THE MARK "[ * * * ]" IN THIS EXHIBIT 10.1 IS USED WHERE CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Advanced Energy Comprehensive Supplier Agreement (CSA) # 965100

This Agreement dated MAY 18TH, 1998 is by and between Applied Materials, Inc., ("Applied"), a Delaware corporation, having its place of business in Santa Clara, California and Austin, Texas and ADVANCED ENERGY INDUSTRIES, INC., having its place of business in FT. COLLINS, COLORADO.

The parties agree as follows:

1. SCOPE

1.2 INTENTION / DESCRIPTION OF COMPREHENSIVE SUPPLIER AGREEMENT PRINCIPLES

This Comprehensive Supplier Agreement ("CSA") serves as a tool to manage the parts Applied purchases from Advanced Energy as well as sub-assemblies Advanced Energy processes for Applied. Attachment 1 lists the part numbers covered by this agreement. Any updates to this document will INCLUDE a current list of the part numbers covered by this CSA.

The intention of this document is to guide the relationship between Applied and Advanced Energy to ensure a consistent supply of material that meets Applied's specifications and support Applied's Business Objectives (e.g. HOSHINs). Decisions regarding future purchases from Advanced Energy will be guided by their performance in this CSA, and their achievement toward Applied's HOSHIN goals.

          Advanced Energy
          1625 SHARP POINT DRIVE        CHRIS FERGEN, BUSINESS UNIT DIRECTOR
          FORT COLLINS, COLORADO, 80525 BRIAN CROWELL, AUSTIN SITE MANAGER
          970-221-4670 MAIN LINE        JIM GENTILCORE, VP SALES AND MARKETING
          970-407-6655 MAIN FAX         JIM PARKER, QUALITY ENGINEERING MANAGER
          www.advanced-energy.com.      FRED WEAVER, VP OF CUSTOMER SATISFACTION

1.3  ENTIRE AGREEMENT

This CSA, including the Standard Terms and Conditions (Exhibit 1), Hoshin Plan (Exhibit 2) and any other Exhibits or Attachments which are incorporated by reference into this CSA, together with any non-disclosure agreement sets forth the entire understanding and agreement of the parties as to the subject matter of this CSA and supersedes all prior agreements, understandings, negotiations and discussions between the parties. No amendment to or modification of this CSA will be binding unless in writing and signed by a duly authorized representative of both parties. In the event of any conflict between the terms of the CSA and the terms of the Exhibits and Attachments, the terms of the CSA shall control.

1.3.1 Attachments and Exhibits

Attachments:                        Attachments cont.
1.   Part Number Listing            10.  Corrective Action Form
2.   Applied Fiscal Year Calendar   11.  Quality Data Form
3.   Delivery Mechanics             12.  Engineering Change Order
4.   Rolling Forecast                    (ECO) Form
5.   Bar Code Specifications        13.  Supplier Problem Sheet
6.   Packaging Specifications       14.  Approved List of Secondary
7.   Corporate Transportation            Sup-pliers
     Routing Guide                  15.  Supplier Performance Plan
8.   Electronic Funds Transfer      16.  Supplier World Wide Support
     Process (in process)                Cen-ter Listings
9.   Non disclosure Agreement       17.  Cycle Time sheets per part

Exhibits:
1. Standard Terms and Conditions

Advanced____Applied Materials____ 1 of 16 Date______

2. Hoshin Plan

1.4 PART NUMBERS COVERED

In general, all part numbers supplied to Applied by Advanced Energy will be covered by this agreement. The list of part numbers covered by this CSA is shown in Attachment 1. New part numbers may be added to Attachment 1 upon mutual agreement between Applied and Advanced Energy. Part numbers may be removed from Attachment 1 by Applied from time to time for legitimate reasons, including, but not limited to:

a. Specification changes the supplier is unable to comply with
b. Quality or delivery default
c. Obsolete parts due to replacement of the part (as opposed to declining demand)
d. Outsourcing of the parent assembly

1.5 DURATION OF AGREEMENT

The effectivity date of this Service Agreement will be the later of two signatures dated in Section 9 and will remain in effect through MAY 18TH, 2001 (the "Initial Term"). Upon conclusion or termination of the Initial Term, Applied, at Applied's option, may extend this Agreement for at least an additional 6 months subject to all terms and conditions of this Agreement.

1.6 RESPONSIBILITIES

1.6.1 Applied Responsibilities

Applied responsibilities for supporting this agreement include but are not limited to:

- Providing demand signals to the supplier as defined in section 2.5.1
- Providing updated twenty-six week rolling forecasts to the supplier
- Measuring inventory levels and scoring compliance to days-of-supply metric
- Receiving and inspecting parts from the supplier and measuring quality for quality metric
- Notifying the supplier in timely manner of any discrepancies
- Working with the supplier to improve operation of this agreement
- Working with the supplier to reduce costs and improve quality of parts purchased from the supplier
- Responding in a timely manner to any of the supplier's inquiries
- Working with the supplier to resolve any exceptions that may arise
- Working with the supplier in writing and recording action plans to resolve exceptions
- Providing the supplier with supplier performance reports

1.6.2 Advanced Energy Responsibilities

Advanced Energy responsibilities for supporting this agreement include but are not limited to:

- Producing high quality and highly reliable parts
- Delivering parts on time to Applied
- Responding in a timely manner to any of Applied's inquiries and requests
- Continuously improving the supplier's operations to better serve Applied's needs and support the Applied's HOSHIN goals
- Working with Applied to improve operation of this agreement
- Working with Applied to reduce costs and improve the quality for all parts the supplier produces for the Applied
- Routinely reviewing the updated twelve month forecasts to adjust the supplier's operation for changes in Applied's plans
- Working with Applied to resolve any exceptions that may arise
- Completing any tasks assigned to resolve exceptions on time
- Meeting with Applied at a minimum of every six (6) months to review performance
- Tracking and reporting Quality (Internal and External), Reliability and Delivery Performance

Advanced____Applied Materials____ 2 of 16 Date______

- Monitor and report to Applied, inventory levels of those finished good parts that Applied might have liability under section 2.2.1.

2. LOGISTICS FRAMEWORK

2.1 OPERATION OF CSA

2.1.1 Operating calendar & holidays

This CSA operates by the Applied fiscal year calendar, shown in Attachment 2. Recognized holidays are those holidays shown on the Applied fiscal year calendar. Should any discrepancies between the operating calendars of Applied and Advanced Energy arise, Advanced Energy must make provisions so that Applied's operations are unaffected.

2.1.2 Flowchart of day to day operations
(Reserved)

2.1.3 Forecasts

Advanced Energy's production of parts will be GUIDED by Applied's most recent 12 WEEK rolling forecast, as provided by Applied to Advanced Energy on a weekly basis ("Applied's Forecast") via EDI transaction ID. Advanced Energy will plan, manufacture, and stock inventory to meet Applied's forecast. Advanced Energy will keep each of Applied's forecasts for audit purposes for a minimum of six (6) months and may be asked to present this document for verification of authorized inventory levels. Applied's forecast is Proprietary Information to be used only by Advanced Energy to meet its obligations to Applied under this Agreement.

2.1.4 Releases

Applied may require a part or parts on an accelerated basis, either in addition to or in place of parts forecast for release or scheduled for delivery at a later date. If feasible, as determined by Applied and Advanced Energy, such parts will be provided by Advanced Energy to meet Applied's requirements. Unless otherwise agreed to by Applied, such accelerated deliveries will not affect the delivery schedule of any parts currently allocated for forecast requirements. Lead times for each accelerated release will be agreed upon by both parties.

2.1.5    Delivery Guidelines

     2.1.5.1 General Delivery

     Advanced Energy will exercise all efforts to meet Applied's
     material requirements on time.  Shipments to Applied by Advanced
     Energy will be also in the right quantities ordered by Applied.

     For Spot Buy purchases for production, deliveries will be
     accepted on the requested date or up to 3 days before the
     requested date.  For Spot Buy purchases for spares, deliveries
     will be accepted on the requested date or up to 2 days before
     the requested date.

2.1.6    Replenishment Approach

Advanced Energy will be expected to supply parts using one or more of the following replenishment approaches:
- Bus Route: Point of use delivery where specified.
- Kanban Replenishment Bins/Line Side Stocking
- Spot Buy

Advanced____Applied Materials____ 3 of 16 Date______

The replenishment methodology to be used for a particular parts are defined on Attachment 1. Specific delivery mechanics are outlined on Attachment 3.

2.1.7 Electronic Commerce

Advanced Energy is required to communicate with Applied using EDI ANSI X.12 standards and encouraged to use either GEIS or EDICT software.

2.1.8 Changes to Logistics

Applied may on occasion change any aspect of any logistics requirement. Applied will expect Advanced Energy to accommodate these changes to the best of its ability. Advanced Energy will be given at least three weeks notification prior to the change being implemented. Applied will then consider all claims for adjustment in the logistics framework if made within the three week notification period in accordance with the AMAT standard terms and conditions. Logistics refers to delivery, transportation and EDI requirements.

2.2 SERVICE LEVELS

2.2.1 Inventory Levels

Advanced Energy, if involved in supporting lean manufacturing, is expected to hold inventory of the parts on Attachment 1 in order to manage demand fluctuations. Advanced Energy will maintain a minimum of [ * * * ] weeks and a maximum of [ * * * ] weeks of each part for Applied's needs based on the most recent rolling forecast (see Attachment 4). Advanced Energy may present a claim for adjustment for payment of inventory manufactured in response to a valid Applied purchase order, or an authorized demand signal, as explained in Section 2.5.1. if Applied has not taken delivery of the inventory within [ * * * ] from date of manufacture. This claim must be made within thirty (30) days from the end of the
[ * * * ] time-frame. Applied is not responsible for payment to Advanced Energy for inventory built without a valid Applied purchase order or an authorized demand signal, as explained in
Section 2.5.1. An inventory goal of 2 weeks is targeted for 1998 and 1 week for 1999, per the HOSHIN plan. The contract will be officially amended following the procedure set forth in Section 7, "Amendments and Modifications" of this CSA.

Applied will not hold any financial responsibility for "off-the-shelf" parts.

2.2.1.1 WIP Tracking

Suppliers are expected to monitor, track, and report their WIP inventory. In the future, Applied will implement regular reporting mechanisms which Advanced Energy will be expected to participate.

2.2.1.2 Excess and Obsolete (E&O) Parts

Applied will not be responsible for excess and obsolete parts other than the amounts specified in section 2.2.1 above. Applied encourages Advanced Energy to make it's best effort to take back excess and obsolete inventory regardless of the reason for its not being required by Applied.

2.2.2 Response Requirements

Responses to the following types of inquiries are expected within the time periods in the tables below.

------------------------------------------------------------------------------
 Inquiry Type                        Advanced Energy          Advanced Energy
                                       Response Time              Contact
------------------------------------------------------------------------------
 LEAD-TIME                               [ * * * ]            MASTER PLANNER
------------------------------------------------------------------------------
 TECHNICAL                               [ * * * ]            MANUFACTURING
                                                                 ENGINEER
------------------------------------------------------------------------------
 QUOTATIONS:  NPI                        [ * * * ]           CUSTOMER SERVICE
              REPEAT ORDER               [ * * * ]            REPRESENTATIVE
------------------------------------------------------------------------------
 QUALITY                                 [ * * * ]           QUALITY ENGINEER
------------------------------------------------------------------------------
 PRICE/INVOICE                           [ * * * ]           CUSTOMER SERVICE
                                                              REPRESENTATIVE
------------------------------------------------------------------------------
 COMPONENT FAILURE & FIELD               [ * * * ]           QUALITY ENGINEER
 SAFETY
------------------------------------------------------------------------------
 PRODUCT PROBLEMS                        [ * * * ]            ACCOUNT MANAGER
------------------------------------------------------------------------------

          2.2.2.2   Applied Response Time

------------------------------------------------------------------------------
 Inquiry Type                      Applied Response Time      Applied Contact
------------------------------------------------------------------------------
 LEAD-TIME                               [ * * * ]           SUPPLIER ACCOUNT
                                                                   TEAM
                                                                LEAD/MEMBER
------------------------------------------------------------------------------
 TECHNICAL                               [ * * * ]           SUPPLIER ACCOUNT
                                                                   TEAM
                                                                LEAD/MEMBER
------------------------------------------------------------------------------
 QUALITY                                 [ * * * ]           SUPPLIER ACCOUNT
                                                                   TEAM
                                                                LEAD/MEMBER
------------------------------------------------------------------------------
 PRICE/INVOICE                           [ * * * ]           SUPPLIER ACCOUNT
                                                                   TEAM
                                                                LEAD/MEMBER
------------------------------------------------------------------------------

2.2.3 Flexibility Requirements

Advanced Energy is expected to perform regular capacity planning and to demonstrate upside/downside flexibility in case of volume changes at Applied. For Bus Route parts, Advanced Energy will support unplanned sustained increases/decreases in demand above/below the forecast as defined below. For Spot Buy parts, Advanced Energy allows the following increases/decreases to Purchase Order quantities above/below the quantities originally requested:

----------------------------------------------------------------------------------------
 WEEKS UNTIL
 DELIVERY DATE               < 1 WEEK    < 4 WEEKS   < 8 WEEKS  < 12 WEEKS    12+ WEEKS
----------------------------------------------------------------------------------------
 FLEXIBILITY (BUSROUTE) +/-  [ * * * ]   [ * * * ]   [ * * * ]  [ * * * ]     [ * * * ]
----------------------------------------------------------------------------------------
 FLEXIBILITY (SPOT BUY) +/-  [ * * * ]   [ * * * ]   [ * * * ]  [ * * * ]     [ * * * ]
----------------------------------------------------------------------------------------

2.2.4 On-site support requirements

As determined by Applied, Advanced Energy may be asked to provide logistics, quality engineering, and new product development support on-site at Applied's facilities. At the appropriate juncture, Applied will require Advanced Energy to complete the On-site Representative Agreement and processing PRIOR to issuing a building badge to Advanced Energy's representatives.

Advanced____Applied Materials____ 5 of 16 Date______

2.2.5 Global Support

For the parts listed in Attachment 1, and all other parts that Advanced Energy provides to Applied, Advanced Energy will provide support globally for Applied and Applied's customers. Advanced Energy support centers contact names and phone numbers are listed in Attachment 16. Repair rates will be outlined in Attachment 1.

Technical assistance and product support services shall be provided at no additional charge during normal business hours. Advanced Energy must have an established and deployed global service capability. The required support services must be available globally, however, the Supplier may utilize a Supplier distributor, or other qualified entity designated by Supplier to meet this requirement. Advanced Energy is expected to use best efforts to provide a resolution to requests for assistance within the elapsed time objectives described in 2.2.2.

2.2.6 Turn-around time for Repairs

Advanced Energy will supply Applied with repair parts within,
[ * * * ] days for parts in warranty and [ * * * ] days for parts out warranty, of Applied's request. [ * * * ] will have a [ * * * ] day repair part turn around time for parts in and out of warranty.

2.3 INFORMATION

2.3.1 Applied Planning Systems

Advanced Energy may be given electronic access to Applied's planning data. This access can be used to facilitate production and delivery of parts to support Applied's requirements.

2.3.3 Applied New Product Plans

Advanced Energy will, on occasion and at Applied's discretion, be invited to forums in which Applied's new product plans are shared.

2.4 PACKAGING AND TRANSPORTATION

2.4.1 Packaging and Shipment

Advanced Energy will have all parts packaged "fit for use" in accordance with Applied's packaging specification (Attachment 6). Advanced Energy will mark and identify every item in compliance with Applied's part identification specifications and requirements (reference Attachment 6).
THE WORD "FIT" WAS USED TO REPLACE THE WORK "READY", SINCE "READY" WAS NOT REFERENCED IN ATTACHMENT 6; REFERENCE PAGE 3-4 OF 0250-00098, REV. K, PACKAGING SPECIFICATION.

2.4.2 Bar Coding

All shipments should be bar coded to Applied's specifications (Attachment 5).

2.4.3 Transportation Mode

Parts will be transported, FOB Destination, Freight Collect in accordance with Attachment A of Applied's Corporate Transportation Routing Guide which is provided in Attachment 7.

Advanced____Applied Materials____ 6 of 16 Date______

2.5 PAYMENT

2.5.1 Demand Signal

BUS ROUTE

Applied sends via EDI transmission an order sheet to Advanced Energy containing Applied's material requirements information. This information is organized at the part-number level and represents Applied's daily purchase from Advanced Energy. This EDI transmission constitutes an authorized demand signal.

SPOT BUY

As needed, Applied sends via fax an order sheet to Advanced Energy containing Applied's material requirements information. This information is organized at the part-number level and represents an Applied purchase from Advanced Energy. This fax constitutes an authorized demand signal.

2.5.2 Invoices

Invoices shall contain the following information: purchase order number, line item number, Applied part number, description of goods, sizes, quantities, unit prices, and extended totals in addition to any other information requested. Applied's payment of invoice does not represent unconditional acceptance of items and will be subject to adjustment for errors, shortages, or defects. Applied may at any time set off any amount owed by Applied to Advanced Energy against any amount owed by Advanced Energy or any of its affiliated companies to Applied.

All invoices must be sent directly to Accounts Payable in Austin:

Accounts Payable
Applied Materials
9700 US Highway 290 East M/S 4200 Austin, TX 78724-1199

2.5.3 Cash Discounts

Payment will be made [ * * * ] days from receipt of:
a. invoice, in form and substance acceptable to Applied, or
b. delivery and acceptance of the invoiced Item(s), whichever is later.

2.6 DISASTER RECOVERY PLAN

Advanced Energy is expected to provide evidence of a disaster recovery plan that includes emergency back up capacity and appropriate record protection and recovery. Furthermore, Advanced Energy represents that its information systems are year 2000 compatible and hereby grants Applied the right to verify Advanced Energy's internal processes for ensuring compliance with this provision.

Applied believes it is critical for suppliers to be prepared and protected in case of disasters or interruptions to normal business operations.

Advanced____Applied Materials____ 7 of 16 Date______

2.7 MANAGING EXCEPTIONS TO COMPREHENSIVE SUPPLIER AGREEMENT (CSA)

2.7.1 Identifying constraints

Suppliers are responsible for identifying constraints to meeting CSA objectives, informing Applied when those constraints occur, and initiating action plans to resolve them. Constraints might typically include:

a. Consumption over forecast
b. Consumption under forecast
c. Quality problems
d. Capacity/production problems
e. Supply Chain Management problems
f. Other business issues

2.7.2 Process for Exceptions

Applied will work with suppliers to determine the impact of an exception and approve and execute the action plans. Advanced Energy will notify the Supplier Account Team Lead as soon as exceptions are identified.

3. QUALITY FRAMEWORK

3.1 SUPPLIER NON-CONFORMANCES AND CORRECTIVE ACTION

Advanced Energy's quality must meet all applicable Applied specifications. Advanced Energy is required to replace or repair defective parts at supplier's expense in a timely manner. Suppliers are required to use the most expeditious manner possible to affect the corrections including the use of overnight delivery services for shipment of parts; at Applied's request, in certain circumstances, suppliers may be asked to provide new parts in lieu of repairing a part to ensure immediate corrective action.

Advanced Energy will be notified of defects with a corrective action form, Attachment 10, to which they are expected to respond appropriately. A corrective action process to resolve non-conformances will be documented and used. In addition, Advanced Energy will participate in continuous improvement plans and programs as defined by Applied and Advanced Energy.

[ * * * ]

3.2 APPLIED NON-CONFORMANCES AND CORRECTIVE ACTION

Applied will return parts at Applied's expense that do not conform to Applied's requirements due to Applied errors. These parts will be returned for potential rework. Applied and Advanced Energy will agree in advance on "standard" repair costs (labor, parts and freight) on items not covered under warranty (Attachment 1).

To the extent that a "standard" repair cost has not been established, Advanced Energy will assess rework costs and timing and inform Applied before work is performed. The parties agree that under no circumstances will the total price charged for repairing a part exceed 50% of the current purchase price stated in Attachment 1.

Advanced____Applied Materials____ 8 of 16 Date______

Advanced Energy agrees to repair and return all parts within five (5) business days from receipt of damaged part. Applied shall have the right to designate certain parts for "Same Day" or "24 Hour" repair turnaround. Any premium charges for "Same Day" or "24 Hour" repair turnaround will not exceed [ * * * ] per part.

Prior to return of repaired parts to Applied, Advanced Energy will mark parts with Applied's part number, serial number, gas and range the part has been exposed to if applicable. Applied shall bear the risk of loss or damage during transit of Products whether or not the Product meets warranty requirements.

In addition, a corrective action process to resolve non-conformances will be documented and used.

3.3 QUALITY ASSURANCE

All goods purchased under this CSA will be subject to inspection and test by Applied at the appropriate time and place, including the period of manufacture and anytime prior to final acceptance. If inspection or test is made by Applied on Advanced Energy's premises, Advanced Energy will provide all reasonable facilities and assistance for the safety and convenience of Applied's inspectors at no charge to Applied. No preliminary inspection or test shall constitute acceptance. Records of all inspection work shall be kept complete and available to Applied during the performance of this order and for such further period as Applied may determine.

Certificate of Conformance (COC): Seller agrees to certify that Items have passed all production acceptance tests and configuration requirements and provide a "Certificate of Conformance" and a Calibration Data Report that will be included with each product during shipment.

With regard to repair services, Advanced Energy shall maintain documentation evidencing that all test inspections have been performed. The documentation shall indicate the nature and number of observations made, the quantities approved and rejected as well as the nature of the corrective action taken. Advanced Energy's service centers shall be responsible for submitting this data for Applied's review of the delivery summaries. The data shall be submitted monthly not later than five days after the close of each of Applied's fiscal months to Applied's Contract Specialist and Applied's IBSS Repairs Purchasing Group.

At Applied's request, Advanced Energy will provide a certificate and/or a copy of the final inspection records showing compliance to applicable specifications, contract requirements and any other required documents stipulated in Applied's repair authorization. Advanced Energy also agrees to provide Applied with copies of its current procedures relative to repairs, range change and warranty repairs.

Advanced Energy will track and maintain reject rate by percentage of assemblies, and/or part per million reject internally (through Advanced Energy Quality Service Organization). Trend reporting and corrective actions shall be furnished to Applied as requested by the Applied Purchasing or Quality representatives. Advanced Energy will provide quality data in the format, as shown in Attachment 11, and at the timing required by Applied. Suppliers may also be required to provide reasonable additional data to support qualification and certification programs.

3.4 WARRANTY

Advanced Energy warrants that all goods and services delivered to Applied will be free from defects in workmanship, material, and manufacture; will comply with the requirements of this agreement, and, where design is Advanced Energy's responsibility, will be free from defects in design. ADVANCED ENERGY FURTHER WARRANTS ALL GOODS PURCHASED OR REPAIRED WILL BE OF MERCHANTABLE QUALITY AND WILL BE FIT AND SUITABLE FOR THE PURPOSE INTENDED BY APPLIED. These warranties are in addition to all other warranties, whether expressed or implied, and will survive any delivery, inspection, acceptance, or payment by Applied. If any goods or services delivered by Advanced Energy do not meet the warranties specified herein or otherwise applicable, Applied may, at its option :

(i) require Advanced Energy to correct at no cost to Applied any defective or nonconforming goods or services by repair or replacement, or

Advanced____Applied Materials____ 9 of 16 Date______

(ii) return such defective or nonconforming goods at Advanced Energy's expense to Advanced Energy and recover from Advanced Energy the order price thereof, or
(iii) correct the defective or nonconformant goods or services itself and charge Advanced Energy with the cost of such correction. Maximum cost will not exceed [ * * * ] of current purchase price in Attachment 1. Such units will subsequently be maintained by Applied Materials.
(iv) There will be a [ * * * ] Re-test and Evaluate fee for IBSS ONLY upon request.
(v) Advanced Energy will comply with IBSS tie wrap requirements while maintaining Applied Materials logo on the tie wrap.

All warranties will run to Applied and to its customers. Applied's approval of Advanced Energy's material or design will not relieve Advanced Energy of the warranties established in this agreement. In addition, if Applied waives any drawing or specification requirement for one or more of the goods, it will not constitute a waiver of all requirements for the remaining goods to be delivered unless stated by Applied in writing. Warranty length for all parts is listed in Attachment 1. The warranty on repaired Items will be [ * * * ] from customer receipt of repaired Item or remainder of initial warranty period, which ever is longer. For non-warranty repaired Items, the repaired Item will be warranted from the date of customer receipt of the repaired Item, for [ * * * ] for parts and labor or [ * * * ] for parts only.

3.5 OTHER QUALITY PROGRAMS

(Reserved)

3.6 SAFETY

(Reserved)

4. PRICING FRAMEWORK

4.1 PRICING BY PART NUMBER COVERED IN THIS AGREEMENT

The pricing for the parts are shown in Attachment 1. Any modifications to these must be made in accordance with Section 7. The total cost of parts supplied by Advanced Energy should be reduced regularly, not just the unit price. Advanced Energy commits to on-going cost improvement during the period of this agreement.

At the time of the contract acceptance in Section 9, all open PO's are to be revised to the contract price.

Specific circumstances may result in re-negotiation of contract terms, including prices. These include, but are not limited to:

a. Volume increases resulting in an increase in contract value of over
[ * * * ]
b. Addition of part numbers to the contract increasing it in value over [ * * * ]
c. Cost savings over and above those committed in the performance plan

4.2 COOPERATIVE PRICING MODELS/FORMULAS

(Reserved)

4.3 VOLUME Advanced Energy will be provided a range of potential volumes that may be purchased. Applied does not commit to buy a specific volume of a part number from a supplier. Applied does not limit its ability to buy the same part number from multiple sources.

4.4 EXPORT PRICING

Advanced____Applied Materials____ 10 of 16 Date______

Advanced Energy should quote Applied in unit prices based upon delivery FCA Free carrier. Advanced Energy is expected to prepare the export paperwork and be the exporter of record. Advanced Energy must utilize Applied's preferred carriers to arrange the export of the goods. Applied will pay the freight charges based on Applied's rates with its preferred carriers. Applied will be responsible for importing the goods into the destination country.

4.5 CURRENCY

All prices are quoted in US dollars; prices for foreign manufactured parts will not be adjusted to reflect changes in the exchange rate. Advanced Energy is encouraged to obtain any necessary currency exchange protection it deems appropriate.

4.6 PROTOTYPES

Advanced Energy is committed to price all parts consistent with contract prices.

Advanced Energy agrees to provide prototype parts priced considering the total value of Applied's business with the supplier. This may be accomplished in several ways, including:

a. a specific number of prototype parts may be provided free of charge
b. parts may be priced at production levels

4.7 ADVANCES FOR RAW MATERIAL

Applied does not provide advance payment for the purchase of raw material.

