EXHIBIT 10.46

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

1. BASIC PROVISIONS ("BASIC PROVISIONS").

1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes only,
November 2 , 2004, is made by and between DEL MONICO INVESTMENTS, INC., a
California corporation ("LESSOR") and ENDOLOGIX, INC., a Delaware corporation
("LESSEE"), (collectively the "PARTIES," or individually a "PARTY").

1.2 PREMISES: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and commonly
known as 11 Studebaker, Irvine, California, located in the County of Orange,
State of California, and generally described as (describe briefly the nature of
the property and, if applicable, the "PROJECT", if the property is located
within a Project) a freestanding industrial building containing approximately
30,224 square feet, Exhibit A attached hereto ched hereto ("PREMISES"). (See
also Paragraph 2)

1.3 TERM: five (5) years and -0- months ("ORIGINAL TERM") commencing
April 1, 2005 ("COMMENCEMENT DATE") and ending March 31, 2010 ("EXPIRATION
DATE"). (See also Paragraph 3 and Addendum No. 1, Section 59)

1.4 EARLY POSSESSION: upon lease execution ("EARLY POSSESSION DATE"). (See
also Paragraphs 3.2 and 3.3)

1.5 BASE RENT: $25,690.40 per month ("BASE RENT"), payable on the first
(1st) day of each month commencing April 1, 2005. (See also Paragraph 4 and
Addendum No. 1, Section 51)

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

1.6 BASE RENT AND OTHER MONIES PAID UPON EXECUTION:

(a) BASE RENT: $25,690.40 for the period April 1, 2005 - April 30,
2005

(b) SECURITY DEPOSIT: $75,000.00 ("SECURITY DEPOSIT"). (See also
Paragraph 5)

(d) OTHER: $__________ for_________________________________________.

(e) TOTAL DUE UPON EXECUTION OF THIS LEASE: $100,690.40.

1.7 AGREED USE: Administration, research and development of medical
devices, and other related lawful uses. (See also Paragraph 6)

1.8 INSURING PARTY: Lessor is the "INSURING PARTY" unless otherwise stated
herein. (See also Paragraph 8)

1.9 REAL ESTATE BROKERS: (See also Paragraph 15)

(a) REPRESENTATION: The following real estate brokers
(the "BROKERS") and brokerage relationships exist in this
transaction (check applicable boxes):

[x] Collins Commercial Corporation represents Lessor exclusively ("LESSOR'S
BROKER");

[x] Julien J. Studley, Inc. represents Lessee exclusively ("LESSEE'S BROKER");
or

[ ] ________________________represents both Lessor and Lessee ("DUAL AGENCY"),

(b) PAYMENT TO BROKERS: Upon execution and delivery of this Lease by
both Parties, Lessor shall pay to the Broker the fee agreed to in their separate
written agreement.

1.10 GUARANTOR. The obligations of the Lessee under this Lease are to be
guaranteed by n/a ("GUARANTOR"). (See also Paragraph 37)

1.11 ATTACHMENTS. Attached hereto are the following, all of which
constitute a part of this Lease:

[x] an Addendum consisting of Paragraphs 51 through 63;

[ ] a plot plan depicting the Premises;

[ ] a current set of the Rules and Regulations;

[ ] a Work Letter;

[x] other (specify): Exhibits A, B and C.

2. PREMISES.

2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of size set forth in this Lease, or that may have been
used in calculating Rent, is an approximation which the Parties agree is
reasonable and any payments based thereon are not subject to revision whether or
not the actual size is more or less. NOTE: LESSEE IS ADVISED TO VERIFY THE
ACTUAL SIZE PRIOR TO EXECUTING THIS LEASE.

2.2 CONDITION. Lessor shall deliver the Premises to Lessee broom clean and
free of debris on the Commencement Date or the Early

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Possession Date, whichever first occurs ("START DATE"), and, so long as the
required service contracts described in Paragraph 7.1(b) below are obtained by
Lessee and in effect within thirty days following the Start Date, warrants that
the existing electrical, plumbing, fire sprinkler, lighting, heating,
ventilating and air conditioning systems ("HVAC"), loading doors, sump pumps, if
any, and all other such elements in the Premises, other than those constructed
by Lessee, shall be in good operating condition on said date and that the
structural elements of the roof, bearing walls and foundation of any buildings
on the Premises (the "BUILDING") shall be free of material defects. If a
non-compliance with said warranty exists as of the Start Date, or if one of such
systems or elements should malfunction or fail within the appropriate warranty
period, Lessor shall, as Lessor's sole obligation with respect to such matter,
except as otherwise provided in this Lease, promptly after receipt of written
notice from Lessee setting forth with specificity the nature and extent of such
non-compliance, malfunction or failure, rectify same at Lessor's expense. The
warranty periods shall be as follows: (i) 6 months as to the HVAC systems, and
(ii) 30 days as to the remaining systems and other elements of the Building. If
Lessee does not give Lessor the required notice within the appropriate warranty
period, correction of any such non-compliance, malfunction or failure shall be
the obligation of Lessee at Lessee's sole cost and expense. See Addendum,
Sections 54 and 56.

2.3 COMPLIANCE. Lessor warrants that the improvements on the Premises
comply with the building codes, applicable laws, covenants or restrictions of
record, regulations, and ordinances ("APPLICABLE REQUIREMENTS") that were in
effect at the time that each improvement, or portion thereof, was constructed,
as well as the "Current Requirements" (as defined in Addendum, Section 54.2).
Said warranty does not apply to the use to which Lessee will put the Premises,
modifications which may be required by the Americans with Disabilities Act or
any similar laws as a result of Lessee's use (see Paragraph 50), or to any
Alterations or Utility Installations (as defined in Paragraph 7.3(a)) OR "TENANT
IMPROVEMENTS" (defined in Exhibit B) made or to be made by Lessee. NOTE: LESSEE
IS RESPONSIBLE FOR DETERMINING WHETHER OR NOT THE APPLICABLE REQUIREMENTS, AND
ESPECIALLY THE ZONING, ARE APPROPRIATE FOR LESSEE'S INTENDED USE, AND
ACKNOWLEDGES THAT PAST USES OF THE PREMISES MAY NO LONGER BE ALLOWED. If the
Premises do not comply with said warranty, Lessor shall, except as otherwise
provided, promptly after receipt of written notice from Lessee setting forth
with specificity the nature and extent of such non-compliance, rectify the same
at Lessor's expense. If Lessee does not give Lessor written notice of a
non-compliance with this warranty within 6 months following the Start Date,
correction of that non-compliance shall be the obligation of Lessee at Lessee's
sole cost and expense. If the Applicable Requirements are hereafter changed so
as to require during the term of this Lease the construction of an addition to
or an alteration of the Premises and/or Building, the remediation of any
Hazardous Substance, or the reinforcement or other physical modification of the
Unit, Premises and/or Building ("CAPITAL EXPENDITURE"), Lessor and Lessee shall
allocate the cost of such work as follows:

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

(b) If such Capital Expenditure is not the result of the specific
and unique use of the Premises by Lessee (such as, governmentally mandated
seismic modifications), then Lessor and Lessee shall allocate the obligation to
pay for such costs pursuant to the provisions of Paragraph 7.1(d); provided,
however, that if such Capital Expenditure is required during the last 2 years of
this Lease or if Lessor reasonably determines that it is not economically
feasible to pay its share thereof, Lessor shall have the option to terminate
this Lease upon 90 days prior written notice to Lessee unless Lessee notifies
Lessor, in writing, within 10 days after receipt of Lessor's termination notice
that Lessee will pay for such Capital Expenditure. If Lessor does not elect to
terminate, and fails to tender its share of any such Capital Expenditure, Lessee
may advance such funds and deduct same, with Interest, from Rent until Lessor's
share of such costs have been fully paid. If Lessee is unable to finance
Lessor's share, or if the balance of the Rent due and payable for the remainder
of this Lease is not sufficient to fully reimburse Lessee on an offset basis,
Lessee shall have the right to terminate this Lease upon 30 days written notice
to Lessor.

(c) Notwithstanding the above, the provisions concerning Capital
Expenditures are intended to apply only to non-voluntary, unexpected, and new
Applicable Requirements. If the Capital Expenditures are instead triggered by
Lessee as a result of an actual or proposed change in use, change in intensity
of use, or modification to the Premises then, and in that event, Lessee shall
either: (i) immediately cease such changed use or intensity of use and/or take
such other steps as may be necessary to eliminate the requirement for such
Capital Expenditure, or (ii) complete such Capital Expenditure at its own
expense. Lessee shall not, however, have any right to terminate this Lease.

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

2.5 LESSEE AS PRIOR OWNER/OCCUPANT. The warranties made by Lessor in
Paragraph 2 shall be of no force or effect if immediately prior to the Start
Date Lessee was the owner or occupant of the Premises. In such event, Lessee
shall be responsible for any necessary corrective work.

3. TERM.

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

3.2 EARLY POSSESSION. If Lessee totally or partially occupies the Premises
prior to the Commencement Date, the obligation to pay Base Rent shall be abated
for the period of such early possession. Lessee's obligation to pay Real
Property Taxes, insurance premiums, maintenance and repair costs and all other
costs and expenses (other than Base Rent) set forth in this Lease shall commence
on the earlier to occur of (a) the date when Lessee commences construction in
the Premises or (b) January 1, 2005. All other terms of this Lease shall,
however, be in effect during such period. Any such early possession shall not
affect the Expiration Date.

3.3 DELAY IN POSSESSION. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession by such date, Lessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease. Lessee shall not,
however, be obligated to pay Rent or perform its other obligations until Lessor
delivers possession of the Premises and any period of rent abatement that Lessee
would otherwise have enjoyed shall run from the date of delivery of possession
and continue for a period equal to what Lessee would otherwise have enjoyed
under the terms hereof, but minus any days of delay caused by the acts or
omissions of Lessee. If possession is not delivered within 60 days after the
Commencement Date, Lessee may, at its option, by notice in writing within 10
days after the end of such 60 day period, cancel this Lease, in which event the
Parties shall be discharged from all obligations hereunder. If such written
notice is not received by Lessor within said 10 day period, Lessee's right to
cancel shall terminate. If possession of the Premises is not delivered within
120 days after the Commencement Date, this Lease shall terminate unless other
agreements are reached between Lessor and Lessee, in writing.

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

4. RENT.

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

4.2 PAYMENT. Lessee shall cause payment of Rent to be received by Lessor
in lawful money of the United States on or before the day on which it is due,
without offset or deduction (except as specifically permitted in this Lease).
Rent for any period during the term hereof which is for less than one full
calendar month shall be prorated based upon the actual number of days of said
month. Payment of Rent shall be made to Lessor at its address stated herein or
to such other persons or place as Lessor may from time to time designate in
writing. Acceptance of a payment which is less than the amount then due shall
not be a waiver of Lessor's rights to the balance of such Rent, regardless of
Lessor's endorsement of any check so stating. In the event that any check,
draft, or other instrument of payment given by Lessee to Lessor is dishonored
for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any
Late Charge and Lessor, at its option, may require all future payments to be
made by Lessee to be by cashier's check. Payments will be applied first to
accrued late charges and attorney's fees, second to accrued interest, then to
Base Rent and Operating Expense Increase, and any remaining amount to any other
outstanding charges or costs.

4.3 ASSOCIATION FEES. In addition to the Base Rent, Lessee shall pay to
Lessor each month an amount equal to any owner's association or condominium fees
levied or assessed against the Premises. Said monies shall be paid at the same
time and in the same manner as the Base Rent.

