10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For fiscal year ended September 30, 2006
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from          to           .

Commission File Number: 0-25434

Brooks Automation, Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware	04-3040660
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
15 Elizabeth Drive Chelmsford, Massachusetts (Address of Principal Executive Offices)	01824 (Zip Code)

978-262-2400

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.01 par value

Rights to Purchase Common Stock

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o     No þ

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  Yes o     No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Rule 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ Accelerated filer o Non-accelerated filer o      

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).  Yes o     No þ

The aggregate market value of the registrant’s Common Stock, $0.01 par value, held by nonaffiliates of the registrant as of March 31, 2006, was approximately $1,061,248,600 based on the closing price per share of $14.24 on that date on the Nasdaq Stock Market. As of March 31, 2006, 75,365,813 shares of the registrant’s Common Stock, $0.01 par value, were outstanding. As of November 30, 2006, 75,563,054 shares of the registrant’s Common Stock, $0.01, par value, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement involving the election of directors, which is expected to be filed within 120 days after the end of the registrant’s fiscal year, are incorporated by reference in Part III of this Report.

TABLE OF CONTENTS

PART I
	Item 1.	Business	1
	Item 1A.	Risk Factors	15
	Item 1B.	Unresolved Staff Comments	23
	Item 2.	Properties	23
	Item 3.	Legal Proceedings	24
	Item 4.	Submission of Matters to a Vote of Security Holders	27
PART II
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	28
	Item 6.	Selected Financial Data	29
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	45
	Item 8.	Financial Statements and Supplementary Data	46
	Item 9.	Changes In and Disagreements With Accountants on Financial Accounting and Financial Disclosure	89
	Item 9A.	Controls and Procedures	89
	Item 9B.	Other Information	90
PART III
	Item 10.	Directors and Executive Officers of the Registrant	90
	Item 11.	Executive Compensation	90
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	90
	Item 13.	Certain Relationships and Related Transactions	90
	Item 14.	Principal Accountant Fees and Services	90
PART IV
	Item 15.	Exhibits and Financial Schedules	91
SIGNATURES			94
Ex-4.03 Amendment No.1 to Rights Agreement
Ex-10.08 Employment Agreement (Robert Woodbury)
Ex-10.09 Employment Agreement (Thomas S. Grilk)
Ex-10.10 Employment Agreement (James Gentilcore)
Ex-10.11 Employment Agreement (Joseph Bellini)
Ex-10.12 Employment Agreement (Robert Anastasi)
Ex-10.15 1995 Employee Stock Purchase Plan, as amended
Ex-10.23 Form of Restricted Stock Option Grant Agreement
Ex-10.28 Amendment to Lease dated as of July 24, 2000
Ex-10.29 Lease Agreement dated as of October 12, 2000
Ex-10.30 First Amendment to Lease dated as of March 21, 2001
Ex-10.31 Lease, dated March 14, 1999
Ex-10.32 Multi-Tenant Industrial Triple Net Lease, effective December 15, 2000
Ex-10.33 Factory Lease Advanced Agreement
Ex-12.01 Calculation of Ratio of Earnings to Fixed Charges
Ex-21.01 Subsidiaries of the Company
Ex-23.01 Consent of PricewaterhouseCoopers LLP
Ex-31.01 Section 302 Certification of CEO
Ex-31.02 Section 302 Certification of CFO
Ex-32 Section 906 Certification of CEO & CFO

PART I

Item 1.   Business

Brooks Automation, Inc. (“Brooks”, “we”, “us” or “our”) is a leading supplier of technology products and solutions primarily serving the worldwide semiconductor market. We supply hardware, software and services to both chip manufacturers and original equipment manufacturers, or OEMs, who make semiconductor device manufacturing equipment. We are a technology and market leader with offerings ranging from individual hardware and software modules to fully integrated systems as well as services to install and support our products world-wide. Although our core business addresses the increasingly complex automation and integrated subsystems requirements of the global semiconductor industry, we also provide solutions for a number of related industries, including the flat panel display manufacturing, data storage and certain other industries which have complex manufacturing environments.

We were founded in 1978 to develop and market automated substrate handling equipment for semiconductor manufacturing and became a publicly traded company in February 1995. We have grown significantly from being a niche supplier of wafer-handling robot modules for vacuum-based processes, to become the largest merchant supplier of hardware and software automation products for the semiconductor industry in consecutive calendar years from 2001 through 2005, and the world’s thirteenth largest semiconductor front-end capital equipment company in 2005, according to the independent market research firm Gartner Dataquest.

Our business is significantly dependent on capital expenditures by semiconductor manufacturers, which in turn are dependent on the current and anticipated market demand for integrated circuit (“IC”) chips and electronics equipment. To maintain manufacturing leadership and growth in the semiconductor industry, companies make significant capital expenditures in manufacturing equipment and investments in research and development. For example, investments in the production of chips that use advanced 90-nanometer (“nm”) and 65nm process technology are the enablers (increased chip performance, decreased power consumption and reduced cost) for a broad range of new products that are expected to help drive growth in the chip industry. Further advances in IC designs utilizing 45nm and smaller sizes continue to enable innovation and are driving the need for new manufacturing facilities and new generation processing equipment.

The demand for semiconductors is cyclical and has historically experienced periodic expansions and contractions, which are called upturns and downturns. The semiconductor industry experienced a prolonged downturn from fiscal 2001 to the end of fiscal 2003. The industry economics improved significantly in fiscal 2004 and we were able to return to profitability in fiscal 2004, benefiting from improved market demand and from some of the cost reduction initiatives that we implemented during the downturn. The industry conditions weakened again in our fiscal 2005 leading to a decline in revenues and profitability for Brooks during 2005, but rebounded in 2006 to help drive growth and profitability for Brooks in fiscal 2006. We expect industry conditions to continue to fluctuate unpredictably.

On October 26, 2005, we acquired all the issued and outstanding stock of Helix Technology Corporation (“Helix”). Helix develops and manufactures vacuum technology solutions for the semiconductor, data storage, and flat panel display markets. We believe that the acquisition of Helix enables us to better serve our current market, increase our addressable market, reduce the volatility that both businesses have historically faced and position us to enhance our financial performance. The aggregate purchase price, net of cash acquired, was approximately $458.1 million, consisting of 29.0 million shares of common stock valued at $444.6 million, the fair value of assumed Helix options of $3.3 million and transaction costs of $10.2 million. The market price used to value the Brooks’ shares issued as consideration for Helix was $15.32, which represents the average of the closing market price of Brooks common stock for the period beginning two trading days before and ending two trading days after the merger agreement was announced. The actual number of shares of Brooks common stock issued was determined based on the actual number of shares of Helix common stock outstanding immediately prior to the completion of the merger, based on an exchange ratio of 1.11 shares of Brooks common stock for each outstanding share of Helix common stock. The Helix business operates in our hardware segment. This transaction qualified as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended.

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On May 8, 2006, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Synetics Solutions Inc. (“Synetics”). We completed our acquisition of Synetics from Yaskawa Electric Corporation (“Yaskawa”), a corporation duly organized and existing under the laws of Japan, through a merger that became effective as of June 30, 2006. Synetics provides customized manufactured solutions for the North American semiconductor equipment industry. Pursuant to the Merger Agreement, Synetics became a wholly owned subsidiary of Brooks. The aggregate purchase price of Synetics, net of cash acquired, was approximately $50.2 million consisting of a $28.6 million cash payment to Yaskawa, repayment of outstanding debt of $19.9 million and transaction costs of $1.7 million.

Also on May 8, 2006, we entered into a Joint Venture Agreement (the “Agreement”) with Yaskawa to form a 50/50 joint venture called Yaskawa Brooks Automation, Inc. (“YBA”) to exclusively market and sell Yaskawa’s semiconductor robotics products and Brooks’ automation hardware products to semiconductor customers in Japan. This Agreement was executed on June 30, 2006. YBA began operations on September 21, 2006.

On November 3, 2006, our Board of Directors committed to a formal plan of disposal of our software division, Brooks Software and entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Applied Materials, Inc. (“Applied”), a Delaware corporation. Under the terms of the Purchase Agreement, we will divest and sell our software division, Brooks Software, to Applied for $125 million in cash consideration. We will transfer to Applied substantially all of our assets primarily related to Brooks Software, including the stock of several subsidiaries engaged only in the business of Brooks Software, and Applied will assume certain liabilities related to Brooks Software. We are selling our software division in order to focus on our core semiconductor-related hardware businesses. We expect to recognize a gain on disposal of the software division and to reclassify this division as discontinued operations in fiscal 2007.

Completion of the transaction is subject to several conditions, including expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and clearance under any applicable foreign antitrust laws, and other customary closing conditions. We expect to close the transaction during the second fiscal quarter of 2007.

Industry Background

In recent years the semiconductor industry has experienced significant growth in both the volume and complexity of integrated circuit devices manufactured. This growth has been driven by the increased demand for electronic products that require semiconductors such as computers, telecommunications equipment, consumer electronics, data storage media and wireless communications devices.

To meet these demands, semiconductor manufacturers have sought volume and efficiency improvements through increased equipment utilization, higher manufacturing yields, capacity expansion of existing facilities and the construction of new facilities. Automation and vacuum-based processes perform critical functions in the manufacturing of semiconductors. The majority of modern semiconductor fabrication facilities, or fabs, manufacture semiconductor chips on circular silicon wafers with diameters of 150mm, or 6 inches, and 200mm, or 8 inches. More recently the industry has begun to adopt wafers with diameter sizes of 300mm, or 12 inches. The wafers are typically processed in production lots of 25 wafers, with 150mm and 200mm wafers contained in either an open cassette or a fully enclosed pod called SMIF, or standard mechanical interface. Production lots for 300mm manufacturing typically consist of 25 wafers contained in a FOUP, or front-opening unified pod. Both SMIF and FOUP technologies isolate the wafers from their surroundings by creating an ultra-clean “mini-environment” within the pod. One wafer may yield hundreds of chips, and each chip may contain tens or hundreds of millions of microscopic transistors in leading-edge devices.

The production of advanced semiconductor chips is an extremely complex and logistically challenging manufacturing activity. To create the millions of microscopic transistors and connect them together horizontally and in vertical layers into a functioning integrated circuit, or IC chip, the silicon wafers must go through hundreds of process steps that require complex processing equipment, or tools, to create the integrated circuits. A large production fab may have more than 70 different types of process and metrology tools, totaling as many as 500 tools or more. Up to 40 percent of these tools perform processes in a vacuum, such as removing, depositing or measuring material on wafer surfaces. Wafers can go through as many as 400 different process steps before completion. These

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steps, which comprise the initial fabrication of the integrated circuit and are referred to in the industry as front-end processes, are repeated many times to create the desired pattern on the silicon wafer. As the complexity of semiconductors continues to increase, the number of process steps also increases, resulting in a greater need for automation due to more handling and tracking requirements, and higher number of tools. Upon completing the front-end processing, the wafer is cut into individual devices, or chips, which then undergo additional assembly and testing steps before being packaged into a device that is used in an electronic product.

Vacuum-based processes are fundamental steps integral to chip manufacturing. High vacuum pumps are required in certain process steps to remove all potentially contaminating gases and impurities from the processing environment. In order to achieve optimal production yields, semiconductor manufacturers must also ensure that each process operates at carefully controlled pressure levels. Impurities or incorrect pressure levels can lower production yields, thereby significantly increasing the cost per usable semiconductor chip produced. Some key vacuum processes include dry etching and dry stripping; chemical vapor deposition, or CVD; physical vapor deposition, or PVD; and ion implantation.

During manufacturing, the wafers need to be physically transported between different process tools, repeatedly identified, tracked, loaded into the equipment and processed, unloaded, verified and inspected, and dispatched to the next process step or storage area. All these actions can be automated. Automation enables the right material to be delivered at the right time to the right equipment with the right process recipe. Similarly, non-production wafers and durable goods, such as wafer carriers and photolithography masks or reticles used in production, must also be handled, tracked and managed. Consequently, the automation systems physically touch and handle nearly every wafer in the fab, while the software systems manage the tracking and recording of data for virtually every manufacturing lot, piece of equipment and resource in the fab.

The capital expenditure by a semiconductor company to create a modern 200mm fab can be as much as $2 billion while the cost for a 300mm fab can exceed $3 billion. While most 200mm fabs were only partially automated, virtually all 300mm production fabs are fully automated due to the heavier weight and value of a production lot. The investment in automation hardware, software and services has grown from approximately $50 million in a 200mm fab to $180 million in a 300mm fab. Typically 75 to 80 percent of the capital investment for a fab is for manufacturing equipment, while the remainder is dedicated to the land, the physical building, the clean room production floor and automation, network and facilities infrastructure. The served available market for semiconductor automation approximated $1.8 billion in 2005, according to Dataquest. We believe we are the only company with a portfolio of hardware and software products and system integration services that can address the majority of the automation needs for semiconductor manufacturing.

Today, almost every aspect of processing includes automation, from material handling, tracking work-in-process, process control and scheduling. Factory and equipment automation directly impact factory performance. Factory performance, in turn, drives semiconductor manufacturers’ ability to:

•  reduce manufacturing costs;

•  reduce cycle time, making the throughput more predictable;

•  deliver products to market first when product profitability is greatest; and

•  reduce defects and improve yield.

The Company has two reportable segments: hardware and software. In the fourth quarter of fiscal year 2005, the Company’s equipment automation and factory automation segments were combined into the hardware segment, which reflects how management now evaluates its business. The hardware segment also includes the acquired operations of Helix from the date of acquisition. Also included in this segment are the acquired operations of Synetics Solutions from the date of acquisition. Prior year amounts have been reclassified to conform to the current year.

The hardware segment provides a wide range of wafer handling products, vacuum subsystems and wafer transport platforms for use within the semiconductor process and metrology equipment. Within the hardware segment, there are four businesses consisting of automation hardware products, vacuum products and subsystems, customer-designed automation and the global customer service organization. The automation hardware products,

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historically the core products of Brooks, include wafer transfer robots and platforms, or systems that operate in either vacuum or atmospheric environments that are sold to equipment manufacturers. The Company also provides hardware directly to fabs including equipment for lithography that automate the storage, inspection and transport of photomasks, or reticles. Another line of business includes the vacuum products and subsystems acquired from Helix that include vacuum technology solutions such as cryogenic pumps for creating vacuum, products for measuring vacuum, and thermal management products that are used in manufacturing equipment for the semiconductor, data storage and flat panel display industries. Additionally, the Company leverages its domain knowledge and manufacturing expertise to build customer-designed automation systems, or contract automation systems, in a program designed to help customers outsource their automation. This assembly and manufacturing capability was a core competency of Synetics Solutions, and these offerings have been combined under the line of business managed by the former Synetics enterprise. The primary customers for these solutions are manufacturers of process equipment. Finally, the global customer service offerings provide customers with support for all our hardware offerings.

The software segment addresses the need for production management systems driven by the extensive tracking and tracing requirements of the semiconductor industry. At the core of these production systems is the manufacturing execution system (“MES”) that is primarily responsible for tracking the movement of production wafers in a fab, and managing the data and actions for every wafer, equipment, operator and other resources in the fab. These mission-critical systems provide real time information primarily to production operators, supervisors and fab managers. We provide other important software applications to meet the critical requirements of the fab, such as real time dispatching and scheduling, equipment communications, advanced process control, material control for the automated material handling systems, or AMHS, activity execution and control, automated maintenance management of equipment, and other applications. Customers often purchase more than one of these software products from Brooks for a single fab, often driving the need for consulting and integration services. Our software products enable semiconductor manufacturers to increase their return on investment by maximizing production efficiency, and may be sold as part of an integrated solution or on a stand-alone basis. These software products and services are also used in many similar manufacturing industries as semiconductor, including flat panel display, data storage, and electronic assembly.

Hardware

Modern semiconductor process tools demand fast, error-free handling of the silicon wafers on which the integrated circuits are produced. In the late 1980’s and early 1990’s, many processes done in vacuum, such as CVD, PVD, dry etching and other processes, changed from batch processing to single wafer processing, driving the need for equipment that could process individual wafers simultaneously in multiple chambers. The single wafer tool configuration is often referred to as a cluster tool because of the typically radial layout, or cluster, of process chambers surrounding one or more central wafer handling robot. The transition to cluster tools greatly increased the demands on the automation system, forcing it to become as much as four to eight times more reliable than previous generations. The result was a market need for highly reliable and fast vacuum robots, as well as vacuum cluster tool platforms, both of which were the genesis of our business model.

Vacuum cluster tools consist of three primary sections: the equipment front-end module or EFEM, the cluster tool platform, and the process modules or chambers that are attached to the tool platform. An intermediate chamber, called a load-lock, separates the vacuum environment used in processing from the EFEM, which operates at standard atmosphere. A vacuum robot performs the task of transferring wafers from the load-lock to the process chambers that are mounted on the cluster tool platform. Wafers are placed in the load-lock by atmospheric robots that are housed in the EFEM. Vacuum tool automation includes load-locks, robots and other modules as well as the cluster tool platform. Brooks vacuum subsystems, acquired in the Helix transaction, create and manage the vacuum environment needed for several key process steps within semiconductor manufacturing, including ion implant, PVD and metrology.

The introduction and adoption of new materials and technology in semiconductor processing drove the emergence of important non-vacuum processes such as chemical mechanical planarization, or CMP, and electro-chemical deposition, or ECD, as well as increased dependence on other atmospheric processes such as metrology,

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all requiring automation. The growth in atmospheric tool automation has been further driven by the transition to 300mm technology and smaller feature sizes on ICs.

The front end of most 300mm and 200mm process equipment require an atmospheric system called an EFEM. EFEMs have modules called loadports on which wafer carriers are placed. Loadports have mechanisms that open the door or lid on the carriers so that the atmospheric robots can gain access to the wafers in the carriers. The individual atmospheric modules can be sold separately or as an integrated atmospheric system which includes the loadports, the atmospheric robots, and other necessary modules such as aligners, fan filter units and control software.

Many modern fabs are laid out in a series of processing rooms or bays that contain similar equipment. Process engineers recognized early in the history of semiconductor manufacturing that human handling of wafer carriers or wafers was a significant source of defects and errors. Automating the transport and handling of wafers to reduce or eliminate human handling created a market for factory automation. For 200mm fabs, AMHS was widely adopted for inter-bay transport only. AMHS consists of rails that are attached to the ceilings in the main aisles between bays on which cars transport the wafer carriers to a stocker at the head of a bay. These stockers automated the storage and retrieval of the carriers. Virtually all the movement of materials within a bay, or intra-bay transport, is done manually in 200mm fabs — operators carry the cassette or SMIF pod from the stocker to a process tool. As wafer sizes have become larger, carriers have become heavier and the value per wafer has increased significantly, resulting in the need for intra-bay automation systems for transporting wafers directly to and from a tool or stocker. These fully automated systems have become the standard method of transport for 300mm manufacturing. Having the capability of tool-to-tool or tool-to-stocker delivery versus the stocker-to-stocker approach used in 200mm manufacturing eliminates the manual handling of carriers by operators.

The evolution of the wafer carrier technology enabled semiconductor manufacturers to reduce both fab construction costs and production defects. Historically, wafer processing has been performed in clean rooms in order to reduce or eliminate particulates in the atmosphere that could create defects on wafers during processing. As the feature sizes on an integrated circuit became exponentially smaller, the need for cleaner air became more critical, and more expensive. In the late 1990’s the semiconductor industry adopted SMIF technology to protect and isolate wafers from the environment. The air in a SMIF pod is 1,000 times cleaner than a typical surgical operating room; it essentially has its own ultra-pure mini-environment. The SMIF technology gained acceptance in many modern 200mm fabs, although open cassettes are still used widely. In the transition to 300mm wafer sizes, the industry adopted the FOUP technology as its new standard. While SMIF was essentially an after-market modification to 200mm equipment, virtually all 300mm tools since the time of their original design have integrated the FOUP technology. Automation enabled the transition from open cassette carriers to mini-environment pods by providing the loadport modules and robotics to transfer the wafers into and out of process tools as well as the means to track and identify the wafers. As a result, the need for automation has increased for both 300mm and 200mm SMIF fabs.

Software

We are a leading provider of software for:

•  manufacturing execution systems, or MES, used within one factory or to manage multiple sites, for manufacturers of discrete products;

•  factory logistics applications such as simulation, scheduling and dispatching;

•  connecting and integrating equipment with factory management systems;

•  advanced process control; and

•  data analysis and management for factory and enterprise performance monitoring.

In addition, we provide the necessary training, consulting and other services required by customers to successfully implement and use our software.

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The production of semiconductors is arguably one of the most complex manufacturing environments in the world. Factory automation software has played an important role in semiconductor manufacturing since the 1970’s. Computer integrated manufacturing was conceived to control the work flow of a process, gather data and track product in a fab, and to measure and analyze fab performance in order to assist in production and business decisions.

Similar to the MES applications, other software packages were developed by various companies to meet fab requirements, ranging from communicating with and controlling process equipment to factory modeling, scheduling, automated dispatching, planning and data analysis. Industry standards that established protocols for equipment to communicate with a host computer system, and other protocols, paved the way for equipment to be connected online to fab management systems such as the MES, enabling full automation when further integrated with the material handling systems, automated dispatching applications and other software. We entered the factory automation software market through an acquisition strategy aimed at consolidating a number of applications into an integrated software suite.

As semiconductor manufacturing moves towards full automation, factory automation software takes on even more importance. The MES software is required to model and store in its database nearly every resource in the fab — production lots, wafers, non-production wafers, equipment, recipes, process plans, operators, engineers, durable goods such as carriers, reticles, and so forth. The MES contains the real-time status of every item so that, as an example, fab managers can track the location of virtually any production lot or the state of virtually any process tool such as running, idle, down, etc. More importantly, this information is available to other software applications so that dispatching decisions, reports, alarms, data analysis and machine commands can be executed automatically.

We believe it is critical that the major software applications are integrated together to provide an overall solution that meets the increasingly complex demands of automation. These solutions help increase throughput, improve utilization of resources and factory performance, and reduce in-process inventory. Although many of the software applications already have the ability to integrate to other applications or systems, the implementation of individual pieces require services and consulting expertise from the software providers. Services can range from training and best practices consulting to full integration services that essentially deliver a turnkey solution to the customer.

The functionality of semiconductor MES software allowed it to be applied to other complex industries that require tracking and control of work-in-process, such as in the manufacture of liquid crystal displays or LCD, storage devices such as magnetic thin film heads, medical devices, and telecommunications fiber optics. New markets are being opened for Brooks outside of the semiconductor industry as track and trace capabilities become more in demand in various industries, driven in part by new government regulations and compliance standards. Likewise, simulation and modeling software can be used in a number of different industries where logistics and planning are important, ranging from airport traffic control to theme park scheduling. Finally, many engineering data analysis and statistical process control products are being used in complex manufacturing environments in addition to the semiconductor industry, such as LCD, precision electronics, automotive, aerospace, and life sciences industries.

Products

Hardware Products

Our hardware for process and metrology equipment is offered as either modules or systems. Modules are discrete components such as robots and aligners, cryogenic pumps, chillers and vacuum gauges, while systems are pre-integrated assemblies such as the cluster tool platform that may consist of a number of modules provided by us or other suppliers. We provide automation modules and systems for vacuum and atmospheric equipment as well as tool control software, mini-environment products, calibration and alignment products, and high-precision airflow controls primarily for the semiconductor industry. Other industries that we serve in this segment of the market include LCD and data storage. We use a common architecture in the design and production of systems and modules. Shared technologies and common software controls enable us to respond to changing industry demands, such as processing larger 300mm semiconductor wafers. Our Original Equipment Manufacturer (“OEM”) customers have the option of either buying individual modules from us and assembling their own systems in-house, or buying the entire automation system from us, pre-assembled, tested and certified from our factory. Also included in this

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segment is the assembly and manufacturing of customer designed automation systems, known as contract automation systems.

The major modules we offer for equipment are vacuum robotics, atmospheric robotics, wet robotics and loadport modules.

Vacuum modules include:

•  MagnaTran 7, a family of robots used in vacuum processes such as CVD, PVD and etch;

•  VacuTran, the legacy vacuum robot product line; and

•  MagnaTran 8, a new family of robots that addresses the needs of specific customers.

Vacuum pumping components and systems include:

•  CTI-Cryogenics cryopumps and systems;

•  On-Board monitoring and control systems; and

•  Turbo Plus^® waterpumps and Turbopumps

Vacuum measurement components and systems include:

•  STABL-ION^®, CONVECTRON^® and MICRO-ION components and systems; and

•  Vacuum gauging products that are integrated into analytical instruments such as mass spectrometers

Our atmospheric robot modules include:

•  Razor, a new 2- and 3-FOUP trackless robot;

•  Reliance, a family of 3-, 4-, and 5-axis robots; and

•  407, a legacy atmospheric robot with a large installed base of customers.

We have introduced a new generation of atmospheric automation products to replace the current atmospheric product offerings, the culmination of an extensive R&D program the past 2 years. These new products were developed using a product life cycle management process designed to meet goals for performance, manufacturability, cost, reliability and support.

We also offer modules for wet processing, i.e., processes that utilize liquid chemicals such as acid baths for removing material from wafer surfaces, developers for photoresist and cleaning stations. The products we offer include:

•  AquaTran 7 wet robot; and

•  Reliance 8, a new family of wet robots for CMP.

Modules for LCD process tools include:

•  MagnaTran 70 series vacuum robots for Gen3, Gen4 and Gen5 glass technologies; and

•  DLX and SLX vacuum robots for Gen6 and Gen7 technologies.

Also within the category of modules sold to OEMs are 300mm FOUP loadports. Our loadport modules include:

•  Vision, a new software-configurable 300mm loadport with touch-screen LCD;

•  FixLoad 6M, a 300mm loadport; and

•  SMIFLoad, a 200mm SMIF loadport.

Vacuum systems for semiconductor manufacturing that we offer include:

•  Gemini Express, a platform for vacuum cluster tools;

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•  InLine Express, a platform for linear, or in-line, tool configurations;

•  Marathon Express, our legacy cluster tool platform; and

•  We have also introduced our next generation of vacuum systems, including the Marathon Express 2, or M2, line of products.

Atmospheric systems we offer include:

•  Jet, a new EFEM designed for fast setup and easy integration;

•  Fab Express, an EFEM for 300mm and 200mm wafer sizes;

•  Atmospheric Express, a controlled environment atmospheric cluster tool for 200mm and smaller wafers; and

•  Custom systems, typically a customer-designed system with our modules.

For the LCD market, our systems offerings include:

•  Hercules Express, a cluster tool platform; and

•  Bali 400, an EFEM for LCD process tools.

Lithography automation solutions for reticle inspection, storage and management include:

•  Guardian Bare Reticle Stocker for storing reticles; and

•  Zaris, our reticle sorting, cleaning and macro-inspection tool.

We provide 200mm SMIF products directly to factory customers, including:

•  ErgoSpeed II loadport for 200mm SMIF that complements a number of other SMIF products that we provide to our customers;

•  Hermos RF readers for RFID applications;

•  IRIDnet, a tracking system utilizing infra-red technology; and

•  Custom mini-environments and tool enclosures.

Automated ID and tracking of carriers in a 300mm fab is provided by our RFID readers.

Software Products

We offer a range of products, from MES that manage the operations of an entire fab, to logistics software for scheduling and coordinating work flow, to individual software packages designed to meet specific requirements such as preventive maintenance systems for equipment. We also offer integrated systems that incorporate our software on an open architecture to deliver factory automation solutions tailored specifically for customers within the context of their industry.

Our software also provides the capabilities to tie fab software systems into the enterprise and supply chain with planning and logistics software applications. We provide business system integration modules to provide integration between our manufacturing applications and business systems from SAP and Oracle. Real-time dispatching and factory scheduling applications can be used to drive manufacturing according to a customer’s best practices. Automation and job management functions help to control manufacturing workflow and automate decision-making across multiple computer integrated manufacturing systems. Simulation software allows manufacturers to model and analyze the use and performance of their tools, systems and overall manufacturing environment.

Our MES products span a wide spectrum of factory requirements. Our offerings include:

•  FACTORYworks, a high-end MES that is flexible and highly configurable and can be tailored to meet the advanced requirements of complex operations such as 300mm manufacturing; and

•  Promis Systems, with its mature off-the-shelf functionality and large installed base, more suitable for customers who do not require extensive customization of functionality.

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We have built our software suite of applications by acquiring and developing products that complement our MES offerings. Products for equipment integration utilizing the SECS protocol include:

•  CELLworks-Grapheq, a UNIX-based cell controller;

•  WinSECS, a Windows-based equipment integration package;

•  STATIONworks, a Windows-based station control system; and

•  FAbuilder, a Windows-based cell controller.

Real-time execution systems and logistics software include:

•  RTD, real-time dispatcher;

•  APF Reporter for factory performance reporting and analysis;

•  Activity Manager, an adaptive workflow manager that integrates workflow between multiple plant and enterprise applications workflow between the transport system and MES;

•  AutoSched for simulation and planning of workflow; and

•  CLASS-MCS for transport control that provides an equipment-neutral software system to manage and control material handling equipment including AMHS systems, conveyors, wafer and reticle stockers, and inter-floor lift devices in clean room environments.

Composite applications designed to simplify and lower the cost of integration between enterprise and plant floor systems and aid demand-driven manufacturing include:

•  RealView Manufacturing Intelligence, an enterprise manufacturing application to enhance overall plant performance;

•  Demand Execution, integrating Brooks’ Real-Time dispatcher with SAPs APO product;

•  Enterprise Quality Management, a framework for quality management that captures and analyzes data from multiple sources;

•  Asset Management, providing detailed production planning capabilities; and

•  Enterprise Integration Hub, which is designed to connect and integrate the capabilities of the four products listed immediately above and is certified for us with the products of SAP, AG, with whom Brooks software is collaborating on joint development activities.

We have recognized the growing need for process optimization and advanced process control, APC, in modern fabs. Our offerings for these requirements include:

•  Patterns for fault detection and classification;

•  BAP for advance process control and run-to-run control applications; and

•  iProcess for factory-wide process and tool health monitoring.

Engineering data analysis is another important requirement for managing a fab. We offer products that provide extensive data analysis and statistical process control, or SPC, including:

•  SPACE, a module for real-time SPC; and

•  RS Series and Cornerstone for design of experiments and statistical analysis.

We offer unique industry-specific systems that address the comprehensive needs of the customers who prefer a total solutions approach from one supplier, including:

•  300works for 300mm manufacturers; and

•  LCDworks for LCD manufacturers.

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These offerings provide applications built around our products.

Our software supports a wide range of manufacturing environments, from manual and semi-automated to fully automated operations. In deploying our solutions, manufacturers worldwide have seen improvements in their cycle times, yields, work-in-process levels, customer responsiveness and fulfillment, plant utilization, and their return-on-manufacturing-assets.

In addition to software packages, we offer comprehensive solutions delivery, training, consulting and post-implementation services designed to empower our customers to realize the capabilities of our products and solutions.

Customers

We sell our products and services to nearly every major semiconductor chip manufacturer and OEM in the world, including all of the top ten chip companies and nine of the top ten equipment companies. Our customers also include companies who are in the LCD, data storage and other similar industries. As a result of the Helix acquisition, certain products are sold to non-semiconductor customers in imaging and coating and analytic instruments. We have major customers in the United States, Europe and Asia. We expect international revenues to continue to represent a significant percentage of total revenues. Our industry is seeing an increasing business shift to Asia. See Note 16, “Segment and Geographic Information” of Notes to the Consolidated Financial Statements for further discussion of our sales by geographic region and revenue, income and assets by financial reporting segment. See Part I, Item 1A, “Risk Factors” for a discussion of the risks related to foreign operations.

Relatively few customers account for a substantial portion of our revenues, with the top twenty customers accounting for approximately 55% of our business in fiscal 2006. We do not have any single customer who makes up more than ten percent of our overall revenue for the year.

Sales, Marketing and Customer Support

We market and sell our equipment and factory automation hardware and software in the United States, Asia and Europe through our direct sales organization. The sales process for our products is often multilevel, involving a team comprised of individuals from sales, marketing, engineering, operations and senior management. In many cases a customer is assigned a team that engages the customer at different levels of its organization to facilitate planning, provide product customization where required, and to assure open communication and support.

Our marketing activities include participation in trade shows, delivery of seminars, participation in industry forums, distribution of sales literature, and publication of press releases and articles in business and industry publications. To enhance communication and support, particularly with our international customers, we maintain sales and service centers in the United States, China, Japan, South Korea, Taiwan, Singapore, Malaysia, the United Kingdom, France and Germany. These facilities, together with our headquarters, maintain local support capability and demonstration equipment for customers to evaluate. Customers are encouraged to discuss the features and applications of our demonstration equipment with our engineers located at these facilities.

We provide services to assist customers through our global customer support organization, including the installation of hardware products, software implementation, product training, consulting and sustaining on-site support. We strive to provide world-class support to our customers to help make them successful users of our products through:

•  Service contracts, including multi-year agreements;

•  Fixed price repair programs;

•  Diagnostic and predictive maintenance support;

•  Telephone technical support;

•  Direct training programs;

•  User symposia and seminars; and

•  Operating manuals and other technical support information for our products.

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We maintain spare parts inventories in regional hubs to enable our personnel to serve our customers and to service our products more efficiently.

We provide an extensive range of global support and system monitoring services that are designed to lower the total costs of ownership for our customers. We increase our customers’ system uptime through rapid response to potential operating problems. We also develop and deliver enhancements to our customers’ installed base of production tools through upgrades and other services. Our service offerings include TrueBlue Service Agreements, GUTS^® (Guaranteed Up Time Support) customer response system and GOLDLink^® (Global On-Line Diagnostics) support system, which provides a remote e-diagnostics solution that allows us to monitor, in real time, the system performance of our customers’ production tools. The GOLDLink capability has made us a leading total solution provider in the emerging market for Internet-based, proactive e-diagnostics for the semiconductor and semiconductor capital equipment industries.

Competition

Hardware

The semiconductor fabs and process equipment manufacturing industries are highly competitive and characterized by continual changes and improvements in technology. The majority of equipment automation is still done in-house by OEMs. As a result, we believe that our primary opportunity in this area is from the larger semiconductor OEMs that currently satisfy their substrate handling needs in-house rather than by purchasing them from an external supplier such as us. For example, Applied Materials, the leading process equipment OEM, develops and manufactures a majority of its own central vacuum wafer handling systems and vacuum modules. Our competitors among external vacuum automation suppliers are primarily Japanese companies such as Daihen, Daikin and Rorze. Also, contract manufacturing companies such as Sanmina, FoxSemicon, and Flextronics are beginning to offer assembly and manufacturing services to the OEM companies. Our competitors among vacuum subsystems suppliers include Sumitomo Heavy Industries (SHI), Genesis, MKS instruments and Inficon.

Atmospheric tool automation is more outsourced with a number of competitors due to the low barriers to entry. We compete directly with other equipment automation suppliers of atmospheric modules and systems such as Asyst, Hirata, Kawasaki, Rorze, Sankyo, TDK and Shinko. Contract manufacturers are also providing assembly and manufacturing services for atmospheric systems, mainly Flextronics.

Brooks has a significant share of the market for vacuum cryogenic pumps and faces only a few competitors such as SHI (Sumitomo Heavy Industries) and Genesis. The measurement gauge market is more fragmented with a variety of competitors that include MKS Instruments.

We believe our customers will purchase our equipment automation products and vacuum subsystems as long as we continue to provide the necessary throughput, reliability, contamination control and accuracy for their advanced processing tools at an acceptable price point. We believe that we have competitive offerings with respect to all of these factors; however, we cannot guarantee that we will be successful in selling our products to OEMs who currently satisfy their automation needs in-house or from other independent suppliers, regardless of the performance or the price of our products.

In addressing the Asian markets, we may be at a competitive disadvantage to local suppliers. We are seeking to improve our competitive position by establishing stronger local capabilities, such as the YBA joint venture in Japan and more material sourcing in China.

We believe that the competitive factors when selling hardware directly to fabs are technical capabilities, reliability, price/performance, ease of integration and global sales and support resources. We believe that our solutions compete favorably with respect to all these factors.

Software

We believe that the primary competitive factors in the end-user market for factory automation software are product functionality, degree of integration with other applications, compatibility of hardware and software architecture, price/performance, ease of implementation, cost of ownership, vendor reputation and financial

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stability. We believe our products compete favorably with other systems with regards to the factors listed above due to the unique nature of the software segment. We also believe that the relative importance of these competitive factors may change over time.

We experience direct competition in the factory automation software market from various companies, including Applied Materials, Camstar, IBM and numerous small independent software companies. In some cases, we are able to sell our software products to our direct competitors. For example, Daifuku uses our software to control the operations of their AMHS hardware.

Many customers purchase software products from more than one supplier. Even in cases where a competitor is selected over us for a particular application, we may still gain substantial business with that customer since our product offerings cover a wide range of requirements and are considered best-in-class for many applications.

In advanced fabs, a greater burden is placed on software and implementation of increasingly complex automation applications, resulting in a critical need for integration of many different software and hardware components. We cooperate with large organizations such as IBM, SAP and Hewlett Packard to deliver complete solutions for customers. When we subcontract our products and services to another company, our ability to win business may be highly dependent on the success of the prime contractor with whom we have partnered.

Research and Development

Our research and development efforts are focused on developing new products and services as well as further enhancing the functionality, degree of integration, reliability and performance of our existing products. Our engineering, marketing, operations and management personnel have developed close collaborative relationships with many of their counterparts in customer organizations and have used these relationships to identify market demands and focus our research and development investment to meet those demands. With the rapid pace of change that characterizes semiconductor technology it is essential for us to provide high-performance and reliable products in order for us to maintain our leadership position. Software in particular represents a business that relies heavily on research and development resources to develop, enhance and support our products.

Manufacturing

Manufacturing is one of our core competencies. Our manufacturing operations are used for product assembly, integration and testing. We have adopted quality assurance procedures that include standard design practices, component selection procedures, vendor control procedures and comprehensive reliability testing and analysis to assure the performance of our products. Our two major manufacturing facilities in Chelmsford, Massachusetts and Kiheung, Korea are ISO 9001 certified. Additionally we have a facility in Jena, Germany whose purpose is to perform integration and final testing of our products for the European market. We acquired additional manufacturing facilities in Mansfield, Massachusetts, Longmont, Colorado and Petaluma, California in connection with the acquisition of Helix. We also acquired additional manufacturing facilities in Gresham, Oregon in connection with the acquisition of Synetics.

We utilize a just-in-time manufacturing strategy, based on the concepts of demand flow technology, for a large portion of our manufacturing process. We believe that this strategy coupled with the outsourcing of non-critical components such as machined parts, wire harnesses, PC boards, etc. reduces fixed operating costs, improves working capital efficiency, reduces manufacturing cycle times and improves flexibility to rapidly adjust our production capacities. While we often use single source suppliers for certain key components and common assemblies to achieve quality control and the benefits of economies of scale, we believe that these parts and materials are readily available from other supply sources. We are currently focusing our efforts in implementing global low-cost sourcing and manufacturing strategies, specifically in Asia.

We have established a subsidiary in India to provide low cost off-shore engineering resources primarily for sustaining mature software products. As a result, our core staff of software engineers should be better enabled to focus on research and development of new technology and enriching the functions of currently active products.

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Patents and Proprietary Rights

We rely upon patents, trade secret laws, confidentiality procedures, copyrights, trademarks and licensing agreements to protect our technology. Due to the rapid technological change that characterizes the semiconductor and flat panel display process equipment industries, we believe that the improvement of existing technology, reliance upon trade secrets and unpatented proprietary know-how and the development of new products may be as important as patent protection in establishing and maintaining competitive advantage. To protect trade secrets and know-how, it is our policy to require all technical and management personnel to enter into nondisclosure agreements. We cannot guarantee that these efforts will meaningfully protect our trade secrets.

We have obtained patents and will continue to make efforts to obtain patents, when available, in connection with our product development program. We cannot guarantee that any patent obtained will provide protection or be of commercial benefit to us. Despite these efforts, others may independently develop substantially equivalent proprietary information and techniques. As of September 30, 2006, we have obtained 338 United States patents and had 108 United States patent applications pending on our behalf. In addition, we have obtained 374 foreign patents and had 388 foreign patent applications pending on our behalf. Our United States patents expire at various times through April 2022. We cannot guarantee that our pending patent applications or any future applications will be approved, or that any patents will not be challenged by third parties. Others may have filed and in the future may file patent applications that are similar or identical to ours. These patent applications may have priority over patent applications filed by us.

We have successfully licensed our FOUP load port technology to several companies and continue to pursue the licensing of this technology to more companies that we believe are utilizing our intellectual property.

There has been substantial litigation regarding patent and other intellectual property rights in the semiconductor and related industries. We have in the past been, and may in the future be, notified that we may be infringing intellectual property rights possessed by other third parties. We cannot guarantee that infringement claims by third parties or other claims for indemnification by customers or end users of our products resulting from infringement claims will not be asserted in the future or that such assertions, if proven to be true, will not materially and adversely affect our business, financial condition and results of operations. If any such claims are asserted against our intellectual property rights, we may seek to enter into a royalty or licensing arrangement. We cannot guarantee, however, that a license will be available on reasonable terms or at all. We could decide in the alternative to resort to litigation to challenge such claims or to attempt to design around the patented technology. Litigation or an attempted design around could be costly and would divert our management’s attention and resources. In addition, if we do not prevail in such litigation or succeed in an attempted design around, we could be forced to pay significant damages or amounts in settlement. Even if a design around is effective, the functional value of the product in question could be greatly diminished.

We acquired certain assets, including a transport system known as IridNet, from the Infab division of Jenoptik AG on September 30, 1999. Asyst Technologies, Inc. had previously filed suit against Jenoptik AG and other defendants, or collectively, the defendants, in the Northern District of California charging that products of the defendants, including IridNet, infringe Asyst’s U.S. Patent Nos. 4,974,166, or the ’166 patent, and 5,097,421, or the ’421 patent. Asyst later withdrew its claims related to the ’166 patent from the case. Summary judgment of noninfringement was granted in that case by the District Court and judgment was issued in favor of Jenoptik on the ground that the product at issue did not infringe the asserted claims of the ’421 patent. However, Asyst appealed the adverse judgment and the Court of Appeals for the Federal Circuit. In its decision on that appeal the Court of Appeals affirmed a portion of the District Court’s grant of summary judgment in favor of Jenoptik but also reversed another portion of that judgment and reinstated one of Asyst’s other claims. On the basis of that order and the claim construction guidance furnished by the Court of Appeals, the District Court issued an order granting summary judgment in favor of Asyst on one of its infringement claims against Jenoptik. Jenoptik has appealed that order, and that appeal is currently pending before the Court of Appeals for the Federal Circuit. In addition, the District Court has set a January 2007 trial date on the question of the validity of the Asyst claim upon which summary judgment was granted in Asyst’s favor.

We had received notice that Asyst might amend its complaint in this Jenoptik litigation to name Brooks as an additional defendant, but no such action was ever taken. Based on our investigation of Asyst’s allegations, we do not

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believe we are infringing any claims of Asyst’s patents. We intend to continue to support Jenoptik to argue vigorously, among other things, the position that the IridNet system does not infringe the Asyst patent. If Asyst prevails in its appeal and ultimately in its case against Jenoptik, Asyst may seek to prohibit us from developing, marketing and using the IridNet product without a license. We cannot guarantee that a license would be available to us on reasonable terms, if at all. If a license from Asyst were not available, we could be forced to incur substantial costs to reengineer the IridNet product, which could diminish its value. In any case, we could face litigation with Asyst. Jenoptik has agreed to indemnify us for any loss we may incur in this action.

In addition, Asyst made assertions in approximately 1995 that certain technology employed in products manufactured and sold by Hermos Informatik GmbH infringed one or more of Asyst’s patents. We acquired Hermos in July 2002. To date Asyst has taken no steps to assert or enforce any such rights against us, and to our knowledge, Asyst never commenced enforcement proceedings against Hermos prior to its acquisition by us. Should Asyst seek to pursue any such claims against Hermos or us, we would be subject to all of the business and litigation risks identified in the preceding paragraph.

On August 29, 2006, we acquired a portfolio of semiconductor-related patents from Newport Corporation, consisting of 16 registered United States patents, one United States pending patent application, three registered non-U.S. patents, and 11 non-U.S. pending patent applications. The transferred patents are subject to certain non-exclusive licenses previously granted by Newport Corporation. In consideration for this portfolio, we paid Newport Corporation the sum of $3 million.

Backlog

Backlog for our products as of September 30, 2006, totaled $181.4 million as compared to $87.2 million at September 30, 2005. Backlog consists of purchase orders for which a customer has scheduled delivery within the next 12 months. Backlog for our hardware segment and software segment was $152.6 million and $28.8 million, respectively, at September 30, 2006. Orders included in the backlog may be cancelled or rescheduled by customers without significant penalty. Backlog as of any particular date should not be relied upon as indicative of our revenues for any future period. A substantial percentage of current business generates no backlog because we deliver our products and services in the same period in which the order is received.

Employees

At September 30, 2006, we had approximately 2,400 employees as compared to 1,800 employees at September 30, 2005. The net increase is reflective of the Company’s acquisition of Helix Technology Corporation in October 2005 and Synetics Solutions Inc. in June 2006. We believe our future success will depend in large part on our ability to attract and retain highly skilled employees.

Approximately 80 employees in our Jena, Germany facility are covered by a collective bargaining agreement. We consider our relationships with our employees to be good.

Available Information

Our Internet website address is http://www.brooks.com. Through our website, we make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonable practicable after we electronically file such material with, or furnish it to, the SEC. These SEC reports can be accessed through the investor relations section of our website. The information found on our website is not part of this or any other report we file with or furnish to the SEC.

Gartner Information

Information contained in this annual report on Form 10-K attributable to Gartner, Gartner Dataquest or Dataquest as reflected in their 2005 Semiconductor Manufacturing Equipment Market Share Analysis published in April 2006 represents Gartner’s estimates and we make no representation as to the accuracy or completeness of this information.

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Item 1A.  Risk Factors

Factors That May Affect Future Results

You should carefully consider the risks described below and the other information in this report before deciding to invest in shares of our common stock. These are the risks and uncertainties we believe are most important for you to consider. Additional risks and uncertainties not presently known to us, which we currently deem immaterial or which are similar to those faced by other companies in our industry or business in general, may also impair our business operations. If any of the following risks or uncertainties actually occurs, our business, financial condition and operating results would likely suffer. In that event, the market price of our common stock could decline and you could lose all or part of your investment.

Risks Relating to Our Industry

Due in part to the cyclical nature of the semiconductor manufacturing industry and related industries, we have recently incurred substantial operating losses and may have future losses.

Our business is largely dependent on capital expenditures in the semiconductor manufacturing industry and other businesses employing similar manufacturing technology. The semiconductor manufacturing industry in turn depends on current and anticipated demand for integrated circuits and the products that use them. In recent years, these businesses have experienced unpredictable and volatile business cycles due in large part to rapid changes in demand and manufacturing capacity for semiconductors. The semiconductor industry experienced a prolonged downturn, which negatively impacted us from the third quarter of fiscal 2001 until well into 2003. Although our business became profitable during 2004, a downward trend again developed during fiscal 2005 in the semiconductor industry, and our revenues in fiscal 2005 declined from the prior year. We could continue to experience future operating losses during an industry downturn and any period of uncertain demand. If an industry downturn continues for an extended period of time, our business could be materially harmed. Conversely, if demand improves rapidly, we could have insufficient inventory and manufacturing capacity to meet our customer needs on a timely basis, which could result in the loss of customers and various other expenses that could reduce gross margins and profitability.

We face substantial competition which may lead to price pressure and otherwise adversely affect our sales.

We face substantial competition throughout the world in each of our product areas. Our primary competitors are Asyst, Camstar, Genesis, IBM, Inficon, Kawasaki, MKS Instruments, Rorze, Sankyo, SHI, Shinko and TDK and other smaller, regional companies. We also endeavor to sell products to OEM manufacturers, such as Applied Materials, Novellus, KLA-Tencor and TEL, that also satisfy their semiconductor and flat panel display handling needs internally rather than by purchasing systems or modules from a supplier like us. Some of our competitors have substantially greater financial resources and more extensive engineering, manufacturing, marketing and customer support capabilities than we do. We expect our competitors to continue to improve the performance of their current products and to introduce new products and technologies that could adversely affect sales of our current and future products and services. New products and technologies developed by our competitors or more efficient production of their products could require us to make significant price reductions to avoid losing orders. If we fail to respond adequately to pricing pressures or fail to develop products with improved performance or developments with respect to the other factors on which we compete, we could lose customers or orders. If we are unable to compete effectively, our business and prospects could be materially harmed.

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Risks Relating to Brooks

Our operating results could fluctuate significantly, which could negatively impact our business.

Our revenues, operating margins and other operating results could fluctuate significantly from quarter to quarter depending upon a variety of factors, including:

•  demand for our products as a result of the cyclical nature of the semiconductor manufacturing industry and the markets upon which it depends or otherwise;

•  changes in the timing and terms of product orders by our customers as a result of our customer concentration or otherwise;

•  changes in the mix of products and services that we offer;

•  timing and market acceptance of our new product introductions;

•  delays or problems in the planned introduction of new products, or in the performance of any such products following delivery to customers;

•  our competitors’ announcements of new products, services or technological innovations, which can, among other things, render our products less competitive due to the rapid technological change in our industry;

•  the timing and related costs of any acquisitions, divestitures or other strategic transactions;

•  our ability to reduce our costs in response due to decreased demand for our products and services;

•  disruptions in our manufacturing process or in the supply of components to us;

•  write-offs for excess or obsolete inventory; and

•  competitive pricing pressures.

As a result of these risks, we believe that quarter to quarter comparisons of our revenue and operating results may not be meaningful, and that these comparisons may not be an accurate indicator of our future performance.

Delays and technical difficulties in our products and operations may result in lost revenue, lost profit, delayed or limited market acceptance or product liability claims.

As the technology in our systems and manufacturing operations has become more complex and customized, it has become increasingly difficult to design and integrate these technologies into our newly-introduced systems, procure adequate supplies of specialized components, train technical and manufacturing personnel and make timely transitions to volume manufacturing. Due to the complexity of our manufacturing processes, we have on occasion failed to meet our customers’ delivery or performance criteria, and as a result we have deferred revenue recognition, incurred late delivery penalties and had higher warranty and service costs. We may experience these problems again in the future. We may be unable to recover expenses we incur due to changes or cancellations of customized orders. There are also substantial unanticipated costs associated with ensuring that new products function properly and reliably in the early stages of their life cycle. These costs have been and could in the future be greater than expected as a result of these complexities. Our failure to control these costs could materially harm our business and profitability.

Because many of our customers use our products for business-critical applications, any errors, defects or other performance or technical problems could result in financial or other damage to our customers and could significantly impair their operations. Our customers could seek to recover damages from us for losses related to any of these issues. A product liability claim brought against us, even if not successful, would likely be time- consuming and costly to defend and could adversely affect our marketing efforts.

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If we do not continue to introduce new products and services that reflect advances in technology in a timely and effective manner, our products and services will become obsolete and our operating results will suffer.

Our success is dependent on our ability to respond to the rapid rate of technological change present in the semiconductor manufacturing industry. The success of our product development and introduction depends on our ability to:

•  accurately identify and define new market opportunities and products;

•  obtain market acceptance of our products;

•  timely innovate, develop and commercialize new technologies and applications;

•  adjust to changing market conditions;

•  differentiate our offerings from our competitors’ offerings;

•  obtain intellectual property rights;

•  continue to develop a comprehensive, integrated product and service strategy;

•  properly price our products and services; and

•  design our products to high standards of manufacturability such that they meet customer requirements.

If we cannot succeed in responding in a timely manner to technological and/or market changes or if the new products that we introduce do not achieve market acceptance, we could lose our competitive position which could materially harm our business and our prospects.

The global nature of our business exposes us to multiple risks.

For the fiscal year ended September 30, 2006, approximately 41% of our revenues were derived from sales outside North America, while approximately 48% of our revenues in fiscal 2005 were derived from sales outside North America. We expect that international sales, including increased sales in Asia, will continue to account for a significant portion of our revenues. As a result of our international operations, we are exposed to many risks and uncertainties, including:

•  difficulties in staffing, managing and supporting operations in multiple countries;

•  longer sales-cycles and time to collection;

•  tariff and international trade barriers;

•  fewer legal protections for intellectual property and contract rights abroad;

•  different and changing legal and regulatory requirements in the jurisdictions in which we operate;

•  government currency control and restrictions on repatriation of earnings;

•  fluctuations in foreign currency exchange and interest rates; and

•  political and economic changes, hostilities and other disruptions in regions where we operate.

Negative developments in any of these areas in one or more countries could result in a reduction in demand for our products, the cancellation or delay of orders already placed, threats to our intellectual property, difficulty in collecting receivables, and a higher cost of doing business, any of which could materially harm our business and profitability.

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Our business could be materially harmed if we fail to adequately integrate the operations of the businesses that we have acquired or may acquire.

We acquired Helix effective October 26, 2005 and Synetics effective June 30, 2006. In addition we have made in the past, and may make in the future, acquisitions or significant investments in businesses with complementary products, services and/or technologies. Our acquisitions present numerous risks, including:

•  difficulties in integrating the operations, technologies, products and personnel of the acquired companies and realizing the anticipated synergies of the combined businesses;

•  defining and executing a comprehensive product strategy;

•  managing the risks of entering markets or types of businesses in which we have limited or no direct experience;

•  the potential loss of key employees, customers and strategic partners of ours or of acquired companies;

•  unanticipated problems or latent liabilities, such as problems with the quality of the installed base of the target company’s products or infringement of another Company’s intellectual property by a target Company’s activities or products;

•  problems associated with compliance with the target company’s existing contracts;

•  difficulties in managing geographically dispersed operations; and

•  the diversion of management’s attention from normal daily operations of the business.

If we acquire a new business, we may be required to expend significant funds, incur additional debt or issue additional securities, which may negatively affect our operations and be dilutive to our stockholders. In periods following an acquisition, we will be required to evaluate goodwill and acquisition-related intangible assets for impairment. When such assets are found to be impaired, they will be written down to estimated fair value, with a charge against earnings. The failure to adequately address these risks could materially harm our business and financial results.

The planned divestiture of the Brooks Software Division could adversely affect our business or our financial results.

On November 3, 2006, we entered into an agreement to sell the assets of the Brooks software Division (the “Division”) to Applied Materials, Inc. (“Applied”) pending the completion of necessary regulatory approvals. If those approvals are not obtained and the transaction is not completed, the business of the Division could be adversely affected by a loss of customer confidence, a reduction in employee morale and a reduction in revenue. If the sale of the Division is completed, the removal of the Division from Brooks could have an adverse effect on our relationship with customers to whom we have sold both hardware and software products, and the loss of the revenue associated with the Division and the associated profits could adversely affect both our financial results and our ability to diminish the impact on our business of the cyclical nature of the semiconductor manufacturing industry.

Failure to retain key personnel could impair our ability to execute our business strategy.

The continuing service of our executive officers and essential engineering, technical and management personnel, together with our ability to attract and retain such personnel, is an important factor in our continuing ability to execute our strategy. There is substantial competition to attract such employees and the loss of any such key employees could have a material adverse effect on our business and operating results. The same could be true if we were to experience a high turnover rate among engineering and technical personnel and we were unable to replace them.

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We face risks related to the restatement of our financial statements and the pending SEC and US Attorney investigations regarding our past practices with respect to equity incentives.

On May 16, 2006, the Securities and Exchange Commission notified us that it had commenced an informal inquiry into certain stock option grants and accounting practices. Subsequently, we have been informed that the informal inquiry has been converted into a formal inquiry, and we have received a subpoena from the SEC requesting, among other things, all documents relating to stock options available for exercise after January 1, 1999. We are cooperating fully with the SEC and will continue to do so as the inquiry moves forward. At this point we are unable to predict what, if any, consequences the SEC investigation may have on us. However, the investigation could result in considerable legal expenses, divert management’s attention from other business concerns and harm our business. If the SEC were to commence legal action, we could be required to pay significant penalties and/or fines and could become subject to an administrative order and/or a cease and desist order. The filing of our restated financial statements to correct the discovered accounting errors has not resolved the pending SEC investigation into our past practices with respect to equity incentives. The resolution of the SEC investigation could require the filing of additional restatements of our prior financial statements, and/or our restated financial statements, or require that we take other actions not presently contemplated.

On May 19, 2006, we received a grand jury subpoena from the United States Attorney for the Eastern District of New York (the “US Attorney”) requesting all documents relating to stock option grants between 1995 and the present and documents concerning the restatement of our financial statements. Responsibility for this investigation was subsequently assumed by the United States Attorney for the District of Massachusetts, and we have received a subpoena from that office requesting, among other things, similar documents relating to option grants. The investigation remains ongoing and we are fully cooperating with the US Attorney. We cannot predict when this inquiry will conclude or its eventual outcome. The uncertainty associated with this investigation into our accounting practices and the restatement of our financial statements could seriously harm our business, financial condition and reputation.

We face litigation risks relating to our past practices with respect to equity incentives that could have a material adverse effect on the Company.

Several lawsuits, including both putative securities class actions and shareholder derivative actions, have been filed against us, our directors and officers and certain of our former directors and officers relating to our past practices with respect to equity incentives. See Part I, Item 3, “Legal Proceedings” for a more detailed description of these proceedings. We are and may in the future be subject to other litigation arising in the normal course of our business. These actions are in the preliminary stages, and their ultimate outcome may have a material adverse effect on our business, financial condition and results of operations. Litigation may be time-consuming, expensive and disruptive to normal business operations, and the outcome of litigation is difficult to predict. The defense of these lawsuits will result in significant expense and the continued diversion of our management’s time and attention from the operation of our business, which could impede our ability to achieve our business objectives. Some or all of the amount we may be required to pay to satisfy a judgment or settlement of any or all of these claims may not be covered by insurance.

Under indemnification agreements we have entered into with our officers and directors, we are required to indemnify them, and advance expenses to them, in connection with their participation in proceedings arising out of their service to us. These payments may be material, in particular if any of these individuals become targets of regulatory investigations into our past practices with respect to equity incentives.

Risks Relating to Our Customers

Because we rely on a limited number of customers for a large portion of our revenues, the loss of one or more of these customers could materially harm our business.

We receive a significant portion of our revenues in each fiscal period from a relatively limited number of customers, and that trend is likely to continue. Sales to our ten largest customers accounted for approximately 43%, 44% and 39% of our total revenues in the fiscal years ended September 30, 2006, 2005 and 2004, respectively. As

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the semiconductor manufacturing industry continues to consolidate and further shifts to foundries which manufacture semiconductors designed by others, the number of our potential customers could decrease, which would increase our dependence on our limited number of customers. The loss of one or more of these major customers or a decrease in orders from one of these customers could materially affect our revenue, business and reputation.

Because of the lengthy sales cycles of many of our products, we may incur significant expenses before we generate any revenues related to those products.

Our customers may need several months to test and evaluate our products. This increases the possibility that a customer may decide to cancel or change plans, which could reduce or eliminate our sales to that customer. The impact of this risk can be magnified during the periods in which we introduce a number of new products, as was the case during fiscal 2005, and will continue in fiscal 2006. As a result of this lengthy sales cycle, we may incur significant research and development expenses, and selling, general and administrative expenses before we generate the related revenues for these products, and we may never generate the anticipated revenues if our customer cancels or changes its plans.

In addition, many of our products will not be sold directly to the end-user but will be components of other products. As a result, we rely on OEMs of our products to select our products from among alternative offerings to be incorporated into their equipment at the design stage; so-called design-ins. The OEM’s decisions often precede the generation of volume sales, if any, by a year or more. Moreover, if we are unable to achieve these design-ins from OEMs, we would have difficulty selling our products to that OEM because changing suppliers involves significant cost, time, effort and risk on the part of that OEM.

Customers generally do not make long term commitments to purchase our products and our customers may cease purchasing our products at any time.

Sales of our products are often made pursuant to individual purchase orders and not under long-term commitments and contracts. Our customers frequently do not provide any assurance of minimum or future sales and are not prohibited from purchasing products from our competitors at any time. Accordingly, we are exposed to competitive pricing pressures on each order. Our customers also engage in the practice of purchasing products from more than one manufacturer to avoid dependence on sole-source suppliers for certain of their needs. The existence of these practices makes it more difficult for us to increase price, gain new customers and win repeat business from existing customers.

Other Risks

We may be subject to claims of infringement of third-party intellectual property rights, or demands that we license third-party technology, which could result in significant expense and prevent us from using our technology.

We rely upon patents, trade secret laws, confidentiality procedures, copyrights, trademarks and licensing agreements to protect our technology. Due to the rapid technological change that characterizes the semiconductor- and flat panel display process equipment industries, we believe that the improvement of existing technology, reliance upon trade secrets and unpatented proprietary know-how and the development of new products may be as important as patent protection in establishing and maintaining competitive advantage. To protect trade secrets and know-how, it is our policy to require all technical and management personnel to enter into nondisclosure agreements. We cannot guarantee that these efforts will meaningfully protect our trade secrets.

There has been substantial litigation regarding patent and other intellectual property rights in the semiconductor related industries. We have in the past been, and may in the future be, notified that we may be infringing intellectual property rights possessed by other third parties. We cannot guarantee that infringement claims by third parties or other claims for indemnification by customers or end users of our products resulting from infringement claims will not be asserted in the future or that such assertions, if proven to be true, will not materially and adversely affect our business, financial condition and results of operations.