4.8 COST REDUCTION / VALUE ANALYSIS

Buyer and Seller will initiate and continue for the term of this Agreement, value analysis, value engineering, and cost reduction efforts for all Item(s) in accordance with the Supplier Performance Plan (Attachment 15 and Section 6). Upon agreement on the incorporation of changes resulting from these activities, Buyer will amend Attachment 1. Seller will provide a 3 year plan indicating alignment with HOSHIN cost reduction goals.

5. TECHNICAL FRAMEWORK

5.1 ENGINEERING CHANGE ORDERS

Applied may change its drawings, design, and specifications at any time. The Applied Supplier Engineer will review with Advanced Energy all proposed Engineering Change Orders (ECO's) that impact the form, fit, or function of supplied material. Applied will, in writing, provide approved ECO's (refer to Attachment 12) and state the effectivity dates of all changes. Unless otherwise notified, Applied Receiving Inspection will inspect to the latest revision in effect at the time of receipt.

Advanced Energy may request engineering changes via a Supplier Problem Sheet (refer to Attachment 13). This form should be submitted to the Applied Supplier Engineer. Changes will not be implemented by Advanced Energy until written permission to proceed is given by Applied. Applied will consider claims for adjustment in the terms of this Agreement if made before the implementation of the changes.

5.2 TOOLING

Unless otherwise agreed to in writing, special dies, tools, patterns and drawings used in the manufacture of parts shall be furnished by and at the expense of, Advanced Energy.

Advanced Energy ______ Appled Materials _______ 11 of 16 Date ________

5.3 DESIGN CHANGES AND RESOLUTION

For the term of this Agreement, Advanced Energy will not make changes to the design of any critical part that may alter form, fit, function or manufacturing process without a documented engineering change request and prior written approval from Applied.

If Applied's design changes impact the pricing, delivery, lead-time, or other terms and conditions of this Agreement, and agreement upon alternate terms cannot be reached, then Applied may remove the subject part(s) from this Agreement without affecting the remaining part(s).

5.4 PROCESS CHANGES AND RESOLUTION

Advanced Energy is expected to inform Applied of process and supplier changes to any critical parts even when specifications are met. Advanced Energy must receive approval in writing from Applied before implementing changes. If no approval is forthcoming from Applied within 5 working days of notification, approval is granted. Suppliers must use the "approved" list of secondary process suppliers (Attachment 14).

5.5 SUBCONTRACTING

Advanced Energy shall not subcontract for completed or substantially completed parts supplied to Applied without prior written approval of Applied. If no approval is forthcoming from Applied within 5 working days of notification, approval is granted. All subcontractors to Advanced Energy that have access (directly or indirectly) to Applied specifications must be covered by an Applied Non-Disclosure agreement.

5.6 FIRST ARTICLES

A new part, part with revised drawings, or other changes as delineated above, must have a first article evaluated and accepted by Applied (a "First Article"). A part will not be authorized for deliveries until acceptance of the First Article by Applied. Advanced Energy will maintain First Article qualifications/evidence data file with content as defined by Applied for the specific part. First Article data is to be made available to Applied upon request and shall be retained by Advanced Energy during the performance of this Agreement or subsequent agreements.

5.7 OUTSOURCING

Applied may at its discretion elect to outsource an assembly or module to a third party ("Subassembler") and if the selected assembly or module includes any part under this CSA (an "affected part"), Applied will use reasonable efforts to provide Advanced Energy with the opportunity to bid on the affected part as a supplier to the Subassembler. Although Applied may, at its discretion and under no obligation to Advanced Energy, direct a Subassembler to purchase any affected parts from Advanced Energy, Advanced Energy understands that the selection and responsibility for sourcing any affected parts will generally be the responsibility of the Subassembler. If Advanced Energy is not selected as the source for an affected part, any affected parts or applicable quantities of affected parts may, at Applied's discretion, be removed from this Agreement.

Advanced Energy ______ Appled Materials _______ 12 of 16 Date ________

5.8 PRODUCT SUPPORT

Advanced Energy agrees to provide parts, and technical and service support to Applied for all of the parts for a minimum of TEN years from the date of final shipment of a part to Applied. Alternatively, the parties may agree to establish a product support period less than ten years provided that Advanced Energy agrees to grant to Applied a non-exclusive license to make, have made, use, sell, and support the parts.

5.9 COMMODITY SPECIFIC ISSUES

(Reserved)

5.10 TECHNOLOGY ROADMAP

(Reserved)

6. PERFORMANCE MANAGEMENT

6.1 SUPPLIER PERFORMANCE PLAN

As part of this Comprehensive Supplier Agreement, Applied and Advanced Energy agree to jointly develop a supplier performance plan. Attachment 15 outlines the performance plan.

6.2 SUPPLIER PERFORMANCE MANAGEMENT

6.2.1 Metrics and Targets

Advanced Energy agrees to perform to the following operational performance measures: quality, delivery, cost, manufacturing disruption occurrences, cycle time, and flexibility. Performance targets for FY2000 are listed. Intermediate performance targets are established in the Supplier Performance Management Plan. The following defines how Applied and Advanced Energy will measure performance metrics:

--------------------------------------------------------------------------------------------------------------
 MEASURE             DEFINITION              CALCULATION             1998 TARGET     1999 TARGET   2000 TARGET
--------------------------------------------------------------------------------------------------------------
 Quality ppm*        Number of quality       Number of DMR           1750 ppm        750 ppm       400 ppm
                     discrepancies detected  occurrences recorded
                     prior to shipping a     for all parts provided
                     completed system to an  by the supplier
                     end customer,           accumulated over the
                     expressed as parts per  prior 13-week period,
                     million                 divided by the total
                                             receipts for that part
                                             over the same period
                                             and multiplied by 1
                                             million
--------------------------------------------------------------------------------------------------------------
 Field Failures      Number of part quality  Number of RMA           0               0             0
                     discrepancies detected  occurrences recorded    occurrences     occurrences   occurrences
                     in the field during     for each part
                     installation or         accumulated over the
                     routine repair          prior 13-week period
--------------------------------------------------------------------------------------------------------------
Late Delivery ppm*   Number of parts         Number of parts         20,000 ppm      10,000 ppm    5000 ppm
                     delivered later than    received one day or     with 0 ppm      with 0 ppm    with 0 ppm
                     the agreed upon         more after the          LESS THAN       LESS THAN     LESS THAN
                                                                     OR EQUAL TO     OR EQUAL TO   OR EQUAL TO
                                                                     4 days late     4 days late   4 days late
--------------------------------------------------------------------------------------------------------------

Advanced Energy ______ Appled Materials _______       13 of 16
Date ________

--------------------------------------------------------------------------------------------------------------
                     commit date             commit date,
                                             accumulated for
                                             each part over a
                                             rolling 13-week
                                             period, divided by the
                                             total number of parts
                                             received over the same
                                             period and multiplied
                                             by 1 million
--------------------------------------------------------------------------------------------------------------
 Early Delivery      Number of parts         Total number of parts   0 ppm           0 ppm         0 ppm
 ppm*                received three or more  received three or more
                     days before the commit  days before the commit
                     date                    date, accumulated over
                                             a rolling 13-week
                                             period, divided by the
                                             total number of parts
                                             received over the same
                                             13-week period,
                                             multiplied by 1
                                             million
--------------------------------------------------------------------------------------------------------------
 Percentage Cost     Percentage difference   Difference between the  10%             10%           10%
 Reduction           between the average     total average unit      reduction       reduction     reduction
                     unit price paid for     cost of all parts
                     materials in the prior  purchased from the
                     year and the price      supplier in the
                     paid in the current     current year and the
                     year                    total average unit
                                             cost of all parts
                                             purchased from the
                                             supplier in the prior
                                             year (for parts common
                                             to both periods)
--------------------------------------------------------------------------------------------------------------
 Should-Cost         Total variance between  Difference between the  Develop &       +/- 5% of     +/- 5% of
 Deviation           the should- cost        average unit price for  Execute Model   should-cost   should-cost
                     established by Applied  the part and the        +/- 5% of
                     Materials and the       Applied Materials       should-cost
                     average unit price      should-cost target
                     paid by Applied         (for critical parts
                                             and parts introduced
                                             through NPI activities
                                             within the past 12
                                             months)
--------------------------------------------------------------------------------------------------------------
 Order Fulfillment                           Consistent performance  2 weeks         LESS THAN     LESS THAN
 Cycle Time                                  to the delivery                         OR EQUAL TO   OR EQUAL TO
 Ref. 2.2.3                                  metrics identified                      2 weeks       2 weeks
                                             above
--------------------------------------------------------------------------------------------------------------
 Source Cycle Time   Total cycle time to     Elapsed time, as        60% parts       80% parts     80% parts
                     source all materials    determined through      w/4wk LT        w/4wk LT      w/2wk LT
                     required to produce an  process audits and      20% parts       20% parts     20% parts
                     order                   supplier self-           w/6-8wk LT     w/4-8wk LT    w/2-4wk LT
                                             assessments             20% parts
--------------------------------------------------------------------------------------------------------------

Advanced Energy ______ Appled Materials _______       14 of 16
Date ________

--------------------------------------------------------------------------------------------------------------
                                                                      w/8-12wk LT
--------------------------------------------------------------------------------------------------------------
 Make Cycle Time     Total production time   Elapsed time, as        See Attach      See Attach    See Attach
 Attachment 17       required to fulfill an  determined through      17              17            17
                     order, including        process audits and
                     manufacturing order     supplier self-
                     release and build time  assessments
--------------------------------------------------------------------------------------------------------------
 Manufacturing       Number of times a       Number of instances of                                0
 Disruption          quality defect or late  part unavailability at                                occurrences
 Occurrence (MDO)    delivery results in a   line side due to
 TBD                 disruption to the       quality defects or
                     normal flow of Applied  late shipments over
                     Materials               the prior 13 week
                     manufacturing           period
                     operations
--------------------------------------------------------------------------------------------------------------
 Supplier Upside     Number of weeks         Number of weeks from                                  2 weeks
 Flexibility         required to             the occurrence of                                     (25% volume
 See Sect. 2.2.3     consistently meet       Applied orders that                                   increase)
                     delivery requirements   exceed forecast volume                                4 weeks
                     (including full order   to the return of                                      (50% volume
                     delivery) under         quality and delivery                                  increase)
                     sustained,              performance to the                                    9 weeks
                     unanticipated demand    levels achieved prior                                 (75% volume
                     increases of 10%, 20%,  to the increase                                       increase)
                     and 50% of the                                                                13 weeks
                     thirteen-week rolling                                                         (100% volume
                     forecast                                                                      increase)
--------------------------------------------------------------------------------------------------------------

7. AMENDMENTS AND MODIFICATIONS

This CSA may be revised by the mutual consent of Applied Materials and Advanced Energy. Revisions to this CSA must be in writing, signed by both Applied and Advanced Energy, traced by revision numbers and attached to this original agreement. A change to one attachment of this agreement will constitute a revision level change. The master copy of this CSA and any revisions are to be maintained by Applied.

Updates to Section 2.2, Service levels, and changes may be communicated via memos sent by mail or e-mail.

Advanced Energy ______ Appled Materials _______       15 of 16
Date ________

9.   ACCEPTANCE


     Accepted:

     Date:  5-18-98
          ----------------


/s/ Annette M. Palacios                      /s/ Chris Fergen
-----------------------------------------    ---------------------------------
Annette M. Palacios , Supplier Engineer      Chris Fergen, ABU Director
Applied Materials, Inc.                      Advanced Energy Industries, Inc.
Applied Materials OEM-Electrical SMO         Applied Materials Business Unit

Advanced Energy ______ Appled Materials _______ 16 of 16 Date ________

EXHIBIT 1
APPLIED MATERIALS TERMS AND CONDITIONS OF PURCHASE

TABLE OF CONTENTS

ARTICLE                    TOPIC                         PAGE #
-------                    -----                         ------
   1         Acceptance                                    2
   2         Confidential and Proprietary Information      2
   3         Intellectual Property                         3
   4         Patent License                                3
   5         Press Releases/Public Disclosure not          4
             Authorized
   6         Favored Customer                              4
   7         Duty Drawback                                 4
   8         ODC Elimination                               5
   9         Compliance with Laws                          5
   10        Equal Employment Opportunity                  5
   11        Applicable Law                                5
   12        Notice of Labor Disputes                      6
   13        Taxes                                         6
   14        Responsibility for Goods                      6
   15        Insurance                                     6
   16        Change of Control                             7
   17        Assignments                                   7
   18        Gratuities                                    7
   19        Insolvency                                    7
   20        Waiver                                        8
   21        Disclaimer and Limitation of Liability        8
   22        Indemnity by Supplier                         8
   23        Force Majeure                                 8
   24        Changes                                       9
   25        Termination for Default                       9
   26        Termination for Convenience                   9

Page 1 Advanced Energy ____; Applied _____ Date:_____

1. Acceptance

The terms and conditions stated in these Applied Materials Standard Terms and Conditions of Purchase become the agreement between the parties covering the purchase of the goods or services (collectively referred to as "Items") ordered in the Purchase Agreement/Comprehensive Supplier Agreement/Basic Supplier Agreement of which these Terms and Conditions are a part when this Agreement is accepted by acknowledgment or commencement of performance. This Agreement can be accepted only on these terms and conditions. Additional or different terms proposed by Supplier will not be applicable unless accepted in writing by the Buyer. No change, modification, or revision of this Agreement will be effective unless in writing and signed by duly authorized representative of Buyer.

2. Confidential and Proprietary Information

Supplier will observe and is bound by the terms and conditions of any and all Non-Disclosure Agreements (NDAs. Ref. Attachment 9) executed by Supplier with or for the benefit of Buyer, whether now or hereafter in effect. In addition, all schematics, drawings, specifications and manuals, and all other technical and business information provided to Supplier by Buyer during the term of, or in connection with the negotiation, performance or enforcement of this Agreement shall be deemed included in the definition (subject to any applicable exclusions therefrom) of "Proprietary Information" for purposes of this Agreement.

Supplier may use Buyer's Proprietary Information only for the purpose of providing Items, parts or components of Items or services to Buyer. Supplier will not discuss and further will not use any of Buyer's Proprietary Information, directly or indirectly, for any other purpose including, without limitation, (a) developing, designing, manufacturing, refurbishing, selling or offering for sale parts or components of Items or parts, or providing services, for or to any party other than Buyer, and (b) assisting any third party, in any manner, to perform any of the activities described herein. All Proprietary Information shall (a) be clearly marked by Supplier as Buyer's property and segregated when not in use, and (b) be returned to Buyer promptly upon request.

Supplier acknowledges and agrees that Buyer would suffer irreparable harm for which monetary damages would be an inadequate remedy if Supplier were to breach its obligations under this provision. Supplier further acknowledges and agrees that equitable relief, including injunctive relief, would be appropriate to protect Buyer's rights and interests if such a breach were to arise, or threatened, or were asserted.

Supplier will use reasonable efforts to notify Buyer of any third party requests to engage in any of the activities prohibited by this Article.

3. Intellectual Property

Nothing in this Agreement shall be deemed to grant to Supplier any license or other right under any of Buyer's intellectual property (including, without limitation, Buyer's patents, copyrights, trade and service marks, trade secrets, and Proprietary Information) for Supplier's own benefit or to provide or offer Items to any party other than Buyer.

All Items supplied by Supplier and the sale of Items by Supplier and, as applicable, use thereof by Buyer or its subsequent purchasers or transferees will be free from liability for or claim by any persons of royalties, patent rights, copyright, trademark, mechanics' liens or other encumbrances, and trade secrets or confidential or proprietary intellectual property rights (collectively "rights" and "encumbrances"), and Supplier shall defend, indemnify and hold harmless Buyer against all claims, demands, costs and actions for actual or alleged infringements of patent, copyright, trademark or trade secret rights or other rights and encumbrances in the use, sale or re-sale of any Item which are valid at the time of or after the effective date of this Agreement; except to the extent that the infringement was unavoidably caused by Supplier's compliance with

Page 2 Advanced Energy ____; Applied _____ Date:_____

a detailed design furnished and required by Buyer or by Buyer's non-compliance with Supplier's prior written advice or warning of a possible and likely infringement.

At the request of Buyer, Supplier will provide to Buyer the most current and complete specifications and drawings (the "Drawings") for each Item manufactured or produced for Buyer that is based on Buyer's design or Drawings showing the complete specifications and design for the Item as manufactured or produced by Supplier. All Drawings are the sole property of Buyer.

Upon termination of this Agreement, Supplier will return all Applied Proprietary Information and documentation to Buyer. Notwithstanding this requirement, Supplier may request Buyer approval to destroy any Proprietary Information of Buyer that has become obsolete or outdated (e.g., financial projections, forecasts, et cetera); provided that Supplier certifies to Buyer the destruction of such Proprietary Information.

4. Patent LICENSE (PENDING MODIFICATION, 5/18/98, APPLIED _____, ADVANCED ENERGY _____)

Supplier, as part consideration for this Agreement and without further cost to Buyer, hereby grants to Buyer an irrevocable, non-exclusive, paid-up world-wide right and license to make, have made, use, and sell any inventions derivative works, improvements, enhancements, or intellectual property (the "Inventions") made by or for Supplier in the performance of this Agreement. Supplier shall cause any employee, consultant, contractor or other persons who provides work for hire to Supplier to assign to Supplier for licensing as above of any such inventions. In addition, Buyer shall be entitled to license Buyer's customers to use such inventions during the operation of Buyer's products.

5. Press Releases/Public Disclosure Not Authorized

Supplier will not, without the prior written approval of Buyer, issue any press releases, advertising, publicity, public statements or in any way engage in any other form of public disclosure that indicates the terms of this Agreement, Buyer's relationship with Supplier or implies any endorsement by Buyer of Supplier or Supplier's products or services.
Supplier further agrees not to use, without the prior written consent of Buyer, the name or trademarks (including, but not limited to Buyer's corporate symbol). Any requests under this Section must be made in writing and submitted to the parties designated by Buyer for the review and authorization of such matters.

6. Favored Customer

Supplier does not presently sell or offer any Item that is similar in form, fit or function to any Item to any third party for prices and terms and conditions of sale (including, without limitation, warranties, services or other benefits) (collectively, "Benefits") that are more favorable than the equivalent prices and Benefits granted by Supplier to Buyer in this Agreement If during the term of this Agreement, Supplier enters into any arrangement with any third party providing more favorable prices or Benefits for any Item than those available to Buyer under this Agreement (a "Third Party Arrangement"), Supplier will notify Buyer immediately of that price or Benefits for any Item than those available to Buyer under this Agreement (a "Third Party Arrangement"), Supplier will notify Buyer immediately of that price or Benefit and this Agreement will be deemed amended to provide the same price or Benefit to Buyer without any further action. However, Buyer, at its option, may formally amend this Agreement to reflect such changes. If any deemed amendment results in lowering the price to be paid by Buyer for any Item, Supplier will refund or credit to Buyer the aggregate amount of the price difference (including any taxes, fees and similar charges) that Buyer has paid or been charged from the effective date of the Third Party Arrangement. Such refund or credit shall be made within thirty
(30) days of the effective date of the Third Party Arrangement. In no event shall Supplier quote prices to Buyer that would be unlawfully discriminatory under any applicable law.

7. Duty Drawback

Page 3 Advanced Energy ____; Applied _____ Date:_____

Supplier will provide Buyer with U.S. Customs entry data, including information and receipts for duties paid directly or indirectly on all Items that are either imported or contain imported parts or components, that Buyer determines is necessary for Buyer to qualify for duty drawback ("Duty Drawback Information"). This data will be provided to Buyer within fifteen (15) days after each calendar quarter
[or fiscal year quarter of Buyer] and be accompanied by a completed Certificate of Delivery of Imported Merchandise or Certificate of Manufacture and Delivery of Imported Merchandise (Customs Form 331) as promulgated pursuant to 19 CFR 191.

8. ODC Elimination

In the event Supplier's goods are manufactured with or contain Class I ODCs as defined under Section 602 of the Federal Clean Air Act (42 USC
Section 7671a) and implementing regulations, or if Supplier suspects that such a condition exists, Supplier shall notify Buyer prior to performing any work against this Agreement. Buyer reserves the right to: (a) terminate all Agreements for such goods without penalties, (b) to return any and all goods delivered which are found to contain or have been manufactured with Class I ODCs, or (c) to terminate any outstanding Agreements for such goods without penalties. Supplier shall reimburse Buyer all monies paid to Supplier and all additional costs incurred by Buyer in purchasing and returning such goods.

9. Compliance With Laws

Supplier warrants that no law, rule, or ordinance of the United States, a state, any other governmental agency, or that of any country has been violated in supplying the goods or services ordered herein.

10. Equal Employment Opportunity

Supplier represents and warrants that it is in compliance with Executive Agreement 11246, any amending or supplementing Executive Agreements, and implementing regulations unless exempted.

11. Applicable Law, Consent to Jurisdiction, Venue

This Agreement shall be governed by, be subject to, and be construed in accordance with the internal laws of the State of California, excluding conflicts of law rules. The parties agree that any suit arising out of this Agreement, for any claim or cause of action, whether in contract, in tort, statutory, at law or in equity, shall exclusively be brought in the United States District Court for the Northern District of California or in the Superior or Municipal Courts of Santa Clara County, California, or in the United States District Court for the Western District of Texas, Austin Division, or the Texas State District Courts of Travis County, Texas, provided that such court has jurisdiction over the subject matter of the action. Each party agrees that each of the named courts shall have personal jurisdiction over it and consents to such jurisdiction. Supplier further agrees that venue of any suit arising out of this Agreement is proper and appropriate in any of the courts identified above; Supplier consents to such venue therein as Buyer selects and to any transfer of venue that Buyer may seek to any of such courts, without respect to the initial forum.

With respect to transactions to which the1980 United Nations Convention of Contracts for the International Sale of Goods would otherwise apply, the rights and obligations of the parties under the Agreement, including these terms and conditions, shall not be governed by the provisions of the 1980 United Nations Convention of Contracts for the International Sale of Goods; instead, applicable laws of the State of California, including the Uniform Commercial Code as adopted therein (but exclusive of such 1980 United Nations Convention) shall govern.

12. Notice of Labor Disputes

Whenever an actual or potential labor dispute, or any government embargoes, regulatory or tribunal proceedings relating thereto is delaying or threatens to delay the timely performance of this Agreement, Supplier will immediately notify Buyer of such dispute and furnish all relevant details regardless of whether

Page 4 Advanced Energy ____; Applied _____ Date:_____

said dispute arose directly, or indirectly, as a result of an actual or potential dispute within the Supplier's subtier supply base or its own operations.

13. Taxes

Unless otherwise specified, the agreed prices include all applicable federal, state, and local taxes. All such taxes shall be stated separately on Supplier's invoice.

14. Responsibility for Goods; Risk of Loss

Notwithstanding any prior inspections, Supplier shall bear all risks of loss, damage, or destruction to the Items called for hereunder until final acceptance by Buyer at Buyer's facility(s) delivery destination specified in the Agreement, which risk of loss shall not be altered by statement of any at F.O.B. point herein. These Supplier responsibilities remain with respect to any Items rejected by Buyer provided, however, that in either case, Buyer shall be responsible for any loss occasioned by the gross negligence of its employees acting within the scope of their employment. Items are not accepted by reason of any preliminary inspection or test, at any location.

15. Insurance

A. Supplier shall maintain (i) comprehensive general liability insurance covering bodily injury, property damage, contractual liability, products liability and completed operations, (ii) Worker's Compensation and employer's liability insurance, and (iii) auto insurance, in such amounts as are necessary to insure against the risks to Supplier's operations.

B. Minimally, Supplier will obtain and keep in force, insurance of the types and in the amounts set forth below:

Insurance                          Minimum Limits of Liability
---------                          ---------------------------
Worker's Compensation              Statutory
Employer's Liability               $1,000,000
Automobile Liability               $1,000,000 per occurrence
Comprehensive General Liability    $1,000,000 per occurrence
(including Products Liability)
Umbrella/Excess Liability          $1,000,000 per occurrence

All policies must be primary and non-contributing, and shall include Buyer as an additional insured. Supplier also waives all rights of subrogation. Supplier will also require and verify that each of its subcontractors carry at least the same insurance coverage and minimum limits or insurance as Supplier carries under this Agreement. Supplier shall notify Buyer at least thirty (30) days prior to the cancellation of or implementation of any material change in the foregoing policy coverage that would affect the Buyer's interests. Upon request, Supplier shall furnish to Buyer as evidence of insurance a certificate of insurance stating that the coverage would not be canceled or materially altered without thirty (30) days prior notice to the Buyer.

16. Change of Control

Supplier will notify Buyer immediately of any change of control or change (including any change in person or persons with power to direct or cause the direction of management or policies of Seller) or any change (10% or more) in the ownership of Supplier, or of any materially adverse change in Supplier's financial condition or in the operation of Supplier's business, including, but not limited to, Supplier's net worth, assets, production capacity, properties, obligations or liabilities (fixed or contingent) (collectively, a "change of control").
Notwithstanding any other rights Buyer may have under this Agreement, upon a change of control, Buyer may, in its discretion, renegotiate or terminate for convenience this Agreement.

Page 5 Advanced Energy ____; Applied _____ Date:_____

17. Assignments

A. No right or obligation under this Agreement shall be assigned by Supplier without the prior written consent of Buyer, and any purported assignment without such consent shall be void.

B. Buyer may assign this Agreement in whole or part at any time if such assignment is considered necessary by Buyer in connection with a sale of Buyer's assets, or a transfer of any of its contracts or obligations under such contracts, or a transfer to a third party of manufacturing activities previously conducted by Buyer.

18. Gratuities

Supplier warrants that it has not offered or given and will not offer or give any gratuity to induce this or any other agreement. Upon Buyer's written request, an officer of Supplier shall certify in writing that Supplier has complied with and continues to comply with this Section. Any breach of this warranty shall be a material breach of each and every agreement and contract between Buyer and Supplier.

19. Insolvency

The insolvency of Supplier, the filing of a voluntary or involuntary petition for relief by or against Supplier under any bankruptcy, insolvency or like law, or the making of an assignment for the benefit of creditors, by Supplier, shall be a material breach hereof and default.

20. Waiver

In the event Buyer fails to insist on performance of any of the terms and conditions, or fails to exercise any of its rights or privileges hereunder, such failure shall not constitute a waiver of such terms, conditions, rights or privileges.