5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof
the Security Deposit as security for Lessee's faithful performance of its

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

6. USE.

6.1 USE. Lessee shall use and occupy the Premises only for the Agreed
Use, or any other legal use which is reasonably comparable thereto, and for no
other purpose. Lessee shall not use or permit the use of the Premises in a
manner that is unlawful, creates damage, waste or a nuisance, or that disturbs
occupants of or causes damage to neighboring premises or properties. Lessor
shall not unreasonably withhold or delay its consent to any written request for
a modification of the Agreed Use, so long as the same will not impair the
structural integrity of the improvements on the Premises or the mechanical or
electrical systems therein, and/or is not significantly more burdensome to the
Premises. If Lessor elects to withhold consent, Lessor shall within 7 days after
such request give written notification of same, which notice shall include an
explanation of Lessor's objections to the change in the Agreed Use.

6.2 HAZARDOUS SUBSTANCES.

(a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS SUBSTANCE"
as used in this Lease shall mean any product, substance, or waste whose
presence, use, manufacture, disposal, transportation, or release, either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safety or welfare, the
environment or the Premises, (ii) regulated or monitored by any governmental
authority, or (iii) a basis for potential liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substances shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, and/or crude oil or any products, by-products or fractions
thereof. Lessee shall not engage in any activity in or on the Premises which
constitutes a Reportable Use of Hazardous Substances without the express prior
written consent of Lessor and timely compliance (at Lessee's expense) with all
Applicable Requirements. "REPORTABLE USE" shall mean (i) the installation or use
of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with respect to
which any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Agreed Use, ordinary office
supplies (copier toner, liquid paper, glue, etc.) and common household cleaning
materials, so long as such use is in compliance with all Applicable
Requirements, is not a Reportable Use, and does not expose the Premises or
neighboring property to any meaningful risk of contamination or damage or expose
Lessor to any liability therefor. In addition, Lessor may condition its consent
to any Reportable Use upon receiving such additional assurances as Lessor
reasonably deems necessary to protect itself, the public, the Premises and/or
the environment against damage, contamination, injury and/or liability,
including, but not limited to, the installation (and removal on or before Lease
expiration or termination) of protective modifications (such as concrete
encasements) and/or increasing the Security Deposit. Provided that Lessee is not
in Default under the Lease and, without limitation, compiles with this Section
6.2, Lessor hereby consents to the storage on the Premises of the Hazardous
Substances set forth on Exhibit C hereto. Lessee represents and warrants that it
has supplied Lessor with all applicable material safety data sheets regarding
the Hazardous Substances listed on Exhibit C hereto, and covenants and agrees
not to use or to store on the Premises any additional types of Hazardous
Substances unless (a) the same are required as part of the ordinary course of
Lessee's business and (b) Lessee obtains Lessor's prior written consent thereto.

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

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

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

(e) LESSOR INDEMNIFICATION. Lessor and its successors and assigns
shall indemnify, defend, reimburse and hold Lessee, its employees and lenders,
harmless from and against any and all environmental damages, including the cost
of remediation, which result from Hazardous Substances which existed on the
Premises prior to Lessee's occupancy or which are caused by Lessor, its agents
or employees. Lessor's obligations, as and when required by the Applicable
Requirements, shall include, but not be limited to, the cost of investigation,
removal, remediation, restoration and/or abatement and shall survive the
expiration or termination of this Lease.

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

(g) LESSOR TERMINATION OPTION. If a Hazardous Substance Condition
(see Paragraph 9.1 (e)) occurs during the term of this Lease, unless Lessee is
legally responsible therefor (in which case Lessee shall make the investigation
and remediation thereof required by the Applicable Requirements and this Lease
shall continue in full force and effect but subject to Lessor's rights under
Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either (i)
investigate and remediate such Hazardous Substance Condition, if required, as
soon as reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect or (ii) if the estimated cost to remediate
such condition exceeds 12 times the then monthly Base Rent or $100,000,
whichever is greater, give written notice to Lessee, within 30 days after
receipt by Lessor of knowledge of the occurrence of such Hazardous Substance
Condition, of Lessor's desire to terminate this Lease as of the date 60 days
following the date of such notice: provided, however, that if the estimated cost
to remediate such Hazardous Substance Condition exceeds 12 times the then
monthly Base Rent or $100,000, whichever is greater, Lessee shall have the right
to terminate the Lease by giving written notice to Lessor within 20 days after
receipt of the knowledge of the estimated cost of remediation. In the event
Lessor elects to give a termination notice. Lessee may, within 10 days
thereafter, give written notice to Lessor of Lessee's commitment to pay the
amount by which the cost of the remediation of such Hazardous Substance
Condition exceeds an amount equal to 12 times the then monthly Base Rent or
$100,000, whichever is greater. Lessee shall provide Lessor with said funds or
satisfactory assurance thereof within 30 days following such commitment. In such
event, this Lease shall continue in full force and effect and Lessor shall
proceed to make such remediation as soon as reasonably possible after the
required funds are available. If Lessee does not give such notice and provide
the required funds or assurance thereof within the time provided, this Lease
shall terminate as of the date specified in Lessor's notice of termination.

6.3 LESSEE'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as otherwise
provided in this Lease, Lessee shall, at Lessee's sole expense, fully,
diligently and in a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable fire insurance underwriter or
rating bureau, and the recommendations of Lessor's engineers and/or consultants
which relate in any manner to the such Requirements, without regard to whether
such Requirement are now in effect or become effective after the Start Date.
Lessee shall, within 10 days after receipt of Lessor's written request provide
Lessor with copies of all permits and other documents, and other information
evidencing Lessee's compliance with any Applicable

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Requirements specified by Lessor, and shall immediately upon receipt, notify
Lessor in writing (with copies of any documents involved) of any threatened or
actual claim, notice, citation, warning, complaint or report pertaining to or
involving the failure of Lessee or the Premises to comply with any Applicable
Requirements.

6.4 INSPECTION; COMPLIANCE. Lessor and its employees, agents and
representatives and Lessor's "LENDER" (as defined in Paragraph 30) and
consultants shall have the right to enter into Premises at any time, in the case
of an emergency, and otherwise at reasonable times after reasonable notice, for
the purpose of inspecting the condition of the Premises and for verifying
compliance by Lessee with this Lease. The cost of any such inspections shall be
paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous
Substance Condition (see paragraph 9.1) is found to exist or be imminent, or the
inspection is requested or ordered by a governmental authority. In such case,
Lessee shall upon request reimburse Lessor for the cost of such inspection, so
long as such inspection is reasonably related to the violation or contamination.
In addition, Lessee shall provide copies of all relevant material safety data
sheets (MSDS) to Lessor within 10 days of the receipt of a written request
therefor. See Addendum, Section 55.

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

7.1 LESSEE'S OBLIGATIONS.

(a) IN GENERAL. Subject to the provisions of Paragraph 2.2
(Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable
Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14
(Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises,
Utility Installations (intended for Lessee's exclusive use, no matter where
located), and Alterations in good order, condition and repair (whether or not
the portion of the Premises requiring repairs, or the means of repairing the
same, are reasonably or readily accessible to Lessee, and whether or not the
need for such repairs occurs as a result of Lessee's use, any prior use, the
elements or the age of such portion of the Premises), including, but not limited
to, all equipment or facilities, such as plumbing, HVAC equipment, electrical,
lighting facilities, boilers, pressure vessels, fire protection system,
fixtures, walls (interior and exterior), foundations, ceilings, roofs, roof
drainage systems, floors, windows, doors, plate glass, skylights, landscaping,
driveways, parking lots, fences, retaining walls, signs, sidewalks and parkways
located in, on, or adjacent to the Premises. Lessee, in keeping the Premises in
good order, condition and repair, shall exercise and perform good maintenance
practices, specifically including the procurement and maintenance of the service
contracts required by Paragraph 7.1(b) below. Lessee's obligations shall include
restorations, replacements or renewals when necessary to keep the Premises and
all improvements thereon or a part thereof in good order, condition and state of
repair. Lessee shall, during the term of this Lease, keep the exterior
appearance of the Building in a first-class condition (including, e.g. graffiti
removal) consistent with the exterior appearance of other similar facilities of
comparable age and size in the vicinity, including, when necessary, the exterior
repainting of the Building.

(b) SERVICE CONTRACTS. Lessee shall, at Lessee's sole expense,
procure and maintain contracts, with copies to Lessor, in customary form and
substance for, and with contractors specializing and experienced in the
maintenance of the following equipment and improvements, if any, if and when
installed on the Premises: (i) HVAC equipment, (ii) boiler, and pressure
vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke
detection, (iv) landscaping and irrigation systems, (v) roof covering and
drains, (vi) clarifiers (vii) basic utility feed to the perimeter of the
Building, and (viii) any other equipment, if reasonably required by Lessor.
However, Lessor reserves the right, upon notice to Lessee, to procure and
maintain any or all of such service contracts, and if Lessor so elects, Lessee
shall reimburse Lessor, upon demand, for the reasonable cost thereof.

(c) FAILURE TO PERFORM. If Lessee fails to perform Lessee's
obligations under this Paragraph 7.1, Lessor may enter upon the Premises after
10 days' prior written notice to Lessee and provided that Lessee has not yet
commenced to cure such default or, if it has so commenced care, has ceased the
performance thereof (except in the case of an emergency, in which case no notice
shall be required), perform such obligations on Lessee's behalf, and put the
Premises in good order, condition and repair, and Lessee shall promptly pay to
Lessor a sum equal to 115% of the cost thereof.

(d) REPLACEMENT. Subject to Lessee's indemnification of Lessor as
set forth in Paragraph 8.7 below, and without relieving Lessee of liability
resulting from Lessee's failure to exercise and perform good maintenance
practices, if an item described in Paragraph 7.1(b) cannot be repaired other
than at a cost which is in excess of 50% of the cost of replacing such item,
then such item shall be replaced by Lessor, and the cost thereof shall be
prorated between the Parties and Lessee shall only be obligated to pay, each
month during the remainder of the term of this Lease, on the date on which Base
Rent is due, an amount equal to the product of multiplying the cost of such
replacement by a fraction, the numerator of which is one, and the denominator of
which is 180 444 (ie. 1/180th of the cost per month). Lessee shall pay interest
on the unamortized balance at a rate that is commercially reasonable in the
judgment of Lessor's accountants. Lessee may, however, prepay its obligation at
any time.

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

7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.

(a) DEFINITIONS. The term "UTILITY INSTALLATIONS" refers to all
floor and window coverings, air and/or vacuum lines, power panels, electrical
distribution, security and fire protection systems, communication cabling,
lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises.
The term "TRADE FIXTURES" shall mean Lessee's machinery and equipment that can
be removed without doing material damage to the Premises. The term "ALTERATIONS"
shall mean any modification of the improvements, other than Utility
Installations or Trade Fixtures, whether by addition or deletion. "LESSEE OWNED
ALTERATIONS AND/OR UTILITY INSTALLATIONS" are defined as Alterations and/or
Utility Installations made by Lessee that are not yet owned by Lessor pursuant
to Paragraph 7.4(a).

