reasonable times during the construction of the Tenant Improvements. (d) Tenant shall cause the Tenant's Architect to prepare and submit to Landlord for its approval complete architectural plans, drawings and specifications for all Tenant Improvements, including, without limitation, complete engineered mechanical and electrical working drawings for the Premises, showing the subdivision, layout, finish and decoration work desired by Tenant therefor, and any internal or external communications or special utility facilities which will require installation of conduits or other improvements which within common areas, all in such form and in such detail as may be required by Landlord. Such complete plans, drawings and specifications are referred to herein as "Final Plans". Tenant shall comprise submit the Final Plans for the approval of Landlord. Within seven (7) business days after Landlord receives the Final Plans for approval, Landlord shall give its written approval of the Final Plans, or provide Tenant with specific written objections to the Final Plans. If Landlord objects to the Final Plans, Landlord shall make itself available to meet with Tenant and the Tenant's Architect within five (5) business days after said objection to resolve the objections and to deliver to the Tenant's Architect such information as may be necessary to enable the Tenant's Architect to cause the Final Plans to be revised consistent with Landlord's objections. No delay in the scheduling of completion of the Tenant Improvements resulting from Landlord's timely review, revision and approval of the Final Plans shall be deemed to extend the commencement date or expiration date of the term of the Lease or waive or toll Tenant's rental obligations with respect to the Premises. In the course event that Tenant and/or its contractors and subcontractors desire to change the Final Plans subsequent to approval by Landlord, Tenant shall provide notice of such constructionproposed change to Landlord for Landlord's written approval, Lessor hereby agrees which approval shall be required prior to construct the tenant improvements set forth in implementation of such proposed change. Landlord shall approve or disapprove the proposed change within five (5) business days after Landlord's receipt of all final plans and specifications attached hereto as Exhibit "B"therefor or within such time period after such five (5) business day period which is reasonably practical. Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee At the conclusion of construction, Tenant shall cause the Tenant's Architect to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent provide two (10%2) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval complete sets of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy record drawings of the Premises Tenant Improvements, as constructed, which shall not materially deviate from the Final Plans, and Tenant shall also cause to be provided a project closeout package, including, without limitation, a punchlist sign-off, project team list, permit cards, unconditional lien releases and final construction costs itemized by Lessee. All tenant improvements trade. (e) Tenant shall be deemed substantially completed when enter into a contract (the City "General Contract") with one of Carpinteria issues a Certificate of Occupancy the Bidding Contractors ("Tenant's Contractor") for the Premises. Notwithstanding construction of the issuance of such Certificate, Lessee shall be provided with Tenant Improvements selected from a punch list of such tenant improvements prior contractors approved by Landlord. (f) With respect to fire and life safety systems work required under the General Contract, Tenant shall cause Tenant's Contractor to use either EDS or Simplex. With respect to the commencement of mechanical, electrical and plumbing engineering required under the lease termGeneral Contract, and Tenant shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises cause Tenant's Contractor to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa use ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure Tenant's Contractor may engage such discrepancies other laborers and suppliers as it deems appropriate selected from a list of subcontractors approved by Landlord, subject to the extent Lessor deems such discrepancies provisions of subparagraph (g) below. (g) Notwithstanding anything to the contrary contained herein, all major contractors' and subcontractors' contracts for the Tenant Improvements shall be reasonably claimedunion contracts, within thirty (30) days following commencement and Tenant shall use its commercially reasonable efforts to ensure that union labor is employed in connection with the design and construction of the lease term. Provided howeverTenant Improvements. (h) Tenant hereby designates ▇▇▇ ▇▇▇▇▇▇▇▇▇, if or any such discrepancy is incapable other person designated by Tenant from time to time, as its representative in connection with the design and construction of cure within such thirty (30)-day periodthe Tenant Improvements, and Lessor Landlord shall be entitled to rely upon the decisions and agreements made by such representative as binding upon Tenant. (i) Although Landlord has commenced the cure right to review, request revisions to and approve the Final Plans, Landlord's sole interest in doing so is to protect the Building and Landlord's interest in the Building, and Landlord is not in any way warranting or representing that Tenant's Final Plans are suitable for their intended use or comply with applicable laws and regulations. Landlord shall have no liability whatsoever in connection with Tenant's Final Plans, nor any responsibility for any omissions or errors contained therein. Accordingly, Tenant shall not rely upon Landlord's approval for any purpose other than for the purpose of acknowledging the consent of Landlord to proceed with the requested action, and Landlord shall incur no liability of any kind by reason of the granting of such discrepancy approvals. (j) Nothing in this EXHIBIT C shall affect the obligations of Tenant under the Lease with respect to any alterations, additions and improvements within such thirty (30)-day periodthe Premises, this provision shall be satisfiedincluding, without limitation, any obligation to obtain the prior written consent of Landlord in connection therewith.

Construction of Tenant Improvements. Lessee understands and agrees that a. Lessor is currently in the process of constructing the improvements which shall comprise the Premises. In the course of make arrangements for Reno Contracting, Inc. or such construction, other contractor selected by Lessor hereby agrees ("Contractor") to construct the tenant improvements set forth Phase 1 Tenant Improvements as indicated on the Phase 1 Plans in a good and workmanlike manner as soon as reasonably possible and consistent with industry custom and practice. Although Lessor will enforce the contract with Contractor to have the Tenant Improvements completed as soon as reasonably possible, Lessor shall not be liable for delay in the plans construction of the Tenant Improvements except to the extent that such delay is caused by Lessor's failure to respond to Working Drawings or Plans within three business days of their submission to Lessor and specifications attached hereto as Exhibit such delay directly causes a delay in the Substantial Completion of the proposed Tenant Improvements. b. The construction contract for the Phase 1 Tenant Improvements with Contractor (the "BConstruction Contract". Such plans ) shall be in form and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed substance acceptable to Lessor and reasonably approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expenseinclude, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: without limitation, requirements (i) fifty percent (50%) upon approval of that Contractor carry such change by Lessor; insurance as Lessor and Lessee may reasonably require, (ii) fifty that the Contractor provide a commercially reasonable construction warranty, which may be enforced by Lessee, (iii) that the Contractor's fee shall be calculated on a "cost plus a fee" basis where the fee for overhead and profit shall not exceed five percent (505%) prior of cost and the fee for liability insurance shall not exceed .60% (with the amount charged for general conditions and supervision competitive with the current market for similar tenant improvement projects in the Carlsbad Research Center, and (iv) that Contractor secure independent sealed bids from three (3) subcontractors mutually acceptable to occupancy Lessor and Lessee (to the extent that such bids are reasonably available) for each trade (except for roofing and fire safety, which subcontractors Lessor shall select) whose costs are in excess of five percent (5%) of the Premises by Work Cost Estimate. Lessee may designate that the lowest bidding subcontractor be selected. Both Lessor and Lessee shall have the full benefit of all contractor warranties in connection with the Phase 1 Tenant Improvements. Lessor shall direct and authorize Contractor to keep Lessee. All tenant improvements shall be deemed substantially completed when 's representative fully informed of the City of Carpinteria issues a Certificate of Occupancy construction process for the PremisesPhase 1 Tenant Improvements and to provide Lessee's representative with access to all documentation and other information in Contractor's possession or control regarding construction of the Phase 1 Tenant Improvements. Notwithstanding The Construction Contract shall not require the Contractor to post a completion bond if the premium therefor will be included in the Total Cost without the Lessee's express prior written consent. c. If Lessor and Lessee elect to construct the Tenant Improvements in two phases, then following the issuance of such Certificatea certificate of occupancy for the Phase 1 Tenant Improvements and Lessee's deposit of the amount by which the Total Cost exceeds the remaining Allowance as described in paragraph 5 below, Lessor shall make arrangements for Contractor to construct the Phase 2 Tenant Improvements. Lessor and Lessee shall cooperate with Contractor and Designer to cause the Phase 2 Tenant Improvements to be provided with completed as soon as reasonably possible after the completion and approval of the Phase 2 Working Drawings as described in Section 3.e above. d. Lessee shall designate a punch list of such tenant improvements prior representative who shall attend all planning and construction meetings related to the commencement Tenant Improvements. Lessor shall designate a representative to participate in the Tenant Improvement process. However, Lessor shall not receive a separate fee in connection with Lessor's reviewing the design and construction of the lease term, and shall inspect Tenant Improvements for the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space supervising Contractor in the Santa construction of the Tenant Improvements. ▇. ▇▇▇▇▇▇ area shall complete construction of the Shell within a commercially reasonable period in accordance with the Shell Architectural Drawings. However, if Lessor delays completion of the Shell (hereinafter other than delays related to the Mezzanine Improvements or other changes requested by Lessee) and such delay causes a corresponding delay in the completion of the Tenant Improvements, then the Commencement Date shall be pushed forward by the number of days in delay of the completion of the Shell that caused a corresponding delay in the completion of the Tenant Improvements. f. Prior to execution of the contracts with the Designer and the Contractor, Lessor and Lessee shall agree upon a schedule for design and construction of the Tenant Improvements ("discrepancyCompletion Schedule"), broken down by number of days to complete certain milestones and attach it to this Agreement as Schedule I. If either Designer or Contractor fall behind more than fourteen (14) days in the completion of any milestone in the Completion Schedule, then Lessee may provide Lessor with a notice that the Completion Schedule is not being met. Lessor shall cure such discrepancies use commercially reasonable efforts to cause Designer or Contractor, as the case may be, to remedy the failure to proceed pursuant to the extent Construction Schedule. If within five (5) business days after receipt of such notice Lessor deems such discrepancies is unable to cause Designer or Contractor, as the case may be, to provide reasonably acceptable assurances that there will be reasonably claimed, within thirty (30) days following commencement no further delay in the identified portion of the lease term. Provided howeverCompletion Schedule or that the identified delay otherwise will be remedied and the other portions of the Completion Schedule will be met, if any such discrepancy is incapable of cure within such thirty (30)-day periodthen Lessee shall have the right to enforce its third party beneficiary rights under the contract with the Designer or Contractor, as applicable, and Lessor has commenced take any action Lessee deems reasonably necessary to cause completion of the cure Tenant Improvements as soon as reasonably possibly, including, without limitation, termination of such discrepancy within such thirty (30)-day periodthe applicable contract with Designer or Contractor. Notwithstanding the foregoing, any action Lessee may take pursuant to this provision subparagraph 4.f shall be satisfieddeemed a Change Order for purposes of this Agreement and Lessee shall comply with the provisions of Paragraph 7 of this Agreement with respect to any action that Lessee may take that increases the cost of completing the Tenant Improvements, including, without limitation, the cost of terminating any contracts. Lessor shall have no liability with respect to any delays in completion of the Tenant Improvements in connection with such circumstances.

Construction of Tenant Improvements. Lessee understands (a) Except as otherwise set forth herein, Landlord shall have no responsibility with respect to delivery of the Leased Premises except to (i) construct at Landlord's sole cost and agrees that Lessor is currently expense (except as agreed to by Tenant in any Change Order Memorandum of Agreement (as hereinafter defined)) in a good and workmanlike manner the Tenant Improvements in the process of constructing the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications Space Plan attached hereto as Exhibit B (the "BTenant Improvements". Such ) free of defects and using materials and equipment of good quality, and in accordance with all applicable laws and the Scope of Work and preliminary plans dated October 15, 2002, incorporated herein as Exhibit B-1 ("Scope of Work"), and specifications are hereby clarified with the approved Plans and Specifications (as follows: SEE EXHIBIT. Lessee has reviewed defined below) as prepared by Alliance Architecture, subject to events and approved delays due to causes beyond its reasonable control, (ii) deliver the Leased Premises in good, vacant, broom clean condition, with all such plans building systems in good working order and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; in compliance with all laws and (ii) fifty percent (50%) prior to obtain any and all approvals and permits from the appropriate governmental authorities required for the legal occupancy of the Leased Premises by Lesseeand the construction of the Tenant Improvements in accordance with applicable law. All tenant improvements Notwithstanding anything herein to the contrary, Tenant's acceptance of the Leased Premises or submission to Landlord of a written "punch list" shall not be deemed substantially completed when a waiver of Tenant's right to have defects in the City of Carpinteria issues a Certificate of Occupancy for Tenant Improvements or the PremisesLeased Premises repaired at no cost to Tenant within one year from the Commencement Date. Notwithstanding At anytime within one year from the issuance of Commencement Date, Tenant shall give notice to Landlord whenever any such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease termdefect becomes reasonably apparent, and Landlord shall inspect the Premises after their substantial completionrepair such defect as soon as practicable. Lessee On or before October 28, 2002, (i) Landlord shall prepare and submit to Tenant a set forth any manner in which Lessee claims that the Premises to do not conform to the of plans and specifications and/or construction drawings (the "Plans and Specifications") covering all work to be performed by Landlord in constructing and installing the Tenant Improvements, which shall be based on and be consistent with the Space Plan and Scope of Work attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇B-1 and (ii) Landlord shall provide Tenant with a ▇▇▇▇ area (hereinafter chart detailing the "discrepancy"). Lessor shall cure such discrepancies to daily construction schedule for the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement construction of the lease termTenant Improvements. Provided however, if any such discrepancy is incapable Tenant shall have five (5) business days after receipt of cure within such thirty (30)-day period, the Plans and Lessor has commenced Specifications in which to review the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfied.Plans and

Construction of Tenant Improvements. Lessee understands At Lessor's sole cost and agrees that expense, Lessor is currently in the process of constructing shall construct the improvements which shall comprise the Premises("Tenant Improvements") described in that certain letter from ▇▇▇▇▇ ▇. In the course of such construction▇▇▇▇▇ & Sons, Lessor hereby agrees Inc. to construct the tenant improvements set forth in the plans and specifications VidaMed Inc., dated July 13, 1994, attached hereto as Exhibit "B"" and incorporated by reference herein. Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all The Tenant Improvements shall be constructed in accordance with such attached plans and specifications, in a good and workmanlike manner, free of defects and using new materials and equipment of good quality and in compliance with all Applicable Law (including, without limitation, the Americans with Disabilities Act of 1990). Any changes Within thirty (30) days after the Commencement Date, Lessee shall have the right to submit a written "punchlist" to Lessor, setting forth any defective items to be corrected. Notwithstanding anything to the contrary contained in this Lease or additions made by Lessee to such plans and specifications shall be at in the foregoing, Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy acceptance of the Premises by Lessee. All tenant improvements or submission of a "punchlist" shall not be deemed substantially completed when a waiver of Lessee's right to have defects in the City of Carpinteria issues a Certificate of Occupancy for Tenant Improvements or the PremisesPremises repaired at Lessor's sole expense. Notwithstanding the issuance of such Certificate, Lessee shall be provided give notice to Lessor whenever any such defect becomes reasonably apparent, and Lessor shall repair such defect as soon as practicable. Lessor also hereby assigns to Lessee all warranties with a punch list of such tenant improvements prior respect to the commencement of the lease termTenant Improvements, including, without limitation, warranties which would reduce Lessee's maintenance obligations hereunder, and shall inspect cooperate with Lessee to enforce such warranties. 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 BROKERS(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 RELAY 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 BY CONSULTED. The parties hereto have executed this Lease at the Premises after place on the dates specified above to their substantial completionrespective signatures. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B"Executed at Palo Alto, as reasonably measured by the standards of finishedCA Executed at Zomed/Mountain View, comparably priced industrial space in the Santa CA ----------------------------- ---------------------------- On February 13, 1995 On February 13, 1995 ----------------------------------- ---------------------------------- By: LESSOR By: LESSEE The ▇▇▇▇▇ Mountain View Joint Venture ZoMed International ------------------------------------- ------------------------------------ By: /s/: ▇▇▇▇▇ ▇▇▇▇▇ By: /s/: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ area ---------------------------------- --------------------------------- -32- Name Printed: ▇▇▇▇▇ ▇▇▇▇▇ Name Printed: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Title: Managing Joint Venturer Title: Executive Vice President Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Address: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Palo ▇▇▇▇.▇▇ 94304 ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Phone: (hereinafter the 4l5) ▇▇▇-▇▇▇▇ ▇hone: (▇▇▇) ▇▇▇-▇▇▇▇ EXHIBIT "discrepancy")B" ▇▇▇▇▇ ▇. Lessor shall cure such discrepancies ▇▇▇▇▇ & Sons, Inc. General Contractors ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (415) 321-8432 July 13, 1994 VIDAMED ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ RE: Preliminary Cost Estimate Qualifications All work is based on Zomed/Scionex floor plan, 1 sheet dated 7/1/94 1. Demolition: ---------- Remove approximately 9000 SF of carpet; remove approximately 10 lineal feet of wall; remove one sink and cabinet for relocation to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedkitchen/dining room.