21. Disclaimer and Limitation of Liability

In no event shall Buyer be liable for any special, indirect, incidental, consequential, or contingent damages (the foregoing being collectively called "Damages"), whether or not Buyer has been advised of the possibility of such damages, for any reason. Buyer excludes and Supplier waives any liability of Buyer for any "Damages", as so defined.

22. Indemnity by Supplier

Supplier shall defend, indemnify and hold harmless Buyer from and against, and shall solely and exclusively bear and pay, any and all claims, suits, losses, penalties, damages (whether actual, punitive, consequential or otherwise) and all liabilities and the associated costs and expenses (including attorney's feesexpert's fees, and costs of investigation (all of the foregoing being collectively called "Indemnified Liabilities"), caused in whole or in part by Supplier's breach of any term or provision of this Agreement, or in whole or in any part by any negligent, grossly negligent or intentional acts, errors or omissions by Supplier, its employees, officers, agents or representatives in the performance of this Agreement or that are for, that are in the nature of, or that arise under, strict liability or products liability with respect to or in connection with the Items. The indemnity by Supplier in favor of Buyer shall extend to Buyer, its officers, directors, agents, and representatives and shall include and is intended to include Indemnified Liabilities which arise from or are caused by, in whole or in part, the concurrent negligence, including negligence or gross negligence of Buyer or any person entitled to the benefit of this indemnity or any other person. The indemnity of Supplier shall not extend to liabilities and damages that are caused by the sole negligence of Buyer.

23.  Force Majeure

Page 6                           Advanced Energy ____; Applied _____
                                                          Date:_____

A failure by either party to perform due to causes beyond the control and without the fault or negligence of the party is deemed excusable during the period in which the cause of the failure persists. Such causes may include, but not be limited to, acts of God or the public enemy, acts of the Government in either sovereign or contractual capacity, fires, floods, epidemics, strikes, freight embargoes and unusually severe weather. If the failure to perform is caused by the default of a subcontractor, and such default arises out of causes beyond the control of both the Supplier and subcontractor, and without the fault or negligence of either of them, the Supplier will not be liable for any excess cost for failure to perform, unless the supplies or services to be furnished by the subcontractor were obtainable from other sources in sufficient time to permit the Supplier to meet the required delivery releases. When Supplier becomes aware of any potential force majeure condition as described in this Agreement, Supplier shall immediately notify Buyer of the condition and provide relevant details.

24. Changes

Buyer may at anytime, by a written order and without notice to sureties or assignees, suspend performance hereunder, increase or decrease the Agreement quantities, or make changes within the general scope of this Agreement in any one or more of the following:

(a) applicable drawings, designs, or specification;
(b) method of shipment or packing, and/or;
(c) place and date of delivery;
(d) place and date of inspection or acceptance.

If any such change causes an increase or decrease in the cost of or time required for performance of the Agreement, an equitable adjustment shall be made in the Agreement price or delivery schedule, or both, and the Agreement shall be modified in writing accordingly. No claim by Supplier for adjustment hereunder shall be valid unless asserted within thirty (30) days from the date of receipt by Supplier of the notification of change, provided, however, that such period may be extended upon the written approval of Buyer. However, nothing in this clause shall excuse Supplier from proceeding with the Agreement as changed or amended.

25. Termination for Default

(a) Buyer may, by notice, terminate this Agreement in whole or in part
(i) if Supplier fails to deliver goods or services on agreed delivery schedules or any installments thereof strictly within the time specified; (ii) if Supplier fails to replace or correct defective goods or services; (iii) if Supplier fails to comply strictly with any provision of, or repudiates this agreement, or
(iv) Supplier defaults under, or any event or condition stated to be a default occurs under, any provision of the Agreement, including these Applied Materials Standard Terms and Conditions of Purchase.

(b) In the event of termination pursuant to this Section:

(i) Supplier shall continue to supply any portion of the Items contracted for under this Agreement that are not terminated;

(ii) Supplier shall be liable for additional costs, if any, for the purchase of such similar goods and services to cover such default;

(iii) At Buyer's request Supplier will transfer title and deliver to Buyer (1) any completed goods, (2) any partially completed goods and (3) all unique materials. Prices for partially completed goods and unique materials so accepted shall be negotiated. However, such prices shall not exceed the Agreement price per item.

(c) Buyer's rights and remedies herein or otherwise stated in this Agreement, any Purchase Order, Comprehensive Supplier Agreement or Basic Supplier Agreement are in addition to and shall not limit or preclude resort to any other rights and remedies provided by law or in equity. Termination under this Agreement shall constitute "cancellation" under the Uniform Commercial Code.

Page 7 Advanced Energy ____; Applied _____ Date:_____

26. Termination for convenience

(a) Buyer may terminate, for convenience, work under this Agreement in whole or in part, at any time by written or electronic notice. Upon any such termination Supplier shall, to the extent and at the time specified by Buyer, stop all work on this Agreement, place no further orders hereunder, terminate work outstanding hereunder, assign to Buyer all Supplier's interests under terminated sub-contracts and Agreements, settle all claims thereunder after obtaining Buyer's approval, protect all property in which Buyer has or may acquire an interest, and transfer title and make delivery to Buyer of all Items, materials, work in process, or other things held or acquired by Supplier in connection with the terminated portion of this Agreement. Supplier shall proceed promptly to comply with Buyer's directions respecting each of the foregoing without awaiting settlement or payment of its termination claim.

(b) Within six (6) months from such termination, Supplier may submit to Buyer its written claim for termination charges, in the form and with supporting data and detail prescribed by Buyer. Failure to submit such claim within the prescribed time frame and with such items shall constitute a waiver of all claims and a release of all Buyer's liability arising out of such termination.

(c) The parties may agree upon the amount to be paid Supplier for such termination. If they fail to agree, Buyer shall pay Supplier the amount due for Items delivered prior to termination and in addition thereto but without duplication, shall pay the following amounts:

(i) The contract price for all Items completed in accordance with this Agreement and not previously paid for;

(ii) The actual costs for work in process incurred by Supplier which are properly allocable or apportionable under Generally Accepted Accounting Principles (GAAP) to the terminated portion of this Agreement and a sum constituting a fair and reasonable profit on such costs. The Supplier agrees to keep true, complete, and accurate records in compliance with GAAP for the purpose of determining allocability of Suppliers costs under this agreement. Such records shall contain sufficient detail to permit a determination of the accuracy of the costs; Independent nationally recognized accountants (the "Auditor") designated by Buyer and reasonably acceptable to Supplier shall have the right, at Buyer's expense and upon reasonable notice, to conduct audits of all of the relevant books and records of Supplier in order to determine the accuracy and allocability of costs submitted by Supplier to Buyer under this provision.

(iii) The reasonable costs of Supplier in making settlement hereunder and in protecting Items to which Buyer has or may acquire an interest.

(d) Payments made under subparagraphs (c)(i) and (c)(ii) shall not exceed the aggregate price specified in this Agreement, less payment otherwise made or to be made. Buyer shall have no obligation to pay for Items lost, damaged, stolen or destroyed prior to delivery to Buyer.

(e) The foregoing paragraphs (a) to (d) inclusive, shall be applicable only to a termination for Buyer's convenience and shall not affect or impair any right of Buyer to terminate this Agreement for Supplier's default in the performance hereof.

Page 8 Advanced Energy ____; Applied _____ Date:_____

---------------------------------------------------------------------------------------------------------------
 ITEM    AMAT    DESCRIPTION    MODEL   CURRENT    NEG. 2%   ADDITIONAL    VAE 98    TOTAL HOSHIN EST. % SVGS
         PART                           STD PRICE  TOTALS >> NEGOTIATED               PRICE 1998    [* * *]
        NUMBER
---------------------------------------------------------------------------------------------------------------
  1    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
  2    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
  3    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
  4    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
  5    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
  6    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
  7    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
  8    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
  9    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 10    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 11    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 12    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 13    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 14    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 15    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 16    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 17    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 18    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 19    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 20    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 21    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 22    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 23    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 24    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 25    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]


--------------------------------------------------------
 ITEM   EAU '98  CURRENT EXT.     EXT. STD    $$ SAVINGS
                     STD.       1998 CONTRACT [ * * * ]
                     1998         [ * * * ]
                    [* * *]
--------------------------------------------------------
  1    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
  2    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
  3    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
  4    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
  5    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
  6    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
  7    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
  8    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
  9    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 10    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 11    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 12    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 13    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 14    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 15    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 16    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 17    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 18    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 19    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 20    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 21    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 22    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 23    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 24    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 25    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]

---------------------------------------------------------------------------------------------------------------
 ITEM    AMAT    DESCRIPTION    MODEL   CURRENT    NEG. 2%   ADDITIONAL    VAE 98    TOTAL HOSHIN EST. % SVGS
         PART                           STD PRICE  TOTALS >> NEGOTIATED               PRICE 1998    [* * *]
        NUMBER
---------------------------------------------------------------------------------------------------------------
 26    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 27    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 28    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 29    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 30    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 31    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 32    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 33    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 34    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 35    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 36    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 37    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 38    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]
 39    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]


--------------------------------------------------------
 ITEM   EAU '98  CURRENT EXT.     EXT. STD    $$ SAVINGS
                     STD.       1998 CONTRACT [ * * * ]
                     1998         [ * * * ]
                    [* * *]
--------------------------------------------------------
 26    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 27    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 28    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 29    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 30    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 31    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 32    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 33    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 34    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 35    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 36    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 37    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 38    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]
 39    [ * * * ]   [ * * * ]      [ * * * ]   [ * * * ]

NOTES:

1. 1998 EAUs are from Applied Internal Website dated 4/28/98
2. [ * * * ] are expected to transition to P/N [ * * * ]

--------------------------------------------------------------------------------------
 ITEM    AMAT    DESCRIPTION    MODEL     1998      NEG. %     VAE 99   TOTAL HOSHIN
         PART                             STD      TOTALS >>             PRICE 1999
        NUMBER                            PRICE
--------------------------------------------------------------------------------------
  1    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  2    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  3    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  4    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  5    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  6    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  7    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  8    [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  9    [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  10   [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  11   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  12   [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  13   [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  14   [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  15   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  16   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  17   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  18   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  19   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  20   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  21   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  22   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  23   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  24   [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  25   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]


-------------------------------------------------------------------
 ITEM  EST. % SVGS  EAU '99   EXT. STD. 1999 EXT. 1999   $$ SAVINGS
        [ * * * ]               [ * * * ]    CONTRACT    [ * * * ]
                                               PRICE
                                             [ * * * ]
-------------------------------------------------------------------
  1     [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  2     [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  3     [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  4     [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  5     [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  6     [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  7     [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  8     [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  9     [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  10    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  11    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  12    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  13    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  14    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  15    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  16    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  17    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  18    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  19    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  20    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  21    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  22    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  23    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  24    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  25    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]

--------------------------------------------------------------------------------------
 ITEM    AMAT    DESCRIPTION    MODEL     1998      NEG. %     VAE 99   TOTAL HOSHIN
         PART                             STD      TOTALS >>             PRICE 1999
        NUMBER                            PRICE
--------------------------------------------------------------------------------------
  26   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  27   [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  28   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  29   [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  30   [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  31   [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  32   [ * * * ]  [ * * * ]   [ * * * ]
  33   [ * * * ]  [ * * * ]   [ * * * ]
  34   [ * * * ]  [ * * * ]   [ * * * ]
  35   [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  36   [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  37   [ * * * ]  [ * * * ]             [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  38   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]
  39   [ * * * ]  [ * * * ]   [ * * * ] [ * * * ]  [ * * * ]  [ * * * ]  [ * * * ]


-------------------------------------------------------------------
 ITEM  EST. % SVGS  EAU '99   EXT. STD. 1999 EXT. 1999   $$ SAVINGS
        [ * * * ]               [ * * * ]    CONTRACT    [ * * * ]
                                               PRICE
                                             [ * * * ]
-------------------------------------------------------------------
  26    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  27    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  28    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  29    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  30    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  31    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  32
  33
  34
  35    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  36    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  37    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  38    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]
  39    [ * * * ]  [ * * * ]    [ * * * ]    [ * * * ]   [ * * * ]

NOTES:

1. 1999 EAUs are from original estimates 11/25/97
2. [ * * * ] are expected to become obsolete
3. The [ * * * ] PROJECT will combine P/Ns [ * * * ], into ONE part. The combined price of [ * * * ] will drop to [ * * * ]
4. EAUs for P/Ns [ * * * ] have been adjusted down by [ * * * ] with the anticipation of the transition to [ * * * ].
5. EAUs for [ * * * ] P/N is calculated off of [ * * * ] Usage and represent [ * * * ] of [ * * * ] demand
6. EAUs for PVD are best estimates

------------------------------------------------------------------------------------------------------
 ITEM    AMAT    DESCRIPTION    MODEL       1999        NEG. %     VAE 99   TOTAL HOSHIN  EST. % SVGS
         PART                                STD       TOTALS >>             PRICE 1999    [ * * * ]
        NUMBER                              PRICE
------------------------------------------------------------------------------------------------------
  1    [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  2    [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  3    [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  4    [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  5    [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  6    [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  7    [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  8    [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  9    [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  10   [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  11   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  12   [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  13   [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  14   [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  15   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  16   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  17   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  18   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  19   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  20   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  21   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  22   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  23   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  24   [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  25   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  26   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]


------------------------------------------------------
 ITEM   EAU '00  EXT. STD. 2000  EXT. 2000  $$ SAVINGS
                   [ * * * ]     CONTRACT   [ * * * ]
                                   PRICE
                                 [ * * * ]
------------------------------------------------------
  1    [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  2    [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  3    [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  4    [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  5    [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  6    [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  7    [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  8    [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  9    [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  10   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  11   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  12   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  13   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  14   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  15   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  16   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  17   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  18   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  19   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  20   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  21   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  22   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  23   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  24   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  25   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  26   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]

------------------------------------------------------------------------------------------------------
 ITEM    AMAT    DESCRIPTION    MODEL       1999        NEG. %     VAE 99   TOTAL HOSHIN  EST. % SVGS
         PART                                STD       TOTALS >>             PRICE 1999    [ * * * ]
        NUMBER                              PRICE
------------------------------------------------------------------------------------------------------
  27   [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  28   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  29   [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  30   [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  31   [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  32   [ * * * ]  [ * * * ]   [ * * * ]
  33   [ * * * ]  [ * * * ]   [ * * * ]
  34   [ * * * ]  [ * * * ]   [ * * * ]
  35   [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  36   [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  37   [ * * * ]  [ * * * ]               [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  38   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]
  39   [ * * * ]  [ * * * ]   [ * * * ]   [ * * * ]    [ * * * ]  [ * * * ]  [ * * * ]     [ * * * ]


------------------------------------------------------
 ITEM   EAU '00  EXT. STD. 2000  EXT. 2000  $$ SAVINGS
                   [ * * * ]     CONTRACT   [ * * * ]
                                   PRICE
                                 [ * * * ]
------------------------------------------------------
  27   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  28   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  29   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  30   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  31   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  32
  33
  34               [ * * * ]     [ * * * ]  [ * * * ]
  35   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  36   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  37   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  38   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]
  39   [ * * * ]   [ * * * ]     [ * * * ]  [ * * * ]

NOTES:

1. 2000 EAUs are based on an expected [ * * * ] increase on top of 1999 usage
2. [ * * * ] will remain obsolete
3. The [ * * * ] PROJECT will combine P/Ns [ * * * ] into ONE part. The combined price of [ * * * ] will drop to [ * * * ]
4. EAUs for P/Ns [ * * * ] have been adjusted down by [ * * * ] with the anticipation of the transition to [* * *]
5. EAUs for [ * * * ] P/N is calculated off of [ * * * ] Usage and represent [ * * * ] of [ * * * ] demand.
6. EAUs for PVD are best estimates

---------------------------------------------------------------------------------------------------------------
 ITEM  AMAT PART  DESCRIPTION  UNIT PRICE 1998 UNIT PRICE 1999 UNIT PRICE 2000    UNIT    LEAD TIME  WARRANTY
         NUMBER                                                                                       MONTHS
---------------------------------------------------------------------------------------------------------------
  1    [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  2    [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  3    [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  4    [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  5    [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  6    [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  7    [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  8    [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  9    [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  10   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  11   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  12   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  13   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  14   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  15   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  16   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  17   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  18   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  19   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  20   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  21   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  22   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  23   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  24   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  25   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  26   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]


----------------------------------------------------
 ITEM   MAX LIABILITY  EAU '98    EAU '99   EAU '00
          [ * * * ]
----------------------------------------------------
  1       [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  2       [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  3       [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  4       [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  5       [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  6       [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  7       [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  8       [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  9       [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  10      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  11      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  12      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  13      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  14      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  15      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  16      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  17      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  18      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  19      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  20      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  21      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  22      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  23      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  24      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  25      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  26      [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]

---------------------------------------------------------------------------------------------------------------
 ITEM  AMAT PART  DESCRIPTION  UNIT PRICE 1998 UNIT PRICE 1999 UNIT PRICE 2000    UNIT    LEAD TIME  WARRANTY
         NUMBER                                                                                       MONTHS
---------------------------------------------------------------------------------------------------------------
  27   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  28   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  29   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  30   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  31   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  32   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  33   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  34   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  35   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  36   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  37   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  38   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]
  39   [ * * * ]   [ * * * ]      [ * * * ]       [ * * * ]       [ * * * ]     [ * * * ] [ * * * ]  [ * * * ]


----------------------------------------------------
 ITEM   MAX LIABILITY  EAU '98    EAU '99   EAU '00
          [ * * * ]
----------------------------------------------------
  27     [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  28     [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  29     [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  30     [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  31     [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  32     [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  33     [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  34     [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  35     [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  36     [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  37     [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  38     [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]
  39     [ * * * ]   [ * * * ]  [ * * * ] [ * * * ]

NOTES:

1. EAUs (Estimated Annual Usages) are ESTIMATES ONLY, based on Applied's Forecast
2. 1998 EAUs are from Applied Internal Website dated 4/28/98
3. 1999 EAUs are from original estimates 11/25/97
4. 2000 EAUs are based on an expected [ * * * ] increase
5. Exhibit 2: HOSHIN PLAN, itemizes reduced pricing by part for VAE Projects
6. 1999 Pricing is effective 1/1/99

Standard Industrial Lease Agreement
Cross Creek Business Center Lease Form (4/6/98)

LEASE AGREEMENT

THIS LEASE AGREEMENT is made and entered into by and between CROSS PARK INVESTORS, LTD., hereinafter referred to as "Landlord", and ADVANCED ENERGY INDUSTRIES, INC., hereinafter referred to as "Tenant".

1. PREMISES AND TERM. In consideration of the mutual obligations of Landlord and Tenant set forth herein, Landlord leases to Tenant and Tenant hereby takes from Landlord, certain leased premises situated within the County of Travis, State of Texas, and known locally as SUITE 400, CROSS CREEK BUSINESS CENTER, LOCATED AT 8601 CROSS PARK DRIVE AND CONSISTING OF APPROXIMATELY 6,812 SQUARE FEET OF RENTABLE AREA AS MEASURED TO THE BUILDING'S DRIP LINE and as more particularly described on EXHIBIT "A" attached hereto and incorporated herein by reference (THE "PREMISES"), to have and to hold, subject to the term, covenants and conditions in this Lease. The term of this Lease shall commence on the COMMENCEMENT DATE as hereinafter set forth and shall end on the last day of the month that is TWELVE (12) months after the Commencement Date.

A. EXISTING BUILDING AND IMPROVEMENTS. The "Commencement Date" shall be JUNE 1, 1998 or the date Fisher-Rosemount Systems, Inc. has vacated the Premises and Tenant has begun to occupy the Premises, whichever should occur earliest. Tenant acknowledges that (i) it has inspected and accepts the Premises in its "as is" condition, (ii) the buildings and improvements comprising the same are suitable for the purpose for which the Premises are leased, (iii) the Premises are in good and satisfactory condition and (iv) no representations as to the repair of the Premises, nor promises to alter, remodel or improve the Premises have been made by Landlord (unless otherwise expressly set forth in this Lease).

2. BASE RENT, SECURITY DEPOSIT AND ESCROW DEPOSITS.

A. BASE RENT. Tenant agrees to pay to Landlord rent for the Premises in advance, without demand, deduction or set off, at the rate of:

MONTHS 1 THROUGH 12: FOUR THOUSAND FOUR HUNDRED TWENTY-SEVEN DOLLARS

AND 80/XX ($4,427.80) PER MONTH,

during the term hereof. One monthly installment of Base Rentt and other monthly charges set forth in Paragraph 2C below, shall be due and payable on the date hereof, and a like monthly installment shall be due and payable on or before the first day of each calendar month succeeding the Commencement Date, except that all payments due thereunder for any fractional calendar month shall be prorated.

B. SECURITY DEPOSIT. In addition, Tenant agrees to deposit with Landlord on the date hereof the sum of FIVE THOUSAND SEVEN HUNDRED AND NINETY DOLLARS AND 20/XX ($5,790.20) which shall be held by Landlord, without obligation for interest, as security for the performance of Tenant's obligations under this Lease (the "Security Deposit"), it being expressly understood and agreed that the Security Deposit is not an advance rental deposit or a measure of Landlord's damages in case of Tenant's default. Upon occurrence of an Event of Default, Landlord may use all or part of the Security Deposit to pay past due rent or other payments due Landlord under this Lease, or the cost of any other damage, injury, expense or liability caused by such Event of Default, without prejudice to any other remedy provided herein or provided by law. On demand, Tenant shall pay Landlord the amount that will restore the Security Deposit to its original amount. The Security Deposit shall be deemed the property of Tenant and any remaining balance of the Security Deposit shall be returned by Landlord to Tenant when all of Tenant's present and future obligations under this Lease have been fulfilled.

C. ESCROW DEPOSITS. Without limiting in any way Tenant's other obligations under this Lease, Tenant agrees to pay to Landlord its Proportionate Share (as defined in this Paragraph 2C below) of (i) Taxes * payable by Landlord pursuant to Paragraph 3A below, (ii) the cost of utilities payable by Landlord pursuant to Paragraph 8 below, (iii) Landlord's cost of maintaining insurance pursuant to Paragraph 9A below and (iv) Landlord's cost of maintaining any common area charges payable by Tenant in accordance with Paragraph 4B below (collectively, the "Tenant Costs"). During each month of the term of this Lease, on the same day that rent is due hereunder, Tenant shall deposit in escrow with Landlord an amount equal to 1/12 of the estimated annual amount of Tenant's Proportionate Share of the Tenant Costs. Tenant authorizes Landlord to use the funds deposited with Landlord under this Paragraph 2C to pay such Tenant Costs. The initial monthly escrow payments are based upon the estimated amounts for the year in which the Commencement Date occurs, and shall be increased or decreased annually to reflect the projected actual amount of all Tenant Costs. If the Tenant's total escrow deposits for any calendar year are less than Tenant's actual Proportionate Share of the Tenant Costs for such calendar year, Tenant shall pay the difference to Landlord within thirty (30) days after demand. If the total escrow deposits of Tenant for any calendar year are more than Tenant's actual Proportionate Share of the Tenant Costs for such calendar year, Landlord shall retain such excess and credit it against Tenant's escrow deposits next maturing after such determination. In the event the Premises constitute a portion of a multiple occupancy building (the "Building"), Tenant's "Proportionate Share" with respect to the Building, as used in this Lease, shall mean a fraction, the numerator of which is the net rentable area contained in the Premises and the denominator of which is the net rentable area contained in the entire Building. In the event the Premises or the Building is part of a project or business park owned, managed or leased by Landlord, or an affiliate of Landlord (the "Project"), Tenant's "Proportionate Share" of the Project, as used in this Lease shall mean a fraction, the numerator of which is the net rentable area contained in the Premises and the denominator of which is the net rentable area contained in all of the buildings (including the Building) within the Project. For the purposes of this Lease, Tenant's proportionate share shall be defined as ELEVEN AND TWO TENTHS PERCENT (11.2%).

3. TAXES.

A. REAL PROPERTY TAXES. Subject to reimbursement under Paragraph 2C herein, Landlord agrees to pay all Taxes* that accrue against the Premises, the Building and /or the land of which the Premises or the Building are a part. If at any time during the term of this Lease, there shall be levied, assessed or imposed on Landlord a capital levy or other tax directly on the rents received therefrom and /or the land and improvements of which the Premises are a part, then all such taxes, assessments, levies or charges, or the part thereof so measured or based, shall be deemed to be included within the term "Taxes" for the purpose hereof. The Landlord shall have the right to employ a tax consulting firm to attempt to assure a fair tax burden on the real property within the applicable taxing jurisdiction. Tenant agrees to pay its Proportionate Share of the cost of such consultant.

B. PERSONAL PROPERTY TAXES. Tenant shall be liable for all taxes levied or assessed against any personal property or fixtures placed in or on the Premises. If any such taxes are levied or assessed against Landlord or Landlord's property (i) Landlord pays the same or (ii) the assessed value of Landlord's property is increased by inclusion of such personal property and fixtures and Landlord pays the increased taxes, then Tenant shall pay to Landlord, upon demand, the amount of such taxes.

4. LANDLORD'S REPAIRS AND MAINTENANCE.

A. STRUCTURAL REPAIRS. Landlord, at its own cost and expense, shall maintain the roof, foundation and the structural soundness of the exterior walls of the Building in good repair, reasonable wear and tear excluded. The term "walls" as used herein shall not include windows, glass, or plate glass, any doors, special store fronts or office entries, and the term "foundation" as used herein shall not include loading docks. Tenant shall immediately give Landlord written notice of defect or need for repairs, after which Landlord shall have thirty (30) days to commence to effect such repairs or cure such defect. In the event a defect occurs that seriously jeopardizes the safety of persons occupying the Premises or threatens equipment or machinery owned by Tenant within the Premises, and Landlord has failed to commence the repairs for such defect within the thirty (30) day period outlined above, Tenant shall be permitted to initiate the repair and Landlord will be obligated to reimburse Tenant for the actual cost of the repair.

B. TENANT'S SHARE OF COMMON AREA CHARGES. Tenant agrees to pay its Proportionate Share of the cost of (i) maintenance and/or landscaping (including both maintenance and replacement of landscaping) of any property that is a part of the Building and/or the Project; and (ii) operating, maintaining and repairing any property, facilities or services (including without limitation utilities and insurance therefor) provided for the

*For purposes of this Lease, "Taxes" means all taxes, assessments and governmental charges (excluding any federal and state income taxes, franchise taxes, profit taxes and lease taxes, so long as such federal and state income taxes, franchise taxes, profit taxes or lease taxes are not assessed in lieu of some or all of the customary ad valorem taxes being assessed against the Project as of the date of this Lease).