(b) CONSENT. Lessee shall not make any Alterations or Utility
Installations to the Premises without Lessor's prior written consent. Lessee
may, however, make non-structural Utility Installations to the interior of the
Premises (excluding the roof) without such consent but upon notice to Lessor, as
long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, will not affect the
electrical, plumbing, HVAC, and/or life safety systems, and the cumulative cost
thereof during this Lease as extended does not exceed a sum equal to 3 month's
Base Rent in the aggregate or a sum equal to one month's Base Rent in any one
year. Notwithstanding the foregoing, Lessee shall not make or permit any roof
penetrations and/or install anything on the roof without the prior written
approval of Lessor. Lessor may, as a precondition to granting such approval,
require Lessee to utilize a contractor chosen and/or approved by Lessor. Any
Alterations or Utility Installations that Lessee shall desire to make and which
require the consent of the Lessor shall be presented to Lessor in written form
with detailed plans. Consent shall be deemed conditioned upon Lessee's: (i)
acquiring all applicable governmental permits, (ii) furnishing Lessor with
copies of both the permits and the plans and specifications prior to
commencement of the work, and (iii) compliance with all conditions of said
permits and other Applicable Requirements in a prompt and expeditious manner.
Any Alterations or Utility Installations shall be performed in a workmanlike
manner with good and sufficient materials. Lessee shall promptly upon completion
furnish Lessor with as-built plans and specifications. For work which costs an
amount in excess of one month's Base Rent, Lessor may condition its consent upon
Lessee providing a lien and completion bond in an amount equal to 150% of the
estimated cost of such Alteration or Utility Installation and/or upon Lessee's
posting an additional Security Deposit with Lessor. Lessor's consent shall be
deemed given if Lessor fails to respond to Lessee's written request therefor
within ten (10) days after receipt of such request; provided, however, that
Lessor's request for further information given to Lessee within said ten (10)
day period shall not be deemed a failure to respond.

(c) LIENS; BONDS. Lessee shall pay, when due, all claims for labor
or materials furnished or alleged to have been furnished to or for Lessee at or
for use on the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than 10 days notice prior to the commencement of any work
in, on or about the Premises, and Lessor shall have the right to post notices of
non-responsibility. If Lessee shall contest the validity of any such lien, claim
or demand, then Lessee shall, at its sole expense defend and protect itself,
Lessor and the Premises against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement thereof. If
Lessor shall require, Lessee shall furnish a surety bond in an amount equal to
150% of the amount of such contested lien, claim or demand, indemnifying Lessor
against liability for the same. If Lessor elects to participate in any such
action, Lessee shall pay Lessor's attorneys' fees and costs; provided, however,
Lessor shall only participate in such action at Lessee's expense if necessary
due to a conflict of interest.

7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.

(a) OWNERSHIP. Subject to Lessor's right to require removal or elect
ownership as hereinafter provided, all Alterations and Utility Installations
made by Lessee shall be the property of Lessee, but considered a part of the
Premises. Lessor may, at the time when Lessee requests consent to the Alteration
or Utility Installation in question, elect in writing to be the owner of all or
any specified part of the Lessee Owned Alterations and Utility Installations.

(b) REMOVAL. Unless Lessor elects to be the owner thereof, pursuant
to Section 7.4(a) above, Lessee shall remove all Lessee Owned Alterations or
Utility Installations by the expiration or termination of this Lease. Lessor may
require the removal at any time of all or any part of any Lessee Owned
Alterations or Utility Installations made without the required consent.

(c) SURRENDER; RESTORATION. Lessee shall surrender the Premises by
the Expiration Date or any earlier termination date, with all of the
improvements, parts and surfaces thereof broom clean and free of debris, and in
good operating order, condition and state of repair, ordinary wear and tear
excepted and damage due to casualty (for which Lessee has no restoration
obligation under this Lease) or condemnation. "Ordinary wear and

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tear" shall not include any damage or deterioration that would have been
prevented by good maintenance practice. Notwithstanding the foregoing, if this
Lease is for 12 months or less, then Lessee shall surrender the Premises in the
same condition as delivered to Lessee on the Start Date with NO allowance for
ordinary wear and tear. Lessee shall repair any damage occasioned by the
installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations
and/or Utility installations, furnishings, and equipment as well as the removal
of any storage tank installed by or for Lessee. Lessee shall completely remove
from the Premises any and all Hazardous Substances brought onto the Premises by
or for Lessee, or any third party (except Hazardous Substances which were
deposited via underground migration from areas outside of the Premises, or if
applicable, the Project) if such removal is required by Applicable
Requirements; provided, however, that the foregoing shall not be construed, nor
is it Intended, to affect or to reduce Lessee's obligation to remove all drums
and other storage vessels and containers of any kind for all Hazardous
Materials. Trade Fixtures shall remain the property of Lessee and shall be
removed by Lessee. Any personal property of Lessee not removed on or before the
Expiration Date or any earlier termination date shall be deemed to have been
abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may
desire. The failure by Lessee to timely vacate the Premises pursuant to this
Paragraph 7.4(c) without the express written consent of Lessor shall constitute
a holdover under the provisions of Paragraph 26 below.

8. INSURANCE; INDEMNITY.

8.1 PAYMENT FOR INSURANCE. Lessee shall pay for all insurance required
under Paragraph 8 except to the extent of the cost attributable to liability
insurance carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per
occurrence. Premiums for policy periods commencing prior to or extending beyond
the Lease term shall be prorated to correspond to the Lease term. Payment shall
be made by Lessee to Lessor within 10 days following receipt of an invoice.

8.2 LIABILITY INSURANCE.

(a) CARRIED BY LESSEE. Lessee shall obtain and keep in force a
Commercial General Liability policy of insurance protecting Lessee and Lessor as
an additional insured against claims for bodily injury, personal injury and
property damage based upon or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing single limit coverage in an amount not
less than $2,000,000 per occurrence with an annual aggregate of not less than
$5,000,000, an "Additional Insured-Managers or Lessors of Premises Endorsement"
and contain the "Amendment of the Pollution Exclusion Endorsement" for damage
caused by heat, smoke or fumes from a hostile fire. The policy shall not contain
any intra-insured exclusions as between insured persons or organizations, but
shall include coverage for liability assumed under this Lease as an "insured
contract" for the performance of Lessee's indemnity obligations under this
Lease. The limits of said insurance shall not, however, limit the liability of
Lessee nor relieve Lessee of any obligation hereunder. All insurance carried by
Lessee shall be primary to and not contributory with any similar insurance
carried by Lessor, whose insurance shall be considered excess insurance only.

(b) CARRIED BY LESSOR. Lessor shall maintain liability insurance as
described in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance
required to be maintained by Lessee. Lessee shall not be named as an additional
insured therein.

8.3 PROPERTY INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.

(a) BUILDING AND IMPROVEMENTS. The Insuring Party shall obtain and
keep in force a policy or policies in the name of Lessor, with loss payable to
Lessor, any ground-lessor, and to any Lender insuring loss or damage to the
Premises. The amount of such insurance shall be equal to the full replacement
cost of the Premises, as the same shall exist from time to time, or the amount
required by any Lender, but in no event more than the commercially reasonable
and available insurable value thereof. If Lessor is the insuring Party, however,
Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee's
personal property shall be insured by Lessee under Paragraph 8.4 rather than by
Lessor. If the coverage is available and commercially appropriate, such policy
or policies shall insure against all risks of direct physical loss or damage
(except the perils of flood and/or earthquake unless required by a Lender),
including coverage for debris removal and the enforcement of any Applicable
Requirements requiring the upgrading, demolition, reconstruction or replacement
of any portion of the Premises as the result of a covered loss. Said policy or
policies shall also contain an agreed valuation provision in lieu of any
coinsurance clause, waiver of subrogation, and inflation guard protection
causing an increase in the annual property insurance coverage amount by a factor
of not less than the adjusted U.S. Department of Labor Consumer Price Index for
All Urban Consumers for the city nearest to where the Premises are located. If
such insurance coverage has a deductible clause, the deductible amount shall not
exceed $1,000 per occurrence, and Lessee shall be liable for such deductible
amount in the event of an insured Loss.

(b) RENTAL VALUE. The insuring Party shall obtain and keep in force
a policy or policies in the name of Lessor with loss payable to Lessor and any
Lender, insuring the loss of the full Rent for one year with an extended period
of indemnity for an additional 180 days ("Rental Value Insurance"). Said
insurance shall contain an agreed valuation provision in lieu of any coinsurance
clause, and the amount of coverage shall be adjusted annually to reflect the
projected Rent otherwise payable by Lessee, for the next 12 month period. Lessee
shall be liable for any deductible amount in the event of such loss.

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

8.4 LESSEE'S PROPERTY; BUSINESS INTERRUPTION INSURANCE.

(a) PROPERTY DAMAGE. Lessee shall obtain and maintain insurance
coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned
Alterations and Utility Installations. Such insurance shall be full replacement
cost coverage with a deductible of not to exceed $1,000 per occurrence. The
proceeds from any such insurance shall be used by Lessee for the replacement of
personal property, Trade Fixtures and Lessee Owned Alterations and Utility
Installations. Lessee shall provide Lessor with written evidence that such
insurance is in force.

(b) BUSINESS INTERRUPTION. Lessee shall obtain and maintain loss of
income and extra expense insurance in amounts as will reimburse Lessee for
direct or indirect loss of earnings attributable to all perils commonly insured
against by prudent lessees in the business of Lessee or attributable to
prevention of access to the Premises as a result of such perils.

(c) NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no
representation that the limits or forms of coverage of insurance specified
herein are adequate to cover Lessee's property, business operations or
obligations under this Lease.

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

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

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

8.8 EXEMPTION OF LESSOR FROM LIABILITY. Except to the extent caused by
Lessor's sole negligence or willful misconduct, Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, HVAC or lighting fixtures, or from any other part, or from
other sources or places. Lessor shall not be liable for any damages arising from
any act or neglect of any other tenant of Lessor nor from the failure of Lessor
to enforce the provisions of any other lease in the Project. Notwithstanding
Lessor's negligence or breach of this Lease, Lessor shall under no circumstances
be liable for injury to Lessee's business or for any loss of income or profit
therefrom.

8.9 FAILURE TO PROVIDE INSURANCE. Lessee acknowledges that any failure
on its part to obtain or maintain the insurance required herein will expose
Lessor to risks and potentially cause Lessor to incur costs not contemplated by
this Lease, the extent of which will be extremely difficult to ascertain.
Accordingly, for any month or portion thereof that Lessee does not maintain the
required Insurance and/or does not provide Lessor with the required binders or
certificates evidencing the existence of the required insurance, the Base Rent
shall be automatically increased, without any requirement for notice to Lessee,
by an amount equal to 10% of the then existing Base Rent or $100, whichever is
greater. The parties agree that such increase in Base Rent represents fair and
reasonable compensation for the additional risk/ costs that Lessor will incur
by reason of Lessee's failure to maintain the required insurance. Such increase
in Base Rent shall in no event constitute a waiver of Lessee's Default or Breach
with respect to the failure to maintain such insurance, prevent the exercise of
any of the other rights and remedies granted hereunder, nor relieve Lessee of
its obligation to maintain the insurance specified in this Lease.

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9. DAMAGE OR DESTRUCTION.

9.1 DEFINITIONS.

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

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

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

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

(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises which requires repair, remediation, or restoration.

9.2 PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that is
an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such
damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility
Installations or those Tenant Improvements required to be removed at the
expiration or sooner termination of the term of this Lease) as soon as
reasonably possible and this Lease shall continue in full force and effect;
provided, however, that Lessee shall, at Lessor's election, make the repair of
any damage or destruction the total cost to repair of which is $10,000 or less,
and, in such event, Lessor shall make any applicable insurance proceeds
available to Lessee on a reasonable basis for that purpose. Notwithstanding the
foregoing, if the required insurance was not in force or the insurance proceeds
are not sufficient to effect such repair, the insuring Party shall promptly
contribute the shortage in proceeds (except as to the deductible which is
Lessee's responsibility) as and when required to complete said repairs. In the
event, however, such shortage was due to the fact that, by reason of the unique
nature of the improvements, full replacement cost insurance coverage was not
commercially reasonable and available, Lessor shall have no obligation to pay
for the shortage in insurance proceeds or to fully restore the unique aspects of
the Premises unless Lessee provides Lessor with the funds to cover same, or
adequate assurance thereof, within 10 days following receipt of written notice
of such shortage and request therefor. If Lessor receives said funds or adequate
assurance thereof within said 10 day period, the party responsible for making
the repairs shall complete them as soon as reasonably possible and this Lease
shall remain in full force and effect. If such funds or assurance are not
received, Lessor may nevertheless elect by written notice to Lessee within 10
days thereafter to: (i) make such restoration and repair as is commercially
reasonable with Lessor paying any shortage in proceeds, in which case this Lease
shall remain in full force and effect, or (ii) have this Lease terminate 30 days
thereafter, so long as the cost of repair is equal to or greater than ten
percent (10%) of the replacement cost and the casualty in question was not
caused by Lessee or its agents, employees, or contractors. Lessee shall not be
entitled to reimbursement of any funds contributed by Lessee to repair any such
damage or destruction. Premises Partial Damage due to flood or earthquake shall
be subject to Paragraph 9.3, notwithstanding that there may be some insurance
coverage, but the net proceeds of any such insurance shall be made available for
the repairs if made by either Party.