Construction of Tenant Improvements. Lessee understands Tenant has personally inspected the Leased Premises and agrees accepts the same "as is" without representation or warranty by Landlord of any kind and with the understanding that Lessor is currently Landlord shall have no responsibility with respect thereto except to construct in a good and workmanlike manner the improvements in the process of constructing the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth Leased Premises in the accordance with Tenant's plans and specifications which shall be mutually agreed upon by both Landlord and Tenant and attached hereto as Exhibit "B"B in an amount not to exceed Twenty-seven Thousand Three Hundred Forty-six Dollars ($27,346.00) (-Landlord's Allowance') and except as provided in Section 2.01. Such plans Tenant hereby acknowledges and specifications are agrees that all costs in excess of Landlord's Allowance will be (i) paid by Tenant to Landlord within thirty (30) days of Tenant's receipt of Landlord's invoice therefor; or (ii) amortized at an interest rate of eleven percent (11%) per annum and paid by Tenant as Additional Rent over the Lease Term. Notwithstanding anything contained herein to the contrary, Landlord agrees that, at Landlord's sole cost and expense (and without deduction from Landlord's Allowance), Landlord shall repair the existing defect in floor elevation rise within the Leased Premises. In addition, Landlord and Tenant hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed agree that Landlord will not be responsible for removing the existing scissor ▇▇▇▇ lift in the Leased Premises (the `Lift') and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications Tenant shall be have the right, at LesseeTenant's sole cost and expense, including a ten percent (10%) administrative payment to Lessorremove the Lift, provided that Tenant promptly repairs any damage caused by such removal and restores the Leased Premises to its prior condition. Such additional payments In the event Tenant elects not to remove the Lift, Tenant shall have no liability or responsibility to ensure that the Lift is operational at the end of the Lease Term. Landlord hereby agrees that the tenant finish improvements to be constructed pursuant to Exhibit B shall be paid submitted to four (4) contractors for bids, including one (1) contractor selected by Lessee Tenant. Landlord and Tenant shall thereafter work together in good faith and in a reasonable manner to Lessor as follows: (i) fifty percent (50%) upon approval of select the contractor to perform such change by Lessor; work, based on price, quality, delivery and (ii) fifty percent (50%) prior other reasonable factors. Landlord shall keep Tenant involved in the selection process, but Landlord shall have the ultimate right to occupancy select the contractor based on its reasonable evaluation of the Premises by Lesseefactors set forth above. All tenant improvements There shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims d presumption that the lowest bid will be selected, unless outweighed by other factors. Landlord agrees to warrant all work performed on the tenant finish improvements within the Leased Premises pursuant to do not conform to EXHIBIT B for a period of one (1) year from the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedCommencement Date.

Construction of Tenant Improvements. Lessee understands I. Landlord's Work. ---------------- Tenant has personally inspected the Leased Premises and agrees accepts the same "AS IS" without representation or warranty by Landlord of any kind and with the understanding that Lessor is currently Landlord shall have no responsibility with respect thereto except to construct in a good and workmanlike manner the improvements described on EXHIBIT B attached hereto and made a part hereof (the "Tenant Improvements"). Notwithstanding the foregoing to the contrary, based upon Landlord's inspection of the Building systems servicing the Leased Premises prior to the Commencement Date, Landlord represents that as of the Commencement Date the building systems servicing the Leased Premises are in good working order and repair. Within five (5) days of Landlord's Substantial Completion of the Tenant Improvements, Landlord and Tenant shall complete a walk-through of the Leased Premises at which time Tenant shall notify Landlord in writing of any deficiencies in the process Tenant Improvements ("Punch List Items"). Landlord shall promptly commence and diligently proceed until the Punch List Items are completed or remedied. Promptly following the Commencement Date, Tenant shall execute Landlord's Letter of constructing Understanding in substantially the improvements which shall comprise form attached hereto as EXHIBIT C and made a part hereof, acknowledging, among other things, that Tenant has accepted the Leased Premises. If Tenant takes possession of and occupies the Leased Premises, then, subject to the foregoing paragraph, Tenant shall be deemed to have accepted the Leased Premises and that the condition of the Leased Premises and the Building was at the time satisfactory and in conformity with the provisions of this Lease in all respects. II. Tenant's Work ------------- In addition to the course foregoing, Tenant shall be responsible for the installation of such constructionTenant's fixtures and equipment (the "Tenant's Work") within the Leased Premises. Tenant's proposed architect/engineer, Lessor hereby agrees construction contractor, and mechanical, electric and plumbing subcontractors are subject to construct Landlord's prior written approval, which approval shall not be unreasonably withheld or delayed. Promptly following the tenant improvements set forth selection and approval of the contractor, Tenant shall forward to said contractor (and copy Landlord on the transmittal) Landlord's mechanical and plumbing specifications, all of which have been delivered to Tenant prior to the date of this Lease. Tenant shall cause said contractor. to comply with said specifications. At Landlord's request, Tenant shall coordinate a meeting among Landlord, Tenant and Tenant's contractor to discuss the Building systems and other matters related to the construction of the Tenant's Work. Tenant's Work shall be completed in the accordance with plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and which shall be approved all such plans and specifications. Any changes in writing by Landlord, which approval shall not be unreasonably withheld, conditioned or additions made by Lessee to delayed; provided, however, such plans and specifications shall be at Lesseenot materially alter the exterior appearance or basic nature of the Building, or any Building systems. Tenant, its contractors, and subcontractors, shall maintain in full force and effect during the construction of the Tenant's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as followsWork: (i) fifty percent worker's compensation insurance in an amount no less than the minimum statutory amount; (50%ii) upon approval commercial general liability insurance (which shall not exclude blanket, contractual liability, broad form property damage, personal injury, completed operations, products liability, and fire damage) with a combined single limit of not less than $3,000,000 (which may be satisfied by any combination of primary or excess/umbrella coverage) for both bodily injury and property damage; and (iii) all risk coverage for the full cost of replacement of Tenant's business personal property, including Tenant's Work and betterments. Notwithstanding anything contained in this Lease to the contrary, Tenant and its contractor's and subcontractors' insurance required hereunder shall be the primary policy with respect to any liability, claims, demands or expenses (including reasonable attorneys' fees) for injury (including death) or damages to person or property arising from or in connection with the construction of the Tenant's Work. Tenant shall indemnify and hold harmless Landlord from and against any and all such change claims, except for such liability, claim, or demand arising directly out of the sole negligence of Landlord. Tenant further agrees to indemnify, defend and hold harmless Landlord and its agents, directors and employees from all claims and suits of whatever type, including court costs, attorneys' fees, and other expenses, caused by Lessor; any act or omission of its contractors and subcontractors. Tenant's obligations to indemnify and hold harmless Landlord hereunder shall survive the termination of this Lease. Prior to commencing the construction of the Tenant's Work, Tenant shall deliver to Landlord (i) evidence of insurance (carried by Tenant, its contractors, and any subcontractors) reasonably satisfactory to Landlord, which insurance shall name Landlord as an additional insured and shall be maintained throughout the construction of the Tenant's Work, and (ii) fifty percent (50%) prior a project schedule in detail reasonably satisfactory to occupancy Landlord. Throughout the construction of the Tenant's Work, Tenant shall notify Landlord promptly of any material deviations from such project schedule. Tenant or its contractor shall construct the Tenant's Work in a good, first-class and workmanlike manner and in accordance with the approved plans and specifications and all applicable governmental regulations. If Tenant shall fail to .complete the Tenant's Work by the Commencement Date, Tenant's obligation to pay Minimum Annual Rent in the amount set forth in Sections 1.01(D) and (E) and Additional Rent hereunder shall nevertheless begin on the Commencement Date. Landlord shall have the right, from time to time throughout the construction process, to enter upon the Leased Premises to perform periodic inspections of the Tenant's Work. Tenant agrees to respond to and address promptly any reasonable concerns raised by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues Landlord during or as a Certificate of Occupancy for the Premises. Notwithstanding the issuance result of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement inspections. Upon substantial completion of the lease termTenant's Work, a representative of Landlord and a representative of Tenant together shall inspect the Leased Premises and generate a punchlist of defective or uncompleted items relating to the completion of construction of the Tenant's Work. Tenant shall, within a reasonable time after their substantial completion. Lessee shall such punchlist is prepared and agreed upon by Landlord and Tenant, complete such incomplete work and remedy such defective work as are set forth on the punchlist. Tenant acknowledges and agrees that Tenant shall have no right to conduct its business at the Leased Premises unless and until Tenant delivers to Landlord an original certificate of occupancy for the Leased Premises. No person shall be entitled to any manner in which Lessee claims that the Premises to do not conform lien derived through or under Tenant for any labor or material furnished to the plans Leased Premises, and specifications attached hereto as Exhibit "B", as reasonably measured nothing in this Lease shall be construed to constitute a consent by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies Landlord to the extent Lessor deems creation of any lien. If any lien is filed against the Leased Premises for work claimed to have been done for or material claimed to have been furnished to Tenant, Tenant shall cause such discrepancies lien to be reasonably claimed, discharged of record within thirty (30) days following commencement of the lease termafter filing. Provided howeverTenant shall indemnify Landlord from all costs, if losses, expenses and attorneys' fees in connection with any such discrepancy is incapable of cure within such thirty (30)-day period, construction or alteration and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedany related lien.

Construction of Tenant Improvements. Lessee understands Tenant shall have the right to place partitions and agrees that Lessor is currently fixtures and make improvements or other alterations in the process Premises in accordance with the provisions of constructing the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy Paragraph 9 of the Premises Lease. Tenant shall have the right to apply up to $84,320.19, which amount constitutes the amount remaining from improvement 7 -285- allowances previously provided by LesseeLandlord to Tenant for Suites 315 and 350A ("Carry Over Improvement Allowance"), and, in addition, Landlord shall provide to Tenant an additional improvement allowance of up to two hundred fifteen thousand, one hundred fifty-two dollars ($215,152) ("Additional Improvement Allowance"), all of which may be applied toward the cost of any such tenant-provided improvements as follows (the Carry Over Improvement Allowance and the Additional Improvement Allowance are hereinafter sometimes referred to together as the "Improvement Allowance"): 1. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements At least three (3) weeks prior to the commencement of the lease termany construction, and Tenant shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the furnish Landlord with two (2) complete sets of plans and specifications attached hereto for Tenant's proposed improvements for review and assessment as to the compatibility of said improvements with the Building's systems. Such review shall be a Tenant's sole cost and expense and shall not be unduly delayed. Tenant agrees to make such modifications as are reasonably required by Landlord. 2. The Improvement Allowance shall be paid in periodic installments, not more frequently than once per month, equal to the total of the contractor's or consultant's invoice amounts for improvements made to the Premises, excluding any furnishings or business equipment (such as computers, satellite/microwave dish, office equipment, etc.), as submitted by Tenant and verified to Landlord's reasonable satisfaction; provided, however, that such payments will be made only if Tenant is not then in default under the terms of this Lease and the invoices are accompanied by lien waivers in the amount equal to that of the invoices, and provided further that the Final Installment, as defined in paragraph 8 below, shall be paid only upon compliance with the provisions of said paragraph 8. Landlord shall make such periodic payments within thirty days of complete submittal by Tenant in accordance with the provisions hereof. The Improvement Allowance shall be allocated and distributed subject to the provisions of this Exhibit "B"" within the following time frame, as reasonably measured by subject to Excusable Delays: Additional Improvement Allowance - Between the standards Expansion Premises Commencement Date and the later of finished12 months thereafter or June 30, comparably priced industrial space in 2003. Carry Over Improvement Allowance - Between the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimeddate of this Amendment and June 30, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfied.2000

Construction of Tenant Improvements. Lessee understands Upon Final Approval of the Working Drawings, Landlord agrees promptly to bid the construction of the Expansion Improvements to the following four (4) mutually approved general contractors: (i) ▇▇▇▇▇ & ▇▇▇▇, (ii) Resource Commercial, (iii) ICI Construction, Inc., and agrees that Lessor is currently in the process of constructing the improvements which shall comprise the Premises. In the course (iv) ▇▇▇▇▇▇ Construction, and to immediately provide a copy of such construction, Lessor hereby agrees bids to construct Tenant for Tenant's consideration. The costs associated with the tenant improvements construction of the Expansion Improvements shall be paid as set forth in Section 5 of this Work Letter. Landlord shall see that the plans construction complies with all applicable building, fire, plumbing, electrical, health, and specifications attached hereto as Exhibit "B". Such plans sanitary codes, regulations, laws, ordinances, rules and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications regulations of any applicable governmental authority, the satisfaction of which shall be at Lessee's sole cost evidenced by a certificate of occupancy for the Expansion Space if the same is required to be issued; provided that in the event the Working Drawings do not comply with such codes and expenseregulations, including a ten percent (10%) administrative payment to Lessor. Such additional payments all costs resulting from such non-compliance shall be paid by Lessee Tenant. Further, Landlord shall see that the construction complies with any and all restrictive covenants and/or deed restrictions applicable to Lessor as follows: the Expansion Space. Landlord shall recommend the selection of the Contractor to Tenant ten (i10) fifty percent (50%) business days after Final Approval of the Working Drawings; and upon Tenant's approval of such change the selection, Landlord shall promptly enter into a construction contract ("Construction Contract"), subject to Tenant's reasonable approval (which shall be not unreasonably withheld or delayed) with the general contractor approved by Lessor; and Tenant (iiwhich approval shall not be unreasonably withheld) fifty percent (50%) prior to occupancy the "Contractor"). Landlord shall cause the construction of the Premises by Lessee. All tenant improvements shall Expansion Improvements to be deemed substantially completed when carried out in substantial conformance with the City of Carpinteria issues Working Drawings in a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, good and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area like manner using first-class materials. The Construction Contract shall, at a minimum, call for (hereinafter i) the "discrepancy"construction of the Expansion Improvements for a stipulated sum contract, based on the Working Drawings; (ii) contractor warranties as described in AIA form A201 1997 Edition; (iii) Tenant's right to review and approve all Contractor pay applications (which approval shall not be unreasonably withheld or delayed by Tenant); and (iv) the Contractor to furnish evidence of the insurance set forth in Schedule 1 attached to Exhibit D of the Lease and any other insurance required by Landlord, and naming Landlord and Tenant as an additional insured on all liability insurance policies. Lessor Such Construction Contract price shall cure such discrepancies be subject to adjustment based on any changes to the extent Lessor deems such discrepancies to Working Drawings required by Tenant in accordance with this Work Letter. The Construction Contract may not be reasonably claimedamended nor the Construction Contract price increased by change order or otherwise, within thirty (30) days following commencement of the lease term. Provided howeverwithout Tenant's prior written approval, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision which approval shall not be satisfiedunreasonably withheld or delayed.