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Particular elements of our technology could be found to infringe on the intellectual property rights or patents of others. Other companies may hold or obtain patents on inventions or otherwise claim proprietary rights to technology necessary to our business. For example, twice in 1992 and once in 1994 we received notice from General Signal Corporation that it believed that certain of our tool automation products infringed General Signal’s patent rights. We believe the matters identified in the notice from General Signal were also the subject of a dispute between General Signal and Applied Materials, Inc., which was settled in November 1997. There are also claims that have been made by Asyst Technologies Inc. that certain products we acquired through acquisition embody intellectual property owned by Asyst. To date no action has been instituted against us directly by General Signal, Applied Materials or Asyst.

We cannot predict the extent to which we might be required to seek licenses or alter our products so that they no longer infringe the rights of others. We also cannot guarantee that licenses will be available or the terms of any licenses we may be required to obtain will be reasonable. Similarly, changing our products or processes to avoid infringing the rights of others may be costly or impractical and could detract from the value of our products. If a judgment of infringement were obtained against us, we could be required to pay substantial damages and a court could issue an order preventing us from selling one or more of our products. Further the cost and diversion of management attention brought about by such litigation could be substantial, even if we were to prevail. Any of these events could result in significant expense to us and may materially harm our business and our prospects.

Our failure to protect our intellectual property could adversely affect our future operations.

Our ability to compete is significantly affected by our ability to protect our intellectual property. Existing trade secret, trademark and copyright laws offer only limited protection, and certain of our patents could be invalidated or circumvented. In addition, the laws of some countries in which our products are or may be developed, manufactured or sold may not fully protect our products. We cannot guarantee that the steps we have taken to protect our intellectual property will be adequate to prevent the misappropriation of our technology. Other companies could independently develop similar or superior technology without violating our intellectual property rights. In the future, it may be necessary to engage in litigation or like activities to enforce our intellectual property rights, to protect our trade secrets or to determine the validity and scope of proprietary rights of others, including our customers. This could require us to incur significant expenses and to divert the efforts and attention of our management and technical personnel from our business operations.

If the site of the majority of our manufacturing operations were to experience a significant disruption in operations, our business could be materially harmed.

Most of our manufacturing facilities are concentrated in one location. If the operations of these facilities were disrupted as a result of a natural disaster, fire, power or other utility outage, work stoppage or other similar event, our business could be seriously harmed because we may be unable to manufacture and ship products and parts to our customers in a timely fashion.

Our business could be materially harmed if one or more key suppliers fail to deliver key components.

We currently obtain many of our key components on an as-needed, purchase order basis from numerous suppliers. We do not generally have long-term supply contracts with these suppliers, and many of them have undertaken cost-containment measures in light of the recent downturn in the semiconductor industry. In the event of an industry upturn, these suppliers could face significant challenges in delivering components on a timely basis. Our inability to obtain components in required quantities or of acceptable quality could result in delays or reductions in product shipments to our customers. In addition, if a supplier or sub-supplier alters their manufacturing processes suffers a production stoppage for any reason or modifies or discontinues their products, this could result in a delay or reduction in product shipments to our customers. Any of the contingencies could cause us to lose customers, result in delayed or lost revenue and otherwise materially harm our business.

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We are exposed to potential risks and we will continue to incur increased costs as a result of the internal control testing and evaluation process mandated by Section 404 of the Sarbanes-Oxley Act of 2002.

We assessed the effectiveness of our internal control over financial reporting as of September 30, 2006 and assessed all deficiencies on both an individual basis and in combination to determine if, when aggregated, they constitute more than a significant deficiency. As a result of this evaluation, no material weaknesses were identified. Although we have completed the documentation and testing of the effectiveness of our internal control over financial reporting for fiscal 2006, as required by Section 404 of the Sarbanes-Oxley Act of 2002, we expect to continue to incur costs in order to maintain compliance with that section of the Sarbanes-Oxley Act. We continue to monitor controls on an ongoing basis in fiscal 2007 for any deficiencies. No evaluation can provide complete assurance that our internal controls will detect or uncover all failures of persons within our company to disclose material information otherwise required to be reported. The effectiveness of our controls and procedures could also be limited by simple errors or faulty judgments. In addition, if we continue to expand globally, the challenges involved in implementing appropriate internal controls will increase and will require that we continue to improve our internal controls.

In the future, if we fail to complete the Sarbanes-Oxley 404 evaluation in a timely manner, we could be subject to regulatory scrutiny and a loss of public confidence in our internal controls. In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations.

Recently completed and future acquisitions of companies, some of which may have operations outside the United States, may provide us with challenges in implementing the required processes, procedures and controls in our acquired operations. Acquired companies may not have disclosure controls and procedures or internal control over financial reporting that are as thorough or effective as those required by securities laws in the United States. Although we intend to devote substantial time and incur substantial costs, as necessary, to ensure ongoing compliance, we cannot be certain that we will be successful in complying with Section 404.

Our stock price is volatile.

The market price of our common stock has fluctuated widely. From the beginning of fiscal year 2005 through the end of fiscal year 2006, our stock price fluctuated between a high of $18.73 per share and a low of $10.61 per share. Consequently, the current market price of our common stock may not be indicative of future market prices, and we may be unable to sustain or increase the value of an investment in our common stock. Factors affecting our stock price may include:

•  variations in operating results from quarter to quarter;

•  changes in earnings estimates by analysts or our failure to meet analysts’ expectations;

•  changes in the market price per share of our public company customers;

•  market conditions in the semiconductor industry or the industries upon which it depends;

•  general economic conditions;

•  political changes, hostilities or natural disasters such as hurricanes and floods;

•  low trading volume of our common stock; and

•  the number of firms making a market in our common stock.

In addition, the stock market has recently experienced significant price and volume fluctuations. These fluctuations have particularly affected the market prices of the securities of high technology companies like ours. These market fluctuations could adversely affect the market price of our common stock.

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Provisions in our organizational documents and contracts may make it difficult for someone to acquire control of us.

Our certificate of incorporation, bylaws and contracts contain provisions that would make more difficult an acquisition of control of us and could limit the price that investors might be willing to pay for our securities, including:

•  the ability of our board of directors to issue shares of preferred stock in one or more series without further authorization of stockholders;

•  a prohibition on stockholder action by written consent;

•  the elimination of the right of stockholders to call a special meeting of stockholders;

•  a requirement that stockholders provide advance notice of any stockholder nominations of directors to be considered at any meeting of stockholders;

•  a requirement that the affirmative vote of at least 80 percent of our shares be obtained for certain actions requiring the vote of our stockholders; and

•  a requirement under our shareholder rights plan that, in many potential takeover situations, rights issued under the plan become exercisable to purchase our common stock at a price substantially discounted from the then applicable market price of our common stock.

We will incur significant stock-based compensation charges related to certain stock options and restricted stock in future periods.

The Financial Accounting Standards Board (FASB) issued in December 2004 Statement of Financial Accounting Standards (SFAS) No. 123R, “Share-Based Payment”, an amendment of FASB Statements Nos. 123 and 95, that addresses the accounting treatment for employee stock options and other share-based payment transactions. The statement eliminates the ability to account for share-based compensation transactions using Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” and requires that such transactions be accounted for using a fair-value-based method and recognized as expenses. These expenses have been incorporated into our financial statements beginning in the quarter ending December 31, 2005. Our stock-based compensation cost, which reflects the adoption of Statement 123R, was $8.3 million in fiscal 2006. In future periods, stock-based compensation cost could have a material effect on our net income as a result of Statement 123R, and could adversely affect the market price of our common stock.

Item 1B.   Unresolved Staff Comments

We have not received written comments from the Securities and Exchange Commission regarding its periodic or current reports under the Securities Exchange Act of 1934, as amended, that were received 180 days or more before September 30, 2006 and remain unresolved.

Item 2.   Properties

Our corporate headquarters and primary manufacturing/research and development facilities are currently located in three buildings in Chelmsford, Massachusetts, which we purchased in January 2001. We have a lease on a

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fourth building in Chelmsford adjacent to the three that we own. In summary, we maintain the following active facilities:

		Square Footage		Ownership Status/Lease
Location	Functions	(approx.)		Expiration
Chelmsford, Massachusetts	Corporate headquarters, training, manufacturing, R&D hardware and software		295,000	Owned
Chelmsford, Massachusetts	Manufacturing, training and warehouse		93,000	October 2014
Jena, Germany	Manufacturing, R&D hardware, sales, support and training (4 buildings)		38,700	Several leases with terms that end through July 2009
Salt Lake City, Utah	R&D software and training		33,500	September 2011
San Jose, California	Sales & support and R&D hardware		55,600	January 2010
Gresham, Oregon	Manufacturing and R&D hardware		154,800	December 2010
Petaluma, California	Manufacturing and R&D hardware		77,300	December 2007
Kiheung, South Korea	Manufacturing, R&D hardware and sales & support		63,000	November 2015
Phoenix, Arizona	R&D software		19,500	Owned
Mansfield, Massachusetts	Manufacturing and R&D hardware		80,000	December 2006
Longmont, Colorado	Engineering, manufacturing and R&D hardware		60,900	February 2015

Our hardware segment utilizes the facilities in Massachusetts, California, Colorado, Oregon, South Korea, and Germany. Our software segment utilizes facilities in Massachusetts, Utah and Arizona.

We maintain additional sales, support, service, and training offices in the United States (Florida, North Carolina, Pennsylvania and Texas), in Toronto, Canada and overseas in Europe (France, Germany and UK), as well as in Asia (Japan, China, Malaysia, Singapore, South Korea, India and Taiwan) and the Middle East (Israel).

We currently sublease a total of 188,700 square feet of space previously exited as a result of our various restructuring activities. Another 122,300 of square feet of mixed office and manufacturing/research and development space located in Massachusetts is not in use and unoccupied at this time. We are actively exploring options to sublease, sell or negotiate an early termination agreement on this vacant property.

Item 3.   Legal Proceedings

There has been substantial litigation regarding patent and other intellectual property rights in the semiconductor and related industries. Brooks has in the past been, and may in the future be, notified that it may be infringing intellectual property rights possessed by other third parties. Brooks cannot guarantee that infringement claims by third parties or other claims for indemnification by customers or end users of its products resulting from infringement claims will not be asserted in the future or that such assertions, if proven to be true, will not materially and adversely affect Brooks’ business, financial condition and results of operations. If any such claims are asserted against Brooks’ intellectual property rights, we may seek to enter into a royalty or licensing arrangement. Brooks cannot guarantee, however, that a license will be available on reasonable terms or at all. Brooks could decide in the alternative to resort to litigation to challenge such claims or to attempt to design around the patented technology. Litigation or an attempted design around could be costly and would divert our management’s attention and resources. In addition, if Brooks does not prevail in such litigation or succeed in

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an attempted design around, Brooks could be forced to pay significant damages or amounts in settlement. Even if a design around is effective, the functional value of the product in question could be greatly diminished.

In addition to the material set forth below, please see “Patents and Proprietary Rights” in Part 1, Item 1, “Business” for a description of certain potential patent disputes.

ITI Lawsuit

On or about April 21, 2005, we were served with a third-party complaint seeking to join us as a party to a patent lawsuit brought by an entity named Information Technology Innovation, LLC based in Northbrook, Illinois (“ITI”) against Motorola, Inc. (“Motorola”) and Freescale Semiconductor, Inc. (“Freescale”). In the lawsuit (the “ITI Lawsuit”), ITI claimed that Motorola and Freescale had infringed a U.S. patent that ITI asserted covers processes used to model a semiconductor manufacturing plant. ITI asserted that we had induced and contributed to the infringement of the patent. Subsequently Intel Corporation (“Intel”) filed a lawsuit against ITI seeking a declaratory judgment that Intel had not infringed and was not infringing the patent (the “Intel Lawsuit”) and notified us that Intel believed that we had an indemnification obligation to Intel, but that, at that time, Intel was not seeking to have those obligations determined and enforced in the Intel Lawsuit.

Freescale alleged that we had a duty to indemnify Freescale and Motorola from any infringement claims asserted against them based on their use of our AutoSched software program by paying all costs and expenses and all or part of any damages that either of them might incur as a result of the ITI Lawsuit brought by ITI.

Pursuant to an agreement executed on April 28, 2006, we settled and concluded with ITI and the other parties all of the matters that were or might have been raised in this litigation. In exchange for a cash payment, the settlement affords a license, releases and covenants from ITI not to sue us, the other parties named above, and all users of certain of our factory modeling software products such as the “Autosched” product. The Intel Lawsuit was also dismissed as a result of this settlement. In addition, we settled the claim for indemnification brought against us by Freescale by the payment to Freescale of $400,000 to defray a portion of the legal expenses borne by Freescale in the defense of the ITI litigation.

Other Commercial Litigation Matters

In January 2006 a ruling was issued against us by a Massachusetts state court in a commercial litigation matter involving us and BlueShift Technologies, Inc. Awards of damages and costs were assessed against us in January and April 2006 in the amount of approximately $1.6 million, which had been accrued for at December 31, 2005. We have filed a notice of appeal in the case with the Massachusetts Appeals Court and that appeal is now pending.

Regulatory Proceedings

On May 12, 2006, we announced that the Company had received notice that the Boston Office of the United States Securities and Exchange Commission (the “SEC”) was conducting an informal inquiry concerning stock option grant practices to determine whether violations of the securities laws had occurred. On June 2, 2006, the SEC issued a voluntary request for information to us in connection with an informal inquiry by that office regarding a loan we previously reported had been made to former Chairman and CEO Robert Therrien in connection with the exercise by him of stock options in 1999. On June 23, 2006, we were informed that the SEC had opened a formal investigation into this matter and on the general topic of the timing of stock option grants. On June 28, 2006, the SEC issued subpoenas to the Company and to the Special Committee, which had previously been formed on March 8, 2006, requesting documents related to the Company’s stock option grant practices and to the loan to Mr. Therrien.

On May 19, 2006, we received a grand jury subpoena from the United States Attorney (the “DOJ”) for the Eastern District of New York requesting documents relating to stock option grants. Responsibility for the DOJ’s investigation was subsequently assumed by the United States Attorney for the District of Massachusetts. On June 22, 2006 the United States Attorney’s Office for the District of Massachusetts issued a grand jury subpoena to us in connection with an investigation by that office into the timing of stock option grants by us and the loan to Mr. Therrien mentioned above.

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The Company is cooperating fully with the investigations being conducted by the SEC and the DOJ.

Private Litigation

On May 22, 2006, a derivative action was filed nominally on our behalf in the Superior Court for Middlesex County, Massachusetts, captioned as Mollie Gedell, Derivatively on Behalf of Nominal Defendant Brooks Automation, Inc. v. A. Clinton Allen, et al.  The Defendants named in the complaint are: A. Clinton Allen, Director of the Company; Roger D. Emerick, former Director of the Company; Edward C. Grady, Director, President and CEO of the Company; Amin J. Khoury, former Director of the Company; Joseph R. Martin, Director of the Company; John K. McGillicuddy, Director of the Company; and Robert J. Therrien, former Director, President and CEO of the Company.

On May 26, 2006, a derivative action was filed in the Superior Court for Middlesex County, Massachusetts nominally on our behalf, captioned as Ralph Gorgone, Derivatively on Behalf of Nominal Defendant Brooks Automation, Inc. v. Edward C. Grady, et al. The Defendants named in the complaint are: Mr. Grady; Mr. Allen; Mr. Emerick; Mr. Khoury; Robert J. Lepofsky, Director of the Company; Mr. Martin; Mr. McGillicuddy; Krishna G. Palepu, Director of the Company; Alfred Woollacott, III, Director of the Company; Mark S. Wrighton, Director of the Company; and Marvin Schorr, Director Emeritus of the Company.

On August 4, 2006 the Superior Court for Middlesex County, Massachusetts, entered an order consolidating the above state derivative actions under docket number 06-1808 and the caption In re Brooks Automation, Inc. Derivative Litigation. On September 5, 2006, the Plaintiffs filed a Consolidated Shareholder Derivative Complaint; the Defendants named therein are: Mr. Allen, Mr. Martin, Mr. Grady, Mr. McGillicuddy, Mr. Therrien, Mr. Emerick, and Mr. Khoury; Robert W. Woodbury, Jr., the Company’s Chief Financial Officer; Joseph Bellini, and Thomas S. Grilk, Secretary and General Counsel of the Company, current Officers of the Company; Stanley D. Piekos and Ellen B. Richstone, the Company’s former Chief Financial Officers; and David R. Beaulieu, Jeffrey A. Cassis, Santo DiNaro, Peter Frasso, Robert A. McEachern, Dr. Charles M. McKenna, James A. Pelusi, Michael W. Pippins and Michael F. Werner, former Officers and employees of the Company. The Consolidated Shareholder Derivative Complaint alleges that certain current and former directors and officers breached fiduciary duties owed to Brooks by backdating stock option grants, issuing inaccurate financial results and false or misleading public filings, and that Messrs. Therrien, Emerick and Khoury breached their fiduciary duties, and Mr. Therrien was unjustly enriched, as a result of the loan to and stock option exercise by Mr. Therrien mentioned above, and seeks, on our behalf, damages for breaches of fiduciary duty and unjust enrichment, disgorgement to the Company of all profits from allegedly backdated stock option grants, equitable relief, and Plaintiffs’ costs and disbursements, including attorneys’ fees, accountants’ and experts’ fees, costs, and expenses. The Defendants have served motions to dismiss the Consolidated Shareholder Derivative Complaint.

On May 30, 2006, a derivative action was filed in the United States District Court for the District of Massachusetts, captioned as Mark Collins, Derivatively on Behalf of Nominal Defendant Brooks Automation, Inc. v. Robert J. Therrien, et al.  The defendants in the action are: Mr. Therrien; Mr. Allen; Mr. Emerick; Mr. Grady; Mr. Khoury; Mr. Martin; and Mr. McGillicuddy.

On June 7, 2006, a derivative action was filed in the United States District Court for the District of Massachusetts, captioned as City of Pontiac General Employees’ Retirement System, Derivatively on Behalf of Brooks Automation, Inc. v. Robert J. Therrien, et al. The Defendants in this action are: Mr. Therrien; Mr. Emerick; Mr. Khoury; Mr. Allen; Mr. Grady; Mr. Lepofsky; Mr. Martin; Mr. McGillicuddy; Mr. Palepu; Mr. Woollacott, III; Mr. Wrighton; and Mr. Schorr.

The District Court issued an Order consolidating the above federal derivative actions on August 15, 2006, and a Consolidated Verified Shareholder Derivative Complaint was filed on October 6, 2006; the Defendants named therein are: Mr. Allen, Mr. Grady, Mr. Lepofsky, Mr. Martin, Mr. McGillicuddy, Mr. Palepu, Mr. Schorr, Mr. Woollacott, Mr. Wrighton, Mr. Woodbury, Mr. Therrien, Mr. Emerick, Mr. Khoury, and Mr. Werner. The Consolidated Verified Shareholder Derivative Complaint alleges violations of Section 10(b) and Rule 10b-5 of the Exchange act; Section 14(a) of the Exchange Act; Section 20(a) of the Exchange Act; breach of fiduciary duty; corporate waste; and unjust enrichment, and seeks, on behalf of Brooks, damages, extraordinary equitable relief including disgorgement and a constructive trust for improvidently granted stock options or proceeds from alleged

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insider trading by certain defendants, Plaintiffs’ costs and disbursements including attorneys’ fees, accountants’ and experts’ fees, costs and expenses. The Defendants have filed motions to dismiss the Consolidated Verified Shareholder Derivative Complaint and to Stay this action pending the outcome of motions to dismiss in the state derivative action described above.

On June 19, 2006, a putative class action was filed in the United States District Court, District of Massachusetts, captioned as Charles E. G. Leech Sr. v. Brooks Automation, Inc., et al. The defendants in this action are: the Company; Mr. Therrien; Ellen Richstone, the Company’s former Chief Financial Officer; Mr. Emerick; Mr. Khoury; Robert W. Woodbury, Jr., the Company’s Chief Financial Officer; and Mr. Grady. The complaint alleges violations of Section 10(b) of the Exchange Act and Rule 10b-5 against us and the individual defendants; Section 20(a) of the Exchange Act against the individual defendants; Section 11 of the Securities Act against us and Messrs. Grady, Woodbury, Emerick, Khoury and Therrien; Section 12 of the Securities Act against us and Messrs. Grady, Woodbury, Emerick, Khoury and Therrien; and Section 15 of the Securities Act against Messrs. Grady, Woodbury, Emerick, Khoury and Therrien. The complaint seeks, inter alia, damages, including interest, and plaintiff’s costs. The Defendants have filed motions to dismiss the Leech complaint.

On July 19, 2006, a putative class action was filed in the United States District Court for the District of Massachusetts, captioned as James R. Shaw v. Brooks Automation, Inc. et al., No. 06-11239-RWZ. The Defendants in the case are the Company, Mr. Therrien, Ms Richstone, Mr. Emerick, Mr. Khoury, Mr. Woodbury, and Mr. Grady. As of this date, the Company has not been served with the complaint. The complaint alleges violations of Section 10(b) of the Exchange Act and Rule 10b-5 against all defendants and violations of Section 20(a) of the Exchange Act against all individual defendants. The complaint seeks, inter alia, damages, including interest, and plaintiff’s costs. Competing plaintiffs and their counsel have moved for consolidation with the Leech action described above, and for appointment as lead counsel.

On August 22, 2006, an action captioned as Mark Levy v. Robert J. Therrien and Brooks Automation, Inc., was filed in the United States District Court for the District of Delaware, seeking recovery, on behalf of the Company, from Mr. Therrien under Section 16(b) of the Securities Exchange Act of 1934 for alleged “short-swing” profits earned by Mr. Therrien due the loan and stock option exercise in November 1999 referenced above, and a sale by Mr. Therrien of Brooks stock in March 2000. The Complaint seeks disgorgement of all profits earned by Mr. Therrien on the transactions, attorneys’ fees and other expenses. Defendants have filed motions to dismiss.

We are aware of additional proposed class actions, posted on the websites of various law firms. We are not yet aware of the filing of any such actions and have not been served with a complaint or any other process in any of these matters.

Item 4.   Submission of Matters to a Vote of Security Holders

During the quarter ended September 30, 2006, no matters were submitted to a vote of security holders through the solicitation of proxies or otherwise.

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PART II

Item 5.   Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is traded on the Nasdaq National Market under the symbol “BRKS”. The following table sets forth, for the periods indicated, the high and low close prices per share of our common stock, as reported by the Nasdaq National Market:

	High		Low
Fiscal year ended September 30, 2006
First quarter	$	13.74	$	11.70
Second quarter		17.65		12.72
Third quarter		14.85		11.00
Fourth quarter		14.14		10.61
Fiscal year ended September 30, 2005
First quarter	$	18.26	$	13.48
Second quarter		18.73		14.38
Third quarter		16.21		12.86
Fourth quarter		16.60		13.00

Number of Holders

As of November 30, 2006, there were 1,262 holders on record of our common stock.

Dividend Policy

We have never declared or paid any cash dividends on our capital stock. Our current policy is to retain all of our earnings to finance future growth. In addition, we have never declared or issued any stock dividends on our capital stock and do not plan to issue any stock dividends in the foreseeable future.

Issuance of Unregistered Common Stock

Not applicable.

Issuer’s Purchases of Equity Securities

We did not repurchase any of our equity securities during the fourth quarter of fiscal 2006.

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Item 6.   Selected Financial Data

The selected consolidated financial data set forth below should be read in conjunction with our consolidated financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” appearing elsewhere in this report.

	Year Ended September 30,
	2006(4)(7)		2005(4)			2004(4)		2003(1)(2)(4)(5)			2002(3)(4)(6)
	(In thousands, except per share data)
Revenues	$	692,870	$	463,746		$	535,053	$	340,092		$	300,538
Gross profit	$	244,784	$	160,136		$	199,666	$	95,211		$	63,681
Income (loss) from continuing operations before income taxes and minority interests	$	29,907	$	(2,751	)	$	32,398	$	(194,806	)	$	(637,491	)
Income (loss) from continuing operations	$	25,841	$	(8,096	)	$	24,134	$	(199,926	)	$	(732,222	)
Net income (loss)	$	25,930	$	(11,612	)	$	14,659	$	(203,024	)	$	(738,637	)
Basic earnings (loss) from continuing operations per share	$	0.36	$	(0.18	)	$	0.56	$	(5.44	)	$	(28.37	)
Diluted earnings (loss) from continuing operations per share	$	0.36	$	(0.18	)	$	0.55	$	(5.44	)	$	(28.37	)
Shares used in computing basic earnings (loss) per share		72,323		44,919			43,006		36,774			25,807
Shares used in computing diluted earnings (loss) per share		72,533		44,919			43,573		36,774			25,807

	As of September 30,
	2006		2005		2004		2003		2002
	(In thousands)
Total assets	$	992,577	$	624,080	$	671,039	$	493,245	$	657,497
Working capital	$	252,633	$	168,231	$	294,137	$	135,156	$	176,338
Current portion of long-term debt and other obligations	$	11	$	12	$	11	$	98	$	8
Subordinated notes due 2008	$	—	$	175,000	$	175,000	$	175,000	$	175,000
Other long-term debt (less current portion)	$	2	$	2	$	14	$	25	$	177
Stockholders’ equity	$	799,134	$	309,835	$	312,895	$	162,830	$	308,235

	Year Ended September 30, 2006
	First			Second		Third		Fourth
	Quarter			Quarter		Quarter		Quarter
	(In thousands, except per share data)
Revenues	$	127,175		$	169,177	$	186,195	$	210,323
Gross profit	$	36,934		$	59,740	$	71,483	$	76,627
Income (loss) from continuing operations	$	(11,752	)	$	4,354	$	17,158	$	16,081
Basic earnings (loss) from continuing operations per share	$	(0.18	)	$	0.06	$	0.23	$	0.22
Diluted earnings (loss) from continuing operations per share	$	(0.18	)	$	0.06	$	0.23	$	0.22

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	Year Ended September 30, 2005
	First			Second			Third		Fourth
	Quarter			Quarter			Quarter		Quarter
	(In thousands, except per share data)
Revenues	$	117,233		$	129,454		$	113,760	$	103,299
Gross profit	$	41,086		$	43,297		$	39,523	$	36,230
Income (loss) from continuing operations	$	(1,404	)	$	(274	)	$	1,260	$	(7,678	)
Basic earnings (loss) from continuing operations per share	$	(0.03	)	$	(0.01	)	$	0.03	$	(0.17	)
Diluted earnings (loss) from continuing operations per share	$	(0.03	)	$	(0.01	)	$	0.03	$	(0.17	)

(1)	Amounts include results of operations of Microtool, Inc. (acquired October 9, 2002) for the periods subsequent to its acquisition.
(2)	Amounts include our share of the results of operations of Brooks Switzerland in accordance with the equity method of accounting.
(3)	Amounts include results of operations of Hermos Informatik GmbH (acquired July 3, 2002); PRI Automation, Inc. (acquired May 14, 2002); Intelligent Automation Systems, Inc. and IAS Products, Inc. (acquired February 15, 2002); Fab Air Control (acquired December 15, 2001); the Automation Systems Group of Zygo Corporation (acquired December 13, 2001); Tec-Sem A.G. (acquired October 9, 2001) and General Precision, Inc. (acquired October 5, 2001) for the periods subsequent to their respective acquisitions.
(4)	Amounts from continuing operations exclude results of operations of the Specialty Equipment and Life Sciences division, previously reported as the Company’s “Other” reportable segment, which was reclassified as a discontinued operation in June 2005.
(5)	Amounts include $40.0 million for asset impairments.
(6)	Amounts include $474.4 million for asset impairments and $106.7 million for deferred tax write-offs.
(7)	Amounts include results of operations of Helix Technology Corporation (acquired October 26, 2005) and Synetics Solutions Inc. (acquired June 30, 2006) for the periods subsequent to their respective acquisitions.

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements in this Form 10-K constitute “forward-looking statements” which involve known risks, uncertainties and other factors which may cause the actual results, our performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements such as estimates of future revenue, gross margin, and expense levels as well as the performance of the semiconductor industry as a whole. Such factors include the “Risk Factors” set forth in Part I, Item 1A. Precautionary statements made herein should be read as being applicable to all related forward-looking statements whenever they appear in this report.

Overview

We are a leading supplier of automation products and solutions primarily serving the worldwide semiconductor market. We supply hardware, software and services to both chip manufacturers and original equipment manufacturers, or OEMs, who make semiconductor device manufacturing equipment. We are a technology and market leader with offerings ranging from individual hardware and software modules to fully integrated systems as well as services to install and support our products world-wide. Although our core business addresses the increasingly complex automation requirements of the global semiconductor industry, we also provide automation solutions for a number of related industries, including flat panel display manufacturing, data storage and other complex manufacturing.

We operate in two segments: hardware and software.

The hardware segment provides a wide range of wafer handling products, vacuum subsystems and wafer transport platforms for use within the semiconductor process and metrology equipment. Within the hardware

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segment, there are four businesses consisting of automation hardware products, vacuum products and subsystems, customer-designed automation and the global customer service organization. The automation hardware products, historically the core products of Brooks, include wafer transfer robots and platforms, or systems that operate in either vacuum or atmospheric environments that are sold to equipment manufacturers. The Company also provides hardware directly to fabs including equipment for lithography that automate the storage, inspection and transport of photomasks, or reticles. Another line of business includes the vacuum products and subsystems acquired from Helix that include vacuum technology solutions such as cryogenic pumps for creating vacuum, products for measuring vacuum, and thermal management products that are used in manufacturing equipment for the semiconductor, data storage and flat panel display industries. Additionally, the Company leverages its domain knowledge and manufacturing expertise to build customer-designed automation systems, or contract automation systems, in a program designed to help customers outsource their automation. This assembly and manufacturing capability was a core competency of Synetics Solutions, and these offerings have been combined under the line of business managed by the former Synetics enterprise. The primary customers for these solutions are manufacturers of process equipment. Finally, the global customer service offerings provide customers with support for all our hardware offerings.

The software segment addresses the need for production management systems driven by the extensive tracking and tracing requirements of the semiconductor industry. At the core of these production systems is the manufacturing execution system (“MES”) that is primarily responsible for tracking the movement of production wafers in a fab, and managing the data and actions for every wafer, equipment, operator and other resources in the fab. These mission-critical systems provide real time information primarily to production operators, supervisors and fab managers. We provide other important software applications to meet the critical requirements of the fab, such as real time dispatching and scheduling, equipment communications, advanced process control, material control for the AMHS, activity execution and control, automated maintenance management of equipment, and other applications. Customers often purchase more than one of these software products from Brooks for a single fab, often driving the need for consulting and integration services. Our software products enable semiconductor manufacturers to increase their return on investment by maximizing production efficiency, and may be sold as part of an integrated solution or on a stand-alone basis. These software products and services are also used in many similar manufacturing industries as semiconductor, including flat panel display, data storage, and electronic assembly.

We are currently focusing our major efforts in the following aspects of our business:

•  Implementing global low-cost sourcing and manufacturing strategies, specifically in Mexico and Asia;

•  Expanding our global customer service business;

•  Sustaining our ability to meet our customers’ requirements on a timely basis;

•  Successfully operating our newly-formed joint venture in Japan with Yaskawa;

•  Continuing to integrate Helix and Synetics into our operations, systems, processes and controls;

•  Expanding our sales of equipment automation products to process tool manufacturers that currently produce automation equipment internally;

•  Continuing to develop our customer designed automation (“CDA”) business with process tool manufacturers;

•  Greater expansion of our hardware products into the China market;

•  Improving the efficiency of our internal information and business systems, which could result in the upgrade or replacement of certain applications; and

•  Continuing to evaluate on an opportunistic basis whether new acquisitions of or alliances with other companies would be beneficial to our business and shareholders.

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In fiscal 2006, our total revenues increased 49.4% to $692.9 million from the prior year compared to a 13.3% decline in fiscal 2005. This increase is primarily due to the additional revenues related to our acquisitions of Helix Technology Corporation and Synetics Solutions Inc., along with higher industry demand for semiconductor capital equipment in fiscal 2006. Our revenue by segment for fiscal 2006 and 2005 is as follows (in thousands):

	For the Year Ended September 30,
	2006				2005
Hardware	$	607,494	87.7	%	$	369,778	79.7	%
Software		85,376	12.3	%		93,968	20.3	%
	$	692.870	100.0	%	$	463,746	100.0	%

Our hardware segment revenues increased 64.3% from the prior year to $607.5 million. This increase is primarily attributable to the additional revenues related to our Helix and Synetics acquisitions along with higher demand for semiconductor capital equipment during fiscal year 2006. Our software segment revenues decreased 9.1% from the prior year to $85.4 million. The decrease is primarily attributable to lower market demand for our software products. We expect fiscal 2007 total hardware revenues to increase over 2006 due to the inclusion of Helix and Synetics for a full year, although there are indications that demand for semiconductor capital equipment may soften in the later half of fiscal 2007.

Gross margins increased to 35.3% for fiscal 2006 from 34.5% in the prior year. The increase is primarily attributable to higher overhead absorption due to higher sales volumes, improved product mix and the result of various cost reduction measures. We expect our gross margins to continue to increase in the near term as a result of new product introductions and material cost reduction initiatives.

We recorded income from continuing operations of $25.8 million or $0.36 per diluted share in fiscal 2006 compared to a loss from continuing operations of $8.1 million or $0.18 per diluted share in fiscal 2005. This improvement is the result of higher revenues and gross margins, lower restructuring charges and higher interest income. We generated $65.2 million of cash from operations in fiscal year 2006, compared to a cash flow from operations of $31.1 million in fiscal 2005. At September 30, 2006, we had cash, cash equivalents and marketable securities aggregating $191.4 million.

Recent Developments

On July 11, 2005, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Helix Technology Corporation (“Helix”), a Delaware corporation and Mt. Hood Corporation (“Mt. Hood”), a newly-formed Delaware corporation and a direct wholly-owned subsidiary of the Company. This acquisition closed on October 26, 2005. Under the terms of the Merger Agreement, Mt. Hood merged (the “Merger”) with and into Helix, with Helix continuing as the surviving corporation. Each share of Helix common stock, par value $1.00 per share, other than shares held by Helix as treasury stock and shares held by the Company or Mt. Hood, was cancelled and extinguished and automatically converted into 1.11 (“Exchange Ratio”) shares of the Company’s common stock. In addition, we assumed all options then outstanding under Helix’s existing equity incentive plans, each of which is now exercisable into a number of shares of the Company’s common stock (and at an exercise price) adjusted to reflect the Exchange Ratio. The Helix acquisition is valued at approximately $458.1 million, consisting of 29.0 million shares of common stock valued at $444.6 million, the fair value of assumed Helix options of $3.3 million, and cash of $10.2 million. This transaction qualified as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986. Helix was a leader in the development, manufacture, and application of innovative vacuum technology solutions for the semiconductor, data storage, and flat panel display markets. The acquisition of Helix enables us to better serve our current market, increase our addressable market, reduce the volatility that both businesses have historically faced and position us to enhance our financial performance.

On May 8, 2006 we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Synetics Solutions Inc. (“Synetics”). We completed our acquisition of Synetics from Yaskawa Electric Corporation (“Yaskawa”), a corporation duly organized and existing under the laws of Japan, through a merger that became effective as of June 30, 2006. Synetics provides customized manufacturing solutions for the North American

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semiconductor equipment industry. The Synetics acquisition is valued at $50.2 million consisting of a $28.6 million cash payment to Yaskawa, repayment of outstanding debt of $19.9 million and transaction costs of $1.7 million.

Also on May 8, 2006, we entered into Joint Venture Agreement (the “Agreement”) with Yaskawa to form a 50/50 joint venture called Yaskawa Brooks Automation, Inc.( “YBA”) to exclusively market and sell Yaskawa’s semiconductor robotics products and Brooks’ automation hardware products to semiconductor customers in Japan. This Agreement was executed on June 30, 2006. YBA began operations on September 21, 2006.

On November 3, 2006, we entered into a definitive agreement to sell our Software Division to Applied Materials for $125 million. We expect to close this transaction during the second fiscal quarter of 2007. We are selling our software division in order to focus on our core semiconductor-related hardware businesses. We expect to operate in one segment, hardware, in fiscal 2007. We expect to recognize a gain on disposal of the software division and to reclassify this division as discontinued operations in fiscal 2007.

Related Parties

On June 11, 2001, we appointed Joseph R. Martin to our Board of Directors. Mr. Martin served as a director of Fairchild Semiconductor International, Inc. (“Fairchild”), one of our customers, until May 3, 2006. Accordingly, Fairchild is considered a related party for the period from June 11, 2001 through May 3, 2006. Revenues from Fairchild from October 1, 2005 to March 31, 2006 were approximately $205,000 and for the years ended September 30, 2005 and 2004 were approximately $319,000, and $409,000, respectively. The amounts due from Fairchild included in accounts receivable at March 31, 2006 and September 30, 2005 were $40,000 and $33,000, respectively.

Related party transactions and amounts included in accounts receivable and revenue are on standard pricing and contractual terms and manner of settlement for products and services of similar types and at comparable volumes.

Critical Accounting Policies and Estimates

The preparation of the Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to bad debts, inventories, intangible assets, goodwill, income taxes, warranty obligations, the adequacy of restructuring reserves and contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, including current and anticipated worldwide economic conditions both in general and specifically in relation to the semiconductor industry, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. As discussed in the year over year comparisons below, actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our Consolidated Financial Statements.

Revenues

Product revenues are associated with the sale of hardware systems and components as well as software licenses. Service revenues are associated with hardware-related field service, training, software maintenance and software-related consulting and integration services.

Revenue from product sales that do not include significant customization is recorded upon delivery and transfer of risk of loss to the customer provided there is evidence of an arrangement, fees are fixed or determinable, collection of the related receivable is reasonably assured and, if applicable, customer acceptance criteria have been successfully demonstrated. Customer acceptance provisions include final testing and acceptance carried out prior to shipment. These pre-shipment testing and acceptance procedures ensure that the product meets the published specification requirements before the product is shipped. In the limited situations where the arrangement contains extended payment terms, revenue is recognized as the payments become due. Shipping terms are customarily FCA

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shipping point. Amounts charged to customers for costs incurred for shipping and handling are credited to cost of revenues where the associated costs are charged. When significant on site customer acceptance provisions are present in the arrangement, revenue is recognized upon completion of customer acceptance testing.

Revenue from the sale of off-the-shelf software licenses is recognized upon delivery to the customer provided there is evidence of an arrangement, fees are fixed or determinable, collection of the related receivable is probable, and there are no unusual acceptance criteria or extended payment terms. If the arrangement contains acceptance criteria or testing, then revenue is recognized upon acceptance or the successful completion of the testing. If the arrangement contains extended payment terms, revenue is recognized as the payments become due. Revenue related to post-contract support is deferred and recognized ratably over the contract period.

For tailored software contracts, we provide significant consulting services to tailor the software to the customer’s environment. If we are able to reasonably estimate the level of effort and related costs to complete the contract, we recognize revenue using the percentage-of-completion method, which compares costs incurred to total estimated project cost. Revisions in revenue and cost estimates are recorded in the period in which the facts that require such revisions become known. If our ability to complete the tailored software is uncertain or if we cannot reasonably estimate the level of effort and related costs, completed contract accounting is applied. Losses, if any, are provided for in the period in which such losses are first identified by management. Generally, the terms of long-term contracts provide for progress billing based on completion of certain phases of work. For maintenance contracts, service revenue is deferred based on vendor specific objective evidence of its fair value and is recognized ratably over the term of the maintenance contract. Deferred revenue primarily relates to services and maintenance agreements and billings in excess of revenue recognized on long term contracts accounted for using the percentage-of-completion method and contracts awaiting final customer acceptance.

In transactions that include multiple products and/or services, such as tailored software arrangements, described above, or software sales with post-contract support, we allocate the sales value among each of the elements based on their relative fair values and recognize such revenue when each element is delivered. If these relative fair values are not known, the Company uses the residual method to recognize revenue from arrangements with one or more elements to be delivered at a future date, when evidence of the fair value of all undelivered elements exists. Under the residual method, the fair value of any the undelivered elements at the date of delivery, such as post-contract support, are deferred and the remaining portion of the total arrangement fee is recognized as revenue. The Company determines fair value of undelivered services based on the prices that are charged when the same element is sold separately to customers.

Intangible Assets and Goodwill

We have made a number of acquisitions in previous years, and as a result, identified significant intangible assets and generated significant goodwill. Intangible assets are valued based on estimates of future cash flows and amortized over their estimated useful life. Goodwill is subject to annual impairment testing as well as testing upon the occurrence of any event that indicates a potential impairment. Intangible assets and other long-lived assets are subject to an impairment test if there is an indicator of impairment. The carrying value and ultimate realization of these assets is dependent upon estimates of future earnings and benefits that we expect to generate from their use. If our expectations of future results and cash flows are significantly diminished, intangible assets and goodwill may be impaired and the resulting charge to operations may be material. When we determine that the carrying value of intangibles or other long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment, we use the projected undiscounted cash flow method to determine whether an impairment exists, and then measure the impairment using discounted cash flows. For goodwill, we compare the fair value of our reporting units by measuring discounted cash flows to the book value of the reporting units and measure impairment, if any, as the difference between the resulting implied fair value of goodwill and the recorded book value of the goodwill.

The estimation of useful lives and expected cash flows require us to make significant judgments regarding future periods that are subject to some factors outside of our control. Changes in these estimates can result in significant revisions to the carrying value of these assets and may result in material charges to the results of operations.

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We have elected to perform our annual goodwill impairment testing as required under FAS 142 on September 30 of each fiscal year. During this process estimates of revenue and expense were developed for each of our segments and as a whole based on internal as well as external market forecasts. Our analyses indicated no impairment of the goodwill in fiscal 2006 or fiscal 2005. In fiscal 2004, we determined that the implied fair value of the goodwill associated with the SELS division was $7.4 million less than its book value and recorded a charge to write-down the value of this goodwill in the fourth quarter. This charge has been recorded as a component of the loss from discontinued operations of $9.5 million for fiscal year 2004.

Accounts Receivable

We record trade accounts receivable at the invoiced amount. Trade accounts receivables do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company determines the allowance based on historical write-off experience by customer. The Company reviews its allowance for doubtful accounts quarterly. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. All other balances are reviewed on a pooled basis by type of receivable. Account balances are charged off against the allowance when the Company feels it is probable the receivable will not be recovered. The Company does not have any off-balance-sheet credit exposure related to its customers.

Warranty

We provide for the estimated cost of product warranties at the time revenue is recognized. While we engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers, our warranty obligation is estimated by assessing product failure rates and material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from our estimates, revisions to the estimated warranty liability would be required and may result in additional benefits or charges to operations.

Inventory

We provide reserves for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. We fully reserve for inventories and noncancelable purchase orders for inventory deemed obsolete. We perform periodic reviews of all inventory items to identify excess inventories on hand by comparing on-hand balances to anticipated usage using recent historical activity as well as anticipated or forecasted demand, based upon sales and marketing inputs through our planning systems. If estimates of demand diminish further or actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required.

Deferred Taxes

We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. We have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance. In the event we determine that we would be able to realize our deferred tax assets in excess of their net recorded amount, an adjustment to the deferred tax asset would increase income in the period such determination was made. Likewise, should we subsequently determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to income in the period such determination was made.

Stock-Based Compensation

Prior to October 1, 2005, our employee stock compensation plans were accounted for in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related interpretations. Under this method, no compensation expense was recognized as long as the exercise price equaled or exceeded the market price of the underlying stock on the measurement date of the grant. The Company elected

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the disclosure-only alternative permitted under SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), as amended by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure” (SFAS 148”), for fixed stock-based awards to employees.

On December 23, 2004, the Company accelerated the vesting of certain unvested stock options awarded to employees, officers and other eligible participants under the Company’s various stock option plans, other than its 1993 Non-Employee Director Stock Option Plan. As such, the Company fully vested options to purchase 1,229,239 shares of the Company’s common stock with exercise prices greater than or equal to $24.00 per share. The acceleration of the vesting of these options resulted in a charge based on generally accepted accounting principles of approximately $1.0 million. We took this action because it produced a more favorable impact on our results from operations in light of the effective date of SFAS 123R, which took place in our first fiscal quarter of 2006.

As of October 1, 2005, the Company adopted SFAS 123R using the modified prospective method, which requires measurement of compensation cost for all stock awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The fair value of restricted stock is determined based on the number of shares granted and the excess of the quoted price of the Company’s common stock over the exercise price of the restricted stock, and the fair value of stock options is determined using the Black-Scholes valuation model, which is consistent with our valuation techniques previously utilized for options in footnote disclosures required under SFAS 123, as amended by SFAS 148. Such value is recognized as expense over the service period, net of estimated forfeitures. The estimation of stock awards that will ultimately vest requires significant judgment. We consider many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. Actual results, and future changes in estimates, may differ substantially from our current estimates. Prior periods have not been restated to incorporate the stock-based compensation charge.

Year Ended September 30, 2006, Compared to Year Ended September 30, 2005

Revenues

We reported revenues of $692.9 million for the year ended September 30, 2006, compared to $463.7 million in the previous year, a 49.4% increase. The increase reflects the additional revenues of $183.3 million and $23.7 million related to the Helix and Synetics acquisitions respectively, along with higher revenues related to our legacy Brooks hardware segment of $30.8 million due to higher demand for semiconductor capital equipment experienced in fiscal 2006, offset by lower revenues from our software segment of $8.6 million. The decrease in our software revenues is reflective of reduced demand for software products and tailored software projects from the prior year.

Our hardware segment reported revenues of $607.5 million in the year ended September 30, 2006, an increase of 64.3% from the prior year. This increase reflects the additional revenues of $183.3 million and $23.7 million related to the Helix and Synetics acquisitions respectively, along with higher revenues related to our legacy Brooks hardware segment of $30.8 million due to higher demand for semiconductor capital equipment experienced in fiscal 2006.

Our software segment reported revenues of $85.4 million, a 9.1% decrease from $94.0 million in the prior year. The decrease is primarily attributable to lower software license sales of $2.6 million driven by reduced market demand, along with lower revenues from tailored software services project of $6.7 million, offset by higher revenues of $0.7 million from software maintenance contracts.

Product revenues increased $176.2 million, or 52.1%, to $514.3 million, in the year ended September 30, 2006, from $338.1 million in the previous year. This increase is attributable to additional revenues of $133.1 million and $22.7 million related to the Helix and Synetics acquisitions respectively, along with higher revenues of legacy Brooks hardware of $23.0 million due to increased demand for semiconductor capital equipment in fiscal 2006, offset by lower software license revenues of $2.6 million reflective of industry trends of decreased demand for software products in fiscal 2006. Product revenues associated with our hardware segment increased by 57.7% from fiscal 2005 levels, while product revenues from our software segment decreased by 9.2%. Service revenues

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increased $52.9 million, or 42.1%, to $178.6 million. This increase is attributable to additional revenues of $50.2 million and $1.0 million related to the Helix and Synetics acquisitions respectively, along with higher revenues of legacy Brooks hardware services of $7.7 million due to higher demand for spares and additional revenues from new service contracts, offset by lower software services revenues of $6.0 million primarily due to reduced activity on tailored software projects.

Revenues outside the United States were $283.3 million, or 40.9% of total revenues, and $223.1 million, or 48.1% of total revenues, in the years ended September 30, 2006 and 2005, respectively. We expect that foreign revenues will continue to account for a significant portion of total revenues.

Deferred revenue of $26.1 million at September 30, 2006 consisted of $13.2 million related to deferred maintenance contracts and $12.9 million related to revenues deferred for percentage-of-completion method arrangements and contracts awaiting final customer acceptance.

Gross Margin

Gross margin increased to $244.8 million or 35.3% for the year ended September 30, 2006, compared to $160.1 million or 34.5% for the previous year. This overall increase in gross margin reflects the additional gross margin from the Helix acquisition of $55.8 million, plus the additional gross margin from the Synetics acquisition of $4.2 million, plus higher gross margin of $26.9 million associated with the legacy Brooks hardware segment from higher revenues, better overhead absorption and improved product mix, offset by reduced gross margin of $2.2 million associated with the legacy Brooks software segment from lower revenues. The overall increase in the gross margin percentage reflects the impact of cost reduction initiatives, favorable product mix, and greater overhead absorption associated with the legacy Brooks hardware and software businesses along with slightly higher margins associated with the Helix business, offset by the lower margins associated with Synetics business as well as the write-off of the inventory step-up totaling $11.6 million associated with Helix and Synetics acquisition and the amortization of completed technology associated with these acquisitions totaling $8.1 million in fiscal 2006.

Our hardware segment gross margin increased to $186.7 million or 30.7% in the year ended September 30, 2006, from $99.8 million or 27.0% in the prior year. This increase reflects the additional gross margin of $55.8 million related to the Helix acquisition, $4.2 million of additional gross margin related to the Synetics acquisition, along with higher margin on higher revenues from legacy Brooks hardware. The additional gross margin related to the Helix acquisition is net of a $11.2 million charge to write-off the step-up in inventory associated with the acquisition, a charge of $8.0 million for the amortization of completed technology acquired in the Helix transaction, and $1.3 million of additional costs incurred to bring our new Mexico manufacturing operations on line. The additional gross margin related to the Synetics acquisition is net of a $0.4 million charge to write-off the step-up in inventory associated with the acquisition, and a charge of $0.2 million for the amortization of completed technology acquired in the Synetics transaction. Our software segment’s gross margin for the year ended September 30, 2006, decreased to $58.1 million or 68.1%, compared to $60.4 million or 64.2% in the prior year. The decrease in gross margin is primarily attributable to lower software license sales, offset by reduced costs realized by our cost reduction program.

Gross margin on product revenues was $168.7 million or 32.8% for the year ended September 30, 2006, compared to $99.0 million or 29.3% for the prior year. The increase in product margins is primarily attributable to additional margin of $36.8 million related to the Helix acquisition, and $3.9 million of additional margin associated with the Synetics acquisition, along with higher margin from the legacy Brooks hardware products of $30.6 million, offset by lower margin from software products of $1.6 million.

Gross margin on service revenues was $76.1 million or 42.6% for the year ended September 30, 2006, compared to $61.1 million or 48.6% in the previous year. The increase is primarily attributable to incremental gross profit of $19.0 million, or 37.8%, from Helix customer support services, additional gross margin of $0.3 million from Synetics customer support services, offset by lower margin from legacy Brooks hardware-related services of $3.7 million and lower profit of $0.6 million on software-related services.

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Research and Development

Research and development expenses for the year ended September 30, 2006, were $70.7 million, an increase of $7.6 million, compared to $63.1 million in the previous year. Research and development expenses decreased as a percentage of revenues, to 10.2%, from 13.6% in the prior year. The increase in absolute spending is primarily attributable to the additional spending of $9.3 million and $0.9 million related to the Helix and Synetics acquisition respectively, offset by lower spending in our legacy Brooks hardware and software businesses. The decrease in absolute legacy Brooks spending and the overall decrease in R&D spending as a percentage of revenue is the result of our continued efforts to control costs and focus our development activities.

Selling, General and Administrative

Selling, general and administrative expenses were $141.0 million for the year ended September 30, 2006, an increase of $56.2 million, compared to $84.8 million in the prior year. Selling, general and administrative expenses increased as a percentage of revenues, to 20.4% in the year ended September 30, 2006, from 18.3% in the previous year. The increase in absolute spending is primarily attributable to the additional spending of $30.3 million and $2.0 million related to the Helix and Synetics acquisitions respectively, additional amortization of various intangible assets of $3.8 million and $0.4 million related to the Helix and Synetics acquisitions respectively, higher management incentive costs of $7.4 million, higher legal expenses of $2.6 million mostly associated with the ITI and Blueshift litigation matters, $4.8 million of additional costs incurred to conduct our review of prior years’ stock option compensation, and the $1.3 million write-off of the remaining depreciation of a sales management application recorded in the quarter ended December 31, 2005 which was phased out of use.

Restructuring and Acquisition-related Charges

We recorded a charge to operations of $5.3 million in the year ended September 30, 2006. This charge, which consists of $2.0 million of excess facilities charges primarily related to a vacant facility in Billerica Massachusetts due to a longer period than initially estimated to sub-lease the facility, $2.4 million of severance costs associated with the termination of approximately 40 legacy Brooks employees worldwide in sales, service, operations and administrative functions, whose positions were made redundant as a result of the Helix acquisition and further downsizing in our software segment, and $1.8 million for retention bonuses earned in the period by employees who have been notified of their termination in the current and prior periods, offset by the $0.9 million reversal of previously accrued termination costs to employees who will no longer be terminated or whose termination was settled at a reduced cost. The accruals for workforce reductions are expected to be paid over the next twelve months. We estimate that salary and benefit savings as a result of these actions will be approximately $4.3 million annually. The impact of these cost reductions on our liquidity is not significant, as these cost savings are expected to yield actual cash savings within twelve months.

We recorded a charge to continuing operations of $16.5 million in the year ended September 30, 2005, of which $13.3 million related to workforce reductions of approximately 270 employees worldwide and $3.2 million to excess facilities charges. Workforce reduction charges included $4.3 million for headcount reductions of approximately 100 employees associated with our software segment, $3.6 million for reductions of approximately 65 employees in our Jena, Germany facility and $5.4 million related to various other actions undertaken in fiscal 2005. Excess facilities charges of $3.2 million consisted of excess facilities identified in fiscal 2005 that were recorded to recognize the expected amount of the remaining lease obligations. Of the $3.2 million of facilities charges, $1.5 million represents an additional accrual on a previous vacated facility due to a longer period than initially estimated to sub-lease the facility. This revision, including lower estimates of expected sub-rental income over the remainder of the lease terms, was based on management’s evaluation of the rental space available. The balance of these excess facilities charges primarily related to excess and abandoned facilities in Toronto Canada, Jena Germany, Austin Texas, and Livingston Scotland.

We also recorded a charge of $1.0 million in fiscal year 2005 for workforce reductions of approximately 25 employees related to our discontinued SELS division, which is included in the loss from discontinued operations.

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Interest Income and Expense

Interest income increased by $4.4 million, to $13.7 million, in the year ended September 30, 2006, from $9.3 million the previous year. This increase is due primarily to higher average cash balances in fiscal 2006 available for investment. We recorded interest expense of $9.4 million in fiscal year 2006 compared to $9.5 million in the previous year. This expense primarily relates to the 4.75% Convertible Subordinated Notes which were paid off in the quarter ended September 30, 2006. Interest expense of $9.4 million in fiscal year 2006 includes the write-off of the balance of unamortized debt issuance costs of $1.6 million recorded in the fourth quarter.

Equity in Earnings of Ulvac Cryogenics, Inc

We participate in a joint venture, ULVAC Cryogenics, Inc., or UCI, with ULVAC Corporation of Chigasaki, Japan, which was part of the acquired operations of Helix in October 2005. Income associated with our 50% interest in UCI was $1.0 million in the year ended September 30, 2006.

Other (Income) Expense

Other expense, net of $3.2 million for the year ended September 30, 2006 consisted of the accrual of $5.0 million related to various legal contingencies and foreign exchanges losses of $0.5 million, offset by the receipt of $2.0 million of principal repayment on a note that had been previously written off, and a gain of $0.3 million on the sale of other assets. Other income, net of $1.8 million for the year ended September 30, 2005 consisted primarily of the receipt of principal repayments on a note that had been previously written off, foreign exchange gains, and gain on the sales of other assets.

Income Tax Provision

We recorded an income tax provision of $4.7 million in the year ended September 30, 2006 and an income tax provision of $5.2 million in the year ended September 30, 2005. The tax provision recorded in fiscal 2006 and 2005 is attributable to foreign income and withholding taxes. We continued to provide a full valuation allowance for our net deferred tax assets at September 30, 2006 and 2005, as we believe it is more likely than not that the future tax benefits from accumulated net operating losses and deferred taxes will not be realized. However, it is possible that the “more likely than not” criterion could be met in fiscal 2007 or a future period, which could result in the reversal of a significant portion or all of the valuation allowance, which, at that time, would be recorded as a tax benefit in the consolidated statements of operations.

We are subject to income taxes in various jurisdictions. Significant judgment is required in determining the world-wide provision for income taxes. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, we believe that the tax reserves reflect the probable outcome of known contingencies. Tax reserves established include, but are not limited to, business combinations, transfer pricing, withholding taxes, and various state and foreign audit matters, some of which may be resolved in the near future resulting in an adjustment to the reserve.

Discontinued Operations

We recorded income from operations for our discontinued SELS business of $0.1 million for the year ended September 30, 2006, compared to a loss of $3.5 million in the previous year. The income in fiscal year 2006 relates to maintenance revenues earned during the year that had previously been deferred, while the loss in fiscal year 2005 reflects the winding down of this business.

Year Ended September 30, 2005, Compared to Year Ended September 30, 2004

Revenues

We reported revenues of $463.7 million for the year ended September 30, 2005, compared to $535.1 million in the previous year, a 13.3% decrease. The decrease is consistent with and reflective of the lower demand for semiconductor capital equipment experienced in fiscal 2005.

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Our hardware segment reported revenues of $369.8 million in the year ended September 30, 2005, a decrease of 11.0% from the prior year. This decrease reflects the lower demand for semiconductor capital equipment during fiscal year 2005.

Our software segment reported revenues of $94.0 million, a 21.4% decrease from $119.6 million in the prior year. The decrease is primarily attributable to lower software license sales driven by reduced market demand. Included in the March 31, 2004 quarter we recognized $17.3 million of revenue on a European software services project which had been accounted for on the completed contract basis. Excluding the impact of this contract for fiscal year 2004, software revenues decreased by $8.3 million or 8.1%. A significant portion of revenue for the software segment relates to maintenance contracts. Maintenance revenues are only slightly affected by an economic downturn, as customers typically continue to use previously purchased software products and renew related maintenance arrangements.

Product revenues decreased $64.2 million, or 16.0%, to $338.1 million, in the year ended September 30, 2005, from $402.3 million in the previous year. This decrease is attributable to reduced demand for our hardware products and software license revenues reflective of industry trends of decreased demand for semiconductor capital equipment in fiscal 2005. Product revenues associated with our hardware segment decreased by 13.2% from fiscal 2004 levels, while product revenues from our software segment decreased by 37.6%. Service revenues decreased $7.1 million, or 5.4%, to $125.7 million. This decrease is primarily attributable to the completion and acceptance by the customer of a major European software project for approximately $17.3 million in the second quarter of fiscal 2004.

Revenues outside the United States were $223.1 million, or 48.1% of total revenues, and $262.4 million, or 49.0% of total revenues, in the years ended September 30, 2005 and 2004, respectively.

Deferred revenue of $22.1 million at September 30, 2005 consisted of $11.9 million related to deferred maintenance contracts and $10.2 million related to revenues deferred for percentage-of-completion method arrangements and contracts awaiting final customer acceptance.

Gross Margin

Gross margin decreased to $160.1 million or 34.5% for the year ended September 30, 2005, compared to $199.7 million or 37.3% for the previous year. Our hardware segment gross margin decreased to $99.8 million or 27.0% in the year ended September 30, 2005, from $130.1 million or 31.3% in the prior year. The decrease is primarily attributable to reduced overhead absorption due to reduced sales volumes. Our software segment’s gross margin for the year ended September 30, 2005, decreased to $60.4 million or 64.2%, compared to $69.5 million or 58.2% in the prior year. The decrease in gross margin is primarily attributable to lower software license sales. The increase in the gross margin as a percentage of revenue primarily reflects the impact of lower gross margins realized on the $17.3 million of software project revenue recognized upon completion and acceptance by the customer in the second quarter of fiscal 2004.

Gross margin on product revenues was $99.0 million or 29.3% for the year ended September 30, 2005, compared to $157.4 million or 39.1% for the prior year. The decrease in product margins is primarily attributable to reduced overhead absorption due to reduced sales volumes.

Gross margin on service revenues was $61.1 million or 48.6% for the year ended September 30, 2005, compared to $42.3 million or 31.9% in the previous year. The increase is primarily the result of the higher margins on hardware segment services coupled with the impact of lower gross margins realized on the $17.3 million software project revenue discussed above.

Research and Development

Research and development expenses for the year ended September 30, 2005, were $63.1 million, a decrease of $3.2 million, compared to $66.3 million in the previous year. Research and development expenses increased as a percentage of revenues, to 13.6%, from 12.4% in the prior year. The decrease in absolute spending is primarily the result of our cost reduction actions, while the increase as a percentage of revenue reflects the lower revenue levels against which these costs were measured.

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Selling, General and Administrative

Selling, general and administrative expenses were $84.8 million for the year ended September 30, 2005, a decrease of $5.4 million, compared to $90.2 million in the prior year. Selling, general and administrative expenses increased as a percentage of revenues, to 18.3% in the year ended September 30, 2005, from 16.9% in the previous year. The decrease in absolute spending is primarily due to lower expenses for incentive compensation plans of approximately $5.2 million, while the increase as a percentage of revenue reflects the lower revenue levels against which these costs were measured.