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

9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall terminate 60 days following
such Destruction, provided that Lessee shall have no obligation to pay Rent or
any other charge after the date of such Destruction. If the damage or
destruction was caused by the gross negligence or willful misconduct of Lessee,
Lessor shall have the right to recover Lessor's damages from Lessee, except as
provided in Paragraph 8.6.

9.5 DAMAGE NEAR END OF TERM. If at any time during the last 6 months of
this Lease there is damage for which the cost to repair exceeds one month's Base
Rent, whether or not an Insured Loss, Lessor or Lessee, at either party's
option, may terminate this Lease effective 60 days following the date of
occurrence of such damage by giving a written termination notice to Lessee
within 30 days after the date of occurrence of such damage. Notwithstanding the
foregoing, if Lessee at that time has an exercisable option to extend this
Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a)
exercising such option and (b) providing Lessor with any shortage in insurance
proceeds (or adequate assurance thereof) needed to make the repairs on or before
the earlier of (i) the date which is 10 days after Lessee's receipt of Lessor's
written notice purporting to terminate this Lease, or (ii) the day prior to the
date upon which such option expires. If Lessee duly exercises such option during
such period and provides Lessor with funds (or adequate assurance thereof) to
cover any shortage in insurance proceeds, Lessor shall, at Lessor's commercially
reasonable expense, repair such damage as soon as reasonably possible and this
Lease shall continue in full force and effect. If Lessee fails to exercise such
option and provide such funds or assurance during such period, then this Lease
shall terminate on the date specified in the termination notice and Lessee's
option shall be extinguished.

9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.

(a) ABATEMENT. In the event of Premises Partial Damage or Premises
Total Destruction or a Hazardous Substance Condition for which Lessee is not
responsible under this Lease, the Rent payable by Lessee for the period required
for the repair, remediation or restoration of such damage shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired. All
other obligations of Lessee hereunder shall be performed by Lessee, and Lessor
shall have no liability for any such damage, destruction, remediation, repair or
restoration except as provided herein.

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

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

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

10. REAL PROPERTY TAXES.

10.1 DEFINITION. As used herein, the term "REAL PROPERTY TAXES" shall
include any form of assessment; real estate, general, special, ordinary or
extraordinary, or rental levy or tax (other than inheritance, personal income or
estate taxes); improvement bond; and/or license fee imposed upon or levied
against any legal or equitable interest of Lessor in the Premises or the
Project, Lessor's right to other income therefrom, and/or Lessor's business of
leasing, by any authority having the direct or indirect power to tax and where
the funds are generated with reference to the Building address and where the
proceeds so generated are to be applied by the city, county or other local
taxing authority of a jurisdiction within which the Premises are located. Real
Property Taxes shall also include any tax, fee, levy, assessment or charge, or
any increase therein: (i) imposed by reason of events occurring during the term
of this Lease, including but not limited to, a change in the ownership of the
Premises, and (ii) levied or assessed on machinery or equipment provided by
Lessor to Lessee pursuant to this Lease.

10.2 PAYMENT OF TAXES. In addition to Base Rent, Lessee shall pay to
Lessor an amount equal to the Real Property Tax installment due at least 20 days
prior to the applicable delinquency date. If any such installment shall cover
any period of time prior to or after the expiration or termination of this
Lease, Lessee's share of such installment shall be prorated. In the event Lessee
incurs a late charge on any Rent payment, Lessor may estimate the current Real
Property Taxes, and require that such taxes be paid in advance to Lessor by
Lessee monthly in advance with the payment of the Base Rent. Such monthly
payments shall be an amount equal to the amount of the estimated installment of
taxes divided by the number of months remaining before the month

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in which said installment becomes delinquent. When the actual amount of the
applicable tax bill is known, the amount of such equal monthly advance payments
shall be adjusted as required to provide the funds needed to pay the applicable
taxes. If the amount collected by Lessor is insufficient to pay such Real
Property Taxes when due, Lessee shall pay Lessor, upon demand, such additional
sum as is necessary. Advance payments may be intermingled with other moneys of
Lessor and shall not bear interest. In the event of a Breach by Lessee in the
performance of its obligations under this Lease, then any such advance payments
may be treated by Lessor as an additional Security Deposit.

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

10.4 PERSONAL PROPERTY TAXES. Lessee shall pay, prior to delinquency, all
taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee. When possible, Lessee shall cause its Lessee Owned Alterations and
Utility Installations, Trade Fixtures, furnishings, equipment and all other
personal property to be assessed and billed separately from the real property of
Lessor. If any of Lessee's said property shall be assessed with Lessor's real
property, Lessee shall pay Lessor the taxes attributable to Lessee's property
within 10 days after receipt of a written statement setting forth the taxes
applicable to Lessee's property.

11. UTILITIES AND SERVICES. Lessee shall pay for all water, gas, heat, light,
power, telephone, trash disposal and other utilities and services supplied to
the Premises, together with any taxes thereon. If any such services are not
separately metered or billed to Lessee, Lessee shall pay a reasonable
proportion, to be determined by Lessor, of all charges jointly metered or
billed. There shall be no abatement of rent and Lessor shall not be liable in
any respect whatsoever for the inadequacy, stoppage, interruption or
discontinuance of any utility or service due to riot, strike, labor dispute,
breakdown, accident, repair or other cause beyond Lessor's reasonable control or
in cooperation with governmental request or directions.

12. ASSIGNMENT AND SUBLETTING.

12.1 LESSOR'S CONSENT REQUIRED.

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

(b) Unless Lessee is a corporation and its stock is publicly traded
on a national stock exchange, a change in the control of Lessee shall constitute
an assignment requiring consent. The transfer, on a cumulative basis, of 25% or
more of the voting control of Lessee shall constitute a change in control for
this purpose.

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

(d) An assignment or subletting without consent shall, at Lessor's
option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable
Breach without the necessity of any notice and grace period. If Lessor elects to
treat such unapproved assignment or subletting as a noncurable Breach, Lessor
may either: (i) terminate this Lease, or (ii) upon 30 days written notice,
increase the monthly Base Rent to 110% of the Base Rent then in effect. Further,
in the event of such Breach and rental adjustment, (i) the purchase price of any
option to purchase the Premises held by Lessee shall be subject to similar
adjustment to 110% of the price previously in effect, and (ii) all fixed and
non-fixed rental adjustments scheduled during the remainder of the Lease term
shall be increased to 110% of the scheduled adjusted rent.

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

12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.

(a) Regardless of Lessor's consent, no assignment or subletting
shall: (i) be effective without the express written assumption by such assignee
or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee
of any obligations hereunder, or (iii) alter the primary liability of Lessee for
the payment of Rent or for the performance of any other obligations to be
performed by Lessee.

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

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

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

(e) Each request for consent to an assignment or subletting shall be
in writing, accompanied by information relevant to Lessor's determination as to
the financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a fee of $500 as
consideration for Lessor's considering and processing said request. Lessee
agrees to provide Lessor with such other or additional information and/or
documentation as may be reasonably requested. (See also Paragraph 36)

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

(g) Lessor's consent to any assignment or subletting shall not
transfer to the assignee or sublessee any Option granted to the original Lessee
by this Lease unless such transfer is specifically consented to by Lessor in
writing. (See Paragraph 39.2)

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

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

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

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

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

13. DEFAULT; BREACH; REMEDIES.

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

(a) The abandonment of the Premises; or the vacating of the Premises
without providing a commercially reasonable level of security, or where the
coverage of the property insurance described in Paragraph 8.3 is jeopardized as
a result thereof, or without providing reasonable assurances to minimize
potential vandalism.

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

(c) The failure by Lessee to provide (i) reasonable written evidence
of compliance with Applicable Requirements, (ii) the service contracts, (iii)
the rescission of an unauthorized assignment or subletting, (iv) an Estoppel
Certificate, (v) a requested subordination, (vi) evidence concerning any
guaranty and/or Guarantor, (vii) any document requested under Paragraph 42,
(viii) material safety data sheets (MSDS). or (ix) any other documentation or
information which Lessor may reasonably require of Lessee under the terms of
this Lease, where any such failure continues for a period of 15 days following
written notice to Lessee.

(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40

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

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

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

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

13.2 REMEDIES. If Lessee fails to perform any of its affirmative duties or
obligations, within 10 days after written notice (or in case of an emergency,
without notice), Lessor may, at its option, perform such duty or obligation on
Lessee's behalf, including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and
expenses incurred by Lessor in such performance upon receipt of an invoice
therefor. In the event of a Breach, Lessor may, with or without further notice
or demand, and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such Breach:

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

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

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

13.3 INDUCEMENT RECAPTURE. Any agreement for free or abated rent or other
charges, or for the giving or paying by Lessor to or for Lessee of any cash or
other bonus, inducement or consideration for Lessee's entering into this Lease,
all of which concessions are hereinafter referred to as "INDUCEMENT PROVISIONS,"
shall be deemed conditioned upon Lessee's full and faithful performance of all
of the terms, covenants and conditions of this Lease. Upon Breach of this Lease
by Lessee, any such Inducement Provision shall automatically be deemed deleted
from this Lease and of no further force or effect, and any rent, other charge,
bonus, inducement or consideration theretofore abated, given or paid by Lessor
under such an inducement Provision shall be immediately due and payable by
Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee.
The acceptance by Lessor of rent or the cure of the Breach which initiated the
operation of this paragraph shall not be deemed a waiver by Lessor of the
provisions of this paragraph unless specifically so stated in writing by Lessor
at the time of such acceptance.

13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee
of Rent will cause Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent
shall not be received by Lessor within 5 days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall immediately pay
to Lessor a one-time late charge equal to 10% of each such overdue amount or
$100, whichever is greater; provided, however, that a late charge shall not be
payable until the second occasion in any twelve (12) month period that a payment
is received late. The Parties hereby agree that such late charge represents a
fair and reasonable estimate of the costs Lessor will incur by reason of such
late payment. Acceptance of such late charge by Lessor shall in no event
constitute a waiver of Lessee's Default or Breach with respect to such overdue
amount, nor prevent the exercise of any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder, whether or not
collected, for 3 consecutive installments of Base Rent, then notwithstanding any
provision of this Lease to the contrary. Base Rent shall, at Lessor's option,
become due and payable quarterly in advance.

13.5 INTEREST. Any monetary payment due Lessor hereunder, other than late
charges, not received by Lessor, when due as to scheduled payments (such as Base
Rent) or within 30 days following the date on which it was due for non-scheduled
payment, shall bear interest from the date when due, as to scheduled payments,
or the 31st day after it was due as to non-scheduled payments. The interest
("INTEREST") charged shall be computed at the rate of 10% per annum but shall
not exceed the maximum rate allowed by law. Interest is payable in addition to
the potential late charge provided for in Paragraph 13.4.