Construction of Tenant Improvements. Lessee understands and agrees that Lessor is currently in the process of constructing the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at LesseeUpon Landlord's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements ----------------------------------- Tenant's plans, Landlord shall be deemed substantially completed when the City of Carpinteria issues enter into a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided construction contract with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇ ▇▇▇▇▇▇ area ▇▇▇▇▇ (hereinafter "GLY") for the "discrepancy")construction of the Tenant Improvements. Lessor Landlord will guaranty the delivery dates for the Premises, on a floor by floor basis, set forth in Section 1(e) above, and shall cure such discrepancies be subject to the extent Lessor deems such discrepancies penalties set forth in Section 40 for failure to so deliver the Premises, if Tenant complies with the following dates regarding delivery of items necessary for construction of the Tenant Improvements: (1) March 15, 2000: begin preparation of design and drawings for the Tenant Improvements; (2) June 1, 2000: submit the plans for Tenant Improvements to the City of Bellevue for a preliminary permit; (3) July 1, 2000: finalize construction drawings for the Tenant Improvements; and (4) August 10, 2000: approval of bid price for construction of the Tenant Improvements by Landlord and Tenant, which approval shall not be unreasonably withheld. If Tenant does not comply with the dates set forth above, then the dates for delivery of the Premises set forth in Section 1(e) above shall, on a floor-by-floor basis, be moved back one day for each day that Tenant fails to meet its delivery date for any item. The construction of all improvements to be reasonably claimedmade on the Premises shall be performed in a first-class, within thirty (30) days following commencement workmanlike manner, in conformity with all applicable governmental laws, ordinances, rules, orders, regulations and other requirements, and in substantial accordance with plans and specifications. Tenant or Tenant's agents shall have the right to inspect the construction of the lease termTenant Improvements during the progress thereof at Tenant's sole cost and expense and at times coordinated with Landlord and GLY. Provided howeverIf, during the progress of construction of the Tenant Improvements, Tenant desires to have any changes made to the approved plans and specifications, then Landlord shall cause GLY to prepare and deliver to Tenant's designated representative a change order showing the cost therefor and the additional time necessary for substantial completion of the Tenant Improvements, if any any. Tenant shall promptly inform Landlord and GLY whether such discrepancy is incapable change order has been approved by Tenant. The dates for delivery of cure within such thirty (30)-day periodthe Premises set forth in Section 1(e) above shall, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day periodon a floor-by-floor basis, this provision shall be satisfiedmoved back one day for each additional day that a change order approved by Tenant will require.

Construction of Tenant Improvements. Lessee understands Until Tenant approves the Final Plans, Landlord will be under no obligation to cause the construction of any of the Tenant Improvements. Following Tenant’s approval of the Final Plans, Landlord’s contractor will commence and diligently proceed with the construction of the Tenant Improvements, subject to Tenant Delays (as defined in Section 3A of the Lease) and Force Majeure Delays (as described in Section 9 below). Landlord warrants and guarantees all labor, material and services employed and furnished by or to it in performing the Tenant Improvements and agrees that Lessor is currently in promptly to amend and make good, upon demand by Tenant, and at Landlord’s expense, any and all defects due to imperfect workmanship, materials and damages resulting therefrom, to the process reasonable approval and acceptance of constructing Tenant, provided such defects and deficiencies are discovered within three (3) years following the improvements which Suite 350 Commencement Date. Should Landlord refuse or neglect to proceed at once with the correction of rejected or defective materials or workmanship, after receiving notice to do so, then Tenant, after reasonable prior written notice to Landlord and an opportunity to cure, shall comprise have the Premises. In right and power to have the course defects, remedies or changes made at the expense of such constructionLandlord, Lessor hereby and Landlord agrees to construct pay Tenant on demand any and all loss or expense paid or incurred by Tenant in remedying such defects, and making such changes, together with interest on said total sum at the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a rate of ten percent (10%) administrative payment per annum until paid, plus all court costs and attorney fees incurred in collection. Furthermore, Landlord agrees to Lessor. Such additional payments shall be paid by Lessee transfer on a non-exclusive basis to Lessor Tenant all manufacturer’s product and equipment warranties in so far as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior same pertain to the commencement of the lease term, Tenant Improvements and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedare assignable.

Construction of Tenant Improvements. Lessee understands and agrees that Lessor is currently in the process of constructing the improvements which shall comprise the Premises(a) PRELIMINARY PLANS/WORKING PLANS. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B"Landlord has retained Dona▇▇ ▇. Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area ▇, ▇.I.A. to prepare preliminary space plans (hereinafter "Preliminary Plans") to be utilized in the preparation of final working drawings and specifications for tenant improvements to the Premises ("discrepancyTenant Improvements"). Lessor The Preliminary Plans have been completed and delivered to Landlord and are attached hereto as "Exhibit C." Within five (5) days after execution of the Lease, Landlord shall cure return same to Tenant marked and accompanied by comments and such discrepancies required revisions as are reasonable under the circumstances. Within five (5) days thereafter, Tenant shall submit two (2) sets of revised Preliminary Plans, revised to reflect review and approval. Promptly following Landlord's approval of the Preliminary Plans, Landlord shall cause its architect to prepare and submit two (2) copies of working drawings and specifications ("Working Plans") to Tenant for its review and approval. Tenant shall advise Landlord within five (5) days of Tenant's receipt of the Working Plans of any requested revisions. Immediately upon receipt of said comments, Landlord shall make all approved revisions to the extent Lessor deems such discrepancies Working Plans and submit two (2) copies thereof to be reasonably claimedTenant for its final review and approval. Concurrently with the above review and approval process, within thirty (30) days following commencement Landlord shall submit all plans and specifications to the City and other applicable governmental agencies in an attempt to expedite City approval and issuance of all necessary permits and licenses to construct the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced Tenant Improvements as shown on the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedWorking Plans.

Construction of Tenant Improvements. Lessee understands and agrees that Lessor is currently in the process of constructing the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "“B"”. Such plans and specifications are hereby clarified as follows: SEE EXHIBITEXHIBIT “B”. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's ’s sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall sha11 be deemed substantially completed when the City of Carpinteria issues a Certificate certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "“B"”, as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇B▇▇▇▇▇▇ area (hereinafter the "“discrepancy"”). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days 30)-days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day 30) day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfied.

Construction of Tenant Improvements. Lessee understands At Lessor's sole cost and agrees that expense, Lessor is currently in the process of constructing shall construct the improvements which shall comprise the Premises("Tenant Improvements") described in that certain letter from ▇▇▇▇▇ ▇. In the course of such construction▇▇▇▇▇ & Sons, Lessor hereby agrees Inc. to construct the tenant improvements set forth in the plans and specifications VidaMed Inc., dated July 13, 1994, attached hereto as Exhibit "B"" and incorporated by reference herein. Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all The Tenant Improvements shall be constructed in accordance with such attached plans and specifications, in a good and workmanlike manner, free of defects and using new materials and equipment of good quality and in compliance with all Applicable Law (including, without limitation, the Americans with Disabilities Act of 1990). Any changes Within thirty (30) days after the Commencement Date, Lessee shall have the right to submit a written "punchlist" to Lessor, setting forth any defective items to be corrected. Notwithstanding anything to the contrary contained in this Lease or additions made by Lessee to such plans and specifications shall be at in the foregoing, Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy acceptance of the Premises by Lessee. All tenant improvements or submission of a "punchlist" shall not be deemed substantially completed when a waiver of Lessee's right to have defects in the City of Carpinteria issues a Certificate of Occupancy for Tenant Improvements or the PremisesPremises repaired at Lessor's sole expense. Notwithstanding the issuance of such Certificate, Lessee shall be provided give notice to Lessor whenever any such defect becomes reasonably apparent, and Lessor shall repair such defect as soon as practicable. Lessor also hereby assigns to Lessee all warranties with a punch list of such tenant improvements prior respect to the commencement of the lease termTenant Improvements, including, without limitation, warranties which would reduce Lessee's maintenance obligations hereunder, and shall inspect cooperate with Lessee to enforce such warranties. 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 BROKERS(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 RELAY 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 BY CONSULTED. The parties hereto have executed this Lease at the Premises after place on the dates specified above to their substantial completionrespective signatures. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa Executed at_________________________ Executed at__________________________ On__________________________________ On___________________________________ By: LESSOR By: LESSEE The ▇▇▇▇▇ Mountain View Joint Venture ZoMed International ------------------------------------- ------------------------------------- By:_________________________________ By:__________________________________ Name Printed: ▇▇▇▇▇ ▇▇▇▇▇ Name Printed: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ area ---------------------- ----------------------- Title: Managing Joint Venturer Title: Executive Vice President ----------------------------- ------------------------------ Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Address: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ --------------------------- ---------------------------- ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ --------------------------- ---------------------------- Phone: (hereinafter ▇▇▇) ▇▇▇-▇▇▇▇ Phone: (▇▇▇) ▇▇▇-▇▇▇▇ --------------------------- ---------------------------- -41- EXHIBIT A --------- VidaMed, Inc., Scionex Corporation and ZoMed International do not use hazardous materials as of the signing of the attached lease. ▇▇▇▇ MEDICAL SYSTEMS, INC. June 22, 1999 ▇▇▇▇ ▇▇▇▇▇▇▇▇ Cohesive Technology Solutions, Inc. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Subject: Extension of sublease of ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Dear Alex, This letter shall serve as the formal agreement to extend the sublease between ▇▇▇▇ Medical Systems, Inc. ("Sublessor") and Computer LANscapes, Inc. (now Cohesive Technology Solutions, Inc.) ("Sublessee"), said sublease dated 13 January 1997. Reference is made, also, to Addendum One dated as of 13 January 1997 and Addendum Number Two, dated 19 February 1999. The standard sublease agreement as amended by Addendum One and Addendum Two and further described in this letter shall be referred to as the "discrepancySublease Agreement"). Lessor shall cure such discrepancies to All capitalized terms are defined in the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedsublease.

Construction of Tenant Improvements. Lessee understands and agrees that Lessor is currently in the process of constructing the improvements which 4.1 Tenant shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy retain one of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when following general contractors (the City of Carpinteria issues a Certificate of Occupancy “Contractor”) for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement construction of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa Tenant Improvements: Hathaway ▇▇▇▇▇▇▇▇▇ area Construction, Skyline Construction, NOVO, Dome, and ▇▇▇▇ ▇▇▇▇▇. Prior to entering into any contract with the Contractor, Tenant shall submit such contract to Landlord for its review and consent (hereinafter not to be unreasonably withheld) for the "discrepancy"). Lessor sole purpose of confirming that such contract complies with the provisions of the Work Letter. 4.2 Tenant shall cure cause the Contractor to agree that: (i) the Tenant Improvements shall be constructed in strict accordance with the Approved Working Drawings; (ii) Tenant and the Contractor shall abide by all rules made by ▇▇▇▇▇▇▇▇’s Building manager with respect to performance of construction in the Building, including the handling of deliveries, use of elevators, storage of materials, and any other matter in connection with the construction of the Tenant Improvements; and (iii) all reasonable safety precautions must be taken throughout construction. 4.3 Throughout the course of the Tenant Improvement Work, Tenant and its Contractor shall maintain such discrepancies insurance coverage as is commercially standard for such construction work. 4.4 Tenant or its Contractor must obtain all applicable building permits and approvals for the construction of Tenant Improvements, and such Tenant Improvements must be constructed in accordance with Applicable Laws, including ADA and Title 24. 4.5 With regards to any work to be performed on the Building Systems and subsystems, Tenant and its Contractor shall use those subcontractors that regularly maintain and manage such systems, and such work will include design, components, distribution, and installation to meet ▇▇▇▇▇▇▇▇’s specifications for the operations of the Building; any such subsequent contractors with whom Tenant or Contractor are required to contract will charge commercially reasonable rates for the services involved, or Tenant shall have the right to propose reasonably acceptable substitute contractors or sub-contractors to perform such work, subject to Landlord’s prior written consent, not to be unreasonably withheld, conditioned or delayed. 4.6 At the conclusion of construction, (i) Tenant shall cause the Architect and Contractor (A) to update the Approved Working Drawings as necessary to reflect all changes made to the extent Lessor deems Approved Working Drawings during the course of construction, (B) to certify to the best of their knowledge that the “record-set” of as-built drawings are true and correct, which certification shall survive the expiration or termination of this Lease, and (C) to deliver to Landlord two (2) sets of copies of such discrepancies to be reasonably claimed, record set of drawings within thirty ninety (3090) days following commencement issuance of the lease term. Provided however, if any such discrepancy is incapable a certificate of cure within such thirty (30)-day periodoccupancy, and Lessor has commenced (ii) Tenant shall deliver to Landlord a copy of all warranties, guaranties, and operating manuals and information relating to the cure of such discrepancy within such thirty (30)-day periodimprovements, this provision shall be satisfiedequipment, and systems.

Construction of Tenant Improvements. Lessee understands and agrees that Lessor a. Lessor, as soon as this Agreement is currently in the process of constructing the improvements which executed, shall comprise the Premises. In the course of such constructionmake arrangements for Reno Contracting, Lessor hereby agrees Inc. (“Contractor”) to construct the tenant improvements set forth Tenant Improvements as indicated on the Plans as soon as commercially possible and consistent with industry custom and practice. Although Lessor will enforce the contract with Contractor to have the Tenant Improvements completed as soon as reasonably possible, Lessor shall not be liable for delay in the plans and specifications attached hereto construction of the Tenant Improvements that cause the date of Substantial Completion to occur after December 31, 2008 (as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all extended by delays due to Lessee’s breach of its obligations hereunder or due to a delay arising from a Change Order requested by Lessee) except to the extent that such plans and specifications. Any changes or additions made delay is caused by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent Lessor’s failure to respond to Schematic Drawings or Plans within three (50%3) upon approval business days of such change by their submission to Lessor; and , (ii) fifty percent (50%) prior to occupancy any willful misconduct by Contractor which actually delays completion of the Premises by LesseeTenant Improvements, and (iii) Lessor’s gross negligence or intentional misconduct. All Lessor shall direct Contractor to secure independent bids from three (3) subcontractors mutually acceptable to Lessor and Lessee (to the extent that such bids are reasonably available) for each trade (except for HVAC, fire safety, plumbing and electrical, for which the same subcontractors that completed lobby and core work and first floor tenant improvements at the Building will perform the work for such items in the Premises). Unless mutually agreed by Lessor and Lessee, the lowest bidding subcontractor shall be deemed substantially completed when retained by Contractor to perform the City of Carpinteria issues a Certificate of Occupancy for the Premiseswork. Notwithstanding the issuance of such Certificate, Lessee shall be provided with the bid packages submitted for bid and, based on the winning bids, a punch list budget of such tenant improvements prior Total Costs (defined below) shall be prepared by Contractor and submitted to Lessor and Lessee for final approval (the commencement “Approved Budget”). In connection with its approval of the lease termApproved Budget, subject to Landlord’s Minimum Standard, Lessee shall have the right to eliminate or modify any elements of the Tenant Improvements and cause the Total Cost estimate to be revised accordingly, however Lessee shall inspect be solely liable for any additional cost or delay in completion of the Premises after their substantial completionTenant Improvements resulting therefrom. Lessee shall set forth any manner in which Lessee claims that have the Premises benefit of the lowest pricing Contractor provides to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured Lessor for comparable construction on other properties owned by the standards of finished, comparably priced industrial space in the Santa Lessor or its affiliated companies. ▇. ▇▇▇▇▇▇ area (hereinafter shall not be paid a separate fee in connection with Lessor’s obligations set forth in this Agreement with respect to reviewing the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement design and construction of the lease term. Provided however, if any such discrepancy is incapable Tenant Improvements for the Premises and supervising Contractor in the construction of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedTenant Improvements.

Construction of Tenant Improvements. Lessee understands Following Landlord’s approval of the Final Plans, and agrees that Lessor is currently once construction has commenced, Tenant’s contractor (selected as provided in Section 8(n)) will commence and diligently proceed with the process construction of constructing the improvements which Tenant Improvements. Tenant shall comprise use diligent efforts to cause its contractor to complete the PremisesTenant Improvements in a good and workmanlike manner in accordance with the Final Plans. Landlord shall have the right to enter upon the Premises to inspect Tenant’s construction activities following reasonable advance notice Tenant. In the course event of a Landlord Delay (as hereinafter defined) which causes Tenant to be delayed in its ability to substantially complete the Tenant Improvements and use the Premises (or portion thereof) for normal business operations on or before the date that is six (6) months following Landlord’s delivery of the Premises to Tenant with the Tenant Improvements substantially completed, and provided Tenant does not actually use the Premises (or portion thereof) as a result of such constructionLandlord Delay, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications then Tenant shall be at Lessee's sole cost and expense, including entitled to a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as followsper day rent credit for each day of a Landlord Delay equal to: (i) fifty percent (50%) upon approval the rentable square footage of such change the effected portion of the Premises, multiplied by Lessor; and (ii) fifty percent (50%) prior to occupancy the Annual Rental Rate per rentable square foot, and with such product then divided by 365. Tenant acknowledges that some interruptions and/or interference with Tenant’s business may occur during the course of Tenant’s completion of the Premises by Lessee. All tenant improvements Tenant Improvements, but agrees that no interruptions or inconveniences to Tenant or its business suffered as a result of Tenant’s own completion of the Tenant Improvements shall be deemed substantially completed when the City constitute an eviction of Carpinteria issues a Certificate of Occupancy for Tenant from the Premises. Notwithstanding , whether constructive or otherwise, and Tenant shall in no event be excused from paying the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior rent that it is scheduled to pay pursuant to the commencement terms of the lease termLease, except in accordance with the terms and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement conditions of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedimmediately preceding sentence.