Restructuring and Acquisition-related Charges

We recorded a charge to continuing operations of $16.5 million in the year ended September 30, 2005, of which $13.3 million related to workforce reductions of approximately 270 employees worldwide and $3.2 million to excess facilities charges. Workforce reduction charges included $4.3 million for headcount reductions of approximately 100 employees associated with our software segment, $3.6 million for reductions of approximately 65 employees in our Jena, Germany facility and $5.4 million related to various other actions undertaken in fiscal 2005. Excess facilities charges of $3.2 million consisted of excess facilities identified in fiscal 2005 that were recorded to recognize the expected amount of the remaining lease obligations. These costs were estimated from the time when the space is vacant; costs incurred prior to vacating the facilities were charged to operations. Of the $3.2 million of facilities charges, $1.5 million represents an additional accrual on a previous vacated facility due to a longer period than initially estimated to sub-lease the facility. This revision, including lower estimates of expected sub-rental income over the remainder of the lease terms, are based on management’s evaluation of the rental space available. The balance of these excess facilities charges primarily relates to excess and abandoned facilities in Toronto Canada, Jena Germany, Austin Texas, and Livingston Scotland.

We also recorded a charge of $1.0 million in fiscal year 2005 for workforce reductions of approximately 25 employees related to our discontinued SELS division, which is included in the loss from discontinued operations.

We recorded a charge to continuing operations of $5.4 million in the year ended September 30, 2004, of which $0.1 million related to acquisitions and $5.3 million to restructuring costs. The $0.1 million related to acquisitions is comprised of $0.1 million of legal and consulting costs to integrate and consolidate acquired entities into our existing entities. The $5.3 million of restructuring costs consisted of $3.9 million related to workforce reductions of approximately 60 employees world wide, across all functions of the business and $1.4 million related to excess facilities. Excess facilities charges of $1.4 million consisted of $0.2 million for excess facilities identified in fiscal 2004 that we recorded to recognize the amount of remaining lease obligations. These costs have been estimated from the time when the space is vacant, and there are no plans to utilize the facility. Costs incurred prior to vacating the facilities were charged to operations. Final exit costs for facilities abandoned in previous restructurings amounted to $0.7 million. The remaining $0.5 million represents a reevaluation of the assumptions used in determining the fair value of certain lease obligations related to facilities abandoned in a previous restructuring.

Interest Income and Expense

Interest income increased by $4.3 million, to $9.3 million, in the year ended September 30, 2005, from $5.0 million the previous year. This increase is due primarily to higher cash balances available for investment. Interest expense of $9.5 million in each of the years ended September 30, 2005 and 2004 relates primarily to the 4.75% Convertible Subordinated Notes.

Other (Income) Expense

Other income, net of $1.8 million for the year ended September 30, 2005 consisted of the receipt of principal repayments on a note that had been previously written off, foreign exchange gains, and gains on the sales of other assets. Other expense, net of $0.9 million for the year ended September 30, 2004 consisted primarily of the settlement of an arbitration proceeding in Israel of $0.7 million and realized losses on foreign currency transactions during the year.

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Income Tax Provision

We recorded an income tax provision of $5.2 million in the year ended September 30, 2005 and an income tax provision of $8.1 million in the year ended September 30, 2004. The tax provision recorded in fiscal 2005 and 2004 is attributable to foreign income and withholding taxes. We continued to provide a full valuation allowance for our net deferred tax assets at September 30, 2005 and 2004, as we believe it is more likely than not that the future tax benefits from accumulated net operating losses and deferred taxes will not be realized. If we generate future taxable income against which these tax attributes may be applied, some portion or all of the valuation allowance would be reversed and a corresponding increase in net income would be reported in future periods.

Discontinued Operations

We recorded a loss from operations for our discontinued SELS business of $3.5 million for the year ended September 30, 2005, compared to a loss of $9.5 million in the previous year. The reduced loss reflects the winding down of this business in fiscal year 2005, and the $7.4 million goodwill impairment charge recorded in fiscal year 2004 as previously discussed in “Intangible Assets and Goodwill.”

Liquidity and Capital Resources

Our business is significantly dependent on capital expenditures by semiconductor manufacturers and OEM’s that are, in turn, dependent on the current and anticipated market demand for semiconductors. Demand for semiconductors is cyclical and has historically experienced periodic downturns. In response to these downturns, we have implemented cost reduction programs aimed at aligning our ongoing operating costs with our currently expected revenues over the near term. These cost management initiatives have included consolidating facilities, reductions to headcount, salary and wage reductions and reduced spending. The cyclical nature of the industry make estimates of future revenues, results of revenues, results of operations and net cash flows inherently uncertain.

On May 23, 2001, we completed the private placement of $175.0 million aggregate principal amount of 4.75% Convertible Subordinated Notes due in 2008. Interest on the notes was paid on June 1 and December 1 of each year. The notes were scheduled to mature on June 1, 2008. We did not file our quarterly report on Form 10-Q for the period ended March 31, 2006 by the prescribed due date. As a result of this delay, we were not in compliance with our obligation under Section 6.2 of the indenture with respect to our 4.75% Convertible Subordinated Notes due 2008 to file with the SEC all reports and other information and documents which we are required to file with the SEC pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934. On May 15, 2006, we received a notice from holders of more than 25% in aggregate principal amount of notes outstanding that we were in default of Section 6.2 of the indenture based on our failure to file our Form 10-Q. On Friday July 14, 2006, we received a further notice from holders of more than 25% of the aggregate outstanding principal amount of the notes accelerating our obligation to repay the unpaid principal on the notes because our Report on Form 10-Q for the quarter ended March 31, 2006 had not yet been filed. On Monday, July 17, 2006, we paid the outstanding $175.0 million principal balance to the trustee and subsequently paid all accrued interest. The notes are now retired, having been paid in full.

At September 30, 2006, we had cash, cash equivalents and marketable securities aggregating $191.4 million. This amount was comprised of $115.8 million of cash and cash equivalents, $68.3 million of investments in short-term marketable securities and $7.3 million of investments in long-term marketable securities.

At September 30, 2005, we had cash, cash equivalents and marketable securities aggregating $357.0 million. This amount was comprised of $202.5 million of cash and cash equivalents, $121.6 million of investments in short-term marketable securities and $32.9 million of investments in long-term marketable securities.

Cash and cash equivalents were $115.8 million at September 30, 2006, a decrease of $86.7 million from September 30, 2005. This decrease in cash and cash equivalents was primarily due to the debt repayment of $175.0 million, the net acquisitions of Helix and Synetics of $41.4 million and the $18.0 million used for capital additions, partially offset by cash provided by operations of $65.2 million, the net sales/maturities of marketable securities of $83.1 million and $3.7 million of net proceeds from the issuance of common stock.

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Cash provided by operations was $65.2 million for the year ended September 30, 2006, and was primarily attributable to our net income of $25.9 million, adjustments for non-cash depreciation and amortization of $31.7 million, compensation expense related to common stock and options of $8.3 million and changes in our net working capital of $1.2 million, partially offset by discount of marketable securities of $3.0 million. The $1.2 million increase in working capital was primarily the result of increased accounts payable levels of $22.5 million primarily as a result of higher inventory purchases, and increased accrued compensation and benefits of $9.6 million, primarily associated with variable compensation plans. Offsetting changes in working capital included increased accounts receivable balances of $20.5 million and net cash outlays of $10.4 million of restructuring-related spending. The increase in accounts receivable is a result of our increased level of business.

Cash provided by investing activities was $19.1 million for the year ended September 30, 2006, and is principally comprised of net sales/maturities of marketable securities of $83.1 million, offset by the net acquisitions of Helix and Synetics of $41.4 million and $18.0 million used for capital additions.

Cash used in financing activities was $171.4 million for the year ended September 30, 2006 from the debt repayment of $175.0 million partially offset by $3.6 million due to the issuance of stock under our employee stock purchase plan and the exercise of options to purchase our common stock.

While we have no significant capital commitments, as we expand our product offerings, we anticipate that we will continue to make capital expenditures to support our business and improve our computer systems infrastructure. We may also use our resources to acquire companies, technologies or products that complement our business.

At September 30, 2006, we had approximately $0.7 million of letters of credit outstanding.

Our contractual obligations consist of the following (in thousands):

			Less than		One to		Four to
	Total		One Year		Three Years		Five Years		Thereafter
Contractual obligations
Operating leases — continuing	$	36,766	$	7,431	$	15,987	$	6,059	$	7,289
Operating leases — exited facilities		25,330		5,180		15,486		4,664		—
Purchase commitments		99,427		99,427		—		—		—
Total contractual obligations	$	161,523	$	112,038	$	31,473	$	10,723	$	7,289

We believe that our existing resources will be adequate to fund our currently planned working capital and capital expenditure requirements for both the short and long-term. In addition, we expect to receive $125 million from the sale of the software division during the second fiscal quarter of 2007. However, the cyclical nature of the semiconductor industry makes it difficult for us to predict future liquidity requirements with certainty. We may be unable to obtain any required additional financing on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, we may be unable to fund our expansion, successfully develop or enhance products, respond to competitive pressure or take advantage of acquisition opportunities, any of which could have a material adverse effect on our business. In addition, we are subject to litigation related to our stock-based compensation restatement which could have an adverse affect on our existing resources.

Recently Enacted Accounting Pronouncements

In May 2005, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 154, “Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20, Accounting Changes and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements” (“SFAS 154”). SFAS 154 provides guidance on the accounting for and reporting of accounting changes and error corrections. It establishes, unless impracticable, retrospective application as the required method for reporting a change in accounting principle in the absence of explicit transition requirements specific to the newly adopted accounting principle. SFAS 154 also provides guidance for determining whether retrospective application of a change in accounting principle is impracticable and for reporting a change when retrospective application is impracticable. The provisions of this Statement are effective for accounting changes and corrections of errors made in fiscal periods beginning after December 15, 2005.

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In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109” (“FIN No. 48”). FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FAS No. 109, “Accounting for Income Taxes.” FIN No. 48 prescribes a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 percent likelihood of being realized upon ultimate settlement. The guidance will become effective as of the beginning of our fiscal year beginning after December 15, 2006. We are currently evaluating the potential impact of FIN No. 48 on our financial position and results of operations.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”) expressing the Staff’s views regarding the process of quantifying financial statement misstatements. There have been two widely-recognized methods for quantifying the effects of financial statement errors: the “roll-over” method and the “iron curtain” method. The roll-over method focuses primarily on the impact of a misstatement on the income statement, including the reversing effect of prior year misstatements, but its use can lead to the accumulation of misstatements in the balance sheet. The iron-curtain method, on the other hand, focuses primarily on the effect of correcting the period-end balance sheet with less emphasis on the reversing effects of prior year errors on the income statement. SAB 108 establishes an approach that requires quantification of financial statement errors based on the effects of the error on each of our financial statements and the related financial statement disclosures. This model is commonly referred to as a “dual approach” because it essentially requires quantification of errors under both the iron-curtain and the roll-over methods. The provisions of SAB 108 should be applied to annual financial statements covering the first fiscal year ending after November 15, 2006. We are currently evaluating the provisions of SAB 108.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (’GAAP”) and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, SFAS 157 does not require any new fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, with earlier adoption permitted. The provisions of SFAS 157 should be applied prospectively as of the beginning of the fiscal year in which it is initially applied, with limited exceptions. We are currently evaluating the provisions of SFAS 157.

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)” (“SFAS 158”). SFAS 158 requires an employer that is a business entity and sponsors one or more single-employer defined benefit plans to:

a. Recognize the funded status of a benefit plan, measured as the difference between plan assets at fair value and the benefit obligation, in its statement of financial position. For a pension plan, the benefit obligation is the projected benefit obligation; for any other postretirement benefit plan, such as a retiree health care plan, the benefit obligation is the accumulated postretirement benefit obligation.

b. Recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost pursuant to SFAS No. 87, “Employers’ Accounting for Pensions”, or SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions”. Amounts recognized in accumulated other comprehensive income, including the gains or losses, prior service costs or credits, and the transition asset or obligation remaining from the initial application of SFAS No. 87 and SFAS No. 106, are adjusted as they are subsequently recognized as components of net periodic benefit cost pursuant to the recognition and amortization provisions of those Statements.

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c. Measure defined benefit plan assets and obligations as of the date of the employer’s fiscal year-end statement of financial position (with limited exceptions).

d. Disclose in the notes to financial statements additional information about certain effects on net periodic benefit cost for the next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition asset or obligation.

An employer with publicly traded equity securities is required to initially recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. Retrospective application is not permitted. We are currently evaluating the provisions of SFAS 158.

Item 7A.   Quantitative and Qualitative Disclosure About Market Risk

Our primary market risk exposures are to changes in foreign currency exchange rates. A portion of our business is conducted outside the United States through foreign subsidiaries which maintain accounting records in their local currencies. Consequently, some of our assets and liabilities are denominated in currencies other than the United Stated dollar. Fluctuations in foreign currency exchange rates affect the carrying amount of these assets and liabilities and our operating results. We do not enter into market risk sensitive instruments to hedge these exposures.

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Item 8.   Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm	47
Consolidated Balance Sheets as of September 30, 2006 and 2005	49
Consolidated Statements of Operations for the three years ended September 30, 2006, 2005 and 2004	50
Consolidated Statements of Cash Flows for the three years ended September 30, 2006, 2005 and 2004	51
Consolidated Statements of Changes in Stockholders’ Equity for the three years ended September 30, 2006, 2005 and 2004	52
Notes to Consolidated Financial Statements	53

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

of Brooks Automation, Inc.:

We have completed integrated audits of Brooks Automation, Inc.’s 2006 and 2005 consolidated financial statements and of its internal control over financial reporting as of September 30, 2006 and an audit of its 2004 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.

Consolidated financial statements

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Brooks Automation, Inc. and its subsidiaries at September 30, 2006 and 2005, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 2006 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for share-based compensation in fiscal 2006.

Internal control over financial reporting

Also, in our opinion, management’s assessment, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A, that the Company maintained effective internal control over financial reporting as of September 30, 2006 based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2006, based on criteria established in Internal Control — Integrated Framework issued by the COSO. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made

47

only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded Helix Technology Corporation (“Helix”) and Synetics Solutions Inc. (“Synetics”) from its assessment of internal control over financial reporting as of September 30, 2006 because those entities were acquired by the Company in purchase business combinations during fiscal 2006. We have also excluded Helix and Synetics from our audit of internal control over financial reporting. The total assets and total revenues of the acquired businesses of Helix and Synetics represent 18% and 30%, respectively, of the related consolidated financial statement amounts as of and for the year ended September 30, 2006.

/s/  PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Boston, Massachusetts

December 13, 2006

48

BROOKS AUTOMATION, INC.

CONSOLIDATED BALANCE SHEETS

	September 30,			September 30,
	2006			2005
	(In thousands, except share and per share data)
ASSETS
Current assets
Cash and cash equivalents	$	115,773		$	202,462
Marketable securities		68,280			121,561
Accounts receivable, net		127,195			77,555
Inventories, net		99,854			48,434
Current assets from discontinued operations		—			55
Prepaid expenses and other current assets		21,710			18,259
Total current assets		432,812			468,326
Property, plant and equipment, net		78,833			54,165
Long-term marketable securities		7,307			32,935
Goodwill		351,444			62,094
Intangible assets, net		94,067			3,828
Equity investment in Ulvac Cryogenics, Inc.		21,489			—
Other assets		6,625			2,732
Total assets	$	992,577		$	624,080
LIABILITIES, MINORITY INTERESTS AND STOCKHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt	$	11		$	12
Short-term debt		—			175,000
Accounts payable		69,392			30,820
Deferred revenue		26,119			22,143
Accrued warranty and retrofit costs		11,608			9,782
Accrued compensation and benefits		27,712			15,886
Accrued restructuring costs		7,254			12,171
Accrued income taxes payable		17,773			17,331
Current liabilities from discontinued operations		—			399
Accrued expenses and other current liabilities		20,310			16,551
Total current liabilities		180,179			300,095
Long-term debt		2			2
Accrued long-term restructuring		9,289			10,959
Other long-term liabilities		3,579			2,129
Total liabilities		193,049			313,185
Commitments and contingencies (Note 19)
Minority interests		394			1,060
Stockholders’ equity
Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued and outstanding at September 30, 2006 and 2005, respectively		—			—
Common stock, $0.01 par value, 125,000,000 shares authorized, 75,431,592 and 45,434,709 shares issued and outstanding at September 30, 2006 and 2005, respectively		754			454
Additional paid-in capital		1,763,247			1,307,145
Deferred compensation		—			(3,493	)
Accumulated other comprehensive income		15,432			11,958
Accumulated deficit		(980,299	)		(1,006,229	)
Total stockholders’ equity		799,134			309,835
Total liabilities, minority interests and stockholders’ equity	$	992,577		$	624,080

The accompanying notes are an integral part of these consolidated financial statements.

49

BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended September 30,
	2006			2005			2004
	(In thousands, except per share data)
Revenues
Product	$	514,294		$	338,072		$	402,252
Services		178,576			125,674			132,801
Total revenues		692,870			463,746			535,053
Cost of revenues
Product		345,592			239,024			244,894
Services		102,494			64,586			90,493
Total cost of revenues		448,086			303,610			335,387
Gross profit		244,784			160,136			199,666
Operating expenses
Research and development		70,671			63,115			66,266
Selling, general and administrative		141,032			84,797			90,227
Restructuring charges		5,297			16,542			5,356
Total operating expenses		217,000			164,454			161,849
Income (loss) from continuing operations		27,784			(4,318	)		37,817
Interest income		13,715			9,284			4,984
Interest expense		9,384			9,469			9,492
Equity in earnings of Ulvac Cryogenics, Inc.		985			—			—
Other (income) expense, net		3,193			(1,752	)		911
Income (loss) from continuing operations before income taxes and minority interests		29,907			(2,751	)		32,398
Income tax provision		4,732			5,204			8,053
Income (loss) from continuing operations before minority interests		25,175			(7,955	)		24,345
Minority interests in income (loss) of consolidated subsidiary		(666	)		141			211
Income (loss) from continuing operations		25,841			(8,096	)		24,134
Discontinued operations:
Income (loss) from operations		89			(3,492	)		(9,475	)
Loss on disposal		—			(24	)		—
Income (loss) from discontinued operations, net of income taxes		89			(3,516	)		(9,475	)
Net income (loss)	$	25,930		$	(11,612	)	$	14,659
Basic income (loss) per share from continuing operations	$	0.36		$	(0.18	)	$	0.56
Basic income (loss) per share from discontinued operations		0.00			(0.08	)		(0.22	)
Basic net income (loss) per share	$	0.36		$	(0.26	)	$	0.34
Diluted income (loss) per share from continuing operations	$	0.36		$	(0.18	)	$	0.55
Diluted income (loss) per share from discontinued operations		0.00			(0.08	)		(0.22	)
Diluted net income (loss) per share	$	0.36		$	(0.26	)	$	0.34
Shares used in computing earnings (loss) per share
Basic		72,323			44,919			43,006
Diluted		72,533			44,919			43,573

The accompanying notes are an integral part of these consolidated financial statements.

50

BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year ended September 30,
	2006			2005			2004
	(In thousands)
Cash flows from operating activities
Net income (loss)	$	25,930		$	(11,612	)	$	14,659
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		31,664			16,351			17,541
Impairment of assets		—			—			7,421
Stock-based compensation		8,287			3,640			4,824
Discount on marketable securities		(3,012	)		(1,936	)		—
Amortization of debt issuance costs		2,237			839			839
Undistributed earnings of joint venture		(985	)		—			—
Minority interests		(666	)		141			211
Loss on disposal of long-lived assets		534			178			505
Changes in operating assets and liabilities, net of acquired assets and liabilities:
Accounts receivable		(20,466	)		47,922			(53,960	)
Inventories		(1,459	)		23,933			(17,744	)
Prepaid expenses and other assets		2,575			(3,048	)		8,376
Accounts payable		22,513			(14,202	)		17,967
Deferred revenue		3,705			(12,718	)		(91	)
Accrued warranty and retrofit costs		540			(2,104	)		231
Accrued compensation and benefits		9,553			(9,847	)		10,621
Accrued restructuring costs		(10,364	)		3,300			(9,123	)
Accrued expenses and other liabilities		(5,394	)		(9,723	)		6,578
Net cash provided by operating activities		65,192			31,114			8,855
Cash flows from investing activities
Purchases of property, plant and equipment		(17,954	)		(11,704	)		(8,203	)
Purchases of intangible assets		(3,000	)		—			—
Acquisition of Helix Technology Corporation, cash acquired net of expenses		8,805			—			—
Acquisition of Synetics Solutions Inc., net of cash acquired		(50,182	)		—			—
Investment in Yaskawa Brooks Automation, Inc. joint venture		(1,955	)		—			—
Purchases of marketable securities		(851,884	)		(635,683	)		(231,687	)
Sale/maturity of marketable securities		934,961			618,453			169,141
Dividends from equity investment		281			—			—
Proceeds from sale of long-lived assets		—			1,294			—
Net cash provided by (used in) investing activities		19,072			(27,640	)		(70,749	)
Cash flows from financing activities
Payments of short- and long-term debt and capital lease obligations		(175,015	)		(11	)		(98	)
Proceeds from issuance of common stock, net of issuance costs		3,659			5,313			130,203
Net cash provided by (used in) financing activities		(171,356	)		5,302			130,105
Effects of exchange rate changes on cash and cash equivalents		403			405			71
Net increase (decrease) in cash and cash equivalents		(86,689	)		9,181			68,282
Cash and cash equivalents, beginning of year		202,462			193,281			124,999
Cash and cash equivalents, end of year	$	115,773		$	202,462		$	193,281
Supplemental disclosures:
Cash paid during the year for interest	$	9,932		$	8,603		$	8,653
Cash paid during the year for income taxes, net of refunds	$	6,280		$	3,696		$	2,237
Non-cash transactions:
Acquisition of Helix Technology, net of transaction costs	$	447,949		$	—		$	—

The accompanying notes are an integral part of these consolidated financial statements.

51

BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

														Accumulated
														Other
	Common		Common		Additional									Comprehensive						Total
	Stock		Stock at		Paid-In			Deferred			Comprehensive			Income			Accumulated			Stockholders’
	Shares		par Value		Capital			Compensation			Income (Loss)			(Loss)			Deficit			Equity
	(In thousands, except share data)
Balance September 30, 2003		37,266,181	$	373	$	1,165,427		$	(6,084	)				$	12,390		$	(1,009,276	)	$	162,830
Shares issued under stock option and purchase plans		487,161		5		5,917															5,922
Common stock offering		6,900,000		69		124,213															124,282
Common stock issued in acquisitions		38,502		—		1,181															1,181
Deferred compensation, net of forfeitures						(188	)		188												—
Amortization of deferred compensation									4,052												4,052
Comprehensive income (loss):
Net income											$	14,659						14,659			14,659
Currency translation adjustments												928			928						928
Unrealized loss on marketable securities												(959	)		(959	)					(959	)
Comprehensive income											$	14,628
Balance September 30, 2004		44,691,844		447		1,296,550			(1,844	)					12,359			(994,617	)		312,895
Shares issued under stock option and purchase plans		708,432		7		5,306															5,313
Common stock issued in acquisitions		34,433		—		628															628
Deferred compensation, net of forfeitures						4,661			(4,661	)											—
Amortization of deferred compensation									3,012												3,012
Comprehensive income (loss):
Net loss											$	(11,612	)					(11,612	)		(11,612	)
Currency translation adjustments												353			353						353
Unrealized loss on marketable securities												(754	)		(754	)					(754	)
Comprehensive loss											$	(12,013	)
Balance September 30, 2005		45,434,709		454		1,307,145			(3,493	)					11,958			(1,006,229	)		309,835
Shares issued under stock option and purchase plans		975,519		10		3,649															3,659
Common stock issued in acquisitions		29,021,364		290		447,659															447,949
Reclassification of deferred compensation upon adoption of SFAS 123R						(3,493	)		3,493												—
Stock-based compensation						8,287															8,287
Comprehensive income (loss):
Net income											$	25,930						25,930			25,930
Currency translation adjustments												2,626			2,626						2,626
Unrealized gain on marketable securities												848			848						848
Comprehensive income											$	29,404
Balance September 30, 2006		75,431,592	$	754	$	1,763,247		$	—					$	15,432		$	(980,299	)	$	799,134

The accompanying notes are an integral part of these consolidated financial statements.

52

BROOKS AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Nature of the Business

Brooks Automation, Inc. (“Brooks” or the “Company”) is a leading supplier of technology products and solutions primarily serving the worldwide semiconductor market. Brooks supplies hardware, software and services to both chip manufacturers and original equipment manufacturers, or OEMs, who make semiconductor device manufacturing equipment. Brooks has offerings ranging from individual hardware and software modules to fully integrated systems as well as services to install and support our products world-wide. Although Brooks’ core business addresses the increasingly complex automation and integrated subsystems requirements of the global semiconductor industry, Brooks provides solutions for a number of related industries, including the flat panel display manufacturing, data storage and certain other industries which have complex manufacturing environments.

2.   Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. All intercompany accounts and transactions are eliminated. Equity investments in which we exercise significant influence but do not control and are not the primary beneficiary are accounted for using the equity method.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates are associated with accounts receivable, inventories, intangible assets, goodwill, deferred income taxes and warranty obligations. Although the Company regularly assesses these estimates, actual results could differ from those estimates. Changes in estimates are recorded in the period in which they become known.

Foreign Currency Translation

Some transactions of the Company and its subsidiaries are made in currencies different from their functional currency. Foreign currency gains (losses) on these transactions or balances are recorded in “Other (income) expense, net” when incurred. Net foreign currency transaction gains (losses) included in income (loss) before income taxes and minority interest totaled $(0.5) million, $0.4 million and $(0.4) million for the years ended September 30, 2006, 2005 and 2004, respectively. For non-U.S. subsidiaries, assets and liabilities are translated at period-end exchange rates, and income statement items are translated at the average exchange rates for the period. The local currency for all foreign subsidiaries is considered to be the functional currency and, accordingly, translation adjustments are reported in “Accumulated other comprehensive income”. Foreign currency translation adjustments are one of the components added to the Company’s net income (loss) in the calculation of comprehensive net income (loss).

Cash and Cash Equivalents

Cash and cash equivalents include cash and highly liquid investments with original maturities of three months or less. At September 30, 2006 and 2005, cash equivalents were $16.5 million and $111.3 million, respectively. Cash equivalents are held at fair value.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of trade receivables and temporary and long-term cash investments in treasury bills and commercial paper. The

53

BROOKS AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Company restricts its investments to repurchase agreements with major banks, U.S. government and corporate securities, and mutual funds that invest in U.S. government securities, which are subject to minimal credit and market risk. The Company’s customers are concentrated in the semiconductor industry, and relatively few customers account for a significant portion of the Company’s revenues. The Company’s top twenty largest customers account for approximately 55% of revenues. The Company regularly monitors the creditworthiness of its customers and believes that it has adequately provided for exposure to potential credit losses.

Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company determines the allowance based on historical write-off experience by customer. The Company reviews its allowance for doubtful accounts quarterly. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. All other balances are reviewed on a pooled basis by type of receivable. Account balances are charged off against the allowance when the Company feels it is probable the receivable will not be recovered. The Company does not have any off-balance-sheet credit exposure related to its customers.

Inventories

Inventories are stated at the lower of cost or market, cost being determined using the first-in, first-out method. The Company provides inventory reserves for excess, obsolete or damaged inventory based on changes in customer demand, technology and other economic factors.

Fixed Assets and Impairment of Long-lived Assets

Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method. Depreciable lives are summarized below:

Buildings	20 -  40 years
Computer equipment and software	2 -  6 years
Machinery and equipment	2 - 10 years
Furniture and fixtures	3 - 10 years

Leasehold improvements and equipment held under capital leases are amortized over the shorter of their estimated useful lives or the term of the respective leases. Equipment used for demonstrations to customers is included in machinery and equipment and is depreciated over its estimated useful life. Repair and maintenance costs are expensed as incurred.

The Company periodically evaluates the recoverability of long-lived assets, including its intangible assets, whenever events and changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. This periodic review may result in an adjustment of estimated depreciable lives or an asset impairment. When indicators of impairment are present, the carrying values of the asset are evaluated in relation to their operating performance and future undiscounted cash flows of the underlying business. If the future undiscounted cash flows are less than their book value, an impairment exists. The impairment is measured as the difference between the book value and the fair value of the underlying asset. Fair values are based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk.

When an asset is retired, the cost of the asset disposed of, and the related accumulated depreciation, are removed from the accounts, and any resulting gain or loss is included in the determination of operating profit (loss).

54

BROOKS AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Intangible Assets and Goodwill

Patents include capitalized direct costs associated with obtaining patents as well as assets that were acquired as a part of purchase business combinations. Capitalized patent costs are amortized using the straight-line method over the estimated economic life of the patents. As of September 30, 2006 and 2005, the net book value of the Company’s patents was $3.1 million and $0.2 million, respectively.

Goodwill represents the excess of purchase price over the fair value of net tangible and identifiable intangible assets of the businesses the Company acquired. The Company performs an annual impairment test of its goodwill as required under the provisions of FAS 142 on September 30 of each fiscal year unless interim indicators of impairment exist (see Note 6).

The amortizable lives of intangible assets, including those identified as a result of purchase accounting, are summarized as follows:

Patents	3 - 8 years
Completed technology	2 - 10 years
License agreements	5 years
Trademarks and trade names	3 - 6 years
Non-competition agreements	3 - 5 years
Customer relationships	4 - 11 years

Revenue Recognition

Product revenues are associated with the sale of hardware systems and components as well as software licenses. Service revenues are associated with hardware-related field service, training, software maintenance and software-related consulting and integration services.

Revenue from product sales that do not include significant customization is recorded upon delivery and transfer of risk of loss to the customer provided there is evidence of an arrangement, fees are fixed or determinable, collection of the related receivable is reasonably assured and, if applicable, customer acceptance criteria have been successfully demonstrated. Customer acceptance provisions include final testing and acceptance carried out prior to shipment. These pre-shipment testing and acceptance procedures ensure that the product meets the published specification requirements before the product is shipped. In the limited situations where the arrangement contains extended payment terms, revenue is recognized as the payments become due. Shipping terms are customarily FCA shipping point. Amounts charged to customers for costs incurred for shipping and handling are credited to cost of revenues where the associated costs are charged. When significant on site customer acceptance provisions are present in the arrangement, revenue is recognized upon completion of customer acceptance testing.

Revenue from the sale of off-the-shelf software licenses is recognized upon delivery to the customer provided there is evidence of an arrangement, fees are fixed or determinable, collection of the related receivable is probable, and there are no unusual acceptance criteria or extended payment terms. If the arrangement contains acceptance criteria or testing, then revenue is recognized upon acceptance or the successful completion of the testing. If the arrangement contains extended payment terms, revenue is recognized as the payments become due. Revenue related to post-contract support is deferred and recognized ratably over the contract period.

For tailored software contracts, we provide significant consulting services to tailor the software to the customer’s environment. If we are able to reasonably estimate the level of effort and related costs to complete the contract, we recognize revenue using the percentage-of-completion method, which compares costs incurred to total estimated project costs. Revisions in revenue and cost estimates are recorded in the period in which the facts that require such revisions become known. If our ability to complete the tailored software is uncertain or if we cannot reasonably estimate the level of effort and related costs, completed contract accounting is applied. Losses, if any, are provided for in the period in which such losses are first identified by management. Generally, the terms of long-term

55

BROOKS AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

contracts provide for progress billing based on completion of certain phases of work. For maintenance contracts, service revenue is deferred based on vendor specific objective evidence of its fair value and is recognized ratably over the term of the maintenance contract. Deferred revenue primarily relates to services and maintenance agreements and billings in excess of revenue recognized on long term contracts accounted for using the percentage-of-completion method and contracts awaiting final customer acceptance.

In transactions that include multiple products and/or services, such as tailored software arrangements, described above, or software sales with post-contract support, we allocate the sales value among each of the elements based on their relative fair values and recognize such revenue when each element is delivered. If these relative fair values are not known, the Company uses the residual method to recognize revenue from arrangements with one or more elements to be delivered at a future date, when evidence of the fair value of all undelivered elements exist. Under the residual method, the fair value of any the undelivered elements at the date of delivery, such as post-contract support, are deferred and the remaining portion of the total arrangement fee is recognized as revenue. The Company determines fair value of undelivered services based on the prices that are charged when the same element is sold separately to customers.

Warranty

The Company offers warranties on the sales of certain of its products and records an accrual for estimated future claims. Such accruals are based upon historical experience and management’s estimate of the level of future claims.

Research and Development Expenses

Research and development costs are charged to expense when incurred, except for certain software development costs. Software development costs are expensed prior to establishing technological feasibility and capitalized thereafter until the product is available for general release to customers. Capitalized software development costs are amortized to cost of sales on a product-by-product basis over the estimated lives of the related products, typically three years. The Company did not capitalize any such costs during fiscal 2006, 2005 or 2004.

Stock-Based Compensation

Effect of Adoption of SFAS 123R, Share-Based Payment

Prior to October 1, 2005, the Company’s employee stock compensation plans were accounted for in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related interpretations. Under this method, no compensation expense was recognized as long as the exercise price equaled or exceeded the market price of the underlying stock on the measurement date of the grant. The Company elected the disclosure-only alternative permitted under SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), as amended by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure” (SFAS 148”), for fixed stock-based awards to employees.

On December 23, 2004, the Company accelerated the vesting of certain unvested stock options awarded to employees, officers and other eligible participants under the Company’s various stock option plans, other than its 1993 Non-Employee Director Stock Option Plan. As such, the Company fully vested options to purchase 1,229,239 shares of the Company’s common stock with exercise prices greater than or equal to $24.00 per share. The acceleration of the vesting of these options resulted in a charge based on generally accepted accounting principles of approximately $1.0 million. The Company took this action because it produced a more favorable impact on the Company’s results from operations in light of the effective date of SFAS 123R, which took place in the Company’s first fiscal quarter of 2006.

As of October 1, 2005, the Company adopted SFAS 123R using the modified prospective method, which requires measurement of compensation cost for all stock awards at fair value on date of grant and recognition of

56

BROOKS AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

compensation over the service period for awards expected to vest. The fair value of restricted stock is determined based on the number of shares granted and the excess of the quoted price of the Company’s common stock over the exercise price of the restricted stock, and the fair value of stock options is determined using the Black-Scholes valuation model, which is consistent with our valuation techniques previously utilized for options in footnote disclosures required under SFAS 123, as amended by SFAS 148. Such value is recognized as expense over the service period, net of estimated forfeitures. The estimation of stock awards that will ultimately vest requires significant judgment. We consider many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. Actual results, and future changes in estimates, may differ substantially from our current estimates. Prior periods have not been restated to incorporate the stock-based compensation charge.

The following table reflects compensation expense recorded during the year ended September 30, 2006 in accordance with SFAS 123R (in thousands):

	Year Ended
	September 30, 2006
Stock options	$	4,769
Restricted stock		2,714
Employee stock purchase plan		804
	$	8,287

Valuation Assumptions for Stock Options and Employee Stock Purchase Plans

For the years ended September 30, 2006, 2005 and 2004, 217,000, 652,250 and 2,486,159 stock options were granted, respectively. The fair value of each option was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	Year Ended September 30,
	2006			2005			2004
Risk-free interest rate		4.4	%		3.3% - 4.0%			2.6% - 3.3%
Volatility		55	%		65	%		60	%
Expected life (years)		4.9			4.0			4.0
Dividend yield		0	%		0	%		0	%

The fair value of shares issued under the employee stock purchase plan was estimated on the commencement date of each offering period using the Black-Scholes option-pricing model with the following assumptions:

	Year Ended September 30,
	2006			2005			2004
Risk-free interest rate		4.5	%		3.2	%		1.6	%
Volatility		39	%		39	%		55	%
Expected life		6 months			6 months			6 months
Dividend yield		0	%		0	%		0	%

Expected volatilities are based on historical volatilities of our common stock; the expected life represents the weighted average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and our historical exercise patterns; and the risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option.

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Fair Value Disclosures — Prior to SFAS 123R Adoption

The following table provides supplemental information for the years ended September 30, 2005 and 2004 as if stock-based compensation had been computed under SFAS 123 (in thousands, except per share data):

	Year Ended September 30,
	2005			2004
Net income (loss), as reported	$	(11,612	)	$	14,659
Add stock-based employee compensation expense included in reported net income (loss)		3,012			4,052
Deduct pro forma stock-based compensation expense		24,319			21,889
Pro forma net loss	$	(32,919	)	$	(3,178	)
Earnings (loss) per share
Basic earnings (loss) per share, as reported	$	(0.26	)	$	0.34
Diluted earnings (loss) per share, as reported	$	(0.26	)	$	0.34
Basic loss per share, pro forma	$	(0.73	)	$	(0.07	)
Diluted loss per share, pro forma	$	(0.73	)	$	(0.07	)

Equity Incentive Plans

The Company’s equity incentive plans are intended to attract and retain employees and to provide an incentive for them to assist the Company to achieve long-range performance goals and to enable them to participate in the long-term growth of the Company. The equity incentive plans consist of plans under which employees may be granted options to purchase shares of the Company’s stock, restricted stock and other equity incentives. Stock options generally have a vesting period of 4 years and are exercisable for a period not to exceed 7 years from the date of issuance. Restricted stock awards generally vest over one to four years. At September 30, 2006, a total of 5,972,077 shares were reserved and available for the issuance of stock and restricted stock, which reflects an increase of 3,000,000 shares approved by the shareholders in March 2006.

Income Taxes

The Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and operating loss and tax credit carryforwards. The Company’s consolidated financial statements contain certain deferred tax assets which have arisen primarily as a result of operating losses, as well as other temporary differences between financial and tax accounting. Statement of Financial Accounting Standards No. 109 “Accounting for Income Taxes,” requires the Company to establish a valuation allowance if the likelihood of realization of the deferred tax assets is reduced based on an evaluation of objective verifiable evidence. Significant management judgment is required in determining the Company’s provision for income taxes, the Company’s deferred tax assets and liabilities and any valuation allowance recorded against those net deferred tax assets. The Company evaluates the weight of all available evidence to determine whether it is more likely than not that some portion or all of the net deferred income tax assets will not be realized.

Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated based on the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated based on the weighted average number

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of common shares and dilutive common equivalent shares assumed outstanding during the period. Shares used to compute diluted earnings (loss) per share exclude common share equivalents if their inclusion would have an anti-dilutive effect.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, investments in long- and short-term debt securities, accounts receivable, accounts payable and accrued expenses. The carrying amounts reported in the balance sheets approximate their fair value at September 30, 2006 and 2005. The Company’s financial instruments at September 30, 2005 also included its convertible notes, which were paid in full in July 2006. At September 30, 2005, the estimated fair value of the Company’s convertible notes was approximately $169.3 million compared to the carrying value of $175.0 million. The estimated fair value of the convertible notes is based on the quoted market price of the convertible notes on September 30, 2005.

Reclassifications

Certain reclassifications have been made in the 2005 and 2004 Consolidated Financial Statements to conform to the 2006 presentation.

Recent Accounting Pronouncements

In May 2005, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 154, “Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20, Accounting Changes and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements” (“SFAS 154”). SFAS 154 provides guidance on the accounting for and reporting of accounting changes and error corrections. It establishes, unless impracticable, retrospective application as the required method for reporting a change in accounting principle in the absence of explicit transition requirements specific to the newly adopted accounting principle. SFAS 154 also provides guidance for determining whether retrospective application of a change in accounting principle is impracticable and for reporting a change when retrospective application is impracticable. The provisions of this Statement are effective for accounting changes and corrections of errors made in fiscal periods beginning after December 15, 2005.

In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109” (“FIN No. 48”). FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FAS No. 109, “Accounting for Income Taxes.” FIN No. 48 prescribes a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 percent likelihood of being realized upon ultimate settlement. The guidance will become effective as of the beginning of the Company’s fiscal year beginning after December 15, 2006. The Company is currently evaluating the potential impact of FIN No. 48 on its financial position and results of operations.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”) expressing the Staff’s views regarding the process of quantifying financial statement misstatements. There have been two widely-recognized methods for quantifying the effects of financial statement errors: the “roll-over” method and the “iron curtain” method. The roll-over method focuses primarily on the impact of a misstatement on the income statement, including the reversing effect of prior year misstatements, but its use can lead to the accumulation of misstatements in the balance sheet. The iron-curtain method, on the other hand, focuses primarily on the effect of correcting the period-end balance sheet with less emphasis on the reversing effects of prior year errors on the income statement.

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SAB 108 establishes an approach that requires quantification of financial statement errors based on the effects of the error on each of the Company’s financial statements and the related financial statement disclosures. This model is commonly referred to as a “dual approach” because it essentially requires quantification of errors under both the iron-curtain and the roll-over methods. The provisions of SAB 108 should be applied to annual financial statements covering the first fiscal year ending after November 15, 2006. The Company is currently evaluating the provisions of SAB 108.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (“GAAP”) and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, SFAS 157 does not require any new fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, with earlier adoption permitted. The provisions of SFAS 157 should be applied prospectively as of the beginning of the fiscal year in which it is initially applied, with limited exceptions. The Company is currently evaluating the provisions of SFAS 157.

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)” (“SFAS 158”). SFAS 158 requires an employer that is a business entity and sponsors one or more single-employer defined benefit plans to:

a. Recognize the funded status of a benefit plan, measured as the difference between plan assets at fair value and the benefit obligation, in its statement of financial position. For a pension plan, the benefit obligation is the projected benefit obligation; for any other postretirement benefit plan, such as a retiree health care plan, the benefit obligation is the accumulated postretirement benefit obligation.

b. Recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost pursuant to SFAS No. 87, “Employers’ Accounting for Pensions”, or SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions”. Amounts recognized in accumulated other comprehensive income, including the gains or losses, prior service costs or credits, and the transition asset or obligation remaining from the initial application of SFAS No. 87 and SFAS No. 106, are adjusted as they are subsequently recognized as components of net periodic benefit cost pursuant to the recognition and amortization provisions of those Statements.

c. Measure defined benefit plan assets and obligations as of the date of the employer’s fiscal year-end statement of financial position (with limited exceptions).

d. Disclose in the notes to financial statements additional information about certain effects on net periodic benefit cost for the next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition asset or obligation.

An employer with publicly traded equity securities is required to initially recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. Retrospective application is not permitted. The Company is currently evaluating the provisions of SFAS 158.

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3.   Business Acquisitions

Helix Technology Corporation

On October 26, 2005, the Company acquired all the issued and outstanding stock of Helix Technology Corporation (“Helix”). Helix develops and manufactures vacuum technology solutions for the semiconductor, data storage, and flat panel display markets. The Company believes that the acquisition of Helix enables it to better serve its current market, increase its addressable market, reduce the volatility that both businesses have historically faced and positions the Company to enhance its financial performance. The aggregate purchase price, net of cash acquired, was approximately $458.1 million, consisting of 29.0 million shares of common stock valued at $444.6 million, the fair value of assumed Helix options of $3.3 million and transaction costs of $10.2 million. The market price used to value the Brooks’ shares issued as consideration for Helix was $15.32, which represents the average of the closing market price of Brooks common stock for the period beginning two trading days before and ending two trading days after the merger agreement was announced. The actual number of shares of Brooks common stock issued was determined based on the actual number of shares of Helix common stock outstanding immediately prior to the completion of the merger, based on an exchange ratio of 1.11 shares of Brooks common stock for each outstanding share of Helix common stock. The Helix business operates in the Company’s hardware segment. This transaction qualified as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended.

The consolidated financial statements include the results of Helix from the date of acquisition.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition based upon a third-party valuation (in millions):

Current assets	$	79.9
Property, plant and equipment		15.4
Intangible assets		84.4
Goodwill		276.8
Other assets		20.8
Total assets acquired		477.3
Current liabilities		18.1
Other liabilities		1.1
Total liabilities assumed		19.2
Total purchase price including acquisition costs	$	458.1

Of the $84.4 million of acquired intangible assets, the following table reflects the allocation of the acquired intangible assets and related estimates of useful lives (in millions):

Completed and core technology	$	56.4	6.9 years weighted average estimated useful life
Customer and contract relationships		23.3	6.9 years weighted average estimated economic consumption life
Trade names and trademarks		4.7	6 year weighted average estimated useful life
	$	84.4

Synetics Solutions Inc.

On May 8, 2006, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Synetics Solutions Inc. (“Synetics”). Brooks completed its acquisition of Synetics from Yaskawa Electric Corporation (“Yaskawa”), a corporation duly organized and existing under the laws of Japan, through a merger that

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

became effective as of June 30, 2006. Synetics provides customized manufactured solutions for the North American semiconductor equipment industry. Pursuant to the merger agreement, Synetics became a wholly owned subsidiary of Brooks. The aggregate purchase price of Synetics, net of cash acquired, was approximately $50.2 million consisting of a $28.6 million cash payment to Yaskawa, repayment of outstanding debt of $19.9 million and transaction costs of $1.7 million. The acquisition of Synetics will provide the Company with the opportunity to enhance its existing capabilities with respect to manufacturing customer designed automation systems. The Synetics business operates in the Company’s hardware segment.

Also on May 8, 2006, the Company agreed to enter into a Joint Venture Agreement (the “Agreement”) with Yaskawa to form a 50/50 joint venture called Yaskawa Brooks Automation, Inc. (“YBA”) to exclusively market and sell Yaskawa’s semiconductor robotics products and Brooks’ automation hardware products to semiconductor customers in Japan. This Agreement was executed on June 30, 2006. YBA began operations on September 21, 2006.

The consolidated financial statements include the results of Synetics from the date of acquisition.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition based upon a third-party valuation (in millions):

Current assets	$	19.8
Property, plant and equipment		8.6
Intangible assets		17.4
Goodwill		12.6
Other assets		0.1
Total assets acquired		58.5
Current liabilities		8.3
Total purchase price including acquisition costs	$	50.2

Of the $17.4 million of acquired intangible assets, the following table reflects the allocation of the acquired intangible assets and related estimates of useful lives (in millions):

Core technology	$4.2	7 years weighted average estimated useful life
Customer and contract relationships	4.8	7 years weighted average estimated economic consumption life
Customer supply agreement	8.4	10 year weighted average estimated useful life
	$17.4

Proforma Information of Acquisitions

The following unaudited proforma information gives effect to the acquisition of Helix and Synetics as if the acquisitions occurred at the beginning of the years presented (in thousands, except per share data):

	September 30,
	2006		2005
Revenues	$	756,325	$	669,377
Net income (loss)	$	20,576	$	(36,932	)
Basic income (loss) per share	$	0.28	$	(0.50	)
Diluted income (loss) per share	$	0.28	$	(0.50	)

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Proforma information above includes adjustments to reflect increased amortization expense, the write-off of the entire fair value step-up in inventory, and a full valuation allowance for deferred tax assets.

4.   Marketable Securities

The Company invests its cash in marketable debt securities and classifies them as available-for-sale. The Company records these securities at fair value in accordance with Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (“FAS 115”). Marketable securities reported as current assets represent investments that mature within one year from the balance sheet date. Long-term marketable securities represent investments with maturity dates greater than one year from the balance sheet date. At the time that the maturity dates of these investments become one year or less, the securities are reclassified to current assets. Unrealized gains and losses are excluded from earnings and reported in a separate component of stockholders’ equity until they are sold. At the time of sale, any gains or losses, calculated by the specific identification method, will be recognized as a component of operating results.

The following is a summary of marketable securities (included in short and long-term marketable securities in the consolidated balance sheets), including accrued interest receivable, as of September 30, 2006 and 2005 (in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
September 30, 2006:
U.S. Treasury securities and obligations of U.S. government agencies	$	62,220	$	1	$	(80	)	$	62,141
U.S. corporate securities		5,871		—		(54	)		5,817
Mortgage-backed securities		3,640		—		(110	)		3,530
Other debt securities		4,167		—		(68	)		4,099
	$	75,898	$	1	$	(312	)	$	75,587
September 30, 2005:
U.S. Treasury securities and obligations of U.S. government agencies	$	108,083	$	1	$	(545	)	$	107,539
U.S. corporate securities		29,428		12		(240	)		29,200
Mortgage-backed securities		5,004		—		(108	)		4,896
Other debt securities		13,140		—		(279	)		12,861
	$	155,655	$	13	$	(1,172	)	$	154,496

Gross realized gains and losses realized on sales of available-for-sale marketable securities included in “Other (income) expense” in the Consolidated Statements of Operations for the years ended September 30, 2006, 2005 and 2004 are as follows (in thousands):

	Year Ended September 30,
	2006		2005		2004
Gross realized gains	$	226	$	—	$	148
Gross realized losses		—		—		(111	)
Net realized gains	$	226	$	—	$	37

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From April 2004 through September 2005, the Company held its available-for-sale marketable securities until maturity and, as such, did not incur any realized gains or losses.

The fair value of the marketable securities at September 30, 2006, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties (in thousands).

	Fair Value
Due in one year or less	$	68,280
Due after one year through five years		794
Due after ten years		6,513
	$	75,587

5.   Property, Plant and Equipment

Property, plant and equipment as of September 30, 2006 and 2005 were as follows (in thousands):

	September 30,
	2006			2005
Buildings and land	$	44,961		$	40,019
Computer equipment and software		67,759			62,190
Machinery and equipment		40,584			27,572
Furniture and fixtures		14,648			12,471
Leasehold improvements		24,233			16,093
Construction in progress		5,382			2,682
		197,567			161,027
Less accumulated depreciation and amortization		(118,734	)		(106,862	)
Property, plant and equipment, net	$	78,833		$	54,165

Depreciation expense was $17.1 million, $13.3 million and $13.8 million for the years ended September 30, 2006, 2005 and 2004, respectively.

In the fourth quarter of fiscal 2005, the Company accelerated the depreciation on its existing Customer Relations Management system which was phased out in December 31, 2005. The impact of this accelerated depreciation was $1.3 million during the fourth quarter of fiscal 2005.

6.   Goodwill and Intangible Assets

The Company performs an annual impairment test of its goodwill as required under the provisions of FAS 142 on September 30 of each fiscal year unless interim indicators of impairment exist. Goodwill is considered to be impaired when the net book value of a reporting unit exceeds its estimated fair value. Fair values are estimated using a discounted cash flow methodology. Discounted cash flows are based on the businesses’ strategic plans and management’s best estimate of revenue growth and gross profit by each reporting unit. In the fourth quarter of fiscal year 2005, the Company’s equipment automation and factory automation segments were combined into the hardware segment, which reflects how management now evaluates its business (see Note 16).

In fiscal 2004, in connection with a third party letter of intent to purchase the assets of the SELS, which made up the Company’s “Other” segment, the Company assessed the potential impairment of goodwill for this segment (See Note 20). The Company considered the offer in the letter of intent as an indication of fair value. Based on its analysis, the Company determined that the implied fair value of the then “Other” segment’s goodwill was

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$7.4 million less than its book value and therefore recorded a charge to write-down the value of this goodwill in the fourth quarter, which has been recorded as a component of the loss from discontinued operations for fiscal year 2004. As there were no interim indicators of potential impairment of goodwill in the Company’s other segments, the Company performed its annual impairment test under FAS 142 in the fourth quarter of fiscal 2004 using the present value of expected cash flows. The Company’s analysis indicated no impairment of the goodwill in these segments.

In fiscal 2005 and 2006, the Company performed its annual impairment test for goodwill and determined that no adjustment to goodwill was necessary.

The changes in the carrying amount of goodwill by segment for the years ended September 30, 2006 and 2005 are as follows (in thousands):

	Hardware		Software			Total
Balance at September 30, 2004	$	25,020	$	37,014		$	62,034
Adjustments to goodwill:
Foreign currency translation		—		60			60
Balance at September 30, 2005		25,020		37,074			62,094
Adjustments to goodwill:
Acquisitions:
Helix		276,801		—			276,801
Synetics		12,631		—			12,631
Purchase accounting adjustments on prior period acquisitions		—		(232	)		(232	)
Foreign currency translation		—		150			150
Balance at September 30, 2006	$	314,452	$	36,992		$	351,444

Components of the Company’s identifiable intangible assets are as follows (in thousands):

	September 30, 2006						September 30, 2005
			Accumulated		Net Book				Accumulated		Net Book
	Cost		Amortization		Value		Cost		Amortization		Value
Patents	$	10,024	$	6,899	$	3,125	$	7,179	$	6,934	$	245
Completed technology		90,585		38,386		52,199		30,385		29,120		1,265
License agreements		305		305		—		305		305		—
Trademark and trade names		7,232		3,120		4,112		2,532		2,336		196
Non-competition agreements		1,726		1,721		5		1,726		1,716		10
Customer relationships		43,017		8,391		34,626		6,517		4,405		2,112
	$	152,889	$	58,822	$	94,067	$	48,644	$	44,816	$	3,828

Amortization expense for intangible assets was $14.6 million, $3.1 million and $3.7 million for the years ended September 30, 2006, 2005 and 2004, respectively.

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Estimated future amortization expense for the intangible assets recorded by the Company as of September 30, 2006 is as follows (in millions):

Year ended September 30,
2007	$	16.0
2008		17.0
2009		18.1
2010		14.9
2011		9.9
Thereafter		18.2

7.   Investment in Affiliates

Joint Ventures

The Company participates in a joint venture, ULVAC Cryogenics, Inc., or UCI, with ULVAC Corporation of Chigasaki, Japan, which was part of the acquired operations of Helix in October 2005. The joint venture was formed in 1981 by Helix and ULVAC Corporation. UCI manufactures and sells cryogenic vacuum pumps, principally to ULVAC Corporation, one of the largest semiconductor and flat panel OEM’s in Japan. Each company owns 50% of UCI. The joint venture arrangement includes a license and technology agreement exclusively involving technology previously owned by Helix.

The Company owns 50% of the outstanding common stock of UCI. This investment is accounted for using the equity method. Under this method of accounting, the Company records in income its proportionate share of the earnings of UCI with a corresponding increase in the carrying value of the investment.

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On May 8, 2006, the Company entered into a Joint Venture Agreement (the “Agreement”) with Yaskawa Electric Corporation (Yaskawa) to form a 50/50 joint venture called Yaskawa Brooks Automation, Inc. (“YBA”) to exclusively market and sell Yaskawa’s semiconductor robotics products and Brooks’ automation hardware products to semiconductor customers in Japan. This Agreement was executed on June 30, 2006. The Company invested $1,955,000 into this joint venture. YBA began operations on September 21, 2006.

8.   Earnings (Loss) Per Share

Below is a reconciliation of earnings (loss) per share and weighted average common shares outstanding for purposes of calculating basic and diluted earnings (loss) per share (in thousands, except per share data):

	Year Ended September 30,
	2006		2005			2004
Net income (loss)	$	25,930	$	(11,612	)	$	14,659
Weighted average common shares outstanding used in computing basic earnings (loss) per share		72,323		44,919			43,006
Dilutive common stock options		210		—			567
Weighted average common shares outstanding for purposes of computing diluted earnings (loss) per share		72,533		44,919			43,573
Basic earnings (loss) per share	$	0.36	$	(0.26	)	$	0.34
Diluted earnings (loss) per share	$	0.36	$	(0.26	)	$	0.34

Approximately 4,796,000, 5,374,000 and 4,985,000 options to purchase common stock and 1,000, 21,000 and 0 shares of restricted stock were excluded from the computation of diluted earnings (loss) per share attributable to common stockholders for the years ended September 30, 2006, 2005 and 2004, respectively, as their effect would be anti-dilutive. The 4,796,000 and 4,985,000 options for the years ended September 30, 2006 and 2004 had an exercise price greater than the average market price of the common stock. These options and restricted stock awards could, however, become dilutive in future periods. In addition, 1,980,000, 2,492,000 and 2,492,000 shares of common stock for the assumed conversion of the Company’s convertible debt were excluded from this calculation for the years ended September 30, 2006, 2005 and 2004, respectively, as the effect of conversion would be anti-dilutive. On July 17, 2006, the Company paid the convertible debt in full.

9.   Income Taxes

The components of the income tax provision are as follows (in thousands):

	Year Ended September 30,
	2006		2005		2004
Current:
Federal	$	680	$	—	$	—
State		6		6		6
Foreign		4,046		5,198		8,047
		4,732		5,204		8,053

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	Year Ended September 30,
	2006		2004		2003
Deferred:
Federal		—		—		—
State		—		—		—
Foreign		—		—		—
	$	4,732	$	5,204	$	8,053

The components of income (loss) from continuing operations before income taxes and minority interests, are as follows (in thousands):

	Year Ended September 30,
	2006		2005			2004
Domestic	$	19,562	$	(7,015	)	$	10,820
Foreign		10,345		4,264			21,578
	$	29,907	$	(2,751	)	$	32,398

The differences between the income tax provision (benefit) and income taxes computed using the applicable U.S. statutory federal tax rate are as follows (in thousands):

	Year Ended September 30,
	2006			2005			2004
Income tax provision (benefit) computed at federal statutory rate	$	10,467		$	(963	)	$	11,339
State income taxes, net of federal benefit		4			(643	)		286
Research and development tax credits		—			—			(1,079	)
ETI tax benefit/Sec. 199 manufacturing deduction		(1,009	)		(357	)		(621	)
Foreign income taxed at different rates		1,661			2,035			(3,090	)
Dividends		1,148			3,531			223
Change in deferred tax asset valuation allowance		(9,289	)		(1,164	)		(4,618	)
Other permanent differences		135			56			45
Deferred compensation		117			636			1,124
Nondeductible meals and entertainment		259			220			254
Withholding taxes		1,540			3,328			3,895
Foreign taxes deducted		(539	)		(1,475	)		—
Other		238			—			295
Income tax provision	$	4,732		$	5,204		$	8,053

The Company does not provide for U.S. income taxes applicable to undistributed earnings of its foreign subsidiaries since these earnings are indefinitely reinvested.

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The significant components of the net deferred tax assets are as follows (in thousands):

	Year Ended September 30,
	2006		2005
Reserves not currently deductible	$	30,151	$	25,630
Federal, state and foreign tax credits		14,700		13,546
Amortization		—		27,370
Depreciation		8,505		8,399
Stock-based compensation		4,866		6,749
Net operating loss carryforwards		157,721		166,079
Deferred tax assets		215,943		247,773
Amortization		7,706		—
Other liabilities		2,877		2,054
Deferred tax liabilities		10,583		2,054
Valuation allowance		205,360		245,719
Net deferred tax assets	$	—	$	—

As a result of recognizing substantial operating losses in prior years, including the year ended September 30, 2005, and the continuing uncertainty in the semiconductor sector, the Company has determined that it is more likely than not that the net deferred tax assets will not be realized and has maintained a full valuation allowance against its net deferred tax assets from continuing operations at September 30, 2006 and 2005. The amount of the deferred tax asset considered realizable is subject to change based on future events, including generating taxable income in future periods. The Company continues to assess the need for the valuation allowance at each balance sheet date based on all available evidence. However, it is possible that the “more likely than not” criterion could be met in fiscal 2007 or a future period, which could result in the reversal of a significant portion or all of the valuation allowance, which, at that time, would be recorded as a tax benefit in the consolidated statements of operations.

The approximate $40.4 million decrease in the valuation allowance at September 30, 2006 compared to September 30, 2005 is principally due to the recording of deferred tax liabilities due to acquired identified intangibles, utilization of net operating losses, expiring tax credits and changes in state and foreign tax rates.

As of September 30, 2006, the Company had federal, state and foreign net operating loss carryforwards from continuing and discontinued operations of approximately $721.6 million and federal and state research and development tax credit carryforwards of approximately $14.7 million available to reduce future tax liabilities, which expire at various dates through 2026. Included in the net operating loss carryforwards are stock option deductions of approximately $19.5 million. The benefits of these tax deductions approximate $7.0 million of which approximately $4.0 million will be credited to additional paid-in capital upon being realized or recognized.

We are subject to income taxes in various jurisdictions. Significant judgment is required in determining the world-wide provision for income taxes. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, we believe that the tax reserves reflect the probable outcome of known contingencies. Tax reserves established include, but are not limited to, business combinations, transfer pricing, withholding taxes, and various state and foreign audit matters, some of which may be resolved in the near future resulting in an adjustment to the reserve.

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10.   Common Stock Offering

On December 16, 2003, the Company completed a public offering of 6,900,000 shares of its common stock. The Company received proceeds, net of $6.8 million of issuance costs, of $124.3 million on the sale of the common stock.

11.   Financing Arrangements

On May 23, 2001, the Company completed the private placement of $175.0 million aggregate principal amount of 4.75% Convertible Subordinated Notes due in 2008. The Company received net proceeds of $169.5 million from the sale. Interest on the notes was paid on June 1 and December 1 of each year. The notes were scheduled to mature on June 1, 2008.

The Company did not file its quarterly report on Form 10-Q for the period ended March 31, 2006 by the prescribed due date. As a result of this delay, the Company was not in compliance with its obligation under Section 6.2 of the indenture with respect to its 4.75% Convertible Subordinated Notes due 2008 to file with the SEC all reports and other information and documents which the Company is required to file with the SEC pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934. On May 15, 2006, the Company received a notice from holders of more than 25% in aggregate principal amount of notes outstanding that the Company was in default of Section 6.2 of the indenture based on its failure to file its Form 10-Q. On Friday July 14, 2006, the Company received a further notice from holders of more than 25% of the aggregate outstanding principal amount of the notes accelerating the Company’s obligation to repay the unpaid principal on the notes because its Report on Form 10-Q for the quarter ended March 31, 2006 had not yet been filed. On Monday, July 17, 2006, the Company paid the outstanding $175.0 million principal balance to the trustee and subsequently paid all accrued interest. The notes are now retired, having been paid in full.