13.6 BREACH BY LESSOR.

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

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

15. BROKERAGE FEES.

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

16. ESTOPPEL CERTIFICATES.

(a) Each Party (as "RESPONDING PARTY") shall within 15 days after
written notice from the other Party (the "REQUESTING PARTY") execute,
acknowledge and deliver to the Requesting Party a statement in writing in form
similar to the then most current "ESTOPPEL CERTIFICATE" form published by the
AIR Commercial Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably requested by the Requesting
Party.

(b) If the Responding Party shall fail to execute or deliver the
Estoppel Certificate within such 15 day period, the Requesting Party may execute
an Estoppel Certificate stating that: (i) the Lease is in full force and effect
without modification except as may be represented by the Requesting Party, (ii)
there are no uncured defaults in the Requesting Party's performance, and (iii)
if Lessor is the Requesting Party, not more than one month's rent has been paid
in advance. Prospective purchasers and encumbrancers may rely upon the
Requesting Party's Estoppel Certificate, and the Responding Party shall be
estopped from denying the truth of the facts contained in said Certificate.

(c) If Lessor desires to finance, refinance, or sell the Premises,
or any part thereof, Lessee and all Guarantors shall deliver to any potential
lender or purchaser designated by Lessor such financial statements as may be
reasonably required by such lender or purchaser, including but not limited to
Lessee's financial statements for the past 3 years. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.

17. DEFINITION OF LESSOR. The term "LESSOR" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises, or, if this
is a sublease, of the Lessee's interest in the prior lease. In the event of a
transfer of Lessor's title or interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid, the
prior Lessor shall be relieved of all liability with respect to the obligations
and/or covenants under this Lease thereafter to be performed by the Lessor.
Subject to the foregoing, the obligations and/or covenants in this Lease to be
performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined.

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

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

20. LIMITATION ON LIABILITY. The obligations of Lessor under this Lease shall
not constitute personal obligations of Lessor or its partners, members,
directors, officers or shareholders, and Lessee shall look to the Premises, and
to no other assets of Lessor, for the satisfaction of any liability of Lessor
with respect to this Lease, and shall not seek recourse against Lessor's
partners, members, directors, officers or shareholders, or any of their personal
assets for such satisfaction.

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

22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessee represents and warrants to Lessor that it has made, and is relying solely
upon, its own investigation as to the use, nature, quality and character of the
Premises. Brokers have no responsibility with respect thereto or with respect to
any default or breach hereof by either Party.

23. NOTICES.

23.1 NOTICE REQUIREMENTS. All notices required or permitted by this Lease
or applicable law shall be in writing and may be delivered in person (by hand or
by courier) or may be sent by certified or registered mail or U.S. Postal
Service Express Mail, with postage prepaid or other overnight carrier service,
or by facsimile transmission, and shall be deemed sufficiently given if served
in a manner specified in this Paragraph 23. The addresses noted adjacent to a
Party's signature on this Lease shall be that Party's address for delivery or
mailing of notices. Either Party may by written notice to the other specify a
different address for notice, except that upon Lessee's taking possession of the
Premises, the Premises shall constitute Lessee's address for notice. A copy of
all notices to Lessor shall be concurrently transmitted to such party or parties
at such addresses as Lessor may from time to time hereafter designate in
writing.

23.2 DATE OF NOTICE. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. Notices
delivered by United States Express Mail or overnight courier that guarantee next
day delivery shall be deemed given 24 hours after delivery of the same to the
Postal Service or courier. Notices transmitted by facsimile transmission or
similar means shall be deemed delivered upon telephone confirmation of receipt
(confirmation report from fax machine is sufficient), provided a copy is also
delivered via delivery or mail. If notice is received on a Saturday, Sunday or
legal holiday, it shall be deemed received on the next business day.

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

25. DISCLOSURES REGARDING THE NATURE OF A REAL ESTATE AGENCY RELATIONSHIP.

(a) When entering into a discussion with a real estate agent
regarding a real estate transaction, a Lessor or Lessee should from the outset
understand what type of agency relationship or representation it has with the
agent or agents in the transaction. Lessor and Lessee acknowledge being advised
by the Brokers in this transaction, as follows:

(i) Lessor's Agent. A Lessor's agent under a listing agreement
with the Lessor acts as the agent for the Lessor only. A Lessor's agent or
subagent has the following affirmative obligations: To the Lessor; A fiduciary
duty of utmost care, integrity, honesty, and loyalty in dealings with the
Lessor. To the Lessee and the Lessor; a. Diligent exercise of reasonable skills
and care in performance of the agent's duties. b. A duty of honest and fair
dealing and good faith, c. A duty to disclose all facts known to the agent
materially affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of, the Parties. An
agent is not obligated to reveal to either Party any confidential information
obtained from the other Party which does not involve the affirmative duties set
forth above.

(ii) Lessee's Agent. An agent can agree to act as agent for
the Lessee only. In these situations, the agent is not the

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INITIALS PAGE 9 OF 12 INITIALS

Lessor's agent, even if by agreement the agent may receive compensation for
services rendered, either in full or in part from the Lessor. An agent acting
only for a Lessee has the following affirmative obligations. To the Lessee: A
fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with
the Lessee. To the Lessee and the Lessor: a. Diligent exercise of reasonable
skills and care in performance of the agent's duties. b. A duty of honest and
fair dealing and good faith. c. A duty to disclose all facts known to the agent
materially affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of, the Parties. An
agent is not obligated to reveal to either Party any confidential information
obtained from the other Party which does not involve the affirmative duties set
forth above.

(iii) Agent Representing Both Lessor and Lessee. A real estate
agent, either acting directly or through one or more associate licenses, can
legally be the agent of both the Lessor and the Lessee in a transaction, but
only with the knowledge and consent of both the Lessor and the Lessee. In a dual
agency situation, the agent has the following affirmative obligations to both
the Lessor and the Lessee: a. A fiduciary duty of utmost care, integrity,
honesty and loyalty in the dealings with either Lessor or the Lessee. b. Other
duties to the Lessor and the Lessee as stated above in subparagraphs (i) or
(ii). In representing both Lessor and Lessee, the agent may not without the
express permission of the respective Party, disclose to the other Party that the
Lessor will accept rent in an amount less than that indicated in the listing or
that the Lessee is willing to pay a higher rent than that offered. The above
duties of the agent in a real estate transaction do not relieve a Lessor or
Lessee from the responsibility to protect their own interests. Lessor and Lessee
should carefully read all agreements to assure that they adequately express
their understanding of the transaction. A real estate agent is a person
qualified to advise about real estate. If legal or tax advice is desired,
consult a competent professional.

(b) Brokers have no responsibility with respect to any default or
breach hereof by either Party. The liability (including court costs and
attorneys' fees), of any Broker with respect to any breach of duty, error or
omission relating to this Lease shall not exceed the fee received by such Broker
pursuant to this Lease; provided, however, that the foregoing limitation on each
Broker's liability shall not be applicable to any gross negligence or willful
misconduct of such Broker.

(c) Lessor and Lessee agree to identify to Brokers as "Confidential"
any communication or information given Brokers that is considered by such Party
to be confidential.

26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee holds over, then the Base Rent shall be increased to
150% of the Base Rent applicable immediately preceding the expiration or
termination. Nothing contained herein shall be construed as consent by Lessor to
any holding over by Lessee.

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

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

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

30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.

30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now or
hereafter placed upon the Premises, to any and all advances made on the security
thereof, and to all renewals, modifications, and extensions thereof. Lessee
agrees that the holders of any such Security Devices (in this Lease together
referred to as "LENDER") shall have no liability or obligation to perform any of
the obligations of Lessor under this Lease. Any Lender may elect to have this
Lease and/or any Option granted hereby superior to the lien of its Security
Device by giving written notice thereof to Lessee, whereupon this Lease and such
Options shall be deemed prior to such Security Device, notwithstanding the
relative dates of the documentation or recordation thereof.

30.2 ATTORNMENT. In the event that Lessor transfers title to the Premises,
or the Premises are acquired by another upon the foreclosure or termination of a
Security Device to which this Lease is subordinated (i) Lessee shall, subject to
the non-disturbance provisions of Paragraph 30.3, attorn to such new owner, and
upon request, enter into a new lease, containing all of the terms and provisions
of this Lease, with such new owner for the remainder of the term hereof, or, at
the election of such new owner, this Lease shall automatically become a new
Lease between Lessee and such new owner, upon all of the terms and conditions
hereof, for the remainder of the term hereof, and (ii) Lessor shall thereafter
be relieved of any further obligations hereunder and such new owner shall assume
all of Lessor's obligations hereunder, except that such new owner shall not: (a)
be liable for any act or omission of any prior lessor or with respect to events
occurring prior to acquisition of ownership; (b) be subject to any offsets or
defenses which Lessee might have against any prior lessor, (c) be bound by
prepayment of more than one month's rent, or (d) be liable for the return of any
security deposit paid to any prior lessor.

30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving a commercially reasonable non-disturbance
agreement (a "NON-DISTURBANCE AGREEMENT") from the Lender which Non-Disturbance
Agreement provides that Lessee's possession of the Premises, and this Lease,
including any options to extend the term hereof, will not be disturbed so long
as Lessee is not in Breach hereof and attorns to the record owner of the
Premises. Further, within 60 days after the execution of this Lease, Lessor
shall use its commercially reasonable efforts to obtain a Non-Disturbance
Agreement from the holder of any pre-existing Security Device which is secured
by the Premises. Notwithstanding the foregoing, if Lessor has failed to obtain a
Non-Disturbance Agreement from the Lender on or before January 1, 2005, then
Lessee shall have the right to terminate this Lease by giving written notice to
Lessor on or before January 15, 2005, to be effective on the date (the
"Termination Date") set forth in said notice but in no event sooner than ten
(10) days after Lessor's receipt thereof; provided, however, that any such
notice shall be null and void, and this Lease shall continue in full force and
effect, if Lessor delivers to Lessee said Non-Disturbance and Attornment
Agreement on or before the Termination Date.

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

31. ATTORNEYS' FEES. If any Party brings an action or proceeding involving the
Premises whether founded in tort, contract or equity, or to declare rights
hereunder, the Prevailing Party (as hereafter defined) in any such proceeding,
action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such
fees may be awarded in the same suit or recovered in a separate suit, whether or
not such action or proceeding is pursued to decision or judgment. The term,
"PREVAILING PARTY" shall include, without limitation, a Party who substantially
obtains or defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party of its claim or
defense. The attorneys' fees award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
reasonably incurred. In addition, Lessor shall be entitled to attorneys' fees,
costs and expenses incurred in the preparation and service of notices of Default
and consultations in connection therewith, whether or not a legal action is
subsequently commenced in connection with such Default or resulting Breach ($200
is a reasonable minimum per occurrence for such services and consultation).

32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents shall
have the right to enter the Premises at any time, in the case of an emergency,
and otherwise at reasonable times after reasonable prior notice for the purpose
of showing the same to prospective purchasers, lenders, or tenants, and making
such alterations, repairs, improvements or additions to the Premises as Lessor
may deem necessary or desirable and the erecting, using and maintaining of
utilities, services, pipes and conduits through the Premises and/or other
premises as long as there is no material adverse effect to Lessee's use of the
Premises. All such activities shall be without abatement of rent or liability to
Lessee.

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

34. SIGNS. Lessor may place on the Premises ordinary "For Sale" signs at any
time and ordinary "For Lease" signs during the last 6 months of the term hereof.
Except for ordinary "for sublease" signs, Lessee shall not place any sign upon
the Premises without Lessor's prior written consent. All signs must comply with
all Applicable Requirements. Lessee may install its identification signage
subject to the preceding sentence, and subject to Lessor's prior written
consent.

35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual

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INITIALS PAGE 10 OF 12 INITIALS

termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, that Lessor may elect to continue any one or all
existing subtenancies. Lessor's failure within 10 days following any such event
to elect to the contrary by written notice to the holder of any such lesser
interest, shall constitute Lessor's election to have such event constitute the
termination of such interest.