Construction of Tenant Improvements. All improvements not included ----------------------------------- within the scope of the Building Shell shall be deemed "Tenant Improvements." Lessor, using the General Contractor, shall construct the Tenant Improvements and shall contribute the Tenant Improvement Allowance towards the payment of same and Lessee understands shall pay all costs associated with same in excess of the Tenant Improvement Allowance. Notwithstanding the foregoing, Lessee may select a general contractor other than Lessor's General Contractor to construct the Tenant Improvements by giving written notice to Lessor on or before April 1, 2000, provided that (i) such general contractor has sufficient financial strength and agrees that Lessor is currently experience in constructing first class quality improvements of the type to be constructed in the process Premises to reasonably satisfy Lessor and any lender whose loan is secured by the Project or any part thereof and, (ii) Lessee agrees in such notice that the Tenant Improvements identified on Exhibit N hereto as "Early Construction Improvements" shall be constructed by Lessor's General Contractor to facilitate construction of constructing the improvements balance of the Tenant Improvements by the Lessee selected general contractor (that the Early Construction Improvements shall retain concurrent status as Tenant Improvements, the cost of which shall comprise is to be charged to the Premises. In the course of Tenant Improvement Allowance), and (iii) such constructiongeneral contractor is ready, Lessor hereby willing and able and agrees to construct the tenant improvements set forth Tenant Improvements in accordance with Lessor's General Contractor's construction schedule, and (iv) any failure by such Lessee selected general contractor to construct the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications Tenant Improvements in accordance with Lessor's General Contractor's construction schedule shall be at LesseeLessee Delay. If Lessor's sole cost and expenseGeneral Contractor constructs the Tenant Improvements, including or if Lessee selects a ten percent (10%) administrative payment general contractor other than Lessor's General Contractor, but Lessor's General Contractor nonetheless contracts with Lessor to Lessor. Such additional payments construct the "Early Construction Improvements," in each case the contract shall be paid by Lessee a guaranteed maximum price contract based upon the successful bids of subcontractors and/or negotiated prices as provided in Section 2.04(f). The total compensation to Lessor as follows: (i) fifty percent (50%) upon approval of the General Contractor under such change by Lessor; and (ii) fifty percent (50%) prior contract shall be equal to occupancy a contractor's fee not to exceed an amount equal to 2.5% of the Premises contract (provided that a contractor's fee shall not be payable for change orders required due to coordination errors caused by Lessee. All tenant improvements shall be deemed substantially completed when the City General Contractor or any of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior its subcontractors) and an amount not to the commencement exceed an amount equal to 2 1/2% of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises contract for general conditions plus an amount equal to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement .75% of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedcontract for insurance.

Construction of Tenant Improvements. Lessee understands Ninety (90) days prior to the Commencement Date, Landlord will deliver possession to Tenant of the Premises for construction of the Tenant Improvements as provided herein in its current “as is” and agrees that Lessor is currently “where is” condition. Delivery of the Premises to Tenant by Landlord shall be with all structural systems, roof systems, plumbing systems, window systems, window coverings, new ceiling grid, tiles (unless removed by Landlord pursuant to Section 14 hereof), elevator systems, restrooms, the base Building HVAC mechanical systems, the base Building electrical systems and the fire and life safety systems (“Base Building Premises”), free from latent defects and structural defects, in good and proper working order and in full compliance with all Laws, applicable building codes and ordinances which govern the process use and occupancy of constructing the improvements which shall comprise the Premises. In the course of such constructionoffice buildings in Denver, Lessor hereby agrees Colorado to allow Tenant to construct the tenant improvements Tenant Improvements. Upon such delivery date, Tenant shall have a license thereafter to perform construction of the Tenant Improvements, as further provided in this Exhibit C, such license to be upon all of the terms of this Lease, except that no Monthly Base Rent or Tenant’s Percentage of Operating Expenses, Taxes, Insurance Costs and Utilities Costs shall be due and payable. The Landlord shall provide all utilities (electrical, HVAC and lighting) during the construction of the Tenant Improvements at no cost to Tenant. Taking of possession by Tenant shall establish that the Premises are in good and satisfactory condition when possession was so taken, subject to latent defects that could not reasonably have been discovered upon diligent inspection upon taking possession and that are identified by Tenant to Landlord in writing within six (6) months after the date of possession by Tenant. Tenant acknowledges that no representations as to the condition of the Premises have been made by Landlord, unless such are expressly set forth in the plans and specifications attached hereto as Exhibit "B"this Lease. Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any Tenant shall make no changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of Plans and Specifications or the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space work reflected in the Santa ▇▇▇▇▇▇▇ area (hereinafter Plans and Specifications without the "discrepancy"). Lessor consent of Landlord, which consent shall cure such discrepancies to the extent Lessor deems such discrepancies to not be reasonably claimedunreasonably withheld, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedconditioned or delayed.

Construction of Tenant Improvements. Lessee understands Landlord shall construct the initial Tenant improvements prior to Tenant's occupancy, and agrees that Lessor is currently such construction shall commence following Tenant's approval of the final Schematic Floor Plan and its incorporation into this Lease as Exhibit B and the Construction Outline Specifications and their incorporation CIENA into this Lease as Exhibits C-l and C-2 ("Tenant's Approval"). Once commenced, construction shall be prosecuted with due diligence until completion. Tenant shall direct all communication concerning the Schematic Floor Plan, the Construction Outline Specifications or the actual construction solely to Landlord's Representative. 7.1 The Schematic Floor Plan and Construction Outline Specifications may be modified by the parties provided they mutually agree to (a) the modifications to be made; (b) the manner in which any additional cost shall be paid or reflected in the process Total Basic Rent; and (c) modifications of constructing the schedule for the construction of Tenant improvements which shall comprise and of the PremisesEstimated Commencement Date. In To the course extent that such modifications result in increased expenses, such expenses will be paid by Tenant at the time of such constructionmodification, Lessor hereby agrees and decreases in expenses resulting from such modifications shall be credited to construct Tenant. 7.2 All improvements now or hereafter constructed, except movable furniture and trade fixtures and those improvements described on Exhibit C-1 (the tenant improvements set forth "Initial Tenant Improvements") put in at the expense of Tenant, shall be the property of Landlord and shall remain with the Premises at the termination of this Lease without molestation or injury; provided, however, that Landlord may elect, at the time it approves the plans and specifications attached hereto therefor, to require Tenant to remove all or any part of said Tenant improvements (other than the Initial Tenant Improvements except as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all hereinafter provided) at the expiration of this Lease, in which event such plans and specifications. Any changes or additions made by Lessee to such plans and specifications removal shall be done at LesseeTenant's sole cost and expense. Tenant shall, including a ten percent (10%) administrative payment at its sole cost and expense, repair any damage to Lessorthe Premises and/or the Building caused by the removal of its personalty. Such additional payments The Initial Tenant Improvements shall be paid deemed to be owned during the Term by Lessee Tenant but shall not be removed or altered by Tenant without Landlord's prior approval, to Lessor as follows: the extent required under this Lease, and shall remain with the Premises at the termination of this Lease. Notwithstanding the foregoing, Tenant shall remove all Initial Tenant Improvements from the area crosshatched on Exhibit B and shall restore such area to its condition prior to such removal. 7.3 Provided this Lease and all Exhibits are fully executed on or before noon on October 1, 1995, Tenant shall have access to the Premises beginning on or about November 6, 1995 for cabling and computer installation; provided that (i) fifty percent Tenant shall give advance verbal notice to Landlord of at least one working day but not more than ten days of its intention to seek such access; (50%ii) upon approval neither Tenant nor Tenant's employees, contractors, agents, or representatives shall interfere with Landlord's construction of the Tenant improvements (and if such change interference occurs and the Completion Date is delayed as a result, the Completion Date shall be deemed to have occurred one day earlier than it actually occurs for each day the construction of the Tenant improvements is delayed due to such interference); (iii) all cabling and installation of fixtures shall be approved in advance by LessorLandlord and shall be done under the general supervision of Landlord; and (iiiv) fifty percent (50%) all terms of this Lease shall be deemed to be in effect as of the first day hereunder except for Sections 3.1, 3.5 and 4.1. Tenant agrees to indemnify and hold harmless CIENA Landlord for any damage or personal injury which may occur as a result of Tenant s entry into the Premises prior to the Commencement Date. Tenant shall deliver to Landlord evidence of the insurance required to be maintained by Tenant pursuant to Section 19 of this Lease prior to Tenant's entry into the Premises. 7.4 Upon substantial completion of the Tenant improvements such that the Premises are in a condition suitable to permit installation of Tenant's manufacturing equipment, Landlord shall notify Tenant that the Premises are ready for occupancy. Landlord shall then arrange a joint inspection of the Premises during which Landlord and Tenant shall develop a mutually agreeable list of any items to be completed (the "Punchlist"). Agreement to and completion of those items on the Punchlist which materially interfere with Tenant's use or occupancy of the Premises by LesseePremises, if any, shall establish the "Completion Date" which is estimated to be on December 4, 1995. All tenant improvements If the Completion Date occurs later than December 4, 1995, other than as a result of Tenant's fault, the Commencement Date shall be deemed substantially completed when deferred one (1) day for every two (2) days between December 4, 1995 and the City of Carpinteria issues a Certificate of Occupancy for the Premisesactual Completion Date. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement The occurrence of the lease termCompletion Date, and with the exception of those remaining minor items contained in the Punchlist, conclusively shall inspect establish that as of the Commencement Date the Premises after their substantial completion. Lessee shall (a) are in good and satisfactory condition, subject to Landlord's Warranty set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured C-2; (b) have been accepted by the standards Tenant; (c) have been completed in accordance with the Schematic Floor Plan and Construction Outline Specifications; and (d) in such event, shall establish the Commencement Date of finishedthis Lease. If any remaining minor Punchlist item is not completed by Landlord within a reasonable period of time after notice thereof from Tenant, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies Tenant may complete same and offset any cost incurred as a result thereof against Tenant's remaining construction payment obligations to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedLandlord.

Construction of Tenant Improvements. Lessee understands Section 2.02 of the Lease is hereby amended by adding the following language to the end of the section: “Notwithstanding the foregoing, with respect to the Additional Space, the following shall apply: Tenant has personally inspected the Additional Space and agrees that Lessor is currently accepts the same “AS IS” without representation or warranty by Landlord of any kind. Tenant may make tenant finish improvements and equipment installations in the process Additional Space (collectively, the “Additional Space Improvements”). The Additional Space Improvements shall comply with the provisions of constructing Section 7.03 of the improvements Lease. Landlord agrees to reimburse Tenant in an amount not to exceed Twelve Thousand Three Hundred Seventy-five Dollars ($12,375.00) (the “Additional Space Allowance”) for the costs incurred by Tenant for the Additional Space Improvements. Landlord shall pay the Additional Space Allowance to Tenant within thirty (30) days after receipt of paid invoices from Tenant (all such paid invoices shall be submitted to Landlord on or before the date which is six (6) months immediately after the Improvement Completion Date [as defined below]) and Landlord’s inspection of the completed work, if applicable, to the Additional Space. All plans and specifications for the Additional Space Improvements to be made by Tenant shall comprise be subject to Landlord’s reasonable approval (which approval shall not be unreasonably withheld or delayed). Landlord, or its affiliate, shall be permitted to bid on the Premisesconstruction of the Additional Space Improvements. Tenant shall consider Landlord’s bid in good faith and in the event that another contractor’s bid is lower than the bid submitted by Landlord or one of its affiliates, Landlord or its affiliate shall have the right to revise its bid to match the other contractor’s bid by providing Tenant with written notice of its desire to match the bid, which notice shall contain a revised written bid containing the matching offer, within five (5) business days of notification by Tenant that the other contractor’s bid was lower than the bid of Landlord or its affiliate (“Notice”) and Landlord’s bid, if revised to match the other contractor’s bid within the 5-day period after receipt of Notice and given to Tenant in writing in the manner described in this sentence, shall be accepted by Tenant. In the course event that a contractor other than Landlord or one of such constructionits affiliates performs the Additional Space Improvements, Lessor hereby agrees Tenant shall pay Landlord a fee for its supervision of the project equal to construct five percent (5%) of the tenant improvements set forth in cost of the plans and specifications attached hereto as Exhibit "B"Additional Space Improvements (the “Fee”). Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications Tenant shall be at Lessee's sole cost and expenseresponsible for all costs of the Additional Space Improvements in excess of the Additional Space Allowance. At Landlord’s option, including a ten percent (10%) administrative payment to Lessor. Such additional payments the Fee shall either be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and applied against the Additional Space Allowance, or (ii) fifty percent (50%) prior billed to occupancy Tenant after substantial completion of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner Additional Space Improvements (in which Lessee claims that event Tenant shall pay the Premises Fee to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, Landlord within thirty (30) days following commencement Landlord’s delivery of an invoice to Tenant). If a contractor other than Landlord or one of its affiliates is selected to construct the Additional Space Improvements, Tenant and its personnel and the contractor, its subcontractors and their respective personnel shall have the right to enter the Additional Space in order to install the Additional Space Improvements. If and to the extent permitted by applicable laws, rules and ordinances and after the execution of this Amendment by the parties, Tenant shall have the right to enter the Additional Space in order to install fixtures (such as racking) and otherwise prepare the Additional Space for occupancy, which right shall expressly exclude making any structural modifications. During any entry prior to the Additional Space Commencement Date (a) Tenant shall comply with all terms and conditions of the lease termLease other than the obligation to pay rent on the Additional Space, and (b) Tenant shall not interfere with Landlord’s completion of the Additional Space Improvements. Provided howeverTenant acknowledges that Tenant shall be responsible for obtaining all applicable permits and inspections relating to any such entry by Tenant. Tenant shall cause its personnel and the personnel of the contractors and subcontractors to comply with the terms and conditions of Landlord’s rules of conduct (which Landlord agrees to furnish to Tenant upon request), and Tenant shall not begin operation of its business in the Additional Space unless and until Tenant delivers to Landlord an original certificate of occupancy, if applicable, for the Additional Space. Tenant acknowledges that Tenant shall be responsible for obtaining all applicable permits and inspections relating to Tenant’s occupancy of the Additional Space. If Landlord or one of its affiliates is selected to construct the Additional Space Improvements, Landlord or its affiliate shall receive reasonable and competitive compensation for its services, but shall in no event be entitled to receive any such discrepancy amounts in excess of the amount set forth in the bid accepted by Tenant unless the variance is incapable in compliance with the definitive agreement between the parties related to the Additional Space Improvements, which fee(s) shall be applied against the Additional Space Allowance. Any costs of cure said work performed by Landlord or its affiliates in excess of the Additional Space Allowance shall be borne by Tenant and reimbursed to Landlord or paid to Landlord’s designee within such thirty (30)-day period, 30) days of receipt of an itemized statement therefor. Landlord and Lessor has commenced Tenant shall in good faith cooperate to cause the cure of such discrepancy within such thirty (30)-day period, this provision Additional Space Improvements to be completed at the earliest reasonably practical date. Tenant shall be satisfiedentitled to the Additional Space Allowance only if the Additional Space Improvements are substantially complete on or before the Improvement Completion Date and Tenant submits paid invoices to Landlord seeking reimbursement of the Additional Space Allowance on or before the date which is three (3) months immediately after February 29, 2008 (the “Improvement Completion Date”). The foregoing limitation on Tenant’s right to receive the Additional Space Allowance shall not apply if the failure to substantially complete the Additional Space Improvements by the Improvement Completion Date arises from the negligence or willful misconduct of Landlord or its affiliates.”