At September 30, 2006, the Company had $0.7 million of an uncommitted demand promissory note facility still in use, all of it for letters of credit.

Debt consists of the following (in thousands):

	September 30,
	2006		2005
Convertible subordinated notes at 4.75%, due on June 1, 2008	$	—	$	175,000
Other		13		14
		13		175,014
Less current portion		11		175,012
Long-term debt	$	2	$	2

The Company’s debt repayments are due as follows (in thousands):

Year ended September 30, 2007	$	11
2008		2
	$	13

12.   Postretirement Benefits

On October 26, 2005, the Company purchased Helix and assumed responsibility for the liabilities and assets of the Helix Employees’ Pension Plan (“Plan”). The Plan is a final average pay pension plan. The Company’s funding policy is to contribute an amount equal to the minimum required employer contribution under the Employee

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Retirement Income Security Act of 1974. In May 2006, the Company’s Board of Directors approved the freezing of benefit accruals and future participation in the Plan effective October 31, 2006.

The Company uses a September 30th measurement date in the determination of net periodic benefit costs, benefit obligations and the value of plan assets. The following tables set forth the funded status and amounts recognized in the Company’s consolidated balance sheets at September 30, 2006 for the Plan (in thousands):

	Year Ended
	September 30, 2006
Benefit obligation at October 1, 2005	$	—
Benefit obligation assumed at date of acquisition		13,777
Service cost		1,740
Interest cost		821
Actuarial gain		(567	)
Disbursements		(3,444	)
Benefit obligation at September 30, 2006	$	12,327

	Year Ended
	September 30, 2006
Fair value of assets at October 1, 2005	$	—
Fair value assumed at date of acquisition		11,865
Actual return on plan assets		1,637
Company contributions		3,000
Disbursements		(3,444	)
Fair value of assets at September 30, 2006	$	13,058

	Year Ended
	September 30, 2006
Funded status at September 30, 2006	$	731
Unrecognized net actuarial gain		(915	)
Accrued benefit liability	$	(184	)

The Company’s investment strategy with respect to Plan assets is to maximize return while protecting principal. These investments are primarily in equity and debt securities. The expected long term rate of return on Plan assets was 8.25% for the year ended September 30, 2006. The expected rate of return was developed through analysis of historical market returns, current market conditions and the Plans’ past experience.

Net periodic benefit cost consisted of the following (in thousands):

	Year Ended
	September 30, 2006
Service cost	$	1,740
Interest cost		821
Expected return on assets		(1,000	)
Settlement gain		(289	)
Net periodic pension cost	$	1,272

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The accumulated benefit obligation for the Plan was $12.3 million at September 30, 2006. Certain information for the Plan with accumulated benefit obligations follows (in thousands):

	September 30, 2006
Projected benefit obligation	$	12,327
Accumulated benefit obligation		12,327
Fair value of plan assets		13,058

Weighted-average assumptions used to determine net cost at September 30, 2006 follows:

	September 30, 2006
Discount rate		5.75	%
Expected return on plan assets		8.25	%
Rate of compensation increase		4.00	%

The Company does not expect to make a contribution to the Plan in fiscal 2007.

Expected benefit payments are expected to be paid as follows (in thousands):

2007	$	290
2008		1,175
2009		550
2010		1,153
2011		1,135
Thereafter		8,633

The Company sponsors defined contribution plans that meet the requirements of Section 401(k) of the Internal Revenue Code. All United States employees of the Company who meet minimum age and service requirements are eligible to participate in the plan. The plan allows employees to invest, on a pre-tax basis, a percentage of their annual salary subject to statutory limitations.

The Company’s contribution expense for worldwide defined contribution plans was $2.8 million, $1.9 million and $0.9 million for the years ended September 30, 2006, 2005 and 2004, respectively.

The Company had an accrual of $9.9 million related to the retirement benefit to be paid to its former Chief Executive Officer under the terms of his employment agreement as of September 30, 2004. The amount payable was earned over time and due upon his retirement. In accordance with his employment contract, the full retirement benefit as determined by the employment agreement of $10.1 million was paid in January 2005.

The Company has a Supplemental Key Executive Retirement Plan (acquired with Helix) which is designed to supplement benefits paid to participants under Company-funded, tax-qualified retirement plans. The Company recorded additional retirement costs of $59,000 for the year ended September 30, 2006 in connection with this plan. At September 30, 2006, the Company had $641,000 accrued for benefits payable under the Supplemental Key Executive Retirement Plan.

13.   Stockholders’ Equity and Convertible Redeemable Preferred Stock

Preferred Stock

At September 30, 2006 and 2005 there were one million shares of preferred stock, $0.01 par value per share authorized; no shares were issued and outstanding at September 30, 2006 and 2005, respectively. Preferred stock may be issued at the discretion of the Board of Directors without stockholder approval with such designations, rights and preferences as the Board of Directors may determine.

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Rights Distribution

Brooks is a party to a rights agreement between itself and EquiServe Trust Company, N.A. Pursuant to this agreement, Brooks declared a dividend to its stockholders as of August 12, 1997 of the right to initially purchase Brooks common stock or 1/1,000 of a share of Series A Junior Participating Preferred Stock. The preferred stock purchase rights are attached to the shares of Brooks common stock until a triggering event occurs. The preferred stock purchase rights are triggered by the acquisition by a person or group, an “acquiring person” as defined in the rights agreement, other than Brooks or any of Brooks’ subsidiaries or employee benefit plans, of 15% or more of the outstanding shares of Brooks common stock. In such event, the holder of a preferred stock purchase right paying the exercise price would be able to purchase, instead of a fraction of a share of Series A Junior Participating Preferred Stock, a number of shares of Brooks common stock having a market value equal to twice the exercise price. In the event of specified mergers and similar transactions involving Brooks, shares of the other party to the transaction or its parent could be purchased at half of the market price of such shares by the holders of the preferred stock purchase rights. The preferred stock purchase rights are redeemable in whole, but not in part, by Brooks for $0.001 per right and expire July 31, 2007. Subject to restrictions, the preferred stock purchase rights may be exchanged for one share of Brooks common stock upon election by Brooks’ board of directors. An “acquiring person” would not be permitted to exercise a preferred stock purchase right. The intended effect of the rights agreement is to deter any person or group from becoming an “acquiring person” without negotiating the acquisition with Brooks’ board of directors.

14.   Stock Plans

Amended and Restated 2000 Equity Incentive Plan

The purposes of the Amended and Restated 2000 Equity Incentive Plan (the “2000 Plan”), are to attract and retain employees and to provide an incentive for them to assist the Company to achieve long-range performance goals and to enable them to participate in the long-term growth of the Company. Under the 2000 Plan the Company may grant (i) incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended, and (ii) options that are not qualified as incentive stock options (“nonqualified stock options”) and (iii) stock appreciation rights, performance awards and restricted stock. All employees of the Company or any affiliate of the Company, independent directors, consultants and advisors are eligible to participate in the 2000 Plan. Options under the 2000 Plan generally vest over four years and expire seven years from the date of grant. At the Company’s March 2006 Annual Meeting, stockholders approved an amendment to the 2000 Plan to increase the number of shares authorized for issuance under the plan by 3,000,000 shares, for a total of 9,000,000 shares. As of September 30, 2006, options to purchase 2,436,029 shares are outstanding and 5,527,450 shares remain available for grant.

During the year ended September 30, 2006, the Company issued 699,500 shares of restricted stock or units under the Amended and Restated 2000 Equity Incentive Plan, net of cancellations. These restricted stock awards generally have the following vesting schedules: three year vesting in which 25% vest in Year 1, 25% vest in Year 2 and 50% vest in Year 3; four year vesting in which 50% vest in Year 2, 25% vest in Year 3 and 25% vest in Year 4: and four year cliff vesting. Compensation expense related to these awards is being recognized on a straight line basis over the vesting period, based on the difference between the fair market value of the Company’s common stock on the date of grant and the amount received from the employee.

1998 Employee Equity Incentive Plan

The purposes of the 1998 Employee Equity Incentive Plan (the “1998 Plan”), adopted by the Board of Directors of the Company in April 1998, are to attract and retain employees and provide an incentive for them to assist the Company in achieving long-range performance goals, and to enable them to participate in the long-term growth of the Company. All employees of the Company, other than its officers and directors, (including contractors, consultants, service providers or others) who are in a position to contribute to the long-term success and growth of

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the Company, are eligible to participate in the 1998 Plan. Options under the 1998 Plan generally vest over a period of four years and generally expire seven years from the date of grant. From February 26, 2003 through September 30, 2006, 1,780,405 options were forfeited due to employee terminations. A total of 1,560,039 options are outstanding and 291,032 shares remain available for grant under the 1998 Plan as of September 30, 2006.

1993 Non-Employee Director Stock Option Plan

The purpose of the 1993 Non-Employee Director Stock Option Plan (the “Directors Plan”) was to attract and retain the services of experienced and knowledgeable independent directors of the Company for the benefit of the Company and its stockholders and to provide additional incentives for such independent directors to continue to work for the best interests of the Company and its stockholders through continuing ownership of its common stock. The Directors Plan expired in 2003, although some options issued under that plan remain outstanding. Under its terms, each director who was not an employee of the Company or any of its subsidiaries was eligible to receive options under the Directors Plan. Under the Directors Plan, each eligible director received an automatic grant of an option to purchase 25,000 shares of common stock upon becoming a director of the Company and an option to purchase 10,000 shares on July 1 each year thereafter. Options granted under the Directors Plan generally vested over a period of five years and generally expired ten years from the date of grant. A total of 10,000 options are outstanding and no shares remain available for grant under the Directors Plan as of September 30, 2006.

1992 Combination Stock Option Plan

Under the Company’s 1992 Stock Option Plan (the “1992 Plan”), the Company may grant both incentive stock options and nonqualified stock options. Incentive stock options may only be granted to persons who are employees of the Company at the time of grant, which may include officers and directors who are also employees. Nonqualified stock options may be granted to persons who are officers, directors or employees of or consultants or advisors to the Company or persons who are in a position to contribute to the long-term success and growth of the Company at the time of grant. Options granted under the 1992 Plan generally vest over a period of four years and generally expire ten years from the date of grant. A total of 115,596 options are outstanding and no shares remain available for grant under the 1992 Plan as of September 30, 2006.

Stock Options of Acquired Companies

In connection with the acquisition of PRI on May 14, 2002, the Company assumed the outstanding options of multiple stock option plans that were adopted by PRI. At acquisition, 6,382,329 options to purchase PRI common stock were outstanding and converted into 3,319,103 options to purchase the Company’s Common Stock. There were options to purchase 120,554 shares granted under this plan that were outstanding at September 30, 2006. The Company does not intend to issue any additional options under the PRI stock option plan.

In connection with the acquisition of Helix on October 26, 2005, the Company assumed the outstanding options of multiple stock option plans that were adopted by Helix. At acquisition, 689,622 options to purchase Helix common stock were outstanding and converted into 765,480 options to purchase the Company’s Common Stock. A total of 574,977 options are outstanding and 153,595 shares remain available for grant under the Helix plans as of September 30, 2006. The Company does not intend to issue any additional options under the Helix stock option plan.

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Stock Option Activity

Aggregate stock option activity for all the above plans for the years ended September 30, 2006, 2005 and 2004 is as follows:

	Year Ended September 30,
	2006					2005					2004
				Weighted					Weighted					Weighted
				Average					Average					Average
	Shares			Price		Shares			Price		Shares			Price
Options outstanding at beginning of year		5,205,354		$	23.92		5,709,626		$	25.43		4,639,910		$	28.93
Granted		217,000		$	12.82		652,250		$	16.38		2,486,159		$	23.84
Assumed from Helix Technology acquisition		765,480		$	16.42		—		$	—		—		$	—
Exercised		(108,104	)	$	10.69		(179,694	)	$	12.77		(157,730	)	$	15.51
Forfeited/expired		(1,289,253	)	$	27.56		(976,828	)	$	29.77		(1,258,713	)	$	36.95
Options outstanding at end of year		4,790,477		$	21.51		5,205,354		$	23.92		5,709,626		$	25.43
Options exercisable at end of year		4,008,600		$	22.82		4,120,400		$	25.83		3,234,428		$	27.75
Weighted average fair value of options granted at market value during the year				$	6.84				$	7.39				$	10.40
Weighted average fair value of options granted below market value during the year				$	6.81				$	6.20				$	12.37
Options available for future grant		5,972,077

The following table summarizes information about stock options outstanding at September 30, 2006:

	Options Outstanding
			Weighted-
			Average						Options Exercisable
			Remaining				Aggregate						Aggregate
			Contractual		Weighted-		Intrinsic				Weighted-		Intrinsic
			Life		Average		Value (In				Average		Value (In
Range of Exercise Prices	Shares		(Years)		Exercise Price		Thousands)		Shares		Exercise Price		Thousands)
$3.62 — $13.05		1,028,780		4.44	$	11.07	$	2,038		708,468	$	10.74	$	1,635
$13.06 — $24.02		1,218,225		4.69	$	17.95	$	—		766,103	$	18.62	$	—
$24.30 — $24.30		1,328,279		3.13	$	24.30	$	—		1,318,836	$	24.30	$	—
$24.78 — $59.44		1,215,193		1.86	$	30.89	$	—		1,215,193	$	30.89	$	—
$3.62 — $59.44		4,790,477		3.49	$	21.51	$	2,038		4,008,600	$	22.82	$	1,635

The weighted average remaining contractual life of options exercisable at September 30, 2006 was 3.1 years.

The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $13.05 as of September 30, 2006, which would have been received by the option holders had all option holders exercised their options as of that date. The total number of in-the-money options exercisable as of September 30, 2006 was 708,468.

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The weighted average grant date fair value of options, as determined under SFAS No. 123R, granted during fiscal 2006, 2005 and 2004 was $6.82, $7.30, and $10.81 per share, respectively. The total intrinsic value of options exercised during fiscal 2006 and 2005 was $371,000 and $718,000, respectively. The total cash received from employees as a result of employee stock option exercises during fiscal 2006 and 2005 was $1,155,000 and $2,294,000, respectively.

As of September 30, 2006 future compensation cost related to nonvested stock options is approximately $6.0 million and will be recognized over an estimated weighted average period of 2.3 years.

The Company settles employee stock option exercises with newly issued common shares.

Based on information currently available, the Company believes that, although certain options may have been granted in violation of our applicable option plans, those options are valid and enforceable obligations of the Company.

Restricted Stock Activity

Restricted stock for the year ended September 30, 2006 was determined using the fair value method. A summary of the status of the Company’s restricted stock as of September 30, 2006 and changes during the year ended September 30, 2006 is as follows:

	Year Ended
	September 30, 2006
				Weighted
				Average
				Grant-Date
	Shares			Fair Value
Outstanding at beginning of year		288,000		$	16.40
Awards granted		828,000			13.15
Awards vested		(91,750	)		16.10
Awards canceled		(128,500	)		13.94
Outstanding at end of year		895,750		$	13.79

The fair value of restricted stock awards vested during fiscal 2006 was $1.5 million. No restricted stock awards vested during fiscal 2005.

As of September 30, 2006, the unrecognized compensation cost related to nonvested restricted stock is $8.9 million and will be recognized over an estimated weighted average amortization period of 3.0 years.

1995 Employee Stock Purchase Plan

On February 22, 1996, the stockholders approved the 1995 Employee Stock Purchase Plan (the “1995 Plan”) which enables eligible employees to purchase shares of the Company’s common stock. Under the 1995 Plan, eligible employees may purchase up to an aggregate of 2,250,000 shares during six-month offering periods commencing on February 1 and August 1 of each year at a price per share of 85% of the lower of the fair market value price per share on the first or last day of each six-month offering period. Participating employees may elect to have up to 10% of their base pay withheld and applied toward the purchase of such shares. The rights of participating employees under the 1995 Plan terminate upon voluntary withdrawal from the plan at any time or upon termination of employment. At the Company’s March 2006 Annual Meeting, stockholders approved an amendment to the 1995 Plan to increase the number of shares authorized for issuance under the plan by 750,000 shares. As of September 30, 2006, 1,551,762 shares of common stock have been purchased under the 1995 Plan and 1,448,238 shares remain available for purchase.

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15.   Acquisition-Related and Restructuring Costs and Accruals

Fiscal 2006 Activities

The Company recorded a charge to continuing operations of $5.3 million in the year ended September 30, 2006 for restructuring costs.

Restructuring Costs

Based on estimates of its near term future revenues and operating costs, in fiscal 2006, the Company took additional cost reduction actions. Accordingly, charges of $5.3 million were recorded for these actions. Of this amount, $3.3 million related to workforce reductions and $2.0 million related to excess facilities primarily related to a vacant facility in Billerica, Massachusetts due to a longer period than initially estimated to sublease the facility. The workforce reductions consisted of $2.4 million of severance costs associated with the termination of approximately 40 legacy Brooks employees worldwide in sales, service, operations and administrative functions, whose positions were made redundant as a result of the Helix acquisition and further downsizing in the Company’s software segment, and $1.8 million for retention bonuses earned in the period by employees who have been notified of their termination in the current and prior periods, offset by the $0.9 million reversal of previously accrued termination costs to employees who will no longer be terminated or whose termination was settled at a reduced cost. The accruals for workforce reductions are expected to be paid over the next twelve months. The impact of these cost reductions on the Company’s liquidity is not expected to be significant, as these cost savings yield actual cash savings within twelve months.

The Company continues to review and align its cost structure to attain profitable operations amid the changing semiconductor cycles.

Fiscal 2005 Activities

The Company recorded a charge to continuing operations of $16.5 million in the year ended September 30, 2005 for restructuring costs. The Company also recorded a charge of $1.0 million in the year ended September 30, 2005 related to the discontinued SELS division, which is included in the loss from discontinued operations.

Restructuring Costs

Based on estimates of its near term future revenues and operating costs, the Company announced in fiscal 2005 plans to take additional cost reduction actions. Accordingly, charges of $17.5 million, of which $1.0 million related to, and is classified within discontinued operations, were recorded for these actions. Of this amount, $14.3 million related to workforce reductions of approximately 270 employees world wide, across all functions of the business and $3.2 million related to excess facilities. Of the $3.2 million of facilities charges, $1.5 million represents an additional accrual on a previous vacated facility due to a longer period than initially estimated to sub-lease the facility. Workforce reduction charges included $4.3 million for headcount reduction of approximately 100 individuals associated with our software segment, $3.6 million for reductions of approximately 65 employees in our Jena, Germany facility and $6.4 million related to various other actions undertaken in fiscal 2005. Excess facility charges consist of the present value of remaining lease obligations on facilities vacated in fiscal 2005. The impact of these cost reductions on the Company’s liquidity is not expected to be significant, as these actions yield equivalent actual cash savings within twelve months.

Fiscal 2004 Activities

The Company recorded a charge to operations of $5.4 million in the year ended September 30, 2004 of which $0.1 million related to acquisitions and $5.3 million related to restructuring costs.

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Acquisition-Related Costs

The $0.1 million related to acquisitions is comprised of legal and consulting costs to integrate and consolidate acquired entities into existing Brooks entities.

Restructuring Costs

Based on estimates of its near term future revenues and operating costs, the Company announced in fiscal 2004 several plans to take additional cost reduction actions. Accordingly, charges of $5.3 million were recorded for these actions. Of this amount, $3.9 million related to workforce reductions of approximately 60 employees world wide, across all functions of the business and $1.4 million related to excess facilities. Excess facilities charges of $1.4 million consisted of $0.2 million for excess facilities identified in fiscal 2004 that were recorded to recognize the amount of the remaining lease obligations. These costs have been estimated from the time when the space is vacant and there are no plans to utilize the facility. Costs incurred prior to vacating the facilities were charged to operations. Final exit costs for facilities abandoned in previous restructurings amounted to $0.7 million. The remaining $0.5 million represents a reevaluation of the assumptions used in determining the fair value of certain lease obligations related to facilities abandoned in a previous restructuring. The revised assumptions, including lower estimates of expected sub-rental income over the remainder of the lease terms, are based on management’s evaluation of the rental space available. The Company believes that the cost reduction programs implemented will align costs with revenues. In the event the Company is unable to achieve this alignment, additional cost cutting programs may be required in the future. The facilities charges are expected to be paid over the remaining lease periods, expiring in fiscal 2011. These charges helped better align the Company’s cost structure. The impact of these cost reductions on the Company’s liquidity is not expected to be significant, as these actions yield equivalent actual cash savings within twelve months.

The activity related to the Company’s restructuring accruals is below, which includes activity related to our discontinued SELS division (in thousands):

	Fiscal 2006 Activity
	Balance												Balance
	September 30,												September 30,
	2005		Expense		Helix Acquisition		Reversals			Utilization			2006
Facilities	$	15,045	$	1,966	$	580	$	—		$	(3,894	)	$	13,697
Workforce-related		8,429		4,321		2,756		(990	)		(11,670	)		2,846
	$	23,474	$	6,287	$	3,336	$	(990	)	$	(15,564	)	$	16,543

	Fiscal 2005 Activity
	Balance												Balance
	September 30,												September 30,
	2004		Expense		Adjustments		Reversals			Utilization			2005
Facilities	$	17,730	$	1,680	$	1,542	$	—		$	(5,907	)	$	15,045
Workforce-related		2,460		14,451		—		(184	)		(8,298	)		8,429
	$	20,190	$	16,131	$	1,542	$	(184	)	$	(14,205	)	$	23,474

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	Fiscal 2004 Activity
	Balance											Balance
	September 30,											September 30,
	2003		Expense		Adjustments		Reversals		Utilization			2004
Facilities	$	24,312	$	192	$	1,216	$	—	$	(7,990	)	$	17,730
Workforce-related		4,955		3,922		—		—		(6,417	)		2,460
	$	29,267	$	4,114	$	1,216	$	—	$	(14,407	)	$	20,190

16.   Segment and Geographic Information

The Company has two reportable segments: hardware and software. In the fourth quarter of fiscal year 2005, the Company’s equipment automation and factory automation segments were combined into the hardware segment, which reflects how management now evaluates its business.

The hardware segment provides wafer handling products and components for use within semiconductor process equipment. These systems automate the movement of wafers into and out of semiconductor manufacturing process chambers and provide an integration point between factory automation systems and process tools. The products offered by the Company include vacuum and atmospheric systems and robots, subsystems, and related components. Also offered are assembly and manufacturing of customer designed automation systems, or contract automation systems. The primary customers for these solutions are manufacturers of process tool equipment. Other hardware products include Brooks’ automated material handling systems, or AMHS, and equipment for lithography automation that manage the storage, inspection and transport of photomasks, or reticles.

The software segment addresses the need for production management systems driven by the extensive tracking and tracing requirements of the semiconductor industry. At the core of these production systems is the manufacturing execution system (“MES”) that is primarily responsible for tracking the movement of production wafers in a fab, and managing the data and actions for every wafer, equipment, operator and other resources in the fab. These mission-critical systems provide real time information primarily to production operators, supervisors and fab managers. Also provided is other important software applications to meet the critical requirements of the fab, such as real time dispatching and scheduling, equipment communications, advanced process control, material control using the AMHS, activity execution and control, automated maintenance management of equipment, and other applications. Customers often purchase more than one of these software products from Brooks for a single fab, often driving the need for consulting and integration services. These software products enable semiconductor manufacturers to increase their return on investment by maximizing production efficiency, and may be sold as part of an integrated solution or on a stand-alone basis. These software products and services are also used in many similar manufacturing industries as semiconductor, including flat panel display, data storage, and electronic assembly.

The Company evaluates performance and allocates resources based on revenues and operating income (loss). Operating income (loss) for each segment includes selling, general and administrative expenses directly attributable to the segment. Amortization of acquired intangible assets, including impairment of these assets and of goodwill and acquisition-related and restructuring charges are excluded from the segments’ operating income (loss). The Company’s non-allocable overhead costs, which include corporate general and administrative expenses, are allocated between the segments based upon segment revenues. Segment assets exclude deferred tax assets, acquired intangible assets, goodwill, marketable securities and cash equivalents.

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Financial information for the Company’s business segments is as follows (in thousands):

	Hardware		Software		Total
Year ended September 30, 2006
Revenues
Product	$	488,827	$	25,467	$	514,294
Services		118,667		59,909		178,576
	$	607,494	$	85,376	$	692,870
Gross profit	$	186,650	$	58,134	$	244,784
Segment operating income	$	34,921	$	3,054	$	37,975
Depreciation	$	15,362	$	1,742	$	17,104
Assets	$	418,296	$	36,707	$	455,003
Year ended September 30, 2005
Revenues
Product	$	310,025	$	28,047	$	338,072
Services		59,753		65,921		125,674
	$	369,778	$	93,968	$	463,746
Gross profit	$	99,786	$	60,350	$	160,136
Segment operating income	$	12,481	$	547	$	13,028
Depreciation	$	9,899	$	3,352	$	13,251
Assets	$	237,676	$	54,675	$	292,351
Year ended September 30, 2004
Revenues
Product	$	357,280	$	44,972	$	402,252
Services		58,194		74,607		132,801
	$	415,474	$	119,579	$	535,053
Gross profit	$	130,124	$	69,542	$	199,666
Segment operating income	$	35,231	$	8,995	$	44,226
Depreciation	$	8,817	$	4,940	$	13,757
Assets	$	296,115	$	79,647	$	375,762

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A reconciliation of the Company’s reportable segment operating income (loss) and segment assets to the corresponding consolidated amounts as of and for the year ended September 30, 2006, 2005 and 2004 is as follows (in thousands):

	As of and for the Year Ended
	September 30,
	2006		2005			2004
Segment income (loss) from continuing operations	$	37,975	$	13,028		$	44,226
Amortization of acquired intangible assets		4,894		804			1,053
Restructuring and acquisition-related charges		5,297		16,542			5,356
Total income (loss) from continuing operations	$	27,784	$	(4,318	)	$	37,817
Segment assets	$	455,003	$	292,351		$	375,762
Assets from discontinued operations		—		55			1,706
Goodwill		351,444		62,094			62,034
Intangible assets		94,067		3,828			6,929
Investments in marketable securities and cash equivalents		92,063		265,752			224,608
Total assets	$	992,577	$	624,080		$	671,039

Net revenues based upon the source of the order by geographic area are as follows (in thousands):

	Year Ended September 30,
	2006		2005		2004
North America	$	412,941	$	241,681	$	272,694
Asia/Pacific		157,379		141,703		141,697
Europe		122,550		80,362		120,662
	$	692,870	$	463,746	$	535,053

Long-lived assets, including property, plant and equipment by geographic area are as follows (in thousands):

	September 30,
	2006		2005
North America	$	73,142	$	51,115
Asia/Pacific		5,076		2,357
Europe		615		693
	$	78,833	$	54,165

17.   Significant Customers and Related Party Information

On June 11, 2001, the Company appointed a new member to its Board of Directors. This individual served as a director of one of the Company’s customers until May 3, 2006. Accordingly, this customer is considered a related party for the period from June 11, 2001 through May 3, 2006. Revenues from this customer from October 1, 2005 to March 31, 2006 were approximately $205,000 and for the years ended September 30, 2005 and 2004 were approximately $319,000 and $409,000, respectively. The amounts due from this customer included in accounts receivable at March 31, 2006 and September 30, 2005 were $40,000 and $33,000, respectively. Related party transactions and amounts included in accounts receivable are on standard pricing and contractual terms and manner of settlement for products and services of similar types and at comparable volumes.

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The Company had no customer that accounted for more than 10% of revenues in the years ended September 30, 2006, 2005 and 2004. The Company had two customers that accounted for more than 10% of its accounts receivable balance at September 30, 2006 and one customer that accounted for 10% of its accounts receivable balance at September 30, 2005.

18.   Other Balance Sheet Information

Components of other selected captions in the Consolidated Balance Sheets are as follows (in thousands):

	September 30,
	2006		2005
Accounts receivable	$	128,904	$	80,352
Less allowance for doubtful accounts		1,709		2,797
	$	127,195	$	77,555

The allowance for doubtful accounts activity for the years ended September 30, 2006, 2005 and 2004 were as follows (in thousands):

	Balance at
	Beginning of		Acquisition				Reversals of			Write-offs and			Balance at
Description	Period		Reserves		Provisions		Bad Debt Expense			Adjustments			End of Period
2006 Allowance for doubtful accounts	$	2,797	$	579	$	—	$	(842	)	$	(825	)	$	1,709
2005 Allowance for doubtful accounts		3,230		—		—		—			(433	)		2,797
2004 Allowance for doubtful accounts		6,499		—		225		(2,050	)		(1,444	)		3,230

	September 30,
	2006		2005
Inventories
Raw materials and purchased parts	$	48,996	$	24,612
Work-in-process		25,064		12,043
Finished goods		25,794		11,779
	$	99,854	$	48,434

Reserves for excess and obsolete inventory were $12,707,000, $12,707,000 and $14,520,000 at September 30, 2006, 2005 and 2004, respectively. The Company recorded additions to reserves for excess and obsolete inventory of $2,917,000 (including net acquired reserves of $1,686,000), $8,902,000 and $9,259,000 in fiscal 2006, 2005 and 2004, respectively, comprised of $1,231,000, $8,752,000 and $7,340,000 charged to expense in fiscal 2006, 2005 and 2004, respectively, and $8,000, $150,000 and $421,000 of foreign exchange differences charged to other accounts in fiscal 2006, 2005 and 2004, respectively. The Company reduced the reserves for excess and obsolete inventory by $2,917,000, $10,715,000 and $10,244,000, in fiscal 2006, 2005 and 2004, respectively, for write-offs of inventory.

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The Company provides for the estimated cost of product warranties, primarily from historical information, at the time product revenue is recognized and retrofit accruals at the time retrofit programs are established. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers, the Company’s warranty obligation is affected by product failure rates, utilization levels, material usage, service delivery costs incurred in correcting a product failure, and supplier warranties on parts delivered to the Company. Product warranty and retrofit activity on a gross basis for the years ended September 30, 2006, 2005, and 2004 is as follows (in thousands):

Balance September 30, 2003	$	11,809
Accruals for warranties during the year		3,980
Settlements made during the year		(3,843	)
Balance September 30, 2004		11,946
Accruals for warranties during the year		3,786
Settlements made during the year		(5,950	)
Balance September 30, 2005		9,782
Acquisitions		1,586
Accruals for warranties during the year		13,040
Settlements made during the year		(12,800	)
Balance September 30, 2006	$	11,608

19.   Commitments and Contingencies

Lease Commitments

The Company leases manufacturing and office facilities and certain equipment under operating leases that expire through 2015. Rental expense under operating leases, excluding expense recorded as a component of restructuring, for the years ended September 30, 2006, 2005 and 2004 was $5.6 million, $4.7 million and $6.5 million, respectively. Future minimum lease commitments on non-cancelable operating leases, lease income and sublease income are as follows (in thousands):

			Lease and
	Operating		Sublease
	Leases		Income
Year ended September 30, 2007	$	12,611	$	1,220
2008		10,787		1,230
2009		10,528		1,245
2010		10,158		1,261
2011		8,184		1,277
Thereafter		9,828		—
	$	62,096	$	6,233

These future minimum lease commitments include approximately $25.3 million related to facilities the Company has elected to abandon in connection with its restructuring initiatives. In addition, the Company is a guarantor on a 7 year lease in Mexico for approximately $2.5 million.

Purchase Commitments

The Company has non-cancelable contracts and purchase orders for inventory of $99.4 million at September 30, 2006.

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Contingencies

There has been substantial litigation regarding patent and other intellectual property rights in the semiconductor and related industries. The Company has in the past been, and may in the future be, notified that it may be infringing intellectual property rights possessed by other third parties. The Company cannot guarantee that infringement claims by third parties or other claims for indemnification by customers or end users of its products resulting from infringement claims will not be asserted in the future or that such assertions, if proven to be true, will not materially and adversely affect the Company’s’ business, financial condition and results of operations. If any such claims are asserted against the Company’s intellectual property rights, the Company may seek to enter into a royalty or licensing arrangement. The Company cannot guarantee, however, that a license will be available on reasonable terms or at all. The Company could decide in the alternative to resort to litigation to challenge such claims or to attempt to design around the patented technology. Litigation or an attempted design around could be costly and would divert the Company’s management’s attention and resources. In addition, if the Company does not prevail in such litigation or succeed in an attempted design around, the Company could be forced to pay significant damages or amounts in settlement. Even if a design around is effective, the functional value of the product in question could be greatly diminished.

ITI Lawsuit

On or about April 21, 2005, the Company was served with a third-party complaint seeking to join the Company as a party to a patent lawsuit brought by an entity named Information Technology Innovation, LLC based in Northbrook, Illinois (“ITI”) against Motorola, Inc. (“Motorola”) and Freescale Semiconductor, Inc. (“Freescale”). In the lawsuit (the “ITI Lawsuit”), ITI claimed that Motorola and Freescale had infringed a U.S. patent that ITI asserts covers processes used to model a semiconductor manufacturing plant. ITI asserted that the Company has induced and contributed to the infringement of the patent. Subsequently Intel Corporation (“Intel”) filed a lawsuit against ITI seeking a declaratory judgment that Intel has not infringed and is not infringing the patent (the “Intel Lawsuit”) and notified the Company that Intel believed that the Company had an indemnification obligation to Intel, but that, at that time, Intel was not seeking to have those obligations determined and enforced in the Intel Lawsuit.

Freescale alleged that the Company had a duty to indemnify Freescale and Motorola from any infringement claims asserted against them based on their use of our AutoSched software program by paying all costs and expenses and all or part of any damages that either of them might incur as a result of the ITI Lawsuit brought by ITI.

Pursuant to an agreement executed on April 28, 2006, the Company settled and concluded with ITI and the other parties all of the matters that were or might have been raised in this litigation. In exchange for a cash payment, the settlement affords a license, releases and covenants from ITI not to sue the Company, the other parties named above, and all users of certain of our factory modeling software products such as the “Autosched” product. The Intel Lawsuit was also dismissed as a result of this settlement. In addition, the Company settled the claim for indemnification brought against Brooks by Freescale by the payment to Freescale of $400,000 to defray a portion of the legal expenses borne by Freescale in the defense of the ITI litigation.

Other Commercial Litigation Matters

In January 2006 a ruling was issued against the Company by a Massachusetts state court in a commercial litigation matter involving the Company and BlueShift Technologies, Inc. Awards of damages and costs were assessed against Brooks in January and April 2006 in the amount of approximately $1.6 million, which had been accrued for at December 31, 2005. Brooks has filed a notice of appeal in the case with the Massachusetts Appeals Court and that appeal is now pending.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Proceedings Relating to Equity Incentive Practices and the Restatement

On May 12, 2006, we announced that the Company had received notice that the Boston Office of the United States Securities and Exchange Commission (the “SEC”) was conducting an informal inquiry concerning stock option grant practices to determine whether violations of the securities laws had occurred. On June 2, 2006, the SEC issued a voluntary request for information to us in connection with an informal inquiry by that office regarding a loan we previously reported had been made to former Chairman and CEO Robert Therrien in connection with the exercise by him of stock options in 1999. On June 23, 2006, we were informed that the SEC had opened a formal investigation into this matter and on the general topic of the timing of stock option grants. On June 28, 2006, the SEC issued subpoenas to the Company and to the Special Committee, which had previously been formed on March 8, 2006, requesting documents related to the Company’s stock option grant practices and to the loan to Mr. Therrien.

On May 19, 2006, we received a grand jury subpoena from the United States Attorney (the “DOJ”) for the Eastern District of New York requesting documents relating to stock option grants. Responsibility for the DOJ’s investigation was subsequently assumed by the United States Attorney for the District of Massachusetts. On June 22, 2006 the United States Attorney’s Office for the District of Massachusetts issued a grand jury subpoena to us in connection with an investigation by that office into the timing of stock option grants by us and the loan to Mr. Therrien mentioned above.

The Company is cooperating fully with the investigations being conducted by the SEC and the DOJ.

Private Litigation

On May 22, 2006, a derivative action was filed nominally on our behalf in the Superior Court for Middlesex County, Massachusetts, captioned as Mollie Gedell, Derivatively on Behalf of Nominal Defendant Brooks Automation, Inc. v. A. Clinton Allen, et al. The Defendants named in the complaint are: A. Clinton Allen, Director of the Company; Roger D. Emerick, former Director of the Company; Edward C. Grady, Director, President and CEO of the Company; Amin J. Khoury, former Director of the Company; Joseph R. Martin, Director of the Company; John K. McGillicuddy, Director of the Company; and Robert J. Therrien, former Director, President and CEO of the Company.

On May 26, 2006, a derivative action was filed in the Superior Court for Middlesex County, Massachusetts nominally on our behalf, captioned as Ralph Gorgone, Derivatively on Behalf of Nominal Defendant Brooks Automation, Inc. v. Edward C. Grady, et al. The Defendants named in the complaint are: Mr. Grady; Mr. Allen; Mr. Emerick; Mr. Khoury; Robert J. Lepofsky, Director of the Company; Mr. Martin; Mr. McGillicuddy; Krishna G. Palepu, Director of the Company; Alfred Woollacott, III, Director of the Company; Mark S. Wrighton, Director of the Company; and Marvin Schorr, Director Emeritus of the Company.

On August 4, 2006 the Superior Court for Middlesex County, Massachusetts, entered an order consolidating the above state derivative actions under docket number 06-1808 and the caption In re Brooks Automation, Inc. Derivative Litigation. On September 5, 2006, the Plaintiffs filed a Consolidated Shareholder Derivative Complaint; the Defendants named therein are: Mr. Allen, Mr. Martin, Mr. Grady, Mr. McGillicuddy, Mr. Therrien, Mr. Emerick, and Mr. Khoury; Robert W. Woodbury, Jr., the Company’s Chief Financial Officer; Joseph Bellini, and Thomas S. Grilk, Secretary and General Counsel of the Company, current Officers of the Company; Stanley D. Piekos and Ellen B. Richstone, the Company’s former Chief Financial Officers; and David R. Beaulieu, Jeffrey A. Cassis, Santo DiNaro, Peter Frasso, Robert A. McEachern, Dr. Charles M. McKenna, James A. Pelusi, Michael W. Pippins and Michael F. Werner, former Officers and employees of the Company. The Consolidated Shareholder Derivative Complaint alleges that certain current and former directors and officers breached fiduciary duties owed to Brooks by backdating stock option grants, issuing inaccurate financial results and false or misleading public filings, and that Messrs. Therrien, Emerick and Khoury breached their fiduciary duties, and Mr. Therrien was unjustly enriched, as a result of the loan to and stock option exercise by Mr. Therrien mentioned above, and seeks, on our behalf,

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damages for breaches of fiduciary duty and unjust enrichment, disgorgement to the Company of all profits from allegedly backdated stock option grants, equitable relief, and Plaintiffs’ costs and disbursements, including attorneys’ fees, accountants’ and experts’ fees, costs, and expenses. The Defendants have served motions to dismiss the Consolidated Shareholder Derivative Complaint.

On May 30, 2006, a derivative action was filed in the United States District Court for the District of Massachusetts, captioned as Mark Collins, Derivatively on Behalf of Nominal Defendant Brooks Automation, Inc. v. Robert J. Therrien, et al. The defendants in the action are: Mr. Therrien; Mr. Allen; Mr. Emerick; Mr. Grady; Mr. Khoury; Mr. Martin; and Mr. McGillicuddy.

On June 7, 2006, a derivative action was filed in the United States District Court for the District of Massachusetts, captioned as City of Pontiac General Employees’ Retirement System, Derivatively on Behalf of Brooks Automation, Inc. v. Robert J. Therrien, et al. The Defendants in this action are: Mr. Therrien; Mr. Emerick; Mr. Khoury; Mr. Allen; Mr. Grady; Mr. Lepofsky; Mr. Martin; Mr. McGillicuddy; Mr. Palepu; Mr. Woollacott, III; Mr. Wrighton; and Mr. Schorr.

The District Court issued an Order consolidating the above federal derivative actions on August 15, 2006, and a Consolidated Verified Shareholder Derivative Complaint was filed on October 6, 2006; the Defendants named therein are: Mr. Allen, Mr. Grady, Mr. Lepofsky, Mr. Martin, Mr. McGillicuddy, Mr. Palepu, Mr. Schorr, Mr. Woollacott, Mr. Wrighton, Mr. Woodbury, Mr. Therrien, Mr. Emerick, Mr. Khoury, and Mr. Werner. The Consolidated Verified Shareholder Derivative Complaint alleges violations of Section 10(b) and Rule 10b-5 of the Exchange act; Section 14(a) of the Exchange Act; Section 20(a) of the Exchange Act; breach of fiduciary duty; corporate waste; and unjust enrichment, and seeks, on behalf of Brooks, damages, extraordinary equitable relief including disgorgement and a constructive trust for improvidently granted stock options or proceeds from alleged insider trading by certain defendants, Plaintiffs’ costs and disbursements including attorneys’ fees, accountants’ and experts’ fees, costs and expenses. The Defendants have filed motions to dismiss the Consolidated Verified Shareholder Derivative Complaint and to Stay this action pending the outcome of motions to dismiss in the state derivative action described above.

On June 19, 2006, a putative class action was filed in the United States District Court, District of Massachusetts, captioned as Charles E. G. Leech Sr. v. Brooks Automation, Inc., et al. The defendants in this action are: the Company; Mr. Therrien; Ellen Richstone, the Company’s former Chief Financial Officer; Mr. Emerick; Mr. Khoury; Robert W. Woodbury, Jr., the Company’s Chief Financial Officer; and Mr. Grady. The complaint alleges violations of Section 10(b) of the Exchange Act and Rule 10b-5 against us and the individual defendants; Section 20(a) of the Exchange Act against the individual defendants; Section 11 of the Securities Act against us and Messrs. Grady, Woodbury, Emerick, Khoury and Therrien; Section 12 of the Securities Act against us and Messrs. Grady, Woodbury, Emerick, Khoury and Therrien; and Section 15 of the Securities Act against Messrs. Grady, Woodbury, Emerick, Khoury and Therrien. The complaint seeks, inter alia, damages, including interest, and plaintiff’s costs. The Defendants have filed motions to dismiss the Leech complaint.

On July 19, 2006, a putative class action was filed in the United States District Court for the District of Massachusetts, captioned as James R. Shaw v. Brooks Automation, Inc. et al., No. 06-11239-RWZ. The Defendants in the case are the Company, Mr. Therrien, Ms Richstone, Mr. Emerick, Mr. Khoury, Mr. Woodbury, and Mr. Grady. As of this date, the Company has not been served with the complaint. The complaint alleges violations of Section 10(b) of the Exchange Act and Rule 10b-5 against all defendants and violations of Section 20(a) of the Exchange Act against all individual defendants. The complaint seeks, inter alia, damages, including interest, and plaintiff’s costs. Competing plaintiffs and their counsel have moved for consolidation with the Leech action described above, and for appointment as lead counsel.

On August 22, 2006, an action captioned as Mark Levy v. Robert J. Therrien and Brooks Automation, Inc., was filed in the United States District Court for the District of Delaware, seeking recovery, on behalf of the Company, from Mr. Therrien under Section 16(b) of the Securities Exchange Act of 1934 for alleged “short-swing” profits

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earned by Mr. Therrien due the loan and stock option exercise in November 1999 referenced above, and a sale by Mr. Therrien of Brooks stock in March 2000. The Complaint seeks disgorgement of all profits earned by Mr. Therrien on the transactions, attorneys’ fees and other expenses. Defendants have filed motions to dismiss.

The Company is aware of additional proposed class actions, posted on the websites of various law firms. The Company is not yet aware of the filing of any such actions and have not been served with a complaint or any other process in any of these matters.

20.   Discontinued Operations

In June 2005, the Company signed definitive purchase and sale agreements to sell substantially all the assets of the Company’s Specialty Equipment and Life Sciences division (“SELS”), formerly known as IAS, which provided standard and custom automation technology and products for the semiconductor, photonics, life sciences and certain other industries. This sale was completed and all activities of SELS have ceased during the fourth quarter of fiscal 2005. Effective June 2005, the Company’s consolidated financial statements and notes have been reclassified to reflect this business as a discontinued operation in accordance with Financial Accounting Standards Board Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

The summary of operating results from discontinued operations is as follows (in thousands):

	Year Ended September 30,
	2006		2005			2004
Revenues	$	90	$	626		$	4,716
Gross profit	$	89	$	(691	)	$	1,531
Gain (loss) from discontinued operations, net of tax	$	89	$	(3,516	)	$	(9,475	)

The loss from discontinued operations, net of tax of $3.5 million for the year ended September 30, 2005 includes a loss on disposal, net of tax of $24,000.

Due to the losses incurred since acquisition, no tax benefit is reflected for the losses incurred. The Company recorded impairment charges related to SELS of $7.4 million in 2004.

Assets and liabilities from discontinued operations are as follows (in thousands):

	September 30,
	2006		2005
Current assets	$	0	$	55
Non-current assets		—		—
Assets from discontinued operations	$	0	$	55
Current liabilities from discontinued operations	$	0	$	399

Current assets include accounts receivable and inventory. Non-current assets include property, plant and equipment. Current liabilities include accounts payable and other current liabilities.

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21.   Subsequent Events

On November 3, 2006, the Company’s Board of Directors committed to a formal plan of disposal of its software division, Brooks Software and entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Applied Materials, Inc. (“Applied”), a Delaware corporation. Under the terms of the Purchase Agreement, the Company will divest and sell its software division, Brooks Software, to Applied for $125 million in cash consideration. The Company will transfer to Applied substantially all of its assets primarily related to Brooks Software, including the stock of several subsidiaries engaged only in the business of Brooks Software, and Applied will assume certain liabilities related to Brooks Software. The Company is selling its software division in order to focus on its core semiconductor-related hardware businesses. The Company expects to recognize a gain on disposal of the software division and to reclassify this division as discontinued operations in fiscal 2007.

Completion of the transaction is subject to several conditions, including expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and clearance under any applicable foreign antitrust laws, and other customary closing conditions. The Company expects to close the transaction during the second fiscal quarter of 2007.

Applied Materials purchases significant amounts of manufacturing equipment from the Company and is among Brooks’ largest customers for such products.

88

Item 9.   Changes In and Disagreements With Accountants on Financial Accounting and Financial Disclosure

Not applicable.

Item 9A.   Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported on a timely basis and that such information is accumulated and communicated to management, including the chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon this evaluation, our chief executive officer and our chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of our chief executive and chief financial officers and effected by our board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

•  pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of our assets;

•  provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and

•  provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an assessment of the effectiveness of our internal control over financial reporting as of September 30, 2006. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) an Internal Control-Integrated Framework.  Based on our assessment, we concluded that, as of September 30, 2006, our internal control over financial reporting was effective.

Management has excluded the operations of Helix Technology Corporation (“Helix”) and Synetics Solutions Inc. (“Synetics”) from its assessment of internal control over financial reporting as of September 30, 2006 because those entities were acquired by the Company in purchase business combinations during fiscal 2006. The total assets and total revenues of the acquired businesses of Helix and Synetics represent 18% and 30%, respectively, of the related consolidated financial statement amounts as of and for the year ended September 30, 2006.

89

Our management’s assessment of the effectiveness of our internal control over financial reporting as of September 30, 2006, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included in Item 8 of this report.

Changes in Internal Control Over Financial Reporting

There were no changes in internal control over financial reporting during the fiscal fourth quarter ended September 30, 2006, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.   Other Information

On December 8, 2006, we entered into an employment agreement with Robert W. Woodbury, Jr., our Senior Vice President and Chief Financial Officer, that replaces Mr. Woodbury’s former employment agreement. The agreement provides for, among other things, an annual base salary of $305,000 and an annual management bonus of 0% to 150% of 70% of base salary. The agreement also provides that Mr. Woodbury will be entitled to severance, including one year’s base salary and continued participation in benefit plans, if he is terminated without “cause” or if he resigns for “good reason.” Cause is defined to include willful failure or refusal to perform the duties pertaining to his job, engagement in conduct that is fraudulent, dishonest, unlawful or otherwise in violation of our standards of conduct or a material breach of the employment agreement or related agreements. Good reason is defined to include diminution of Mr. Woodbury’s responsibility or position, our breach of the agreement or relocation of Mr. Woodbury. Payment of base salary and continued participation in benefit plans may be extended for up to one additional year if Mr. Woodbury is engaged in an ongoing search for replacement employment.

PART III

Item 10.   Directors and Executive Officers of the Registrant

The information required by this Item 10 is hereby incorporated by reference to the Company’s definitive proxy statement to be filed by the Company within 120 days after the close of its fiscal year.

Item 11.   Executive Compensation

The information required by this Item 11 is hereby incorporated by reference to the Company’s definitive proxy statement to be filed by the Company within 120 days after the close of its fiscal year.

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item 12 is hereby incorporated by reference to the Company’s definitive proxy statement to be filed by the Company within 120 days after the close of its fiscal year.

Item 13.   Certain Relationships and Related Transactions

The information required by this Item 13 is hereby incorporated by reference to the Company’s definitive proxy statement to be filed by the Company within 120 days after the close of its fiscal year.

Item 14.   Principal Accountant Fees and Services

The information required by this Item 14 is hereby incorporated by reference to the Company’s definitive proxy statement to be filed by the Company within 120 days after the close of its fiscal year.

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PART IV

Item 15.   Exhibits and Financial Statement Schedules

(a) Financial Statements and Financial Statement Schedule

The consolidated financial statements of the Company are listed in the index under Part II, Item 8, in this Form 10-K.

Other financial statement schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the supplementary consolidated financial statements or notes thereto.

(b) Exhibits

Exhibit
No.			Description
	3	.01	Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 of the Company’s registration statement on Form S-4 (Reg. No. 333-127945), filed on August 30, 2005, as amended on September 26, 2005 (the “Helix S-4”).
	3	.02	Certificate of Designations of the Company’s Series A Junior Participating Preferred Stock (incorporated herein by reference to Exhibit 3.03 of the Company’s registration statement on Form S-3 (Registration No. 333-34487), filed on August 27, 1997).
	3	.03	Certificate of Amendment of the Company’s Certificate of Incorporation (incorporated herein by reference to Exhibit 3.3 of the Helix S-4).
	3	.04	Certificate of Amendment of the Company’s Certificate of Incorporation (incorporated herein by reference to Exhibit 3.4 of the Helix S-4).
	3	.05	Certificate of Increase of Shares Designated as the Company’s Series A Junior Participating Preferred Stock (incorporated herein by reference to Exhibit 3.5 of the Helix S-4).
	3	.06	Certificate of Ownership and Merger of PRI Automation, Inc. into the Company (incorporated herein by reference to Exhibit 3.6 of the Helix S-4).
	3	.07	Certificate of Designations, Preferences, Rights and Limitations of the Company’s Special Voting Preferred Stock (incorporated herein by reference to Exhibit 4.13 of the Company’s registration statement on Form S-3 (Registration No. 333-87194), filed on April 29, 2002, as amended May 13, 2002).
	3	.08	Certificate of Change of Registered Agent and Registered Office of the Company (incorporated herein by reference to Exhibit 3.8 of the Helix S-4).
	3	.09	Certificate of Amendment of Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.01 of the Company’s quarterly report for the fiscal quarter ended March 31, 2003, filed on May 13, 2003).
	3	.10	Certificate of Amendment of Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 of the Company’s current report on Form 8-K, filed on October 26, 2005).
	3	.11	Certificate of Elimination of Special Voting Preferred Stock (incorporated herein by reference to Exhibit 3.2 of the Company’s current report on Form 8-K, filed on October 26, 2005).
	3	.12	Certificate of Increase of Shares Designated as Series A Junior Participating Preferred Stock (incorporated herein by reference to Exhibit 3.3 of the Company’s current report on Form 8-K, filed on October 26, 2005).
	3	.13	Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.4 of the Company’s current report on Form 8-K, filed on October 26, 2005).
	4	.01	Specimen Certificate for shares of the Company’s common stock (incorporated herein by reference to the Company’s registration statement on Form S-3 (Registration No. 333-88320), filed on May 15, 2002).
	4	.02	Rights Agreement dated July 23, 1997 (incorporated by incorporated by reference to Exhibit No. 1 to the Company’s Registration Statement on Form 8-A, filed on August 7, 1997).
	4	.03	Amendment No. 1 to Rights Agreement between the Company and the Rights Agent.
	4	.04	Amendment No. 2 to Rights Agreement between the Company and the Rights Agent (incorporated herein by reference to the Company’s registration statement on Form 8-A/A filed on June 4, 2002).

91

Exhibit
No.			Description
	4	.05	Amendment No. 3 to Rights Agreement between the Company and the Rights Agent (incorporated herein by reference to the Company’s registration statement on Form 8-A/A, filed on July 11, 2005).
	10	.01	Shareholders’ Agreement, dated as of June 30, 2006, among Yaskawa Electric Corporation, Brooks Automation, Inc. and Yaskawa Brooks Automation, Inc. (incorporated herein by reference to Exhibit 10.2 to the Company’s quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2006, filed on August 9, 2006 (the “2006 Q3 10-Q”).
	10	.02	Agreement and Plan of Merger, dated May 8, 2006, by and among Brooks Automation, Inc., Bravo Acquisition Subsidiary, Inc. and Synetics Solutions, Inc. (incorporated herein by reference to Exhibit 10.3 of the 2006 Q3 10-Q).
	10	.03	U.S. Robot Supply Agreement, made as of June 30, 2006, by and between Brooks Automation, Inc. and Yaskawa Electric Corporation. (incorporated herein by reference to Exhibit 10.4 of the 2006 Q3 10-Q).
	10	.04	Brooks Japan Robot Supply Agreement, made as of June 30, 2006, by and between Yaskawa Brooks Automation, Inc. and Brooks Automation, Inc. (incorporated herein by reference to Exhibit 10.5 of the 2006 Q3 10-Q).
	10	.05	Basic agreement between the Company and Ulvac Corporation dated August 17, 1981 (incorporated by reference to Exhibit 10.13 of the registration statement on Form S-2 (Registration No. 2- 84880) filed by Helix Technology Corporation).
	10	.06	Form of Indemnification Agreement for directors and officers of the Company (incorporated herein by reference to the Company’s registration statement on Form S-1 (Registration No. 333-87296), filed on December 13, 1994 (the “Brooks S-1”)).
	10	.07	Second Amended and Restated Employment Agreement, dated as of October 18, 2006, by and between the Company and Edward C. Grady (incorporated herein by reference to Exhibit 10.1 to the Company’s current report on Form 8-K, filed on October 20, 2006).
	10	.08	Employment Agreement, dated as of December 8, 2006, by and between the Company and Robert Woodbury.
	10	.09	Employment Agreement, dated as of October 24, 2005, by and between the Company and Thomas S. Grilk.
	10	.10	Employment Agreement, dated as of October 26, 2005, by and between the Company and James Gentilcore.
	10	.11	Employment Agreement, dated as of October 24, 2005, by and between the Company and Joseph Bellini.
	10	.12	Employment Agreement, dated as of October 26, 2005, by and between the Company and Robert Anastasi.
	10	.13	1993 Nonemployee Director Stock Option Plan (incorporated herein by reference to Exhibit 99.1 to the Company’s registration statement on Form S-8 (Registration No. 333-22717), filed on March 4, 1997).
	10	.14	1992 Combination Stock Option Plan (incorporated herein by reference to Exhibit 99.2 to the Company’s registration statement on Form S-8 (Registration No. 333-07313), filed on July 1, 1996.
	10	.15	1995 Employee Stock Purchase Plan, as amended.
	10	.16	Amended and Restated 2000 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.1 of the Company’s current report on Form 8-K, filed on March 7, 2006).
	10	.17	Helix Technology Corporation 1996 Equity Incentive Plan (incorporated herein by reference to Exhibit 4.1 of the Company’s registration statement on Form S-8 (Registration No. 333-129724), filed on November 16. 2005).
	10	.18	Helix Technology Corporation Amended and Restated Stock Option Plan for Non-Employee Directors (incorporated herein by reference to Exhibit 4.2 of the Company’s registration statement on Form S-8 (Registration No. 333-129724), filed on November 16. 2005).
	10	.19	Helix Technology Corporation 1981 Employee Stock Option Plan (incorporated herein by reference to Exhibit 4.3. of the Company’s registration statement on Form S-8 (Registration No. 333-129724), filed on November 16. 2005).
	10	.20	Form of 2000 Equity Incentive Plan New Employee Nonqualified Stock Option Agreement (incorporated herein by reference to Exhibit 10.44 to the 2004 10-K).

92

Exhibit
No.			Description
	10	.21	Form of 2000 Equity Incentive Plan Existing Employee Nonqualified Stock Option Agreement (incorporated herein by reference to Exhibit 10.45 to the 2004 10-K).
	10	.22	Form of 2000 Equity Incentive Plan Director Stock Option Agreement (incorporated herein by reference to Exhibit 10.46 to the 2004 10-K).
	10	.23	Form of Restricted Stock Grant Agreement.
	10	.24	Deferred Compensation Plan, as amended (incorporated herein by reference to Exhibit 10.1 to the Q3 2006 10-Q).
	10	.25	Lease between the Company and BerCar II, LLC for 12 Elizabeth Drive, Chelmsford, Massachusetts dated October 23, 2002 (incorporated herein by reference to the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2002, filed on December 30, 2002).
	10	.26	First Amendment to Lease between the Company and BerCar II, LLC for 12 Elizabeth Drive, Chelmsford, Massachusetts dated November 1, 2002 (incorporated herein by reference to the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2002, filed on December 30, 2002).
	10	.27	Lease Agreement dated as of May 5, 1994 between the Company and The Prudential Insurance Company of America for 805 Middlesex Turnpike, Billerica, MA (incorporated herein by reference to the Brooks S-1).
	10	.28	Amendment to Lease dated as of July 24, 2000 between the Company and BCIA New England Holdings LLC (successor in interest to The Prudential Insurance Company of America) for 805 Middlesex Turnpike, Billerica, MA.
	10	.29	Lease Agreement dated as of October 12, 2000 between the Company and Progress Road LLC for 17 Progress Road, Billerica, MA.
	10	.30	First Amendment to Lease dated as of March 21, 2001 between the Company and Progress Road LLC for 17 Progress Road, Billerica, MA.
	10	.31	Lease, dated May 14, 1999, between MUM IV, LLC as Lessor and the Company as Lessee.
	10	.32	Multi-Tenant Industrial Triple Net Lease, effective December 15, 2000, between Catellus Development Corporation and Synetics Solutions, Inc., including amendments thereto.
	10	.33	Factory Lease Advanced Agreement among Sang Chul Park, Young Ja Kim, Joon Ho Park, Brooks Automation Asia, Ltd. and Brooks Automation Korea, Inc.
	12	.01	Calculation of Ratio of Earnings to Fixed Charges.
	21	.01	Subsidiaries of the Company.
	23	.01	Consent of PricewaterhouseCoopers LLP (Independent registered public accounting firm for the Company).
	31	.01	Rule 13a-14(a),15d-14(a) Certification.
	31	.02	Rule 13a-14(a),15d-14(a) Certification.
	32		Section 1350 Certifications.

93

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BROOKS AUTOMATION, INC.

By:  /s/  Edward C. Grady

Edward C. Grady,

Chief Executive Officer

Date: December 13, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/  Edward C. Grady Edward C. Grady	Director and Chief Executive Officer (Principal Executive Officer)	December 13, 2006
/s/  Robert W. Woodbury, Jr. Robert W. Woodbury, Jr.	Senior Vice President and Chief Financial Officer (Principal Accounting Officer)	December 13, 2006
/s/  A. Clinton Allen A. Clinton Allen	Director	December 13, 2006
/s/  Robert J. Lepofsky Robert J. Lepofsky	Director	December 13, 2006
/s/  Joseph R. Martin Joseph R. Martin	Director	December 13, 2006
/s/  John K. McGillicuddy John K. McGillicuddy	Director	December 13, 2006
/s/  Krishna G. Palepu Krishna G. Palepu	Director	December 13, 2006
/s/  Alfred Woollacott III Alfred Woollacott III	Director	December 13, 2006
/s/  Mark S. Wrighton Mark S. Wrighton	Director	December 13, 2006

94

EX-4.03

                                                                    Exhibit 4.03


                             BROOKS AUTOMATION, INC.
                          AMENDMENT TO RIGHTS AGREEMENT

      This Amendment (this "Agreement"), dated as of October 23, 2001, to the
Rights Agreement dated as of July 23, 1997 (the "Rights Agreement"), between
Brooks Automation, Inc., a Delaware corporation (the "Company"), and Equiserve
Trust Company, N.A. successor Rights Agent (the "Rights Agent").

                                    RECITALS

      WHEREAS, the board of directors of the Company has approved a certain
agreement and plan of merger (the "Merger Agreement") by and among the Company,
PRI Automation, Inc., a Massachusetts corporation ("PRI"), Pontiac Acquisition
Corp., a Massachusetts corporation wholly owned by the Company ("Brooks Merger
Sub") at a meeting of the board of directors of the Company held on October 23,
2001 (the "Meeting"), pursuant to which Brooks Merger Sub will be merged with
and into PRI (the "Merger"), and the stockholders of PRI will become
stockholders of the Company.

      WHEREAS, upon the effectiveness of the Merger, PRI may acquire more than
15% of the outstanding shares of the Company's Common Stock, $.01 par value per
share (the "Company's Common Stock").