36. CONSENTS. Except as otherwise provided herein, wherever in this Lease the
consent of a Party is required to an act by or for the other Party, such consent
shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs
and expenses (including but not limited to architects', attorneys', engineers'
and other consultants' fees) incurred in the consideration of, or response to, a
request by Lessee for any Lessor consent, including but not limited to consents
to an assignment, a subletting or the presence or use of a Hazardous Substance,
shall be paid by Lessee upon receipt of an invoice and supporting documentation
therefor. Lessor's consent to any act, assignment or subletting shall not
constitute an acknowledgment that no Default or Breach by Lessee of this Lease
exists, nor shall such consent be deemed a waiver of any then existing Default
or Breach, except as may be otherwise specifically stated in writing by Lessor
at the time of such consent. The failure to specify herein any particular
condition to Lessor's consent shall not preclude the imposition by Lessor at the
time of consent of such further or other conditions as are then reasonable with
reference to the particular matter for which consent is being given. In the
event that either Party disagrees with any determination made by the other
hereunder and reasonably requests the reasons for such determination, the
determining party shall furnish its reasons in writing and in reasonable detail
within 10 business days following such request.

37. GUARANTOR.

37.1 EXECUTION. The Guarantors, if any, shall each execute a guaranty in
the form most recently published by the AIR Commercial Real Estate Association,
and each such Guarantor shall have the same obligations as Lessee under this
Lease.

37.2 DEFAULT. It shall constitute a Default of the Lessee if any Guarantor
fails or refuses, upon request to provide: (a) evidence of the execution of the
guaranty, including the authority of the party signing on Guarantor's behalf to
obligate Guarantor, and in the case of a corporate Guarantor, a certified copy
of a resolution of its board of directors authorizing the making of such
guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d)
written confirmation that the guaranty is still in effect.

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

39. OPTIONS. If Lessee is granted an Option, as defined below, then the
following provisions shall apply:

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

39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Any Option granted to Lessee in
this Lease is personal to the original Lessee, and cannot be assigned or
exercised by anyone other than said original Lessee or its permitted assignees
and only while the original Lessee is in full possession of the Premises and, if
requested by Lessor, with Lessee certifying that Lessee has no intention of
thereafter assigning or subletting.

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

39.4 EFFECT OF DEFAULT ON OPTIONS.

(a) Lessee shall have no right to exercise an Option: (i) during the
period commencing with the giving of any notice of Default and continuing until
said Default is cured, (ii) during the period of time any Rent is unpaid
(without regard to whether notice thereof is given Lessee), (iii) during the
time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has
been given 3 or more notices of separate Default whether or not the Defaults are
cured, during the 12 month period immediately preceding the exercise of the
Option.

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

(c) An Option shall terminate and be of no further force or effect,
notwithstanding Lessee's due and timely exercise of the Option, if, after such
exercise and prior to the commencement of the extended term or completion of the
purchase, (i) Lessee fails to pay Rent for a period of 30 days after such Rent
becomes due (without any necessity of Lessor to give notice thereof), or (ii) if
Lessee commits a Breach of this Lease.

40. MULTIPLE BUILDINGS. If the Premises are a part of a group of buildings
controlled by Lessor, Lessee agrees that it will abide by and conform to all
reasonable rules and regulations which Lessor may make from time to time for the
management, safety, and care of said properties, including the care and
cleanliness of the grounds and including the parking, loading and unloading of
vehicles, and to cause its employees, suppliers, shippers, customers,
contractors and invitees to so abide and conform. Lessee also agrees to pay its
fair share of common expenses incurred in connection with such rules and
regulations.

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

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

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

44. AUTHORITY; MULTIPLE PARTIES; EXECUTION.

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

(b) If this Lease is executed by more than one person or entity as
"Lessee", each such person or entity shall be jointly and severally liable
hereunder. It is agreed that any one of the named Lessees shall be empowered to
execute any amendment to this Lease, or other document ancillary thereto and
bind all of the named Lessees, and Lessor may rely on the same as if all of the
named Lessees had executed such document.

(c) This Lease may be executed by the Parties in counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.

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

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

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

43. WAIVER OF JURY TRIAL. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT
OF THIS AGREEMENT.

49. MEDIATION AND ARBITRATION OF DISPUTES. An Addendum requiring the Mediation
and/or the Arbitration of all disputes between the Parties and/or Brokers
arising out of this Lease [ ] is [X] is not attached to this Lease.

50. AMERICANS WITH DISABILITIES ACT. Since compliance with the Americans with
Disabilities Act (ADA) is dependent upon Lessee's specific use of the Premises,
Lessor makes no warranty or representation as to whether or not the Premises
comply with ADA or any similar legislation. In the event that

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INITIALS PAGE 11 OF 12 INITIALS

Lessee's use of the Premises requires modifications or additions to the Premises
in order to be In ADA compliance. Lessee agrees to make any such necessary
modifications and/or additions at Lessee's expense.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

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

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

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

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

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

Executed at: Toronto, Canada Executed at: Irvine, California
------------------------------- ---------------------------------
on: November 11, 2004 on: November 22, 2004
---------------------------------------- ------------------------------------------

BY LESSOR: BY LESSEE:

DEL MONICO INVESTMENTS, INC. ENDOLOGIX, INC.
a California corporation a Delaware corporation

By: /S/ RICHARD M. GOLDBERG By: /S/ PAUL McCORMICK
------------------------------ --------------------------
Name Printed: RICHARD M. GOLDBERG Name Printed: PAUL McCORMICK
Title: Chief Operating Officer Title: CEO

By: By: /S/ ROBERT J. KRIST
----------------------------------------- --------------------------
Name Printed: ______________________________ Name Printed: ROBERT J. KRIST
Title: _____________________________________ Title: CFO
Address: ___________________________________ Address: _____________________________________
____________________________________________ ______________________________________________
Telephone/Facsimile: _______________________ Telephone/Facsimile: _________________________
Federal ID No. _____________________________ Federal ID No. _______________________________

NOTE: These forms are often modified to meet the changing requirements of law
and industry needs. Always write or call to make sure you are utilizing
the most current form: AIR COMMERCIAL REAL ESTATE ASSOCIATION, 700 So.
Flower Street, Suite 600, Los Angeles, California 90017. (213) 687-8777.
Fax No. (213) 687-8616

_________________ _______________
_________________ _______________
INITIALS PAGE 12 OF 12 INITIALS

ADDENDUM NO. 1

STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-NET

THIS ADDENDUM NO. 1 TO STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT
LEASE-NET (the "Addendum") is made as of November 2, 2004, by and between DEL
MONICO INVESTMENTS, INC., a California corporation ("Lessor"), and ENDOLOGIX,
INC., a Delaware corporation ("Lessee"), with reference to the following facts:

A. Lessor and Lessee are parties to that certain Standard
Industrial/Commercial Single-Tenant Lease-Net dated as of the date hereof (the
"Lease"), which provides for Lessee's rental from Lessor of those certain
premises commonly known as 11 Studebaker Street, Irvine, California (the
"Premises").

B. Lessor and Lessee desire to supplement and amend the Lease according to
the terms and conditions set forth herein.

C. Defined terms used herein, unless otherwise provided, shall have the
meanings set forth in the Lease.

NOW, THEREFORE, for valuable consideration the parties hereto agree as
follows:

51. Annual Base Rent Increases. Notwithstanding the terms of the Lease,
monthly Base Rent throughout the Original Term shall be increased as follows:

April 1, 2005 to March 31, 2006 $25,690.40
April 1, 2006 to March 31, 2007 $26,461.11
April 1, 2007 to March 31, 2008 $27,254.95
April 1, 2008 to March 31, 2009 $28,072.59
April 1, 2009 to March 31, 2010 $28,914.77

52. Prepaid Base Rent. Concurrently with Lessee's execution of the Lease
and this Addendum, Lessee shall pay to Lessor the sum of $25,690.40,
representing the Base Rent for the first month of the Original Term.

53. Description of Premises. A site plan showing the location of the
Premises is attached hereto as Exhibit A, hereby made a part hereof.

54. Condition of Premises.

54.1. HVAC Maintenance. Lessor acknowledges that the three HVAC
units which service the office portion of the Premises and more particularly
described on Exhibit 54 hereto (the "Specific Units") are nearing the end of
their useful lives. Accordingly, if during the Original Term any or all of the
Specific Units require replacement other than due to

-1-

Lessee's actions or failure to maintain the same as required by the terms of
this Lease, then Lessor shall replace the same at Lessor's sole cost and
expense. Notwithstanding the foregoing, Lessee may elect by written notice given
to Lessor not later than the Commencement Date to require that Lessor replace
all of the Specific Units, in which event Lessor shall replace the same within
sixty (60) days thereafter and the provisions of Section 7.1(d) of the Lease
shall be applicable to the cost thereof, except that the denominator referred to
therein shall be 360 instead of 180.

54.2. "As Is" Condition. Except as otherwise provided in Sections
2.2 and 2.3 of the Lease, and as follows, Lessee shall accept the Premises in
their then "as is" physical condition as of the Start Date, without any
obligation on Lessor's part to make any repairs, improvements or alterations to
the Premises, except for Lessor's obligation to fund the "T.I. Allowance" (as
defined in Section 3.1 of Exhibit B). As used in Section 2.3 of the Lease,
"Current Requirements" means all Applicable Requirements which are in effect as
of the date of execution of this Lease, including all compliant but
nonconforming conditions (such as, without limitation, conditions which are
permitted under "grandfathering" provisions of law or code), but excluding any
Applicable Requirements which are imposed or triggered as a result of (i) any
Alterations, Utility Installations or tenant improvements (including without
limitation the Tenant Improvements installed by or on behalf of Lessee, (ii) any
specific act of Lessee or Lessee's agents, contractors, employees or licensees,
and/or (iii) Lessee's specific manner of use of the Premises (as distinguished
from general industrial or office use). By way of example only, if, as a result
of the construction of the Tenant Improvements, the City of Irvine requires a
ramp to be installed to the Premises for handicap access, then Lessee shall be
responsible for the cost thereof, but if the Premises are in current violation
of a sprinklering requirement which is not specific to Lessee's proposed use,
then Lessor shall be responsible therefor.

54.3. No Delay in Commencement Date. Lessee understands and
acknowledges that its completion of its desired Tenant Improvements per the
provisions of Exhibit B is not a contingency to the occurrence of the
Commencement Date, and the Commencement Date shall occur on April 1, 2005
regardless of the status of Lessee's work at that time.

55. Confidentiality. Lessor acknowledges that certain manufacturing
processes and other procedures used by Lessee in its business may be
confidential and agrees to comply with such procedures as Lessee may reasonably
require to keep such information confidential while conducting any inspections
pursuant to Section 6.4. Lessor further agrees that Lessor, its agents,
contractors and employees shall keep confidential any and all trade secrets of
Lessee.

56. Roof. Lessor shall, promptly after the date of execution of this
Lease, at its sole cost and expense clean the

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gutters of the Premises and repair any water damage to the Premises.

57. Permitted Assignment. Notwithstanding any provision of Section 12,
Lessee may, without obtaining Lessor's consent, but provided that Lessee gives
Lessor prior written notice thereof specifying in reasonable detail the
transaction or event in question, without constituting a default under this
Lease, and without triggering any recapture or termination rights in favor of
Lessor, assign this Lease or sublet all or any portion of the Premises to (i)
any entity formed by Lessee, provided that Lessee owns or beneficially controls
a majority of the outstanding ownership interest in such entity, (ii) any
parent, subsidiary or affiliate entity of Lessee, (iii) any person or entity
that acquires all or substantially all of Lessee's assets or stock, or (iv) any
entity with which Lessee merges or consolidates, regardless of whether Lessee is
the surviving entity. In addition, an assignment or sublet shall not include,
and Lessor's consent shall not be required for, (i) any initial or subsequent
public offering by Lessee, or (ii) if Lessee is a public company, any sale or
transfer of Lessee's stock or the sale or transfer of Lessee's stock to take
Lessee private.