C. REASSESSMENTS. At the reasonable request of Tenant, Landlord shall vigorously challenge any increases in Taxes, arising from a reassessment of Landlord's property or otherwise.

Landlord's Initials _____

Tenant's Initials _____

use or benefit of Tenant or the common use or benefit of Tenant and other lessees of the Project or the Building; and (iii) the reasonable cost of property management and supervision which shall be at rates customary of the property type and market conditions.

Landlord reserves the right to perform, in whole or in part and without notice to Tenant, maintenance, repairs and replacements to the paving, common area landscape replacement and maintenance, exterior painting, common sewage line plumbing and any other items that are provided for the use or benefit of Tenant or the common use or benefit of Tenant and other lessees of the Project or the Building; in which event, Tenant shall be liable for its Proportionate Share of the cost and expense of such repair, replacement, maintenance and other such items.

5. TENANT'S REPAIRS.

A. MAINTENANCE OF PREMISES AND APPURTENANCES. Tenant at its own cost and expense, shall (i) maintain all parts of the Premises and promptly make all necessary repairs and replacements to the Premises (except those for which Landlord is expressly responsible hereunder), and (ii) keep the parking areas, driveways and alleys surrounding the Premises in a clean and sanitary condition. Tenant's obligation to maintain, repair and make replacements to the Premises shall cover, but not be limited to, pest control (including termites), trash removal and the maintenance repair and replacement of all HVAC, electrical, plumbing, sprinkler and other mechanical systems. For the purposes of this Lease, Landlord shall assign all warranties received from the general contractor who constructs the Tenant Improvements within the Premises and Tenant shall look to the general contractor for warranty on all repairs and replacements required within the Premises.

B. PARKING. Tenant and its employees, customers and licensees shall have the right to use only its Proportionate share of any parking areas that have been designated for such use by Landlord in writing, subject to (i) all rules and regulations promulgated by Landlord; and (ii) rights of ingress and egress of other lessees. Landlord shall not be responsible for enforcing Tenant's parking rights against any third parties, and Tenant expressly does not have the right to tow or obstruct improperly parked vehicles. Tenant agrees not to park on any public streets or private roadways adjacent to or in the vicinity of the Premises. For the purposes of this Lease, Tenant shall be allotted twenty-five (25) parking spaces.

C. SYSTEM MAINTENANCE. Tenant at its own cost and expense, shall enter into a regularly scheduled preventative maintenance/service contract with a maintenance contractor approved by Landlord for servicing all hot water, heating and air conditioning systems and equipment within the Premises. The service contract must include all services suggested by the equipment manufacturer in its operations/maintenance manual and must become effective within thirty (30) days of the date Tenant takes possession of the Premises. In the event of a failure to the heating and air conditioning system, Tenant shall be obligated to pay the first two thousand dollars ($2,000.00) towards any repair or replacement (per occurrence) of the heating and air conditioning system. In the event the repair or replacement cost (per occurrence) exceeds two thousand dollars ($2,000.00), Landlord and Tenant shall share the cost equally for the repair or replacement.

6. ALTERATIONS. Tenant shall not make any alterations, additions or improvements to the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. Tenant, at its own cost and expense, may erect such shelves, bins, machinery and trade fixtures as it desires, provided that (a) such items do not alter the basic character of the Premises or the Building; (b) such items do not overload or damage same; (c) such items may be removed without injury to the Premises; and (d) the construction, erection or installation thereof complies with all applicable governmental laws ordinances, regulations and with Landlord's specifications and requirements. Tenant shall be responsible for compliance with The American With Disabilities Act of 1990. Without implying any consent of Landlord thereto, all alterations, additions, improvements and partitions erected by Tenant shall be remain the property of Tenant during the term of this Lease. All shelves, bins machinery and trade fixtures installed by Tenant shall be removed on or before the earlier to occur of the day of termination or expiration of this Lease or vacating the Premises, at which time Tenant shall restore the Premises to their original condition, normal wear and tear excepted. Alterations, installations, removals and restorations shall be performed in a good and workmanlike manner so as not to damage or alter the primary structure or structural qualities of the Building or other improvements situated on the Premises or of which the Premises are a part.

7. SIGNS. Any signage Tenant desires for the Premises shall be subject to Landlord's written approval, which shall not be unreasonably withheld or delayed and shall be submitted to Landlord prior to the Commencement Date of this Lease. Tenant shall repair and/or replace the Building facia surface to which its signs are attached upon Tenant's vacation of the Premises or the removal or alteration of its signage. Tenant shall not, without Landlord' prior written consent, (i) make any changes to the exterior of the Premises,
(ii) install any exterior lights, decorations, balloons, flags, pennants, banners or painting, or (iii) erect or install any signs, windows or door lettering, placards, decorations or advertising media of any type which can be viewed from the exterior of the Premises. All signs, decorations, advertising media, blinds, draperies and other window treatment or bars or other security installations visible from outside the Premises shall conform in all respects to the criteria established by Landlord or shall be otherwise subject to Landlord's prior written consent. For the purposes of this Lease, Tenant shall be permitted to use its company logo and colors so long as the design, installation and location of the sign is consistent with the requirements outlined in Exhibit "E", Sign Criteria.

8. UTILITIES. Landlord agrees to provide normal water and electricity service to the Premises. Tenant shall pay for all water, gas, heat, light, power, telephone, sewer, sprinkler charges and other utilities and services used on or at the Premises, together with any taxes, penalties, surcharges or the like pertaining to the Tenant's use of the Premises, and any maintenance charges for utilities. Landlord shall have the right to cause any of said services to be separately metered to Tenant, at Tenant's expense. Tenant shall pay its pro rata share, as reasonably determined by Landlord, of all charges for jointly metered utilities. Unless resulting from Landlord's negligence or willful misconduct, Landlord shall not be liable for any interruption or failure of utility service on the Premises and Tenant shall have no rights or claims as a result of any such failure. In the event water is not separately metered to Tenant, Tenant agrees that it will not use water and sewer capacity for uses other than normal domestic restroom and kitchen usage and Tenant further agrees to reimburse Landlord for the entire amount of common water and sewer costs as additional rental if, in fact, Tenant uses water or sewer capacity for uses other than normal domestic restroom and kitchen uses without first obtaining Landlord's written permission, including, but not limited to, the cost for acquiring additional sewer capacity to service Tenant's excess sewer use. Furthermore, Tenant agrees in such event to install at its own expense a submeter to determine Tenant's usage.

9. INSURANCE.

A. LANDLORD'S INSURANCE. Subject to reimbursement under Paragraph 2C herein, Landlord shall maintain insurance covering the Building in an amount not less than eighty percent (80%) of the "replacement cost" thereof, insuring against the perils of fire, lightning, flood, tornado, hail, extended coverage, vandalism and malicious mischief.

B. TENANT'S INSURANCE. Tenant, at its own expense, shall maintain during the term of this Lease a policy or policies of worker's compensation and comprehensive general liability insurance, including personal injury and property damage, with contractual liability endorsement, in the amount of Five Hundred Thousand Dollars ($500,000.00) for property damage and One Million dollars ($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) in the aggregate for personal injuries or deaths of persons occurring in or about the Premises. Tenant, at its own expense, also shall maintain during the term of this Lease, fire and extended coverage insurance covering the replacement cost of (i) all alterations, additions, partitions and improvements installed or placed on the Premises by Tenant or by Landlord on behalf of Tenant and (ii) all of Tenant's personal property contained within the Premises. Said policies shall (i) name Landlord as an additional insured and insure Landlord's contingent liability under or in connection with this Lease (except for the worker's compensation policy, which instead shall include waiver of subrogation endorsement in favor of Landlord) (ii) be insured by an insurance company which is acceptable to Landlord, and (iii) provide that said insurance shall not be canceled unless thirty (30) days prior written notice has been given to Landlord. Said policy or policies or certificates thereof shall be delivered to Landlord by Tenant on or before the Commencement Date and upon each renewal of said insurance.

C. PROHIBITED USES. Tenant will not permit the Premises to be used for any purpose or in any manner that would (i) void the insurance thereon, (ii) increase the insurance risk or cost thereof, or (iii) cause the disallowance of any sprinkler credits; including without limitation, use of the Premises for the receipt, storage or handling of any product, material or merchandise that is explosive or highly inflammable. If any increase in the cost of any insurance on the Premises or the Building is caused by Tenant's use of the Premises, or because Tenant vacates the Premises, then Tenant shall pay the amount of such increase to Landlord within thirty (30) days of written demand therefor.

10. FIRE AND CASUALTY DAMAGE.

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A. TOTAL OR SUBSTANTIAL DAMAGE AND DESTRUCTION. If the Premises or the Building should be damaged or destroyed by fire or other peril, Tenant shall immediately give written notice to Landlord of such damage or destruction. If the Premises or the Building should be totally destroyed by any peril covered by the insurance to be provided by Landlord under Paragraph 9A above, or if they should be so damaged thereby that, in Landlord's estimation, rebuilding or repairs cannot be completed within one hundred and fifty (150) days after the date of such damage or after such completion there is not enough time remaining under the terms of this Lease to fully amortize such rebuilding or repairs, then Landlord shall so notify Tenant in writing and this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease, effective upon the date of the occurrence of such damage.

B. PARTIAL DAMAGE OR DESTRUCTION. If the Premises or the Building should be damaged by any perils covered by the insurance to be provided by Landlord under Paragraph 9A above and, in Landlord's estimation, rebuilding or repairs can be substantially completed within one hundred fifty (150) days after the date of such damage, then this Lease shall not terminate and Landlord shall restore the Premises to its previous condition, except that Landlord shall not be required to rebuild, repair or replace any part of the partitions, fixtures, additions and other improvements that may have been constructed, erected or installed in or about the Premises for the benefit of or by or for Tenant. In the event of partial damage to the Premises, rent shall abate for the period of reconstruction for the portion of the Premises that cannot be occupied due to the casualty.

C. LIENHOLDERS RIGHTS IN PROCEEDS. Notwithstanding anything herein to the contrary, in the event the holder of any indebtedness secured by a mortgagee or deed of trust covering the Premises requires that the insurance proceeds be applied to such indebtedness, then Landlord shall have the right to terminate this Lease by delivering written notice of termination to Tenant within fifteen (15) days after such requirement is made known to Landlord by any such holder, whereupon all rights and obligations hereunder shall cease and terminate.

D. WAIVER OF SUBROGATION. Notwithstanding anything in this Lease to the contrary, Landlord and Tenant hereby waive and release each other of and from any and all rights of recovery, claims, actions or causes of action against each other, or their respective agents, officers and employees, for any loss or damage that may occur to the Premises, improvements to the Building or personal property (Building contents) within the Building and/or Premises, for any reason regardless of cause or origin. Each party to this Lease agrees immediately after execution of this Lease to give written notice of the terms of the mutual waivers contained in this subparagraph to each insurance company that has issued to such party policies of fire and extended coverage insurance and, if necessary, to have the insurance policies properly endorsed to provide that the carriers of such policies waive all rights of recovery under subrogation or otherwise against the other party.

11. LIABILITY AND INDEMNIFICATION. Except for any claims, rights of recovery and causes of action that Landlord has released, Tenant shall hold Landlord harmless from and defend Landlord against any and all claims or liability for any injury or damage (i) to any person or property whatsoever occurring in, on or about the Premises or any part thereof, the Building and/or about the Premises or any part thereof, the Building and/or common areas, the use of which Tenant may have in accordance with this Lease, if (and only if) such injury or damage shall be caused in whole or in part by the act, gross neglect, fault or willful omission of any duty by Tenant, its agents, servant, employees or invitees, (ii) arising from the conduct or management of any work done by the Tenant in or about the Premises, (iii) arising from transactions of the Tenant, and (iv) all costs, counsel fees, expenses and liabilities incurred in connection with any such claim or action or proceeding brought thereon. The provisions of this Paragraph 11 shall survive the expiration or termination of this Lease. Landlord shall not be liable in any event for personal injury or loss of Tenant's property caused by fire, flood, water leaks, rain, hail, ice, snow, smoke, lightning, wind, explosion, interruption of utilities, or other occurrences unless resulting from Landlord's acts. Landlord strongly recommends that Tenant secure Tenant's own insurance, in excess of the amounts required elsewhere in this Lease, to protect against the above occurrences if Tenant desires additional coverage for such risks. Tenant shall give prompt notice to Landlord of any significant accidents involving injury to persons or property. Furthermore, Landlord shall not be responsible for lost or stolen personal property, equipment, money or jewelry from the Premises or from the public areas of the Building or the Project, or for any damages or losses caused by theft, burglary, assault, vandalism, or other crimes. Landlord strongly recommends that Tenant provide its own security systems and services and secure Tenant's own insurance in excess of the amounts required elsewhere in this Lease, to protect against the above occurrences if Tenant desires additional protection or coverage for such risks. Tenant shall give Landlord prompt notice of any criminal or suspicious conduct within or about the Premises, the Building or the Project, and/or any personal injury or property damage caused thereby. Landlord may, but is not obligated to, enter into agreements with third parties for the provision of any courtesy patrols or similar services or fire protective systems and equipment and, to the extent same is provided in Landlord's sole discretion, Landlord shall not be liable to Tenant for any damages, costs or expenses which occur for any reason in the event any such system or equipment is not properly installed, monitored or maintained or any such services are not properly provided, unless resulting from Landlord's acts. Landlord shall use reasonable diligence in the maintenance of existing lighting, if any, in the parking areas servicing the Premises, and Landlord shall not be responsible for additional lighting or any security measures in the Project, the Premises or other parking areas.

12. USE. The Premises shall be used only for the purpose of manufacturing, sales, research and development, telephone support, design, receiving, storing, shipping and selling (other than retail) products, materials and merchandise made and/or distributed by Tenant and for such other lawful purposes as may be directly incidental thereto. Outside storage, including without limitation storage of trucks and other vehicles, is prohibited without Landlord's prior written consent. Tenant shall comply with all governmental laws, ordinances and regulations applicable to the use of the Premises, and shall promptly comply with all governmental orders and directives for the correction, prevention and abatement of nuisances in or upon or connected with the Premises, all at Tenant's sole expense. Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to emanate from the Premises, nor take any other action that would constitute a nuisance or would disturb, unreasonably interfere with or endanger Landlord or any other lessees of the Building or the Project.

13. HAZARDOUS WASTE. The term "Hazardous Substances," as used in this Lease, shall mean pollutants, contaminants, toxic or hazardous wastes, radioactive materials or any other substances, the use and/or the removal of which is required or the use of which is restricted, prohibited or penalized by any "Environmental Law," which term shall mean any federal, state or local statute, ordinance, regulation or other law of a governmental or quasi-governmental authority relating to pollution or protection of the environment or the regulation of the storage or handling of Hazardous Substances. Limited to its actions only, Tenant hereby agrees that: (i) no activity will be conducted on the Premises that will produce any Hazardous Substance, except for such activities that are part of the ordinary course of Tenant's business activities (the "Permitted Activities"), provided said Permitted Activities are conducted in accordance with all Environmental Laws and have been approved in advance in writing by Landlord, which approval shall not be unreasonably withheld or delayed and, in connection therewith, Tenant shall be responsible for obtaining any required permits or authorizations and paying any fees and providing any testing required by any governmental agency; (ii) the Premises will not be used in any manner for the storage of any Hazardous Substances, except for the temporary storage of such materials that are used in the ordinary course of Tenant's business (the "Permitted Materials"), provided such Permitted Materials are properly stored in a manner and location meeting all Environmental Laws and have been approved in advance in writing by Landlord, which such approval shall not be unreasonably withheld or delayed, and, in connection therewith, Tenant shall be responsible for obtaining any required permits or authorizations and paying any fees and providing any testing required by any governmental agency; (iii) no portion of the Premises will be used as a landfill or a dump; (iv) Tenant will not install any underground tanks of any type; (v) Tenant will not allow any surface or subsurface conditions to exist or come into existence that constitute, or with the passage of time may constitute, a public or private nuisance; (vi) Tenant will not permit any Hazardous Substances to be brought onto the Premises, except for the Permitted Materials, and if so brought or found located thereon, the same shall be immediately removed, with proper disposal, and all required clean-up procedures shall be diligently undertaken by Tenant at its sole cost pursuant to all Environmental Laws. Upon prior notice during normal business hours, Landlord and Landlord's representatives shall have the right but not the obligation to enter the Premises for the purpose of inspecting the storage, use and disposal of any Permitted Materials to ensure compliance with all Environmental Laws. Should it be determined, in Landlord's sole opinion, that any Permitted Materials are being improperly stored, used or disposed of, then Tenant shall immediately take such corrective action as requested by Landlord. Should Tenant fail to take such corrective action within twenty-four (24) hours, Landlord shall have the right to perform such work and Tenant shall reimburse Landlord, on demand, for any and all costs associated with said work. If at any time during or after the term of this Lease, the Premises is found to be contaminated with Hazardous Materials, Tenant shall diligently institute proper and thorough clean-up procedures, at Tenant's sole cost. TENANT AGREES TO INDEMNIFY AND HOLD LANDLORD HARMLESS FROM ALL CLAIMS, DEMANDS, ACTIONS, LIABILITIES, COSTS, EXPENSES, DAMAGES, PENALTIES AND OBLIGATIONS OF ANY NATURE ARISING FROM OR AS A RESULT OF ANY CONTAMINATION OF THE PREMISES WITH HAZARDOUS SUBSTANCES BY TENANT, OR OTHERWISE ARISING FROM THE USE OF THE PREMISES BY TENANT. THE FOREGOING INDEMNIFICATION AND THE RESPONSIBILITIES OF TENANT SHALL SURVIVE THE TERMINATION OR EXPIRATION OF THIS LEASE.

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14. INSPECTION. Landlord's agents and representatives, upon notice to Tenant, shall have the right to enter the Premises at any reasonable time during business hours (or at any time in case of emergency) (i) to inspect the Premises; (ii) to make such repairs as may be required or permitted pursuant to this Lease; and/or (iii) during the last six (6) months of the Lease term, for the purpose of showing the Premises. In addition, Landlord shall have the right to erect a suitable sign on the Premises stating the Premises are available for Lease. Tenant shall notify Landlord in writing at least thirty (30) days prior to vacating the Premises and shall arrange to meet with Landlord for a joint inspection of the Premises prior to vacating. If Tenant fails to give such notice or to arrange for such inspection, then Landlord's inspection of the Premises shall be deemed correct for the purpose of determining Tenant's responsibility for repairs and restoration of the Premises.

15. ASSIGNMENT AND SUBLETTING. Tenant shall not have the right to sublet, assign or otherwise transfer or encumber this Lease, or any interest therein, without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. Any attempted assignment, subletting, transfer of encumbrance by Tenant in violation of the terms and covenants of this paragraph shall be void. Any assignee, sublessee or transferee of Tenant's interest in this Lease (all such assignees, sublessees and transferees being hereinafter referred to as "Transferees"), by assuming Tenant's obligations hereunder, shall assume liability to Landlord for all amounts paid to persons other than Landlord by such Transferees to which Landlord is entitled or otherwise in contravention of this Paragraph 15. No assignment, subletting or other transfer, whether or not consented to by Landlord or permitted hereunder, shall relieve Tenant of its liability under this Lease. If an Event of Default occurs while the Premises or any part thereof are assigned or sublet, then Landlord, in addition to any other remedies herein provided or provided by law, may collect directly from such Transferee all rents payable to the Tenant and apply such rent against any sums due Landlord hereunder. No such collection shall be construed to constitute a novation or a release of Tenant from the further performance of Tenant's obligations hereunder. If Landlord consents to any subletting or assignment by Tenant as hereinabove provided and any category of rent subsequently received by Tenant under any such sublease is in excess of the same category of rent payable under this Lease, or any additional consideration is paid to Tenant by the assignee under any such assignment, then Landlord may, at its option, declare such excess rents under any sublease or such additional consideration for any assignment to be due and payable by Tenant to Landlord as additional rent hereunder. The following shall additionally constitute an assignment of this Lease by Tenant for the purposes of this Paragraph 15.: (i) if Tenant is a corporation, any merger, consolidation, dissolution or liquidation, or any change in ownership or power to vote of thirty percent (30%) or more of Tenant's outstanding voting stock; (ii) if Tenant is a partnership, joint venture or other entity, any liquidation, dissolution or transfer of ownership of any interests totaling thirty percent (30%) or more of the total interests in such entity; (iii) the sale, transfer, exchange, liquidation or other distribution of more than thirty percent (30%) of Tenant's assets, other than this Lease; or (iv) the mortgage, pledge, hypothecation or other encumbrance of or grant of a security interest by Tenant in this Lease, or of any of Tenant's rights hereunder. For the purposes of this Lease, the merger or sale of a division owned by Tenant shall not constitute an assignment under this Lease.

16. CONDEMNATION. If more than eighty percent (80%) of the Premises or the required parking and access related thereto, are taken for any public or quasi-public use under governmental law, ordinance or regulation, or by right of eminent domain or private purchase in lieu thereof, and the taking prevents or materially interferes with the use of the remainder of the Premises for the purpose for which they were leased to Tenant, then this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease, effective on the date of such taking. If less than eighty percent (80%) of the Premises are taken for any public or quasi-public use under any governmental law, ordinance or regulation, or by right of eminent domain or private purchase in lieu thereof, or if the taking does not prevent or materially interfere with the use of the remainder of the Premises, parking, access and loading for the purpose for which they were leased to Tenant, then this Lease shall not terminate, but the rent payable hereunder during the unexpired portion of this Lease shall be reduced to such extent as may be fair and reasonable under all of the circumstances. All compensation awarded in connection with or as a result of any of the foregoing proceedings shall be the property of Landlord, and Tenant hereby assigns any interest in any such award to Landlord: provided, however, Landlord shall have no interest in any award made to Tenant for loss of business or goodwill or for the taking of Tenant's trade fixtures and personal property, if a separate award for such items is made to Tenant.

17. HOLDING OVER. At the termination of this Lease by its expiration or otherwise, Tenant shall immediately deliver possession of the Premises to Landlord with all repairs and maintenance required herein to be performed by Tenant completed. If, for any reason, Tenant retains possession of the Premises after the expiration or termination of this Lease, unless the parties hereto otherwise agree in writing, such possession shall be deemed to be a tenancy at will only, and all other terms and provisions of this Lease shall be applicable during such period, except that Tenant shall pay Landlord from time to time, upon demand, as rental for the period of such possession, an amount equal to one and one-half times the rent in effect on the date of such termination of this Lease, computed on a daily basis for each day of such period. No holding over by Tenant, whether with or without consent of Landlord, shall operate to extend this Lease except as otherwise expressly provided. The preceding provisions of this Paragraph 17 shall not be construed as consent for Tenant to retain possession of the Premises in the absence of written consent thereto by Landlord.

18. QUIET ENJOYMENT. Landlord represents that it has the authority to enter into this Lease and that, so long as Tenant pays all amounts due hereunder and performs all other covenants and agreements herein set forth, Tenant shall peaceably and quietly have, hold and enjoy the Premises for the term hereof without hindrance or molestation from Landlord, subject to the terms and provisions of this Lease.

19. EVENTS OF DEFAULT. The following events (herein individually referred to as an "Event of Default") each shall be deemed to be default in or breach of Tenant's obligations under this Lease:

A. Tenant shall fail to pay any installment of the rent herein reserved when due, or any other payment or reimbursement to Landlord required herein when due, and such failure shall continue for a period of ten (10) days from the date Landlord provided written notice that such payment was due.

C. Tenant shall fail to discharge any lien placed upon the Premises in violation of paragraph 22 hereof within twenty (20) days after any such lien or encumbrance is filed against the Premises.

D. Tenant shall default in the performance of any of its obligations under any other lease to Tenant from Landlord, or from any person or entity affiliated with or related to Landlord, and same shall remain uncured after the lapsing of any applicable cure period provide for under such other lease.

E. Tenant shall fail to comply with any term, provision or covenant of this Lease (other than those listed above in this paragraph), and shall not cure such failure within thirty (30) days after written notice thereof from Landlord.

20. REMEDIES. Upon each occurrence an Event of Default, Landlord shall have the option to pursue anyone or more of the following remedies without any notice or demand:

(a) Terminate this Lease;

(b) Enter upon and take possession of the Premises without terminating this Lease;

(c) Make such payments and/or take such action and pay and/or perform whatever Tenant is obligated to pay or perform under the terms of this Lease, and Tenant agrees that Landlord shall not be liable for any damages resulting to Tenant from such action; and/or

(d) Alter all locks and other security devices at the Premises, with or without terminating this Lease, and pursue, at Landlord's option, one or more remedies pursuant to this Lease, and Tenant hereby expressly agrees that Landlord shall not be required to provide to Tenant the new key to the Premises, regardless of hour, including Tenant's regular business hours;

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and in any such event Tenant shall immediately vacate the Premises, and if Tenant fails so to do, Landlord, without waiving any other remedy it may have, may enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying such Premises or any part thereof, without being liable for prosecution or any claim of damages therefor. In the event of any violation of Section 93.008 of the Texas Property Code by Landlord or by any agent or employee of Landlord, Tenant hereby expressly waives any and all rights Tenant may have under Paragraph
(g) of such Section 93.008.

A. DAMAGES UPON TERMINATION. If Landlord terminates this Lease, at Landlord's option, Tenant shall be liable for and shall pay to Landlord the sum of all rental and other payments owed to Landlord hereunder accrued to the date of such termination, plus, as liquidated damages, an amount equal to
(1) the present value of the total rental and other payments owed hereunder for the remaining portion of the Lease term, calculated as if such term expired on the date set forth in Paragraph 1, less, (2) the present value of the then fair market rental for the Premises for such period, provided that, because of the difficulty of ascertaining such value and in order to achieve a reasonable estimate of liquidated damages hereunder, Landlord and Tenant stipulate and agree, for the purposes hereof, that such fair market rental shall in no event exceed seventy-five percent (75%) of the rental amount for such period set forth in Paragraph 2 above.

B. DAMAGES UPON REPOSSESSION. If Landlord repossesses the Premises without terminating this Lease, Tenant, at Landlord's option, shall be liable for and shall pay Landlord on demand all rental and other payments owed to Landlord hereunder, accrued to the date of such repossession, plus all amounts required to be paid by Tenant to Landlord until the date of expiration of the term as stated in Paragraph 1, diminished by all amounts actually received by Landlord through reletting the Premises during such remaining term (but only to the extent of the rent herein reserved). Actions to collect amounts due by Tenant to Landlord under this paragraph may be brought from time to time, on one or more occasions, without the necessity of Landlord's waiting until expiration of the Lease term.