      WHEREAS, the acquisition of more than 15% of the outstanding shares of the
Company's Common Stock would result in the acquiring entity or entities being
deemed to be an "Acquiring Person" under the Rights Agreement, which would
trigger certain events pursuant to the terms of the Rights Agreement.

      WHEREAS, at the Meeting the board of directors of the Company determined
that it is in the best interest of the Company to amend the Rights Agreement
prior to the Company entering into the Merger Agreement so that PRI and its
Affiliates will not become Acquiring Persons under the Rights Agreement.

      WHEREAS, capitalized terms used but not otherwise defined in this
Amendment No. 1 shall have the meanings given them in the Rights Agreement.

      NOW, THEREFORE, in consideration of the promises and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

      1. AMENDMENT OF FIRST SUBPARAGRAPH OF SECTION 1. The first subparagraph of
Section 1, definition of "Acquiring Person," is hereby amended and restated so
that such subparagraph reads in its entirety as follows:

            "Acquiring Person" shall mean any Person who or which, together with
            all Affiliates and Associates of such Person, shall be the
            Beneficial Owner of 15% or more of the Common Shares of the Company
            then outstanding, but shall not


Execution Copy

            include (i) the Company, (ii) any Subsidiary of the Company, (iii)
            any employee benefit plan of the Company or any Subsidiary of the
            Company, (iv) any entity holding Common Shares for or pursuant to
            the terms of any such employee benefit plan, (v) Robert J. Therrien,
            any members of his immediate family or any of his or their
            Affiliates or Associates, (vi) any person that is the Beneficial
            Owner of 15% or more of the Common Shares of the Company outstanding
            as of the close of the Nasdaq National Market on the date hereof;
            provided, however, that after such date such person does not become
            the Beneficial Owner of additional Common Shares of the Company in
            an aggregate amount (net of any sales) of the greater of 200,000
            Common Shares or the number of Common Shares equal to 2.6% of the
            then outstanding Common Shares (as measured as of the date of the
            then acquisition of Common Shares by the Beneficial Owner); and
            provided, further that such person shall be treated as any other
            holder of Common Shares of the Company and shall no longer be
            entitled to the exclusion set forth in this clause (vi) after such
            time as such person becomes the Beneficial Owner of less than 15% of
            the Common Shares of the Company then outstanding or (vii) PRI
            Automation, Inc., a Massachusetts corporation ("PRI"), or any of its
            Affiliates if and only if, PRI or such Affiliates shall become the
            Beneficial Owner of 15% or more of the Common Shares of the Company
            then outstanding as a result of the execution of the Agreement and
            Plan of Merger authorized and approved by the Board of Directors of
            the Company at the meeting of the Board of Directors held on October
            23, 2001, as it may be amended from time to time (the "Merger
            Agreement"), or the consummation of the transactions contemplated
            thereby, and/or any options to purchase or proxies to vote Common
            Shares of the Company granted by the Company or any stockholder of
            the Company to PRI in connection with the Merger Agreement or any
            agreements or arrangements entered into by the Company and PRI in
            connection therewith. Notwithstanding the foregoing, (1) no Person
            shall become an "Acquiring Person" as the result of an acquisition
            of Common Shares by the Company which, by reducing the number of
            shares outstanding, increases the proportionate number of shares
            beneficially owned by such Person to 15% or more of the Common
            Shares of the Company then outstanding; provided, however, that if a
            Person shall so become the Beneficial Owner of 15% or more of the
            Common Shares of the Company then outstanding by reason of an
            acquisition of Common Shares by the Company and shall, after such
            share purchases by the Company, become the Beneficial Owner of an
            additional 1% of the outstanding Common Shares of the Company, then
            such Person shall be deemed to be an "Acquiring Person"; (2) if the
            Board of Directors of the Company determines in good faith that a
            Person who would otherwise be an "Acquiring Person," as defined
            pursuant to the foregoing provisions of this paragraph, has become
            such inadvertently, and such Person divests as promptly as
            practicable a sufficient number of Common Shares so that such Person
            would no longer be an "Acquiring Person," as defined pursuant to the
            foregoing provisions of this paragraph, then such Person shall not
            be deemed to have become an "Acquiring Person" for any purposes of
            this Agreement; and (3) an underwriter or underwriters which become
            the Beneficial Owner of 15% or more of the Common Shares of the
            Corporation then outstanding in connection


Execution Copy

            with an underwritten public offering with a view to the public
            distribution of such Common Shares shall not become an "Acquiring
            Person" hereunder."

      2. REAFFIRMATION OF RIGHTS AGREEMENT. Except as specifically amended by
this Amendment, the Rights Agreement shall remain in full force and effect.


                            [SIGNATURES ON NEXT PAGE]


Execution Copy

      IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.

                                    BROOKS AUTOMATION, INC.

                                    By:   /s/ Ellen B. Richstone
                                       -----------------------------------------
                                          Name:   Ellen B. Richstone
                                          Title:  Senior Vice President of
                                                  Finance and Administration and
                                                  Chief Financial Officer


                                    EQUISERVE TRUST COMPANY, N.A

                                    By:   /s/ Margaret Prentice
                                       -----------------------------------------
                                          Name:   Margaret Prentice
                                          Title:  Managing Director


Execution Copy

EX-10.08

                                                                    Exhibit 10.8

                              EMPLOYMENT AGREEMENT

     This Employment Agreement (the "Agreement") is made and entered into in
Chelmsford, Massachusetts by and between Brooks Automation, Inc., a Delaware
corporation (the "Company") and Robert Woodbury, Jr. (the "Executive"), as
of December 8, 2006.

                                    RECITALS

     1. The Company desires to continue to employ the Executive as Senior Vice
President and Chief Financial Officer of the Company upon the terms and
conditions set forth herein.

     2. In consideration of the employment to be provided hereby as provided
herein and the Indemnification Agreement attached hereto as Exhibit A, the
Executive has entered into the Executive Invention, Nondisclosure,
Non-Competition and Non-Solicitation Agreement attached hereto as Exhibit B.

     For and in consideration of the mutual promises, terms, provisions and
conditions contained in this Agreement, the parties hereby agree as follows:

1. Duties. The Company shall continue to employ Executive on an at will basis as
Senior Vice President and Chief Financial Officer of the Company. Executive
shall report to the Company's President and CEO. Executive shall have such
reasonable and appropriate duties as may from time to time be assigned by the
President & CEO, which duties shall include, without limitation, responsibility
for the Company financials. Executive shall perform the duties of such office as
are provided for in the bylaws of the Company subject to the general supervision
and direction of the President & CEO and the Company's board of directors (the
"Board of Directors").

2. At Will Employment. Subject to Section 6 and the termination provisions
contained therein, the Executive's employment under this Agreement shall be on
an at will basis (the actual period of Executive's employment with the Company
is referred to herein as the "Employment Term").

3. Other Activities. Subject to the terms and conditions of the Executive
Invention, Non-Disclosure, Non-Competition and Nonsolicitation Agreement
attached hereto as Exhibit B, Executive may serve on corporate, civic,
charitable boards or committees, fulfill speaking engagements, teach at
educational institutions or manage personal investments; provided that such
activities do not individually or in the aggregate interfere or conflict with
the performance of his duties or obligations under this Agreement.

4. Performance. During the Employment Term, Executive shall use his business
judgment, skill and knowledge for the advancement of the Company's interests and
to discharge his duties and responsibilities hereunder. Executive shall perform
and discharge, faithfully, diligently and to the best of his ability, his duties
and responsibilities hereunder. Subject to Section 3 hereof, Executive shall
devote substantially all of his working time and efforts to the business and
affairs of the Company.



5. Compensation and Benefits.

     5.1. Base Salary. As consideration for Executive's services performed
during the Employment Term, the Company agrees to pay Executive a base salary of
$305,000 per year (the "Base Salary") payable in accordance with the normal
payroll practices of the Company for its executives and subject to federal and
state tax withholding. The Base Salary shall be reviewed annually by the
compensation committee of the Board of Directors (the "Compensation Committee")
and adjusted as determined by the Compensation Committee (the Base Salary as
adjusted from time to time shall be referred to as the "Current Base Salary").

     5.2. Annual Management Bonus. During the Employment Term, Executive shall
be eligible to receive cash bonuses each year from the Company determined by the
Chief Executive Officer of the Company (the "Chief Executive Officer") and the
Compensation Committee (the "Annual Management Bonus"). The Annual Management
Bonus shall be payable based upon performance criteria to be agreed upon by
Executive and the Chief Executive Officer and approved by the Compensation
Committee. The Annual Management Bonus may range from 0% to 150% of 70% of
Current Base Salary and shall be reviewed at least annually by the Compensation
Committee. Any such Annual Management Bonuses paid to Executive shall be in
addition to the Current Base Salary.

     5.3. Benefits. During the Employment Term, Executive shall be eligible for
participation in and shall receive all benefits available under the Brooks
Automation, Inc. 401(k) Plan, and the Company's welfare benefit plans,
practices, policies and programs (including disability, salary continuance,
group life, accidental death and travel accident insurance plans and programs)
normally available to other senior executives except as any of these may be
limited by law.

     5.4. Business Expenses. Executive shall be entitled to receive prompt
reimbursement during the Employment Term for all reasonable employment-related
expenses incurred or paid by him in the performance of his services, subject to
reasonable substantiation and documentation.

     5.5. Corporate Opportunities. During the Employment Term, Executive agrees
that he will first present to the Chief Executive Officer, or the Board of
Directors, for acceptance or rejection on behalf of the Company, any opportunity
to create or invest in any company which is or will be involved in providing or
furnishing equipment, systems, components, products, software or services to
customers in industries that the Company serves (including, without limitation,
the semiconductor and flat panel display industries) which comes to his
attention and in which he, or any affiliate, might desire to participate. If the
Board of Directors, or the Chief Executive Officer, rejects the same or fails to
act thereon in a reasonable time, Executive shall be free to invest in,
participate or present such opportunity to any other person or entity, subject
to the other terms of this Agreement.

6. Termination Events.

     6.1. Death/Long-Term Disability. This Agreement shall terminate and any and
all rights and obligations of the Company and Executive hereunder shall cease
and be completely


                                        2



void except as specifically set forth in this Agreement, upon the death or
Long-Term Disability (as defined below) of Executive.

          6.1.1. Long-Term Disability. For purposes of this Agreement,
"LONG-TERM DISABILITY" shall mean any disability of Executive that prevents
Executive from devoting to the business of the Company his best efforts, skill
and attention, for a period of 180 consecutive days.

     6.2. Termination by the Company. At the election of the Company, this
Agreement shall terminate and any and all rights and obligations of the Company
and Executive hereunder shall cease and be completely void except as
specifically set forth in this Agreement, upon the earliest to occur of the
following: (i) the termination of Executive by the Company with Cause (as
defined below) under this Agreement and delivery of written notice in accordance
with Sections 6, 7 and 13 or (ii) the termination of Executive by the Company
without Cause upon delivery of written notice in accordance with Sections 6, 7
and 13.

          6.2.1. Cause. For purposes of this Agreement, "CAUSE" shall include,
without limitation, the occurrence of any of the following events during the
Employment Term:

          (i) Executive's conviction of, or the entry of a plea of guilty or
          nolo contendere to any misdemeanor involving moral turpitude or any
          felony;

          (ii) fraud, embezzlement, or similar act of dishonesty; unauthorized
          disclosure, attempted disclosure, use or attempted use of confidential
          information of the company or of any other party if disclosed to the
          Company under the condition that it be kept confidential; acts
          prejudicial to the interest or reputation of the Company; or
          falsification, concealment or distortion of management information;

          (iii) material misrepresentation in connection with the Executive's
          application for employment with the Company;

          (iv) conduct by the Executive constituting an act of moral turpitude,
          or of physical violence while on duty;

          (v) the Executive's willful failure or refusal to perform the duties
          on behalf of the Company which are consistent with the scope and
          nature of the Executive's responsibilities, or otherwise to comply
          with a lawful directive or policy of the Company, including without
          limitation, the Company's Standards of Conduct as then in effect as
          published on the Company's internal website;

          (vi) any act of gross negligence, gross corporate waste or disloyalty
          by the Executive to the Company or the commission of any intentional
          tort by the Executive against the Company; or

          (vii) material breach of this Agreement or the agreements referenced
          herein by the Executive.


                                        3


     6.3. Termination by Executive. At the election of the Executive, this
Agreement shall terminate and any and all rights and obligations of the Company
or Executive hereunder shall cease and be completely void except as specifically
set forth in this Agreement, upon the earliest to occur of the following: (i)
the Executive's resignation for Good Reason (as defined below); provided that
Executive shall have first provided the Company with written notice in
accordance with Section 13 of the occurrence of such action he believes
constitutes Good Reason and the Company shall have failed to remedy such action
within thirty (30) days of its receipt of such notice; or (ii) the Executive's
resignation without Good Reason upon delivery of written notice in accordance
with Section 13.

          6.3.1. Good Reason. For purposes of this Agreement, "Good Reason"
shall mean, without Executive's express written consent, the occurrence of any
one or more of the following events:

          (i) a material breach of this Agreement by the Company;

          (ii) a diminution of the Executive's responsibilities and authority
          described in Section 1 resulting in responsibilities and authority in
          any material respect inconsistent with the responsibilities and
          authority of a senior officer of the Company, provided, however, that
          the parties may agree in writing to a waiver of this right by the
          Executive;

          (iii) a material reduction of the Current Base Salary or of any
          benefit enjoyed by the Executive unless all senior executives suffer a
          substantially similar reduction;

          (iv) the relocation of the Executive's office to a location more than
          60 miles from Chelmsford, Massachusetts; or

          (v) the failure of the Company to obtain the assumption in writing of
          its obligation to perform this Agreement by any successor to all or
          substantially all of the assets of the Company within 15 days after a
          merger, consolidation, sale of assets or similar transaction.

     6.4. Termination Date. The term "Termination Date" shall mean if the
Executive's services are terminated (A) by his death, then the date of his
death, or (B) by his Long-Term Disability, then the 180th day of such
disability, or (C) for any other reason, then the date on which such termination
is to be effective pursuant to the notice of termination to be given by the
party terminating the employment relationship.

7. Effect of Termination.

     7.1. Termination for Death or Disability. It is expressly acknowledged and
agreed that if Executive's employment shall be terminated due to Executive's
death or Long-Term Disability, all of the obligations under Sections 1 through 5
of the Company and Executive shall


                                        4



cease except that the Company shall pay, or provide the following benefits, to
Executive or his heirs, executors or administrators as applicable, without
further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus, if any,
               for the completed portion of the current annual pay period where
               the total Annual Management Bonus is determined in accordance
               with Section 5.2; and

          (iii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date.

     7.2. Termination by the Company.

          7.2.1. Termination by the Company for Cause. It is expressly
acknowledged and agreed that if Executive is terminated by the Company for
Cause, all of the obligations under Sections 1 through 5 of the Company and
Executive shall cease except that the Company shall pay immediately after the
Termination Date the following amounts to the Executive without further recourse
or liability to the Company:

          (i)  an amount equal to the sum of Executive's Current Base Salary
               earned through the Termination Date; and

          (ii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date.

          7.2.2. Termination By the Company Without Cause. It is expressly
acknowledged and agreed that if Executive's employment shall be terminated by
Company for any reason, except as set forth in Sections 6.1, and 6.2.1, then all
of the obligations under Sections 1 through 5 of the Company and Executive shall
cease except that the Company shall pay, or provide the following benefits, to
Executive without further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus, if any,
               for the completed portion of the current annual pay period where
               the total Annual Management Bonus is determined in accordance
               with Section 5.2;

          (iii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date;


                                        5



          (iv) one (1) year's Current Base Salary as severance in pay
               continuation. Payment of this severance will be made in bi-weekly
               payments for one (1) year (the "Initial Salary Continuation
               Period");

          (v)  during the Initial Salary Continuation Period as it may be
               extended pursuant to subsection (vi) below (together, the "Total
               Salary Continuation Period"), Executive will continue to be
               eligible for medical, dental and vision plans in which Executive
               was a participant at the Termination Date. The Company will
               continue to pay the employer portion of the costs of these plans
               during the Total Salary Continuation Period;

          (vi) if the Executive has not found a full time comparable executive
               position with another employer during the Initial Salary
               Continuation Period, the Company will extend the bi-weekly
               payment plan on a month to month basis until the earlier to occur
               of (A) one (1) additional year (26 additional bi-weekly payments)
               or (B) the date Executive secures full-time employment, in each
               case subject only to the Executive's obligation to inform the
               Company's Human Resources Department that Executive's search for
               replacement employment is ongoing and continuing in good faith.
               Said Notice from Executive shall be made on the 15th of the month
               commencing with the last month of the Initial Salary Continuation
               Period and monthly thereafter as applicable. Notice shall be made
               in accordance with Section 13 of this Agreement. Executive's
               rights under the Total Salary Continuation Period shall be offset
               by income earned from consulting fees with the Company, by short
               term and/or sporadic consulting fees earned from any other
               business entity or by income received for part time employment
               with another business entity; and

          (vii) any and all payment by the Company under this Agreement are and
               shall be specifically conditioned upon full compliance by the
               Executive with all elements of the Executive Invention,
               Nondisclosure, Noncompetition and Nonsolicitation Agreement
               (attached as Exhibit B) and the other applicable provisions of
               this Agreement.

     7.3. Termination by Executive

          7.3.1. Termination by Executive Without Good Reason. It is expressly
acknowledged and agreed that if Executive resigns without Good Reason, then all
of the obligations under Sections 1 through 5 of the Company and Executive shall
cease except that the Company shall pay, or provide the following benefits, to
Executive without further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date; and

          (ii) an amount equal to the value of Executive's accrued vacation pay.


                                        6


          7.3.2. Termination by Executive For Good Reason. It is expressly
acknowledged and agreed that if Executive's employment shall be terminated
because the Executive resigns for Good Reason, then all of the obligations under
Sections 1 through 5 of the Company and Executive shall cease except that the
Company shall pay, or provide the following benefits, to Executive without
further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus, if any,
               for the completed portion of the current annual pay period where
               the total Annual Management Bonus is determined in accordance
               with Section 5.2;

          (iii) an amount equal to the value of Executive's vacation pay accrued
               as of the Termination Date;

          (iv) one (1) year's Current Base Salary as severance in pay
               continuation. Payment will be made in bi-weekly payments during
               the Initial Salary Continuation Period;

          (v)  during the Total Salary Continuation Period, Executive will
               continue to be eligible for medical, dental and vision plans in
               which the Executive was a participant at the Termination Date.
               The Company will continue to pay the employer portion of the
               costs of these plans during the Total Salary Continuation Period;

          (vi) if the Executive has not found full time comparable executive
               position with another employer during the Initial Salary
               Continuation Period, the Company will extend the bi-weekly
               payment plan on a month to month basis until the earlier to occur
               of (A) one (1) additional year (26 additional bi-weekly payments)
               or (B) the date Executive secures full-time employment, subject
               only to the Executive's obligation to inform the Company's Human
               Resources Department that Executive's search for replacement
               employment is ongoing and continuing in good faith. Said Notice
               from Executive shall be made on the 15th of the month commencing
               with the last month of the Initial Salary Continuation Period and
               monthly thereafter as applicable. Notice shall be made in
               accordance with Section 13 of this Agreement. Executive's rights
               under the Total Salary Continuation Period shall not be offset by
               income earned from consulting fees with the Company, by short
               term and/or sporadic consulting fees earned from any other
               business entity or by income received for part time employment
               with another business entity; and

          (vii) any and all payment by the Company under this Agreement are and
               shall be specifically conditioned upon full compliance by the
               Executive with all elements of the Executive Invention,
               Nondisclosure, Noncompetition and


                                        7



               Nonsolicitation Agreement (attached as Exhibit B) and the other
               applicable provisions of this Agreement.

     7.4. 280G. In the event that the Executive shall become entitled to payment
and/or benefits provided by this Agreement or any other amounts in the "nature
of compensation" (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any person whose actions result
in a change of ownership or effective control covered by Section 280G(b)(2) of
the Code or any person affiliated with the Company or such person) as a result
of such change in ownership or effective control (collectively the "Company
Payments"), and such Company Payments would be subject to the tax imposed by
Section 4999 of the Code (together with any similar tax that may hereafter be
imposed by any taxing authority, the "Excise Tax") the Executive shall be solely
responsible for the payment in full of any such Excise Tax and the Company shall
withhold any federal or state taxes as required by applicable law.

8. Noncompetition Agreement. The Executive shall execute the Executive
Invention, Non-Disclosure, Non-Competition and Nonsolicitation Agreement
attached as Exhibit B to this Agreement.

9. Assignment. Neither the Company nor Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the
prior written consent of the other party; provided, however, that the Company
may assign its rights and obligations under this Agreement without the consent
of Executive if the Company shall hereafter effect a reorganization, consolidate
with, or merge with or into any other entity or transfer all or substantially
all of its properties or assets to any other person or entity. This Agreement
shall be binding upon and inure to the benefit of the Company, Executive and
their respective successors, executors, administrators, heirs and permitted
assigns.

10. Indemnification. The Executive shall execute the Indemnification Agreement
attached as Exhibit A to this Agreement.

11. Waiver. The waiver by any party hereto of a breach of any provision of this
Agreement by any other party will not operate or be construed as a waiver of any
other or subsequent breach by such other party.

12. Severability. The parties agree that each provision contained in this
Agreement shall be treated as a separate and independent clause, and the
unenforceability of any one clause shall in no way impair the enforceability of
any of the other clauses herein. Moreover, if one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to scope, activity or subject, such provisions shall be construed by the
appropriate judicial body by limiting and reducing it or them, so as to be
enforceable to the extent compatible with the applicable law.

13. Notices. Any notice or other communication in connection with this Agreement
shall be deemed to be delivered if in writing, addressed as provided below and
actually delivered at said address:


                                        8



     If to Executive, to him at the following address:

          Robert Woodbury, Jr.
          13 Plumbly Road
          Upton, MA 01568

     If to the Company, to it at the following address:

          Brooks Automation, Inc.
          15 Elizabeth Drive
          Chelmsford, MA 01824
          Attn: General Counsel

     or to such other person or address as to which either party may notify the
other in accordance with this Section 13.

14. Applicable Law. This Agreement shall be interpreted and construed in
accordance with the laws of the Commonwealth of Massachusetts.

15. Remedies. Executive acknowledges that a breach of any of the promises or
agreements contained herein could result in irreparable and continuing damage to
the Company for which there may be no adequate remedy at law, and the Company
shall be entitled to seek injunctive relief and/or a decree for specific
performance, and such other relief as may be proper (including monetary damages
if appropriate).

16. Integration. This Agreement, the Executive Invention, Non-Disclosure,
Non-Competition and Nonsolicitation Agreement attached as Exhibit B hereto, the
Indemnification Agreement attached as Exhibit A hereto, unless otherwise
provided herein, form the entire agreement between the parties hereto with
respect to the subject matter contained in this Agreement and shall supersede
all prior agreements, oral discussions, promises and representations regarding
employment, compensation, severance or other payments contingent upon
termination of employment, whether in writing or otherwise.

17. Absence of Conflicting Obligations. Executive represents that he is not
bound by any agreement or any other existing or previous business relationship
which conflicts with or prevents the full performance of his duties and
responsibilities under this Agreement. Executive further represents that his
obligations under or in consideration with this Agreement do not breach and will
not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by him.

18. Taxes. Any payments provided for hereunder shall be paid net of any
applicable tax withholding required under federal, state or local law.
Notwithstanding anything herein to the contrary, the Company shall accelerate
the timing of any amounts payable to the Employee pursuant to Section 7
hereunder if and as necessary to prevent such amounts from being deemed
"deferred compensation" pursuant to the American Jobs Creation Act of 2004 (or
the rules and regulation promulgated thereunder).


                                        9



19. Survival. Notwithstanding any provisions of this Agreement to the contrary,
the obligations of Executive and the Company pursuant to Sections 6 through 21
hereof shall each survive termination of this Agreement.

20. Effect of Headings. Any title of a section heading contained herein is for
convenience of reference only, and shall not affect the meaning of construction
or any of the provisions hereof.

     IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, as of
the date first above written.

                                        /s/ Robert Woodbury, Jr.
                                        ----------------------------------------
                                        Robert Woodbury, Jr.


                                        BROOKS AUTOMATION, INC.


                                        By: /s/ Thomas S. Grilk
                                            ------------------------------------
                                            Thomas S. Grilk
                                            Senior Vice President, General
                                            Counsel and Secretary


                                       10

EX-10.09

                                                                    Exhibit 10.9

                              EMPLOYMENT AGREEMENT

     This Employment Agreement (the "Agreement") is made and entered into in
Chelmsford, Massachusetts by and between Brooks Automation, Inc., a Delaware
corporation (the "Company") and Thomas S. Grilk (the "Executive"), as of
October 24, 2005.

                                    RECITALS

     1. The Company desires to continue to employ the Executive as Senior Vice
President and General Counsel of the Company upon the terms and conditions set
forth herein.

     2. In consideration of the employment to be provided hereby as provided
herein and the Indemnification Agreement attached hereto as Exhibit A, the
Executive has entered into the Executive Invention, Nondisclosure,
Non-Competition and Non-Solicitation Agreement attached hereto as Exhibit B.

     For and in consideration of the mutual promises, terms, provisions and
conditions contained in this Agreement, the parties hereby agree as follows:

1. Duties. The Company shall continue to employ Executive on an at will basis as
Senior Vice President and General Counsel of the Company. Executive shall report
to the Company's President and CEO. Executive shall have such reasonable and
appropriate duties as may from time to time be assigned by the President & CEO,
which duties shall include, without limitation, responsibility for the Corporate
Legal Affairs. Executive shall perform the duties of such office as are provided
for in the bylaws of the Company subject to the general supervision and
direction of the President and CEO and the Company's board of directors (the
"Board of Directors").

2. At Will Employment. Subject to Section 6 and the termination provisions
contained therein, the Executive's employment under this Agreement shall be on
an at will basis (the actual period of Executive's employment with the Company
is referred to herein as the "Employment Term").

3. Other Activities. Subject to the terms and conditions of the Executive
Invention, Non-Disclosure, Non-Competition and Nonsolicitation Agreement
attached hereto as Exhibit B, Executive may serve on corporate, civic,
charitable boards or committees, fulfill speaking engagements, teach at
educational institutions or manage personal investments; provided that such
activities do not individually or in the aggregate interfere or conflict with
the performance of his duties or obligations under this Agreement.

4. Performance. During the Employment Term, Executive shall use his business
judgment, skill and knowledge for the advancement of the Company's interests and
to discharge his duties and responsibilities hereunder. Executive shall perform
and discharge, faithfully, diligently and to the best of his ability, his duties
and responsibilities hereunder. Subject to Section 3 hereof, Executive shall
devote substantially all of his working time and efforts to the business and
affairs of the Company.



5. Compensation and Benefits.

     5.1. Base Salary. As consideration for Executive's services performed
during the Employment Term, the Company agrees to pay Executive a base salary of
$260,000 per year (the "Base Salary") payable in accordance with the normal
payroll practices of the Company for its executives and subject to federal and
state tax withholding. The Base Salary shall be reviewed annually by the
compensation committee of the Board of Directors (the "Compensation Committee")
and adjusted as determined by the Compensation Committee (the Base Salary as
adjusted from time to time shall be referred to as the "Current Base Salary").

     5.2. Annual Management Bonus. During the Employment Term, Executive shall
be eligible to receive cash bonuses each year from the Company determined by the
Chief Executive Officer of the Company (the "Chief Executive Officer") and the
Compensation Committee (the "Annual Management Bonus"). The Annual Management
Bonus shall be payable based upon performance criteria to be agreed upon by
Executive and the Chief Executive Officer and approved by the Compensation
Committee. The Annual Management Bonus may range from 0% to 150% of 50% of
Current Base Salary and shall be reviewed at least annually by the Compensation
Committee. Any such Annual Management Bonuses paid to Executive shall be in
addition to the Current Base Salary.

     5.3. Benefits. During the Employment Term, Executive shall be eligible for
participation in and shall receive all benefits available under the Brooks
Automation, Inc. 401(k) Plan, and the Company's welfare benefit plans,
practices, policies and programs (including disability, salary continuance,
group life, accidental death and travel accident insurance plans and programs)
normally available to other senior executives except as any of these may be
limited by law.

     5.4. Business Expenses. Executive shall be entitled to receive prompt
reimbursement during the Employment Term for all reasonable employment-related
expenses incurred or paid by him in the performance of his services, subject to
reasonable substantiation and documentation.

     5.5. Corporate Opportunities. During the Employment Term, Executive agrees
that he will first present to the Chief Executive Officer, or the Board of
Directors, for acceptance or rejection on behalf of the Company, any opportunity
to create or invest in any company which is or will be involved in providing or
furnishing equipment, systems, components, products, software or services to
customers in industries that the Company serves (including, without limitation,
the semiconductor and flat panel display industries) which comes to his
attention and in which he, or any affiliate, might desire to participate. If the
Board of Directors, or the Chief Executive Officer, rejects the same or fails to
act thereon in a reasonable time, Executive shall be free to invest in,
participate or present such opportunity to any other person or entity, subject
to the other terms of this Agreement.

6. Termination Events.

     6.1. Death/Long-Term Disability. This Agreement shall terminate and any and
all rights and obligations of the Company and Executive hereunder shall cease
and be completely


                                        2



void except as specifically set forth in this Agreement, upon the death or
Long-Term Disability (as defined below) of Executive.

          6.1.1. Long-Term Disability. For purposes of this Agreement,
"LONG-TERM DISABILITY" shall mean any disability of Executive that prevents
Executive from devoting to the business of the Company his best efforts, skill
and attention, for a period of 180 consecutive days.

     6.2. Termination by the Company. At the election of the Company, this
Agreement shall terminate and any and all rights and obligations of the Company
and Executive hereunder shall cease and be completely void except as
specifically set forth in this Agreement, upon the earliest to occur of the
following: (i) the termination of Executive by the Company with Cause (as
defined below) under this Agreement and delivery of written notice in accordance
with Sections 6, 7 and 13 or (ii) the termination of Executive by the Company
without Cause upon delivery of written notice in accordance with Sections 6, 7
and 13.

          6.2.1. Cause. For purposes of this Agreement, "CAUSE" shall include,
without limitation, the occurrence of any of the following events during the
Employment Term:

          (i) Executive's conviction of, or the entry of a plea of guilty or
          nolo contendere to any misdemeanor involving moral turpitude or any
          felony;

          (ii) fraud, embezzlement, or similar act of dishonesty; unauthorized
          disclosure, attempted disclosure, use or attempted use of confidential
          information of the company or of any other party if disclosed to the
          Company under the condition that it be kept confidential; acts
          prejudicial to the interest or reputation of the Company; or
          falsification, concealment or distortion of management information;

          (iii) material misrepresentation in connection with the Executive's
          application for employment with the Company;

          (iv) conduct by the Executive constituting an act of moral turpitude,
          or of physical violence while on duty;

          (v) the Executive's willful failure or refusal to perform the duties
          on behalf of the Company which are consistent with the scope and
          nature of the Executive's responsibilities, or otherwise to comply
          with a lawful directive or policy of the Company, including without
          limitation, the Company's Standards of Conduct as then in effect as
          published on the Company's internal website;

          (vi) any act of gross negligence, gross corporate waste or disloyalty
          by the Executive to the Company or the commission of any intentional
          tort by the Executive against the Company; or

          (vii) material breach of this Agreement or the agreements referenced
          herein by the Executive.


                                        3



     6.3. Termination by Executive. At the election of the Executive, this
Agreement shall terminate and any and all rights and obligations of the Company
or Executive hereunder shall cease and be completely void except as specifically
set forth in this Agreement, upon the earliest to occur of the following: (i)
the Executive's resignation for Good Reason (as defined below); provided that
Executive shall have first provided the Company with written notice in
accordance with Section 13 of the occurrence of such action he believes
constitutes Good Reason and the Company shall have failed to remedy such action
within thirty (30) days of its receipt of such notice; or (ii) the Executive's
resignation without Good Reason upon delivery of written notice in accordance
with Section 13.

          6.3.1. Good Reason. For purposes of this Agreement, "Good Reason"
shall mean, without Executive's express written consent, the occurrence of any
one or more of the following events:

          (i) a material breach of this Agreement by the Company;

          (ii) a diminution of the Executive's responsibilities and authority
          described in Section 1 resulting in responsibilities and authority in
          any material respect inconsistent with the responsibilities and
          authority of a senior officer of the Company, provided, however, that
          the parties may agree in writing to a waiver of this right by the
          Executive;

          (iii) a material reduction of the Current Base Salary or of any
          benefit enjoyed by the Executive unless all senior executives suffer a
          substantially similar reduction;

          (iv) the relocation of the Executive's office to a location more than
          60 miles from Chelmsford, Massachusetts; or

          (v) the failure of the Company to obtain the assumption in writing of
          its obligation to perform this Agreement by any successor to all or
          substantially all of the assets of the Company within 15 days after a
          merger, consolidation, sale of assets or similar transaction.

     6.4. Termination Date. The term "Termination Date" shall mean if the
Executive's services are terminated (A) by his death, then the date of his
death, or (B) by his Long-Term Disability, then the 180th day of such
disability, or (C) for any other reason, then the date on which such termination
is to be effective pursuant to the notice of termination to be given by the
party terminating the employment relationship.

7. Effect of Termination.

     7.1. Termination for Death or Disability. It is expressly acknowledged and
agreed that if Executive's employment shall be terminated due to Executive's
death or Long-Term Disability, all of the obligations under Sections 1 through 5
of the Company and Executive shall


                                        4


cease except that the Company shall pay, or provide the following benefits, to
Executive or his heirs, executors or administrators as applicable, without
further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus, if any,
               for the completed portion of the current annual pay period where
               the total Annual Management Bonus is determined in accordance
               with Section 5.2; and

          (iii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date.

     7.2. Termination by the Company.

          7.2.1. Termination by the Company for Cause. It is expressly
acknowledged and agreed that if Executive is terminated by the Company for
Cause, all of the obligations under Sections 1 through 5 of the Company and
Executive shall cease except that the Company shall pay immediately after the
Termination Date the following amounts to the Executive without further recourse
or liability to the Company:

          (i)  an amount equal to the sum of Executive's Current Base Salary
               earned through the Termination Date; and

          (ii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date.

          7.2.2. Termination By the Company Without Cause. It is expressly
acknowledged and agreed that if Executive's employment shall be terminated by
Company for any reason, except as set forth in Sections 6.1, and 6.2.1, then all
of the obligations under Sections 1 through 5 of the Company and Executive shall
cease except that the Company shall pay, or provide the following benefits, to
Executive without further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus, if any,
               for the completed portion of the current annual pay period where
               the total Annual Management Bonus is determined in accordance
               with Section 5.2;

          (iii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date;


                                        5



          (iv) one (1) year's Current Base Salary as severance in pay
               continuation. Payment of this severance will be made in bi-weekly
               payments for one (1) year (the "Initial Salary Continuation
               Period");

          (v)  during the Initial Salary Continuation Period as it may be
               extended pursuant to subsection (vi) below (together, the "Total
               Salary Continuation Period"), Executive will continue to be
               eligible for medical, dental and vision plans in which Executive
               was a participant at the Termination Date. The Company will
               continue to pay the employer portion of the costs of these plans
               during the Total Salary Continuation Period;

          (vi) if the Executive has not found a full time comparable executive
               position with another employer during the Initial Salary
               Continuation Period, the Company will extend the bi-weekly
               payment plan on a month to month basis until the earlier to occur
               of (A) one (1) additional year (26 additional bi-weekly payments)
               or (B) the date Executive secures full-time employment, in each
               case subject only to the Executive's obligation to inform the
               Company's Human Resources Department that Executive's search for
               replacement employment is ongoing and continuing in good faith.
               Said Notice from Executive shall be made on the 15th of the month
               commencing with the last month of the Initial Salary Continuation
               Period and monthly thereafter as applicable. Notice shall be made
               in accordance with Section 13 of this Agreement. Executive's
               rights under the Total Salary Continuation Period shall be offset
               by income earned from consulting fees with the Company, by short
               term and/or sporadic consulting fees earned from any other
               business entity or by income received for part time employment
               with another business entity; and

          (vii) any and all payment by the Company under this Agreement are and
               shall be specifically conditioned upon full compliance by the
               Executive with all elements of the Executive Invention,
               Nondisclosure, Noncompetition and Nonsolicitation Agreement
               (attached as Exhibit B) and the other applicable provisions of
               this Agreement.

     7.3. Termination by Executive

          7.3.1. Termination by Executive Without Good Reason. It is expressly
acknowledged and agreed that if Executive resigns without Good Reason, then all
of the obligations under Sections 1 through 5 of the Company and Executive shall
cease except that the Company shall pay, or provide the following benefits, to
Executive without further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date; and

          (ii) an amount equal to the value of Executive's accrued vacation pay.


                                        6



          7.3.2. Termination by Executive For Good Reason. It is expressly
acknowledged and agreed that if Executive's employment shall be terminated
because the Executive resigns for Good Reason, then all of the obligations under
Sections 1 through 5 of the Company and Executive shall cease except that the
Company shall pay, or provide the following benefits, to Executive without
further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus, if any,
               for the completed portion of the current annual pay period where
               the total Annual Management Bonus is determined in accordance
               with Section 5.2;

          (iii) an amount equal to the value of Executive's vacation pay accrued
               as of the Termination Date;

          (iv) one (1) year's Current Base Salary as severance in pay
               continuation. Payment will be made in bi-weekly payments during
               the Initial Salary Continuation Period;

          (v)  during the Total Salary Continuation Period, Executive will
               continue to be eligible for medical, dental and vision plans in
               which the Executive was a participant at the Termination Date.
               The Company will continue to pay the employer portion of the
               costs of these plans during the Total Salary Continuation Period;

          (vi) if the Executive has not found full time comparable executive
               position with another employer during the Initial Salary
               Continuation Period, the Company will extend the bi-weekly
               payment plan on a month to month basis until the earlier to occur
               of (A) one (1) additional year (26 additional bi-weekly payments)
               or (B) the date Executive secures full-time employment, subject
               only to the Executive's obligation to inform the Company's Human
               Resources Department that Executive's search for replacement
               employment is ongoing and continuing in good faith. Said Notice
               from Executive shall be made on the 15 of the month commencing
               with the last month of the Initial Salary Continuation Period and
               monthly thereafter as applicable. Notice shall be made in
               accordance with Section 13 of this Agreement. Executive's rights
               under the Total Salary Continuation Period shall not be offset by
               income earned from consulting fees with the Company, by short
               term and/or sporadic consulting fees earned from any other
               business entity or by income received for part time employment
               with another business entity; and

          (vii) any and all payment by the Company under this Agreement are and
               shall be specifically conditioned upon full compliance by the
               Executive with all elements of the Executive Invention,
               Nondisclosure, Noncompetition and


                                        7




               Nonsolicitation Agreement (attached as Exhibit B) and the other
               applicable provisions of this Agreement.

     7.4. 280G. In the event that the Executive shall become entitled to payment
and/or benefits provided by this Agreement or any other amounts in the "nature
of compensation" (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any person whose actions result
in a change of ownership or effective control covered by Section 280G(b)(2) of
the Code or any person affiliated with the Company or such person) as a result
of such change in ownership or effective control (collectively the "Company
Payments"), and such Company Payments would be subject to the tax imposed by
Section 4999 of the Code (together with any similar tax that may hereafter be
imposed by any taxing authority, the "Excise Tax") the Executive shall be solely
responsible for the payment in full of any such Excise Tax and the Company shall
withhold any federal or state taxes as required by applicable law.

8. Noncompetition Agreement. The Executive shall execute the Executive
Invention, Non-Disclosure, Non-Competition and Nonsolicitation Agreement
attached as Exhibit B to this Agreement.

9. Assignment. Neither the Company nor Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the
prior written consent of the other party; provided, however, that the Company
may assign its rights and obligations under this Agreement without the consent
of Executive if the Company shall hereafter effect a reorganization, consolidate
with, or merge with or into any other entity or transfer all or substantially
all of its properties or assets to any other person or entity. This Agreement
shall be binding upon and inure to the benefit of the Company, Executive and
their respective successors, executors, administrators, heirs and permitted
assigns.

10. Indemnification. The Executive shall execute the Indemnification Agreement
attached as Exhibit A to this Agreement.

11. Waiver. The waiver by any party hereto of a breach of any provision of this
Agreement by any other party will not operate or be construed as a waiver of any
other or subsequent breach by such other party.

12. Severability. The parties agree that each provision contained in this
Agreement shall be treated as a separate and independent clause, and the
unenforceability of any one clause shall in no way impair the enforceability of
any of the other clauses herein. Moreover, if one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to scope, activity or subject, such provisions shall be construed by the
appropriate judicial body by limiting and reducing it or them, so as to be
enforceable to the extent compatible with the applicable law.

13. Notices. Any notice or other communication in connection with this Agreement
shall be deemed to be delivered if in writing, addressed as provided below and
actually delivered at said address:


                                        8




     If to Executive, to him at the following address:

          Thomas S. Grilk
          lO Underhill Road
          Lynnfield, MA 01940

     If to the Company, to it at the following address:

          Brooks Automation, Inc.
          15 Elizabeth Drive
          Chelmsford, MA 01824
          Attn: General Counsel

     or to such other person or address as to which either party may notify the
other in accordance with this Section 13.

14. Applicable Law. This Agreement shall be interpreted and construed in
accordance with the laws of the Commonwealth of Massachusetts.

15. Remedies. Executive acknowledges that a breach of any of the promises or
agreements contained herein could result in irreparable and continuing damage to
the Company for which there may be no adequate remedy at law, and the Company
shall be entitled to seek injunctive relief and/or a decree for specific
performance, and such other relief as may be proper (including monetary damages
if appropriate).

16. Integration. This Agreement, the Executive Invention, Non-Disclosure,
Non-Competition and Nonsolicitation Agreement attached as Exhibit B hereto, the
Indemnification Agreement attached as Exhibit A hereto, unless otherwise
provided herein, form the entire agreement between the parties hereto with
respect to the subject matter contained in this Agreement and shall supersede
all prior agreements, oral discussions, promises and representations regarding
employment, compensation, severance or other payments contingent upon
termination of employment, whether in writing or otherwise.

17. Absence of Conflicting Obligations. Executive represents that he is not
bound by any agreement or any other existing or previous business relationship
which conflicts with or prevents the full performance of his duties and
responsibilities under this Agreement. Executive further represents that his
obligations under or in consideration with this Agreement do not breach and will
not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by him.

18. Taxes. Any payments provided for hereunder shall be paid net of any
applicable tax withholding required under federal, state or local law.
Notwithstanding anything herein to the contrary, the Company shall accelerate
the timing of any amounts payable to the Employee pursuant to Section 7
hereunder if and as necessary to prevent such amounts from being deemed
"deferred compensation" pursuant to the American Jobs Creation Act of 2004 (or
the rules and regulation promulgated thereunder).


                                        9



19. Survival. Notwithstanding any provisions of this Agreement to the contrary,
the obligations of Executive and the Company pursuant to Sections 6 through 21
hereof shall each survive termination of this Agreement.

20. Effect of Headings. Any title of a section heading contained herein is for
convenience of reference only, and shall not affect the meaning of construction
or any of the provisions hereof.

     IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, as of
the date first above written.


                                        /s/ Thomas S. Grilk
                                        ----------------------------------------
                                        Thomas S. Grilk


                                        BROOKS AUTOMATION, INC.


                                        By: /s/ Edward C. Grady
                                            ------------------------------------
                                            Edward C. Grady
                                            President and CEO


                                       10

EX-10.10

                                                                   Exhibit 10.10

                              EMPLOYMENT AGREEMENT

     This Employment Agreement (the "Agreement") is made and entered into in
Chelmsford, Massachusetts by and between Brooks Automation, Inc., a Delaware
corporation (the "Company") and James F. Gentilcore (the "Executive"), as of the
date of the closing of the acquisition of Helix Technology Corporation by the
Company or a subsidiary of the Company (the "Effective Date").

                                    RECITALS

     1. The Company desires to employ Executive as President and COO,
Semiconductor Products Group of the Company upon the terms and conditions set
forth herein.

     2. In consideration of the employment to be provided hereby and the amounts
to be paid as provided herein and the Indemnification Agreement attached hereto
as Exhibit A, the Executive has entered into the Executive Invention,
Nondisclosure, Non-Competition and Non-Solicitation Agreement attached hereto as
Exhibit B.

     For and in consideration of the mutual promises, terms, provisions and
conditions contained in this Agreement, the parties hereby agree as follows:

1. Duties. Beginning on the Effective Date, so long as the Executive remains an
employee in good standing of Helix Technology Corporation until the date of the
closing identified above, the Company shall employ Executive on an at will basis
as President and COO, Semiconductor Products Group of the Company. Executive
shall report to the Company's President and CEO. Executive shall have such
reasonable and appropriate duties as may from time to time be assigned by the
President and CEO, which duties shall include, without limitation,
responsibility for the Semiconductor Products Group. Executive shall perform the
duties of such office as are provided for in the bylaws of the Company subject
to the general supervision and direction of the President and CEO and the
Company's board of directors (the "Board of Directors").

2. At Will Employment. Subject to Section 6 and the termination provisions
contained therein, the Executive's employment under this Agreement shall be on
an at will basis (the actual period of Executive's employment with the Company
is referred to herein as the "Employment Term").

3. Other Activities. Subject to the terms and conditions of the Executive
Invention, Non-Disclosure, Non-Competition and Nonsolicitation Agreement
attached hereto as Exhibit B, Executive may serve on corporate, civic,
charitable boards or committees, fulfill speaking engagements, teach at
educational institutions or manage personal investments; provided that such
activities do not individually or in the aggregate interfere or conflict with
the performance of his duties or obligations under this Agreement.

4. Performance. During the Employment Term, Executive shall use his business
judgment, skill and knowledge for the advancement of the Company's interests and
to discharge his duties and responsibilities hereunder. Executive shall perform
and discharge, faithfully, diligently and to the best of his ability, his duties
and responsibilities hereunder. Subject to Section 3 hereof,



Executive shall devote substantially all of his working time and efforts to the
business and affairs of the Company.

5. Compensation and Benefits.

     5.1. Base Salary. As consideration for Executive's services performed
during the Employment Term, the Company agrees to pay Executive a base salary of
$375,000 per year (the "Base Salary") payable in accordance with the normal
payroll practices of the Company for its executives and subject to federal and
state tax withholding. The Base Salary shall be reviewed annually by the
compensation committee of the Board of Directors (the "Compensation Committee")
and adjusted as determined by the Compensation Committee (the Base Salary as
adjusted from time to time shall be referred to as the "Current Base Salary").

     5.2. Annual Management Bonus. During the Employment Term, Executive shall
be eligible to receive cash bonuses each year from the Company determined by the
Chief Executive Officer of the Company and the Compensation Committee. The
Annual Management Bonus shall be payable based upon performance criteria to be
agreed upon by Executive and the Chief Executive Officer and approved by the
Compensation Committee. The Annual Management Bonus may range from 0% to 150% of
100% of Current Base Salary and shall be reviewed at least annually by the
Compensation Committee. Any such Annual Management Bonuses paid to Executive
shall be in addition to the Current Base Salary.

     5.3. Option Grants/Restricted Stock. Subject to the approval of the
Compensation Committee, the Company will grant Executive an option to purchase
25,000 shares of Company common stock (the "Common Stock"), effective as of the
Effective Date (the "Grant"). The Grant shall be exercisable at a price equal to
the closing price of the Common Stock on the Nasdaq National Market on the date
the Grant is approved by the Compensation Committee. The Grant shall be subject
to the terms and conditions set forth in the governing option agreement,
provided that the shares subject to the Grant shall vest at a rate of at least
6.25% on the last day of each three month period following the date of the
Grant. On the Effective Date, the Company shall issue Executive 12,500 shares of
restricted stock (the "Restricted Stock") that will vest as follows: 25% of the
shares shall vest after each of the first two years following the share
issuance, and the remaining 50% of the shares shall vest on the third year
following the share issuance, in each case subject to the terms and conditions
as set forth in the governing restricted stock agreement.

     5.4. Benefits. During the first year of the Employment Term, unless
otherwise agreed in writing between the parties hereto, Executive shall be
eligible to participate in the Helix Technology benefit plans currently in
effect. Subsequently, Executive will be eligible for participation in and shall
receive all medical benefits and benefits available under the then Brooks
Automation, Inc. 401(k) Plan, the Company's welfare benefit plans, practices,
policies and programs (including disability, salary continuance, group life,
accidental death and travel accident insurance plans and programs) normally
available to other senior executives.


                                        2



     5.5. Business Expenses. Executive shall be entitled to receive prompt
reimbursement during the Employment Term for all reasonable employment-related
expenses incurred or paid by him in the performance of his services, subject to
reasonable substantiation and documentation.

     5.6. Relocation. Executive shall be eligible to receive reimbursement of
relocation expenses of up to $100,000 (plus gross-up for associated state and
federal taxes) in connection with moving his personal residence to the
Chelmsford, Massachusetts area all in accordance with the Company's current
relocation policy.

     5.7. Corporate Opportunities. During the Employment Term, Executive agrees
that he will first present to the Chief Executive Officer, or the Board of
Directors, for acceptance or rejection on behalf of the Company, any opportunity
to create or invest in any company which is or will be involved in providing or
furnishing equipment, systems, components, products, software or services to
customers in industries that the Company serves (including, without limitation,
the semiconductor and flat panel display industries) which comes to his
attention and in which he, or any affiliate, might desire to participate. If the
Board of Directors, or the Chief Executive Officer, rejects the same or fails to
act thereon in a reasonable time, Executive shall be free to invest in,
participate or present such opportunity to any other person or entity, subject
to the other terms of this Agreement.

6. Termination Events.

     6.1. Death/Long-Term Disability. This Agreement shall terminate and any and
all rights and obligations of the Company and Executive hereunder shall cease
and be completely void except as specifically set forth in this Agreement, upon
the death or Long-Term Disability (as defined below) of Executive.

          6.1.1. Long-Term Disability. For purposes of this Agreement,
"LONG-TERM DISABILITY" shall mean any disability of Executive that prevents
Executive from devoting to the business of the Company his best efforts, skill
and attention, for a period of 180 consecutive days.

     6.2. Termination by the Company. At the election of the Company, this
Agreement shall terminate and any and all rights and obligations of the Company
and Executive hereunder shall cease and be completely void except as
specifically set forth in this Agreement, upon the earliest to occur of the
following: (i) the termination of Executive by the Company with Cause (as
defined below) under this Agreement and delivery of written notice in accordance
with Sections 6, 7 and 13 or (ii) the termination of Executive by the Company
without Cause upon delivery of written notice in accordance with Sections 6, 7
and 13.

          6.2.1. Cause. For purposes of this Agreement, "CAUSE" shall include,
without limitation, the occurrence of any of the following events during the
Employment Term:

          (i) Executive's conviction of, or the entry of a plea of guilty or
          nolo contendere to any misdemeanor involving moral turpitude or any
          felony;


                                        3



          (ii) fraud, embezzlement, or similar act of dishonesty, unauthorized
          disclosure, attempted disclosure, use or attempted use of confidential
          information; acts prejudicial to the interest or reputation of the
          Company; or falsification, concealment or distortion of management
          information;

          (iii) material misrepresentation in connection with the Executive's
          application for employment with the Company;

          (iv) conduct by the Executive constituting an act of moral turpitude,
          or of physical violence while on duty;

          (v) the Executive's willful failure or refusal to perform the duties
          on behalf of the Company which are consistent with the scope and
          nature of the Executive's responsibilities, or otherwise to comply
          with a lawful directive or policy of the Company, including without
          limitation, the Company's Standards of Conduct as then in effect as
          published on the Company's internal website;

          (vi) any act of gross negligence, gross corporate waste or disloyalty
          by the Executive to the Company or the commission of any intentional
          tort by the Executive against the Company; or

          (vii) material breach of this Agreement or the agreements referenced
          herein by the Executive.

     6.3. Termination by Executive. At the election of the Executive, this
Agreement shall terminate and any and all rights and obligations of the Company
or Executive hereunder shall cease and be completely void except as specifically
set forth in this Agreement, upon the earliest to occur of the following: (i)
the Executive's resignation for Good Reason (as defined below); provided that
Executive shall have first provided the Company with written notice in
accordance with Section 13 of the occurrence of such action he believes
constitutes Good Reason and the Company shall have failed to remedy such action
within thirty (30) days of its receipt of such notice; or (ii) the Executive's
resignation without Good Reason upon delivery of written notice in accordance
with Section 13.

          6.3.1. Good Reason. For purposes of this Agreement, "Good Reason"
shall mean, without Executive's express written consent, the occurrence of any
one or more of the following events:

          (i) a material breach of this Agreement by the Company;

          (ii) in the event that the Company fails to offer to the Executive the
          position of Chief Executive Officer of the Company following the
          conclusion of the term of office of the person serving as Chief
          Executive Officer of the Company at the time of the closing of the
          acquisition of Helix Technology Corporation by the Company, then,
          unless otherwise agreed in writing between the parties hereto, the
          Executive may, within 15 days of the appointment of another person as
          Chief Executive Officer of the Company, elect to terminate his
          employment by the


                                        4



          Company and receive in full satisfaction of all obligations of the
          Company to him, the severance pay and benefits defined in Section 7
          hereof.

          (iii) the failure to elect or re-elect the Executive as a senior
          officer of the company or a diminution of the Executive's
          responsibilities and authority described in Section 1 resulting in
          responsibilities and authority in any material respect inconsistent
          with the responsibilities and authority of a senior officer of the
          Company provided, however, that the parties may agree in writing to a
          waiver of this right by the Executive;

          (iv) a material reduction of the Current Base Salary or of any benefit
          enjoyed by the Executive unless all senior executives suffer a
          substantially similar reduction or failure provided, however, that the
          parties may agree in writing to a waiver of this right by the
          Executive;

          (v) the relocation of the Executive's office to a location more than
          60 miles from Mansfield, Massachusetts or such other location as may
          become the Executive's primary residence following a relocation
          conducted pursuant to Section 5.6 hereof; or

          (vi) the failure of the Company to obtain the assumption in writing of
          its obligation to perform this Agreement by any successor to all or
          substantially all of the assets of the Company within 15 days after a
          merger, consolidation, sale of assets or similar transaction.

     6.4. Termination Date. The term "Termination Date" shall mean if the
Executive's services are terminated (A) by his death, then the date of his
death, or (B) by his Long-Term Disability, then the 180th day of such
disability, or (C) for any other reason, then the date on which such termination
is to be effective pursuant to the notice of termination to be given by the
party terminating the employment relationship.

7. Effect of Termination.

     7.1. Termination for Death or Disability. It is expressly acknowledged and
agreed that if Executive's employment shall be terminated due to Executive's
death or Long-Term Disability, all of the obligations under Sections 1 through 5
of the Company and Executive shall cease except that the Company shall pay, or
provide the following benefits, to Executive or his heirs, executors or
administrators as applicable, without further recourse or liability to the
Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus for the
               completed portion of the current annual pay period where the
               total Annual Management Bonus is determined in accordance with
               Section 5.2; and


                                        5



          (iii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date.

     7.2. Termination by the Company.

          7.2.1. Termination by the Company for Cause. It is expressly
acknowledged and agreed that if Executive is terminated by the Company for
Cause, all of the obligations under Sections 1 through 5 of the Company and
Executive shall cease except that the Company shall pay immediately after the
Termination Date the following amounts to the Executive without further recourse
or liability to the Company:

          (i)  an amount equal to the sum of Executive's Current Base Salary
               earned through the Termination Date; and

          (ii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date.

          7.2.2. Termination By the Company Without Cause. It is expressly
acknowledged and agreed that if Executive's employment shall be terminated by
Company for any reason, except as set forth in Sections 6.1, and 6.2(i), then
all of the obligations under Sections 1 through 5 of the Company and Executive
shall cease except that the Company shall pay, or provide the following
benefits, to Executive without further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus for the
               completed portion of the current annual pay period where the
               total Annual Management Bonus is determined in accordance with
               Section 5.2;

          (iii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date;

          (iv) one (1) year's Current Base Salary as severance in pay
               continuation. Payment of this severance will be made in bi-weekly
               payments for one (1) year (the "Initial Salary Continuation
               Period");

          (v)  during the Initial Salary Continuation Period as it may be
               extended pursuant to subsection (vi) below (together, the "Total
               Salary Continuation Period"), Executive will continue to be
               eligible for medical, dental and vision plans in which Executive
               was a participant at the Termination Date. The Company will
               continue to pay the employer portion of the costs of these plans
               during the Total Salary Continuation Period;

          (vi) if the Executive has not found a full time comparable executive
               position with another employer during the Initial Salary
               Continuation Period, the


                                        6



               Company will extend the bi-weekly payment plan on a month to
               month basis until the earlier to occur of (A) one (1) additional
               year (26 additional bi-weekly payments) or (B) the date Executive
               secures full-time employment, in each case subject only to the
               Executive's obligation to inform the Company's Human Resources
               Department that Executive's search for replacement employment is
               ongoing and continuing in good faith. Said Notice from Executive
               shall be made on the 15th of the month commencing with the last
               month of the Initial Salary Continuation Period and monthly
               thereafter as applicable. Notice shall be made in accordance with
               Section 13 of this Agreement. Executive's rights under the Total
               Salary Continuation Period shall be offset by income earned from
               consulting fees with the Company, by short term and/or sporadic
               consulting fees earned from any other business entity or by
               income received for part time employment with another business
               entity; and

          (vii) any and all payment by the Company under this Agreement are and
               shall be specifically conditioned upon full compliance by the
               Executive with all elements of the Executive Invention,
               Nondisclosure, Noncompetition and Nonsolicitation Agreement
               (attached as Exhibit B) and the other applicable provisions of
               this Agreement.

     7.3. Termination by Executive

          7.3.1. Termination by Executive Without Good Reason. It is expressly
acknowledged and agreed that if Executive resigns without Good Reason, then all
of the obligations under Sections 1 through 5 of the Company and Executive shall
cease except that the Company shall pay, or provide the following benefits, to
Executive without further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date; and

          (ii) an amount equal to the value of Executive's accrued vacation pay.

          7.3.2. Termination by Executive For Good Reason. It is expressly
acknowledged and agreed that if Executive's employment shall be terminated
because the Executive resigns for Good Reason, then all of the obligations under
Sections 1 through 5 of the Company and Executive shall cease except that the
Company shall pay, or provide the following benefits, to Executive without
further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus for the
               completed portion of the current annual pay period where the
               total Annual Management Bonus is determined in accordance with
               Section 5.2;


                                        7



          (iii) an amount equal to the value of Executive's vacation pay accrued
               as of the Termination Date;

          (iv) one (1) year's Current Base Salary as severance in pay
               continuation. Payment will be made in bi-weekly payments during
               the Initial Salary Continuation Period;

          (v)  during the Total Salary Continuation Period, Executive will
               continue to be eligible for medical, dental and vision plans in
               which the Executive was a participant at the Termination Date.
               The Company will continue to pay the employer portion of the
               costs of these plans during the Total Salary Continuation Period;

          (vi) if the Executive has not found full time comparable executive
               position with another employer during the Initial Salary
               Continuation Period, the Company will extend the bi-weekly
               payment plan on a month to month basis until the earlier to occur
               of (A) one (1) additional year (26 additional bi-weekly payments)
               or (B) the date Executive secures full-time employment, subject
               only to the Executive's obligation to inform the Company's Human
               Resources Department that Executive's search for replacement
               employment is ongoing and continuing in good faith. Said Notice
               from Executive shall be made on the 15th of the month commencing
               with the last month of the Initial Salary Continuation Period and
               monthly thereafter as applicable. Notice shall be made in
               accordance with Section 13 of this Agreement. Executive's rights
               under the Total Salary Continuation Period shall not be offset by
               income earned from consulting fees with the Company, by short
               term and/or sporadic consulting fees earned from any other
               business entity or by income received for part time employment
               with another business entity; and

          (vii) any and all payment by the Company under this Agreement are and
               shall be specifically conditioned upon full compliance by the
               Executive with all elements of the Executive Invention,
               Nondisclosure, Noncompetition and Nonsolicitation Agreement
               (attached as Exhibit B) and the other applicable provisions of
               this Agreement.

     7.4. 280G. In the event that the Executive shall become entitled to payment
and/or benefits provided by this Agreement or any other amounts in the "nature
of compensation" (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any person whose actions result
in a change of ownership or effective control covered by Section 280G(b)(2) of
the Code or any person affiliated with the Company or such person) as a result
of such change in ownership or effective control (collectively the "Company
Payments"), and such Company Payments would be subject to the tax imposed by
Section 4999 of the Code (together with any similar tax that may hereafter be
imposed by any taxing authority, the "Excise Tax") the Executive shall be solely
responsible for the payment in full of any such


                                        8



Excise Tax and the Company shall withhold any federal or state taxes as required
by applicable law.

8. Noncompetition Agreement. The Executive shall execute the Executive
Invention, Non-Disclosure, Non-Competition and Nonsolicitation Agreement
attached as Exhibit B to this Agreement.