58. Lessee's Contractor. Following the completion of the Tenant
Improvements, the construction of any Alteration or Utility Installation
thereafter by Lessee or Lessee's contractor shall be at Lessee's sole cost and
expense and performed in a lien-free manner by a reputable California licensed
contractor retained by Lessee who has been reasonably approved in advance by
Lessor. The contractor shall have at least five (5) years experience in building
tenant improvements similar to the proposed Alterations or Utility Installations
and shall warrant to Lessee and for the benefit of Lessor that the Alterations
or Utility Installations shall be free from any defects in workmanship and
materials for a period of one (1) year from the date of completion of the
Alterations or Utility Installations. As a condition to the contractor's
commencement of work, Lessor shall receive from the contractor a certificate of
insurance that names Lessor as an additional insured, from an insurer who
complies with the requirements of Section 8.5 of the Lease, and evidencing
liability and property damage coverages reasonably acceptable to Lessor, plus
statutorily-required workers compensation insurance as being in force through
the anticipated completion date of the Alterations or Utility Installations, and
providing that Lessor will receive at least thirty (30) days written notice of
any amendments to or cancellation of such coverage. The insurance shall be
written on an occurrence basis form, and shall include endorsements for
completed operations and broad form and contractually assumed liabilities, and
shall be a non-reporting form. Lessee's contractor shall adhere to such
governmental laws, ordinances, rules and regulations as may now or in the future
be reasonably promulgated. Before Lessee makes payment to the contractor of the
final unpaid balance of the contract amount, the contractor shall provide to
Lessor "as-built" plans for the Alterations or Utility Installations in form
reasonably acceptable to Lessor.

-3-

59. Options to Renew

59.1 Grant. Subject to the provisions of Section 39 of the Lease,
Lessee shall have two (2) options (the "First Option" and the "Second Option",
respectively, sometimes each individually referred to as the "Option" and
collectively as the "Options") to extend the Original Term for two (2)
consecutive terms of five (5) years each (the "First Option Period" and the
"Second Option Period", respectively, sometimes each individually referred to as
the "Option Period" and collectively as the "Option Periods"). The First Option
Period, if any, shall commence immediately following the expiration of the
Original Term, on the terms and conditions set forth herein, and the Second
Option Period, if any, shall commence immediately following the expiration of
the First Option Period, on the terms and conditions set forth herein.

59.2 Exercise. Each Option may be exercised only by Lessee
delivering to Lessor written notice of Lessee's unconditional exercise of the
particular Option then being exercised; provided, however, that the First Option
may be exercised no earlier than one hundred eighty (180) days prior to the
expiration of the Original Term and no later than one hundred twenty (120) days
prior to the expiration of the Original Term, and the Second Option may be
exercised no earlier than one hundred eighty (180) days prior to the expiration
of the First Option Period and no later than one hundred twenty (120) days prior
to the expiration of the First Option Period. If Lessee fails to timely exercise
either Option in the manner herein specified, then that Option and any
successive Option shall immediately and automatically terminate and be of no
further force or effect on the one hundred nineteenth (119th) day prior to the
expiration of the then term of the Lease, and Lessee shall have no other right
or option to renew or extend the Lease. Time is of the essence with respect to
the exercise of each Option.

59.3 Rent Determination. All provisions of the Lease and this
Addendum shall continue in full force and effect during the Option Periods;
provided, however, that the Base Rent for the commencement of each Option Period
shall be set at ninety five percent (95%) of the "Prevailing Market Rent" (as
such term is defined below). Lessor and Lessee shall have thirty (30) days
following the exercise of an Option in which to agree as to the Prevailing
Market Rent for the Premises as of the commencement of the Option Period in
question. In the event Lessor and Lessee are unable to agree on the Prevailing
Market Rent within such thirty (30) day period, the Prevailing Market Rent shall
be determined as follows:

A. Within fifteen (15) days following the expiration of such
thirty (30) day period for Lessor and Lessee to agree on the Prevailing Market
Rent for the Premises at the commencement of the Option Period in question,
Lessor and Lessee shall each give written notice to the other designating by
name, address and telephone number an M.A.I, appraiser having at least five (5)
years experience in the appraisal of industrial

-4-

properties in Orange County, California. Within fifteen (15) days following the
selection of the second appraiser to be designated, the first two (2) appraisers
shall select a third appraiser. The employment of each appraiser shall be
conditioned on such appraiser's agreement to comply with the provisions of this
Section 55.3.A. Within thirty (30) days after the selection of the third
appraiser, the three (3) appraisers so selected shall determine the Prevailing
Market Rent for the Premises and each shall notify Lessor and Lessee in writing
within such thirty (30) day period of the Prevailing Market Rent for the
Premises determined by such appraisal. The Prevailing Market Rent for the
Premises shall be determined by applying the following criteria:

(i) The Prevailing Market Rent shall be based on the
rental amounts that tenants are paying in then-current transactions between
landlords and non-affiliated parties for new, non-expansion (unless the
expansion is pursuant to a comparable definition of fair rent), non-renewal
(unless the renewal is pursuant to a comparable definition of fair rent) and
non-equity lessees of comparable credit-worthiness, for comparable space (in
size and height), for a comparable use for a comparable period of time within
the Irvine, California area, as of the expiration of the Term ("Comparable
Transactions"). In any determination of Comparable Transactions, appropriate
consideration shall be given to the annual rental rates per rentable square
foot, the standard of measurement by which the rentable square footage is
measured, the ratio of rentable square feet to the usable square feet, the type
of escalation clause (e.g., whether increases in additional rent are determined
on a net or gross basis), parking rights and obligations, signage rights,
abatement provisions reflecting free rent and/or no rent during the period of
construction or subsequent to the commencement date as to the space in question,
brokerage commissions, if any, which would be payable by Lessor in similar
transactions, length of lease term, size and location of premises being leased,
building standard work letter and/or tenant improvement allowances, if any, the
condition of the base building and the landlord's responsibility with respect
thereto, the value, if any, of the existing tenant improvements (with such value
being judged with respect to the utility of such existing tenant improvements to
a general business tenant and not to a particular tenant) and other generally
applicable conditions of tenancy for such Comparable Transactions.

B. The two appraisals for the Prevailing Market Rent which
arithmetically are the closest shall be added together and divided by two (2).
The third appraisal shall be disregarded. An amount equal to ninety five percent
(95%) of the quotient so derived shall be the Base Rent for the commencement of
the Option Period in question. Notwithstanding any provision of this Section 55,
however, the Base Rent as of the commencement of the First Option Period shall
in no event be less than the Base Rent during the last month of the Original
Term, and the Base Rent as of the commencement of the Second Option Period shall
in no event be less than the Base Rent during the last month of the First Option
Period. Prevailing

-5-

Market Rent shall not necessarily be a fixed rental rate throughout the Option
Period in question, but shall reflect any periodic increases as may then
constitute part of Prevailing Market Rent.

C. Lessor and Lessee shall each pay the costs and fees of the
appraiser selected by it. Lessor and Lessee shall share equally the costs and
fees of the third appraiser. In the event that either Lessor or Lessee does not
identify an appraiser within the first fifteen day (15) period set forth in
Section 55.3.A above, the appraiser appropriately and timely identified shall
alone render the appraisal based on the PMR Criteria.

59.4 Additional Rent. In addition to Base Rent payable during the
Option Periods, Lessee shall continue to be obligated to pay all real property
taxes and utilities and insurance premiums and other charges required to be paid
by Lessee throughout the Original Term, and all maintenance obligations set
forth in the Lease and this Addendum shall continue in full force and effect.

59.5 Prohibition Against Assignment. The Options granted herein to
Lessee are personal to Lessee and are not assignable separately and apart from
the Lease, but only as a part of an assignment of the Lease to which Lessor has
given its written consent, as set forth in Article 12 of the Lease, or as part
of an Assignment for which Lessor's consent is not required pursuant to this
Lease.

60. Insurance Limitations. Notwithstanding any provision to the contrary
contained in Sections 8.1 and 8.2 (a) of the Lease, the limitations of Lessee's
insurance coverage and Lessee's obligation to reimburse Lessor for the premium
cost therefor during the Original Term shall be adjusted upward to such higher
amounts as Lessor shall reasonably request from time to time.

61. Limited Proposition 13 Protection. Notwithstanding the terms of
Section 10 of the Lease, Lessee shall not be responsible for any increases in
Real Estate Taxes which are attributable to any "change in ownership" (as such
term is defined in the California Revenue and Taxation Code) of the Project
occurring during the Original Term. This Section 57 shall not apply to any
Change in Ownership which occurs during either Option Period.

62. Satellite Dish Installation. Subject to the provisions of this Lease,
Lessor hereby grants to Lessee and its agents and contractors, at Lessee's sole
cost and expense, the non-exclusive right to install, maintain, and operate one
(1) mast-mounted satellite dish, antenna or similar equipment not exceeding
twenty four (24) inches in diameter (the "Dish") and related equipment,
including cables from the exterior of the Premises to equipment inside the
Premises, necessary to the operation of a personal earth station (the "PES") as
part of a satellite network installed by Lessee. Lessee shall indemnify

-6-

Lessor from and against any and all loss, cost, damage, claim, liability and
expense (including court costs and reasonable attorneys' fees) which Lessor or
the Building may suffer as a direct or indirect result of the installation,
maintenance, operation, use or removal of the Dish and including, without
limitation, any additional expense which may be incurred in the cost of
maintaining the condition of the roof structure or membrane. At the expiration
or earlier termination of this Lease, Lessee shall remove the Dish and repair
any damage caused by such removal. The foregoing shall be subject to all of the
following terms and conditions:

(a) The Dish and related equipment shall be located on the roof of
the Premises in a location to be approved by Lessor as more particularly
delineated on plans to be delivered by Lessee to Lessor and approved by Lessor
prior to Lessee's installation of the Dish.

(b) Lessor may request that Lessee relocate the Dish if Lessor is
required to do so by law. Lessee may also request that Lessor allow it to
relocate the Dish on or about the roof of the Premises for the purposes of
facilitating adequate reception, as required by law, or otherwise. Lessee and
Lessor will, in each such instance, cooperate with one another to identify an
alternate location on or about the Premises which will comply with Applicable
Requirements and provide Lessee with adequate reception for the PES. All
expenses incurred in relocating the Dish pursuant to this Section 58 shall be
borne by Lessee.

(d) Lessee will ensure that the PES, and each part of it, will be
installed in accordance with all applicable construction codes. Lessee will
obtain all FCC and other licenses or approvals required to install and operate
the PES.

63. Ratification. Except as otherwise expressly provided in this Addendum,
all of the terms and conditions of the Lease are hereby ratified, confirmed and
remain in full force and effect and shall be applicable to Lessee's rental of
the Premises during the Original Term. The Lease and this Addendum contain the
entire agreement of the parties with respect to Lessee's lease of the Premises
and supersede all prior oral and written agreements, including, without
limitation: (i) Lessee's broker's letters dated September 3 and September 9,
2004; (ii) Lessor's broker's letters of response dated September 7 and September
10, 2004; and (iii) Lessee's broker's e-mail and Lessor's broker's e-mail of
response both dated September 14, 2004.

-7-

IN WITNESS WHEREOF, the parties have entered into this Addendum as of the
day and year first written above.