Construction of Tenant Improvements. Lessee understands Landlord’s contractor shall commence and agrees diligently proceed (using commercially reasonable efforts) with the construction of the Initial Tenant Improvements promptly following mutual execution and delivery of this Lease and receipt of permits, and shall endeavor (using commercially reasonable efforts) to substantially complete the Initial Tenant Improvements by the Estimated Initial Premises Delivery Date, subject to Tenant Delays (as described in Section 4 below) and Force Majeure Delays (as described in Section 5 below). Landlord’s contractor shall commence and diligently proceed (using commercially reasonable efforts) with the construction of the Must Take Tenant Improvements, and shall endeavor (using commercially reasonably efforts) to substantially complete the Must Take Tenant Improvements by the Estimated Must Take Premises Delivery Date, subject to Tenant Delays (as described in Section 4 below) and Force Majeure Delays (as described in Section 5 below); provided, however, that Lessor is currently in no event shall Landlord be obligated to commence construction for the process Must Take Premises prior to the date upon which the current tenant of constructing the improvements which shall comprise Must Take Premises fully vacates the Must Take Premises. In the course of such construction, Lessor hereby agrees but subject to construct the tenant improvements Tenant’s rights set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy Section 1.1 of the Premises Lease arising from Landlord’s failure to complete construction of the Must Take Tenant Improvements by Lesseethe outside delivery date set forth therein. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to Promptly upon the commencement of the lease termapplicable Tenant Improvements, Landlord shall furnish Tenant with a construction schedule letter setting forth the projected completion dates therefor and showing the deadlines for any actions required to be taken by Tenant during such construction, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises Landlord may from time to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure time during construction of such discrepancy within Tenant Improvements modify such thirty (30)-day period, this provision shall be satisfiedschedule.

Construction of Tenant Improvements. Lessee understands (a) Construction of the Sublessee Improvements pursuant to this Sublease Work Letter Agreement shall be performed by such contractor as Sublessor shall reasonably select, under Sublessor's supervision. Construction shall commence promptly following final approval of the Working Drawings and agrees acceptance of final pricing by Sublessee (but not before the date on which this Sublease is signed), and shall be diligently prosecuted to completion thereafter. (b) Sublessor reserves the right to use pre-stocked materials in constructing the Sublessee Improvements, including drywall and studs, lighting fixtures and air handling boxes. Sublessor represents that Lessor is currently all such pre-stocked items were acquired at the best price available in order to save cost and delay in constructing the Sublessee Improvements in the process of constructing the improvements which Project. (c) Sublessee shall comprise the Premises. In be permitted, during the course of construction, upon reasonably notice to Sublessor, and without unreasonably interfering with the conduct of such construction, Lessor hereby agrees to construct inspect the tenant improvements progress of the work and, upon written notice to Sublessor, to cause any material defects or deficiencies to be repaired. (d) Upon completion of construction of the Sublessee Improvements, Sublessor shall cause the Premises to be thoroughly cleaned prior to Sublessee's occupancy of the Premises. (e) Sublessor shall repair or replace as soon as reasonably possible all incomplete or defective items identified in any "pick-up list" or "punchlist" delivered by Sublessee to Sublessor. Sublessee shall deliver such "pick-up list" or "punchlist" to Sublessor within fifteen (15) days after commencement of Sublessee's actual occupancy of the Premises. (f) Following completion of the Sublessee Improvements, Sublessor will cause to be prepared a set forth in the of as-built plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such of the Sublessee Improvements, the cost of which plans and specifications shall be at Lessee's sole included in the cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when Sublessee Improvements to which the City Sublessee Improvement Allowance applies, pursuant to Paragraph 4 of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedSublease Work Letter Agreement.

Construction of Tenant Improvements. Lessee understands Until Tenant selects the Standard ----------------------------------- colors and agrees that Lessor is currently in styles for the process Preliminary Tenant Improvement Work, approves the Preliminary Work Cost Statement and pays Landlord the amount by which the Preliminary Work Cost Statement exceeds the Preliminary Allowance, if any, Landlord will be under no obligation to cause the construction of constructing any of the improvements which shall comprise the PremisesPreliminary Tenant Improvements. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at LesseeFollowing Tenant's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; the Preliminary Work Cost Statement described in Subparagraph 3(b) above and (ii) fifty percent (50%) prior to occupancy upon Tenant's payment of the Premises total amount by Lesseewhich such Preliminary Work Cost Statement exceeds the Preliminary Allowance, if any, Landlord's contractor will commence and diligently proceed with the construction of the Preliminary Tenant Improvements, subject to Tenant Delays (as described in Paragraph 8 below) and Force Majeure Delays (as described in Paragraph 9 below). All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to Promptly upon the commencement of the lease termPreliminary Tenant Improvement Work, Landlord will furnish Tenant with a construction schedule letter setting forth the projected completion dates therefor and showing the deadlines for any actions required to be taken by Tenant during such construction, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises Landlord may from time to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement time during construction of the lease term. Provided however, if any Preliminary Tenant Improvements modify such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedschedule.

Construction of Tenant Improvements. Lessee understands Landlord shall have no responsibility except to perform and agrees that Lessor is currently in the process of constructing the improvements which shall comprise the Premises. In the course of such constructioncomplete, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at LesseeLandlord's sole cost and expense, including the work on the tenant finish improvements described in THE PLANS AND SPECIFICATIONS WHICH HAVE BEEN MUTUALLY AGREED UPON BY BOTH LANDLORD AND TENANT AND ATTACHED HERETO AS EXHIBIT B, subject to events and delays due to causes beyond its reasonable control. Tenant agrees that all work on any change orders to the initial tenant finish improvements shall be performed by Duke Construction Limited Partnership (DCLP) or a subsidiary or affiliate of Landlord which shall receive a cost plus ten percent (10%) administrative payment construction management fee, exclusive of general conditions, as Landlord's construction manager or general contractor; provided, however, that the construction management fee to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All charged for any subsequent tenant finish improvements shall be deemed substantially completed when an amount equal to the City of Carpinteria issues a Certificate of Occupancy construction management fee then being charged by DCLP and other reputable and experienced contractors in the Columbus, Ohio Industrial Market for the Premisescomparable improvements performed in comparable class A INDUSTRIAL PROPERTIES. Notwithstanding the issuance of such Certificate, Lessee ANY COSTS FOR TENANT FINISH IMPROVEMENTS WHICH EXCEED THE SCOPE OF THOSE DESCRIBED ON EXHIBIT B shall be provided with a punch list the sole responsibility of Tenant. Tenant shall reimburse Landlord for such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, excess costs within thirty (30) days following commencement of Tenant's receipt of an invoice for the same. Landlord hereby agrees to warrant all work performed by Landlord within the Leased Premises for a period of twelve (12) months from the Commencement Date (the "Warranty Period"). After the expiration of the lease term. Provided howeverWarranty Period, Landlord shall assign to Tenant all warranties (if any such discrepancy is incapable assignable) from subcontractors and material suppliers for materials, workmanship, fixtures or equipment installed by Landlord in the Leased Premises which warranties continue in effect after the expiration of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedWarranty Period.

Construction of Tenant Improvements. Lessee understands (a) After the Lease Commencement Date, and agrees provided that Lessor Landlord has commenced construction of its first office building on the Adjacent Tract, Tenant shall mobilize or cause to be mobilized the contractors, subcontractors, suppliers and materialmen to commence construction of the Hotel. If such commencement of construction is currently in delayed due to Unavoidable Delay for more than one hundred twenty (120) days after the process issuance of constructing the improvements which building permit and such delays will cause Tenant's original estimate of the Hotel Development Costs to be exceeded, Tenant shall comprise have the Premises. In right to terminate the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made Lease by Lessee giving Landlord written notice to such plans effect within such one hundred twenty (120) days; provided, however, that Tenant shall pay Landlord as liquidated damages and specifications shall be at Lesseenot as a penalty the sum of Two Hundred Thousand Dollars ($200,000). Tenant's sole cost and expense, including a ten percent (10%) administrative payment failure to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of give Landlord such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements notice shall be deemed substantially completed when a waiver by Tenant of its rights to terminate the City of Carpinteria issues a Certificate of Occupancy Lease for the Premises. Notwithstanding reasons specified in this Section. (b) After Tenant has commenced construction of the issuance of such CertificateHotel and provided that Landlord is proceeding with all due diligence to construct and complete its first office building and the Common Area in accordance with Section 2.l0(b)(i), Lessee Tenant agrees that it shall be provided substantially complete the Hotel and all attendant improvements on the Leased Premises in accordance with a punch list of such tenant improvements prior to the Hotel Construction Documents and all applicable laws, codes and ordinances, and shall install its Trade Equipment therein and shall open the Hotel for business within eighteen (18) months from the commencement of construction, subject to the lease termoccurrence of Unavoidable Delays. The Hotel will, when completed, comply with all applicable laws and regulations, federal, state and municipal, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises upon such completion Tenant will obtain and deliver to do not conform to the plans Landlord a photocopy of each temporary certificate of occupancy and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided howeverfinal certificate of occupancy before the Hotel shall be occupied by Tenant, except that if any such discrepancy is incapable a temporary certificate of cure within such thirty (30)-day periodoccupancy shall be issued, and Lessor has commenced Tenant may occupy the cure Leased Premises under the provisions of such discrepancy within such thirty (30)-day period, this provision certificate and except further that if a certificate for any part of the Hotel shall be satisfiedissued, Tenant may occupy the part so certified under the provisions of such certificate.

Construction of Tenant Improvements. Lessee understands Tenant shall substantially ----------------------------------- complete any and agrees that Lessor is currently all alterations of, or improvements to, the Premises (the "Tenant Improvements"), in accordance with the Final Plans (as defined below) submitted to and approved by Landlord. The Tenant Improvements shall be made and performed in a safe and workmanlike manner, using only first-class materials, in compliance with the minimum Building standard specification for interior tenant improvements developed by Landlord for uniform application in the process Building, and in accordance with the provisions of constructing the following provisions of this Exhibit C: --------- (a) No work with respect to the Tenant Improvements shall proceed without Landlord's reasonable prior written approval of: (1) Tenant's contractor(s) and subcontractor(s) (selected from a list of contractors and subcontractors approved by Landlord, which list may include the names of contractors and subcontractors submitted by Tenant to Landlord for Landlord's prior approval); (2) certificates of insurance furnished to Landlord from a company or companies approved by Landlord; (i) by Tenant's general contractor, evidencing commercial general liability insurance (with contractual liability and products and completed operations coverages) with a minimum combined single limit for bodily injury and property damage in an amount not less than Two Million Five Hundred Thousand Dollars ($2,500,000) per occurrence, endorsed to name Landlord, Landlord's managing agent and any other party designated by Landlord as an additional insured, and workers' compensation insurance, as required by law; (ii) by any and all subcontractors, evidencing commercial general liability insurance (with contractual liability and products and completed operations coverages) with a minimum combined single limit for bodily injury and property damage in an amount not less than One Million Dollars ($1,000,000) per occurrence, endorsed name Landlord, Landlord's managing agent and any other party designated by Landlord as an additional insured, and workers' compensation insurance, as required by law; and (iii) by Tenant evidencing builder's risk insurance with respect to the Tenant Improvements, in such amounts as are deemed reasonable by Landlord, and workers' compensation insurance, as required by law; and (3) detailed plans and specifications for such work, prepared by a licensed architect approved in writing by Landlord (the "Tenant's Architect"), which indicate that such work will not exceed the design load capacities and performance criteria of the Building, including, without limitation, its electrical, HVAC and weight capacities, and construction means and methods. (b) Except as otherwise expressly provided herein, the Tenant Improvements shall be undertaken at Tenant's sole cost and expense and in strict conformance with all applicable laws, regulations, building codes and the requirements of any building permit and all other applicable permits or licenses issued with respect to such work. Tenant shall be solely responsible for obtaining all such permits and licenses from the appropriate governmental authorities, and any delay in obtaining such permits or licenses shall not be deemed to extend the commencement date or the expiration date of the term of the Lease or to waive or toll Tenant's rental and other obligations with respect to the Premises. Copies of all permits and licenses shall be furnished to Landlord before any work is commenced, and any work not acceptable to any governmental authority or agency having or exercising jurisdiction over such work, or not reasonably satisfactory to Landlord, shall be promptly replaced and corrected at Tenant's expense. (c) Tenant shall provide Landlord with a construction schedule and all revisions thereto. All work by Tenant shall be scheduled through Landlord and shall be diligently and continuously pursued from the date of its commencement through its completion. Landlord hereby agrees to use its reasonable efforts to facilitate such work and to ensure access by Tenant to and availability to Tenant of all freight elevators and all such similar facilities necessary to facilitate such work, subject, however, to the rules and regulations established by Landlord for construction work in the Building. All work shall be conducted in a manner that maintains harmonious labor relations and does not unreasonably interfere with or delay any other work or activities being carried out by Landlord in the Building. Landlord or Landlord's agent shall have the right to enter the Premises and inspect the Premises and the Tenant Improvements at all reasonable times during the construction of the Tenant Improvements. (d) Tenant shall cause the Tenant's Architect to prepare and submit to Landlord for its approval complete architectural plans, drawings and specifications for all Tenant Improvements, including, without limitation, complete engineered mechanical and electrical working drawings for the Premises, showing the subdivision, layout, finish and decoration work desired by Tenant therefor, and any internal or external communications or special utility facilities which will require installation of conduits or other improvements within common areas, all in such form and in such detail as may be required by Landlord. Such complete plans, drawings and specifications are referred to herein as "Final Plans". Tenant shall submit the Final Plans for the approval of Landlord, which approval shall comprise not be unreasonably withheld, conditioned or delayed. Within seven (7) business days after Landlord receives the Final Plans for approval, Landlord shall give its written approval of the Final Plans, or provide Tenant with specific written objections to the Final Plans. If Landlord objects to the Final Plans, Landlord shall make itself available to meet with Tenant and the Tenant's Architect within five (5) business days after said objection to resolve the objections and to deliver to the Tenant's Architect such information as may be necessary to enable the Tenant's Architect to cause the Final Plans to be revised consistent with Landlord's objections. No delay in the scheduling of completion of the Tenant Improvements resulting from Landlord's review, revision and approval of the Final Plans (except delays caused by Landlord's failure to comply with the seven (7) and five (5) day period mentioned above where such review and approval by Landlord could have been reasonably completed within such timeframes) shall be deemed to extend the commencement date or expiration date of the term of the Lease or waive or toll Tenant's rental obligations with respect to the Premises. In the course event that Tenant and/or its contractors and subcontractors desire to change the Final Plans subsequent to approval by Landlord, Tenant shall provide notice of such constructionproposed change to Landlord for Landlord's written approval, Lessor hereby agrees which approval shall not be unreasonably withheld, conditioned or delayed, and which approval shall be required prior to construct the tenant improvements set forth in implementation of such proposed change. Landlord shall approve or disapprove the proposed change within five (5) business days after Landlord's receipt of all final plans and specifications attached hereto therefor or within such time period after such five (5) business day period which is reasonably practical. At the conclusion of construction, Tenant shall cause the Tenant's Architect to provide two (2) complete sets of record drawings of the Tenant Improvements, as Exhibit constructed, which shall not materially deviate from the Final Plans, and Tenant shall also cause to be provided a project closeout package, including, without limitation, a punchlist sign-off, project team list, permit cards, unconditional lien releases and final construction costs itemized by trade. (e) Tenant shall enter into a contract (the "BGeneral Contract") with one of the bidding contractors ("Tenant's Contractor") for the construction of the Tenant Improvements selected from a list of contractors approved by Landlord (which list may include the names of contractors submitted by Tenant to Landlord for Landlord's prior approval). (f) With respect to fire and life safety systems work required under the General Contract ____________ shall cause Tenant's Contractor __________ and review bids from at least three (3) subcontractors (the "Fire and Life Safety Bidders") from a list of contractors approved by Landlord (which list may include the names of subcontractors submitted by Tenant to Landlord for Landlord's prior approval) and to enter into a subcontract with one of the Fire and Life Safety Bidders. Such plans With respect to all mechanical systems work required under the General Contract, Tenant shall cause Tenant's Contractor to solicit and specifications are hereby clarified as follows: SEE EXHIBITreview bids from at least three (3) subcontractors (the "Mechanical Bidders") from a list of contractors approved by Landlord (which list may include the names of subcontractors submitted by Tenant to Landlord for Landlord's prior approval) and to enter into a subcontract with one of the Mechanical Bidders. Lessee has reviewed With respect to all electrical systems work required under the General Contract, Tenant shall cause Tenant's Contractor to solicit and approved review bids from at least three (3) subcontractors for all such plans work (the "Electrical Bidders") from a list of contractors approved by Landlord (which list may include the names of subcontractors submitted by Tenant to Landlord for Landlord's prior approval) and specificationsto enter into a subcontract with one of the Electrical Bidders. Any changes To the extent Tenant's Contractor desires to subcontract other work required under the General Contract, Tenant shall cause Tenant's Contractor to solicit bids for such proposed subcontract (the "Other Work Bid________), at least one (1) of which, if Landlord so elects, shall be a subcontractor design __________ Landlord, and, with the prior written notice to Landlord, to enter into such subcontract with one of the Other Work Bidders. Tenant's Contractor may engage such laborers and suppliers as it deems appropriate, subject to the provisions of subparagraph (g) below. (g) Notwithstanding anything to the contrary contained herein, all major contractors' and subcontractors contracts for the Tenant Improvements shall be union contracts, and Tenant shall use its commercially reasonable efforts to ensure that union labor is employed in connection with the design and construction of the Tenant Improvements. (h) Tenant hereby designates Tenant's Vice President of Finance, or additions any other person designated by Tenant from time to time, as its representative in connection with the design and construction of the Tenant Improvements, and Landlord shall be entitled to rely upon the decisions and agreements made by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor representative as follows: binding upon Tenant. (i) fifty percent (50%) Although Landlord has the right to review, request revisions to and approve the Final Plans, Landlord's sole interest in doing so is to protect the Building and Landlord's interest in the Building, and Landlord is not in any way warranting or representing that Tenant's Final Plans are suitable for their intended use or comply with applicable laws and regulations. Landlord shall have no liability whatsoever in connection with Tenant's Final Plans, nor any responsibility for any omissions or errors contained therein. Accordingly, Tenant shall not rely upon Landlord's approval for any purpose other than for the purpose of acknowledging the consent of Landlord to proceed with the requested action, and Landlord shall incur no liability of any kind by reason of the granting of such change by Lessor; approvals. (j) Nothing in this Exhibit C shall affect the obligations of Tenant --------- under the Lease with respect to any alterations, additions and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for within the Premises. Notwithstanding , including, without limitation, any obligation to obtain the issuance prior written consent of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner Landlord in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedconnection therewith.