C. COSTS OF RELETTING, REMOVING, REPAIRS AND ENFORCEMENT. Upon an Event of Default, in addition to any sum provided to be paid under this Paragraph 20, Tenant also shall be liable for and shall pay to Landlord (i) brokers' fees and all other costs and expenses incurred by Landlord in connection with reletting the whole or any part of the Premises; (ii) the costs of removing, storing or disposing Tenant's or any other occupant's property; (iii) the costs of repairing, altering, remodeling or otherwise putting the Premises into condition acceptable to a new Tenant or Tenants:
(iv) any and all actual costs and expenses incurred by Landlord in effecting compliance with Tenant's obligations under this Lease; and (v) all reasonable expenses incurred by Landlord in enforcing or defending Landlord's rights and/or remedies hereunder, including without limitation, all reasonable attorneys' fees and all court costs incurred in connection with such enforcement or defense.

D. LATE CHARGE. In the event Tenant fails to make any payment due hereunder within five (5) days after such payment is due, including without limitation any rental or escrow payment, in order to help defray the additional cost to Landlord for processing such late payments and not as interest, Tenant shall pay to Landlord on demand a late charge in an amount equal to five percent (5%) of such payment. The provision for such late charge shall be in addition to all of Landlord's other rights and remedies hereunder or at law, and shall not be construed as liquidated damages or as limiting Landlord's remedies in any manner.

E. INTEREST ON PAST DUE AMOUNTS. If Tenant fails to pay any sum which at any time becomes due to Landlord under any provision of this Lease as and when the same becomes due hereunder, and such failure continues for ten (10) days after the due date for such payment, then Tenant shall pay to Landlord interest on such overdue amounts from the date due until paid at an annual rate which equals the lesser of (i) eighteen percent (18%) or (ii) the highest rate then permitted by law.

F. NO IMPLIED ACCEPTANCES OR WAIVERS. Exercise by Landlord of any one or more remedies hereunder granted or otherwise available shall not be deemed to be an acceptance by Landlord of Tenant's surrender of the Premises, it being understood that such surrender can be effected only by the written agreement of Landlord. Tenant and Landlord further agree that forbearance by Landlord to enforce any of its rights under this Lease or at law or in equity shall not be a waiver of Landlord's right to enforce any one or more of its rights, including any right previously forborne, in connection with any existing or subsequent default. No re-entry or taking possession of the Premises by Landlord shall be construed as an election on its part to terminate this Lease, unless a written notice of such intention is given to Tenant, and, notwithstanding any such reletting or re-entry or taking possession of the Premises, Landlord may at any time thereafter elect to terminate this Lease for a previous default. Pursuit of any remedies hereunder shall not preclude the pursuit of any other remedy herein provided or any other remedies provided by law, nor shall pursuit of any remedy herein provided constitute a forfeiture or waiver of any rent due to Landlord hereunder or of any damages occurring to Landlord by reason of the violation of any of the terms, provisions and covenants contained in this Lease. Landlord's acceptance of any rent following either an Event of Default hereunder shall not be construed as Landlord's waiver of such Event of Default. No waiver by Landlord of any violation or breach of any of the terms, provisions and covenants of this Lease shall be deemed or construed to constitute a waiver of any other violation or default.

G. RELETTING OF PREMISES. In the event of any termination of this Lease and/or repossession of the Premises for an Event of Default, Landlord shall use reasonable efforts to relet the Premises and to collect rental after reletting, with no obligation to accept any lessee that Landlord deems undesirable or to expend any funds in connection with such reletting or collection of rents therefrom. Tenant shall not be entitled to credit for or reimbursement of any proceeds of such reletting in excess of the rental owed hereunder for the period of such reletting. Landlord may relet the whole or any portion of the Premises for any period, to any Tenant and for any use or purpose.

H. LANDLORD'S DEFAULT. If Landlord fails to commence to perform any of its obligations hereunder within thirty (30) days after written notice from Tenant specifying such failure, and such failure results in a defect that seriously jeopardizes the safety of persons occupying the Premises or threatens equipment or machinery owned by Tenant within the Premises, or such defect impairs Tenant's ability to conduct its business within the Premises, and Landlord has failed to commence to cure the default or obligation within the thirty (30) day period outlined above, Tenant shall be permitted to cure Landlord's default or obligation and Landlord will be obligated to reimburse Tenant for the actual cost incurred to cure Landlord's default or obligation.

All obligations of Landlord hereunder will be construed as covenants, not conditions; and all such obligations will be binding upon Landlord only during the period of its possession of the Premises and not thereafter. The term "Landlord" shall mean only the owner, for the time being of the Premises and, in the event of the transfer by such owner of its interest in the Premises, such owner shall thereupon be released and discharged from all covenants and obligations of the Landlord thereafter accruing, provided that such covenants and obligations shall be binding during the Lease term upon each new owner for the duration of such owner's ownership. Notwithstanding any other provision of this Lease, Landlord shall not have any personal liability hereunder. In the event of any breach or default by Landlord in any term or provision of this Lease, Tenant agrees to look solely to the equity or interest then owned by Landlord in the Premises or the Building; however, in no event, shall any deficiency judgment or any money judgment of any kind by sought or obtained against any Landlord.

I. TENANT'S PERSONAL PROPERTY. If Landlord repossesses the Premises pursuant to the authority herein granted, or if Tenant vacates or abandons all or any part of the Premises, then, in addition to Landlord's rights under Paragraph 29 hereof, Landlord shall have the right to (i) keep in place and use or (ii) remove and store, all of the furniture, fixtures, and equipment at the Premises, including that which is owned by Tenant, at all times prior to any foreclosure thereon by Landlord or repossession thereof by any lessor thereof or third party having a lien thereon. In addition to the Landlord's other rights hereunder, Landlord may dispose of the stored property if Tenant does not claim the property within twenty (20) days after the date the property is stored. Landlord shall give Tenant at least ten (10) ten days prior written notice of such intended disposition. Landlord shall also have the right to relinquish possession of all or any portion of such furniture, fixtures, equipment and other property to any person ("Claimant") who presents to Landlord a copy of any instrument represented by Claimant to have been executed by Tenant (or any predecessor of Tenant) granting Claimant the right under various circumstances to take possession of such furniture, fixtures, equipment or other property, without the necessity on the part of Landlord to inquire into the authenticity or legality of said instrument. The rights of Landlord herein stated shall be in addition to any and all other rights that Landlord has or may hereafter have at law or in equity; and Tenant stipulates and agrees that the rights granted Landlord under this paragraph are commercially reasonable.

21. MORTGAGES. Tenant accepts this Lease subject and subordinate to any mortgages and/or deeds of trust now or at any time hereafter constituting a lien or charge upon the Premises or the improvements situated thereon or the Building, provided, however, that

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if the mortgagee, trustee or holder of any such mortgage or deed of trust elects to have Tenant's interest in this Lease superior to any such instrument, then by notice to Tenant from such mortgagee, trustee or holder, this Lease shall be deemed superior to such lien, whether this Lease was executed before or after said mortgage or deed of trust. Tenant, at any time hereafter on demand, shall execute any instruments, releases or other documents that may be required by any mortgagee for the purpose of subjecting and subordinating this Lease to the lien of any such mortgage, provided the subordination does not change any of the Lease terms contained within this Lease and the subordination agreement contains an attornment and non-disturbance agreement. Tenant shall not terminate this Lease or pursue any other remedy available to Tenant hereunder for any default on the part of Landlord without first giving written notice by certified or registered mail, return receipt requested, to any mortgagee, trustee or holder of any such mortgage or deed of trust, the name and post office address of which Tenant has received written notice, specifying the default in reasonable detail and affording such mortgagee, trustee or holder a reasonable opportunity (but in no event less than thirty days) to make performance, at its election, for and on behalf of Landlord.

22. MECHANIC'S LIENS. Tenant has no authority, express or implied, to create or place any lien or encumbrance of any kind or nature whatsoever upon, or in any manner to bind the interest of Landlord or Tenant in the Premises. TENANT WILL SAVE AND HOLD LANDLORD HARMLESS FROM ANY AND ALL LOSS, COST OR EXPENSE, INCLUDING WITHOUT LIMITATION ATTORNEYS' FEES, BASED ON OR ARISING OUT OF ASSERTED CLAIMS OR LIENS AGAINST THE LEASEHOLD ESTATE OR AGAINST THE RIGHT, TITLE AND INTEREST OF THE LANDLORD IN THE PREMISES OR UNDER THE TERMS OF THIS LEASE.

23. MISCELLANEOUS.

A. INTERPRETATION. The captions inserted in this Lease are for convenience only and in no way define, limit or otherwise describe the scope or intent of this Lease, or any provision hereof, or in any way affect the interpretation of this Lease.

B. BINDING EFFECT. Except as otherwise herein expressly provided, the terms, provisions and covenants and conditions in this Lease shall apply to, inure to the benefit of and be binding upon the parties hereto and upon their respective heirs, executors, personal representatives, legal representatives, successors and assigns. Landlord shall have the right to transfer and assign, in whole or in part, its rights and obligations in the Premises and in the Building and other property that are the subject of this Lease.

C. EVIDENCE OF AUTHORITY. Tenant agrees to furnish to Landlord, promptly upon demand, a corporate resolution, proof of due authorization by partners or other appropriate documentation evidencing the due authorization of such party to enter into this Lease.

D. FORCE MAJEURE. Landlord shall not be held responsible for delays in the performance of its oblations hereunder when caused by material shortages, acts of God, labor disputes or other events beyond the control of Landlord.

E. PAYMENTS CONSTITUTE RENT. Notwithstanding anything in this Lease to the contrary, all amounts payable by Tenant to or on behalf of Landlord under this Lease, whether or not expressly denominated as rent, shall constitute rent.

F. ESTOPPEL CERTIFICATES. Tenant agrees, from time to time, within ten (10) days after request of Landlord, to deliver to Landlord, or Landlord's designee, an estoppel certificate stating that this Lease is in full force and effect, the date to which rent has been paid, the unexpired term of this Lease, any defaults existing under this Lease (or the absence thereof) and such other factual or legal matters pertaining to this Lease as may be requested by Landlord. It is understood and agreed that Tenant's obligation to furnish such estoppel certificates in a timely fashion is a material inducement for Landlord's execution of this Lease, provided it does not alter the terms of this Lease.

G. ENTIRE AGREEMENT. This Lease constitutes obligations which have the entire understanding and agreement of Landlord and Tenant with respect to the subject matter of this Lease, and contains all of the covenants and agreements of Landlord and Tenant with respect thereto. Landlord and Tenant each acknowledge that no representations, inducements, promises or agreements, oral or written, have been made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant, which are not contained herein, and any prior agreements, promises, negotiations or representations not expressly set forth in this Lease are of no force or effect. EXCEPT AS SPECIFICALLY PROVIDED IN THIS LEASE, TENANT HEREBY WAIVES THE BENEFIT OF ALL IMPLIED WARRANTIES, IT BEING UNDERSTOOD THAT LANDLORD WILL CONSTRUCT THE PREMISES SPECIFICALLY FOR TENANT'S INTENDED USE AND IN ACCORDANCE WITH PLANS AND SPECIFICATIONS, AND WITH RESPECT TO THE PREMISES, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE FOR ANY PARTICULAR PURPOSE. Landlord's agents and employees do not and will not have authority to make exceptions, changes or amendments to this Lease, or factual representations not expressly contained in this Lease. Under no circumstances shall Landlord or Tenant be considered an agent of the other. This Lease may not be altered, changed or amended except by an instrument in writing signed by both parties hereto.

H. SURVIVAL OF OBLIGATIONS. All obligations of Tenant hereunder not fully performed as of the expiration or earlier termination of the term of this Lease shall survive the expiration or earlier termination of the term hereof, including without limitation all payment obligations with respect to taxes and insurance and all obligations concerning the condition and repair of the Premises. Upon the expiration or earlier termination of the term hereof, and prior to Tenant vacating the Premises, Tenant shall pay to Landlord any amount reasonably estimated by Landlord as necessary to put the Premises in good condition and repair, reasonable wear and tear excluded, including without limitation the cost of repairs to and replacements of all heating and air conditioning systems and equipment therein. Tenant shall also, prior to vacating the Premises, pay to Landlord the amount, as estimated by Landlord, of Tenant's obligation hereunder for real estate taxes and insurance premiums for the year in which the Lease expires or terminates. All such amounts shall be used and held by Landlord for payment of such obligations of Tenant hereunder, with Tenant being liable for any additional costs therefore upon demand by Landlord, or with any excess to be returned to Tenant after all such obligations have been determined and satisfied, as the case may be. Any Security Deposit held by Landlord may, at Landlord's option, be credited against any amounts due from Tenant under this Paragraph 23H.

I. SEVERABILITY OF TERMS. If any clause or provision of this Lease is illegal, invalid or unenforceable under present of future laws effective during the term of this Lease, then, in such event, it is the intention of the parties hereto that the remainder of this Lease shall not be affected thereby, and it is also the intention of the parties to this Lease that in lieu of each clause or provision of this Lease that is illegal, invalid or unenforceable clause or provision as may be legal, valid and enforceable.

J. EFFECTIVE DATE. All references in this Lease to "the date hereof" or similar references shall be deemed to refer to the last date in point in time on which all parties hereto have executed this Lease.

K. BROKER'S COMMISSION. Tenant represents and warrants that it has dealt with and will deal with no broker, agent or other persons other than CHRIS WHITWORTH OF HILL PARTNERS AND SCOTT YOUNG AND CHAD MUELLER OF SCOTT YOUNG PROPERTIES in connection with this transaction or future related transactions and that no broker, agent or other person brought about this transaction, and Tenant agrees to indemnify and hold Landlord harmless from and against any claims by any other broker, agent or other person claiming a commission or other form of compensation by virtue of having dealt with them with regard to this leasing transaction.

L. AMBIGUITY. Landlord and Tenant hereby agree and acknowledge that this Lease has been fully reviewed and negotiated by both Landlord and Tenant, and that Landlord and Tenant have each had the opportunity to have this Lease reviewed by their respective legal counsel, and, accordingly, in the event of any ambiguity herein, Tenant does hereby waive the rule of construction that such ambiguity shall be resolved against the party who prepared this Lease.

M. JOINT AND SEVERAL LIABILITY. If there be more than one Tenant, the obligations hereunder imposed upon Tenant shall be joint and several. If there be a guarantor of Tenant's obligations hereunder, the obligations hereunder imposed upon Tenant shall be joint and several obligations of Tenant and such guarantor, and Landlord need not first proceed against Tenant before proceeding against such guarantor, nor shall any such guarantor be released from its guaranty for any reason whatsoever, including, without limitation, in case of any amendments hereto, waivers hereof or failure to give such guarantor any notices hereunder

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N. THIRD PARTY RIGHTS. Nothing herein expressed or implied is intended, or shall be construed, to confer upon or give to any person or entity, other than the parties hereto, any right or remedy under or by reason of this Lease.

0. EXHIBITS AND ATTACHMENTS. All exhibits, attachments, riders and addenda referred to in this Lease, and the exhibits listed herein below and attached hereto, are incorporated into this Lease and made a part hereof for all intents and purposes as if fully set out herein. All capitalized terms used in such documents shall, unless otherwise defined therein, have the same meanings as are set forth herein.

P. APPLICABLE LAW. This Lease has been executed in the State of Texas and shall be governed in all respects by the laws of the State of Texas. It is the intent of Landlord and Tenant to conform strictly to all applicable state and federal usury laws. All agreements between Landlord and Tenant, whether now existing or hereafter arising and whether written or oral, are hereby expressly limited so that in no contingency or event whatsoever shall the amount contracted for, charged or received by Landlord for the use, forbearance or retention of money hereunder or otherwise exceed the maximum amount which Landlord is legally entitled to contract for, charge or collect under the applicable state or federal law. If, from any circumstance whatsoever, fulfillment of any provision hereof at the time performance of such provision shall be due shall involve transcending the limit of validity prescribed by law, then the obligation to be fulfilled shall be automatically reduced to the limit of such validity, and if from any such circumstance Landlord shall ever receive as interest or otherwise an amount in excess of the maximum that can be legally collected, then such amount which would be excessive interest shall be applied to the reduction of rent hereunder, and if such amount which would be excessive interest exceeds such rent, then such additional amount shall be refunded to Tenant.

24. NOTICES. Each provision of this instrument or of any applicable governmental laws, ordinances, regulations and other requirements with reference to the sending, mailing or delivering of notice or the making of any payment by Landlord to Tenant or with reference to the sending, mailing or delivering of any notice or the making of any payment by Tenant to Landlord shall be deemed to be complied with when and if the following steps are taken:

(i) All rent and other payments required to be made by Tenant to Landlord hereunder shall be payable to Landlord at the address for Landlord set forth below or at such other address as Landlord may specify from time to time by written notice delivered in accordance herewith. Tenant's obligation to pay rent and any other amounts to Landlord under the terms of this Lease shall not be deemed satisfied until such rent and other amounts have been actually received by Landlord.

(ii) All payments required to be made by Landlord to Tenant hereunder shall be payable to Tenant at the address set forth below, or at such other address within the continental United States as Tenant may specify from time to time by written notice delivered in accordance herewith.

(iii) Except as expressly provided herein, any written notice, document or payment required or permitted to be delivered hereunder shall be deemed to be delivered when received or, whether actually received or not, when deposited in the United States Mail, postage prepaid, Certified or Registered Mail, addressed to the parties hereto at the respective addresses set out below, or at such other address as they have theretofore specified by written notice delivered in accordance herewith.

26. ADDITIONAL PROVISIONS. See EXHIBIT "B" attached hereto and incorporated by reference herein.

EXECUTED BY LANDLORD, this 15th day of April, 1998.

CROSS PARK INVESTORS, LTD.

BY: CAMERON ROAD INVESTORS, LTD. A TEXAS LIMITED LIABILITY CO.

ITS: GENERAL PARTNER

ITS: MANAGING DIRECTOR

Address: C/O Scott Young Properties P.O. Box 1525, Austin, Texas 78767

EXECUTED BY TENANT, this 8th day of April, 1998.

ADVANCED ENERGY INDUSTRIES, INC.

Address: 1625 Sharp Point Drive Fort Collins, CO 80525 Phone: 970-221-4670

                        Fax:      970-407-5243

EXHIBIT  "A"   Description of Premises
EXHIBIT  "B"   Additional Provisions
EXHIBIT  "C"   Rules and Regulations
EXHIBIT  "D"   Tenant Construction Standards
EXHIBIT  "E"   Sign Criteria

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EXHBIT   "F"   Construction Plans

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EXHIBIT "A"

Lots 5 and 6 of Block I, Walnut Creek Business Park, Phase A,
Section 1, Travis County, Texas, and locally known as 8601 Cross Park Drive, Austin, Texas.

[MAP]

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    EXPENSE               PER SQUARE FOOT            AMOUNT PER MONTH
-------------------------------------------------------------------------------
    Property Taxes           $.10                        $  681.20
    Insurance                $.01                        $   68.12
    CAM                      $.09                        $  613.08
-------------------------------------------------------------------------------
    TOTAL                    $.20                        $1,362.40
-------------------------------------------------------------------------------

2. CONDITION OF THE PREMISES. Landlord shall deliver the Premises in an "as-is" condition except that Landlord shall agree to clean the floors and walls prior to occupancy by Tenant.

3. TENANT IMPROVEMENTS. At its' sole cost and expense and with Landlord's prior consent as to the location and the installation technique, Tenant shall be allowed to:

A) Install an approximately 12' x 12' fenced concrete pad at the rear of the Premises. Landlord and Tenant shall agree on a mutually acceptable location for the enclosure.

B) Install an air compressor and chilled water tower within the fenced area behind the Premises.

C) Upgrade the existing electrical service, if necessary.

If required by Landlord, Tenant shall agree to restore the Premises to its original condition, reasonable wear and tear excepted upon the expiration of this Lease.

4. SHARED LOADING DOCK. Landlord will use good faith to obtain a written agreement with Aera Corporation for the sharing of the dock-high loading dock at the rear of the Aera Corporation lease space.

5. LEASE EXPIRATION. This Lease shall expire upon the earlier of the following events occurring:

A) One (1) year from the Commencement Date of the Lease as specified in the Lease.

B) The commencement of the lease term and the payment of rent by Advanced Energy Industries, Inc. for a lease space within the Cameron Technology Center.

6. LEASE EXTENSION. In the event the building shell to be constructed by Cameron Technology Investors, Ltd. for Advanced Energy Industries, Inc. within the Cameron Technology Center is not substantially complete by February 15, 1999, Landlord shall agree to automatically extend this Lease for a period of six (6) additional months from the date the Lease would have otherwise expired as specified in this Lease. All other terms and conditions within the Lease will remain the same during the Lease Extension period.

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EXHIBIT "C"

BUSINESS PARK RULES AND REGULATIONS

The following rules and regulations shall apply where applicable, to the Premises, the Building, the Project, the driveways and parking areas, the land situated beneath the Premises, Building, and Project and the appurtenances thereto:

1. Sidewalks, doorways, halls stairways and other similar areas shall not be obstructed by Tenant or used by any Tenant for any purpose other than ingress and egress to and from the Premises and for going from one to another part of the Building.

2. Plumbing fixtures and appliances shall be used only for the purposes for which designed, and no sweepings, rubbish, rags or other unsuitable material shall be thrown or placed therein. Damage resulting to any such fixtures or appliances from misuse by a Tenant or such Tenant's agents, employees or invitees, shall be paid by such Tenant, and Landlord shall not in any case be responsible therefor.

3. No signs, advertisements or notices shall be painted or affixed on or to any windows or doors or other exterior part of the Building or the Premises except of such color, size and style and in such places as shall be first approved by, Landlord. Landlord, at Tenant's sole cost and expense, shall install all letters or numerals by or on doors in such Tenants Premises, which letters or numerals shall be in building standard graphics. No nails, hooks or screws shall be driven or inserted in any part of the Building outside the Premises except by the Building maintenance personnel nor shall any part of the Building be defaced by Tenant. No curtains or other window treatments shall be placed between the glass and the Building standard window treatments.

4. Landlord will provide and maintain a directory for all Tenants at the end of each building and no other directory shall be permitted unless previously consented to by Landlord in writing.

5. Two (2) keys to the locks on the exterior doors entering each Tenant's Premises shall be furnished by Landlord free of charge, with any additional keys to be furnished by Landlord to each Tenant, at Tenant's cost. Tenant shall not place any additional lock or locks on any door in or to its Premises without Landlord's prior written consent. All such keys shall remain the property of Landlord. Landlord will reduce $20.00 per key from Tenant's Security Deposit account for each key issued and not returned by Tenant at time of move out.

6. Landlord will provide within the Business Park a postal box for Tenants receipt of letter mail only. Landlord will issue to the tenant two keys to the postal box. The box keys are not to be duplicated by the Tenant. Tenant is held accountable for the keys and will bear the cost or re-keying the locks should the Tenant fail to return all keys at the end of the Lease.

7. With respect to work being performed by Tenants in its Premises with the approval of Landlord, all tenants will refer all contractors, contractors' representatives and installation technicians rendering any service to them to Landlord for Landlord's supervision, approval and control before the performance of any contractual services. This provision shall apply to all work performed in the Building including, but not limited to, installations of telephones, telegraph equipment, electrical devises and attachments, doors, entrance ways, and any and all installations of every nature affecting floors, walls, woodwork, trim, windows, ceilings, equipment and any other physical portion of the Premises and Building.

8. Each tenant shall cooperate with Landlord's employees in keeping its Premises neat and clean.

9. Tenant is responsible for janitorial service within its Premises.

10. Designated areas for trash containers are assigned to each tenant. Tenants will be billed direct by a trash removal service approved by the Landlord. Drums, pallets, equipment, vehicles, etc. are not allowed to be stored outside of building. Trash in the common area will be removed by the Landlord and the cost of removal prorated to the Tenants sharing the common area.

11. Landlord shall not be responsible to the tenants, their agents, employees, or invitees for any loss of property from the Premises or public areas or for any damages to any property thereon from any cause whatsoever.

12. Should a tenant require telegraphic, telephonic, annunicator or other communication service, Landlord will direct the electrician where and how wires are to be introduced and placed and none shall be introduced or placed except as Landlord shall direct.

13. Tenant shall not make or permit any improper, objectionable or unpleasant noises or odors in the Premises or Building or otherwise interfere in any way with other tenants or persons having business with them.

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14. No machinery of any kind shall be operated by Tenant in its Premises without the prior written consent of Landlord, nor shall any tenant use or keep in the Premises or Building any flammable or explosive fluid or substance.

15. Nothing shall be swept or thrown into parking areas or driveways. No birds or animals shall be brought into or kept in, or about any tenant's leased premises.

16. Tenant, its agents, employees and invitees shall park only in those areas designated by Landlord for parking by Tenant and shall not park on any public or private streets contiguous to, surrounding or in the vicinity of the Building without Landlord's prior written consent.

17. No portion of any tenant's Premises shall at any time be used or occupied as sleeping or lodging quarters.

18. Landlord reserves the right to rescind any of these rules and regulations and to make such other and further reasonable rules and regulations as in its judgment shall from time to time be needful for the safety, protection, care and cleanliness of the Building and Project, the operation hereof, the preservation of good order therein and the protection and comfort of the Tenants and their agents, employees and invitees, which rules and regulations, when made and written notice thereof is given to a Tenant, shall be binding upon it in like manner as if originally herein prescribed.

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EXHIBIT "D"
TENANT CONSTRUCTION STANDARDS

TENANT SPACE DRAWINGS AND SPECIFICATION REQUIREMENTS
If Landlord's Architect does not prepare the drawings and specifications, then Tenant agrees that they shall be prepared by a licensed Architect and shall bear his registration seal, number, and signature. All documents must be reviewed and approved by Landlord and his Architect prior to the start of construction. The Tenant is required, upon completion of the construction, to provide the Landlord with a marked up blue line complete set of prints showing the conditions as built and a reproducible mylar complete set of drawings with changes in ink and a copy of the building permit and Certificate of Occupancy.

BUILDING CODES AND STANDARDS
All plans, specifications and construction for the Tenant's space must conform to the following codes and standards and any other applicable codes, standards, ordinances, and regulations.

1. Current Uniform Building Codes accepted by the City of Austin.
2. National Electrical Code.
3. City of Austin, Electrical Utility Department Code.
4. Uniform Mechanical Code.
5. City of Austin Health Department Code.
6. Department of Labor - Occupational Safety and Health Standards.
7. Consumer Product Safety Commission.
8. State of Texas Architectural Barriers Requirements.
9. Fire Marshall Requirements.