LESSOR: DEL MONICO INVESTMENTS, INC.,
a California corporation

By: /S/ RICHARD M. GOLDBERG
-------------------------
RICHARD M. GOLDBERG
Its COO

Dated: November 11, 2004

LESSEE: ENDOLOGIX, INC.,
a Delaware corporation

By: /S/ PAUL McCORMICK
--------------------
PAUL McCORMICK
Its: CEO

By: /S/ ROBERT J. KRIST
---------------------
ROBERT J. KRIST
Its: CFO

Dated: November 22, 2004

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EXHIBIT A

11. STUDEBAKER ST., IRVINE, CA

[FLOOR PLAN]

Exhibit B

TENANT IMPROVEMENT CONSTRUCTION ADDENDUM

1. Approval Process For Plans.

1.1. Space Planner and Preliminary Plan Approval. Lessee shall
retain, at Lessee's sole cost, an architect/space planner (the "Space Planner")
familiar with the practices and procedures of the City of Irvine's Department of
Building and Safety and reasonably acceptable to Lessor to prepare detailed
plans and specifications for the "Tenant Improvements" (as such term is defined
in Section 3.1 below) to be constructed in the Premises (the "Plans"), which
shall include a layout and designation of all walls, windows, offices, rooms,
restrooms and other partitioning, and location of computer and telephone rooms,
heavy equipment, plumbing requirements, corridors and any specific use items
required by Lessee, and architectural and engineering drawings for the Tenant
Improvements in a form which is complete to allow a general contractor and
subcontractors to bid on the job and to obtain all applicable governmental
permits. The Plans shall include, without limitation. Lessee's finish schedule
for interior decoration of the Premises including, without limitation, floor
coverings or carpets, any special wall coverings, lighting or other fixtures,
painting, finish hardware, detailed drawings of all shelving and cabinet work,
locations of special electrical outlets, telephones, machinery, electrical
equipment and plumbing fixtures. The architectural and engineering drawings
shall include engineering working drawings for all work to the systems in the
Premises (e.g., electrical, plumbing, HVAC, mechanical, fire/life-safety
systems). Together with the Plans, Lessee shall deliver to Lessor such
additional information regarding the Tenant Improvements as Lessor may
reasonably request.

1.2. Lessor Approval of Plans. Lessor shall approve or
disapprove the Plans as soon as reasonably possible, but in no event later than
ten (10) business days following Lessor's receipt thereof. Lessor's disapproval
of the Plans shall be effected by Lessor's delivery to the Space Planner, as
soon as reasonably possible but in no event beyond such ten (10) business day
period, of a writing setting forth the reasonable basis for its disapproval. As
soon as reasonably possible following delivery by Lessor of its reasonable
objections, the Space Planner shall cause the Plans to be modified and delivered
to Lessor. Lessor shall then approve or disapprove such modified Plans in the
same manner as set forth above as soon as reasonably possible, but in no event
later than five(5) business days from Lessor's receipt thereof. This procedure
shall be followed until all reasonable objections of Lessor have been resolved
and the Plans have been approved by Lessor. Lessee's and Lessor's approval of
the Plans shall be evidenced by their initialing and dating of each page
thereof. Lessor's review of the Plans as set forth in this Section 1 shall be
for Lessor's sole purpose and shall not obligate Lessor to review the same for
quality, design, fitness for Lessee's intended use

-1-

of the Premises, compliance with applicable law or other like matters. The Plans
as approved by Lessor shall be referred to herein as the "Final Plans."

1.3. Plan Check. Upon Lessor's approval of the Final Plans,
the Space Planner shall submit the Final Plans to the applicable department of
the City of Irvine (the "City") for necessary plan checks and approvals as
required by applicable law. The Space Planner shall provide Lessor with
reasonable advance notice of all its meetings with City personnel, so as to
provide Lessor reasonable opportunity to have a representative accompany the
Space Planner to such meetings as Lessor may desire, for purposes of allowing
Lessor input on matters affecting the Premises. Any and all plan check
corrections shall be made by the Space Planner, subject to Lessor's approval, as
soon as reasonably possible following receipt of such corrections from the City.

1.4. Timely Performance. Lessee shall cause any plans,
specifications, drawings, schedules and documents to be provided by the Space
Planner under this Section 1 to be prepared promptly and delivered to Lessor.

1.5. Exculpation. Notwithstanding Lessor's or Lessor's agents
involvement in the preparation of any Plans, and Lessor's approval of the Final
Plans, Lessor and its officers, directors, shareholders, employees, agents and
contractors shall not have any liability in connection with any errors or
omissions in such Plans, including the Final Plans.

2. Selection of Contractor.

2.1. Lessee's Selection. Lessee shall utilize a contractor who shall
meet the requirements of Section 54 of Addendum No. 1 ("Lessee's Contractor") as
the general contractor to construct the Tenant Improvements.

2.2. Lessee's Contractor. Lessee's Contractor shall enter into a
written contract with Lessee for the construction of the Tenant Improvements.
Lessor shall have the right to review and reasonably approve in advance in
writing the provisions of the contract between Lessee and Lessee's Contractor as
relate to payment procedures, warranties, indemnities and insurance.
Notwithstanding any of the foregoing, however, Lessor reserves the right to
review and reasonably approve in advance Lessee's designated subcontractors for
work affecting the electrical, plumbing, HVAC, fire/life-safety and mechanical
systems of the Premises.

2.3. Construction Standards. Lessee's Contractor shall obtain all
necessary permits for and construct the Tenant Improvements in strict accordance
with all applicable codes, ordinances, regulations, laws and the Final Plans.
The Tenant Improvements shall be constructed and completed lien-free and in a
diligent and workmanlike manner. As a condition to Lessee's Contractor's
commencement of work, Lessor shall receive from Lessee's Contractor a
certificate of insurance that names Lessor

-2-

as an additional insured, from an insurer meeting the requirements of Section 8
of the Lease and Section 54 of Addendum No. 1, and evidencing liability,
property damage and "course of construction" coverages reasonably acceptable to
Lessor, plus statutorily-required workers compensation insurance as being in
force through the anticipated completion date of the Tenant Improvements, and
providing that Lessor will receive at least thirty (30) days written notice of
any amendments to or cancellation of such coverage. Lessee's Contractor shall
warrant to Lessee and for the benefit of Lessor that the tenant improvements
shall be free from any defects in workmanship and materials for a period of one
(1) year from the date of completion of the Tenant Improvements. Lessee's
Contractor shall adhere to such governmental laws, ordinances, rules and
regulations as may now or in the future be reasonably promulgated. Lessee shall
permit Lessor or Lessor's representatives to observe the on-going construction
within the Premises to insure compliance with Lessee's obligations under the
Lease and this Exhibit B, so long as such observation does not interfere with
Lessee's Contractor's activities. Promptly following the completion of the
Tenant Improvements, Lessee shall obtain from Lessee's Contractor or the Space
Planner and deliver to Lessor "as-built" or a record set (contained corrections
made at the site) of plans for the Tenant Improvements in form reasonably
acceptable to Lessor.

3. Tenant Improvement Allowance.

3.1. Allowance Amount. Provided that Lessee shall fully and timely
perform all of its duties and obligations under the Lease, the Addendum No. 1
and this Exhibit B during the Original Term, Lessor shall grant to Lessee a
tenant improvement allowance not to exceed Three Hundred Two Thousand Two
Hundred Forty Dollars ($302,240) (the "T.I. Allowance"). The T.I. Allowance
shall be used by Lessee only for: (i) costs of construction of improvements that
are permanently affixed to the Premises and are included in the Final Plans; and
(ii) Lessee's out-of-pocket fees and costs incurred in connection with
architectural, engineering and space planning services pertaining to the Final
Plans, and for governmental permits. Lessee shall not be entitled to receive or
apply any unused portion of the T.I. Allowance for any other purpose, including
without limitation the payment of any Rent due under the Lease or the Addendum
No. 1. The improvements to be permanently affixed to the Premises as described
in the Final Plans are collectively referred herein as the "Tenant
Improvements". The T.I. Allowance shall be disbursed by Lessor in accordance
with Section 3.2 below.

3.2. Payment. Provided that Lessee is not then in Default under the
Lease, the Addendum No. 1, or this Exhibit B, not more than once per month,
Lessee shall submit to Lessor with a request for disbursement of the T.I.
Allowance, an application for payment, with supporting documentation, which
statements shall be used as a basis for payment of the "Applicable Portion" (as
hereinafter defined) of the disbursement requested, setting forth a description
of work performed, materials supplied and

-3-

costs incurred or due for which reimbursement is requested. Such statement shall
be certified in writing by Lessee's Contractor and shall be accompanied by
unconditional lien releases from the contractor and each subcontractor and
materialman of the contractor for prior work for which payment by Lessor has
been made, and conditional lien releases from the contractor and each
subcontractor and materialman of contractor for the work for which application
is being made. Such releases shall be in statutory form. Lessor's obligation to
make any disbursements shall be conditioned upon Lessor's receipt of the
following: (1) bills, invoices, vouchers, statements, receipts and other
documents evidencing the total amount expended, due or incurred for any
requested items; (2) certifications of percentage and/or stage of construction
that has been completed in accordance with Lessee's Plans and applicable
governmental laws and requirements; and (3) releases of any mechanic's liens,
stop notice claims, equitable lien claims or other lien claims which may be
filed or served during the course of construction or statutory bonds or other
security adequate to protect Lessor and the Premises from liability for such
claims. In the case of the final disbursement of the T.I. Allowance, item (3)
shall include the following: (i) a written statement from the Space Planner and
Lessee that the Tenant Improvements have been completed to Lessee's
satisfaction; (ii) copies of all invoices from Lessee's contractor, all
subcontractors and all other suppliers of labor and material to the Tenant
Improvements, whether or not being paid for out of the T.I. Allowance,
pertaining to the Tenant Improvements; (iii) copies of all applicable
governmental permits, approvals and signed-off inspection cards, for the Tenant
Improvements; (iv) ink-executed mechanic's lien releases in compliance with the
applicable provisions of California Civil Code Section 3262(d) from Lessee's
Contractor and all other suppliers of labor and material to the Tenant
Improvements having mechanics lien rights, or other documentary evidence
satisfactory to Lessor that neither Lessee's Contractor nor any subcontractor,
laborer or materialman has filed or threatened to file a mechanic's lien against
the Premises. As used herein, "Applicable Portion" means the lesser of (a) the
T.I. Allowance divided by the amount of the aggregate cost of the Tenant
Improvements as reasonably estimated by Lessee and approved in writing by
Lessor, or (b) the certification of percentage, if any, provided pursuant to
clause (2) above.

3.3. Construction by Lessee's Contractor. Except as otherwise
provided in the Lease or this Exhibit B, Lessor shall not have any
responsibility or obligations whatsoever for the design or construction of any
of the Tenant Improvements or for the timeliness in completion of the Tenant
Improvements, including deficiencies in the quality or adequacy of the labor or
material constructed in the Premises. Lessee understands and acknowledges that
the occurrence of the Commencement Date of the Original Term is not contingent
on the completion of the Tenant Improvements by Lessee's Contractor.

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Exhibit C

STORAGE OF HAZARDOUS SUBSTANCES

Isopropyl Alcohol 70% (CAS No. 67-63-0) No more than 55 gallons are stored at
the site at any one time

Genesolv D Freon (CAS 76-13-1) No more than 5 gallons of Freon are
stored at the site at any one time

Tetra-etch Etchant (CAS No. 110-71-4) No more than 1 liter is stored at the
site at any one time

Cidex Plus Solution (CAS 111-30-8) No more than 5 gallons of Freon are
stored at the site at any one time

Several different kinds of adhesives Total quantities are measured in
used: UV and cyanoacrylate grams

Remaining items are cleaning solvents
for janitorial activities

EXHIBIT 54

[ROOF PLAN]