Construction of Tenant Improvements. Lessee understands Paragraph 1.3(b) of the Lease is deleted and agrees that Lessor is currently replaced as follows. As soon as practicable after the date hereof, and in all events not later than five (5) days after Tenant’s Plans and Specifications have been prepared, Landlord and Tenant mutually shall establish written objective criteria (“Criteria”) for the process selection of constructing a general contractor or construction manager to complete or supervise, or both, construction of Tenant’s Improvements (being the improvements which pursuant to Tenant’s Plans and Specifications; all capitalized terms herein, unless otherwise expressly provided, shall comprise have the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements meaning set forth in the plans and specifications attached hereto as Exhibit "B"Lease). Such plans Criteria shall include, without limitation, the date by which the contractor commits to completing the work, the contract price and specifications are hereby clarified the contractor’s reputation as follows: SEE EXHIBITa contractor. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy Bids for construction of the Premises Tenant Improvements will be solicited by Lessee. All tenant improvements shall be deemed substantially completed when the City ▇▇▇▇ and Wentworth as soon as practicable after completion of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement Tenant’s Plans and Specifications and establishment of the lease termCriteria, and shall inspect the Premises after their substantial completionin all events in time sufficient to receive, review and select a bid by October 15, 2000. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans Bids will be solicited from Point Construction, ▇▇▇▇ and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇▇▇ area and at least one other contractor mutually selected by the parties. Selection of the contractor will be made by mutual agreement, based on the written Criteria. The parties agree to cooperate and act in good faith, as expeditiously as practicable, in establishing the Criteria, soliciting bids and selecting a contractor. If the contractor selected is Point Construction, Landlord shall enter into a contract with Point Construction in accordance with its bid and the Criteria. If the contractor selected is not Point Construction, Tenant will enter into the contract with the contractor in accordance with its bid and the Criteria (hereinafter referred to hereafter as Tenant’s “Construction Option”), in which case the "discrepancy"following provisions shall apply: (a) Paragraph 1.3(a) of the Lease (excluding the portions of Paragraph 1.3 preceding Paragraph 1.3(a)) shall be of no further force and effect. (b) By January 10, 2001 Landlord shall substantially complete (as defined in Section 3(c) hereof) the following base building items (“Landlord’s Initial Base Building Construction”) in order to allow the Tenant Improvement work (which can then be commenced)to proceed without material interference (any one or more of which can be waived in writing by Tenant, in its sole discretion): (i) All structural systems including, but not limited to, structural steel, metal deck and concrete floors shall be complete. (ii) The building roof will be completely watertight and will remain so throughout the completion of the project. (iii) Building heating systems will be fully installed and capable of operation immediately following the installation of Tenant distribution ductwork. If the heating system is not fully capable of operation, it will be the obligation of Landlord to provide, operate, maintain and pay for temporary heating measures in order to maintain a building climate that is adequate to support all construction operations. (iv) The metal studwork at the building perimeter will be entirely installed. (v) Metal framing for all window systems will be entirely installed. (vi) The entire perimeter wall will be watertight and shall remain so until the completion of the project. If (due to the progress of the base building work) Landlord is required to provide this enclosure through temporary means (i.e. tarps), it will be solely Landlord’s responsibility to install and maintain such items of temporary protection. Additionally, Landlord will be responsible to remove and reinstall these items of temporary protection to allow material loading. (vii) The building electrical distribution will be fully operational with all systems that are required as a part of base building construction in place. If this system is not operational as of January 10, 2001, temporary power outlets and lighting will be installed by Landlord as required to facilitate the installation of Tenant Improvement work. The temporary power will include no less than five (5) quad outlets evenly distributed per floor. The temporary lighting will consist of one (1) one hundred watt lamp every 200 S.F. Removal of the temporary lighting and power wiring and devices will be the responsibility of Landlord. In any event, the building electrical distribution system will be fully operational with all systems that are required as a part of base building construction by February 22, 2001. (viii) All fire sprinkler risers and sprinkler piping mains that are required as a part of base building work will be fully installed. (ix) Access to the site for deliveries will be uninhibited. (x) Landlord will be responsible for all utility charges until all of the glass is installed in the exterior wall. When all glass is installed, costs will be distributed as indicated in Exhibit A to the Lease. (xi) Designated parking areas will be provided for construction personnel involved in the Tenant Improvement work. (xii) Two operational bathrooms will be provided for construction personnel that will be performing the tenant work. If operational bathrooms are not available, the substitution of four (4) portable toilet units will be acceptable. (xiii) All stair shafts, mechanical shafts and elevator shafts will be constructed prior to the commencement of tenant installation work. (c) Landlord shall substantially complete the following work (“Landlord’s Additional Base Building Construction”) (any one or more of which can be waived in writing by Tenant, in its sole discretion). Lessor Landlord shall cure be deemed to have substantially completed a component of the work when all of the work comprising such discrepancies component is completed so that (x) work on Tenant’s Improvements is not delayed beyond the TI Construction Period (hereafter defined), (y) the cost of completing Tenant’s Improvements is not increased beyond the cost which would be incurred if the component of Landlord’s Additional Base Building Construction were completed and (z) the only incomplete items are minor or insubstantial details of construction. Landlord’s Additional Base Building Construction shall be completed by the following dates: (i) Elevators will be operational, inspected and available for use as of February 10, 2001. If this is not completed and a standby mechanic is required for tool and material loading for Tenant Improvement work, the costs for this mechanic will be the responsibility of Landlord. (ii) The base building fire alarm system will be fully installed and capable of operation immediately following the installation of tenant devices and wiring by March 8, 2001. (iii) All glass will be installed in the perimeter wall system by February 10, 2001. (iv) All base building plumbing systems will be fully installed and operational by March 8, 2001. (v) The sheetrock and windowsills at the perimeter walls will be completely installed, spackled and ready for finishes by February 10, 2001. It is understood and accepted that the installation of this sheetrock will be completed in a sequence that will facilitate the installation of the Tenant Improvement work to the extent Lessor deems such discrepancies degree that this sequencing does not adversely effect the base building construction work. Additionally, it is agreed that Landlord and Tenant or Tenant’s contractor will work in cooperation to allow the installation of wiring and/or outlets in this wall. This includes prior notification to Tenant before installing sheetrock on any of these walls. (vi) The base building fire sprinkler system as shown on the project drawings will be reasonably claimedfully in place and capable of operation immediately following the installation of the branch piping and sprinkler heads by February 10, within thirty 2001 at the latest. (30vii) Landlord will apply for the Base Building CO as early as practicable and shall obtain the Base Building CO at least one (1) week before the end of the TI Construction Period (hereafter defined). (d) Tenant acknowledges that when Tenant’s contractors commence and continue the completion of the construction of the Tenant Improvements, that Landlord’s contractors will be at the Building completing the work which is Landlord’s responsibility under the Lease. Tenant and Landlord agree to make diligent and good faith efforts to minimize the amount of interference with the other party’s contractors. Tenant, Landlord and their respective architect(s) and contractors shall use diligent, continuous and good faith efforts to cooperate with one another to maximize the likelihood that each party will successfully complete its portion of work to the Leased Premises so that substantial completion of the Leased Premises (as provided in Paragraph 1.4 of the Lease) occurs on or before April 8, 2001. (e) Subject to the subsection 3(d) of this Amendment, Tenant shall have the right (but no obligation) to commence Tenant Improvement work prior to completion of Landlord’s Initial Base Building Construction provided that this work does not significantly impact the progress of the base building construction. (f) Tenant shall have ninety-one (91) days following commencement of (the lease term“TI Construction Period”) after Landlord’s Initial Base Building Construction is complete to complete the Tenant Improvements. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision The TI Construction Period shall be satisfied.extended for up to but not more that fifteen (15) days by reason of Force Majeure as defined and provided in Paragraph 31.1

Construction of Tenant Improvements. Lessee understands Tenant has personally inspected the Leased Premises and accepts the same “AS IS” without representation or warranty by Landlord of any kind and with the understanding that Landlord shall have no responsibility with respect thereto except to construct in a good and workmanlike manner the improvements designated as Landlord’s obligations in the attached Exhibit B. Landlord shall pay the cost of such improvements in an amount not to exceed Five Hundred Ninety-four Thousand Dollars ($594,000.00) (“Landlord’s Allowance”). Tenant hereby agrees that Lessor is currently all costs for tenant finish improvements which exceed Landlord’s Allowance shall be paid by Tenant to Landlord within thirty (30) days of receipt of Landlord’s invoice therefor. Notwithstanding anything contained herein to the contrary, Landlord hereby agrees to allow Oakwood Builders (“Oakwood”) to bid on the initial tenant finish improvement work to be performed in the process of constructing the improvements which shall comprise the Leased Premises. In the course event Oakwood’s bid is more than three percent (3%) lower than Landlord’s estimated cost of such constructiontenant finish improvements, Lessor hereby agrees Oakwood shall perform such tenant finish improvements and Landlord shall receive a supervisory fee in an amount not to construct exceed three percent (3%) of the costs incurred to complete the tenant finish improvements, together with customary general conditions. In the event Tenant reduces the initial tenant finish improvements set forth to achieve a cost savings; or in the plans event Oakwood performs the initial tenant finish improvements and specifications attached hereto the cost thereof plus Landlord’s supervisory fee is less than the Landlord’s Allowance, Tenant shall utilize the cost difference between Landlord’s Allowance and the actual costs incurred to complete the initial tenant finish improvements, towards additional tenant finish improvements within the Leased Premises, including wiring and cabling. In the event Landlord is chosen as Exhibit "B". Such plans and specifications are hereby clarified the general contractor, all work on the initial tenant finish improvements shall be performed by Duke Construction Limited Partnership or a subsidiary or affiliate of Landlord (“DCLP”) which shall receive a construction management fee, in an amount not to exceed seven percent (7%) of the costs incurred to complete the tenant finish improvements, together with customary general conditions, as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specificationsLandlord’s construction manager or general contractor. Any changes or additions made by Lessee to such plans and specifications work performed for non-structural tenant finish improvements shall be at Lessee's sole cost warranted by Landlord against defects in materials and expense, including workmanship for a period of one (1) year from the Commencement Date. Landlord and Tenant agree that all work on any subsequent tenant finish improvements shall be performed by DCLP which shall receive a construction management fee in an amount not to exceed ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All costs incurred to complete the tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificatefinish improvements, Lessee shall be provided together with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B"customary general conditions, as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedLandlord’s construction manager or general contractor.

Construction of Tenant Improvements. Lessee understands Landlord shall provide an allowance for Tenant Improvements as set forth in this Section 13 as follows: (a) Landlord shall provide an allowance in a maximum amount of eight dollars ($8.00) per rentable square foot of the Reduced Premises (defined below), unless, prior to the TI Allowance Commencement Date (defined below), Tenant delivers a Commitment Notice to continue to lease the entirety of the currently existing Leased Premises throughout the Extended Lease Term, in which event such allowance shall be based upon the rentable square footage of the entire Leased Premises (the “Allowance”) to be used only for the following purposes: (i) for refurbishment of the Reduced Premises or the Leased Premises, as the case may be, (ii) to reconfigure furniture at the Reduced Premises or the Leased Premises, as the case may be, and agrees (iii) to demise the Reduced Premises from the Relinquished Space or the Additional Space, as the case may be (if applicable); (b) Tenant acknowledges that Lessor is currently in Landlord has agreed to perform the process of constructing the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements Tenant Improvements as set forth in the plans and specifications Work Letter attached hereto as Exhibit "B"C (the “Work Letter”). Such plans Except as otherwise specifically provided in either or both of this Lease and specifications are hereby clarified the Work Letter, Landlord shall not be obligated to make any repairs, replacement or improvements of any kind or nature to the foregoing in connection with, or in consideration of, this Lease, nor shall Landlord be required to expend any monies pursuant to the Work Letter in excess of the Allowance. (c) Landlord shall have no obligation to construct any of the Tenant Improvements unless and until the first to occur of (a) February 1, 2007, being the commencement date of the Extended Lease Term or (b) the date on which Landlord and a third party tenant enter into an AS Lease, as follows: SEE EXHIBIT. Lessee has reviewed defined below, and approved all such plans (c) the date on which Plan A is implemented (whichever of (a), (b) or (c) is applicable, the “TI Allowance Commencement Date”). (d) All rights of Tenant and specifications. Any changes or additions made by Lessee to such plans obligations of Landlord contained in this Section 13 and specifications the Work Letter shall apply solely if, as of the TI Allowance Commencement Date, this Lease shall be at Lessee's sole cost in full force and expenseeffect and no act or omission shall occur which, including with the giving of notice or the passage of time, or both, shall constitute a ten percent breach or default by Tenant under this Lease. (10%e) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within Within thirty (30) days following commencement substantial completion of, and payment in full for, the Tenant Improvements (“Substantial Completion and Payment”), and to the extent that unexpended funds remain available in the Allowance, Landlord shall pay to Tenant, as an allowance for Tenant’s purchase of additional personal property to be utilized for Tenant’s business operations in the Leased Premises, including, but not limited to, furniture and equipment, and to otherwise provide Tenant with funds to facilitate the cleaning and redecorating of the lease term. Provided howeverLeased Premises, if any such discrepancy is incapable an amount equal to the lesser of cure within such thirty (30)-day periodi) the then-remaining and unexpended portion of the Allowance; and (ii) a sum equal to the product of (x) $2.00 and (y) the Rentable Area as of February 1, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfied2007.

Construction of Tenant Improvements. Lessee understands and agrees that Lessor is currently in the process of constructing the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "“B"”. Such plans and specifications are hereby clarified as follows: SEE EXHIBITEXHIBIT “B”. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's ’s sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "“B"”, as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "“discrepancy"”). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfied.