9. Assignment. Neither the Company nor Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the
prior written consent of the other party; provided, however, that the Company
may assign its rights and obligations under this Agreement without the consent
of Executive if the Company shall hereafter effect a reorganization, consolidate
with, or merge with or into any other entity or transfer all or substantially
all of its properties or assets to any other person or entity. This Agreement
shall be binding upon and inure to the benefit of the Company, Executive and
their respective successors, executors, administrators, heirs and permitted
assigns.

10. Indemnification. The Executive shall execute the Indemnification Agreement
attached as Exhibit A to this Agreement.

11. Waiver. The waiver by any party hereto of a breach of any provision of this
Agreement by any other party will not operate or be construed as a waiver of any
other or subsequent breach by such other party.

12. Severability. The parties agree that each provision contained in this
Agreement shall be treated as a separate and independent clause, and the
unenforceability of any one clause shall in no way impair the enforceability of
any of the other clauses herein. Moreover, if one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to scope, activity or subject, such provisions shall be construed by the
appropriate judicial body by limiting and reducing it or them, so as to be
enforceable to the extent compatible with the applicable law.

13. Notices. Any notice or other communication in connection with this Agreement
shall be deemed to be delivered if in writing, addressed as provided below and
actually delivered at said address:

     If to Executive, to him at the following address:

          James F. Gentilcore
          18 Seal Island Road
          Bristol, RI 02809

     If to the Company, to it at the following address:

          Brooks Automation, Inc.
          15 Elizabeth Drive


                                        9



          Chelmsford, MA 01824
          Attn: General Counsel

     or to such other person or address as to which either party may notify the
other in accordance with this Section 13.

14. Applicable Law. This Agreement shall be interpreted and construed in
accordance with the laws of the Commonwealth of Massachusetts.

15. Remedies. Executive acknowledges that a breach of any of the promises or
agreements contained herein could result in irreparable and continuing damage to
the Company for which there may be no adequate remedy at law, and the Company
shall be entitled to seek injunctive relief and/or a decree for specific
performance, and such other relief as may be proper (including monetary damages
if appropriate).

16. Integration. This Agreement, the Executive Invention, Non-Disclosure,
Non-Competition and Nonsolicitation Agreement attached as Exhibit B hereto, the
Indemnification Agreement attached as Exhibit A hereto, unless otherwise
provided herein, form the entire agreement between the parties hereto with
respect to the subject matter contained in this Agreement and shall supersede,
upon the commencement of employment with the Company as set forth in Paragraph
1, all prior agreements, oral discussions, promises and representations
regarding employment, compensation, severance or other payments contingent upon
termination of employment, whether in writing or otherwise.

17. Absence of Conflicting Obligations. Executive represents that he is not
bound by any agreement or any other existing or previous business relationship
which conflicts with or prevents the full performance of his duties and
responsibilities under this Agreement. Executive further represents that his
obligations under or in consideration with this Agreement do not breach and will
not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by him.

18. Taxes. Any payments provided for hereunder shall be paid net of any
applicable tax withholding required under federal, state or local law.
Notwithstanding anything herein to the contrary, the Company shall accelerate
the timing of any amounts payable to the Employee pursuant to Section 7
hereunder if and as necessary to prevent such amounts from being deemed
"deferred compensation" pursuant to the American Jobs Creation Act of 2004 (or
the rules and regulation promulgated thereunder).

19. Survival. Notwithstanding any provisions of this Agreement to the contrary,
the obligations of Executive and the Company pursuant to Sections 6 through 20
hereof shall each survive termination of this Agreement.

20. Effect of Headings. Any title of a section heading contained herein is for
convenience of reference only, and shall not affect the meaning of construction
or any of the provisions hereof.


                                       10



     IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, as of
the date first above written.


                                        /s/ James F. Gentilcore
                                        ----------------------------------------
                                        James F. Gentilcore


                                        BROOKS AUTOMATION, INC.


                                        By: /s/ Thomas S. Grilk
                                            ------------------------------------
                                            Thomas S. Grilk
                                            Senior Vice President, General
                                            Counsel and Secretary


                                       11

EX-10.11

                                                                   Exhibit 10.11

                              EMPLOYMENT AGREEMENT

     This Employment Agreement (the "Agreement") is made and entered into in
Chelmsford, Massachusetts by and between Brooks Automation, Inc., a Delaware
corporation (the "Company") and Joseph M. Bellini (the "Executive"), as of OCT
24, 2005.

                                    RECITALS

     1. The Company desires to continue to employ the Executive as Executive
Vice President, Brooks Software of the Company upon the terms and conditions set
forth herein.

     2. In consideration of the employment to be provided hereby as provided
herein and the Indemnification Agreement attached hereto as Exhibit A, the
Executive has entered into the Executive Invention, Nondisclosure,
Non-Competition and Non-Solicitation Agreement attached hereto as Exhibit B.

     For and in consideration of the mutual promises, terms, provisions and
conditions contained in this Agreement, the parties hereby agree as follows:

1. Duties. The Company shall continue to employ Executive on an at will basis as
Executive Vice President, Brooks Software of the Company. Executive shall report
to the Company's President and CEO. Executive shall have such reasonable and
appropriate duties as may from time to time be assigned by the President & CEO,
which duties shall include, without limitation, responsibility for Brooks
Software. Executive shall perform the duties of such office as are provided for
in the bylaws of the Company subject to the general supervision and direction of
the President and CEO and the Company's board of directors (the "Board of
Directors").

2. At Will Employment. Subject to Section 6 and the termination provisions
contained therein, the Executive's employment under this Agreement shall be on
an at will basis (the actual period of Executive's employment with the Company
is referred to herein as the "Employment Term").

3. Other Activities. Subject to the terms and conditions of the Executive
Invention, Non-Disclosure, Non-Competition and Nonsolicitation Agreement
attached hereto as Exhibit B, Executive may serve on corporate, civic,
charitable boards or committees, fulfill speaking engagements, teach at
educational institutions or manage personal investments; provided that such
activities do not individually or in the aggregate interfere or conflict with
the performance of his duties or obligations under this Agreement.

4. Performance. During the Employment Term, Executive shall use his business
judgment, skill and knowledge for the advancement of the Company's interests and
to discharge his duties and responsibilities hereunder. Executive shall perform
and discharge, faithfully, diligently and to the best of his ability, his duties
and responsibilities hereunder. Subject to Section 3 hereof, Executive shall
devote substantially all of his working time and efforts to the business and
affairs of the Company.



5. Compensation and Benefits.

     5.1. Base Salary. As consideration for Executive's services performed
during the Employment Term, the Company agrees to pay Executive a base salary of
$350,000 per year (the "Base Salary") payable in accordance with the normal
payroll practices of the Company for its executives and subject to federal and
state tax withholding. The Base Salary shall be reviewed annually by the
compensation committee of the Board of Directors (the "Compensation Committee")
and adjusted as determined by the Compensation Committee (the Base Salary as
adjusted from time to time shall be referred to as the "Current Base Salary").

     5.2. Annual Management Bonus. During the Employment Term, Executive shall
be eligible to receive cash bonuses each year from the Company determined by the
Chief Executive Officer of the Company (the "Chief Executive Officer") and the
Compensation Committee (the "Annual Management Bonus"). The Annual Management
Bonus shall be payable based upon performance criteria to be agreed upon by
Executive and the Chief Executive Officer and approved by the Compensation
Committee. The Annual Management Bonus may range from 0% to 150% of 100% of
Current Base Salary and shall be reviewed at least annually by the Compensation
Committee. Any such Annual Management Bonuses paid to Executive shall be in
addition to the Current Base Salary.

     5.3. Benefits. During the Employment Term, Executive shall be eligible for
participation in and shall receive all benefits available under the Brooks
Automation, Inc. 401(k) Plan, and the Company's welfare benefit plans,
practices, policies and programs (including disability, salary continuance,
group life, accidental death and travel accident insurance plans and programs)
normally available to other senior executives except as any of these may be
limited by law.

     5.4. Business Expenses. Executive shall be entitled to receive prompt
reimbursement during the Employment Term for all reasonable employment-related
expenses incurred or paid by him in the performance of his services, subject to
reasonable substantiation and documentation.

     5.5. Corporate Opportunities. During the Employment Term, Executive agrees
that he will first present to the Chief Executive Officer, or the Board of
Directors, for acceptance or rejection on behalf of the Company, any opportunity
to create or invest in any company which is or will be involved in providing or
furnishing equipment, systems, components, products, software or services to
customers in industries that the Company serves (including, without limitation,
the semiconductor and flat panel display industries) which comes to his
attention and in which he, or any affiliate, might desire to participate. If the
Board of Directors, or the Chief Executive Officer, rejects the same or fails to
act thereon in a reasonable time, Executive shall be free to invest in,
participate or present such opportunity to any other person or entity, subject
to the other terms of this Agreement.

6. Termination Events.

     6.1. Death/Long-Term Disability. This Agreement shall terminate and any and
all rights and obligations of the Company and Executive hereunder shall cease
and be completely


                                        2



void except as specifically set forth in this Agreement, upon the death or
Long-Term Disability (as defined below) of Executive.

          6.1.1. Lonz-Term Disability. For purposes of this Agreement,
"LONG-TERM DISABILITY" shall mean any disability of Executive that prevents
Executive from devoting to the business of the Company his best efforts, skill
and attention, for a period of 180 consecutive days.

     6.2. Termination by the Company. At the election of the Company, this
Agreement shall terminate and any and all rights and obligations of the Company
and Executive hereunder shall cease and be completely void except as
specifically set forth in this Agreement, upon the earliest to occur of the
following: (i) the termination of Executive by the Company with Cause (as
defined below) under this Agreement and delivery of written notice in accordance
with Sections 6, 7 and 13 or (ii) the termination of Executive by the Company
without Cause upon delivery of written notice in accordance with Sections 6, 7
and 13.

          6.2.1. Cause. For purposes of this Agreement, "CAUSE" shall include,
without limitation, the occurrence of any of the following events during the
Employment Term:

          (i) Executive's conviction of, or the entry of a plea of guilty or
          nolo contendere to any misdemeanor involving moral turpitude or any
          felony;

          (ii) fraud, embezzlement, or similar act of dishonesty; unauthorized
          disclosure, attempted disclosure, use or attempted use of confidential
          information of the company or of any other party if disclosed to the
          Company under the condition that it be kept confidential; acts
          prejudicial to the interest or reputation of the Company; or
          falsification, concealment or distortion of management information;

          (iii) material misrepresentation in connection with the Executive's
          application for employment with the Company;

          (iv) conduct by the Executive constituting an act of moral turpitude,
          or of physical violence while on duty;

          (v) the Executive's willful failure or refusal to perform the duties
          on behalf of the Company which are consistent with the scope and
          nature of the Executive's responsibilities, or otherwise to comply
          with a lawful directive or policy of the Company, including without
          limitation, the Company's Standards of Conduct as then in effect as
          published on the Company's internal website;

          (vi) any act of gross negligence, gross corporate waste or disloyalty
          by the Executive to the Company or the commission of any intentional
          tort by the Executive against the Company; or

          (vii) material breach of this Agreement or the agreements referenced
          herein by the Executive.


                                        3



     6.3. Termination by Executive. At the election of the Executive, this
Agreement shall terminate and any and all rights and obligations of the Company
or Executive hereunder shall cease and be completely void except as specifically
set forth in this Agreement, upon the earliest to occur of the following: (i)
the Executive's resignation for Good Reason (as defined below); provided that
Executive shall have first provided the Company with written notice in
accordance with Section 13 of the occurrence of such action he believes
constitutes Good Reason and the Company shall have failed to remedy such action
within thirty (30) days of its receipt of such notice; or (ii) the Executive's
resignation without Good Reason upon delivery of written notice in accordance
with Section 13.

          6.3.1. Good Reason. For purposes of this Agreement, "Good Reason"
shall mean, without Executive's express written consent, the occurrence of any
one or more of the following events:

          (i) a material breach of this Agreement by the Company;

          (ii) a diminution of the Executive's responsibilities and authority
          described in Section 1 resulting in responsibilities and authority in
          any material respect inconsistent with the responsibilities and
          authority of a senior officer of the Company, provided, however, that
          the parties may agree in writing to a waiver of this right by the
          Executive;

          (iii) a material reduction of the Current Base Salary or of any
          benefit enjoyed by the Executive unless all senior executives suffer a
          substantially similar reduction;

          (iv) the relocation of the Executive's office to a location more than
          60 miles from Chelmsford, Massachusetts; or

          (v) the failure of the Company to obtain the assumption in writing of
          its obligation to perform this Agreement by any successor to all or
          substantially all of the assets of the Company within 15 days after a
          merger, consolidation, sale of assets or similar transaction.

     6.4. Termination Date. The term "Termination Date" shall mean if the
Executive's services are terminated (A) by his death, then the date of his
death, or (B) by his Long-Term Disability, then the 180th day of such
disability, or (C) for any other reason, then the date on which such termination
is to be effective pursuant to the notice of termination to be given by the
party terminating the employment relationship.

7. Effect of Termination.

     7.1. Termination for Death or Disability. It is expressly acknowledged and
agreed that if Executive's employment shall be terminated due to Executive's
death or Long-Term Disability, all of the obligations under Sections 1 through 5
of the Company and Executive shall


                                        4



cease except that the Company shall pay, or provide the following benefits, to
Executive or his heirs, executors or administrators as applicable, without
further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus, if any,
               for the completed portion of the current annual pay period where
               the total Annual Management Bonus is determined in accordance
               with Section 5.2; and

          (iii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date.

     7.2. Termination by the Company.

          7.2.1. Termination by the Company for Cause. It is expressly
acknowledged and agreed that if Executive is terminated by the Company for
Cause, all of the obligations under Sections 1 through 5 of the Company and
Executive shall cease except that the Company shall pay immediately after the
Termination Date the following amounts to the Executive without further recourse
or liability to the Company:

          (i)  an amount equal to the sum of Executive's Current Base Salary
               earned through the Termination Date; and

          (ii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date.

          7.2.2. Termination By the Company Without Cause. It is expressly
acknowledged and agreed that if Executive's employment shall be terminated by
Company for any reason, except as set forth in Sections 6.1, and 6.2.1, then all
of the obligations under Sections 1 through 5 of the Company and Executive shall
cease except that the Company shall pay, or provide the following benefits, to
Executive without further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus, if any,
               for the completed portion of the current annual pay period where
               the total Annual Management Bonus is determined in accordance
               with Section 5.2;

          (iii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date;


                                        5



          (iv) one (1) year's Current Base Salary as severance in pay
               continuation. Payment of this severance will be made in bi-weekly
               payments for one (1) year (the "Initial Salary Continuation
               Period");

          (v)  during the Initial Salary Continuation Period as it may be
               extended pursuant to subsection (vi) below (together, the "Total
               Salary Continuation Period"), Executive will continue to be
               eligible for medical, dental and vision plans in which Executive
               was a participant at the Termination Date. The Company will
               continue to pay the employer portion of the costs of these plans
               during the Total Salary Continuation Period;

          (vi) if the Executive has not found a full time comparable executive
               position with another employer during the Initial Salary
               Continuation Period, the Company will extend the bi-weekly
               payment plan on a month to month basis until the earlier to occur
               of (A) one (1) additional year (26 additional bi-weekly payments)
               or (B) the date Executive secures full-time employment, in each
               case subject only to the Executive's obligation to inform the
               Company's Human Resources Department that Executive's search for
               replacement employment is ongoing and continuing in good faith.
               Said Notice from Executive shall be made on the 15th of the month
               commencing with the last month of the Initial Salary Continuation
               Period and monthly thereafter as applicable. Notice shall be made
               in accordance with Section 13 of this Agreement. Executive's
               rights under the Total Salary Continuation Period shall be offset
               by income earned from consulting fees with the Company, by short
               term and/or sporadic consulting fees earned from any other
               business entity or by income received for part time employment
               with another business entity; and

          (vii) any and all payment by the Company under this Agreement are and
               shall be specifically conditioned upon full compliance by the
               Executive with all elements of the Executive Invention,
               Nondisclosure, Noncompetition and Nonsolicitation Agreement
               (attached as Exhibit B) and the other applicable provisions of
               this Agreement.

     7.3. Termination by Executive

          7.3.1. Termination by Executive Without Good Reason. It is expressly
acknowledged and agreed that if Executive resigns without Good Reason, then all
of the obligations under Sections 1 through 5 of the Company and Executive shall
cease except that the Company shall pay, or provide the following benefits, to
Executive without further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date; and

          (ii) an amount equal to the value of Executive's accrued vacation pay.


                                        6



          7.3.2. Termination by Executive For Good Reason. It is expressly
acknowledged and agreed that if Executive's employment shall be terminated
because the Executive resigns for Good Reason, then all of the obligations under
Sections 1 through 5 of the Company and Executive shall cease except that the
Company shall pay, or provide the following benefits, to Executive without
further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus, if any,
               for the completed portion of the current annual pay period where
               the total Annual Management Bonus is determined in accordance
               with Section 5.2;

          (iii) an amount equal to the value of Executive's vacation pay accrued
               as of the Termination Date;

          (iv) one (1) year's Current Base Salary as severance in pay
               continuation. Payment will be made in bi-weekly payments during
               the Initial Salary Continuation Period;

          (v)  during the Total Salary Continuation Period, Executive will
               continue to be eligible for medical, dental and vision plans in
               which the Executive was a participant at the Termination Date.
               The Company will continue to pay the employer portion of the
               costs of these plans during the Total Salary Continuation Period;

          (vi) if the Executive has not found full time comparable executive
               position with another employer during the Initial Salary
               Continuation Period, the Company will extend the bi-weekly
               payment plan on a month to month basis until the earlier to occur
               of (A) one (1) additional year (26 additional bi-weekly payments)
               or (B) the date Executive secures full-time employment, subject
               only to the Executive's obligation to inform the Company's Human
               Resources Department that Executive's search for replacement
               employment is ongoing and continuing in good faith. Said Notice
               from Executive shall be made on the 15th of the month commencing
               with the last month of the Initial Salary Continuation Period and
               monthly thereafter as applicable. Notice shall be made in
               accordance with Section 13 of this Agreement. Executive's rights
               under the Total Salary Continuation Period shall not be offset by
               income earned from consulting fees with the Company, by short
               term and/or sporadic consulting fees earned from any other
               business entity or by income received for part time employment
               with another business entity; and

          (vii) any and all payment by the Company under this Agreement are and
               shall be specifically conditioned upon full compliance by the
               Executive with all elements of the Executive Invention,
               Nondisclosure, Noncompetition and


                                        7



               Nonsolicitation Agreement (attached as Exhibit B) and the other
               applicable provisions of this Agreement.

     7.4. 280G. In the event that the Executive shall become entitled to payment
and/or benefits provided by this Agreement or any other amounts in the "nature
of compensation" (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any person whose actions result
in a change of ownership or effective control covered by Section 280G(b)(2) of
the Code or any person affiliated with the Company or such person) as a result
of such change in ownership or effective control (collectively the "Company
Payments"), and such Company Payments would be subject to the tax imposed by
Section 4999 of the Code (together with any similar tax that may hereafter be
imposed by any taxing authority, the "Excise Tax") the Executive shall be solely
responsible for the payment in full of any such Excise Tax and the Company shall
withhold any federal or state taxes as required by applicable law.

8. Noncompetition Agreement. The Executive shall execute the Executive
Invention, Non-Disclosure, Non-Competition and Nonsolicitation Agreement
attached as Exhibit B to this Agreement.

9. Assignment. Neither the Company nor Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the
prior written consent of the other party; provided, however, that the Company
may assign its rights and obligations under this Agreement without the consent
of Executive if the Company shall hereafter effect a reorganization, consolidate
with, or merge with or into any other entity or transfer all or substantially
all of its properties or assets to any other person or entity. This Agreement
shall be binding upon and inure to the benefit of the Company, Executive and
their respective successors, executors, administrators, heirs and permitted
assigns.

10. Indemnification. The Executive shall execute the Indemnification Agreement
attached as Exhibit A to this Agreement.

11. Waiver. The waiver by any party hereto of a breach of any provision of this
Agreement by any other party will not operate or be construed as a waiver of any
other or subsequent breach by such other party.

12. Severability. The parties agree that each provision contained in this
Agreement shall be treated as a separate and independent clause, and the
unenforceability of any one clause shall in no way impair the enforceability of
any of the other clauses herein. Moreover, if one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to scope, activity or subject, such provisions shall be construed by the
appropriate judicial body by limiting and reducing it or them, so as to be
enforceable to the extent compatible with the applicable law.

13. Notices. Any notice or other communication in connection with this Agreement
shall be deemed to be delivered if in writing, addressed as provided below and
actually delivered at said address:


                                        8



     If to Executive, to him at the following address:

          Joseph M. Bellini
          18 Cerulean Way
          Lincoln, MA 01773

     If to the Company, to it at the following address:

          Brooks Automation, Inc.
          15 Elizabeth Drive
          Chelmsford, MA 01824
          Attn: General Counsel

     or to such other person or address as to which either party may notify the
other in accordance with this Section 13.

14. Applicable Law. This Agreement shall be interpreted and construed in
accordance with the laws of the Commonwealth of Massachusetts.

15. Remedies. Executive acknowledges that a breach of any of the promises or
agreements contained herein could result in irreparable and continuing damage to
the Company for which there may be no adequate remedy at law, and the Company
shall be entitled to seek injunctive relief and/or a decree for specific
performance, and such other relief as maybe proper (including monetary damages
if appropriate).

16. Integration. This Agreement, the Executive Invention, Non-Disclosure,
Non-Competition and Nonsolicitation Agreement attached as Exhibit B hereto, the
Indemnification Agreement attached as Exhibit A hereto, unless otherwise
provided herein, form the entire agreement between the parties hereto with
respect to the subject matter contained in this Agreement and shall supersede
all prior agreements, oral discussions, promises and representations regarding
employment, compensation, severance or other payments contingent upon
termination of employment, whether in writing or otherwise.

17. Absence of Conflicting Obligations. Executive represents that he is not
bound by any agreement or any other existing or previous business relationship
which conflicts with or prevents the full performance of his duties and
responsibilities under this Agreement. Executive further represents that his
obligations under or in consideration with this Agreement do not breach and will
not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by him.

18. Taxes. Any payments provided for hereunder shall be paid net of any
applicable tax withholding required under federal, state or local law.
Notwithstanding anything herein to the contrary, the Company shall accelerate
the timing of any amounts payable to the Employee pursuant to Section 7
hereunder if and as necessary to prevent such amounts from being deemed
"deferred compensation" pursuant to the American Jobs Creation Act of 2004 (or
the rules and regulation promulgated thereunder).


                                        9



19. Survival. Notwithstanding any provisions of this Agreement to the contrary,
the obligations of Executive and the Company pursuant to Sections 6 through 21
hereof shall each survive termination of this Agreement.

20. Effect of Headings. Any title of a section heading contained herein is for
convenience of reference only, and shall not affect the meaning of construction
or any of the provisions hereof.

     IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, as of
the date first above written.


                                        /s/ Joseph M. Bellini
                                        ----------------------------------------
                                        Joseph M. Bellini


                                        BROOKS AUTOMATION, INC.


                                        By: /s/ Thomas S. Grilk
                                            ------------------------------------
                                            Thomas S. Grilk
                                            Senior Vice President, General
                                            Counsel and Secretary


                                       10

EX-10.12

                                                                   Exhibit 10.12

                              EMPLOYMENT AGREEMENT

     This Employment Agreement (the "Agreement") is made and entered into in
Chelmsford, Massachusetts by and between Brooks Automation, Inc., a Delaware
corporation (the "Company") and Robert E. Anastasi (the "Executive"), as of the
date of the closing of the acquisition of Helix Technology Corporation by the
Company or a subsidiary of the Company (the "Effective Date").

                                    RECITALS

     1. The Company desires to employ Executive as Executive Vice President,
Global Operations of the Company upon the terms and conditions set forth herein.

     2. In consideration of the employment to be provided hereby and the amounts
to be paid as provided herein and the Indemnification Agreement attached hereto
as Exhibit A, the Executive has entered into the Executive Invention,
Nondisclosure, Non-Competition and Non-Solicitation Agreement attached hereto as
Exhibit B.

     For and in consideration of the mutual promises, terms, provisions and
conditions contained in this Agreement, the parties hereby agree as follows:

1. Duties. Beginning the "Effective Date", so long as the Executive remains an
employee in good standing of Helix Technology Corporation until the date of the
closing identified above, the Company shall employ Executive on an at will basis
as Executive Vice President, Global Operations of the Company. Executive shall
report to the Company's President and COO, Semiconductor Products Group.
Executive shall have such reasonable and appropriate duties as may from time to
time be assigned by the President and COO, Semiconductor Products Group, which
duties shall include, without limitation, responsibility for the Semiconductor
Products Group. Executive shall perform the duties of such office as are
provided for in the bylaws of the Company subject to the general supervision and
direction of the President and COO, Semiconductor Products Group and the
Company's board of directors (the "Board of Directors").

2. At Will Employment. Subject to Section 6 and the termination provisions
contained therein, the Executive's employment under this Agreement shall be on
an at will basis (the actual period of Executive's employment with the Company
is referred to herein as the "Employment Term").

3. Other Activities. Subject to the terms and conditions of the Executive
Invention, Non-Disclosure, Non-Competition and Nonsolicitation Agreement
attached hereto as Exhibit B, Executive may serve on corporate, civic,
charitable boards or committees, fulfill speaking engagements, teach at
educational institutions or manage personal investments; provided that such
activities do not individually or in the aggregate interfere or conflict with
the performance of his duties or obligations under this Agreement.

4. Performance. During the Employment Term, Executive shall use his business
judgment, skill and knowledge for the advancement of the Company's interests and
to discharge his duties and responsibilities hereunder. Executive shall perform
and discharge, faithfully, diligently and



to the best of his ability, his duties and responsibilities hereunder. Subject
to Section 3 hereof, Executive shall devote substantially all of his working
time and efforts to the business and affairs of the Company.

5. Compensation and Benefits.

     5.1. Base Salary. As consideration for Executive's services performed
during the Employment Term, the Company agrees to pay Executive a base salary of
$290,000 per year (the "Base Salary") payable in accordance with the normal
payroll practices of the Company for its executives and subject to federal and
state tax withholding. The Base Salary shall be reviewed annually by the
compensation committee of the Board of Directors (the "Compensation Committee")
and adjusted as determined by the Compensation Committee (the Base Salary as
adjusted from time to time shall be referred to as the "Current Base Salary").

     5.2. Annual Management Bonus. During the Employment Term, Executive shall
be eligible to receive cash bonuses each year from the Company determined by the
Chief Executive Officer of the Company (the "Chief Executive Officer") and the
Compensation Committee (the "Annual Management Bonus"). The Annual Management
Bonus shall be payable based upon performance criteria to be agreed upon by
Executive and the Chief Executive Officer and approved by the Compensation
Committee. The Annual Management Bonus may range from 0% to 150% of 70% of
Current Base Salary and shall be reviewed at least annually by the Compensation
Committee. Any such Annual Management Bonuses paid to Executive shall be in
addition to the Current Base Salary.

     5.3. Option Grants/Restricted Stock. Subject to the approval of the
Compensation Committee, the Company will grant Executive an option to purchase
15,000 shares of Company common stock (the "Common Stock"), effective as of the
Effective Date (the "Grant"). The Grant shall be exercisable at a price equal to
the closing price of the Common Stock on the Nasdaq National Market on the date
the Grant is approved by the Compensation Committee. The Grant shall be subject
to the terms and conditions set forth in the governing option agreement,
provided that the shares subject to the Grant shall vest at a rate of at least
6.25% on the last day of each three month period following the date of the
Grant. On the Effective Date, the Company shall issue Executive 7,500 shares of
restricted stock (the "Restricted Stock") that will vest as follows: 25% of the
shares shall vest after each of the first two years following the share
issuance, and the remaining 50% of the shares shall vest on the third year
following the share issuance, in each case subject to the terms and conditions
as set forth in the governing restricted stock agreement.

     5.4. Benefits. During the first year of the Employment Term, unless
otherwise agreed in writing between the parties hereto, Executive shall be
eligible to participate in the Helix Technology benefit plans currently in
effect. Subsequently, Executive will be eligible for participation in and shall
receive all medical benefits and benefits available under the then Brooks
Automation, Inc. 401(k) Plan, the Company's welfare benefit plans, practices,
policies and programs (including disability, salary continuance, group life,
accidental death and travel accident insurance plans and programs) normally
available to other senior executives.


                                        2



     5.5. Business Expenses. Executive shall be entitled to receive prompt
reimbursement during the Employment Term for all reasonable employment-related
expenses incurred or paid by him in the performance of his services, subject to
reasonable substantiation and documentation.

     5.6. Relocation. Executive shall be eligible to receive reimbursement of
relocation expenses of up to $100,000 (plus gross-up for associated state and
federal taxes) in connection with moving his personal residence to the
Chelmsford, Massachusetts area, all in accordance with the Company's current
relocation policy.

     5.7. Corporate Opportunities. During the Employment Term, Executive agrees
that he will first present to the Chief Executive Officer, or the Board of
Directors, for acceptance or rejection on behalf of the Company, any opportunity
to create or invest in any company which is or will be involved in providing or
furnishing equipment, systems, components, products, software or services to
customers in industries that the Company serves (including, without limitation,
the semiconductor and flat panel display industries) which comes to his
attention and in which he, or any affiliate, might desire to participate. If the
Board of Directors, or the Chief Executive Officer, rejects the same or fails to
act thereon in a reasonable time, Executive shall be free to invest in,
participate or present such opportunity to any other person or entity, subject
to the other terms of this Agreement.

6. Termination Events.

     6.1. Death/Long-Term Disability. This Agreement shall terminate and any and
all rights and obligations of the Company and Executive hereunder shall cease
and be completely void except as specifically set forth in this Agreement, upon
the death or Long-Term Disability (as defined below) of Executive.

          6.1.1. Lons-Term Disability. For purposes of this Agreement,
"LONG-TERM DISABILITY" shall mean any disability of Executive that prevents
Executive from devoting to the business of the Company his best efforts, skill
and attention, for a period of 180 consecutive days.

     6.2. Termination by the Company. At the election of the Company, this
Agreement shall terminate and any and all rights and obligations of the Company
and Executive hereunder shall cease and be completely void except as
specifically set forth in this Agreement, upon the earliest to occur of the
following: (i) the termination of Executive by the Company with Cause (as
defined below) under this Agreement and delivery of written notice in accordance
with Sections 6, 7 and 13 or (ii) the termination of Executive by the Company
without Cause upon delivery of written notice in accordance with Sections 6, 7
and 13.

          6.2.1. Cause. For purposes of this Agreement, "CAUSE" shall include,
without limitation, the occurrence of any of the following events during the
Employment Term:

          (i) Executive's conviction of, or the entry of a plea of guilty or
          nolo contendere to any misdemeanor involving moral turpitude or any
          felony;


                                        3



          (ii) fraud, embezzlement, or similar act of dishonesty, unauthorized
          disclosure, attempted disclosure, use or attempted use of confidential
          information; acts prejudicial to the interest or reputation of the
          Company; or falsification, concealment or distortion of management
          information;

          (iii) material misrepresentation in connection with the Executive's
          application for employment with the Company;

          (iv) conduct by the Executive constituting an act of moral turpitude,
          or of physical violence while on duty;

          (v) the Executive's willful failure or refusal to perform the duties
          on behalf of the Company which are consistent with the scope and
          nature of the Executive's responsibilities, or otherwise to comply
          with a lawful directive or policy of the Company, including without
          limitation, the Company's Standards of Conduct as then in effect as
          published on the Company's internal website;

          (vi) any act of gross negligence, gross corporate waste or disloyalty
          by the Executive to the Company or the commission of any intentional
          tort by the Executive against the Company; or

          (vii) material breach of this Agreement or the agreements referenced
          herein by the Executive.

     6.3. Termination by Executive. At the election of the Executive, this
Agreement shall terminate and any and all rights and obligations of the Company
or Executive hereunder shall cease and be completely void except as specifically
set forth in this Agreement, upon the earliest to occur of the following: (i)
the Executive's resignation for Good Reason (as defined below); provided that
Executive shall have first provided the Company with written notice in
accordance with Section 13 of the occurrence of such action he believes
constitutes Good Reason and the Company shall have failed to remedy such action
within thirty (30) days of its receipt of such notice; or (ii) the Executive's
resignation without Good Reason upon delivery of written notice in accordance
with Section 13.

          6.3.1. Good Reason. For purposes of this Agreement, "Good Reason"
shall mean, without Executive's express written consent, the occurrence of any
one or more of the following events:

          (i) a material breach of this Agreement by the Company;

          (ii) the failure to elect or re-elect the Executive as a senior
          officer of the company, or a diminution of the Executive's
          responsibilities and authority described in Section 1 resulting in
          responsibilities and authority in any material respect inconsistent
          with the responsibilities and authority of a senior officer of the
          Company provided, however, that the parties may agree in writing to a
          waiver of this right by the Executive;


                                        4



          (iii) a material reduction of the Current Base Salary or of any
          benefit enjoyed by the Executive unless all senior executives suffer a
          substantially similar reduction or failure;

          (iv) the relocation of the Executive's office to a location more than
          60 miles from Mansfield, Massachusetts or such other location as may
          become the Executive's primary residence following a relocation
          conducted pursuant to Section 5.6 hereof; or

          (v) the failure of the Company to obtain the assumption in writing of
          its obligation to perform this Agreement by any successor to all or
          substantially all of the assets of the Company within 15 days after a
          merger, consolidation, sale of assets or similar transaction.

     6.4. Termination Date. The term "Termination Date" shall mean if the
Executive's services are terminated (A) by his death, then the date of his
death, or (B) by his Long-Term Disability, then the 180th day of such
disability, or (C) for any other reason, then the date on which such termination
is to be effective pursuant to the notice of termination to be given by the
party terminating the employment relationship.

7. Effect of Termination.

     7.1. Termination for Death or Disability. It is expressly acknowledged and
agreed that if Executive's employment shall be terminated due to Executive's
death or Long-Term Disability, all of the obligations under Sections 1 through 5
of the Company and Executive shall cease except that the Company shall pay, or
provide the following benefits, to Executive or his heirs, executors or
administrators as applicable, without further recourse or liability to the
Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus for the
               completed portion of the current annual pay period where the
               total Annual Management Bonus is determined in accordance with
               Section 5.2; and

          (iii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date.


                                        5



     7.2. Termination by the Company.

          7.2.1. Termination by the Company for Cause. It is expressly
acknowledged and agreed that if Executive is terminated by the Company for
Cause, all of the obligations under Sections 1 through 5 of the Company and
Executive shall cease except that the Company shall pay immediately after the
Termination Date the following amounts to the Executive without further recourse
or liability to the Company:

          (i)  an amount equal to the sum of Executive's Current Base Salary
               earned through the Termination Date; and

          (ii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date.

          7.2.2. Termination By the Company Without Cause. It is expressly
acknowledged and agreed that if Executive's employment shall be terminated by
Company for any reason, except as set forth in Sections 6.1, and 6.2(i), then
all of the obligations under Sections 1 through 5 of the Company and Executive
shall cease except that the Company shall pay, or provide the following
benefits, to Executive without further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus for the
               completed portion of the current annual pay period where the
               total Annual Management Bonus is determined in accordance with
               Section 5.2;

          (iii) an amount equal to the value of Executive's vacation accrued as
               of the Termination Date;

          (iv) one (1) year's Current Base Salary as severance in pay
               continuation. Payment of this severance will be made in bi-weekly
               payments for one (1) year (the "Initial Salary Continuation
               Period");

          (v)  during the Initial Salary Continuation Period as it may be
               extended pursuant to subsection (vi) below (together, the "Total
               Salary Continuation Period"), Executive will continue to be
               eligible for medical, dental and vision plans in which Executive
               was a participant at the Termination Date. The Company will
               continue to pay the employer portion of the costs of these plans
               during the Total Salary Continuation Period;

          (vi) if the Executive has not found a full time comparable executive
               position with another employer during the Initial Salary
               Continuation Period, the Company will extend the bi-weekly
               payment plan on a month to month basis until the earlier to occur
               of (A) one (1) additional year (26 additional bi-weekly payments)
               or (B) the date Executive secures full-time


                                        6



               employment, in each case subject only to the Executive's
               obligation to inform the Company's Human Resources Department
               that Executive's search for replacement employment is ongoing and
               continuing in good faith. Said Notice from Executive shall be
               made on the 15th of the month commencing with the last month of
               the Initial Salary Continuation Period and monthly thereafter as
               applicable. Notice shall be made in accordance with Section 13 of
               this Agreement. Executive's rights under the Total Salary
               Continuation Period shall be offset by income earned from
               consulting fees with the Company, by short term and/or sporadic
               consulting fees earned from any other business entity or by
               income received for part time employment with another business
               entity; and

          (vii) any and all payment by the Company under this Agreement are and
               shall be specifically conditioned upon full compliance by the
               Executive with all elements of the Executive Invention,
               Nondisclosure, Noncompetition and Nonsolicitation Agreement
               (attached as Exhibit B) and the other applicable provisions of
               this Agreement.

     7.3. Termination by Executive

          7.3.1. Termination by Executive Without Good Reason. It is expressly
acknowledged and agreed that if Executive resigns without Good Reason, then all
of the obligations under Sections 1 through 5 of the Company and Executive shall
cease except that the Company shall pay, or provide the following benefits, to
Executive without further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date; and

          (ii) an amount equal to the value of Executive's accrued vacation pay.

          7.3.2. Termination by Executive For Good Reason. It is expressly
acknowledged and agreed that if Executive's employment shall be terminated
because the Executive resigns for Good Reason, then all of the obligations under
Sections 1 through 5 of the Company and Executive shall cease except that the
Company shall pay, or provide the following benefits, to Executive without
further recourse or liability to the Company:

          (i)  an amount equal to the unpaid portion of Executive's Current Base
               Salary earned through the Termination Date;

          (ii) an amount equal to the prorata Annual Management Bonus for the
               completed portion of the current annual pay period where the
               total Annual Management Bonus is determined in accordance with
               Section 5.2;

          (iii) an amount equal to the value of Executive's vacation pay accrued
               as of the Termination Date;


                                        7



          (iv) one (1) year's Current Base Salary as severance in pay
               continuation. Payment will be made in bi-weekly payments during
               the Initial Salary Continuation Period;

          (v)  during the Total Salary Continuation Period, Executive will
               continue to be eligible for medical, dental and vision plans in
               which the Executive was a participant at the Termination Date.
               The Company will continue to pay the employer portion of the
               costs of these plans during the Total Salary Continuation Period;

          (vi) if the Executive has not found full time comparable executive
               position with another employer during the Initial Salary
               Continuation Period, the Company will extend the bi-weekly
               payment plan on a month to month basis until the earlier to occur
               of (A) one (1) additional year (26 additional bi-weekly payments)
               or (B) the date Executive secures full-time employment, subject
               only to the Executive's obligation to inform the Company's Human
               Resources Department that Executive's search for replacement
               employment is ongoing and continuing in good faith. Said Notice
               from Executive shall be made on the 15th of the month commencing
               with the last month of the Initial Salary Continuation Period and
               monthly thereafter as applicable. Notice shall be made in
               accordance with Section 13 of this Agreement. Executive's rights
               under the Total Salary Continuation Period shall not be offset by
               income earned from consulting fees with the Company, by short
               term and/or sporadic consulting fees earned from any other
               business entity or by income received for part time employment
               with another business entity; and

          (vii) any and all payment by the Company under this Agreement are and
               shall be specifically conditioned upon full compliance by the
               Executive with all elements of the Executive Invention,
               Nondisclosure, Noncompetition and Nonsolicitation Agreement
               (attached as Exhibit B) and the other applicable provisions of
               this Agreement.

     7.4. 280G. In the event that the Executive shall become entitled to payment
and/or benefits provided by this Agreement or any other amounts in the "nature
of compensation" (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any person whose actions result
in a change of ownership or effective control covered by Section 280G(b)(2) of
the Code or any person affiliated with the Company or such person) as a result
of such change in ownership or effective control (collectively the "Company
Payments"), and such Company Payments would be subject to the tax imposed by
Section 4999 of the Code (together with any similar tax that may hereafter be
imposed by any taxing authority, the "Excise Tax") the Executive shall be solely
responsible for the payment in full of any such Excise Tax and the Company shall
withhold any federal or state taxes as required by applicable law.


                                        8



8. Noncompetition Agreement. The Executive shall execute the Executive
Invention, Non-Disclosure, Non-Competition and Nonsolicitation Agreement
attached as Exhibit B to this Agreement.

9. Assignment. Neither the Company nor Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the
prior written consent of the other party; provided, however, that the Company
may assign its rights and obligations under this Agreement without the consent
of Executive if the Company shall hereafter effect a reorganization, consolidate
with, or merge with or into any other entity or transfer all or substantially
all of its properties or assets to any other person or entity. This Agreement
shall be binding upon and inure to the benefit of the Company, Executive and
their respective successors, executors, administrators, heirs and permitted
assigns.

10. Indemnification. The Executive shall execute the Indemnification Agreement
attached as Exhibit A to this Agreement.

11. Waiver. The waiver by any party hereto of a breach of any provision of this
Agreement by any other party will not operate or be construed as a waiver of any
other or subsequent breach by such other party.

12. Severability. The parties agree that each provision contained in this
Agreement shall be treated as a separate and independent clause, and the
unenforceability of any one clause shall in no way impair the enforceability of
any of the other clauses herein. Moreover, if one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to scope, activity or subject, such provisions shall be construed by the
appropriate judicial body by limiting and reducing it or them, so as to be
enforceable to the extent compatible with the applicable law.

13. Notices. Any notice or other communication in connection with this Agreement
shall be deemed to be delivered if in writing, addressed as provided below and
actually delivered at said address:

     If to Executive, to him at the following address:

          Robert E. Anastasi
          125 Martingale Drive
          Warwick, RI 02886

     If to the Company, to it at the following address:

          Brooks Automation, Inc.
          15 Elizabeth Drive
          Chelmsford, MA 01824
          Attn: General Counsel


                                        9



     or to such other person or address as to which either party may notify the
other in accordance with this Section 13.

14. Applicable Law. This Agreement shall be interpreted and construed in
accordance with the laws of the Commonwealth of Massachusetts.

15. Remedies. Executive acknowledges that a breach of any of the promises or
agreements contained herein could result in irreparable and continuing damage to
the Company for which there may be no adequate remedy at law, and the Company
shall be entitled to seek injunctive relief and/or a decree for specific
performance, and such other relief as maybe proper (including monetary damages
if appropriate).

16. Integration. This Agreement, the Executive Invention, Non-Disclosure,
Non-Competition and Nonsolicitation Agreement attached as Exhibit B hereto, the
Indemnification Agreement attached as Exhibit A hereto, unless otherwise
provided herein, form the entire agreement between the parties hereto with
respect to the subject matter contained in this Agreement and shall supersede,
upon the commencement of employment with the Company as set forth in Paragraph
1, all prior agreements, oral discussions, promises and representations
regarding employment, compensation, severance or other payments contingent upon
termination of employment, whether in writing or otherwise.

17. Absence of Conflicting Obligations. Executive represents that he is not
bound by any agreement or any other existing or previous business relationship
which conflicts with or prevents the full performance of his duties and
responsibilities under this Agreement. Executive further represents that his
obligations under or in consideration with this Agreement do not breach and will
not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by him.

18. Taxes. Any payments provided for hereunder shall be paid net of any
applicable tax withholding required under federal, state or local law.
Notwithstanding anything herein to the contrary, the Company shall accelerate
the timing of any amounts payable to the Employee pursuant to Section 7
hereunder if and as necessary to prevent such amounts from being deemed
"deferred compensation" pursuant to the American Jobs Creation Act of 2004 (or
the rules and regulation promulgated thereunder).

19. Survival. Notwithstanding any provisions of this Agreement to the contrary,
the obligations of Executive and the Company pursuant to Sections 6 through 20
hereof shall each survive termination of this Agreement.

20. Effect of Headings. Any title of a section heading contained herein is for
convenience of reference only, and shall not affect the meaning of construction
or any of the provisions hereof.


                                       10




     IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, as of
the date first above written.


                                        /s/ Robert E. Anastasi
                                        ----------------------------------------
                                        Robert E. Anastasi


                                        BROOKS AUTOMATION, INC


                                        By: /s/ Thomas S. Grilk
                                            ------------------------------------
                                            Thomas s. Grilk
                                            Senior Vice President, General
                                            Counsel and Secretary


                                       11

EX-10.15

                                                                   EXHIBIT 10.15

                             BROOKS AUTOMATION, INC.

                        1995 EMPLOYEE STOCK PURCHASE PLAN
                       (As amended through July 31, 2006)

1. PURPOSE

     The Brooks Automation, Inc. 1995 Employee Stock Purchase Plan (the "Plan")
is intended to provide a method whereby employees of Brooks Automation, Inc.
(the "Company") will have an opportunity to acquire a proprietary interest in
the Company through the purchase of shares of the Company's $.01 par value
common stock (the "Common Stock"). It is the intention of the Company to have
the Plan qualify as an "employee stock purchase plan" under Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"). The provisions of the
Plan shall, accordingly, be construed so as to extend and limit participation in
a manner consistent with the requirements of that Section of the Code.

2. ELIGIBLE EMPLOYEES

     (a) All employees of the Company or any of its participating subsidiaries
shall be eligible to receive options under this Plan to purchase the Company's
Common Stock. In no event may an employee be granted an option if such employee,
immediately after the option is granted, owns stock possessing five (5%) percent
or more of the total combined voting power or value of all classes of stock of
the Company or of its parent corporation or subsidiary corporation as the terms
"parent corporation" and "subsidiary corporation" are defined in Section 424(e)
and (f) of the Code. For purposes of determining stock ownership under this
paragraph, the rules of Section 424(d) of the Code shall apply and stock which
the employee may purchase under outstanding options shall be treated as stock
owned by the employee.

     (b) For the purpose of this Plan, the term employee shall not include an
employee whose customary employment is for not more than twenty (20) hours per
week or is for not more than five (5) months in any calendar year.

3. STOCK SUBJECT TO THE PLAN

     The stock subject to the options granted hereunder shall be shares of the
Company's authorized but unissued Common Stock or shares of Common Stock
reacquired by the Company, including shares purchased in the open market. The
aggregate number of shares which may be issued pursuant to the Plan is
3,000,000, subject to increase or decrease by reason of stock split-ups,
reclassifications, stock dividends, changes in par value and the like. If the
number of shares of Common Stock reserved and available for any Offering Period
(as defined herein) is insufficient to satisfy all purchase requirements for
that Offering Period, the reserved and available shares for that Offering Period
shall be apportioned among participating employees in proportion to their
options.



4. OFFERING PERIODS AND STOCK OPTIONS

     (a) The time periods during which payroll deductions will be accumulated
under the Plan shall consist of six month periods ("Offering Periods"),
commencing on the first day of each Offering Period ("Offering Commencement
Date") and ending on the last day of the Offering Period ("Offering Termination
Date"). The Offering Periods for the 2003 calendar year shall consist of (i) an
Offering Commencement Date of January 1 and an Offering Termination Date of June
30, and (ii) an Offering Commencement Date of July 1 that shall comprise a seven
month period ending on the Offering Termination Date, January 31, 2004.
Thereafter, each calendar year shall have two six-month Offering Periods, the
first with an Offering Commencement Date of February 1 and an Offering
Termination Date of July 31, and the second with an Offering Commencement Date
of August 1 and Offering Termination Date of January 31. Notwithstanding the
foregoing, the Offering Period beginning on February 1, 2006 shall have an
Offering Termination Date of August 16, 2006 (rather than July 31, 2006), and
the subsequent Offering Period shall have an Offering Commencement Date of
August 17, 2006 (rather than August 1, 2006) and an Offering Termination Date of
January 31, 2007. Each Offering Period includes only regular pay days falling
within it.

     (b) On each Offering Commencement Date, the Company will grant to each
eligible employee who is then a participant in the Plan an option to purchase on
the Offering Termination Date at the Option Exercise Price, as provided in this
paragraph (b), that number of full shares of Common Stock reserved for the
purpose of the Plan as his or her accumulated payroll deductions on the Offering
Termination Date (including any amount carried forward pursuant to Article 8
hereof) will pay for at the Option Exercise Price; provided that such employee
remains eligible to participate in the Plan throughout such Offering Period. The
Option Exercise Price for each Offering Period shall be the lesser of (i)
eighty-five percent (85%) of the fair market value of the Common Stock on the
Offering Commencement Date, or (ii) eighty-five percent (85%) of the fair market
value of the Common Stock on the Offering Termination Date. In the event of an
increase or decrease in the number of outstanding shares of Common Stock through
stock split-ups, reclassifications, stock dividends, changes in par value and
the like, an appropriate adjustment shall be made in the number of shares and
Option Exercise Price per share provided for under the Plan, either by a
proportionate increase in the number of shares and proportionate decrease in the
Option Exercise Price per share, or by a proportionate decrease in the number of
shares and a proportionate increase in the Option Exercise Price per share, as
may be required to enable an eligible employee who is then a participant in the
Plan to acquire on the Offering Termination Date that number of full shares of
Common Stock as his or her accumulated payroll deductions on such date will pay
for at the Option Exercise Price, as so adjusted.

     (c) For purposes of this Plan, the term "fair market value" on any date
means, if the Common Stock is listed on a national securities exchange or on the
Nasdaq National Market, the average of the high and low sales prices of the
Common Stock on such date on such exchange or as reported on the Nasdaq National
Market or, if the Common Stock is traded in the over-the-counter securities
market, but not on the Nasdaq National Market, the average of the high and low
bid quotations for the Common Stock on such date, each as published by The
Nasdaq National Market. If no shares of Common Stock are traded on the Offering
Commencement Date or Offering Termination Date, the fair market value will be
determined by taking the



average of the fair market values on the immediately preceding and the next
following business days on which shares of Common Stock are traded.

     (d) For purposes of this Plan the term "business day" as used herein means
a day on which there is trading on the Nasdaq National Market or on a national
securities exchange on which the Common Stock is listed.

     (e) No employee shall be granted an option which permits his or her rights
to purchase Common Stock under the Plan and any similar plans of the Company or
any parent or participating subsidiary corporations to accrue at a rate which
exceeds $25,000 of fair market value of such stock (determined at the time such
option is granted) for each calendar year in which such option is outstanding at
any time. The purpose of the limitation in the preceding sentence is to comply
with and shall be construed in accordance with Section 423(b)(8) of the Code.

5. EXERCISE OF OPTION

     Each eligible employee who continues to be a participant in the Plan on the
Offering Termination Date shall be deemed to have exercised his or her option on
such date and shall be deemed to have purchased from the Company such number of
full shares of Common Stock reserved for the purpose of the Plan as his or her
accumulated payroll deductions on such date, plus any amount carried forward
pursuant to Article 8 hereof, will pay for at the Option Exercise Price, but in
no event may an employee purchase shares of Common Stock in excess of 1,500
shares of Common Stock on any Offering Termination Date. If a participant is not
an employee on the Offering Termination Date and throughout an Offering Period,
he or she shall not be entitled to exercise his or her option. All options
issued under the Plan shall, unless exercised as set forth herein, expire at the
end of the Offering Termination Date with respect to the Offering Period during
which such options were issued.

6. AUTHORIZATION FOR ENTERING PLAN

     (a) An eligible employee may enter the Plan by filling out, signing and
delivering to the Chief Financial Officer of the Company or his or her designee
an authorization ("Authorization"):

     (i)  stating the amount to be deducted regularly from his or her pay;

     (ii) authorizing the purchase of stock for him or her in each Offering
          Period in accordance with the terms of the Plan; and

     (iii) specifying the exact name in which Common Stock purchased for him or
          her is to be issued in accordance with Article 11 hereof.

Such Authorization must be received by the Chief Financial Officer of the
Company or his or her designee at least ten (10) business days before an
Offering Commencement Date.



     (b) The Company will accumulate and hold for the employee's account the
amounts deducted from his or her pay. No interest will be paid thereon.
Participating employees may not make any separate cash payments into their
account.

     (c) Unless an employee files a new Authorization or withdraws from the
Plan, his or her deductions and purchases under the Authorization he or she has
on file under the Plan will continue as long as the Plan remains in effect. An
employee may increase or decrease the amount of his or her payroll deductions as
of the next Offering Commencement Date by filling out, signing and delivering to
the Chief Financial Officer of the Company or his or her designee a new
Authorization. Such new Authorization must be received by the Chief Financial
Officer of the Company or his or her designee at least ten (10) business days
before the date of such next Offering Commencement Date.

7. ALLOWABLE PAYROLL DEDUCTIONS

     Effective July, 1, 2002, an employee may authorize payroll deductions in
any whole percentage amount up to but not more than ten percent (10%) of his or
her base pay; provided, however, that the minimum deduction in respect of any
payroll period shall be one percent (1%) of his or her base pay but in no event
less than five dollars ($5); and provided further that the maximum percentage
shall be reduced to meet the requirements of Section 4(e) hereof. Base pay means
regular straight-time earnings and, if applicable, commissions, but excluding
payments for overtime, bonuses, and other special payments.

8. UNUSED PAYROLL DEDUCTIONS

     Only full shares of Common Stock may be purchased. Any balance remaining in
an employee's account after a purchase will be reported to the employee and will
be carried forward to the next Offering Period. However, in no event will the
amount of the unused payroll deductions carried forward from a payroll period
exceed the Option Exercise Price per share for the immediately preceding
Offering Period. If for any Offering Period the amount of unused payroll
deductions should exceed the Option Exercise Price per share, the amount of the
excess for any participant shall be refunded to such participant, without
interest.

9. CHANGE IN PAYROLL DEDUCTIONS

     Deductions may not be increased or decreased during an Offering Period.

10. WITHDRAWAL FROM THE PLAN

     (a) An employee may withdraw from the Plan and withdraw all but not less
than all of the payroll deductions credited to his or her account under the Plan
by delivering a written notice to the Chief Financial Officer of the Company or
his or her designee ("Withdrawal Notice") no later than the Offering Termination
Date (subject to such administrative procedures as the Company may reasonably
impose), in which event the Company will promptly refund without interest the
entire balance of such employee's deductions not theretofore used to purchase
Common Stock under the Plan.



     (b) If an employee withdraws from the Plan, the employee's rights under the
Plan will be terminated and no further payroll deductions will be made. To
reenter, such an employee must file a new Authorization at least ten (10)
business days before the next Offering Commencement Date. Such Authorization
will become effective for the Offering Period that commences on such Offering
Commencement Date.

11. ISSUANCE OF STOCK

     Upon written request, certificates for Common Stock will be issued and
delivered to participants and uncertificated shares of Common Stock issued to or
for the account of participants will be delivered, in either case as soon as
practicable after each Offering Period. Common Stock purchased under the Plan
will be issued only in the name of, or for the account of, the employee.

12. NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS

     An employee's rights under the Plan are his or hers alone and may not be
transferred or assigned to, or availed of by, any other person. Any option
granted to an employee may be exercised only by him or her, except as provided
in Article 13 in the event of an employee's death.

13. TERMINATION OF EMPLOYEE'S RIGHTS

     (a) Except as set forth in the last paragraph of this Article 13, an
employee's rights under the Plan will terminate when he or she ceases to be an
employee because of retirement, resignation, lay-off, discharge, death, change
of status, failure to remain in the customary employ of the Company for greater
than twenty (20) hours per week, or for any other reason. A Withdrawal Notice
will be considered as having been received from the employee on the day his or
her employment ceases, and all payroll deductions not used to purchase Common
Stock will be refunded.

     (b) If an employee's payroll deductions are interrupted by any legal
process, a Withdrawal Notice will be considered as having been received from him
or her on the day the interruption occurs.

     (c) Upon termination of the participating employee's employment because of
death, the executor or administrator of the estate of the employee shall have
the right to elect, by written notice given to the Chief Financial Officer of
the Company or his or her designee prior to the earlier to occur of the 30th day
following the date of the death of the employee or the next Offering Termination
Date, either (i) to withdraw, without interest, all of the payroll deductions
credited to the employee's account under the Plan, or (ii) to exercise the
employee's option for the purchase of shares of Common Stock on the next
Offering Termination Date following the date of the employee's death for the
purchase of that number of full shares of Common Stock reserved for the purpose
of the Plan which the accumulated payroll deductions in the employee's account
at the date of the employee's death will purchase at the applicable Option
Exercise Price



(subject to the maximum number set forth in Article 5), and any excess in such
account will be returned to said executor or administrator. In the event that no
such written notice of election shall be timely received by the Chief Financial
Officer of the Company or his or her designee, the executor or administrator
shall automatically be deemed to have elected to withdraw the payroll deductions
credited to the employee's account at the date of the employee's death and the
same will be paid promptly to said executor or administrator, without interest.

14. DEATH OF PARTICIPANT

     In the event of the death of a participating employee, the Company shall
deliver such Common Stock and/or cash to the executor or administrator of the
estate of the employee, or if, to the knowledge of the Company, no such executor
or administrator has been appointed, the Company, in the discretion of the
Committee, may deliver such Common Stock and/or cash to the spouse or to any one
or more dependents of the employee as the Committee may designate.

15. TERMINATION AND AMENDMENTS TO PLAN

     (a) The Plan may be terminated at any time by the Company's Board of
Directors, effective on the next following Offering Termination Date.
Notwithstanding the foregoing, it will terminate when all of the shares of
Common Stock reserved for the purposes of the Plan have been purchased. Upon
such termination or any other termination of the Plan, all payroll deductions
not used to purchase Common Stock will be refunded without interest.

     (b) The Board of Directors reserves the right to amend the Plan from time
to time in any respect; provided, however, that no amendment shall be effective
without stockholder approval if the amendment would (a) except as provided in
Articles 3, 4, 24 and 25, increase the aggregate number of shares of Common
Stock to be offered under the Plan, or (b) change the class of employees
eligible to receive options under the Plan.

16. LIMITATIONS OF SALE OF STOCK PURCHASED UNDER THE PLAN

     Employees who are subject to Section 16 of the Securities Exchange Act of
1934, as amended, may sell Common Stock purchased under the Plan at any time
provided that such sale qualifies for an exemption from Section 16(b) under Rule
16b-3, or otherwise does not give rise to Section 16(b) liability.
Notwithstanding the foregoing, because of certain Federal tax requirements, all
employees will agree by entering the Plan, promptly to give the Company notice
of any such Common Stock disposed of within two years after the Offering
Commencement Date on which the related option was granted showing the number of
such shares disposed of. The employee assumes the risk of any market
fluctuations in the price of such Common Stock.

17. COMPANY'S PAYMENT OF EXPENSES RELATED TO PLAN

     The Company will bear all costs of administering and carrying out the Plan.

18. PARTICIPATING SUBSIDIARIES



     The term "participating subsidiaries" shall mean any subsidiary of the
Company which is designated by the Committee (as defined in Article 19) to
participate in the Plan. The Committee shall have the power to make such
designation before or after the Plan is approved by the stockholders.

19. ADMINISTRATION OF THE PLAN

     (a) The Plan shall be administered by the Compensation Committee of the
Company's Board of Directors or such other committee designated by the Company's
Board of directors (the "Committee").

     (b) The interpretation and construction by the Committee of any provisions
of the Plan or of any option granted under it shall be final. The Committee may
from time to time adopt such rules and regulations for carrying out the Plan as
it may deem best. With respect to persons subject to Section 16 of the
Securities and Exchange Act of 1934, as amended, transactions under the Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under said Act. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by that Committee.

     (c) Annually, the Committee shall prepare and distribute to each
participating employee in the Plan a report containing the amount of the
participating employee's accumulated payroll deductions as of the Offering
Termination Date, the Option Exercise Price for such Offering Period, the number
of shares of Common Stock purchased by the participating employee with the
participating employee's accumulated payroll deductions, and the amount of any
unused payroll deductions either to be carried forward to the next Offering
Period, or returned to the participating employee without interest.

     (d) No member of the Board of Directors or the Committee shall be liable
for any action or determination made in good faith with respect to the Plan or
any option granted under it. The Company shall indemnify each member of the
Board of Directors and the Committee to the fullest extent permitted by law with
respect to any claim, loss, damage or expense (including counsel fees) arising
in connection with their responsibilities under this Plan.

20. OPTIONEES NOT STOCKHOLDERS

     Neither the granting of an option to an employee nor the deductions from
his or her pay shall constitute such employee a stockholder of the Company with
respect to the shares covered by such option until such shares have been
purchased by and issued to him or her.

21. APPLICATION OF FUNDS

     The proceeds received by the Company from the sale of Common Stock pursuant
to options granted under the Plan may be used for any corporate purposes, and
the Company shall not be obligated to segregate participating employees' payroll
deductions.



22. GOVERNMENTAL REGULATION

     (a) The Company's obligation to sell and deliver shares of the Company's
Common Stock under this Plan is subject to the approval of any governmental
authority required in connection with the authorization, issuance or sale of
such stock.

     (b) In this regard, the Board of Directors may, in its discretion, require
as a condition to the exercise of any option that a Registration Statement under
the Securities Act of 1933, as amended, with respect to the shares of Common
Stock reserved for issuance upon exercise of the option shall be effective.

23. TRANSFERABILITY

     Neither payroll deductions credited to an employee's account nor any rights
with regard to the exercise of an option or to receive stock under the Plan may
be assigned, transferred, pledged, or otherwise disposed of in any way by the
employee. Any such attempted assignment, transfer, pledge, or other disposition
shall be without effect, except that the Company may treat such act as an
election to withdraw funds in accordance with Article 10.