CONSTRUCTION ACCESS
Tenant shall use only the area immediately to the rear of its lease space for construction access. Adjoining spaces shall not be used for any purpose. Tenant shall be responsible for the repair of any damage done to the Project or Building by Tenant's construction of its own lease space.

TEMPORARY UTILITIES
Tenant and/or his contractors and/or subcontractors are responsible for temporary toilets and temporary utilities for their work, including payment of all utility charges. All arrangements shall be made with City of Austin, Southern Union Gas, and Southwestern Bell as applicable.

CONSTRUCTION TRASH
Trash, surplus construction materials, boxes, crates, debris, etc., from the Tenant's construction shall be removed daily from the Premises and hauled off the project site. Trash left on the project will be hauled off at the Tenant's expense.

TENANT SEPARATION
Walls which abut another Tenant's space must be a minimum two (2) Hour rated extending from floor to the roof deck with insulation. In the case where the space is vacant adjacent to Tenant's demising wall(s), such a wall shall be constructed of 3 1/2" metal studs spaced at 16" o.c. with minimum two (2) layers of 5/8" thick type X gypsum wallboard on the Tenant's side with staggered 2' joints. All penetrations to the demising wall(s) shall be treated to maintain the minimum two (2) Hour rating.

TELEPHONE
It is each Tenant's responsibility to procure the telephone service to its Premises. If any telephone equipment room is required by the Tenant, it must be located within its Premises. Tenants shall be responsible for routing its telephone service through the raceway system provided by Landlord in the shell building.

HVAC
Space above ceilings may not be used as a return air plenum. All return air shall be ducted from the conditioned space. The Landlord has the right to approve or disapprove the HVAC design and Tenant shall select the HVAC equipment from Landlord's standards. Location of roof top units shall be on pads as provided in the shell building with the location approved by the Landlord. Tenant shall indicate the actual weights and dimensions on their working drawings for review and approval by the Landlord of roof mounted equipment. Condensation lines shall drain into each Tenant's sewer

ROOF PENETRATIONS
All roof penetrations, equipment supports, pitch pans, flashing curbing, and roofing repairs shall be as approved by Landlord and performed by a roofer approved by Landlord at Tenant's expense. All roof penetrations shall occur within the boundaries of the Premises.

WATER
A common water line and valve will be provided for each lease space. Tenant water piping shall start at the point of the valve. All tenants requiring more plumbing than the required toilet room facilities, drinking fountain
(1), service sink (1), employee bar type sink (1) shall be required to furnish their own piping, meter, and installation. Should Tenant's water consumption levels exceed typical levels, Landlord and Tenant agree that Tenant shall supply a water flow meter of which Landlord shall read monthly and bill back Tenant for Tenant's actual consumption.

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SANITARY SEWER
A sewer line will be installed under floor accessible to the Premises. Tenant's sewer piping will start at the point of the sewer line tap in Tenant's Premises.

ELECTRICITY
All electric service meter wireways will be installed in an area determined by Landlord. Each Tenant shall furnish and install his meter at the appropriate meter wireway as approved by Landlord. Tenant shall be responsible for obtaining an electric meter at his cost. If the wattage density exceeds that provided in the shell for Tenant's lease space, the Tenant will pay the additional cost for larger service to be installed by Landlord. Total power requirements shall be tabulated on the Tenant's working drawings submitted for approval.

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EXHIBIT "E"

SIGN CRITERIA

1. COST OF THE SIGN(S). Identifying Tenant graphics for all leased Premises are the responsibility of Tenant. All expenses for fabrication, installation and sign maintenance shall be borne solely by Tenant.

2. APPROVAL OF SHOP DRAWINGS. Prior to the fabrication of any sign, Tenant shall present to Landlord and to the Walnut Creek Improvement Association for approval, shop drawings prepared by the manufacturer. All shop drawings shall be dimensionally scaled with the proposed sign located on a drawing of the building elevation; the shop drawings shall indicate all dimensions; shall indicate the actual letter style or font; if a logo is to be used, the actual logo shall be illustrated on the building elevation; all actual materials, paint brand and color(s) shall be specified; and the method of the sign attachment to the Building shall be clearly denoted. Landlord does not represent or warrant that these sign criteria contained herein will meet the specific requirements of the Walnut Creek Improvement Association. Landlord shall agree to use good faith to assist Tenant in securing the approval of its sign from the Walnut Creek Improvement Association.

3. MATERIALS. Tenant sign graphics shall consist of individually cut letters. Letters shall be cut from 1/8" Lexan mounted or laminated to a three inch (3") width sign foam board or similar material. Letters shall be primed and painted uniformly on face and sides with Benjamin Moore Industrial grade paint or equivalent.

4. LOGOTYPES. Logotypes shall be cut from the same material as letters. Logotype area shall not exceed eighteen inches (18") in height and the sign or logotype length shall not exceed the lesser of fifty percent (50%) of the width of Tenant's Premises or fifteen feet (15'). All signs or logotypes shall be located above and appurtenant to the store front of the Premises.

5. SIZE. No individual letter shall exceed eighteen inches (18") in height. Letter line length shall not exceed the lesser of fifty percent (50%) of the width of Tenant's Premises or fifteen feet (15'). Should Tenant's sign contain more than one letter line, the total height of all letter lines combined shall not exceed forty inches (40"). All signs or logotypes shall be located above and appurtenant to the store front of the Premises.

6. MOUNTING METHODS. All letters shall be mounted with clear silicone and mounted flush to the exterior wall surface. Upon the expiration of the Lease, Tenant shall remove all exterior signs from the Building and shall restore the exterior of the Building to its original condition. Should Tenant fail to do so, Landlord reserves the right to perform this duty and deduct all costs associated with the removal of the sign and restoration of the Building from the Security Deposit.

7. PROHIBITED MATERIALS. Pan signs, illuminated signs, neon or flashing signs, banners, sandwich boards or any other sign type or material not specifically allowed above.

8. DOORS AND WINDOW GRAPHICS. Vinyl door and window graphics are permitted. Letter size shall not exceed 1-1/2" cap height. Line length shall not exceed 20". All graphics shall be reverse cut from white 3M vinyl, Sparcal vinyl or equivalent vinyl material and shall be mounted to the interior of door glass or sidelight glass. Plaques, neon or paper signs are prohibited at all times.

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Standard Industrial Lease Agreement Tenant: Advanced Energy Industries, Inc. Cameron Technology Center (11/25/97) Square Feet: 19,800 square feet Lease Commences: _______________ Lease Expires: _________________

LEASE AGREEMENT

THIS LEASE AGREEMENT is made and entered into by and between CAMERON TECHNOLOGY INVESTORS, LTD., hereinafter referred to as "Landlord", and ADVANCED ENERGY INDUSTRIES, INC., hereinafter referred to as "Tenant".

1. PREMISES AND TERM. In consideration of the mutual obligations of Landlord and Tenant set forth herein, Landlord leases to Tenant and Tenant hereby takes from Landlord, certain leased premises situated within the County of Travis, State of Texas, and known locally as SUITE 100, BUILDING 2, CAMERON TECHNOLOGY CENTER, LOCATED AT 8900 CAMERON ROAD, AUSTIN, TEXAS AND CONSISTING OF APPROXIMATELY 19,800 SQUARE FEET OF RENTABLE AREA as more particularly described on EXHIBIT "A" attached hereto and incorporated herein by reference (THE "PREMISES"), to have and to hold, subject to the term, covenants and conditions in this Lease. The term of this Lease shall commence on the COMMENCEMENT DATE as hereinafter set forth and shall end on the last day of the month that is SIXTY (60) months after the COMMENCEMENT DATE.

A. COMMENCEMENT DATE. The "Commencement Date" shall mean the date on which the earlier of the following occurs: (i) the date Tenant takes possession of the Premises for the operation of its business; or (ii) APRIL 1, 1999. Landlord shall notify Tenant in writing that the Commencement Date has occurred. If for any reason the Building shell is not substantially complete on FEBRUARY 15, 1999 this Lease and the obligations of Tenant shall nonetheless commence and continue in full force and effect and Landlord shall have no liability to Tenant; provided, however, if the Building shell is not substantially complete for any reason other than omission, delay, or default on the part of Tenant or anyone acting under or for Tenant, Tenant may terminate this Lease by providing Landlord written notice not later than MARCH 1, 1999 and the termination of this Lease shall constitute Tenant's sole remedy and shall constitute full settlement of all claims that Tenant might otherwise have against Landlord by reason of the Building shell not being substantially complete by FEBRUARY 15, 1999. Landlord shall not be liable to Tenant or any third party for any damage, claim, expense or loss, actual or consequential, or direct or indirect, resulting from any delay by Landlord to deliver the Building shell, except that Landlord shall refund any rent or Security Deposit that has been pre-paid by Tenant under this Lease.

2. BASE RENT, SECURITY DEPOSIT AND ESCROW DEPOSITS.
A. BASE RENT. Tenant agrees to pay to Landlord rent for the Premises in advance, without demand, deduction or set off, at the rate of:

MONTHS 1-12:   FIFTEEN THOUSAND AND SEVENTY-TWO DOLLARS AND 20/XX
               ($15,072.20) PER MONTH;
MONTHS 13-24:  FIFTEEN THOUSAND FOUR HUNDRED AND SIXTY-EIGHT DOLLARS AND
               20/XX ($15,468.20) PER MONTH;
MONTHS 25-36:  FIFTEEN THOUSAND EIGHT HUNDRED AND SIXTY-FOUR DOLLARS AND
               20/XX ($15,864.20) PER MONTH;
MONTHS 37-48:  SIXTEEN THOUSAND TWO HUNDRED AND SIXTY DOLLARS AND 20/XX
               ($16,260.20) PER MONTH;
MONTHS 49-60:  SIXTEEN THOUSAND SIX HUNDRED AND FIFTY-SIX DOLLARS AND 20/XX
               ($16,656.20) PER MONTH,

during the term hereof. One monthly installment, plus the other monthly charges set forth in Paragraph 2C below, shall be due and payable on the date hereof, and a like monthly installment shall be due and payable on or before the first day of each calendar month succeeding the Commencement Date, except that all payments due thereunder for any fractional calendar month shall be prorated.

B. SECURITY DEPOSIT. In addition, Tenant agrees to deposit with Landlord on the date hereof the sum of SEVENTEEN THOUSAND SIX HUNDRED AND TWENTY-TWO DOLLARS AND 00/XX ($17,622.00) which shall be held by Landlord, without obligation for interest, as security for the performance of Tenant's obligations under this Lease (the "Security Deposit"), it being expressly understood and agreed that the Security Deposit is not an advance rental deposit or a measure of Landlord's damages in case of Tenant's default. Upon occurrence of an Event of Default, Landlord may use all or part of the Security Deposit to pay past due rent or other payments due Landlord under this Lease, or the cost of any other damage, injury, expense or liability caused by such Event of Default, without prejudice to any other remedy provided herein or provided by law. On demand, Tenant shall pay Landlord the amount that will restore the Security Deposit to its original amount. The Security Deposit shall be deemed the property of Landlord, but any remaining balance of the Security Deposit shall be returned by Landlord to Tenant when all of Tenant's present and future obligations under this Lease have been fulfilled.

C. ESCROW DEPOSITS. Without limiting in any way Tenant's other obligations under this Lease, Tenant agrees to pay to Landlord its Proportionate Share (as defined in this Paragraph 2C below) of (i) Taxes* payable by Landlord pursuant to Paragraph 3A below, (ii) the cost of utilities payable by Landlord pursuant to Paragraph 8 below, (iii) Landlord's cost of maintaining insurance pursuant to Paragraph 9A below and (iv) Landlord's cost of maintaining the Premises pursuant to paragraph 5D below and any common area charges payable by Tenant in accordance with Paragraph 4 below (collectively, the "Tenant Costs"). During each month of the term of this Lease, on the same day that rent is due hereunder, Tenant shall deposit in escrow with Landlord an amount equal to 1/12 of the estimated annual amount of Tenant's Proportionate Share of the Tenant Costs. Tenant authorizes Landlord to use the funds deposited with Landlord under this Paragraph 2C to pay such Tenant Costs. The initial monthly escrow payments are based upon the estimated amounts for the year in question, and shall be increased or decreased annually to reflect the projected actual amount of all Tenant Costs. If the Tenant's total escrow deposits for any calendar year are less than Tenant's actual Proportionate Share of the Tenant Costs for such calendar year, Tenant shall pay the difference to Landlord within ten
(10) days after demand. If the total escrow deposits of Tenant for any calendar year are more than Tenant's actual Proportionate Share of the Tenant Costs for such calendar year, Landlord shall retain such excess and credit it against Tenant's escrow deposits next maturing after such determination. In the event the Premises constitute a portion of a multiple occupancy building (the "Building"), Tenant's "Proportionate Share" with respect to the Building, as used in this Lease, shall mean a fraction, the numerator of which is the gross rentable area contained in the Premises and the denominator of which is the gross rentable area contained in the entire Building. In the event the Premises or the Building is part of a project or business park owned, managed or leased by Landlord, or an affiliate of Landlord (the "Project"), Tenant's "Proportionate Share" of the Project, as used in this Lease shall mean a fraction, the numerator of which is the gross rentable area contained in the Premises and the denominator of which is the gross rentable area contained in all of the buildings (including the Building) within the Project. For the purposes of this Lease, Tenant's proportionate share shall be defined initially as SIXTEEN AND SIX-TENTHS PERCENT (16.6%).

3. TAXES.

A. REAL PROPERTY TAXES. Subject to reimbursement under Paragraph 2C herein, Landlord agrees to pay all taxes,* that accrue against the Premises, the Building and /or the land of which the Premises or the Building are a part. If at any time during the term of this Lease, there shall be levied, assessed or imposed on Landlord a capital levy or other tax directly on the rents received therefrom and /or the land and improvements of which the Premises are a part, then all such taxes, assessments, levies or charges, or the part thereof so measured or based, shall be deemed to be included within the term "Taxes" for the purpose hereof. The Landlord shall have the right to employ a tax consulting firm to attempt to assure a fair tax burden on the real property within the applicable taxing jurisdiction. Tenant agrees to pay its Proportionate Share of the cost of such consultant.

B. PERSONAL PROPERTY TAXES. Tenant shall be liable for all taxes levied or assessed against any personal property or fixtures placed in or on the Premises. If any such taxes are levied or assessed against Landlord or Landlord's property (i) Landlord pays the same or (ii) the assessed value of Landlord's property is increased by inclusion of such personal property and fixtures and Landlord pays the increased taxes, then Tenant shall pay to Landlord, upon demand, the amount of such taxes.

4. LANDLORD'S REPAIRS AND MAINTENANCE.

A. STRUCTURAL REPAIRS. Landlord, at its own cost and expense, shall maintain the roof, foundation and the structural soundness of the exterior walls of the Building in good repair, reasonable wear and tear excluded. The term "walls" as used herein shall not include windows, glass, or plate glass, any doors, special store fronts or office entries, and the term "foundation" as used herein shall not include loading docks. Tenant shall immediately give Landlord written notice of defect or need for repairs, after which Landlord shall have thirty (30) days to commence to

* For purposes of this Lease, "Taxes" means all taxes, assessments and governmental charges (excluding any federal and state income taxes, franchise taxes, profit taxes and lease taxes, so long as such federal and state income taxes, franchise taxes, profit taxes or lease taxes are not assessed in lieu of some or all of the customary ad valorem taxes being assessed against the Project as of the date of this Lease).

C. REASSESSMENTS. At the reasonable request of Tenant, Landlord shall virgorously challenge any increases in Taxes, arising from a reassessment of landlord's property or otherwise.

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effect such repairs or cure such defect. In the event a defect occurs that seriously jeopardizes the safety of persons occupying the Premises or threatens equipment or machinery owned by Tenant within the Premises, and Landlord has failed to commence the repairs for such defect within the thirty
(30) day period outlined above, Tenant shall be permitted to initiate the repair and Landlord will be obligated to reimburse Tenant for the actual cost of the repair.

B. TENANT'S SHARE OF COMMON AREA CHARGES. Tenant agrees to pay its Proportionate Share of the cost of (i) maintenance and/or landscaping (including both maintenance and replacement of landscaping) of any property that is a part of the Building and/or the Project; and (ii) operating, maintaining and repairing any property, facilities or services (including without limitation utilities and insurance therefor) provided for the use or benefit of Tenant or the common use or benefit of Tenant and other lessees of the Project or the Building; and (iii) the reasonable cost of property management and supervision which shall be at rates customary of the property type and market conditions.

Landlord reserves the right to perform, in whole or in part and without notice to Tenant, maintenance, repairs and replacements to the paving, common area landscape replacement and maintenance, exterior painting, common sewage line plumbing and any other items that are provided for the use or benefit of Tenant or the common use or benefit of Tenant and other lessees of the Project or the Building; in which event, Tenant shall be liable for its Proportionate Share of the cost and expense of such repair, replacement, maintenance and other such items.

5. TENANT'S REPAIRS.

A. MAINTENANCE OF PREMISES AND APPURTENANCES. Tenant at its own cost and expense, shall (i) maintain all parts of the Premises and promptly make all necessary repairs and replacements to the Premises (except those for which Landlord is expressly responsible hereunder), and (ii) keep the parking areas, driveways and alleys surrounding the Premises in a clean and sanitary condition. Tenant's obligation to maintain, repair and make replacements to the Premises shall cover, but not be limited to, pest control (including termites), trash removal and the maintenance repair and replacement of all HVAC, electrical, plumbing, sprinkler and other mechanical systems. For the purposes of this Lease, Landlord shall assign all warranties received from the general contractor who constructs the Tenant Improvements within the Premises and Tenant shall look to the general contractor for warranty on all repairs and replacements required within the Premises.

B. PARKING. Tenant and its employees, customers and licensees shall have the right to use only its Proportionate share of any parking areas that have been designated for such use by Landlord in writing, subject to (i) all rules and regulations promulgated by Landlord; and (ii) rights of ingress and egress of other lessees. Landlord shall not be responsible for enforcing Tenant's parking rights against any third parties, and Tenant expressly does not have the right to tow or obstruct improperly parked vehicles. Tenant agrees not to park on any public streets or private roadways adjacent to or in the vicinity of the Premises. For the purposes of this Lease, Tenant shall be allotted a parking ratio of four (4) parking spaces per thousand (1,000) square feet of rentable lease area contained within the Premises, with such parking ratio not including areas within the truck court that may be striped for parking from time to time.

C. SYSTEM MAINTENANCE. Tenant at its own cost and expense, shall enter into a regularly scheduled preventative maintenance/service contract with a maintenance contractor approved by Landlord for servicing all hot water, heating and air conditioning systems and equipment within the Premises. The service contract must include all services suggested by the equipment manufacturer in its operations/maintenance manual and must become effective within thirty (30) days of the date Tenant takes possession of the Premises

6. ALTERATIONS. Tenant shall not make any alterations, additions or improvements to the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. Tenant, at its own cost and expense, may erect such shelves, bins, machinery and trade fixtures as it desires, provided that (a) such items do not alter the basic character of the Premises or the Building; (b) such items do not overload or damage same; (c) such items may be removed without injury to the Premises; and (d) the construction, erection or installation thereof complies with all applicable governmental laws ordinances, regulations and with Landlord's specifications and requirements. Tenant shall be responsible for compliance with The American With Disabilities Act of 1990. Without implying any consent of Landlord thereto, all alterations, additions, improvements and partitions erected by Tenant shall be remain the property of Tenant during the term of this Lease. All shelves, bins machinery and trade fixtures installed by Tenant shall be removed on or before the earlier to occur of the day of termination or expiration of this Lease or vacating the Premises, at which time Tenant shall restore the Premises to their original condition, normal wear and tear excepted. Alterations, installations, removals and restorations shall be performed in a good and workmanlike manner so as not to damage or alter the primary structure or structural qualities of the Building or other improvements situated on the Premises or of which the Premises are a part.

7. SIGNS. Any signage Tenant desires for the Premises shall be subject to Landlord's written approval, which shall not be unreasonably withheld or delayed and shall be submitted to Landlord prior to the Commencement Date of this Lease. Tenant shall repair and/or replace the Building facia surface to which its signs are attached upon Tenant's vacation of the Premises or the removal or alteration of its signage. Tenant shall not, without Landlord' prior written consent, (i) make any changes to the exterior of the Premises,
(ii) install any exterior lights, decorations, balloons, flags, pennants, banners or painting, or (iii) erect or install any signs, windows or door lettering, placards, decorations or advertising media of any type which can be viewed from the exterior of the Premises. All signs, decorations, advertising media, blinds, draperies and other window treatment or bars or other security installations visible from outside the Premises shall conform in all respects to the criteria established by Landlord or shall be otherwise subject to Landlord's prior written consent. For the purposes of this Lease, Tenant shall be permitted to use its company logo and colors so long as the design, installation and location of the sign is consistent with the requirements outlined within Exhibit "E", Sign Criteria.

8. UTILITIES. Landlord agrees to provide normal water and electricity service to the Premises. Tenant shall pay for all water, gas, heat, light, power, telephone, sewer, sprinkler charges and other utilities and services used on or at the Premises, together with any taxes, penalties, surcharges or the like pertaining to the Tenant's use of the Premises, and any maintenance charges for utilities. Landlord shall have the right to cause any of said services to be separately metered to Tenant, at Tenant's expense. Tenant shall pay its pro rata share, as reasonably determined by Landlord, of all charges for jointly metered utilities. Unless resulting from Landlord's negligence or willful misconduct, Landlord shall not be liable for any interruption or failure of utility service on the Premises and Tenant shall have no rights or claims as a result of any such failure. In the event water is not separately metered to Tenant, Tenant agrees that it will not use water and sewer capacity for uses other than normal domestic restroom and kitchen usage and Tenant further agrees to reimburse Landlord for the entire amount of common water and sewer costs as additional rental if, in fact, Tenant uses water or sewer capacity for uses other than normal domestic restroom and kitchen uses without first obtaining Landlord's written permission, including, but not limited to, the cost for acquiring additional sewer capacity to service Tenant's excess sewer use. Furthermore, Tenant agrees in such event to install at its own expense a submeter to determine Tenant's usage.

9. INSURANCE.

A. LANDLORD'S INSURANCE. Subject to reimbursement under Paragraph 2C herein, Landlord shall maintain insurance covering the Building in an amount not less than eighty percent (80%) of the "replacement cost" thereof, insuring against the perils of fire, lightning, flood, tornado, hail, extended coverage, vandalism and malicious mischief.

B. TENANT'S INSURANCE. Tenant, at its own expense, shall maintain during the term of this Lease a policy or policies of worker's compensation and comprehensive general liability insurance, including personal injury and property damage, with contractual liability endorsement, in the amount of Five Hundred Thousand Dollars ($500,000.00) for property damage and One Million dollars ($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) in the aggregate for personal injuries or deaths of persons occurring in or about the Premises. Tenant, at its own expense, also shall maintain during the term of this Lease, fire and extended coverage insurance covering the replacement cost of (i) all alterations, additions, partitions and improvements installed or placed on the Premises by Tenant or by Landlord on behalf of Tenant and (ii) all of Tenant's personal property contained within the Premises. Said policies shall (i) name Landlord as an additional insured and insure Landlord's contingent liability under or in connection with this Lease (except for the worker's compensation policy, which instead shall include waiver of subrogation endorsement in favor of Landlord) (ii) be insured by an insurance company which is acceptable to Landlord, and (iii) provide that said insurance shall not be canceled unless thirty (30) days prior written notice has been given to Landlord. Said policy or policies or certificates thereof shall be delivered to Landlord by Tenant on or before the Commencement Date and upon each renewal of said insurance.

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C. PROHIBITED USES. Tenant will not permit the Premises to be used for any purpose or in any manner that would (i) void the insurance thereon, (ii) increase the insurance risk or cost thereof, or (iii) cause the disallowance of any sprinkler credits; including without limitation, use of the Premises for the receipt, storage or handling of any product, material or merchandise that is explosive or highly inflammable. If any increase in the cost of any insurance on the Premises or the Building is caused by Tenant's use of the Premises, or because Tenant vacates the Premises, then Tenant shall pay the amount of such increase to Landlord within thirty (30) days of written demand therefor.

10. FIRE AND CASUALTY DAMAGE.

A. TOTAL OR SUBSTANTIAL DAMAGE AND DESTRUCTION. If the Premises or the Building should be damaged or destroyed by fire or other peril, Tenant shall immediately give written notice to Landlord of such damage or destruction. If the Premises or the Building should be totally destroyed by any peril covered by the insurance to be provided by Landlord under Paragraph 9A above, or if they should be so damaged thereby that, in Landlord's estimation, rebuilding or repairs cannot be completed within one hundred and fifty (150) days after the date of such damage or after such completion there is not enough time remaining under the terms of this Lease to fully amortize such rebuilding or repairs, then Landlord shall so notify Tenant in writing and this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease, effective upon the date of the occurrence of such damage.

B. PARTIAL DAMAGE OR DESTRUCTION. If the Premises or the Building should be damaged by any perils covered by the insurance to be provided by Landlord under Paragraph 9A above and, in Landlord's estimation, rebuilding or repairs can be substantially completed within one hundred fifty (150) days after the date of such damage, then this Lease shall not terminate and Landlord shall restore the Premises to its previous condition, except that Landlord shall not be required to rebuild, repair or replace any part of the partitions, fixtures, additions and other improvements that may have been constructed, erected or installed in or about the Premises for the benefit of or by or for Tenant. In the event of partial damage to the Premises, rent shall abate for the period of reconstruction for the portion of the Premises that cannot be occupied due to the casualty.

C. LIENHOLDERS RIGHTS IN PROCEEDS. Notwithstanding anything herein to the contrary, in the event the holder of any indebtedness secured by a mortgagee or deed of trust covering the Premises requires that the insurance proceeds be applied to such indebtedness, then Landlord shall have the right to terminate this Lease by delivering written notice of termination to Tenant within fifteen (15) days after such requirement is made known to Landlord by any such holder, whereupon all rights and obligations hereunder shall cease and terminate.

D. WAIVER OF SUBROGATION. Notwithstanding anything in this Lease to the contrary, Landlord and Tenant hereby waive and release each other of and from any and all rights of recovery, claims, actions or causes of action against each other, or their respective agents, officers and employees, for any loss or damage that may occur to the Premises, improvements to the Building or personal property (Building contents) within the Building and/or Premises, for any reason regardless of cause or origin. Each party to this Lease agrees immediately after execution of this Lease to give written notice of the terms of the mutual waivers contained in this subparagraph to each insurance company that has issued to such party policies of fire and extended coverage insurance and, if necessary, to have the insurance policies properly endorsed to provide that the carriers of such policies waive all rights of recovery under subrogation or otherwise against the other party.