Construction of Tenant Improvements. Lessee understands and agrees that Lessor is currently 6.1 Landlord shall cause the Tenant Improvements to be substantially completed sufficient for the issuance of a temporary certificate of occupancy for the Premises on or before the Commencement Date of the Lease in accordance with the process of constructing the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements provisions set forth in this Work Letter. Landlord shall supervise the plans completion of such work and specifications attached hereto shall use diligent efforts to secure substantial completion of the work in accordance with the Work Schedule. The cost of such work shall be paid as Exhibit provided in Section 7. 6.2 In connection with the construction of the Tenant Improvements, Landlord and Tenant shall arrange for Tenant to have access to the Premises commencing approximately 75 days prior to the estimated date for substantial completion shown on the Work Schedule, in order to allow Tenant to install telephone lines and telephone systems, fiber optics, computer cabling, and related similar matters, and, on a "B"space ready" basis only, to commence installation of Tenant's trade fixtures. Such plans Tenant shall schedule installation of such items with Landlord and specifications are hereby clarified the Tenant Improvements contractor so as follows: SEE EXHIBITnot to unreasonably impede, interfere with or delay the progress of construction of the Tenant Improvements; and Tenant shall perform such installation in accordance with any guidelines provided by the Tenant Improvements contractor. Lessee has reviewed and approved all Delay, interference or damage arising out of Tenant's installation of such plans and specificationsitems shall constitute a Tenant Delay under Section 8. Any changes or additions made by Lessee to and all costs of installation of such plans and specifications items shall be at LesseeTenant's sole cost and expense. 6.3 During the period of construction of the Tenant Improvements, including a ten percent (10%) administrative payment Landlord shall consult with Tenant from time to Lessortime as necessary to achieve approval of certain matters and installations related to the Tenant Improvements. Such additional payments approvals shall be paid forthcoming from Tenant within a reasonable time period as requested by Lessee Landlord, which time period shall enable Landlord to Lessor as follows: (i) fifty percent (50%) upon maintain the schedule for substantial completion of the Tenant Improvements stated in the Work Schedule. Failure of Tenant to respond within such requested time period shall constitute a Tenant Delay. 6.4 During the period of construction of the Tenant Improvements, Landlord and Tenant shall meet at regular meetings occurring at least once monthly regarding the status of the construction and occurring at least once weekly during the final month of construction. If timely, matters requiring Tenant's approval may be determined at such meetings and decisions shall be reflected in the minutes of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedmeetings.

Construction of Tenant Improvements. Lessee understands and agrees that Lessor is currently in the process of constructing the improvements which 4.1 Tenant shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy retain one of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when following general contractors (the City of Carpinteria issues a Certificate of Occupancy “Contractor”) for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement construction of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa Tenant Improvements: Hathaway ▇▇▇▇▇▇▇▇▇ area Construction, Skyline Construction, NOVO, Dome, and ▇▇▇▇ ▇▇▇▇▇. Prior to entering into any contract with the Contractor, Tenant shall submit such contract to Landlord for its review and consent (hereinafter not to be unreasonably withheld) for the "discrepancy"). Lessor sole purpose of confirming that such contract complies with the provisions of the Work Letter. 4.2 Tenant shall cure cause the Contractor to agree that: (i) the Tenant Improvements shall be constructed in strict accordance with the Approved Working Drawings; (ii) Tenant and the Contractor shall abide by all rules made by Landlord’s Building manager with respect to performance of construction in the Building, including the handling of deliveries, use of elevators, storage of materials, and any other matter in connection with the construction of the Tenant Improvements; and (iii) all reasonable safety precautions must be taken throughout construction. 4.3 Throughout the course of the Tenant Improvement Work, Tenant and its Contractor shall maintain such discrepancies insurance coverage as is commercially standard for such construction work. 4.4 Tenant or its Contractor must obtain all applicable building permits and approvals for the construction of Tenant Improvements, and such Tenant Improvements must be constructed in accordance with Applicable Laws, including ADA and Title 24. 4.5 With regards to any work to be performed on the Building Systems and subsystems, Tenant and its Contractor shall use those subcontractors that regularly maintain and manage such systems, and such work will include design, components, distribution, and installation to meet Landlord’s specifications for the operations of the Building; any such subsequent contractors with whom Tenant or Contractor are required to contract will charge commercially reasonable rates for the services involved, or Tenant shall have the right to propose reasonably acceptable substitute contractors or sub-contractors to perform such work, subject to Landlord’s prior written consent, not to be unreasonably withheld, conditioned or delayed. 4.6 At the conclusion of construction, (i) Tenant shall cause the Architect and Contractor (A) to update the Approved Working Drawings as necessary to reflect all changes made to the extent Lessor deems Approved Working Drawings during the course of construction, (B) to certify to the best of their knowledge that the “record-set” of as-built drawings are true and correct, which certification shall survive the expiration or termination of this Lease, and (C) to deliver to Landlord two (2) sets of copies of such discrepancies to be reasonably claimed, record set of drawings within thirty ninety (3090) days following commencement issuance of the lease term. Provided however, if any such discrepancy is incapable a certificate of cure within such thirty (30)-day periodoccupancy, and Lessor has commenced (ii) Tenant shall deliver to Landlord a copy of all warranties, guaranties, and operating manuals and information relating to the cure of such discrepancy within such thirty (30)-day periodimprovements, this provision shall be satisfiedequipment, and systems.

Construction of Tenant Improvements. Lessee understands Tenant shall construct but Landlord will own (and agrees that Lessor is currently to the extent set forth in this Section 7.1 will pay for) certain improvements (the process of constructing the improvements which shall comprise "Tenant improvements") in the Premises. In The Tenant improvements for the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications Premises shall be designed and completed in accordance with this Article 7 and Article 31 below, the cost to Landlord of which shall not exceed One Hundred Nine Thousand One Hundred Forty-Three and 75/100 Dollars ($109,143.75) (i.e., $6.25 per rentable square foot of the Premises) ("T. I. Allowance"). In addition, an amount not to exceed Fifty-Two Thousand Three Hundred Eighty-Nine Dollars ($52,389) (i.e., $3.00 per rentable square foot of the Premises) shall be contributed by Landlord, at LesseeTenant's sole cost request, for construction of the Tenant Improvements and expenseshall be considered part of the T.I. Allowance; provided, including a ten percent (10%) administrative payment to Lessorthat any such additional amounts contributed will be repaid by Tenant, plus 11% interest per annum, in equal monthly installments amortized over the Initial Term of the Lease. Such additional payments will be made at the same time and in the same manner as Rent. Any costs to construct the Tenant Improvements in excess of the T. I. Allowance shall be paid for by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval Tenant. The Tenant Improvements shall consist of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy all interior improvements constructed in the Premises which are not part of the Premises Building's structure or shell and shall include by Lesseeway of illustration, floor coverings, interior partitions, doors, ceilings, lighting fixtures, wall coverings, electrical and telephone outlets. All tenant improvements The Tenant Improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided constructed in accordance with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B"prepared by Tenant's architect and approved by both Landlord and Tenant. The T. I. Allowance shall be available towards the costs of the actual, as reasonably measured by incurred costs of the standards Tenant Improvements, including the cost of finishedall labor and materials for the construction and installation of the Tenant Improvements; the cost of all permits, comparably priced industrial licenses, and fees; all amounts paid to Tenant's contractors under and pursuant to contracts for the construction and installation of the Tenant Improvements; all architectural, engineering, space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies planning, and other consultant's fees; all amounts paid for mechanical drawings, plans, specifications, shop drawings, designs, and layouts; and reasonable incidental costs related to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedforegoing.

Construction of Tenant Improvements. Lessee understands and agrees Section 2.02 of the Lease is hereby amended by incorporating the following: "Tenant hereby acknowledges that Lessor is currently the leasehold improvements to the Third Additional Space designated as Landlord's obligation in the process of constructing the improvements which shall comprise the PremisesExhibit B-8 have been completed in a satisfactory manner. In addition, Tenant has personally inspected the course Fourth Additional Space and accepts the same "AS IS" without representation or warranty by Landlord of such constructionany kind. Promptly following December 1, Lessor hereby agrees to construct 2013, Tenant shall execute Landlord's Letter of Understanding in substantially the tenant improvements set forth in the plans and specifications form attached hereto as Exhibit "B"D-2 and made a part hereof, acknowledging (a) the Fourth Additional Space commencement date, and (b) that Tenant has accepted the Fourth Additional Space. Such plans letter of understanding shall become a part of this Lease. If Tenant takes possession of and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expenseoccupies the Fourth Additional Space, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements Tenant shall be deemed substantially completed when to have accepted the City Fourth Additional Space in the manner described in this paragraph, even though the letter of Carpinteria issues a Certificate understanding provided for herein may not have been executed by Tenant. Tenant shall have the right to enter the Fourth Additional Space on July 1, 2013 in order to install fixtures, furniture, audio visual equipment, computers, cabling, kitchen equipment and art work and otherwise prepare the Fourth Additional Space for occupancy, which right shall expressly exclude making any structural modifications. During any entry prior to December 1, 2013 (a) Tenant shall comply with all terms and conditions of Occupancy for this Lease other than the Premises. Notwithstanding obligation to pay rent with respect to the issuance Fourth Additional Space, (b) Tenant shall cause its personnel and contractors to comply with the terms and conditions of such CertificateLandlord's rules of conduct (which Landlord agrees to furnish to Tenant upon request), Lessee and (c) Tenant shall not begin operation of its business in the Fourth Additional Space.Tenant acknowledges that Tenant shall be provided with a punch list of such tenant improvements prior responsible for obtaining all applicable permits and inspections relating to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedentry by Tenant."

Construction of Tenant Improvements. Lessee understands and agrees that Lessor is currently 6.1. Landlord shall cause the Tenant Improvements to be substantially completed sufficient for the issuance of a temporary certificate of occupancy for the Premises on or before the Commencement Date of the Lease in accordance with the process of constructing the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements provisions set forth in this Work Letter. Landlord shall supervise the plans completion of such work and specifications attached hereto shall use diligent efforts to secure substantial completion of the work in accordance with the Work Schedule. The cost of such work shall be paid as Exhibit provided in Section 7. 6.2. In connection with the construction of the Tenant Improvements, Landlord and Tenant shall arrange for Tenant to have access to the Premises commencing approximately 10 days prior to the estimated date for substantial completion shown on the Work Schedule, in order to allow Tenant to install telephone lines and telephone systems, fiber optics, computer cabling, and related similar matters, and, on a "B"space ready" basis only, to commence installation of Tenant's trade fixtures. Such plans Tenant shall schedule installation of such items with Landlord and specifications are hereby clarified Landlord's contractor so as follows: SEE EXHIBITnot to unreasonably impede, interfere with or delay the progress of construction of the Tenant Improvements; and Tenant shall perform such installation in accordance with guidelines promulgated by Landlord's contractor. Lessee has reviewed and approved all Delay, interference or damage arising out of Tenant's installation of such plans and specificationsitems shall constitute a Tenant Delay under Section 8. Any changes or additions made by Lessee to and all costs of installation of such plans and specifications items shall be at LesseeTenant's sole cost and expense. 6.3. During the period of construction of the Tenant Improvements, including a ten percent (10%) administrative payment Landlord shall consult with Tenant from time to Lessortime as necessary to achieve approval of certain matters and installations related to the Tenant Improvements. Such additional payments approvals shall be paid forthcoming from Tenant within a reasonable time period as requested by Lessee Landlord, which time period shall enable Landlord to Lessor as follows: (i) fifty percent (50%) upon maintain the schedule for substantial completion of the Tenant Improvements stated in the Work Schedule. Failure of Tenant to respond within such requested time period shall constitute a Tenant Delay. 6.4. During the period of construction of the Tenant Improvements, Landlord and Tenant shall meet at regular meetings occurring at least once monthly regarding the status of the construction and occurring at least once weekly during the final month of construction. If timely, matters requiring Tenant's approval may be determined at such meetings and decisions shall be reflected in the minutes of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedmeetings.