24. EFFECT OF CHANGES OF COMMON STOCK

     If the Company should subdivide or reclassify the Common Stock which has
been or may be optioned under the Plan, or should declare thereon any dividend
payable in shares of such Common Stock, or should take any other action of a
similar nature affecting such Common Stock, then the number and class of shares
of Common Stock which may thereafter be optioned (in the aggregate and to any
individual participating employee) shall be adjusted accordingly.

25. MERGER OR CONSOLIDATION

     If the Company should at any time merge into or consolidate with another
corporation, the Board of Directors may, at its election, either (i) terminate
the Plan and refund without interest the entire balance of each participating
employee's payroll deductions, or (ii) entitle each participating employee to
receive on the Offering Termination Date upon the exercise of such option for
each share of Common Stock as to which such option shall be exercised the
securities or property to which a holder of one share of the Common Stock was
entitled upon and at the time of such merger or consolidation, and the Board of
Directors shall take such steps in connection with such merger or consolidation
as the Board of Directors shall deem necessary to assure that the provisions of
this Article 25 shall thereafter be applicable, as nearly as reasonably
possible. A sale of all or substantially all of the assets of the Company shall
be deemed a merger or consolidation for the foregoing purposes.

26. WITHHOLDING OF ADDITIONAL FEDERAL INCOME TAX

     The Company will undertake such withholding in connection with the Plan as
it determines is appropriate, in its sole discretion.



27. EQUAL TREATMENT

     Notwithstanding any provision herein to the contrary, all Participants
participating in any Offering Period shall have equal rights and privileges
except as provided in Section 423(b)(5) of the Code.

28. APPROVAL OF STOCKHOLDERS

     The Plan shall not take effect until approved by the holders of a majority
of the outstanding shares of Common Stock of the Company, which approval must
occur no later than the end of the first Offering Period after the date the Plan
is adopted by the Board of Directors. Options may be granted under the Plan
prior and subject to such stockholder approval. If the Plan is not so approved
by the stockholders, all payroll deductions from participating employees shall
be returned without interest and all options so granted shall terminate.

Dates of Approval by the Board of Directors or Compensation Committee: November
1, 1995, December 10, 1997, January 6, 2000, December 13, 2001, September 13,
2002, February 26, 2003, February 25, 2004, January 25, 2006 and July 31, 2006.

Dates of Approval by the Stockholders: February 22, 1996, February 26, 1998,
February 24, 2000, May 13, 2002, April 27, 2004 and March 7, 2006.

EX-10.23

                                                                   Exhibit 10.23

                             BROOKS AUTOMATION, INC.

                           RESTRICTED STOCK AGREEMENT

     AGREEMENT made this _____________ between Brooks Automation, Inc., a
Delaware corporation (the "Company"), and _____________ (the "Employee").

                                   WITNESSETH:

     WHEREAS, as an inducement for the Employee to assist the Company to achieve
long-range performance goals and to enable the Employee to participate in the
long-term growth of the Company, the Company desires to grant to the Employee
______ shares (the "Shares") of the Company's common stock, $.01 par value per
share (the "Common Stock"), pursuant to the Company's Amended and Restated 2000
Equity Incentive Plan (the "Plan") and subject to the terms and conditions set
forth herein;

     NOW, THEREFORE, for good and valuable consideration, receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

ARTICLE 1 - ACQUISITION OF SHARES

     1.1 Award of Shares. The Company has granted the Shares to the Employee,
and the Employee hereby accepts the Shares, subject to the terms and conditions
of the Plan and this Agreement. In the event of an inconsistency between this
Agreement and the Plan, which is incorporated herein by reference, the Plan will
control. All capitalized terms not defined in this Agreement have the meaning
specified in the Plan.

     1.2 Record ownership; custody of certificates, etc.

          (a) In accordance with the Plan and Section 158 of the Delaware
General Corporation Law, the Shares shall be evidenced in the books of the
Company as owned by the Employee. The Shares shall be held in uncertificated
form except as the Company otherwise determines. If at any time the Shares are
represented by certificates or other evidence of ownership, the Company may
retain custody of such certificates or other evidence of ownership until such
time as the Shares are either forfeited to the Company or cease to be subject to
the risk of forfeiture and transfer restrictions described herein and in the
Plan. Notwithstanding the foregoing, except as set forth herein or in the Plan
the Employee shall have the rights of an owner of the Shares, including the
right to vote the shares and the right to dividends or other distributions.

          (b) Upon the lapsing of the restrictions described herein with respect
to the Shares, the Company shall take such steps as it determines to be
necessary or appropriate to transfer certificates or other evidence of ownership
to the Employee, including, if so determined by the Company, to a brokerage
account held by or for the benefit of the Employee.


                                       1



     1.3 Employee Representations. The Employee represents, warrants and
covenants as follows:

          (a) The Employee has received and reviewed the Plan and the Prospectus
related to the Plan, including the documents incorporated therein by reference.

          (b) The Employee understands that (i) the Federal income tax
consequences to the Employee of the transfer of the Shares to the Employee will
vary depending upon whether the Employee makes an election under Section 83(b)
of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) the Company
is not providing the Employee with any advice as to whether to make such
election, (iii) the Employee has been advised to seek the counsel of his or her
own tax advisor as to whether, and if so where and how to make such election,
(iv) such election, if made, must be filed with the Internal Revenue Service
within 30 days of the date of this Agreement, and (v) the Employee must notify
the Company upon making such election.

          (c) The Employee understands, agrees and acknowledges that the Shares
are subject to restrictions on transfer and may be forfeited if the conditions
of this Agreement are not satisfied. The Employee also understands, agrees and
acknowledges that if the Shares are ever certificated the Company may, at its
election and in its sole discretion, require that the certificates have affixed
thereto a legend in substantially the following form:

          "The shares of stock represented by this certificate are subject to
     restrictions on transfer and a risk of forfeiture set forth in a certain
     Restricted Stock Agreement between the corporation and the registered owner
     of this certificate (or his or her predecessor in interest). Such Agreement
     is available for inspection without charge at the principal executive
     offices of the corporation."

ARTICLE 2 - FORFEITURE

     2.1 Vesting and Forfeiture. For purposes of this Agreement, employment with
the Company shall include employment with a consolidated subsidiary of the
Company. The Shares shall vest as follows unless earlier forfeited in accordance
with this Section 2.1:

          (a) Unless earlier vested or forfeited, the Shares shall vest: (i) as
     to fifty (50%) percent of the Shares, on ___________, 200x [two years from
     date of grant]; (ii) as to an additional twenty-five (25%) of the Shares,
     on ____________, 200x [three years from date of grant]; and (iii) as to the
     final twenty-five (25%) of the Shares, on ___________, 20xx [four years
     from date of grant].

          (b) If there is a Qualifying Termination of the Employee's employment
     with the Company and its subsidiaries that occurs either before a Change in
     Control or more than one year following a Change in Control, then in
     addition to any Shares previously vested under Section 2.1(a) above, a
     number of Shares equal to the relevant Earned Fraction shall be treated as
     having vested immediately prior to the Qualifying Termination.


                                       2



          (c) If there is a Qualifying Termination of the Employee's employment
     with the Company and its subsidiaries that occurs within the one-year
     period following a Change in Control, any Shares that were unvested but
     outstanding immediately prior to the Qualifying Termination shall be
     treated as having vested immediately prior to the Qualifying Termination.

For purposes of this Section 2.1:

          (A) "Cause" means (i) the Employee's willful failure to perform, or
     serious negligence in the performance of, the Employee's duties and
     responsibilities for the Company or any of its subsidiaries that remains
     uncured, or continues, beyond the fifteenth (15th) day following the date
     on which the Company gives the Employee notice specifying in reasonable
     detail the nature of the failure or negligence; (ii) fraud, embezzlement or
     other dishonesty with respect to the Company or any of its subsidiaries or
     customers; (iii) conviction of, or a plea of guilty or nolo contendere with
     respect to, a felony or to any crime (whether or not a felony) that
     involves moral turpitude; or (iv) breach of fiduciary duty or violation of
     any covenant of confidentiality, assignment of rights to intellectual
     property, non-competition or non-solicitation of customers or employees;
     provided, that if at the time of termination of employment the Employee is
     party to an employment agreement or similar agreement with the Company or
     any of its subsidiaries that includes a definition of "Cause", the
     definition contained in such employment agreement or similar agreement
     shall apply for purposes of this Section 2.1 in lieu of the definition set
     forth above in this clause (A).

          (B) "Qualifying Termination" means a termination by the Company or by
     a subsidiary of the Company of the Employee's employment with the Company
     and its subsidiaries, other than a termination for Cause.

          (C) "Earned Fraction" means:

               (I) for a Qualifying Termination occurring before __________,
          200x, the number of unvested Shares outstanding immediately prior to
          the Qualifying Termination that would have vested on ___________, 200x
          had the Employee continued in the employ of the Company and its
          subsidiaries, multiplied by a fraction, the numerator of which is the
          number of days elapsed between ____________, 200x and the date of the
          Qualifying Termination, and the denominator of which is seven hundred
          thirty (730); and

               (II) for a Qualifying Termination occurring after _________, 200x
          but before __________, 200x, the number of unvested Shares outstanding
          immediately prior to the Qualifying Termination that would have vested
          on _____________, 200x had the Employee continued in the employ of the
          Company and its subsidiaries, multiplied by a fraction, the numerator
          of which is the number of days elapsed between ___________, 200x and
          the date of the Qualifying Termination, and the denominator of which
          is three hundred sixty five (365); and


                                       3



               (III) for a Qualifying Termination occurring after ___________,
          200x but before ___________, 20xx, the number of unvested Shares
          outstanding immediately prior to the Qualifying Termination that would
          have vested on ______________, 20xx had the Employee continued in the
          employ of the Company and its subsidiaries, multiplied by a fraction,
          the numerator of which is the number of days elapsed between
          ____________, 200x and the date of the Qualifying Termination, and the
          denominator of which is three hundred sixty five (365).

          (D) "Change in Control" means the occurrence of any of the events
     described in subsections (i), (ii), (iii) or (iv) below:

               (i) Any Person acquires beneficial ownership (within the meaning
          of Rule 13d-3 promulgated under the Exchange Act) of thirty-five (35%)
          percent or more of either (x) the then outstanding shares of common
          stock of the Company (the "Outstanding Company Common Stock") or (y)
          the combined voting power of the then outstanding voting securities of
          the Company entitled to vote generally in the election of directors
          (the "Outstanding Company Voting Securities"); provided, that for
          purposes of this subsection (D)(i) the following acquisitions shall
          not constitute a Change in Control: (I) any acquisition directly from
          the Company, (II) any acquisition by the Company, (III) any
          acquisition by an employee benefit plan (or related trust) sponsored
          or maintained by the Employer, or (IV) any Business Combination (but
          except as provided in subsection (D)(iii) below a Business Combination
          may nevertheless constitute a Change in Control under subsection
          (D)(iii)); and provided further, that an acquisition by a Person of
          thirty-five percent (35%) percent or more but less than fifty (50%)
          percent of the Outstanding Company Common Stock or of the combined
          voting power of the Outstanding Company Voting Securities shall not
          constitute a Change in Control under this subsection (D)(i) if within
          fifteen (15) days of the Board's being advised that such ownership
          level has been reached, a majority of the "Incumbent Directors" (as
          hereinafter defined) then in office adopt a resolution approving the
          acquisition of that level of securities ownership by such Person; or

               (ii) Individuals who, as of ____________, 200x, constituted the
          Board (the "Incumbent Directors") cease for any reason to constitute
          at least a majority of the Board; provided, that any individual who
          becomes a member of the Board subsequent to ____________, 200x and
          whose election or nomination for election was approved by a vote of at
          least two-thirds of the Incumbent Directors shall be treated as an
          Incumbent Director unless he or she assumed office as a result of an
          actual or threatened election contest with respect to the election or
          removal of directors; or

               (iii) There is consummated a reorganization, merger or
          consolidation involving the Company, or a sale or other disposition of
          all or substantially all of the assets of the Company (a "Business
          Combination"), in each case unless,


                                       4



          following such Business Combination, (x) the Persons who were the
          beneficial owners, respectively, of the Outstanding Company Common
          Stock and of the combined voting power of the Outstanding Company
          Voting Securities immediately prior to the Business Combination
          beneficially own, directly or indirectly, more than 50% of,
          respectively, the then outstanding shares of common stock and the
          combined voting power of the then outstanding voting securities
          entitled to vote generally in the election of directors, as the case
          may be, of the entity resulting from such Business Combination in
          substantially the same proportions as their ownership immediately
          prior to such Business Combination of the Outstanding Company Common
          Stock and of the combined voting power of the Outstanding Company
          Voting Securities, as the case may be, (y) unless in connection with
          such Business Combination a majority of the Incumbent Directors then
          in office determine that this clause (D)(iii)(y) does not apply to
          such Business Combination, no Person (excluding any entity resulting
          from such Business Combination or any employee benefit plan (or
          related trust) of the Employer or of such corporation resulting from
          such Business Combination) beneficially owns, directly or indirectly,
          thirty-five (35%) percent or more of, respectively, the then
          outstanding shares of common stock of the corporation resulting from
          such Business Combination or the combined voting power of the then
          outstanding voting securities of such corporation entitled to vote
          generally in the election of directors, except to the extent that such
          ownership existed prior to the Business Combination and (z) at least a
          majority of the members of the Board resulting from such Business
          Combination were Incumbent Directors at the time of the execution of
          the initial agreement, or of the action of the Board, providing for
          such Business Combination; or

               (iv) The stockholders of the Company approve a complete
          liquidation or dissolution of the Company;

     provided, that if any payment or benefit payable hereunder upon or
     following a Change in Control (as defined herein) would be required to
     comply with the limitations of Section 409A(a)(2)(A)(v) of the Code and the
     guidance thereunder in order to avoid an additional tax under Section 409A
     of the Code, such payment or benefit shall be made only if such Change in
     Control constitutes a change in ownership or control of the Company, or a
     change in ownership of the Company's assets, described in IRS Notice
     2005-1, the proposed regulations under Section 409A of the Code, or any
     successor guidance.

          (E) "Board" means the Board of Directors of the Company.

          (F) "Employer" means the Company and its subsidiaries.

          (G) "Person" means any individual, entity or other person, including a
     group within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act.

          (H) "Exchange Act" means the Securities Exchange Act of 1934, as
     amended.


                                       5



In the event the Employee ceases to be employed by the Company as a full-time
employee for any reason or no reason, with or without cause, prior to
______________, 20xx, all unvested Shares shall be immediately and automatically
forfeited to the Company.

     2.2 Restrictions on Transfer.

          (a) Except as otherwise provided in subsection (b) below, for so long
as any of the Shares are subject to a risk of forfeiture as described above, the
Employee shall not sell, assign, transfer, pledge, hypothecate or otherwise
dispose of, by operation of law or otherwise (collectively "transfer"), any such
Shares or any interest therein. Any attempted transfer in contravention of the
foregoing shall be null and void. The Company shall not be required to transfer
record ownership on its books of any Shares subject to the restrictions herein
that have been sold, assigned or otherwise transferred, hypothecated or disposed
of in violation of this Agreement.

          (b) Once the risk of forfeiture and the transfer restrictions
described above lapse as to any Shares, such Shares may be sold, transferred or
otherwise disposed of subject only to the restrictions of applicable law,
including applicable securities law, and to any insider-trading or similar
restrictions that may be imposed by the Company.

ARTICLE 3 - MISCELLANEOUS

     3.1 Adjustments for Stock Splits, Stock Dividends, etc. If there is any
stock split, reverse stock split, stock dividend, stock distribution or other
reclassification of the Common Stock, any and all new, substituted or additional
securities to which the Employee is entitled by reason of his ownership of the
Shares shall be immediately subject to the risk of forfeiture and transfer
restrictions described herein in the same manner and to the same extent, if any,
as such Shares.

     3.2 Restrictions on Distributions. If at any time while the Shares are
subject to the risk of forfeiture and transfer restrictions described herein
there is a dividend (other than a stock dividend described in Section 3.1) or
other distribution with respect to the Shares, whether of cash, Common Stock,
other securities or other property, the Company may require that the cash,
securities, or other property so dividended or distributed be subjected to
restrictions (including, without limitation, if the Company so determines, by
holding any such amounts in escrow) similar to those to which the Shares are
then subject.

     3.3 Withholding Taxes.

          (a) Pursuant to applicable federal, state, local or foreign laws, the
Company may be required to collect income or other taxes on the transfer of the
Shares to the Employee, the lapse of a restriction placed on the Shares, or at
other times. The Company may require, at such time as it considers appropriate,
that the Employee pay the Company the amount of any taxes that the Company may
determine is required to be withheld or collected, and the Employee shall comply
with the requirement or demand of the Company. The Company may withhold, collect


                                       6



or offset against any amount owed by the Company to the Employee, the amount of
any such taxes in any manner (including, without limitation, by payment in whole
or in part in shares of Common Stock, including the Shares, valued at the Fair
Market Value, by check, or by offsetting such amount against compensation
otherwise due to the Employee), if in its sole discretion it deems any such
method to be an appropriate method for withholding or collecting taxes.

          (b) If the Employee elects, in accordance with Section 83(b) of the
Code, to recognize ordinary income in the year of acquisition of the Shares, the
Company may require that the Employee, at the time of such election, make an
additional payment for withholding tax purposes based on the difference, if any,
between the purchase price for such Shares and the fair market value of such
Shares.

     3.4 No Rights To Employment. Nothing contained in this Agreement shall be
construed as giving the Employee any right to be retained as an employee of the
Company.

     3.5 Waiver; Disposition of Stock. From time to time the Company may waive
its rights hereunder either generally or with respect to one or more specific
transfers which have been proposed, attempted or made. Each such waiver shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver.

     3.6 Successors and Assigns; Assignment. This Agreement shall be binding
upon the parties hereto and their heirs, representatives, successors and
assigns. The Company may assign its rights hereunder either generally or from
time to time.

     3.7 Notices. All notices to a party hereto shall be in writing and shall be
deemed to have been adequately given if delivered in person or mailed, postage
pre-paid and registered or certified mail or federal express or other recognized
commercial courier service:

     If to the Company:

     Brooks Automation, Inc.
     15 Elizabeth Drive
     Chelmsford, Massachusetts 01824
     Attention: Chief Financial Officer

     If to Employee:

or to such other address as any party may from time to time designate for itself
by notice in writing given to the other parties hereto.


                                       7



     3.8 Amendments. This Agreement may be amended or modified in whole or in
part only by an instrument in writing signed by the Company and the Employee.

     3.9 Entire Agreement. This Agreement constitutes the entire agreement
between the parties, and all premises, representations, understandings,
warranties and agreements with reference to the subject matter hereof have been
expressed herein or in the documents incorporated herein by reference.

     3.10 Applicable Law; Severability. This Agreement shall be governed by and
construed and enforced in accordance with Delaware law. Wherever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision hereof shall be
prohibited by or invalid under any such law, that provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating or
nullifying the remainder of that provision or any other provisions of this
Agreement.

     3.11 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed in original but all of which together shall
constitute one and the same instrument.

     3.12 Effect of Headings. Any table of contents, title of an article or
section heading herein contained is for convenience or reference only and shall
not affect the meaning of construction of any of the provisions hereof.

     IN WITNESS WHEREOF, the Employee has hereunto set his or her hand and the
Company has authorized this instrument to be signed by its officers thereunder
duly authorized, effective as an instrument under seal.

BROOKS AUTOMATION, INC.


By:
    ---------------------------------
Name:
      -------------------------------
Title: SVP & CFO


EMPLOYEE


- -------------------------------------
Name:
      -------------------------------


                                       8

EX-10.28

                                                                   Exhibit 10.28

                               AMENDMENT TO LEASE

     THIS AMENDMENT TO LEASE (this "AMENDMENT") is entered into as of the 24th
day of July, 2000, by and between BCIA NEW ENGLAND HOLDINGS LLC, a Delaware
limited liability company with an address of One Boston Place, Boston,
Massachusetts 02108-4406 ("LANDLORD") and PRI AUTOMATION, INC., a Massachusetts
corporation, formerly known as Precision Robots, Inc., with an address of 805
Middlesex Turnpike, Billerica, Massachusetts 01821 ("TENANT").

                                    RECITALS

A.   Landlord is the owner of certain real property located and known as 805
     Middlesex Turnpike, Billerica, Massachusetts (the "LOT") and the building
     thereon (the "BUILDING") (the Lot, together with the Building and all other
     improvements thereon, are hereinafter collectively referred to as the
     "PREMISES");

B.   Reference is made to that certain lease dated as of May 5, 1994 entered
     into between The Prudential Insurance Company of America, as predecessor in
     interest to Landlord, as landlord (the "ORIGINAL Landlord"), and Precision
     Robots, Inc., as tenant, with respect to the Premises;

C.   Landlord is the current owner of the Premises and the current holder of the
     landlord's interest under the Lease, and Tenant is the current holder of
     the tenant's interest under the Lease;

D.   Pursuant to the Lease, Tenant has been, and is now, in occupancy of the
     Premises;

E.   Pursuant to the Lease, the term thereof is set to expire on July 31, 2001;

F.   Landlord and Tenant desire to amend the Lease in order to, among other
     things, extend the term of the Lease upon the terms and conditions set
     forth herein;

     NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which is hereby mutually acknowledged, Landlord and Tenant hereby agree as
follows:

                                   AGREEMENTS

     1.   CAPITALIZED TERMS. Each capitalized term appearing but not defined
          herein shall have the meaning, if any, ascribed to such term in the
          Lease.

     2.   RECITALS. The recitals above set forth are true and complete and are
          incorporated herein by reference.



     3.   AMENDMENTS. As of the date hereof, the Lease is amended as follows:

          a.   LANDLORD. Throughout the Lease, the words "The Prudential
               Insurance Company of America" are hereby deleted and the words
               "BCIA New England Holdings LLC, a Delaware limited liability
               company" are hereby inserted in lieu thereof.

          b.   TENANT. Throughout the Lease, the words "Precision Robots, Inc."
               are hereby deleted and the words "PRI Automation, Inc., a
               Massachusetts corporation" are hereby inserted in lieu thereof.

          c.   REFERENCE DATA. In Exhibit 1 to the Lease (REFERENCE DATA):

               (i)  In the section thereof in which the term "Premises" is
                    defined, the words "consisting of 122,342 square feet (SF)"
                    are hereby deleted and the words "agreed to contain 122,342
                    square feet (SF)" are hereby inserted in lieu thereof.

               (ii) In the section thereof in which the term "Term" is defined,
                    the words "Seven (7) years" are hereby deleted and the words
                    "Seventeen (17) years" are hereby inserted in lieu thereof.

               (iii) In the section thereof in which the term "Rent" is defined,
                    the following language is hereby inserted at the end
                    thereof:

                                                        
"Year 8 $19.50 per SF Net, Net, Net,   $2,385,669 per year;   $198,805.75 per month
Year 9 $19.50 per SF Net, Net, Net,    $2,385,669 per year;   $198,805.75 per month
Year 10 $19.50 per SF Net, Net, Net,   $2,385,669 per year;   $198,805.75 per month
Year 11 $19.50 per SF Net, Net, Net,   $2,385,669 per year;   $198,805.75 per month
Year 12 $19.50 per SF Net, Net, Net,   $2,385,669 per year;   $198,805.75 per month
Year 13 $23.50 per SF Net, Net, Net,   $2,875,037 per year;   $239,586.42 per month
Year 14 $23.50 per SF Net, Net, Net,   $2,875,037 per year;   $239,586.42 per month
Year 15 $23.50 per SF Net, Net, Net,   $2,875,037 per year;   $239,586.42 per month
Year 16 $23.50 per SF Net, Net, Net,   $2,875,037 per year;   $239,586.42 per month
Year 17 $23.50 per SF Net, Net, Net,   $2,875,037 per year;   $239,586.42 per month"



          d.   EXPIRATION DATE. In ARTICLE I of the Lease (TERM), in the third
               (3rd) line of the first (1st) paragraph thereof, the date "July
               31, 2001" is hereby deleted and the date "July 31, 2011" is
               hereby inserted in lieu thereof.

          e.   TAXES. In ARTICLE II of the Lease (PAYMENT OF RENT), in Section
               2.2 thereof (Taxes), the second and third sentences thereof are
               hereby


                                                                               2



               deleted effective as of August 1, 2000 and the following
               sentences are hereby inserted in place thereof as of such date:

               "Estimated payments by Tenant on account of Taxes shall be made
               on the first day of each and every calendar month during the Term
               of this Lease, in the fashion herein provided for the payment of
               fixed rent. The monthly amount so to be paid to Landlord shall be
               sufficient to provide Landlord by the time real estate tax
               payments are due with a sum equal to Tenant's required payment,
               as reasonably estimated by Landlord from time to time, on account
               of Taxes for the then current Tax Year as hereinafter defined.
               "Tax Year" shall mean a twelve (12) month period commencing on
               July 1 and falling wholly or partially within the Term. Once
               annually, Landlord shall advise Tenant of the amount of the tax
               bills for the prior Tax Year and the computation of Tenant's
               payment on account thereof. If estimated payments theretofore
               made by Tenant for the Tax Year covered by such bills exceed the
               required payment on account thereof for such Tax Year, Landlord
               shall credit the amount of overpayment against subsequent
               obligations of Tenant on account of Taxes (or promptly refund
               such overpayment if the Term of this Lease has ended and Tenant
               has no further obligation to Landlord); but if the required
               payments on account thereof for such Tax Year are greater than
               estimated payments theretofore made on account thereof for such
               Tax Year, Tenant shall pay the difference to Landlord as
               additional rent within thirty (30) days after being so advised by
               Landlord in writing, and the obligation to make such payment for
               any period within the Term shall survive the expiration or
               earlier termination of the Term."

          f.   INSURANCE. In ARTICLE II of the Lease (PAYMENT OF RENT), in
               Section 2.2.3 thereof (Insurance), the following shall be added
               to the end of the first sentence thereof:

               "; provided, however, that from and after August 1, 2000, Tenant
               shall provide Comprehensive Liability Insurance indemnifying
               Landlord and Tenant against all claims and demands for any injury
               to person or property which may be claimed to have occurred on
               the Premises or at the Property as follows: $5,000,000.00 per
               occurrence/$10,000,000.00 aggregate (combined single limit) for
               property damage, bodily injury or death."

          g.   UTILITIES. Section 2.3 of the Lease is hereby deleted and the
               following is hereby inserted in its place: "2.3 UTILITIES Tenant
               agrees to pay directly to the utility companies providing
               utilities to the Premises all charges for utilities consumed at
               the Premises, including without limitation, gas, electricity, and
               water and sewer charges."


                                                                               3



          h.   ADDITIONAL COVENANTS. In ARTICLE III of the Lease (ADDITIONAL
               COVENANTS OF TENANT):

               (i)  In Section 3.1.2 thereof, (A) the first sentence thereof is
                    hereby amended to insert the words: "the roof and" before
                    the word "both", (B) in the fourth sentence thereof, the
                    phrase "make all repairs to the Building" is hereby replaced
                    by the phrase: "make all repairs and replacements to the
                    Premises except the Landlord's Repair Obligations, as
                    defined below," and (C) the last sentence thereof is hereby
                    deleted and replaced with the following:

                    "Notwithstanding anything to the contrary herein contained,
                    except as otherwise provided in this Lease, Landlord agrees
                    to perform the following ("Landlord's Repair Obligations"):
                    (a) to keep in good order, condition and repair the
                    Structure, as defined below, of the Building and (b) to
                    replace the roof of the Building and the HVAC system of the
                    Building when and if required in Landlord's sole reasonable
                    judgment. If, during the Term of this Lease, Landlord shall
                    make a capital expenditure for replacement of the HVAC
                    system of the Building, then, (1) to the extent that any
                    individual capital expenditure for such purpose shall be
                    less than $25,000.00 or any set of capital expenditures for
                    such purpose shall be less than $50,000.00 in any calendar
                    year, Tenant shall pay to Landlord the amount thereof as
                    additional rent hereunder within thirty (30) days of written
                    notice thereof and (2) to the extent that any individual
                    capital expenditure for such purpose shall exceed $25,000.00
                    or any set of capital expenditures for such purpose shall
                    exceed $50,000.00 in any calendar year, Tenant shall pay to
                    Landlord as additional rent hereunder, in equal monthly
                    installments for the remainder of the Term, from and after
                    the date of such expenditure(s), an amount for each such
                    calendar year equal to the annual charge-off of such capital
                    expenditure. Annual charge-off shall be determined by
                    dividing the original capital expenditure or expenditures
                    PLUS an interest factor, reasonably determined by Landlord,
                    as being the greater of (a) the per annum interest rate then
                    being charged for long-term mortgages by institutional
                    lenders on like properties within the locality in which the
                    Property is located or (b) twelve percent (12%) per annum,
                    by the number of years of useful life of the capital
                    expenditure or expenditures; and the useful life shall be
                    determined reasonably by Landlord in accordance with
                    generally accepted accounting principles and practices in
                    effect at the time of making such expenditure or
                    expenditures. As used herein the term "Structure" means the
                    load bearing portions of the walls, columns, beams, concrete
                    slab, footings, and structural beams of the roof, in each
                    case necessary to preserve the load bearing capacity
                    thereof, and the outer facade of the outer walls
                    (specifically excluding all windows, window casings, glass,
                    and doors)."


                                                                               4




               (ii) The following is hereby inserted at the end of Section 3.3:
                    "If Tenant assigns this Lease or sublets or otherwise
                    permits occupancy of the Premises or any portion thereof and
                    Landlord consents to the same, Tenant shall pay to Landlord
                    as additional rent, fifty percent (50%) of the amount, if
                    any, by which (a) any and all compensation received by
                    Tenant as a result of such assignment or sublease, or other
                    occupancy, net of reasonable expenses actually incurred by
                    Tenant in connection with such assignment or sublease or
                    other occupancy (with fit-up costs and brokerage fees being
                    amortized without interest over the remaining Term (or, with
                    respect to fit-up costs, the useful life thereof, if greater
                    than the remaining Term) and with such amortization and such
                    excess payments being recalculated upon any extension or
                    renewal of the Term hereof) exceeds (b) in the case of an
                    assignment, the Rent under this Lease, and in the case of a
                    sublease or other occupancy, the portion of the Rent
                    allocable to the portion of the Premises subject to such
                    subletting or other occupancy. Such payments shall be made
                    on the date the corresponding payments under this Lease are
                    due."

          i.   RIGHTS OF MORTGAGEES. In ARTICLE VII of the Lease
               (MISCELLANEOUS), Section 7.2 thereof is hereby amended and
               restated to read in its entirety as follows:

     7.2  RIGHTS OF MORTGAGEES.

          7.2.1 GENERAL. Provided Tenant receives a fully-executed original of
               the SNDA, as defined below, or a similar instrument reasonably
               acceptable to Tenant, this Lease shall be subject and subordinate
               to the lien and terms of any mortgage, deed of trust or ground

               lease or similar encumbrance (collectively, a "Mortgage", and the
               holder thereof from time to time the "Holder") from time to time
               encumbering the Premises, whether executed and delivered prior to
               or subsequent to the date of this Lease; provided, however, that
               the Holder may at any time elect to subordinate the lien and
               terms of any such Mortgage to this Lease. If this Lease is
               subordinate to any Mortgage and the Holder or any other party
               shall succeed to the interest of Landlord pursuant to the
               Mortgage (such Holder or other party, a "Successor"), Tenant
               shall attorn to the Holder or Successor and this Lease shall
               continue in full force and effect between the Holder or Successor
               and Tenant. Tenant agrees to execute such instruments of
               subordination or attornment in confirmation of the foregoing
               agreement as the Holder or Successor reasonably may request. With
               respect to each Mortgage encumbering the Premises from time to
               time during the Term, Tenant agrees to execute a subordination,
               non-disturbance and attornment agreement ("SNDA") in
               substantially the form attached hereto as EXHIBIT C, and Landlord
               shall cause the current Holder of


                                                                               5



               the current Mortgage, and make reasonable efforts to cause any
               future Holder of any future Mortgage, to execute same, and upon
               any such execution Landlord shall deliver such executed SNDA to
               Tenant.

          7.2.2 ASSIGNMENT OF RENTS AND TRANSFER OF TITLE. With reference to any
               assignment by Landlord of Landlord's interest in this Lease, or
               the rents payable hereunder, conditional in nature or otherwise,
               which assignment is made to the Holder of a Mortgage on property
               which includes the Premises, Tenant agrees that the execution
               thereof by Landlord, and the acceptance thereof by the Holder of
               such Mortgage shall never be treated as an assumption by such
               Holder of any of the obligations of Landlord hereunder unless
               such Holder shall, by notice sent to Tenant, specifically
               otherwise elect and, except as aforesaid, such Holder shall be
               treated as having assumed Landlord's obligations hereunder only
               upon foreclosure of such Holder's Mortgage and the taking of
               possession of the Premises.

               (a)  In no event shall the acquisition of Landlord's interest in
                    the Premises by a purchaser which, simultaneously therewith,
                    leases Landlord's entire interest in the Premises back to
                    the seller thereof be treated as an assumption by operation
                    of law or otherwise, of Landlord's obligations hereunder,
                    but Tenant shall look solely to such seller-lessee, and its
                    successors from time to time in title, for performance of
                    Landlord's obligations hereunder. In any such event, this
                    Lease shall be subject and subordinate to the lease to such
                    purchaser. For all purposes, such seller-lessee, and its
                    successors in title, shall be the Landlord hereunder unless
                    and until Landlord's position shall have been assumed by
                    such purchaser-lessor. Landlord shall, however, make
                    reasonable efforts to cause such purchaser-lessor to execute
                    an SNDA with Tenant substantially in the form of EXHIBIT C
                    hereto, and upon any such execution Landlord shall deliver
                    such executed SNDA to Tenant.

               (b)  Except as provided in subsection (a) above, in the event of
                    any transfer of title to the Premises by Landlord, Landlord
                    shall thereafter be entirely freed and relieved from the
                    performance and observance of all covenants and obligations
                    hereunder which accrue after the date of such transfer.

          7.2.3 NOTICE TO MORTGAGEE. After receiving written notice from
               Landlord of any Holder of a Mortgage which includes the Premises,
               no


                                                                               6



               notice from Tenant to Landlord alleging any default by Landlord
               shall be effective unless and until a copy of the same is given
               to such Holder (provided Tenant shall have been furnished with
               the name and address of such Holder), and the curing of any of
               Landlord's defaults by such Holder shall be treated as
               performance by Landlord.

          j.   TENANT'S PREPARATION OF PREMISES. In ARTICLE VIII of the Lease
               (LEASEHOLD IMPROVEMENTS):

               (i)  In the last paragraph of Section 8.1 of the Lease
                    (Landlord's Work), the $75,000 payment thereunder shall only
                    be due and payable by Tenant if (a) Tenant is in default
                    under the Lease beyond all applicable notice and cure
                    periods, if any, and (b) Landlord exercises any of its
                    remedies as set forth in Article V.

               (ii) Section 8.2 (Tenant's Preparation of the Premises) is hereby
                    amended to insert the following language at the end of the
                    first paragraph thereof: "The foregoing provisions of this
                    Section 8.2 shall be applicable to Tenant's initial fit up
                    of the Premises at the commencement of the Term. Commencing
                    on August 1, 2000, Landlord shall provide Tenant with a
                    second leasehold improvement allowance (the "Second
                    Leasehold Improvement Allowance") of an amount not to exceed
                    $428,197.00 in the aggregate for painting, carpeting,
                    reconfiguring architecture, engineering and other costs
                    within thirty (30) days of presentation of invoices to
                    Landlord in reasonable detail. Any of the Second Leasehold
                    Improvement Allowance for which disbursement requests have
                    not been made by December 31, 2001 shall be forfeited by
                    Tenant and Landlord shall have no further obligation with
                    respect thereto.

               (iii) The following is hereby inserted into the Lease as a new
                    Section 8.5:

                    "8.5 (Minor Alterations)

                    Notwithstanding any provision of this Lease to the contrary,
                    without the consent of Landlord, Tenant shall have the right
                    to make alterations to the interior of the Building so long
                    as (a) the cost of the same does not exceed $25,000 in any
                    calendar year, (b) the same does not adversely affect any
                    building system or the Structure of the Building."

               (iv) The following is hereby inserted as a new Section 8.6:

                    "8.6 (Reseal/Restripe)


                                                                               7



                    Landlord agrees to use reasonable efforts to reseal and
                    restripe the Parking Lot adjoining the Building on or before
                    December 31, 2000 or if Landlord is unable to do so, then as
                    soon thereafter as is reasonably practicable."

          k.   NOTICES. ARTICLE IX of the Lease (NOTICES) is hereby amended as
               follows:

               (1)  to change the provision for notice to Landlord to the
                    following: "All notices for Landlord shall be addressed to
                    Landlord c/o Boston Capital Institutional Advisors LLC, One
                    Boston Place, Boston, Massachusetts 02108-4406, Attn: Karl
                    W. Weller, Managing Director, with a copy to Michael F.
                    Burke, Esq., Peabody & Arnold LLP, 50 Rowes Wharf, Boston,
                    Massachusetts 02110, or at such other place as may be
                    designated in written notice to Tenant"; and

               (2)  to delete the last sentence thereof and insert the following
                    in its place: "Unless otherwise directed in writing, all
                    rents shall be payable to Landlord c/o Fleet Lock Box,
                    Boston Capital, Box 31130, 99 Founder's Plaza, Hartford, CT
                    06150 or at such other place as Landlord shall from time to
                    time designate by notice to Tenant."

          l.   OPTION TO EXTEND. The following language is hereby inserted into
               the Lease as Article XIII:

                                  "ARTICLE XIII

                                OPTION TO EXTEND

     13.1 Provided that Tenant is not then in default hereunder beyond
          applicable cure periods, if any, Tenant shall have the option (the
          "Extension Option") to extend the Term of this Lease for an additional
          period of five (5) years commencing on August 1, 2011 and expiring on
          July 31, 2016 (the "Extension Term"). The Extension Option may be
          exercised by Tenant delivering to Landlord written notice thereof (the
          "Tenant Extension Notice") not earlier than February 1, 2010 and not
          later than July 31, 2010. The Extension Term shall be upon all of the
          same terms, covenants and conditions of this Lease as are in effect
          upon Tenant's exercise of such Extension Option, except (i) as to
          Annual Fixed Rent, which shall be determined as set forth below, and
          (ii) that Tenant shall have no further extension rights unless
          otherwise agreed to in writing by Landlord.

               Notwithstanding any provision herein to the contrary, the
          Extension Option shall be null and void upon the occurrence of any of
          the following events: (i) Tenant's failure to exercise the Extension
          Option within the aforementioned time period in accordance with the
          provisions set forth herein, or (ii) Tenant assigning its interest in
          this Lease, or (iii)


                                                                               8



          Tenant at the time of such exercise having subleases in effect which
          total more than 25% of the square footage in the Building.

     13.2 If Tenant exercises the Extension Option as provided in Section 13.1
          above, then the annual fixed rental (Rent), as described in Section
          2.1 of this Lease and in Exhibit 1 to this Lease, for the Extension
          Term shall be the greater of (i) $2,875,037 or (ii) the Fair Market
          Rent. As used herein, the term "Fair Market Rent" means the Annual
          Fixed Rent as determined: (i) by agreement between Landlord and
          Tenant, negotiating in good faith, no later than thirty (30) days
          after Tenant's timely exercise of the Extension Option, or (ii) if
          Landlord and Tenant shall not have agreed upon the Fair Market Rent by
          said date as aforesaid (an "Impasse"), then Fair Market Rent for the
          Extension Term shall be fixed by means of an Appraisers' Determination
          as defined below.

     13.3 The term "Appraisers' Determination" refers to the following
          procedures and requirements:

          If an Impasse, as defined in Section 13.2 of this Lease, occurs, then,
          for the purpose of fixing the Fair Market Rent for the Extension Term,
          Landlord and Tenant shall agree upon an appraiser who shall be a
          member of the M.A.I. or Counselors of Real Estate (CRE) (or successor
          professional organizations) and shall have at least ten (10) years
          experience appraising rental values of comparable properties in the
          greater Boston market area.

          If Landlord and Tenant are not able to agree upon an appraiser by the
          date which is ten (10) days after such an Impasse (the "Appraiser
          Selection Deadline"), each of Landlord and Tenant shall, within ten
          (10) additional days, that is, by the date which is twenty (20) days
          after an Impasse, select an appraiser with the foregoing
          qualifications whereupon each of said appraisers shall, within five
          (5) days of their selection hereunder, select a third appraiser with
          the foregoing qualifications. The Fair Market Rent for the Extension
          Term shall thereafter be determined to be the amount equal to the
          average of the two appraisals which are closest in dollar amount to
          each other except that if all three appraisals are apart in equal
          amounts, then the appraisal which falls in the middle shall be the
          Fair Market Rent for the Extension Term. If either party fails to
          select an appraiser by the Appraiser Selection Deadline, then the
          appraiser selected by the other party, if selected by the Appraiser
          Selection Deadline, shall be the sole appraiser. Landlord and Tenant
          shall share equally the expense of any and all appraisers. The
          appraiser(s) shall be obligated to make a determination of Fair Market
          Rent within thirty (30) days of the appointment of either the single
          appraiser (if only one) and within thirty (30) days of the appointment
          of the third appraiser (if three are so appointed). In determining the
          Fair Market Rent for the Extension Term, the appraisers shall
          consider, among other things, the then current arms length basic rent


                                                                               9



          being charged to tenants for comparable properties in the greater
          Boston market area. The appraisers shall not have the right to modify
          any provision of this Lease and shall only determine the Fair Market
          Rent which shall constitute the annual fixed rent (Rent) under this
          Lease for the Extension Term.

          m.   EXHIBIT C attached to this Amendment is hereby inserted into the
               Lease as EXHIBIT C thereto.

4.   BROKERS. Landlord and Tenant each represent that there are no brokers
     involved with respect to this Amendment other than Meredith & Grew
     Incorporated and Spaulding & Slye/Colliers and each party agrees to
     indemnify, defend and hold harmless the other with respect to any other
     broker in connection herewith. Landlord shall be responsible for any
     commission due to Meredith & Grew Incorporated and Spaulding &
     Slye/Colliers with respect to the transaction contemplated by this
     Amendment.

5.   EFFECTIVE DATE. The parties agree that this Amendment shall be effective
     from and after the date hereof and not to any period of time prior thereto.
     To the extent this Amendment contains language which purports to amend the
     Lease with respect to periods of time prior to the date hereof, such
     language is for clarification purposes only and shall not be deemed to
     change the obligations of the parties with respect thereto. In no event
     shall this Amendment be construed to impose any liability on Landlord for
     any period of time preceding its ownership of the Premises.

6.   RATIFICATION OF LEASE PROVISIONS. Except as otherwise expressly amended,
     modified and provided for in this Amendment, Tenant hereby ratifies all of
     the provisions, covenants and conditions of the Lease, and such provisions,
     covenants and conditions shall be deemed to be incorporated herein and made
     a part hereof and shall continue in full force and effect.

7.   ENTIRE AMENDMENT. This Amendment contains all the agreements of the parties
     with respect to the subject matter hereof and supersedes all prior dealings
     between the parties with respect to such subject matter.

8.   BINDING AMENDMENT. This Amendment shall be binding upon, and shall inure to
     the benefit of the parties hereto, and their respective successors and
     assigns.

9.   GOVERNING LAW. This Amendment shall be governed by the law of the state in
     which the Premises is located and the parties hereby submit to the
     jurisdiction of such state.

10.  SEVERABILITY. If any clause or provision of this Amendment is or should
     ever be held to be illegal, invalid or unenforceable under any present or
     future law applicable to the terms hereof, then and in that event, it is
     the intention of the parties hereto that the remainder of this Amendment
     shall not be affected thereby, and that in lieu of each such clause or
     provision of this Amendment that is illegal, invalid or unenforceable, such
     clause or provision shall be judicially construed and interpreted to be as
     similar in substance and content to such illegal,


                                                                              10



     invalid or unenforceable clause or provision, as the context thereof would
     reasonably suggest, so as to thereafter be legal, valid and enforceable.

11.  NO RESERVATION. Submission of this Amendment for examination or signature
     is without prejudice and does not constitute a reservation, option or
     offer, and this Amendment shall not be effective until execution and
     delivery by all parties.

12.  COUNTERPARTS. This Amendment may be executed simultaneously in two or more
     counterparts, each of which shall be deemed an original, but all of which
     together shall constitute one and the same instrument.

              [The Remainder of this Page Intentionally Left Blank]


                                                                              11



     IN WITNESS WHEREOF, the parties hereto have executed this Amendment under
seal as of the date and year first above written.

                                      LANDLORD:

                                      BCIA NEW ENGLAND HOLDINGS LLC, a Delaware
                                      limited liability company

                                      By: BCIA NEW ENGLAND HOLDINGS MASTER LLC,
                                          a Delaware limited liability company,
                                          its Manager

                                      By: BCIA NEW ENGLAND HOLDINGS MANAGER LLC,
                                          a Delaware limited liability company,
                                          its Manager

                                      By: BCIA NEW ENGLAND HOLDINGS MANAGER
                                          CORP., a Delaware corporation,
                                          its Manager


                                      By: /s/ Karl W. Weller
                                          --------------------------------------
                                      Name: Karl W. Weller
                                      Title: EVP


                                      TENANT:

                                      PRI AUTOMATION, INC.,
                                      a Massachusetts corporation


                                      By: /s/ Cosmo S. Trapani
                                          --------------------------------------
                                      Name: Cosmo S. Trapani
                                      Title: VP & CFO


                                                                              12



                                    EXHIBIT C

          Form of Subordination, Non-Disturbance and Attornment Agreement THIS
AGREEMENT is made and entered into as of the _____ day of _________, _____ by
and between THE CHASE MANHATTAN BANK, as Trustee under that certain Pooling and
Servicing Agreement dated as of November 1, 1999 for Certificateholders of the
Office Finance Corp Commercial Mortgage Pass-Through Certificates Series
1999-FL1 ("MORTGAGEE"), and Power-One, Inc., a Delaware corporation ("LESSEE").

                                    RECITALS:

     A. Mortgagee has made a loan (the "LOAN") to BCIA New England Holdings LLC,
a Delaware limited liability company ("BORROWER"), secured by the Borrower's
interest in the real property known and numbered 805 Middlesex Turnpike,
Billerica, Massachusetts, and more particularly described in EXHIBIT A attached
hereto and incorporated herein by reference (said real property and improvements
being herein called the "PROJECT"), such Loan being secured by a Mortgage,
Assignment of Leases and Rents, Security Agreement and Fixture Filing dated
_________________ (the "MORTGAGE"), and recorded with the _____________ Registry
of Deeds in Book ____, Page ___, which Mortgage constitutes a lien or
encumbrance on the Project; and

     B. Lessee is the holder of a leasehold estate in and to the Project (the
"DEMISED PREMISES"), under that Lease Agreement (the "LEASE") dated
_______________, 2000, executed by Borrower, as Landlord (Borrower being
sometimes hereinafter called "LESSOR"), and Lessee, as Tenant; and

     C. Lessee and Mortgagee desire to confirm their understandings with respect
to the Lease and the Mortgage.

                                   AGREEMENT:

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, Lessee and Mortgagee agree and covenant as
follows:

          1. NON-DISTURBANCE. Mortgagee agrees that it will not disturb the
possession of Lessee under the Lease upon any judicial or non-judicial
foreclosure of the Mortgage or upon acquiring title to the Project by
deed-in-lieu of foreclosure, or otherwise, if the Lease is in full force and
effect and Lessee is not then in default under the Lease, and that Mortgagee
will accept the attornment of Lessee thereafter so long as Lessee is not in
default under the Lease.

          2. ATTORNMENT. If the interests of Lessor in and to the Demised
Premises are owned by Mortgagee by reason of any deed-in-lieu of foreclosure,
judicial foreclosure, sale pursuant to any power of sale or other proceedings
brought by it or by any other manner, including, but not limited to, Mortgagee's
exercise of its rights under any assignment of leases and rents, and Mortgagee
succeeds to the interest of Lessor under the Lease, Lessee shall be bound to
Mortgagee under all of the terms, covenants and conditions of the Lease for the
balance of the term thereof remaining and any extension thereof duly exercised
by Lessee with the same


                                                                              13



force and effect as if Mortgagee were the Lessor under the Lease; and Lessee
does hereby attorn to Mortgagee, as its lessor, said attornment to be effective
and self-operative, without the execution of any further instruments on the part
of any of the parties hereto, immediately upon Mortgagee's succeeding to the
interest of Lessor under the Lease; provided, however, that Lessee shall be
under no obligation to pay rent to Mortgagee until Lessee receives written
notice from Mortgagee that Mortgagee has succeeded to the interest of the Lessor
under the Lease or otherwise has the right to receive such rents. The respective
rights and obligations of Lessee and Mortgagee upon such attornment, to the
extent of the then remaining balance of the term of the Lease, shall be and are
the same as now set forth therein, it being the intention of the parties hereto
for this purpose to incorporate the Lease in this Agreement by reference, with
the same force and effect as if set forth in full herein.

          3. MORTGAGEE'S OBLIGATIONS. If Mortgagee shall succeed to the interest
of Lessor under the Lease, Mortgagee, subject to the last sentence of this
Paragraph 3, shall be bound to Lessee under all of the terms, covenants and
conditions of the Lease; provided, however, that Mortgagee shall not be:

               (a) Liable for any act or omission of any prior lessor (including
     Lessor); or

               (b) Subject to the offsets or defenses which Lessee might have
     against any prior lessor (including Lessor); or

               (c) Bound by any rent or additional rent or advance rent which
     Lessee might have paid for more than the current month to any prior lessor
     (including Lessor), and all such rent shall remain due and owing,
     notwithstanding such advance payment; or

               (d) Bound by any security or advance rental deposit made by
     Lessee which is not delivered or paid over to Mortgagee and with respect to
     which Lessee shall look solely to Lessor for refund or reimbursement;

               (e) Bound by any termination, amendment or modification of the
     Lease made without its consent and written approval;

               (f) Liable under any warranty of construction contained in the
     Lease or any implied warranty of construction; or

               (g) Liable for the performance or completion of any construction
     obligations under the Lease or for any loan or contribution or rent
     concession towards construction of the Demised Premises pursuant to the
     Lease.

Neither THE CHASE MANHATTAN BANK, as Trustee under that certain Pooling and
Servicing Agreement dated as of November 1, 1999 for Certificateholders of the
Office Finance Corp Commercial Mortgage Pass-Through Certificates Series
1999-FL1, nor any other party who from time to time shall be included in the
definition of Mortgagee hereunder, shall have any liability or responsibility
under or pursuant to the terms of this Agreement after it ceases to own an
interest in the Project. Nothing in this Agreement shall be construed to require
Mortgagee to see to the application of the proceeds of the Loan, and Lessee's
agreements set forth herein shall


                                                                              14



not be impaired on account of any modification of the documents evidencing and
securing the Loan. Lessee acknowledges that Mortgagee is obligated only to
Borrower to make the Loan only upon the terms and subject to the conditions set
forth in the Loan Agreement between Mortgagee and Borrower pertaining to the
Loan. In no event shall Mortgagee or any purchaser of the Project at foreclosure
sale or any grantee of the Project named in a deed-in-lieu of foreclosure, nor
any heir, legal representative, successor, or assignee of Mortgagee or any such
purchaser or grantee (collectively the Mortgagee, such purchaser, grantee, heir,
legal representative, successor or assignee, the "SUBSEQUENT LANDLORD") have any
personal liability for the obligations of Lessor under the Lease and should the
Subsequent Landlord succeed to the interests of the Lessor under the Lease,
Tenant shall look only to the estate and property of any such Subsequent
Landlord in the Project for the satisfaction of Tenant's remedies for the
collection of a judgment (or other judicial process) requiring the payment of
money in the event of any default by any Subsequent Landlord as landlord under
the Lease, and no other property or assets of any Subsequent Landlord shall be
subject to levy, execution or other enforcement procedure for the satisfaction
of Tenant's remedies under or with respect to the Lease; provided, however, that
the Lessee may exercise any other right or remedy provided thereby or by law in
the event of any failure by Lessor to perform any such material obligation.

          4. SUBORDINATION. The Lease and all rights of Lessee thereunder are
subject and subordinate to the lien and the terms of the Mortgage and to any
deeds of trust, mortgages, ground leases or other instruments of security which
do now or may hereafter cover the Project or any interest of Lessor therein
(collectively, the "PRIOR ENCUMBRANCES") and to any and all advances made on the
security thereof and to any and all increases, renewals, modifications,
consolidations, replacements and extensions of the Mortgage or of any of the
Prior Encumbrances. This provision is acknowledged by Lessee to be
self-operative and no further instrument shall be required to effect such
subordination of the Lease. Lessee shall, however, upon demand at any time or
times execute, acknowledge and deliver to Mortgagee any and all instruments and
certificates that in Mortgagee's judgment may be necessary or proper to confirm
or evidence such subordination. If Lessee shall fail or neglect to execute,
acknowledge and deliver any such instrument or certificate, Mortgagee may, in
addition to any other remedies Mortgagee may have, as agent and attorney-in-fact
of Lessee, execute, acknowledge and deliver the same and Lessee hereby
irrevocably appoints Mortgagee as Lessee's agent and attorney-in-fact for such
purpose. However, notwithstanding the generality of the foregoing provisions of
this paragraph, Lessee agrees that Mortgagee shall have the right at any time to
subordinate the Mortgage, and any such other mortgagee or ground lessor shall
have the right at any time to subordinate any such Prior Encumbrances, to the
Lease on such terms and subject to such conditions as Mortgagee, or any such
other mortgagee or ground lessor, may deem appropriate in its discretion.

          5. NEW LEASE. Upon the written request of either Mortgagee or Lessee
to the other given at the time of any foreclosure, trustee's sale or conveyance
in lieu thereof, the parties agree to execute a lease of the Demised Premises
upon the same terms and conditions as the Lease between Lessor and Lessee, which
lease shall cover any unexpired term of the Lease existing prior to such
foreclosure, trustee's sale or conveyance in lieu of foreclosure.

          6. NOTICE. Lessee agrees to give written notice to Mortgagee of any
default by Lessor or Borrower under the Lease not less than thirty (30) days
prior to terminating the


                                                                              15



Lease or exercising any other right or remedy thereunder or provided by law.
Lessee further agrees that it shall not terminate the Lease or exercise any such
right or remedy provided such default is cured within such thirty (30) days;
provided, however, that if such default cannot by its nature be cured within
thirty (30) days, then Lessee shall not terminate the Lease or exercise any such
right or remedy, provided the curing of such default is commenced within such
thirty (30) days and is diligently prosecuted thereafter. Such notices shall be
delivered by certified mail, return receipt requested to:

                    GE Capital Loan Services, Inc.
                    363 North Sam Houston Parkway East, Suite 1200
                    Houston, Texas 77060
                    Attention: Pat McEntee
                    and
                    General Electric Capital Corporation
                    Long Ridge Road
                    Stamford, Connecticut 06927
                    Attention: Vice President, Securitizations

          7. MORTGAGEE. The term "Mortgagee" shall be deemed to include THE
CHASE MANHATTAN BANK, as Trustee under that certain Pooling and Servicing
Agreement dated as of November 1, 1999 for Certificateholders of the Office
Finance Corp Commercial Mortgage Pass-Through Certificates Series 1999-FL1 and
any of its successors and assigns, including anyone who shall have succeeded to
Lessor's interest in and to the Lease and the Project by, through or under
judicial foreclosure or sale under any power or other proceedings brought
pursuant to the Mortgage, or deed in lieu of such foreclosure or proceedings, or
otherwise.

          8. ESTOPPEL. Lessee hereby certifies, represents and warrants to
Mortgagee that:

               (a) That the Lease is a valid lease and in full force and effect.
     That there is no existing default in any of the terms and conditions
     thereof and no event has occurred which, with the passing of time or giving
     of notice or both, would constitute an event of default;

               (b) That the Lease has not been amended, modified, supplemented,
     extended, renewed or assigned, and represents the entire agreement of the
     parties;

               (c) That, except as provided in the Lease, Lessee is entitled to
     no rent concessions or abatements;

               (d) That Lessee shall not pay rental under the Lease for more
     than one (1) month in advance. Lessee agrees that Lessee shall, upon
     written notice by Mortgagee, pay to Mortgagee, when due, all rental under
     the Lease;


                                                                              16



               (e) That all obligations and conditions under the Lease to be
     performed to date have been satisfied, free of defenses and set-offs;

               (f) That Lessee has not received written notice of any claim,
     litigation or proceedings, pending or threatened, against or relating to
     Lessee, or with respect to the Demised Premises which would affect its
     performance under the Lease. Lessee has not received written notice of any
     violations of any federal, state, county or municipal statutes, laws,
     codes, ordinances, rules, regulations, orders, decrees or directives
     relating to the use or condition of the Demised Premises or Lessee's
     operations thereon.

          9. MODIFICATION AND SUCCESSORS. This Agreement may not be modified
orally or in any manner other than by an agreement, in writing, signed by the
parties hereto and their respective successors in interest. This Agreement shall
inure to the benefit of and be binding upon the parties hereto, their successors
and assigns.

          10. COUNTERPARTS. This Agreement may be executed in several
counterparts, and all so executed shall constitute one agreement, binding on all
parties hereto, notwithstanding that all parties are not signatories to the
original or the same counterpart.


                                                                              17



         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

MORTGAGEE:

                                        THE CHASE MANHATTAN BANK, as Trustee
                                        under that certain Pooling and Servicing
                                        Agreement dated as of November 1, 1999
                                        for Certificateholders of the Office
                                        Finance Corp Commercial Mortgage
                                        Pass-Through Certificates Series
                                        1999-FL1

                                        BY: GE CAPITAL LOAN SERVICES, INC., as
                                            Servicer pursuant to that certain
                                            Pooling and Servicing Agreement
                                            dated as of November 1, 1999 for
                                            Certificateholders of the Office
                                            Finance Corp Commercial Mortgage
                                            Pass-Through Certificates Series
                                            1999-FL1.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        LESSEE:


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                                                              18



STATE OF
         ----------------------------
COUNTY OF
          ---------------------------

     This instrument was acknowledged before me on this ___________ day of
___________________, ______ by __________________________________, as
__________________________________ of GE CAPITAL LOAN SERVICES, INC., a Delaware
corporation, on behalf of said corporation.


(SEAL)                                  ----------------------------------------
                                        Notary Public in and for
                                        the State of
                                                     ---------------------------

                                        ----------------------------------------
                                        Print name of notary
                                        My Commission Expires:
                                                               -----------------

STATE OF
         ----------------------------
COUNTY OF
          ---------------------------

     This instrument was acknowledged before me on this __________ day of
_______, _____ by ______________________, as _________________________ of
_____________________, a _________________, on behalf of said _________________.


(SEAL)                                  ----------------------------------------
                                        Notary Public in and for
                                        the State of
                                                     ---------------------------

                                        ----------------------------------------
                                        Print name of notary
                                        My Commission Expires:
                                                               -----------------


                                                                              19

EX-10.29

                                                                   Exhibit 10.29

                                      LEASE

     THIS LEASE, dated as of October 12, 2000 is between PROGRESS ROAD LLC, a
Massachusetts corporation with a principal address of 17 Progress Road
Billerica, Massachusetts 01821 as lessor ("Landlord") and PRI AUTOMATION, a
Massachusetts corporation with a principal address of 805 Middlesex Turnpike
Burlington, Massachusetts 01821 as lessee ("Tenant").

                                   ARTICLE ONE
                                    PREMISES

     1.1 DEMISE OF PREMISES: Landlord hereby leases to Tenant, and Tenant hires
from Landlord, on the terms and conditions contained in this Lease, certain real
property with the buildings and structures thereon located in the town of
Billerica, Middlesex County, Massachusetts (as more particularly described in
Exhibit "A" attached hereto), commonly known as 17 Progress Road Billerica,
Massachusetts, and consisting of: (a) the existing building comprised of
approximately 57,000 +/- rentable square feet of space (the "Existing
Building"); and, subject to the provisions of Section 3.2 hereof; (b) an
expansion/addition on the property of one more building which, once constructed,
will consist of approximately 61,543 +/- rentable square feet of space (the
"Proposed Building"); the total approximate rentable area of (a) and (b) to
equal approximately 118,543 rentable square feet of space; (c) parking rights in
the buildings and on the site, which as to the Existing Building and related
site areas constitute approximately 126 spaces, and as to the Proposed Building
and related site areas shall constitute approximately an additional 103 spaces;
the foregoing totaling 229 spaces (the "Parking"); and (d) the land on which the
Existing Building and the Proposed Building are sited along with all
improvements thereon, hereditaments and appurtenances thereto (the "Property");
all of which (a), (b) (c) and (d) above are collectively referred to herein as
the "Premises".

     1.2 LANDLORD'S AND TENANT'S RESPECTIVE BUILD-OUTS OF THE PREMISES: The
Landlord and Tenant shall each bear certain initial build-out responsibilities
relative to the Premises, as follows:

     A. Landlord's Build-Out: As to the Existing Building and the existing
Parking areas and other existing elements on the Property as of the date of
execution of this Lease, Landlord bears no responsibility whatsoever to perform
any work prior to delivery of the Premises to the Tenant. As to the Proposed
Building, proposed Parking areas, and other proposed elements on the Property,
the Landlord's responsibility for construction is as set forth on the plans and
specifications set forth on Exhibit B hereto (the "Landlord's Build-Out").
Landlord shall perform all such work on Landlord's Build-Out at its sole cost
and expense, in accordance with all applicable local, state and federal laws,
bylaws, rules and regulations, and in a good and workmanlike manner using
materials of good quality.