11. LIABILITY AND INDEMNIFICATION. Except for any claims, rights of recovery and causes of action that Landlord has released, Tenant shall hold Landlord harmless from and defend Landlord against any and all claims or liability for any injury or damage (i) to any person or property whatsoever occurring in, on or about the Premises or any part thereof, the Building and/or about the Premises or any part thereof, the Building and/or common areas, the use of which Tenant may have in accordance with this Lease, if (and only if) such injury or damage shall be caused in whole or in part by the act, gross neglect, fault or willful omission of any duty by Tenant, its agents, servant, employees or invitees, (ii) arising from the conduct or management of any work done by the Tenant in or about the Premises, (iii) arising from transactions of the Tenant, and (iv) all costs, counsel fees, expenses and liabilities incurred in connection with any such claim or action or proceeding brought thereon. The provisions of this Paragraph 11 shall survive the expiration or termination of this Lease. Landlord shall not be liable in any event for personal injury or loss of Tenant's property caused by fire, flood, water leaks, rain, hail, ice, snow, smoke, lightning, wind, explosion, interruption of utilities, or other occurrences unless resulting from Landlord's acts. Landlord strongly recommends that Tenant secure Tenant's own insurance, in excess of the amounts required elsewhere in this Lease, to protect against the above occurrences if Tenant desires additional coverage for such risks. Tenant shall give prompt notice to Landlord of any significant accidents involving injury to persons or property. Furthermore, Landlord shall not be responsible for lost or stolen personal property, equipment, money or jewelry from the Premises or from the public areas of the Building or the Project, or for any damages or losses caused by theft, burglary, assault, vandalism, or other crimes. Landlord strongly recommends that Tenant provide its own security systems and services and secure Tenant's own insurance in excess of the amounts required elsewhere in this Lease, to protect against the above occurrences if Tenant desires additional protection or coverage for such risks. Tenant shall give Landlord prompt notice of any criminal or suspicious conduct within or about the Premises, the Building or the Project, and/or any personal injury or property damage caused thereby. Landlord may, but is not obligated to, enter into agreements with third parties for the provision of any courtesy patrols or similar services or fire protective systems and equipment and, to the extent same is provided in Landlord's sole discretion, Landlord shall not be liable to Tenant for any damages, costs or expenses which occur for any reason in the event any such system or equipment is not properly installed, monitored or maintained or any such services are not properly provided, unless resulting from Landlord's acts. Landlord shall use reasonable diligence in the maintenance of existing lighting, if any, in the parking areas servicing the Premises, and Landlord shall not be responsible for additional lighting or any security measures in the Project, the Premises or other parking areas.

12. USE. The Premises shall be used only for the purpose of manufacturing, sales, research and development, telephone support, design, receiving, storing, shipping and selling (other than retail) products, materials and merchandise made and/or distributed by Tenant and for such other lawful purposes as may be directly incidental thereto. Outside storage, including without limitation storage of trucks and other vehicles, is prohibited without Landlord's prior written consent. Tenant shall comply with all governmental laws, ordinances and regulations applicable to the use of the Premises, and shall promptly comply with all governmental orders and directives for the correction, prevention and abatement of nuisances in or upon or connected with the Premises, all at Tenant's sole expense. Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to emanate from the Premises, nor take any other action that would constitute a nuisance or would disturb, unreasonably interfere with or endanger Landlord or any other lessees of the Building or the Project.

13. HAZARDOUS WASTE. The term "Hazardous Substances," as used in this Lease, shall mean pollutants, contaminants, toxic or hazardous wastes, radioactive materials or any other substances, the use and/or the removal of which is required or the use of which is restricted, prohibited or penalized by any "Environmental Law," which term shall mean any federal, state or local statute, ordinance, regulation or other law of a governmental or quasi-governmental authority relating to pollution or protection of the environment or the regulation of the storage or handling of Hazardous Substances. Limited to its actions only, Tenant hereby agrees that: (i) no activity will be conducted on the Premises that will produce any Hazardous Substance, except for such activities that are part of the ordinary course of Tenant's business activities (the "Permitted Activities"), provided said Permitted Activities are conducted in accordance with all Environmental Laws and have been approved in advance in writing by Landlord, which approval shall not be unreasonably withheld or delayed and, in connection therewith, Tenant shall be responsible for obtaining any required permits or authorizations and paying any fees and providing any testing required by any governmental agency; (ii) the Premises will not be used in any manner for the storage of any Hazardous Substances, except for the temporary storage of such materials that are used in the ordinary course of Tenant's business (the "Permitted Materials"), provided such Permitted Materials are properly stored in a manner and location meeting all Environmental Laws and have been approved in advance in writing by Landlord, which such approval shall not be unreasonably withheld or delayed, and, in connection therewith, Tenant shall be responsible for obtaining any required permits or authorizations and paying any fees and providing any testing required by any governmental agency; (iii) no portion of the Premises will be used as a landfill or a dump; (iv) Tenant will not install any underground tanks of any type; (v) Tenant will not allow any surface or subsurface conditions to exist or come into existence that constitute, or with the passage of time may constitute, a public or private nuisance; (vi) Tenant will not permit any Hazardous Substances to be brought onto the Premises, except for the Permitted Materials, and if so brought or found located thereon, the same shall be immediately removed, with proper disposal, and all required clean-up procedures shall be diligently undertaken by Tenant at its sole cost pursuant to all Environmental Laws. Upon prior notice during normal business hours, Landlord and Landlord's representatives shall have the right but not the obligation to enter the Premises for the purpose of inspecting the storage, use and disposal of any Permitted Materials to ensure compliance with all Environmental Laws. Should it be determined, in Landlord's sole opinion, that any Permitted Materials are being improperly stored, used or disposed of, then Tenant shall immediately take such corrective action as requested by Landlord. Should Tenant fail to take such corrective action within twenty-four (24) hours, Landlord shall have the right to perform such work and Tenant shall reimburse Landlord, on demand, for any

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and all costs associated with said work. If at any time during or after the term of this Lease, the Premises is found to be contaminated with Hazardous Materials, Tenant shall diligently institute proper and thorough clean-up procedures, at Tenant's sole cost. TENANT AGREES TO INDEMNIFY AND HOLD LANDLORD HARMLESS FROM ALL CLAIMS, DEMANDS, ACTIONS, LIABILITIES, COSTS, EXPENSES, DAMAGES, PENALTIES AND OBLIGATIONS OF ANY NATURE ARISING FROM OR AS A RESULT OF ANY CONTAMINATION OF THE PREMISES WITH HAZARDOUS SUBSTANCES BY TENANT, OR OTHERWISE ARISING FROM THE USE OF THE PREMISES BY TENANT. THE FOREGOING INDEMNIFICATION AND THE RESPONSIBILITIES OF TENANT SHALL SURVIVE THE TERMINATION OR EXPIRATION OF THIS LEASE.

14. INSPECTION. Landlord's agents and representatives, upon notice to Tenant, shall have the right to enter the Premises at any reasonable time during business hours (or at any time in case of emergency) (i) to inspect the Premises; (ii) to make such repairs as may be required or permitted pursuant to this Lease; and/or (iii) during the last six (6) months of the Lease term, for the purpose of showing the Premises. In addition, Landlord shall have the right to erect a suitable sign on the Premises stating the Premises are available for Lease. Tenant shall notify Landlord in writing at least thirty (30) days prior to vacating the Premises and shall arrange to meet with Landlord for a joint inspection of the Premises prior to vacating. If Tenant fails to give such notice or to arrange for such inspection, then Landlord's inspection of the Premises shall be deemed correct for the purpose of determining Tenant's responsibility for repairs and restoration of the Premises.

15. ASSIGNMENT AND SUBLETTING. Tenant shall not have the right to sublet, assign or otherwise transfer or encumber this Lease, or any interest therein, without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. Any attempted assignment, subletting, transfer of encumbrance by Tenant in violation of the terms and covenants of this paragraph shall be void. Any assignee, sublessee or transferee of Tenant's interest in this Lease (all such assignees, sublessees and transferees being hereinafter referred to as "Transferees"), by assuming Tenant's obligations hereunder, shall assume liability to Landlord for all amounts paid to persons other than Landlord by such Transferees to which Landlord is entitled or otherwise in contravention of this Paragraph 15. No assignment, subletting or other transfer, whether or not consented to by Landlord or permitted hereunder, shall relieve Tenant of its liability under this Lease. If an Event of Default occurs while the Premises or any part thereof are assigned or sublet, then Landlord, in addition to any other remedies herein provided or provided by law, may collect directly from such Transferee all rents payable to the Tenant and apply such rent against any sums due Landlord hereunder. No such collection shall be construed to constitute a novation or a release of Tenant from the further performance of Tenant's obligations hereunder. If Landlord consents to any subletting or assignment by Tenant as hereinabove provided and any category of rent subsequently received by Tenant under any such sublease is in excess of the same category of rent payable under this Lease, or any additional consideration is paid to Tenant by the assignee under any such assignment, then Landlord may, at its option, declare such excess rents under any sublease or such additional consideration for any assignment to be due and payable by Tenant to Landlord as additional rent hereunder. The following shall additionally constitute an assignment of this Lease by Tenant for the purposes of this Paragraph 15.: (i) if Tenant is a corporation, any merger, consolidation, dissolution or liquidation, or any change in ownership or power to vote of thirty percent (30%) or more of Tenant's outstanding voting stock; (ii) if Tenant is a partnership, joint venture or other entity, any liquidation, dissolution or transfer of ownership of any interests totaling thirty percent (30%) or more of the total interests in such entity; (iii) the sale, transfer, exchange, liquidation or other distribution of more than thirty percent (30%) of Tenant's assets, other than this Lease; or (iv) the mortgage, pledge, hypothecation or other encumbrance of or grant of a security interest by Tenant in this Lease, or of any of Tenant's rights hereunder. For the purposes of this Lease, the merger or sale of a division owned by Tenant shall not constitute an assignment under this Lease.

16. CONDEMNATION. If more than eighty percent (80%) of the Premises or the required parking and access related thereto, are taken for any public or quasi-public use under governmental law, ordinance or regulation, or by right of eminent domain or private purchase in lieu thereof, and the taking prevents or materially interferes with the use of the remainder of the Premises for the purpose for which they were leased to Tenant, then this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease, effective on the date of such taking. If less than eighty percent (80%) of the Premises are taken for any public or quasi-public use under any governmental law, ordinance or regulation, or by right of eminent domain or private purchase in lieu thereof, or if the taking does not prevent or materially interfere with the use of the remainder of the Premises, parking, access and loading for the purpose for which they were leased to Tenant, then this Lease shall not terminate, but the rent payable hereunder during the unexpired portion of this Lease shall be reduced to such extent as may be fair and reasonable under all of the circumstances. All compensation awarded in connection with or as a result of any of the foregoing proceedings shall be the property of Landlord, and Tenant hereby assigns any interest in any such award to Landlord:
provided, however, Landlord shall have no interest in any award made to Tenant for loss of business or goodwill or for the taking of Tenant's trade fixtures and personal property, if a separate award for such items is made to Tenant.

17. HOLDING OVER. At the termination of this Lease by its expiration or otherwise, Tenant shall immediately deliver possession of the Premises to Landlord with all repairs and maintenance required herein to be performed by Tenant completed. If, for any reason, Tenant retains possession of the Premises after the expiration or termination of this Lease, unless the parties hereto otherwise agree in writing, such possession shall be deemed to be a tenancy at will only, and all other terms and provisions of this Lease shall be applicable during such period, except that Tenant shall pay Landlord from time to time, upon demand, as rental for the period of such possession, an amount equal to one and one-half times the rent in effect on the date of such termination of this Lease, computed on a daily basis for each day of such period. No holding over by Tenant, whether with or without consent of Landlord, shall operate to extend this Lease except as otherwise expressly provided. The preceding provisions of this Paragraph 17 shall not be construed as consent for Tenant to retain possession of the Premises in the absence of written consent thereto by Landlord.

18. QUIET ENJOYMENT. Landlord represents that it has the authority to enter into this Lease and that, so long as Tenant pays all amounts due hereunder and performs all other covenants and agreements herein set forth, Tenant shall peaceably and quietly have, hold and enjoy the Premises for the term hereof without hindrance or molestation from Landlord, subject to the terms and provisions of this Lease.

19. EVENTS OF DEFAULT. The following events (herein individually referred to as an "Event of Default") each shall be deemed to be default in or breach of Tenant's obligations under this Lease:

A. Tenant shall fail to pay any installment of the rent herein reserved when due, or any other payment or reimbursement to Landlord required herein when due, and such failure shall continue for a period of ten (10) days from the date Landlord provided written notice that such payment was due.

C. Tenant shall fail to discharge any lien placed upon the Premises in violation of paragraph 22 hereof within twenty (20) days after any such lien or encumbrance is filed against the Premises.

D. Tenant shall default in the performance of any of its obligations under any other lease to Tenant from Landlord, or from any person or entity affiliated with or related to Landlord, and same shall remain uncured after the lapsing of any applicable cure period provide for under such other lease.

E. Tenant shall fail to comply with any term, provision or covenant of this Lease (other than those listed above in this paragraph), and shall not cure such failure within thirty (30) days after written notice thereof from Landlord.

20. REMEDIES. Upon each occurrence an Event of Default, Landlord shall have the option to pursue anyone or more of the following remedies without any notice or demand:

(a) Terminate this Lease;

(b) Enter upon and take possession of the Premises without terminating this Lease;

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(c) Make such payments and/or take such action and pay and/or perform whatever Tenant is obligated to pay or perform under the terms of this Lease, and Tenant agrees that Landlord shall not be liable for any damages resulting to Tenant from such action; and/or

(d) Alter all locks and other security devices at the Premises, with or without terminating this Lease, and pursue, at Landlord's option, one or more remedies pursuant to this Lease, and Tenant hereby expressly agrees that Landlord shall not be required to provide to Tenant the new key to the Premises, regardless of hour, including Tenant's regular business hours;

and in any such event Tenant shall immediately vacate the Premises, and if Tenant fails so to do, Landlord, without waiving any other remedy it may have, may enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying such Premises or any part thereof, without being liable for prosecution or any claim of damages therefor. In the event of any violation of Section 93.008 of the Texas Property Code by Landlord or by any agent or employee of Landlord, Tenant hereby expressly waives any and all rights Tenant may have under Paragraph
(g) of such Section 93.008.

A. DAMAGES UPON TERMINATION. If Landlord terminates this Lease, at Landlord's option, Tenant shall be liable for and shall pay to Landlord the sum of all rental and other payments owed to Landlord hereunder accrued to the date of such termination, plus, as liquidated damages, an amount equal to
(1) the present value of the total rental and other payments owed hereunder for the remaining portion of the Lease term, calculated as if such term expired on the date set forth in Paragraph 1, less, (2) the present value of the then fair market rental for the Premises for such period, provided that, because of the difficulty of ascertaining such value and in order to achieve a reasonable estimate of liquidated damages hereunder, Landlord and Tenant stipulate and agree, for the purposes hereof, that such fair market rental shall in no event exceed seventy-five percent (75%) of the rental amount for such period set forth in Paragraph 2 above.

B. DAMAGES UPON REPOSSESSION. If Landlord repossesses the Premises without terminating this Lease, Tenant, at Landlord's option, shall be liable for and shall pay Landlord on demand all rental and other payments owed to Landlord hereunder, accrued to the date of such repossession, plus all amounts required to be paid by Tenant to Landlord until the date of expiration of the term as stated in Paragraph 1, diminished by all amounts actually received by Landlord through reletting the Premises during such remaining term (but only to the extent of the rent herein reserved). Actions to collect amounts due by Tenant to Landlord under this paragraph may be brought from time to time, on one or more occasions, without the necessity of Landlord's waiting until expiration of the Lease term.

C. COSTS OF RELETTING, REMOVING, REPAIRS AND ENFORCEMENT. Upon an Event of Default, in addition to any sum provided to be paid under this Paragraph 20, Tenant also shall be liable for and shall pay to Landlord (i) brokers' fees and all other costs and expenses incurred by Landlord in connection with reletting the whole or any part of the Premises; (ii) the costs of removing, storing or disposing Tenant's or any other occupant's property; (iii) the costs of repairing, altering, remodeling or otherwise putting the Premises into condition acceptable to a new Tenant or Tenants:
(iv) any and all actual costs and expenses incurred by Landlord in effecting compliance with Tenant's obligations under this Lease; and (v) all reasonable expenses incurred by Landlord in enforcing or defending Landlord's rights and/or remedies hereunder, including without limitation, all reasonable attorneys' fees and all court costs incurred in connection with such enforcement or defense.

D. LATE CHARGE. In the event Tenant fails to make any payment due hereunder within five (5) days after such payment is due, including without limitation any rental or escrow payment, in order to help defray the additional cost to Landlord for processing such late payments and not as interest, Tenant shall pay to Landlord on demand a late charge in an amount equal to five percent (5%) of such payment. The provision for such late charge shall be in addition to all of Landlord's other rights and remedies hereunder or at law, and shall not be construed as liquidated damages or as limiting Landlord's remedies in any manner.

E. INTEREST ON PAST DUE AMOUNTS. If Tenant fails to pay any sum which at any time becomes due to Landlord under any provision of this Lease as and when the same becomes due hereunder, and such failure continues for ten (10) days after the due date for such payment, then Tenant shall pay to Landlord interest on such overdue amounts from the date due until paid at an annual rate which equals the lesser of (i) eighteen percent (18%) or (ii) the highest rate then permitted by law.

F. NO IMPLIED ACCEPTANCES OR WAIVERS. Exercise by Landlord of any one or more remedies hereunder granted or otherwise available shall not be deemed to be an acceptance by Landlord of Tenant's surrender of the Premises, it being understood that such surrender can be effected only by the written agreement of Landlord. Tenant and Landlord further agree that forbearance by Landlord to enforce any of its rights under this Lease or at law or in equity shall not be a waiver of Landlord's right to enforce any one or more of its rights, including any right previously forborne, in connection with any existing or subsequent default. No re-entry or taking possession of the Premises by Landlord shall be construed as an election on its part to terminate this Lease, unless a written notice of such intention is given to Tenant, and, notwithstanding any such reletting or re-entry or taking possession of the Premises, Landlord may at any time thereafter elect to terminate this Lease for a previous default. Pursuit of any remedies hereunder shall not preclude the pursuit of any other remedy herein provided or any other remedies provided by law, nor shall pursuit of any remedy herein provided constitute a forfeiture or waiver of any rent due to Landlord hereunder or of any damages occurring to Landlord by reason of the violation of any of the terms, provisions and covenants contained in this Lease. Landlord's acceptance of any rent following either an Event of Default hereunder shall not be construed as Landlord's waiver of such Event of Default. No waiver by Landlord of any violation or breach of any of the terms, provisions and covenants of this Lease shall be deemed or construed to constitute a waiver of any other violation or default.

G. RELETTING OF PREMISES. In the event of any termination of this Lease and/or repossession of the Premises for an Event of Default, Landlord shall use reasonable efforts to relet the Premises and to collect rental after reletting, with no obligation to accept any lessee that Landlord deems undesirable or to expend any funds in connection with such reletting or collection of rents therefrom. Tenant shall not be entitled to credit for or reimbursement of any proceeds of such reletting in excess of the rental owed hereunder for the period of such reletting. Landlord may relet the whole or any portion of the Premises for any period, to any Tenant and for any use or purpose.

H. LANDLORD'S DEFAULT. If Landlord fails to commence to perform any of its obligations hereunder within thirty (30) days after written notice from Tenant specifying such failure, and such failure results in a defect that seriously jeopardizes the safety of persons occupying the Premises or threatens equipment or machinery owned by Tenant within the Premises, or such defect impairs Tenant's ability to conduct its business within the Premises, and Landlord has failed to commence to cure the default or obligation within the thirty (30) day period outlined above, Tenant shall be permitted to cure Landlord's default or obligation and Landlord will be obligated to reimburse Tenant for the actual cost incurred to cure Landlord's default or obligation.

All obligations of Landlord hereunder will be construed as covenants, not conditions; and all such obligations will be binding upon Landlord only during the period of its possession of the Premises and not thereafter. The term "Landlord" shall mean only the owner, for the time being of the Premises and, in the event of the transfer by such owner of its interest in the Premises, such owner shall thereupon be released and discharged from all covenants and obligations of the Landlord thereafter accruing, provided that such covenants and obligations shall be binding during the Lease term upon each new owner for the duration of such owner's ownership. Notwithstanding any other provision of this Lease, Landlord shall not have any personal liability hereunder. In the event of any breach or default by Landlord in any term or provision of this Lease, Tenant agrees to look solely to the equity or interest then owned by Landlord in the Premises or the Building; however, in no event, shall any deficiency judgment or any money judgment of any kind by sought or obtained against any Landlord.

I. TENANT'S PERSONAL PROPERTY. If Landlord repossesses the Premises pursuant to the authority herein granted, or if Tenant vacates or abandons all or any part of the Premises, then, in addition to Landlord's rights under Paragraph 29 hereof, Landlord shall have the right to (i) keep in place and use or (ii) remove and store, all of the furniture, fixtures, and equipment at the Premises, including that which is owned by Tenant, at all times prior to any foreclosure thereon by Landlord or repossession thereof by any lessor thereof or third party having a lien thereon. In addition to the Landlord's other rights hereunder, Landlord may dispose of the stored property if Tenant does not claim the property within twenty (20) days after the date the property is stored. Landlord shall give Tenant at least ten (10) ten days prior written notice of such intended disposition. Landlord shall also have the right to relinquish possession of all or any portion of such furniture, fixtures, equipment and other property to any person ("Claimant") who presents to Landlord a copy of any instrument represented by Claimant to have been executed by Tenant (or any predecessor of Tenant) granting Claimant the right under various circumstances to take

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possession of such furniture, fixtures, equipment or other property, without the necessity on the part of Landlord to inquire into the authenticity or legality of said instrument. The rights of Landlord herein stated shall be in addition to any and all other rights that Landlord has or may hereafter have at law or in equity; and Tenant stipulates and agrees that the rights granted Landlord under this paragraph are commercially reasonable.

21. MORTGAGES. Tenant accepts this Lease subject and subordinate to any mortgages and/or deeds of trust now or at any time hereafter constituting a lien or charge upon the Premises or the improvements situated thereon or the Building, provided, however, that if the mortgagee, trustee or holder of any such mortgage or deed of trust elects to have Tenant's interest in this Lease superior to any such instrument, then by notice to Tenant from such mortgagee, trustee or holder, this Lease shall be deemed superior to such lien, whether this Lease was executed before or after said mortgage or deed of trust. Tenant, at any time hereafter on demand, shall execute any instruments, releases or other documents that may be required by any mortgagee for the purpose of subjecting and subordinating this Lease to the lien of any such mortgage, provided the subordination does not change any of the Lease terms contained within this Lease and the subordination agreement contains an attornment and non-disturbance agreement. Tenant shall not terminate this Lease or pursue any other remedy available to Tenant hereunder for any default on the part of Landlord without first giving written notice by certified or registered mail, return receipt requested, to any mortgagee, trustee or holder of any such mortgage or deed of trust, the name and post office address of which Tenant has received written notice, specifying the default in reasonable detail and affording such mortgagee, trustee or holder a reasonable opportunity (but in no event less than thirty days) to make performance, at its election, for and on behalf of Landlord.

22. MECHANIC'S LIENS. Tenant has no authority, express or implied, to create or place any lien or encumbrance of any kind or nature whatsoever upon, or in any manner to bind the interest of Landlord or Tenant in the Premises. TENANT WILL SAVE AND HOLD LANDLORD HARMLESS FROM ANY AND ALL LOSS, COST OR EXPENSE, INCLUDING WITHOUT LIMITATION ATTORNEYS' FEES, BASED ON OR ARISING OUT OF ASSERTED CLAIMS OR LIENS AGAINST THE LEASEHOLD ESTATE OR AGAINST THE RIGHT, TITLE AND INTEREST OF THE LANDLORD IN THE PREMISES OR UNDER THE TERMS OF THIS LEASE.

23. MISCELLANEOUS.

A. INTERPRETATION. The captions inserted in this Lease are for convenience only and in no way define, limit or otherwise describe the scope or intent of this Lease, or any provision hereof, or in any way affect the interpretation of this Lease.

B. BINDING EFFECT. Except as otherwise herein expressly provided, the terms, provisions and covenants and conditions in this Lease shall apply to, inure to the benefit of and be binding upon the parties hereto and upon their respective heirs, executors, personal representatives, legal representatives, successors and assigns. Landlord shall have the right to transfer and assign, in whole or in part, its rights and obligations in the Premises and in the Building and other property that are the subject of this Lease.

C. EVIDENCE OF AUTHORITY. Tenant agrees to furnish to Landlord, promptly upon demand, a corporate resolution, proof of due authorization by partners or other appropriate documentation evidencing the due authorization of such party to enter into this Lease.

D. FORCE MAJEURE. Landlord shall not be held responsible for delays in the performance of its oblations hereunder when caused by material shortages, acts of God, labor disputes or other events beyond the control of Landlord.

E. PAYMENTS CONSTITUTE RENT. Notwithstanding anything in this Lease to the contrary, all amounts payable by Tenant to or on behalf of Landlord under this Lease, whether or not expressly denominated as rent, shall constitute rent.

F. ESTOPPEL CERTIFICATES. Tenant agrees, from time to time, within ten (10) days after request of Landlord, to deliver to Landlord, or Landlord's designee, an estoppel certificate stating that this Lease is in full force and effect, the date to which rent has been paid, the unexpired term of this Lease, any defaults existing under this Lease (or the absence thereof) and such other factual or legal matters pertaining to this Lease as may be requested by Landlord. It is understood and agreed that Tenant's obligation to furnish such estoppel certificates in a timely fashion is a material inducement for Landlord's execution of this Lease, provided it does not alter the terms of this Lease.

G. ENTIRE AGREEMENT. This Lease constitutes obligations which have the entire understanding and agreement of Landlord and Tenant with respect to the subject matter of this Lease, and contains all of the covenants and agreements of Landlord and Tenant with respect thereto. Landlord and Tenant each acknowledge that no representations, inducements, promises or agreements, oral or written, have been made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant, which are not contained herein, and any prior agreements, promises, negotiations or representations not expressly set forth in this Lease are of no force or effect. EXCEPT AS SPECIFICALLY PROVIDED IN THIS LEASE, TENANT HEREBY WAIVES THE BENEFIT OF ALL IMPLIED WARRANTIES, IT BEING UNDERSTOOD THAT LANDLORD WILL CONSTRUCT THE PREMISES SPECIFICALLY FOR TENANT'S INTENDED USE AND IN ACCORDANCE WITH PLANS AND SPECIFICATIONS, AND WITH RESPECT TO THE PREMISES, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE FOR ANY PARTICULAR PURPOSE. Landlord's agents and employees do not and will not have authority to make exceptions, changes or amendments to this Lease, or factual representations not expressly contained in this Lease. Under no circumstances shall Landlord or Tenant be considered an agent of the other. This Lease may not be altered, changed or amended except by an instrument in writing signed by both parties hereto.