Construction of Tenant Improvements. Lessee understands and agrees that Lessor is currently Landlord shall perform the work (the "Landlord Work") described in the process of constructing the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications EXHIBIT LW attached hereto as Exhibit in a good and workmanlike manner. The term of this Lease shall commence (the "BCommencement Date". Such plans ) fourteen (14) days after the date Landlord shall have substantially completed the Landlord Work (that is, has completed the Landlord Work, except for normal "punch list" items) and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee shall have delivered to such plans and specifications shall be at Lessee's sole cost and expense, including Tenant a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: copy of either (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a permanent Certificate of Occupancy for the PremisesLeased Property from the appropriate building official of the City of Taunton, Massachusetts or (ii) a Temporary Certificate of Occupancy for the Leased Property from such official, provided that such Temporary Certificate of Occupancy contains no conditions which would render the Premises unusable by Tenant for the Permitted Use. Notwithstanding In the issuance event the Landlord's Work is not completed on or before December 31, 1997, Tenant shall have the right to terminate its obligations under this Lease by giving written notice of such Certificatetermination to Landlord on or before February 1, Lessee 1998; provided, however, that (1) such dates shall be provided with extended for a punch list period equal to the duration of any delays in construction caused by strikes, shortages or materials, acts of God or other matters not reasonably within the control of Landlord, and (2) in the event any delays in completing the Landlord's Work are as a result of change orders or other delays caused by Tenant. The foregoing dates shall be extended day for day for each such delay caused by Tenant or longer if appropriate to compensate for additional delays which were encountered on account of items enumerated in (1) above that would not otherwise have been encountered but for the Tenant-caused delays. Tenant's failure to give such notice of termination on or before February 1, 1998 (or such later date as extended pursuant to (1) or (2) above) shall constitute a waiver of such tenant improvements prior termination right with the result that February 1, 1998 (or such later date as extended pursuant to (1) or (2) above) shall become the commencement Commencement Date. Thirty (30) days after the Commencement Date, Landlord shall be deemed to have satisfactorily completed the construction of the lease termLandlord Work, and Tenant shall inspect the Premises after their substantial completion. Lessee shall set forth any manner be deemed to have waived all rights and remedies with respect to deficiencies in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B"such construction, as reasonably measured by the standards of finished, comparably priced industrial space except for (a) deficiencies in the Santa ▇▇▇▇▇▇▇ area HVAC system of which Tenant has informed the Landlord in writing not later than three hundred sixty-five (hereinafter 365) days following the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimedCommencement Date, within (b) deficiencies of any other type of which Tenant has informed Landlord, in writing, not later than thirty (30) days following commencement the Commencement Date, and (c) latent defects in the roof or structural integrity of the building constructed as part of the Landlord Work. Further, with respect to any portions of the Landlord's Work for which Landlord has received a guaranty or warranty from the general contractor or subcontractor performing such work, Tenant shall have the full benefit of such warranty or guaranty as long as Tenant gives Landlord written notice of such defect or deficiency in a timely manner so that Landlord is capable of making a timely claim under the guaranty or warranty in question. 26.1 Landlord and Tenant acknowledge that Landlord intends to enter into agreements with the Massachusetts Development Finance Agency ("MDFA") providing for the issuance of industrial revenue bonds in a principal amount of approximately $4,175,000 (the "Bonds") pursuant to Chapters 23A and 40D of the Massachusetts General Laws. The proceeds from the sale of the Bonds have been or will be used to finance the acquisition of the Leased Property and performance of Landlord's construction work referenced in Section 25 and the repayment of the Bonds will be secured by a mortgage of the Leased Property. The Bonds will be issued and sold on the condition that interest due thereon will be excluded from gross income for purposes of Federal income taxation under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code") and exempt from Massachusetts income taxation. 26.2 Landlord and Tenant further acknowledge that Landlord's willingness to enter into this Lease is specifically and expressly condition upon the agreements of Tenant set forth in this Section 26, all of which are necessary to the establishment and preservation of the aforesaid tax-exempt status. Tenant acknowledges that qualification of the Bonds for tax-exempt status depends upon the continuing qualification under the small issue exemption of Section 144(a) of the Code, and that the Bonds will continue to be treated as a qualified small issue only so long as (a) the sum of (i) the authorized amount of the Bonds plus (ii) the aggregate face amount of certain other exempt small issues plus (iii) the aggregate amount of certain capital expenditures does not exceed $10,000,000 and (b) with respect to (i) the Tenant, (ii) the Landlord, and (iii) each other test-period beneficiary (as defined in Section 144(a)(10)(D) of the Code) of the Leased Property, the sum of the authorized face amount of the Bonds allocable to such test-period beneficiary plus the respective aggregate face amount of all tax-exempt facility related bonds presently outstanding that are allocable to such test-period beneficiary does not exceed $40,000,000. (Except as expressly stated to the contrary, all quoted terms used in this Article 26 shall have the meanings set forth in Sections 103 and 141 through 150 of the Code and in the regulations, rulings and judicial decisions thereunder.) Tenant agrees that each of the following agreements, covenants, obligations and duties of Tenant shall constitute a "Bond Related Obligation" such that the failure of Tenant to perform or observe a Bond Related Obligation shall entitle Landlord to the special remedies set forth in Section 26.4 hereof in addition to any other remedies Landlord may have under this Lease: (a) Tenant covenants and agrees that neither it nor any related person" will make or incur any "capital expenditures" (which term for purposes of this subsection (a) only, shall include both capital expenditures and any exempt small issue industrial revenue bonds (other than the Bonds) for purposes of Section 144(a) of the Code) within the City of Taunton (or with respect to a contiguous or integrated facility within a municipality adjacent to the City of Taunton) such that the total of all such "capital expenditures" from and after the date of this lease term. Provided howeverexceeds $10,000,000 if the effect thereof is to cause a loss in the tax-exempt status of the Bonds. (b) Tenant covenants and agrees that neither it nor any "related person" will become a principal user" of any facility other than the Leased Property located in the City of Taunton (or of a contiguous or integrated facility within a municipality adjacent to the City of Taunton) if the effect thereof is to cause a loss in the tax-exempt status of the Bonds. (c) Tenant covenants and agrees that neither it nor any "related persons" will acquire the stock or assets of any person or entity in a tax-free exchange or reorganization and will not allow its stock or assets to be acquired by any other person or entity in a tax-free exchange or reorganization, or otherwise merge or combine itself with any other person or entity in a tax-free transaction, in each such case if any such discrepancy person or entity shall be a "principal user" of a facility located within the City of Taunton (or of a contiguous or integrated facility within a municipality adjacent to the City of Taunton) or shall be a test period beneficiary" of any outstanding tax-exempt industrial development bonds, whenever issued, of a facility, wherever located, if the effect thereof is incapable to cause the loss of cure the tax-exempt status of the Bonds. (d) Tenant covenants and agrees that neither it nor any "related person" will become a "test period beneficiary" of any outstanding tax-exempt facility related bonds if the sum of the percentage of outstanding principal amount of all tax-exempt facility related bonds, whenever issued, allocable to Tenant and any "related persons", including the Bonds, shall exceed $40,000,000. (e) Any assignee, mortgagee, pledge or sublessee under Section 14 of this Lease will comply with the provisions of this Section 26 in addition to all other provisions of this lease and such assignee, mortgagee, pledge or sublessee must so agree in writing with Landlord. (f) Tenant agrees that Landlord may withhold its consent under Section 14 of this Lease, if, in addition to any other basis for withholding such consent, any requested use of the demised premises will not comply the requirements of the Code with respect to use of facilities financed by the Bonds. 26.3 Tenant hereby represents that within the last six (6) years the total amount of all "capital expenditures" plus all exempt small issue industrial revenue bond financings with respect to any facility located in the City of Taunton (or with respect to a contiguous or integrated facility within a municipality adjacent to the City of Taunton) of which Tenant or any "related person" is a "principal use?' does not exceed $1,000.00, excluding for purposes of making such thirty (30)-day periodcomputation the "capital expenditures" made by Landlord in connection with acquisition of the Leased Property and performance of Landlord's construction work. 26.4 In the event of any failure to observe or perform any of the Bond Related Obligations by Tenant, which failure has caused the loss of the tax-exempt status of the Bonds, in addition to any other remedy which Landlord may have under this Lease or otherwise, Landlord shall be entitled to recover damages from Tenant in an amount equal to the interest payments, fees, back-taxes, penalties and Lessor has commenced other amounts required to be paid by Landlord to the cure holder of the Bonds from the date such loss shall occur until the Bonds are redeemed or retired and that, upon such redemption or retirement, the Base Rent shall be recalculated so as to provide the same debt coverage ratio for the Leased Property with respect to the replacement mortgage financing that existed before redemption or retirement of the Bonds The underwriting standards to be applied in determining what adjustment to Base Rent is necessary to create the same debt coverage ratio for the Leased Property shall be those underwriting standards which were employed in determining the debt coverage ratio that existed with respect to the Leased Property when the Bonds remained in effect Landlord shall give Tenant notice of any claimed loss of tax-exempt status of the Bonds promptly after its receipt of such discrepancy claim, shall afford Tenant an opportunity to participate in any action contesting such loss and shall permit Tenant to cure (if possible) any default on its part giving rise to such loss It is understood and agreed that Tenant shall not be deemed in default of this Lease nor shall Tenant be responsible for any damages as set forth in this Paragraph 26E4 if the loss of tax-exempt status of the Bonds is caused by Landlord 26.5 In the event that Landlord does not obtain Bond financing for the acquisition of the Leased Property or the Landlord's construction work, as contemplated by Section 261 of this Lease, within such thirty four (30)-day period4) years from the date of execution of this Lease, the provisions of this provision Section 26 shall be satisfied.deemed null and void of no further force and effect

Construction of Tenant Improvements. Lessee understands Following Landlord’s approval of the Final Plans, and agrees that Lessor is currently once construction has commenced, Tenant’s contractor (selected as provided in Section 8(n)) will commence and diligently proceed with the process construction of constructing the improvements which Tenant Improvements. Tenant shall comprise use diligent efforts to cause its contractor to complete the PremisesTenant Improvements in a good and workmanlike manner in accordance with the Final Plans. Landlord shall have the right to enter upon the Premises to inspect Tenant’s construction activities following reasonable advance notice Tenant. In the course event of a Landlord Delay (as hereinafter defined) which causes Tenant to be delayed in its ability to substantially complete the Tenant Improvements and use the Premises (or portion thereof) for normal business operations, and provided Tenant does not actually use the Premises (or portion thereof) as a result of such constructionLandlord Delay, Lessor hereby agrees to construct the tenant improvements set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications then Tenant shall be at Lessee's sole cost and expense, including entitled to a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as followsper day rent credit for each day of a Landlord Delay equal to: (i) fifty percent (50%) upon approval the rentable square footage of such change the effected portion of the Premises, multiplied by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises Annual Rental Rate per rentable square foot, and with such product then divided by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises365. Notwithstanding the issuance foregoing, Tenant hereby acknowledges that the Tenant Improvements will be conducted in the Premises while Tenant is in occupancy thereof and paying rent under the Lease. Tenant further acknowledges that some interruptions and/or interference with Tenant’s business may occur during the course of such CertificateTenant’s completion of the Tenant Improvements, Lessee but agrees that no interruptions or inconveniences to Tenant or its business suffered as a result of Tenant’s own completion of the Tenant Improvements shall constitute an eviction of Tenant from the Premises, whether constructive or otherwise, and Tenant shall in no event be provided with a punch list of such tenant improvements prior excused from paying the rent that it is scheduled to pay pursuant to the commencement terms of the lease termLease, except in accordance with the terms and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", as reasonably measured by the standards of finished, comparably priced industrial space in the Santa ▇▇▇▇▇▇▇ area (hereinafter the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement conditions of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedimmediately preceding sentence.

Construction of Tenant Improvements. Lessee understands (a) Lessor shall construct at its sole cost and agrees that expense the Building, in accordance with Exhibit B annexed hereto. Lessor is currently shall also --------- construct in the process of constructing Building at its sole cost and expense except as specifically provided herein, the improvements which shall comprise the Premises. In the course of such construction, Lessor hereby agrees to construct the tenant improvements set forth Tenant Improvements in accordance with the plans and specifications attached hereto described in Exhibit D annexed hereto, as Exhibit the same may be --------- modified in accordance with this Paragraph 3.1 (the "BPlans and Specifications"), which Plans and Specifications have been approved by Lessor and Lessee. (Such plans construction of the Building and specifications are hereby clarified the Tenant Improvements is hereinafter referred to as follows: SEE EXHIBIT. Lessee has reviewed the "Work".) (b) Lessor shall file the Plans and approved all such plans Specifications with the appropriate governmental authorities and specifications. Any changes or additions made by Lessee to such plans and specifications shall take whatever action shall be at necessary (including paying all filing fees and other costs, and cooperating with Lessee in making any required modifications of the Plans and Specifications) to obtain and maintain all governmental permits and authorizations which may be required in connection with the Work. (c) Lessor shall, with all due diligence, perform and complete the Work in a good and workmanlike manner, with only new materials, and free of all mechanics', materialmen's and other liens or claims. Lessor shall construct the Tenant Improvements according to Plans and Specifications approved by Lessee's sole . (d) In the performance of the Tenant Improvements, Lessor shall use all reasonable efforts to conform with the preliminary budget of $560,000.00 for the Tenant Improvements. If the final cost and expenseof the Tenant Improvements, including a ten percent (10%) administrative payment to Lessor. Such all necessary permits and design fees, exceeds the total allowance of $400,000.00, the additional payments cost shall be paid by Lessee to Lessor Lessor, prior to the Commencement of the term of this Lease. (e) For the purposes of this Lease, the term "Tenant Improvements" shall be deemed to include only the items identified in Exhibit D --------- annexed hereto. All other improvements necessary for or related to the Premises shall be deemed to be "Building" improvements as follows: generally depicted in Exhibit B --------- annexed hereto. (f) Tenant Improvement construction cost shall be deemed to mean only the aggregate of the following costs incurred by Owner in connection with the Work: (i) fifty percent (50%) upon approval of such change by Lessor; Payments made to the general contractor, subcontractors, materialmen, and suppliers; (ii) fifty percent All fees, and all permits, licenses and inspection costs paid to governmental entities exercising jurisdiction over the Work; (50%iii) prior Fees for engineers, architects and other reasonably required professional consultants; (iv) Utility connection fees; (v) Signage, for interior and as required by code. 3.2 Lessor will permit Lessee and Lessee's agents, suppliers, contractors and workmen to occupancy of enter the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements Building prior to the commencement Commencement Date to enable Lessee, at Lessee's sole expense, to install telephones, computers, alarm systems and certain other fixtures and equipment as may be required by Lessee to make the Building ready for Lessee's occupancy, provided that Lessee and its agents, contractors, workmen and suppliers shall exercise commercially reasonable efforts not to materially interfere with or delay the completion of construction of the lease termBuilding or the Tenant Improvements to be done by Lessor, and to avoid material interference with any other activities of Lessor on the Land. If Lessor shall inspect the Premises after their substantial completion. reasonably determine that any such material interference or delay has been or may be caused, Lessor shall notify Lessee in writing thereof, whereupon Lessee shall set forth exercise commercially reasonable efforts to cause a termination or modification of the activities which have caused, or may cause, any manner in which Lessee claims that the Premises to do not conform such material interference or delay for as long as and to the plans and specifications attached hereto extent as Exhibit "B"shall reasonably be necessary. If Lessee shall fail to cause a termination or modification of such activities, as reasonably measured by Lessor shall have the standards of finishedright, comparably priced industrial space in the Santa on written notice to Lessee, to cause Lessee or such agent, contractor, ▇▇▇▇▇▇▇ area (hereinafter or supplier causing such material interference or delay to leave the "discrepancy"). Lessor shall cure such discrepancies Building for as long as and to the extent reasonably necessary to bring about a termination or modification of those activities which have caused, or may cause, any such material interference or delay. Lessee agrees that any such entry into the Building shall be at risk and Lessor deems shall not be liable in any way for any injury, loss or damage which may occur to any of Lessee's property or Lessee's installations made in the Building, unless such discrepancies injury, loss or damage shall have been proximately caused by the negligence, gross negligence or intentional misconduct of Lessor or any agent, employee, contractor, subcontractor, licensee or invitee of Lessor. Subject to be reasonably claimedthe conduct of Lessor referenced immediately above, within thirty (30) days following commencement Lessee agrees to indemnify, defend and hold Lessor harmless from and against all liabilities, costs, damages, fees and expenses arising out of the lease termactivities of Lessee or its agents, contractors, suppliers or workmen in or about the Building prior to the Commencement Date. Provided howeverIn addition, if any such discrepancy is incapable prior to the initial entry to the Building by Lessee and by each agent, contractor, supplier or ▇▇▇▇▇▇▇ of cure within such thirty Lessee pursuant to this Paragraph 3.2, Lessee shall furnish Lessor with certificates evidencing policies of insurance covering Lessor as an insured party with the following coverages and in the following amounts: (30)-day periodi) Combined Single Limit, Bodily Injury and Lessor has commenced Premises Damage Insurance in an amount not less than $1,000,000.00 per occurrence and $2,000.000.00 general aggregate; and (ii) Workers' Compensation Insurance in the cure amount of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedthe statutory maximum with an employees liability coverage of at least $1,000,000.00.

Construction of Tenant Improvements. Lessee understands Upon approval by Landlord and agrees that Lessor is currently Tenant of Tenant’s Final Plans, Landlord shall enter into a construction contract with the Contractor, which contract shall be either a fixed price contract or a contract for the cost of the work plus a fee. The Contractor shall proceed with reasonable diligence to cause the Tenant Improvements to be Substantially Completed on or prior to the Commencement Date or the Must Take Commencement Date, as applicable. The Tenant Improvements shall be deemed to be “Substantially Completed” when: (a) the Tenant Improvements in the process Premises are completed in compliance with Tenant’s Final Plans, except for (i) furnishing details, (ii) minor omissions, defects or mistakes, (iii) decorations, (iv) mechanical adjustments and (v) other matters of constructing the improvements which type typically included on “punch lists”; and (b) Tenant has received temporary inspection approvals relating to the Tenant Improvements in the Premises from the local building department having jurisdiction over the Tenant Improvements. The terms “Substantial Completion” and “Substantially Complete” shall comprise refer to and include the Premisesdefinition of Substantially Completed as set forth above. In Following Substantial Completion of the course Tenant Improvements and before Tenant takes possession of such constructionthe Premises (or as soon thereafter as may be reasonably practicable and in any event within 30 days after Substantial Completion), Lessor hereby agrees Landlord, Tenant and the Contractor shall inspect the Premises and collectively prepare a “punch list” of agreed items remaining to construct be completed. The Contractor shall complete the tenant improvements items set forth in the plans and specifications attached hereto as Exhibit "B". Such plans and specifications are hereby clarified as follows: SEE EXHIBIT. Lessee has reviewed and approved all such plans and specifications. Any changes or additions made by Lessee to such plans and specifications shall be at Lessee's sole cost and expense, including a ten percent (10%) administrative payment to Lessor. Such additional payments shall be paid by Lessee to Lessor as follows: (i) fifty percent (50%) upon approval of such change by Lessor; and (ii) fifty percent (50%) prior to occupancy of the Premises by Lessee. All tenant improvements shall be deemed substantially completed when the City of Carpinteria issues a Certificate of Occupancy for the Premises. Notwithstanding the issuance of such Certificate, Lessee shall be provided with a punch list of such tenant improvements prior to the commencement of the lease term, and shall inspect the Premises after their substantial completion. Lessee shall set forth any manner in which Lessee claims that the Premises to do not conform to the plans and specifications attached hereto as Exhibit "B", soon as reasonably measured by possible. Tenant shall cooperate with and accommodate Landlord and the standards of finished, comparably priced industrial space Contractor in completing the Santa ▇▇▇▇▇▇▇ area (hereinafter items on the "discrepancy"). Lessor shall cure such discrepancies to the extent Lessor deems such discrepancies to be reasonably claimed, within thirty (30) days following commencement of the lease term. Provided however, if any such discrepancy is incapable of cure within such thirty (30)-day period, and Lessor has commenced the cure of such discrepancy within such thirty (30)-day period, this provision shall be satisfiedpunch list.