H. SURVIVAL OF OBLIGATIONS. All obligations of Tenant hereunder not fully performed as of the expiration or earlier termination of the term of this Lease shall survive the expiration or earlier termination of the term hereof, including without limitation all payment obligations with respect to taxes and insurance and all obligations concerning the condition and repair of the Premises. Upon the expiration or earlier termination of the term hereof, and prior to Tenant vacating the Premises, Tenant shall pay to Landlord any amount reasonably estimated by Landlord as necessary to put the Premises in good condition and repair, reasonable wear and tear excluded, including without limitation the cost of repairs to and replacements of all heating and air conditioning systems and equipment therein. Tenant shall also, prior to vacating the Premises, pay to Landlord the amount, as estimated by Landlord, of Tenant's obligation hereunder for real estate taxes and insurance premiums for the year in which the Lease expires or terminates. All such amounts shall be used and held by Landlord for payment of such obligations of Tenant hereunder, with Tenant being liable for any additional costs therefore upon demand by Landlord, or with any excess to be returned to Tenant after all such obligations have been determined and satisfied, as the case may be. Any Security Deposit held by Landlord may, at Landlord's option, be credited against any amounts due from Tenant under this Paragraph 23H.

I. SEVERABILITY OF TERMS. If any clause or provision of this Lease is illegal, invalid or unenforceable under present of future laws effective during the term of this Lease, then, in such event, it is the intention of the parties hereto that the remainder of this Lease shall not be affected thereby, and it is also the intention of the parties to this Lease that in lieu of each clause or provision of this Lease that is illegal, invalid or unenforceable clause or provision as may be legal, valid and enforceable.

J. EFFECTIVE DATE. All references in this Lease to "the date hereof" or similar references shall be deemed to refer to the last date in point in time on which all parties hereto have executed this Lease.

K. BROKER'S COMMISSION. Tenant represents and warrants that it has dealt with and will deal with no broker, agent or other persons other than CHRIS WHITWORTH OF HILL PARTNERS AND SCOTT YOUNG AND CHAD MUELLER OF SCOTT YOUNG PROPERTIES in connection with this transaction or future related transactions and that no broker, agent or other person brought about this transaction, and Tenant agrees to indemnify and hold Landlord harmless from and against any claims by any other broker, agent or other person claiming a commission or other form of compensation by virtue of having dealt with them with regard to this leasing transaction.

L. AMBIGUITY. Landlord and Tenant hereby agree and acknowledge that this Lease has been fully reviewed and negotiated by both Landlord and Tenant, and that Landlord and Tenant have each had the opportunity to have this Lease reviewed by their respective legal counsel, and, accordingly, in the event of any ambiguity herein, Tenant does hereby waive the rule of construction that such ambiguity shall be resolved against the party who prepared this Lease.

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M. JOINT AND SEVERAL LIABILITY. If there be more than one Tenant, the obligations hereunder imposed upon Tenant shall be joint and several. If there be a guarantor of Tenant's obligations hereunder, the obligations hereunder imposed upon Tenant shall be joint and several obligations of Tenant and such guarantor, and Landlord need not first proceed against Tenant before proceeding against such guarantor, nor shall any such guarantor be released from its guaranty for any reason whatsoever, including, without limitation, in case of any amendments hereto, waivers hereof or failure to give such guarantor any notices hereunder

N. THIRD PARTY RIGHTS. Nothing herein expressed or implied is intended, or shall be construed, to confer upon or give to any person or entity, other than the parties hereto, any right or remedy under or by reason of this Lease.

0. EXHIBITS AND ATTACHMENTS. All exhibits, attachments, riders and addenda referred to in this Lease, and the exhibits listed herein below and attached hereto, are incorporated into this Lease and made a part hereof for all intents and purposes as if fully set out herein. All capitalized terms used in such documents shall, unless otherwise defined therein, have the same meanings as are set forth herein.

P. APPLICABLE LAW. This Lease has been executed in the State of Texas and shall be governed in all respects by the laws of the State of Texas. It is the intent of Landlord and Tenant to conform strictly to all applicable state and federal usury laws. All agreements between Landlord and Tenant, whether now existing or hereafter arising and whether written or oral, are hereby expressly limited so that in no contingency or event whatsoever shall the amount contracted for, charged or received by Landlord for the use, forbearance or retention of money hereunder or otherwise exceed the maximum amount which Landlord is legally entitled to contract for, charge or collect under the applicable state or federal law. If, from any circumstance whatsoever, fulfillment of any provision hereof at the time performance of such provision shall be due shall involve transcending the limit of validity prescribed by law, then the obligation to be fulfilled shall be automatically reduced to the limit of such validity, and if from any such circumstance Landlord shall ever receive as interest or otherwise an amount in excess of the maximum that can be legally collected, then such amount which would be excessive interest shall be applied to the reduction of rent hereunder, and if such amount which would be excessive interest exceeds such rent, then such additional amount shall be refunded to Tenant.

24. NOTICES. Each provision of this instrument or of any applicable governmental laws, ordinances, regulations and other requirements with reference to the sending, mailing or delivering of notice or the making of any payment by Landlord to Tenant or with reference to the sending, mailing or delivering of any notice or the making of any payment by Tenant to Landlord shall be deemed to be complied with when and if the following steps are taken:

(i) All rent and other payments required to be made by Tenant to Landlord hereunder shall be payable to Landlord at the address for Landlord set forth below or at such other address as Landlord may specify from time to time by written notice delivered in accordance herewith. Tenant's obligation to pay rent and any other amounts to Landlord under the terms of this Lease shall not be deemed satisfied until such rent and other amounts have been actually received by Landlord.

(ii) All payments required to be made by Landlord to Tenant hereunder shall be payable to Tenant at the address set forth below, or at such other address within the continental United States as Tenant may specify from time to time by written notice delivered in accordance herewith.

(iii) Except as expressly provided herein, any written notice, document or payment required or permitted to be delivered hereunder shall be deemed to be delivered when received or, whether actually received or not, when deposited in the United States Mail, postage prepaid, Certified or Registered Mail, addressed to the parties hereto at the respective addresses set out below, or at such other address as they have theretofore specified by written notice delivered in accordance herewith.

26. ADDITIONAL PROVISIONS. See EXHIBIT "B" attached hereto and incorporated by reference herein.

EXECUTED BY LANDLORD, this 15th day of April, 1998.

CAMERON TECHNOLOGY INVESTORS, LTD.

BY: CAMERON ROAD INVESTORS, LTD. A TEXAS LIMITED
LIABILITY CO.

ITS: GENERAL PARTNER

ITS: MANAGING DIRECTOR

Address: C/O Scott Young Properties P.O. Box 1525, Austin, Texas 78767

EXECUTED BY TENANT, this 8th day of April, 1998.

ADVANCED ENERGY INDUSTRIES, INC.

Address: 1625 Sharp Point Drive Fort Collins, CO 80525 Phone: 970-221-4670

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                                                      Fax:      970-407-5243

EXHIBIT  "A"   Description of Premises
EXHIBIT  "B"   Additional Provisions
EXHIBIT  "C"   Rules and Regulations
EXHIBIT  "D"   Tenant Construction Standards
EXHIBIT  "E"   Sign Criteria
EXHBIT   "F"   Construction Plans

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EXHIBIT "A"

[MAP]

EXHIBIT "A-1"

[MAP]

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     EXPENSE                PER SQUARE FOOT              AMOUNT PER MONTH
-------------------------------------------------------------------------------
     Property Taxes             $.09                           $1,782.00
     Insurance                  $.01                             $198.00
     CAM                        $.06                           $1,188.00
-------------------------------------------------------------------------------
     TOTAL                      $.16                           $3,168.00
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2. TENANT IMPROVEMENT AGREEMENT. Landlord shall cause to be performed the improvements (the "TENANT IMPROVEMENTS") in the Premises in accordance with plans and specifications approved by Tenant and Landlord (the "Plans"), which approvals shall not be unreasonably withheld. The Tenant Improvements shall be performed at the Tenant's cost, subject to the reimbursement of Landlord's Contribution.

Tenant shall cause the Plans to be prepared, at Tenant's cost, by a registered professional architect, and mechanical and electrical engineer(s) with the design criteria developed in accordance with EXHIBIT "D", TENANTS CONSTRUCTION STANDARDS attached and incorporated herein. Such engineer(s) shall be approved in advance by the Landlord. Prior to close-of-business on December 1, 1998, Tenant shall furnish the initial draft of the Plans to Landlord for Landlord's review and approval. Landlord shall within two (2) weeks after receipt either provide comments to such Plans or approve the same. Landlord shall be deemed to have approved such Plans if it does not timely provide comments on such Plans. If Landlord provides Tenant with comments to the initial draft of the Plans, Tenant shall provide revised Plans to Landlord incorporating Landlord's comments within one week after receipt of Landlord's comments. Landlord shall within one week after receipt then either provide comments to such revised Plans or approve such Plans. Landlord shall be deemed to have approved such revised Plans if Landlord does not timely provide comments on such Plans. The process described above shall be repeated, if necessary, until the Plans have been finally approved by Landlord. Tenant hereby agrees that the Plans for the Tenant Improvements shall comply with all applicable Governmental requirements. Landlord's approval of any of the Plans (or any modifications or changes thereto) shall not impose upon Landlord or its agents or representatives any obligation with respect to the design of the Tenant Improvements or the compliance of such Tenant Improvement or the Plans with applicable Governmental Requirements.

Landlord, with consultation of Tenant, shall mutually select a contractor to perform the construction of the Tenant Improvements. Such contractor shall be selected by a competitive bid process between three contractors selected by Landlord and Tenant. Landlord shall use commercially reasonable efforts to cause the Tenant Improvements to be substantially completed, except for minor "Punch List" items, on or before the Commencement Date specified in the Lease, subject to Tenant Delay and Force Majeure.

Landlord, or an agent of Landlord, shall provide project management services in connection with the construction of the Tenant Improvements and the Change Orders (hereinafter defined). Such project management services shall be performed, at Tenant's cost, for a fee of five percent (5%) of all costs related to the preparation of the Plans and the construction of the Tenant Improvements and the Change Orders.

A. CHANGE ORDERS. If, prior to the Commencement Date, Tenant shall require improvements or changes (individually or collectively, "CHANGE ORDERS") to the Premises in addition to, revision of, substitution for the Tenant Improvements, Tenant shall deliver to Landlord for its approval plans and specifications for such Change Orders. If Landlord does not approve of the plans for Change Orders, Landlord shall advise Tenant of the revisions required. Tenant shall revise and redeliver the plans and specifications to Landlord within five (5) business days of Landlord's advice or Tenant shall be deemed to have abandoned its request for such Change Orders. Tenant shall pay for all preparations and revisions of plans and specifications, and the construction of all Change Orders, subject to Landlord's Contribution.

B. LANDLORD'S CONTRIBUTION. Landlord shall contribute an amount up to FIFTEEN DOLLARS ($15.00) PER SQUARE FOOT ("LANDLORD'S CONTRIBUTION") toward the costs incurred for the Tenant Improvements and Change Orders. Landlord has no obligation to pay for costs of the Tenant

Improvements or Change Orders in excess of Landlord's Contribution; Tenant shall pay such overage to Landlord prior to commencement of construction of the Tenant Improvements and/or Change Orders.

C. COMMENCEMENT DATE DELAY. Commencement Date shall be delayed until the Tenant Improvements have been substantially completed (the "COMPLETION DATE"), except to the extent that the delay shall be caused by any one or more of the following (a "TENANT DELAY"):

(i) Tenant's request for Change Orders whether or not any such Change Orders are actually performed; or

(ii) Contractor's performance of any Change Orders; or

(iii) Tenant's request for materials, finishes or installations requiring unusually long lead times; or

(iv) Tenant's delay in reviewing, revising or approving plans and specifications beyond the periods set forth herein; or

(v) Tenant's delay in providing information critical to the normal progression of the project. Tenant shall provide such information as soon as reasonably possible, but in no event longer than one week after receipt of such request for information from the Landlord; or

(vi) Tenant's delay in making payments to Landlord for costs of the Tenant Improvements and/or Change Orders in excess of the Landlord's Contribution; or

(vii) Any other act or omission by Tenant, its agents, contractors or persons employed by any of such persons.

If the Commencement Date is delayed for any reason, then Landlord shall cause the Architect to certify the date on which the Tenant Improvements would have been completed but for such Tenant Delay, or were in fact completed without any Tenant Delay.

3. RIGHT TO EXPAND AND RELOCATE. During the term of this Lease, should Tenant's lease space requirements increase to the extent that expansion within the Building containing the Premises is impossible, Landlord shall use good faith in an attempt to relocate Tenant into a larger lease space within the Cameron Technology Center or other office/warehouse space owned by Landlord or in a building to be built by Landlord for Tenant on land mutually agreed upon by Landlord and Tenant.

In such event, Landlord shall agree to lease such space to Tenant at a rental rate indicative of the fair market rental rate prevalent at the time for similarly constructed and located office-warehouse lease space in Austin, Texas. Upon Tenant's relocation into the larger lease space owned or developed by Landlord and upon the reletting of the Premises, this Lease shall terminate and the new lease between Landlord and Tenant shall govern.

4. RIGHT OF FIRST REFUSAL. Tenant shall be granted the Right of First Refusal for any contiguous lease space to the Premises that should become available from time to time during the term of this Lease. Upon Landlord's receipt of an acceptable written offer to lease from a bona fide third party which desires to lease space contiguous to the Premises, Landlord shall immediately notify Tenant as to the terms and conditions contained in the offer. Tenant shall have ten (10) days from the date Landlord notifies Tenant of the third party offer in which to accept or decline the same terms contained in the third party offer. Should Tenant decline to match this offer, Landlord shall be free to lease the available lease space to the third party.

5. MISCELLANEOUS. In addition to the provisions contained within this Lease agreement, Landlord and Tenant mutually agree to the following:

A. DOCK DOORS. Landlord shall install an overhead, dock-high door for each bay within the Premises at the rear of the Building unless Tenant stipulates that an overhead door is unnecessary.

B. TENANT EQUIPMENT. Landlord will allow the Tenant to install at Tenant's sole expense, a 12' X 12' concrete pad with a security fence surrounding the pad at the rear of the Premises in a location mutually agreed upon by Landlord and Tenant. This fenced area will store an air compressor and chilled water tower. At the end of the Lease Term, Tenant shall remove all equipment installed in or about the Premises or Building and the Premises and/or Building shall be returned to its original condition, reasonable wear and tear excepted.

EXHIBIT "C"

BUSINESS PARK RULES AND REGULATIONS

The following rules and regulations shall apply where applicable, to the Premises, the Building, the Project, the driveways and parking areas, the land situated beneath the Premises, Building, and Project and the appurtenances thereto:

1. Sidewalks, doorways, halls stairways and other similar areas shall not be obstructed by Tenant or used by any Tenant for any purpose other than ingress and egress to and from the Premises and for going from one to another part of the Building.

2. Plumbing fixtures and appliances shall be used only for the purposes for which designed, and no sweepings, rubbish, rags or other unsuitable material shall be thrown or placed therein. Damage resulting to any such fixtures or appliances from misuse by a Tenant or such Tenant's agents, employees or invitees, shall be paid by such Tenant, and Landlord shall not in any case be responsible therefor.

3. No signs, advertisements or notices shall be painted or affixed on or to any windows or doors or other exterior part of the Building or the Premises except of such color, size and style and in such places as shall be first approved by, Landlord. Landlord, at Tenant's sole cost and expense, shall install all letters or numerals by or on doors in such Tenants Premises, which letters or numerals shall be in building standard graphics. No nails, hooks or screws shall be driven or inserted in any part of the Building outside the Premises except by the Building maintenance personnel nor shall any part of the Building be defaced by Tenant. No curtains or other window treatments shall be placed between the glass and the Building standard window treatments.

4. Landlord will provide and maintain a directory for all Tenants at the end of each building and no other directory shall be permitted unless previously consented to by Landlord in writing.

5. Two (2) keys to the locks on the exterior doors entering each Tenant's Premises shall be furnished by Landlord free of charge, with any additional keys to be furnished by Landlord to each Tenant, at Tenant's cost. Tenant shall not place any additional lock or locks on any door in or to its Premises without Landlord's prior written consent. All such keys shall remain the property of Landlord. Landlord will reduce $20.00 per key from Tenant's Security Deposit account for each key issued and not returned by Tenant at time of move out.

6. Landlord will provide within the Business Park a postal box for Tenants receipt of letter mail only. Landlord will issue to the tenant two keys to the postal box. The box keys are not to be duplicated by the Tenant. Tenant is held accountable for the keys and will bear the cost or re-keying the locks should the Tenant fail to return all keys at the end of the Lease.

7. With respect to work being performed by Tenants in its Premises with the approval of Landlord, all tenants will refer all contractors, contractors' representatives and installation technicians rendering any service to them to Landlord for Landlord's supervision, approval and control before the performance of any contractual services. This provision shall apply to all work performed in the Building including, but not limited to, installations of telephones, telegraph equipment, electrical devises and attachments, doors, entrance ways, and any and all installations of every nature affecting floors, walls, woodwork, trim, windows, ceilings, equipment and any other physical portion of the Premises and Building.

8. Each tenant shall cooperate with Landlord's employees in keeping its Premises neat and clean.

9. Tenant is responsible for janitorial service within its Premises.

10. Designated areas for trash containers are assigned to each tenant. Tenants will be billed direct by a trash removal service approved by the Landlord. Drums, pallets, equipment, vehicles, etc. are not allowed to be stored outside of building. Trash in the common area will be removed by the Landlord and the cost of removal prorated to the Tenants sharing the common area.

11. Landlord shall not be responsible to the tenants, their agents, employees, or invitees for any loss of property from the Premises or public areas or for any damages to any property thereon from any cause whatsoever.

12. Should a tenant require telegraphic, telephonic, annunicator or other communication service, Landlord will direct the electrician where and how wires are to be introduced and placed and none shall be introduced or placed except as Landlord shall direct.

13. Tenant shall not make or permit any improper, objectionable or unpleasant noises or odors in the Premises or Building or otherwise interfere in any way with other tenants or persons having business with them.

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A sewer line will be installed under floor accessible to the Premises. Tenant's sewer piping will start at the point of the sewer line tap in Tenant's Premises.

All electric service meter wireways will be installed in an area determined by Landlord. Each Tenant shall furnish and install his meter at the appropriate meter wireway as approved by Landlord. Tenant shall be responsible for obtaining an electric meter at his cost. If the wattage density exceeds that provided in the shell for Tenant's lease space, the Tenant will pay the additional cost for larger service to be installed by Landlord. Total power requirements shall be tabulated on the Tenant's working drawings submitted for approval.

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14. No machinery of any kind shall be operated by Tenant in its Premises without the prior written consent of Landlord, nor shall any tenant use or keep in the Premises or Building any flammable or explosive fluid or substance.

15. Nothing shall be swept or thrown into parking areas or driveways. No birds or animals shall be brought into or kept in, or about any tenant's leased premises.

16. Tenant, is agents, employees and invitees shall park only in those areas designated by Landlord for parking by Tenant and shall not park on any public or private streets contiguous to, surrounding or in the vicinity of the Building without Landlord's prior written consent.

17. No portion of any tenant's Premises shall at any time be used or occupied as sleeping or lodging quarters.

18. Landlord reserves the right to rescind any of these rules and regulations and to make such other and further reasonable rules and regulations as in its judgment shall from time to time be needful for the safety, protection, care and cleanliness of the Building and Project, the operation hereof, the preservation of good order therein and the protection and comfort of the Tenants and their agents, employees and invitees, which rules and regulations, when made and written notice thereof is given to a Tenant, shall be binding upon it in like manner as if originally herein prescribed.

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EXHIBIT "D"
TENANT CONSTRUCTION STANDARDS

TENANT SPACE DRAWINGS AND SPECIFICATION REQUIREMENTS
If Landlord's Architect does not prepare the drawings and specifications, then Tenant agrees that they shall be prepared by a licensed Architect and shall bear his registration seal, number, and signature. All documents must be reviewed and approved by Landlord and his Architect prior to the start of construction. The Tenant is required, upon completion of the construction, to provide the Landlord with a marked up blue line complete set of prints showing the conditions as built and a reproducible mylar complete set of drawings with changes in ink and a copy of the building permit and Certificate of Occupancy.

BUILDING CODES AND STANDARDS
All plans, specifications and construction for the Tenant's space must conform to the following codes and standards and any other applicable codes, standards, ordinances, and regulations.

1. Current Uniform Building Codes accepted by the City of Austin.
2. National Electrical Code.
3. City of Austin, Electrical Utility Department Code.
4. Uniform Mechanical Code.
5. City of Austin Health Department Code.
6. Department of Labor - Occupational Safety and Health Standards.
7. Consumer Product Safety Commission.
8. State of Texas Architectural Barriers Requirements.
9. Fire Marshall Requirements.

CONSTRUCTION ACCESS
Tenant shall use only the area immediately to the rear of its lease space for construction access. Adjoining spaces shall not be used for any purpose. Tenant shall be responsible for the repair of any damage done to the Project or Building by Tenant's construction of its own lease space.

TEMPORARY UTILITIES
Tenant and/or his contractors and/or subcontractors are responsible for temporary toilets and temporary utilities for their work, including payment of all utility charges. All arrangements shall be made with City of Austin, Southern Union Gas, and Southwestern Bell as applicable.

CONSTRUCTION TRASH
Trash, surplus construction materials, boxes, crates, debris, etc., from the Tenant's construction shall be removed daily from the Premises and hauled off the project site. Trash left on the project will be hauled off at the Tenant's expense.

TENANT SEPARATION
Walls which abut another Tenant's space must be a minimum two (2) Hour rated extending from floor to the roof deck with insulation. In the case where the space is vacant adjacent to Tenant's demising wall(s), such a wall shall be constructed of 3 1/2" metal studs spaced at 16" o.c. with minimum two (2) layers of 5/8" thick type X gypsum wallboard on the Tenant's side with staggered 2' joints. All penetrations to the demising wall(s) shall be treated to maintain the minimum two (2) Hour rating.

TELEPHONE
It is each Tenant's responsibility to procure the telephone service to its Premises. If any telephone equipment room is required by the Tenant, it must be located within its Premises. Tenants shall be responsible for routing its telephone service through the raceway system provided by Landlord in the shell building.

HVAC
Space above ceilings may not be used as a return air plenum. All return air shall be ducted from the conditioned space. The Landlord has the right to approve or disapprove the HVAC design and Tenant shall select the HVAC equipment from Landlord's standards. Location of roof top units shall be on pads as provided in the shell building with the location approved by the Landlord. Tenant shall indicate the actual weights and dimensions on their working drawings for review and approval by the Landlord of roof mounted equipment. Condensation lines shall drain into each Tenant's sewer

ROOF PENETRATIONS
All roof penetrations, equipment supports, pitch pans, flashing curbing, and roofing repairs shall be as approved by Landlord and performed by a roofer approved by Landlord at Tenant's expense. All roof penetrations shall occur within the boundaries of the Premises.

WATER
A common water line and valve will be provided for each lease space. Tenant water piping shall start at the point of the valve. All tenants requiring more plumbing than the required toilet room facilities, drinking fountain
(1), service sink (1), employee bar type sink (1) shall be required to furnish their own piping, meter, and installation. Should Tenant's water consumption levels exceed typical levels, Landlord and Tenant agree that Tenant shall supply a water flow meter of which Landlord shall read monthly and bill back Tenant for Tenant's actual consumption.

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EXHIBIT "E"

SIGN CRITERIA

1. COST OF THE SIGN(S). Identifying Tenant graphics for all leased Premises are the responsibility of Tenant. All expenses for fabrication, installation and sign maintenance shall be borne solely by Tenant.

2. APPROVAL OF SHOP DRAWINGS. Prior to the fabrication of any sign, Tenant shall present to Landlord for approval, shop drawings prepared by the manufacturer. All shop drawings shall be dimensionally scaled with the proposed sign located on a drawing of the building elevation; the shop drawings shall indicate all dimensions; shall indicate the actual letter style or font; if a logo is to be used, the actual logo shall be illustrated on the building elevation; all actual materials, paint brand and color(s) shall be specified; and the method of the sign attachment to the Building shall be clearly denoted

3. MATERIALS. Tenant sign graphics shall consist of individually cut letters. Letters shall be cut from 1/8" Lexan mounted or laminated to a three inch (3") width sign foam board or similar material. Letters shall be primed and painted uniformly on face and sides with Benjamin Moore Industrial grade paint or equivalent.

4. LOGOTYPES. Logotypes shall be cut from the same material as letters. Logotype area shall not exceed eighteen inches (18") in height and the sign or logotype length shall not exceed the lesser of fifty percent (50%) of the width of Tenant's Premises or fifteen feet (15'). All signs or logotypes shall be located above and appurtenant to the store front of the Premises.

5. SIZE. No individual letter shall exceed eighteen inches (18") in height. Letter line length shall not exceed the lesser of fifty percent (50%) of the width of Tenant's Premises or fifteen feet (15'). Should Tenant's sign contain more than one letter line, the total height of all letter lines combined shall not exceed forty inches (40"). All signs or logotypes shall be located above and appurtenant to the store front of the Premises.

6. MOUNTING METHODS. All letters shall be mounted with clear silicone and mounted flush to the exterior wall surface. Upon the expiration of the Lease, Tenant shall remove all exterior signs from the Building and shall restore the exterior of the Building to its original condition. Should Tenant fail to do so, Landlord reserves the right to perform this duty and deduct all costs associated with the removal of the sign and restoration of the Building from the Security Deposit.

7. PROHIBITED MATERIALS. Pan signs, illuminated signs, neon or flashing signs, banners, sandwich boards or any other sign type or material not specifically allowed above.

8. DOORS AND WINDOW GRAPHICS. Vinyl door and window graphics are permitted. Letter size shall not exceed 1-1/2" cap height. Line length shall not exceed 20". All graphics shall be reverse cut from white 3M vinyl, Sparcal vinyl or equivalent vinyl material and shall be mounted to the interior of door glass or sidelight glass. Plaques, neon or paper signs are prohibited at all times.

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