     Landlord and Tenant each hereby acknowledge that Tenant may make reasonable
changes to the Landlord's Build-Out as set forth in Exhibit B, which Landlord
shall incorporate in its Landlord's Build-Out, provided: (i) the changes do not
materially delay or impede Landlord's ability to procure its permits or make its
delivery deadlines hereunder; (ii) the changes do not materially increase the
scope or nature of Landlord's work as set forth in Exhibit B hereto; (iii) the
changes, to the extent they result in greater cost or expense to Landlord, are



paid for by Tenant in a manner to be mutually agreed by Landlord or Tenant at
the time the changes are proposed and agreed to by them; (iv) the changes do not
materially detract from the quality, appearance, or overall plan for the
Proposed Building, or materially increase the size, area, equipment or
appearance thereof, as set forth in Exhibit B hereto; and, (v) the changes, to
the extent they result in a cost savings to Landlord, will be credited to Tenant
in a manner to be mutually agreed by Landlord or Tenant at the time the changes
are proposed and agreed to by them. To the extent any proposed changes are not
agreed to by Landlord at the time proposed by Tenant, they shall become part of
Tenant's Build-Out (if Tenant elects to pursue them) and shall be paid for
exclusively by Tenant with no credit or offset of any kind.

     Landlord shall undertake reasonable measures to perform its Landlord's
Build-Out in such a manner as minimizes interference with Tenant's use of the
Existing Building, existing Parking areas, and other existing elements on the
Property; Tenant acknowledging however that it is accepting delivery of the
Existing Building, existing Parking areas, and other existing elements on the
Property in complete understanding of the significant construction activities
which will be taking place prior to the delivery of the Proposed Building
(including attendant noise, debris, dust, interruptions and inconveniences which
will be occasioned thereby); Tenant hereby waiving any and all defenses or
claims (including without limitation claims for interference with peaceful
occupation, constructive eviction, etc.) which Tenant may have arising from any
such construction activities.

     B. Tenant's Build-Out: Upon Landlord's delivery of the Existing Building
and subsequent delivery of the Proposed Building, respectively Tenant shall have
the right to enter and commence its own construction thereon, in accord with its
own plans and specifications (the "Tenant's Build-Out") submitted to and
approved in writing in advance by Landlord, which approval shall not be
unreasonably withheld or delayed. Landlord shall not be responsible for any
delays in construction on Tenant's Build-Out. Tenant shall perform all such work
on Tenant's Build-Out at its sole cost and expense, in accordance with all
applicable local, state and federal laws, bylaws, rules and regulations, and in
a good and workmanlike manner using materials of good quality. Tenant's
Build-Out shall not interfere with Landlord's work on the Proposed Building, and
Landlord's construction and site requirements shall take precedence.
Notwithstanding the progress or completion of Tenant's Build-Out, Tenant shall
be required to make its payments of Fixed Rent and Additional Rent at the times
set forth in Article Four of this Lease.

     C. Tenant's Build-Out Allowance: Landlord hereby grants to Tenant an
allowance toward its actual work in place pursuant to Tenant's Build-Out,
determined and applied as follows (the "Tenant's Build-Out Allowance"):

          (i) Existing Building: Tenant's Build-Out Allowance as to Tenant's
Build-Out of its space in the Existing Building shall be calculated on the basis
of $ 4.20 per rentable square foot, not to exceed Two Hundred Fifty Thousand
($250,000.00) Dollars.

          (ii) Proposed Building: Tenant's Build-Out Allowance as to Tenant's
Build-Out of its space in the Proposed Building shall be calculated on the basis
of $ 4.20 per rentable square foot, not to exceed Two Hundred Fifty Thousand
($250,000.00) Dollars.


                                       -2-



          (iii) Advances For Tenant's Build-Out Allowance: Tenant's Build-Out
Allowance shall be advanced to Tenant based on work in place per Requisitions
(as defined below), beginning with Tenant's Build-Out Allowance attributable to
the Existing Building, then, after delivery of the Proposed Building, toward
Tenant's Build-Out Allowance attributable to the Proposed Building. Tenant's
Build-Out Allowance will be advanced by Landlord in monthly installments based
on a monthly statement of work in place (the "Requisition") agreed to and
delivered signed by the Tenant. Payment will be within thirty (30) days of the
receipt of each such Requisition. Tenant shall not submit more than one (1)
Requisition in any thirty (30) day period. Landlord shall have the right to
inspect the Premises to certify that the work for which the credit is claimed is
in fact, in place and in suitable condition. Landlord shall amortize the
Tenant's Build-Out Allowance over the Term of the Lease, and shall assess
interest on any unpaid balance at the annual rate of twelve (12%) percent,
compounded, and these sums shall be paid by Tenant during the Term of the Lease
(or upon any uncured event of default hereunder or earlier termination of this
Lease). Tenant's repayment of the Tenant's Build-Out Allowance (plus interest as
aforesaid) shall be in monthly installments with payments due on the first day
of each calendar month based upon a statement provided by Landlord (or sooner,
upon notice by Landlord and expiration of any cure periods in the event of
default by Tenant or earlier termination of this Lease). All such payments shall
be Additional Rent under this Lease.

     1.3 ACCEPTANCE OF PREMISES: Tenant acknowledges that it is familiar with
the condition of the Existing Building and the Property and is satisfied with
the physical condition thereof. Tenant covenants and agrees to accept the
Existing Building and Property (a) in their condition and state of repair as of
the date hereof, reasonable use and wear excepted, "AS IS", subject only to the
provisions of Section 1.3 below; and (b) subject to all laws, ordinance, rules,
regulations, order and directives, governing, regulating or in any manner
applicable to all or any part of the Premises or any interest therein or any use
or occupancy thereof, (the Premises currently being in compliance with the
foregoing), and to all liens, encumbrances, easements, rights of way, covenants,
conditions, restrictions, servitude, licenses and other matters then of record
or otherwise affecting the Premises, none of which shall materially interfere
with Tenant's use of the Premises. Tenant's acceptance of possession of the
Premises shall be deemed to be Tenant's acknowledgement that it is satisfied in
all respects with the condition of the Premises at the time of accepting
possession, and Tenant's failure to deliver written objection to Landlord upon
delivery as to any conditions thereon shall be deemed a waiver of Tenant's
rights to thereafter object to any physical conditions or attributes of the
Existing Building and Property. Notwithstanding the foregoing, Landlord shall
deliver the existing building systems, including the electrical, HVAC and
mechanical systems, in good working condition on the Commencement Date.

     Except as provided in the immediately preceding paragraph, Tenant further
acknowledges that no person has made any representation or warranty to Tenant as
to the condition of the Premises or their compliance with any such laws,
ordinances, rules, regulations, orders, or directives, or their suitability for
any use or purpose, other than the following:

     A. HVAC Service In Existing Building: As set forth in Exhibit C hereto.


                                       -3-



     B. Electrical Service In Existing Building: As set forth in Exhibit D
hereto.

     C. General: Landlord represents and warrants that: (i) the Existing
Building is free of harmful asbestos or other hazardous materials, and that no
current indoor air quality problems currently exist; (ii) Landlord has completed
Phase 1 and Phase 2 environmental assessments on the Existing Building and
Property within the past three (3) years and has made available such reports to
Tenant; (iii) the Existing Building is in compliance with current requirements
of the Americans With Disabilities Act (ADA).

                                   ARTICLE TWO
                                 USE OF PREMISES

     2.1 USE OF PREMISES: Tenant may use and occupy the Premises during the
Term, as and when the Existing Building and related Property areas and the
Proposed Building and related Property areas are each delivered to the Tenant,
only for light industrial and ancillary warehouse and general business use, as
permitted under the Billerica zoning ordinances and regulations, and for no
other use. Except as otherwise provided in this Lease, during the Term hereof,
Tenant shall keep the Premises and every part thereof, from the date(s) of
delivery thereof to the Tenant, in good repair and condition at its sole cost
and expense, reasonable use and wear, damage by casualty and taking by eminent
domain excepted; provided however that Tenant shall have no obligation with
respect to the Proposed Building and related Property areas until the Proposed
Building and related Property areas are delivered by Landlord to Tenant. At the
expiration of the Term (or upon the earlier termination of this Lease), Tenant
shall surrender the Premises in substantially the same condition and repair as
existed at the time Tenant took possession, reasonable wear and tear, damage by
casualty and taking by eminent domain excepted.

     2.2 GENERAL PROHIBITIONS: Tenant shall not create, or permit to be created,
any public or private nuisance, hazard, waste, or illegal condition on or with
respect to the Premises. Tenant shall not conduct its business operations on the
Premises unless and until all necessary certificates of occupancy, permits,
licenses and consents from all appropriate governmental authorities have been
obtained by Tenant and are in full force and effect. Tenant shall immediately
remove any and all liens which may be placed on the Premises, voluntarily or
involuntarily, by or on account of the Tenant.

     2.3 TENANT'S ENVIRONMENTAL COVENANTS: Tenant warrants and agrees that it
will comply with all applicable environmental laws and regulations in connection
with its use and occupancy of the Premises.

     Tenant warrants and agrees that it will not store, treat, or dispose of any
toxic or hazardous wastes on, above or below the Premises during its leasehold;
provided, however, that Tenant may temporarily accumulate waste for off-site
disposal if such accumulation is in full compliance with applicable laws and
regulations. Notwithstanding the foregoing, Tenant may use ordinary household
and office products generally used by consumers in ordinary quantities.

     Tenant's warranties and agreements contained in this Section 2.3 shall
survive the expiration or earlier termination of the Lease.


                                       -4-



                                  ARTICLE THREE
                                  TERM OF LEASE

     3.1 TERM OF LEASE: "Term" shall mean the initial term of this Lease and all
extensions and renewals thereof. The "Initial Term" of this Lease shall mean the
period beginning on the Commencement Date and continuing for a period of ten
(10) years from and after either (a) the Commencement Date or (b) if the
Commencement Date is other than the first day of the calendar month, then
beginning on the first day of the first calendar month following the
Commencement Date (i.e. the "Anniversary Date"), (the incremental portion
between the Commencement Date and the Anniversary Date to expand the first Lease
Year hereunder).

     3.2 COMMENCEMENT DATE, DELIVERY, AND POSSESSION:

     A. Commencement Date: The "Commencement Date" shall be October 15, 2000.

     B. Delivery Dates: There shall be two separate delivery dates under this
Lease, taking into account the Landlord's delivery of the Existing Building and
related Property areas at the outset, and subsequent delivery of the Proposed
Building and related Property areas:

          (i) Landlord shall deliver the Existing Building and Property to the
Tenant for its possession, use, and occupancy on the Commencement Date as set
forth in subsection A above (the "Delivery Date") free and clear of all other
tenants or occupants (subject to Landlord's Residual Occupancy as defined under
subsection (iii) below). Tenant shall have reasonable access to the Existing
Building prior to the Commencement Date to install Tenant's trade fixtures and
systems, provided that Tenant shall not conduct its business therefrom; Tenant
to access said space during this early access period subject to all the terms
and conditions hereof (but for the obligation to pay Rent).

          (ii) Landlord shall deliver the Proposed Building to the Tenant for
its possession, use, and occupancy on or before June 1, 2001 (the "Deferred
Delivery Date"); provided that the permitting contemplated therefor meets the
schedule prepared by Dacon Construction, which schedule is attached hereto as
Exhibit E; subject to any intervening events of Force Majeure as defined in
Section 14.15 hereof or any construction delays occasioned by unknown site
conditions, in which case the Deferred Delivery Date for the Proposed Building
shall be extended day for day to account of each day of such delay. Commencing
as of sixty (60) days prior to the expected Deferred Delivery Date, Landlord
shall in good faith entertain Tenant's request for early access to the Proposed
Building for the purpose of beginning preliminary work on its Tenant's Build-Out
and Landlord shall use reasonable efforts to accommodate such early access for
Tenant, but Landlord shall be under no obligation to grant any such access as my
interfere with Landlord's construction and delivery obligations hereunder, delay
the Deferred Delivery Date, or which would be unlawful or unsafe given the then
state of completion of said Proposed Building.

          (iii) Notwithstanding Landlord's delivery of the Existing Building and
related Property areas to Tenant on the Delivery Date, Landlord shall be
entitled to continue its occupancy and use of the existing space therein which
houses and is utilized for Landlord's "computer room", consisting of
approximately 2,000 rentable square feet, for a period of ninety


                                       -5-



(90) days from the Delivery Date (the "Landlord's Residual Occupancy"). Landlord
shall use reasonable efforts to vacate said "computer room" and remove its
equipment, furnishings and fixtures therefrom at the earliest feasible time but
in no event later than the end of said ninety (90) day period. Landlord's
activities from the Premises during the Landlord's Residual Occupancy shall not
materially interfere with Tenant's business activities. Landlord acknowledges
Tenant intends to commence its construction work within said ninety (90) day
period and Landlord shall be responsible for the security of its equipment
within the "computer room" within this timeframe. Additionally, Landlord
acknowledges Tenant's right to temporarily from time to time suspend electrical
service to the "computer room" during and notwithstanding Landlord's Residual
Occupancy in order to accommodate Tenant's reasonable construction needs, and
Tenant shall not be liable therefor provided reasonable prior notice is given to
Landlord of the intended suspension.

     C. Possession: Landlord shall deliver and Tenant shall accept possession of
the Existing Building and related Property areas as of the Delivery Date, in the
condition provided for in Section 1.3 hereof. Landlord shall deliver and Tenant
shall accept possession of the Proposed Building as of the Deferred Delivery
Date in its then existing condition; provided that Landlord's construction
obligations have been substantially completed pursuant to the plans and
specifications agreed to in advance by Landlord and Tenant (as contemplated in
Section 1.2 hereof), subject to any then remaining "punchlist" items to be
completed subsequent to the Deferred Delivery Date; and further provided that
any unfinished work on the Proposed Building (such as work on building systems
(i.e. electrical, mechanical, plumbing, HVAC, life safety), or
elevators/escalators; or work on finishes or cosmetic work), or work on the
Property (such as landscaping, paving, etc.) does not materially interfere with
Tenant's ability to substantially occupy and conduct its business on and from
the Proposed Building. Landlord agrees to complete all such punchlist and
unfinished work as soon as is reasonably practicable under the circumstances. To
the extent a Certificate of Occupancy for the Proposed Building can be obtained
from the Town of Billerica (given the scope of Landlord's Build-Out vis a vis
Tenant's Build-Out) then Landlord shall procure the same on or before the
Deferred Delivery Date. However, to the extent any element of Tenant's proposed
work on Tenant's Build-Out (whether included within the plans and specifications
or resulting from on-site construction conditions and/or coordination issues)
precludes issuance of the Certificate of Occupancy, then Landlord shall not be
required to deliver the Certificate of Occupancy on or before the Deferred
Delivery Date.

     3.3 TENANT'S TERMINATION RIGHT:

     This Lease contemplates that Landlord shall make reasonable good faith
efforts to procure the requisite government permits and approvals for its
construction of the Proposed Building on the Property, in a timely fashion, such
that Tenant can begin its occupancy of the Proposed Building on or about June 1,
2001. Preliminarily, commencing upon execution of this Lease Landlord shall
pursue its engineering studies of the site to determine the feasibility of the
Proposed Building, and shall provide such information to Tenant. Additionally,
within sixty (60) days from the date this Agreement is executed and delivered,
Landlord shall provide Tenant with a commitment letter from a federal insured
bank or major insurance company as to its sound interest in financing the
Proposed Building, subject to the usual and customary commercial terms and
conditions. If Landlord can not obtain such a letter Landlord shall so notify
Tenant and


                                       -6-



Tenant shall have the option to provide Landlord with options for such financing
on commercially reasonable non-recourse terms; which Landlord shall entertain in
good faith but which Landlord shall not be bound or required in any manner to
accept. If Landlord does not deliver a third party commitment letter (or
alternatively does not demonstrate an ability to fund Landlord's Build-Out with
its own resources) or does not accept Tenant's financing proposals as
contemplated above, then Tenant may terminate this Lease upon written notice to
Landlord as contemplated below. Landlord shall file for any and all requisite
permits and approvals needed for construction, use and occupancy of the Proposed
Building. If despite Landlord's efforts, all requisite government permits and
approvals for its construction of the Proposed Building on the Property are not
procured by January 1, 2001 (and Landlord does not actually deliver the Proposed
Building by June 1, 2001 if Landlord elects to proceed with and substantially
complete its construction by that date if such permits and approvals have been
delayed beyond January 1, 2001) then Tenant shall have the right to terminate
this Lease on the following terms and conditions: (a) Tenant shall deliver a
written notice to Landlord irrevocably terminating this Lease (the "Tenant's
Termination Notice") at least nine (9) full months prior to the Tenant's stated
date of termination, time being of the essence in the delivery of said Notice;
(b) no termination shall occur and no Tenant's Termination Notice shall be
delivered until the fifth (5th) Lease Year hereunder, and no termination shall
be effective until the beginning of the sixth Lease Year (i.e. the 61st month
under this Lease); (c) notwithstanding Tenant's rights to terminate this Lease,
Tenant shall continue to abide by all Lease terms and conditions as to the
Existing Building and related Property areas, including but not limited to the
payment of all Rent and other expenses due under this Lease, up to the effective
date of termination; (d) Tenant shall pay Landlord for the entire unamortized
portion of the Lease commission as of the termination date, prior to vacating
the Premises occupied by it. Tenant hereby acknowledges that its termination
rights as set forth in this Section 3.3 constitute its sole and exclusive remedy
accruing on account of Landlord's inability to procure permits and approvals and
to deliver the Proposed Building as contemplated above.

     3.4 OPTION TO EXTEND TERM:

     A. Two Consecutive Options: Provided that Tenant has not defaulted under
this Lease, Tenant shall have the option to extend the term of this Lease for
two (2) additional successive periods of five (5) years each ("Renewal
Term(s)"), on the conditions contained in this Section.

     B. Manner Of Exercise: Tenant shall exercise its option hereunder, in each
instance, by giving written notice of its exercise said option (the "Tenant's
Notice Of Intent") as to a given Renewal Term not less than twelve (12) months
prior to the end of the initial Term (or twelve (12) months prior to the
expiration of the first Renewal Term, as the case may be); irrevocably
exercising its option to extend for that period. Tenant must exercise its option
for the first Renewal Term before exercising its option as to the second Renewal
Term. Upon receipt of Tenant's Notice Of Intent, Landlord shall deliver to
Tenant a notice as to Landlord's requested Fixed Rent for the Premises for the
Renewal Term in question reflecting fair market rent (including any annual
escalations, as usual to the market at that time) projected as of the start of
the Renewal Term. If Tenant does not agree with said Fixed Rent, then the Fair
Market Rent for the purpose of this Section to be used in determining Fixed Rent
for the Renewal Term shall be determined by appraisal and arbitration as follows
(the "Rent Appraisal Process"). If Tenant


                                       -7-



does not timely deliver Tenant's Notice of Intent then Tenant's rights hereunder
shall lapse and the Term shall cease at the end of the initial Term or the first
Renewal Term then in process, as applicable. Time is of the essence in the
delivery of Tenant's Notice Of Intent.

     Within thirty (30) days after Tenant's Notice Of Intent, Landlord and
Tenant shall each appoint a person to make a Fair Market Rent determination
(including appropriate escalators); which person shall be an individual who is
not then employed by either party and who is a qualified real estate broker or
appraiser, previously or currently affiliated with a recognized real estate
brokerage or appraisal firm, with sufficient experience or credentials (i.e. MAI
or comparable) and knowledge of the local commercial real estate rental markets.
If either party shall fail to notify the other of its selection by the
expiration of said fourteen (14) day period, and such failure shall continue for
two (2) days after written notice to the other, then that party shall be deemed
to have waived its right to select a representative. Each party shall be
responsible for the costs of its selected representative.

     The two selected representatives (or the lone selected representative in
the case of failure to select) shall each prepare and simultaneously submit in
writing their separate assessments of Fair Market Rent (including escalations)
for the Premises projected for the Renewal Term, within fourteen (14) days.
Within the next fourteen (14) days, the representatives shall meet and attempt
in good faith to reconcile their positions and agree on a Fair Market Rent. If
they so agree, they shall submit their recommendation to the parties in writing
and that determination shall be the Fair Market Rent (including escalators) for
said Renewal Term. If they do not agree, within said fourteen (14) days they
shall submit the name of a mutually agreed and qualified person to serve as the
arbitrator. Absent demonstrable conflict of interest with either party or its
selected appraiser, bias, or prejudice, that individual shall review the two
representatives' reports and make his own determination based on said reports as
to Fair Market Rent (including escalators). Under no circumstances shall any
Fair Market Rent determination be less than the fully escalated Fixed Rent for
the last Lease Year of the initial Term as prescribed above (or in the case of
the second Renewal Term, the last Lease Year of the first Renewal Term). The
third arbitrator shall make a determination with fourteen (14) days of the
submittal of the reports to him or her. The parties shall evenly share the
reasonable costs of the third arbitrator.

     C. Additional Rent: Tenant shall also be required to pay all Additional
Rent due under this Lease during the Renewal Term(s).

     D. Same Terms And Conditions Throughout: Except as modified in this
Section, all terms and conditions of this Lease shall continue and shall remain
in full force and effect throughout the Renewal Term(s).

                                  ARTICLE FOUR
                         FIXED RENT AND ADDITIONAL RENT

     4.1 OBLIGATION TO PAY RENT:

     A. Rent: The Rent payable under this Lease shall consist of Fixed Rent and
Additional Rent.


                                       -8-



     B. Fixed Rent: The Tenant shall pay Fixed Rent to Landlord in the amounts
specified in this Lease, in advance, on the first day of each calendar month
during the Term hereof, without previous demand and without offset or deduction
of any kind whatsoever. Notwithstanding the foregoing, Tenant shall pay the
first month's installment of Fixed Rent upon the execution of the Lease. The
Tenant shall pay Additional Rent in the manner described in Section 4.3.

     C. Late Charge: Should any payment of Rent be received later than the
fifteenth day of the month for which it is due, then concurrently with such
payment Tenant shall pay to Landlord as Additional Rent a late charge equal to
three (3%) percent above the prime rate charged by Fleet Bank (or its successor)
applied to the overdue Rent, compounded monthly from the due date.

     D. Rent Obligation: The parties intend and agree that the obligations of
Tenant to pay Rent shall be separate and independent covenants and agreements
and shall continue unabated throughout the Term hereof unless modified or
terminated pursuant to an express provision of this Lease.

     4.2 FIXED RENT:

          4.2.1 DEFINITION OF LEASE YEAR: "Lease Year" shall mean the
consecutive twelve (12) month period following the Commencement Date or, if the
Commencement Date is other than the first day of a calendar month, then the
first Lease Year shall be extended to include the initial incremental number of
days up to the Commencement Date (for which Tenant shall pay the pro rata
portion of Fixed Rent for said incremental month with its first installment of
Fixed Rent).

          4.2.2 FIXED RENT FOR THE INITIAL TERM: The Fixed Rent for the each
Lease Year of the initial Term of this Lease shall be as follows:

     A. Fixed Rent as to Existing Building and Related Property Areas:

                                   
1st Lease Year:    $396,150.00/annual;   $33,012.50/mo.
2nd Lease Year:    $396,150.00/annual;   $33,012.50/mo.
3rd Lease Year:    $404,700.00/annual:   $33,725.00/mo.
4th Lease Year:    $404,700.00/annual:   $33,725.00/mo.
5th Lease Year:    $413,250.00/annual:   $34,437.50/mo.
6th Lease Year:    $413,250.00/annual:   $34,437.50/mo.
7th Lease Year:    $421,800.00/annual:   $35,150.00/mo.
8th Lease Year:    $421,800:00/annual:   $35,150.00/mo.
9th Lease Year:    $421,800.00/annual:   $35,150.00/mo.
10th Lease Year:   $421,800.00/annual:   $35,150.00/mo.



     B. Fixed Rent as to Proposed Building and Related Property Areas:

          Subject to the completion and delivery of the Proposed Building as
contemplated in Section 3.2 hereof, as of June 1, 2001 Tenant shall pay to
Landlord Fixed Rent attributable to the Proposed Building and related Property
areas as follows:


                                       -9-



                
1st Lease Year:    $7.85 per rentable square foot
2nd Lease Year:    $7.85 per rentable square foot
3rd Lease Year:    $8.00 per rentable square foot
4th Lease Year:    $8.00 per rentable square foot
5th Lease Year:    $8.15 per rentable square foot
6th Lease Year:    $8.15 per rentable square foot
7th Lease Year:    $8.30 per rentable square foot
8th Lease Year:    $8.30 per rentable square foot
9th Lease Year:    $8.30 per rentable square foot
10th Lease Year:   $8.30 per rentable square foot



          4.2.3 FIXED RENT FOR EACH RENEWAL TERM:

          The annual Fixed Rent for each Renewal Term shall be as determined
under Section 3.4B hereof.

     4.3 ADDITIONAL RENT: Landlord and Tenant agree that this Lease is a "triple
net" Lease. Consequently, Tenant shall also pay as additional rent as to the
entire Premises (as of the Delivery Date relative to the delivery of the
Existing Building and related Property areas, and as of June 1, 2001 (or the
date the Proposed Building is actually delivered to Tenant as provided in
Section 3.2(b)(ii) hereof) relative to the delivery of the Proposed Building)
all other amounts, liabilities and obligations required under this Lease
relating to the Premises ("Additional Rent"), including without limitation those
items defined as Expenses in Article Five below, together with all interest that
may accrue thereon if Tenant fails to pay such amounts when due, and all
damages, costs, and expenses which Landlord may incur by reason of any default
of Tenant. Items of Additional Rent which are payable to persons other than
Landlord shall be paid when or before such payment becomes due, before any
interest or penalty shall attach or accrue. Items of Additional Rent which are
payable to Landlord shall be paid on demand. If Tenant fails to pay any of the
Additional Rent, Landlord shall have all legal and equitable rights and remedies
provided either in the Lease or by statute or otherwise in the case of
nonpayment of the Fixed Rent.

     4.4 SECURITY DEPOSIT: Prior to Commencement Date, Tenant shall deliver to
Landlord the sum of (i) Thirty Three Thousand Twelve 50/100 ($33,012.50)
Dollars, i.e. one full month's Fixed Rent under Section 4.2.2 A above; plus,(ii)
within ten (10) days of receiving notice that Landlord has received its building
permit for the Proposed Building, Tenant shall then also deliver to Landlord
that amount which is equal to one full month's Fixed Rent under Section 4.2.2 B
above; (i) and (ii) above equaling one full month's Fixed Rent as to the entire
Premises (herein, the "Security Deposit"), as security for full performance by
Tenant of all the terms, covenants and conditions herein. Provided that Tenant
has fully carried out all of the terms, covenants and conditions herein, the
Security Deposit shall be returned within thirty (30) days after the end of the
Lease Term unless this Lease is extended. In the event of default by Tenant
under this Lease beyond any applicable notice grace and cure period, Landlord
may use, apply or retain all or any part of the Security Deposit in payment of
any expense incurred by Landlord in curing the default by Tenant, in payment of
any rent due, to repair damages to the Premises, or to maintain the Premises in
the condition required hereunder. Unless otherwise required by law, Tenant shall
not be entitled to any interest on the deposit and Landlord may place the
Security


                                      -10-



Deposit with its general funds. If Landlord fails to deliver the Proposed
Building as contemplated under Section 3.2C hereof, then the delivery of the
additional Security Deposit payment under subsection (ii) above is deemed waived
and shall be returned to Tenant.

                                  ARTICLE FIVE
                                    EXPENSES

     5.1 EXPENSES: "Expenses" are those costs which are attributable in whole or
in part to the Premises, to be paid by Tenant. As used in this Lease, "Expenses"
shall include:

          (a)  Taxes, as defined in Section 5.2;

          (b)  Insurance Premiums, as defined in Section 5.3;

          (c)  Operating Costs, as defined in Section 5.4:

          (d)  Utility Costs, as defined in Section 5.5.

     5.2 TAXES

          5.2.1 REQUIREMENT TO PAY TAXES: Tenant shall be responsible for and
pay to the appropriate taxing authority all taxes and assessments (collectively
"Taxes") applicable to the Premises. "Taxes" shall include, without limitation,
all property taxes (whether real or personal), assessments (general or special),
water and sewer connection or tap-in charges, supplemental property taxes,
personal property taxes, privilege taxes, Tenant's gross income taxes, excise
taxes, gross sales taxes, and all other governmental taxes, fees, impositions
and charges of every kind and nature, which shall be or become due and payable
under or by virtue of any law, statute, ordinance, regulation, or other
requirement of any governmental authority, whether federal, state, county, city,
municipal or otherwise, (i) which shall be levied, assessed or imposed upon
Landlord or Tenant with respect to the Premises (other than Landlord's Federal
or state income or transfer taxes), or (ii) which shall be levied, assessed or
imposed upon the Premises or become liens upon or against the Premises or any
portion thereof, or any interest of the owner of the Premises, Tenant, and
sublessee or occupant of the Premises under any instrument creating a leasehold
or other interest in the Premises or any portion thereof, or (iii) which shall
be levied, assessed, or imposed or shall be or become liens upon any personal
property used in connection with or any interest of the owner of the Premises
therein arising out of or related to Tenant's use of the Premises, or (iv) which
shall be levied or imposed upon or with respect to the possession, leasing,
operation, management, maintenance, improvement, alteration, repair, use or
occupancy of the Premises or any portion thereof by the owner of the Premises or
any other person having ownership or security interest in the Premises. All
betterment assessments shall be payable by Tenant when due the taxing
authorities. In no event shall Tenant be responsible for sales taxes due for
materials used to construct the Proposed Building. Landlord shall promptly
deliver to Tenant copies of all real estate tax bills received by Landlord. To
the extent any sums under this Section 5.2.1 are not paid by Tenant by that date
upon which they become an enforceable municipal lien against the Premises, then
Landlord may pay said amounts directly to the municipal taxing authority,
whereupon Tenant shall be separately invoiced by Landlord and shall reimburse
Landlord for such expenditure, together with interest and late fees in the same
measure as if Fixed Rent had been overdue hereunder.


                                      -11-



          5.2.2 RIGHT TO CONTEST TAXES: Landlord shall promptly notify Tenant of
any increase in assessed value of, or increases in Taxes attributable to, the
Premises, of which Landlord receives notice or otherwise becomes aware. If Taxes
are not contested by Landlord, Tenant shall have the right to contest such
Taxes, at Tenant's sole cost and expense, by the appropriate proceedings
diligently contested in good faith. Notwithstanding such proceedings, the
contested Taxes shall be promptly paid and discharged, unless such proceedings
(and where necessary the posting of an appropriate bond or other security) shall
operate to prevent or stay the collection of the Taxes and secure any accruing
penalties or interest, and also to cure Landlord's default in the payment of
Taxes required under any mortgage upon the Premises. Landlord shall join Tenant
in such proceedings, if necessary, provided that Tenant pays all costs and
expenses incurred by Landlord including without limitation attorneys fees.

     5.3 INSURANCE PREMIUMS: "Insurance Premiums" shall mean the premiums
necessary to obtain and maintain the policies described in Article Seven below,
which shall at Landlord's election either be payable to the Landlord (to the
extent it is paying said premiums directly), or alternatively the companies
providing such insurance.

     5.4 OPERATING COSTS: "Operating Costs" shall mean the actual expenses
incurred for the operation and maintenance of the Premises, in accordance with
accepted principles of sound management and accounting practices, including but
not limited to expenses incurred in satisfaction of Tenant's obligations under
this Lease to keep and maintain the Premises in good condition and repair.
Tenant shall make its own direct arrangements with service providers for all
Operating Costs, unless otherwise and separately agreed to in writing by
Landlord and Tenant. Upon reasonable request, Tenant shall inform Landlord as to
the identity of all such providers, the nature of the services and the status of
all such payments and accounts. Operating Costs shall include a management fee
payable directly to Landlord equal to eighteen cents ($ 0.18) per rentable
square feet of the Existing Building and Proposed Building under this Lease
annually upon invoice. Operating Costs shall be payable by Tenant directly to
the third parties which are arranged for by Tenant to provide the respective
services. The following items are excluded from the definition of "Operating
Costs": (a) expenses for repairs or other work occasioned by fire, windstorm or
other insurable casualty (said expenses to be borne as set forth in Articles
Seven and Eight hereof); and (b) interest or amortization payments of any
mortgage placed on the Premises by the Landlord. To the extent Tenant fails to
provide or pay for necessary services to the Property, or the level or quality
of such services are deficient such that the Property or any portion thereof is
jeopardized, or materially impaired, or falls below the physical standard and
appearance of the Property as of the respective delivery dates to Tenant, or is
in violation of any applicable building, sanitary, or environmental laws, codes,
regulations or orders, then Landlord, upon reasonable prior notice to Tenant,
may contract with third party providers of Landlord's own selection and Tenant
shall be obligated to reimburse Landlord upon receipt of its invoice for any and
all such costs incurred for such services.

     5.5 UTILITY COSTS: "Utility Costs" shall include all charges made during
the term of this Lease for water, sewer service, gas, electricity, trash
removal, and other utilities and services supplied to the Premises, together
with any taxes thereon. Tenant shall make its own direct arrangements with
service providers for all Utility Costs, unless otherwise and separately agreed
to in writing by Landlord and Tenant. Upon reasonable request, Tenant shall
inform Landlord as to the identity of all such providers, the nature of the
utilities and related services, and the status


                                      -12-



of all such payments and accounts. Utility costs (to the extent not included in
Operating Costs under Section 5.4 above) shall be payable by Tenant directly to
the provider of such services in a coordinated fashion with any Landlord
payments under Operating Costs under Section 5.4 above. To the extent Tenant
fails to provide or pay for utilities to the Premises, or the level or quality
of such utilities are deficient such that the Premises or any portion thereof is
jeopardized, or materially impaired, or falls below the physical standard and
appearance of the Premises as of the respective delivery dates to Tenant, or is
in violation of any applicable building, sanitary, or environmental laws, codes,
regulations or orders, then Landlord, upon reasonable prior notice to Tenant,
may contract with third party providers of Landlord's own selection and Tenant
shall be obligated to reimburse Landlord upon receipt of its invoice for any and
all such costs incurred for such utilities.

                                   ARTICLE SIX
                       MAINTENANCE, REPAIR AND ALTERATIONS

     6.1 TENANT'S MAINTENANCE AND REPAIR OBLIGATIONS: Tenant shall, at all times
during the Term and at its sole expense, maintain, repair, and replace the
Premises, including, without limitation, the roof and interior and exterior
walls of the building; all plumbing, water and sewer, heating, ventilation, air
conditioning and electrical facilities and equipment; all improvements,
alterations, and additions, structural members, foundations, partitions,
ceilings, skylights, showcases, windows, doors, storage tanks, glass and plate
glass, parking areas, paving, sidewalks, landscaping, drainage, and lighting
facilities; and all fixtures, equipment and facilities appurtenant to any of the
foregoing, and shall maintain the foregoing in good condition and repair. Such
maintenance and repair obligation shall run to all portions of the Premises,
expressly including the Parking areas and the Property, and shall include items
deemed to be capital improvements for tax purposes. Tenant shall be responsible
for its own cleaning of the Premises (interior and exterior). Tenant shall keep
the whole of the Premises in a safe, clean, sanitary, orderly and attractive
condition. Tenant shall paint as reasonably needed, the interior and exterior
surface of exterior walls. Tenant shall store all trash and garbage in adequate
containers located on the Premises. Tenant, at its sole expense, shall arrange
for the regular removal of its trash and garbage from the Premises.

     Notwithstanding the foregoing Tenant obligations, Landlord's sole
responsibility for maintenance, repairs, and replacements (for which Landlord
shall pay) shall be: (i) repairs due to defective workmanship or materials to
shell and core and base systems, structure and roof installed by Landlord in the
Proposed Building as delivered to Tenant, excluding any work on or attributable
to Tenant's Improvements, and (ii) any reasonable and necessary repairs and
replacements to the Existing Building (and its Parking area), or the site, which
are occasioned solely by Landlord's construction of the Proposed Building up to
its delivery to Tenant; and (iii) replacement of the roofs of the Existing
Building and Proposed Building and their exteriors (exclusive of glass in the
windows and doors and framing thereto which shall be Tenant's responsibility)
during the first ten (10) Lease Years hereunder (Tenant to be responsible for
such replacements during any Renewal Term(s); and (iv) replacement of the septic
system servicing the Existing Building, Proposed Building and related Property
areas during the first ten (10) Lease Years hereunder (Tenant to be responsible
for such replacements during any Renewal Term(s). If the Tenant exercises its
option to extend the Lease as provided hereunder, then Landlord shall also be
responsible (and shall pay for) repairs to the floors slabs and structural


                                      -13-



elements which may be reasonably necessary during the extended portion of the
Term. Landlord shall not be responsible for any such repairs or replacements to
the extent caused by the negligence of willful misconduct of the Tenant, its
employees or independent contractors or deliverymen. Specifically, Landlord
shall not be responsible for any damage or wear caused to the septic system by
any materials deposited by Tenant beyond normal wear and tear; it being Tenant's
sole responsibility to ensure that all materials and waste products are properly
disposed of and that there are: no oils, fuels, chemical cleaning agents or
other caustic, biological, or hazardous materials disposed of in any manner
which causes harm to the septic system. Payments for which Landlord is
responsible under this paragraph shall not be included as Operating Costs under
Section 5.4 hereof.

     Tenant shall, at its sole expenses and without limitation, promptly make
all additions to or alterations or repairs or replacements in and about the
Premises which may be required by federal, state and local statutes, be required
by federal, state and local statutes, ordinances, regulations, orders, and
directives, which may hereafter apply in any manner whatsoever to the Premises,
but only after written approval of Landlord and in accordance with the
provisions of this Article.

     6.2 REFUSAL TO MAINTAIN OR REPAIR: If Tenant refuses or neglects to make
any alterations, additions or repairs, or to do any maintenance required
hereunder in a manner reasonably satisfactory to Landlord, Landlord shall have
the right, but not the obligation, after ten (10) days notice to Tenant, to make
such alterations, replacements, additions, or repairs, or perform such
maintenance on behalf of, and for the account of, Tenant. All costs incurred by
Landlord for such work, together with interest thereon at the maximum rate then
allowed under Massachusetts law, from the date of payment thereof by Landlord,
shall be deemed Additional Rent hereunder and shall be payable by Tenant to
Landlord.

     6.3 ALTERATIONS AND ADDITIONS:

          6.3.1 LANDLORD'S CONSENT REQUIRED: Tenant shall not make any
alterations, improvements, additions, or utility installations (collectively
"Alterations") in, on or about the Premises without Landlord's prior written
consent, which shall not be unreasonably withheld so long as Tenant is not in
default hereunder beyond any applicable notice grace and cure period hereunder.
Notwithstanding the foregoing, Tenant may during each Lease Year make
non-structural alterations which in the aggregate do not exceed $ 100,000.,
without Landlord's prior consent. As used in this Article, the term "utility
installation" includes, but is not limited to, carpeting, window coverings, air
lines, power panels, electrical distribution systems, lighting fixtures, space
heaters, air condition, plumbing, and fencing. Landlord may require Tenant to
provide Landlord, at Tenant's sole cost and expense, a lien and completion bond
in an amount equal to one and one-half times the estimated cost of such
Alterations, to insure Landlord against any liability for mechanic's and
materialman's liens and to insure completion of the work. If requested by
Tenant, Landlord may choose to accept a cash bond or letter of credit in an
amount equal to one and one-half times the estimated cost of such Alterations in
lieu of the lien and completion bond. Should Tenant make any Alterations without
the prior approval of Landlord, Landlord may require that Tenant remove any or
all of the same.


                                      -14-



          6.3.2 OWNERSHIP OF ALTERATIONS: All fixtures and all carpeting and
other floor, wall and ceiling coverings, and all lighting fixtures installed on
the Premises by Tenant shall become the property of Landlord and shall remain
upon and be surrendered with the Premises upon the termination of the Lease,
provided however:

               (a) Nothing in this Section shall be construed to give Landlord
     title to or to prevent Tenant's removal of trade fixtures and/or moveable
     office furniture and equipment;

               (b) Landlord may require Tenant to remove any or all of any
     Alterations at the expiration of the Term of this Lease, so long as
     Landlord has at the time of approval of such Alteration advised Tenant that
     such removal will be required;

               (c) Upon removal of any equipment, fixtures, and/or Alteration
     which Tenant is required or permitted to remove under this Lease, Tenant
     shall immediately and at its own expense repair and restore the Premises to
     the condition existing prior to installation (subject to ordinary wear and
     tear) and repair any damage to the Premises due to such removal.

     All property that was permitted to be removed by Tenant at the end of the
Term but which remains in the Premises for sixty (60) days after Tenant vacates
the Premises shall be deemed abandoned and may, at the election of Landlord,
either be retained as Landlord's property or may be removed from the Premises by
Landlord.

          6.3.4 SUBMISSION OF PLANS: Any Alterations in or about the Premises
that Tenant shall desire to make and which require the consent of the Landlord
shall be presented to Landlord, in written form, with proposed detailed plans.
Landlord shall respond to Tenant within five (5) business days of its receipt of
said plans. Landlord's consent, if any, shall be deemed conditioned upon
Tenant's acquiring all permits, licenses, and other authorization to do so from
appropriate governmental agencies at Tenant's cost, the furnishing of a copy
thereof to Landlord prior to the commencement of work, and the compliance by
Tenant with all conditions of said authorization in a prompt and expeditious
manner.

     All Alterations shall be performed in a first-class, workmanlike, manner
and in accordance with any plans and specifications therefor approved by
Landlord, which approval shall not be unreasonably withheld. All Alterations
shall be commenced and completed promptly.

     Landlord may condition its approval in this Article upon maintenance by
Tenant, at its cost, of appropriate insurance coverage.

          6.3.5 LANDLORD INSPECTION: Any Alteration shall be subject to
inspection at any time by Landlord and its architect, or their duly authorized
representatives, and if Landlord's architect upon such inspection shall be of
the opinion that the Alteration is not being performed in accordance with the
provisions of this Article or the plans and specifications, or that any of the
materials or workmanship are not first-class or are unsound or improper, Tenant
shall correct any such failure and shall replace any unsound or improper
materials or workmanship.


                                      -15-



               Upon completion of any Alteration, Tenant, at Tenant's expense,
shall obtain certificates of final approval of such Alteration required by any
appropriate authority and shall furnish Landlord with copies thereof, together
with "as-built" plans and specifications for such Alteration.

     6.4 PAYMENT OF CLAIMS/MECHANICS LIENS: Tenant shall (a) pay when due and
before delinquency all costs and expenses of work done or caused to be done by
Tenant in the Premises; (b) keep the title to the Premises and every part
thereof free and clear of any lien or encumbrance in respect of such work; and
(c) indemnify and hold harmless Landlord against any claim, loss, cost and/or
demand (including legal fees), whether in respect of liens or otherwise, arising
out of the supply of material, services or labor for such work. Tenant shall
give Landlord not less than ten (10) days notice prior to the commencement of
any Alteration on the Premises, and Landlord shall have the right to post
notices of non-responsibility on the Premises.

     Tenant shall immediately notify Landlord of any lien, claim of lien or
other action of which Tenant has or reasonably should have knowledge and which
affects the title to the Premises or any part thereof ("Lien"); and Tenant shall
cause such Lien to be removed within thirty (30) days of the date of its
attachment (or such additional time as Landlord may consent to in writing),
either by paying and discharging such Lien or by posting a bond or such other
security as may be reasonably satisfactory to Landlord.

     If Tenant shall fail to remove any such Lien within the required time
period, Landlord may take such action as Landlord deems necessary to remove
same. Any and all costs incurred by Landlord in taking such action, including,
without limitation, reasonable attorney fees, shall be repaid by Tenant to
Landlord on demand, with interest thereon at the rate of ten percent (10) per
annum from the date of payment; if unpaid, such amounts may be treated as
Additional Rent.

     6.5 LANDLORD NOT LIABLE FOR TENANT'S WORK: Landlord shall not under any
circumstances be liable to pay for any work, labor or services rendered or
materials furnished to Tenant in connection with the Premises, and no mechanic's
or other lien for such Work, labor or services, or materials furnished shall
under any circumstances attach to or affect the reversionary interest of
Landlord in the Premises or in any alterations, repairs or improvements to be
made thereon.

     Nothing contained in the Lease shall be deemed or construed in any way as
constituting the request or consent of Landlord, either express or implied, to
any contractor, subcontractor, laborer or materialman for the performance of any
labor or the furnishing of any materials for any specific improvement,
alteration, or repair to the Premises or any part thereof, nor as giving Tenant
any right, power or authority to contract for or permit the rendering of any
services or the furnishing of any materials on behalf of Landlord that would
give rise to the filing of any lien against the Premises.

                                  ARTICLE SEVEN
                                    INSURANCE

     7.1 LIABILITY INSURANCE: Throughout the Term of this Lease, Tenant shall at
its own expense provide and keep in force for the benefit of Landlord and
Tenant:


                                      -16-



               (a) Property insurance covering the Premises for its full
     replacement (100%) cost, with deductibles reasonably acceptable to Landlord
     (as to which deductibles, Tenant shall be responsible for payment in the
     event of any casualty or loss);

               (b) Commercial (Broad Form Comprehensive) general liability,
     including products, completed operations, and contractual liability
     coverage in limits of not less than $5,000,000.00 per occurrence combined
     single limit for personal injury and property damage, and naming Landlord
     as an additional insured:

               (c) Workers compensation insurance covering all persons employed
     at the Premises to the extent required by the laws of Massachusetts;

               (d) Employers liability coverage at limits not less than
     $250,000/250,000/250,000;

               (e) Comprehensive automobile liability covering all owned, hired
     and non-owned vehicles in limits of not less than $5,000,000.00 per
     occurrence combined single limit for personal injury and property damage
     including all statutory coverages for all states of operation, and naming
     Landlord as an additional insured;

               (f) Builder's risk insurance covering the construction of
     Tenant's Build-Out;

               (g) Such other insurance, in such coverages and amounts and in
     such form, as is customarily obtained by owners of properties similarly
     constructed, operated, and maintained and reasonably acceptable to
     Landlord.

     7.2 CASUALTY INSURANCE: Throughout the Term of this Lease, Landlord shall
have the option as to the insurance required of Tenant in Section 7.1 (a) to
obtain itself and keep in effect insurance for fire and special extended
coverages (of such kind, in such amounts, and with such companies as Landlord
may in its reasonable discretion determine) for the Premises. In the event that
Landlord elects to obtain insurance policies for such coverages, Tenant shall
upon demand reimburse Landlord for the premiums required to obtain and maintain
such policies. Such premiums shall be deemed "Additional Rent" under Section
4.3.

     7.3 REQUIREMENTS FOR ALL INSURANCE POLICIES: Notwithstanding anything
contained herein to the contrary, Tenant shall be obligated to provide insurance
for any of Tenant's property, including without limitation Tenant's furniture,
fixtures, equipment, goods, inventory, and/or trade fixtures. All insurance
required under this Section shall be primary and noncontributing and shall be
written with companies reasonably acceptable to Landlord and its lenders. Tenant
shall deliver to Landlord certificates evidencing the existence and amount of
such insurance. No such policy shall be cancelable or subject to reduction of
coverage or other modification except after twenty (20) days written notice to
Landlord and its lenders and Landlord and its lenders shall be listed as
"additional named insureds" under all policies relating to the Premises. Tenant
shall not do nor permit to be done anything which would or shall invalidate the
insurance policies referred to in this Article.

     7.4 TENANT'S FAILURE TO PROVIDE INSURANCE: If Tenant fails to obtain or to
keep in effect any of the insurance required under this Article, Landlord may,
but shall have no


                                      -17-



obligation to, procure such insurance at its option; any amounts advanced
therefor shall be paid by Tenant as Additional Rent in accordance with Article
IV.

                                  ARTICLE EIGHT
                              DAMAGE OR DESTRUCTION

     8.1 REPAIRS TO PREMISES: In the event the Premises are damaged or destroyed
in whole or in part by fire or other casualty during the term of this Lease, and
provided Landlord's lenders agree to the release of the insurance proceeds
toward this end (which they may do in their sole discretion) then Landlord
shall, after the adjustment of the insurance loss, immediately commence and
diligently pursue the restoration of the Premises to good and tenantable
condition. Landlord shall restore the Premises to substantially the same
condition as before the occurrence of such casualty, and Landlord may elect to
raze the damaged or destroyed improvement(s) and to use the insurance proceeds
to replace the improvement(s) so razed. The completed work of repair,
restoration or replacement shall be at least equal in value, quality and use to
the condition of the Premises before such destruction.

     8.2 APPLICATION OF INSURANCE PROCEEDS: The release of insurance proceeds
shall at all times be subject to the approval and direction of Landlord's
lender(s) as contemplated under Section 8.1 hereof. Tenant and Landlord shall
cooperate fully, at Tenant's sole expense, to obtain the largest possible
insurance recovery. If the insurance proceeds available for rebuilding are
insufficient to cover the cost of repairs and restoration of the Premises as
required hereunder, then Landlord may determine if the Premises shall be
rebuilt. If the available insurance proceeds exceed the cost of such repairs and
restoration, the excess shall be the property of the party obtaining and paying
the premiums for such insurance, and the other party shall have no right or
interest therein.

     8.3 REDUCTION OF RENT/TERMINATION: In the event the Premises are damaged or
destroyed in whole or in part by fire or other casualty during the Term of this
Lease, (a) there shall be no abatement of reduction in Rent due under this Lease
unless the restoration can not be completed within 180 days; and (b) neither
party shall have the right to terminate this Lease on account of such damage or
destruction without the consent of the other party unless the restoration can
not be completed within 180 days.

                                  ARTICLE NINE
                                  CONDEMNATION

     9.1 TOTAL TAKING: If the whole of the Premises or a substantial portion
thereof such that Tenant can not continue any of its business operations, or if
a material portion of the parking area portion of the Premises is taken by any
public authority under the power of eminent domain, then this Lease shall
terminate on the date possession of the Premises is delivered to such public
authority. Fixed Rent and Additional Rent shall be paid to that date and
prorated accordingly.

     9.2 PARTIAL TAKING.

          9.2.1 ADJUSTMENT TO RENT: If part (but less than a substantial portion
of the Premises as contemplated in Section 9.1) of the Premises is taken by any
public authority under the power of eminent domain, then, on the date possession
is required by such public authority,


                                      -18-



this Lease shall terminate as to the portion taken, and the Fixed Rent due
hereunder shall be adjusted as follows:

               (a) If part of either the Existing Building or Proposed Building
     which is included in the Premises is taken, then Fixed Rent shall be
     reduced on a square foot basis in proportion to the amount taken of such
     building which is taken.

               (b) If no part of the Existing Building or Proposed Building is
     taken, but part of the land which is included in the Premises is taken,
     then Fixed Rent shall not be reduced or adjusted, unless said taking
     materially affects the tenant's use of the premises, in which case the
     fixed rent shall be reduced on a square foot basis in proportion to the
     amount of land taken.

          9.2.2 RESPONSIBILITY TO REPAIR: Except, as otherwise provided in this
Section, Landlord shall immediately commence and diligently pursue the
restoration of the remaining Premises to the extent necessary to permit the
continued use of the Premises, and shall use Landlord's Condemnation Award (as
described below) therefor. Landlord shall restore the Premises to substantially
the same condition as before the taking. In no event shall Landlord be required
to repair or replace (a) Tenant's personal property (such as wall coverings,
carpeting and window treatments); (b) Tenant's furnishings, operating equipment,
trade fixtures, or merchandise; or (c) Tenant's Alterations; except to the
extent that Landlord's Condemnation Award contains an amount allocated for
reimbursement of any of the foregoing.

          9.2.3 COST OF REPAIRS: If Landlord's Condemnation Award is
insufficient to cover the cost of restoration required hereunder, Landlord may
(but shall not be required to) complete such restoration and shall pay any and
all amounts by which the cost to complete such work exceeds the Award.

     9.3 LANDLORD'S OPTION TO TERMINATE: Notwithstanding anything to the
contrary contained in this Lease, if part of the Premises is taken by any public
authority under the power of eminent domain, Landlord shall have the right to
terminate this Lease upon the occurrence of any of the following and upon
written notice given to Tenant not later than ninety (90) days after
commencement of condemnation proceedings against the Premises (or, if such
proceedings are not commenced, not later than fourteen (14) days before Landlord
delivers possession of the part so taken by such public authority):

               (a) If the taking of part of the Premises significantly and
     adversely affects Tenant's use of the Premises; or

               (b) If restoration of the remainder of the Premises cannot in
     Landlord's opinion be completed within 180 days after the date possession
     is required by the public authority; or

               (c) If Landlord's Condemnation Award is insufficient to the
     necessary restoration; or

               (d) If the taking (i.e., the date possession is required by the
     public authority) occurs within the last 180 days of the then current Term
     of the Lease, provided however


                                      -19-



     that the Lease may not be terminated under this Subsection if Tenant's
     option, if any, to further extend the term of this Lease is exercised after
     fifteen (15) days after Tenant receives from Landlord the termination
     notice described above.

Termination of the Lease pursuant to this Section shall be effective as of the
later of the date possession is required by the public authority or sixty (60)
days after Tenant receives the termination notice described above.

     9.4 LANDLORD'S CONDEMNATION AWARD: All damages awarded for such taking
shall belong to and be the property of the Landlord, whether such damages shall
be awarded as compensation for diminution in value to the leasehold or to the
fee of the Premises and/or for any improvements to the Premises whether made by
Landlord or Tenant. The amount received by Landlord which is allocable to the
Premises shall be "Landlord's Condemnation Award." However, Tenant shall be
entitled to any award for removal and relocation expenses, Tenant's loss of
business, and fixtures paid for by Tenant. Landlord and Tenant shall each seek
their own award and pay their own expenses in connection therewith.

                                   ARTICLE TEN
                      ASSIGNMENT SUBLETTING AND INSOLVENCY

     10.1 ASSIGNMENT/CHANGE IN TENANT OWNERSHIP: Neither the Lease, nor any
interest of Tenant in the Lease, shall be sold, assigned, or otherwise
transferred, directly or indirectly, whether by operation of law or otherwise,
and there shall be so subletting of the Premises or any part thereof, without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld. Should any such an assignment or transfer be permitted hereunder,
Landlord may at its option (i) elect to enter into a new lease with the assignee
pursuant to the assignment or (ii) require payment to Landlord of fifty (50%)
percent of any and all amounts (after deduction of reasonable brokers and
attorneys fees in connection with the transaction, as well as reasonable
accommodations for tenant improvements and/or "free rent" periods, but only to
the extent they are usual and customary in the office market at that time)
collected by Tenant from the assignee pursuant to the assignment which are in
excess of the Fixed and Additional Rent established by this Lease. No permitted
assignment or other transfer as set forth above shall relieve Tenant of its
direct and primary liability under this Lease.

     The foregoing shall not apply to transactions with an entity into or with
which Tenant is merged or consolidated or to which substantially all of Tenant's
assets are transferred, or to any entity which controls or is controlled by
Tenant or is under common control with Tenant, provided that in any of such
events (i) the successor to Tenant has a net worth computed in accordance with
generally accepted accounting principles at least equal to the net worth of the
Tenant at the highest point within the two years preceding such proposed
transfer; (ii) proof satisfactory to Landlord of such net worth is delivered to
Landlord at least thirty (30) days prior to the effective date of any such
transaction; (iii) the assignee agrees to be directly bound to Landlord and
executes such documentation as may be reasonably requested by Landlord toward
this end and (iv) the proposed assignee or subtenant or transferee makes
substantially similar products to those made by Tenant from the Premises.
Notwithstanding the foregoing, no permitted assignment shall relieve the Tenant
from its direct and primary liability under this Lease.


                                      -20-



     10.2 SUBLETTING: Tenant shall not sublet the Premises, or any part thereof,
at any time during the Term hereof without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. No permitted sublet
shall relieve Tenant of its direct and primary liability under this Lease.

     10.3 MORTGAGE OR PLEDGE: In no event shall Tenant mortgage, encumber,
pledge, grant a security interest in, collaterally assign, or conditionally
transfer as collateral, the Lease, any equipment or fixtures of Landlord
incorporated in or used in connection with the Premises, provided however that
this Section 10.3 shall not preclude assignment permitted pursuant to Section
10.1 hereof.

     10.4 INSOLVENCY PROVISIONS

          10.4.1 LANDLORD'S OPTION TO TERMINATE: If the estate of Tenant created
hereby shall be taken in execution or by other process of law, or if Tenant
shall be adjudicated insolvent pursuant to the provisions of any present or
future insolvency law under state law, or if Tenant shall cease doing business
as a going concern or generally not pay its debts as they become due, or if a
receiver or trustee of the property of Tenant shall be appointed under state law
by reason of Tenant's insolvency or inability to pay its debts as they become
due or otherwise, or if any assignment shall be made of Tenant's property for
the benefit of creditors under state law, then and in such event, Landlord may,
at its option, terminate this Lease and all rights of Tenant hereunder declaring
an Event of Default under Article Twelve.

          10.4.2 TRANSFER OF TENANT'S INTEREST: Neither Tenant's interest in the
Lease, nor any lesser interest of Tenant therein, nor any estate of Tenant
hereby created shall pass to any trustee, receiver, assignee for the benefit of
creditors or other person or entity or otherwise by operation of law under the
laws of any state having jurisdiction of the person or property of Tenant unless
Landlord shall consent to such transfer in writing. No acceptance by Landlord of
Rent or any other payment from any such trustee, receiver, assignee, person or
other entity shall be deemed to have waived, nor shall it waive, the requirement
of Landlord's consent or the right of Landlord to terminate this Lease in the
absence of such consent to any transfer of Tenant's interest in this lease.

          10.4.3 TIME FOR ASSUMPTION OR REJECTION OF LEASE IN TENANT'S
BANKRUPTCY: In the event that either a voluntary petition or involuntary
petition for reorganization or liquidation or adjustment of debts is filed by or
against Tenant under Chapter 7, 11 or 13 of the Bankruptcy Code, the Tenant or
the bankruptcy trustee or the Tenant as debtor in possession must elect to
assume or reject this Lease within 60 days after the date of filing of the
petition. If the Tenant, trustee or debtor in possession shall elect to assume
this Lease, whether for the purpose of assignment or otherwise, such election
and assignment may only be made if all of the terms and conditions of Section
10.4.4 hereof are satisfied. If the Tenant, trustee or debtor in possession
shall fail to elect or assume this Lease within 60 days after the date of filing
the bankruptcy petition, this Lease shall be deemed to have been rejected. In
the event of such rejection, Landlord shall thereupon be immediately entitled to
possession of the Premises without further obligation to the Tenant, trustee or
debtor in possession and this Lease shall be cancelled, but Landlord's right to
be compensated for damages in such proceeding shall survive.


                                      -21-



          10.4.4 CONDITIONS TO THE ASSUMPTION OF LEASE IN BANKRUPTCY
PROCEEDINGS: In the event that a voluntary or involuntary bankruptcy petition is
filed by or against Tenant, and Tenant, trustee or debtor in possession elects
to assume the Lease in accordance with the provisions of Section 10.4.3 above,
such assumption shall only be effective if each of the following conditions,
which Landlord and Tenant hereby acknowledge to be commercially reasonable in
the context of a bankruptcy proceeding of Tenant, have been satisfied:

               (a) The Tenant, trustee or the debtor in possession has cured or
     has provided Landlord adequate assurance that the Tenant, trustee or debtor
     in possession will cure all monetary defaults under the Lease within 10
     days from the date of assumption of the Lease.

               (b) The Tenant, trustee or the debtor in possession has cured or
     has provided Landlord adequate assurance that the Tenant, trustee or debtor
     in possession will cure all non-monetary defaults under the Lease within 30
     days from the date of assumption of the Lease.

               (c) The Tenant, trustee or the debtor in possession has
     compensated or has provided to Landlord adequate assurance that Landlord
     will be compensated for any pecuniary loss incurred by Landlord arising
     from the default of the Tenant, trustee or debtor in possession within 10
     days from the date of assumption of the Lease.

               (d) The Tenant, trustee or debtor in possession has provided
     Landlord with adequate assurance of the future performance of each of the
     Tenants, trustees or debtor in possessions obligations under this Lease;
     provided, however, that the Tenant, trustee or debtor in possession shall
     also deposit with the Landlord as security for the timely payment of rent
     an amount equal to two (2) months rent accruing under this Lease.

               (e) The assumption of the Lease will not breach any provision in
     any other lease, mortgage, financing agreement or other agreement by which
     Landlord is bound relating to the premises.

          10.4.5 ASSIGNMENT OF LEASE BY TENANT: Notwithstanding any provisions
of this Article to the contrary, if this Lease is assigned to any person or
entity pursuant to the provisions of the Bankruptcy Code:

               (a) Any and all monies or other considerations, payable or
     otherwise, to be delivered in connection with such assignment, shall be
     paid or delivered to Landlord, shall be and remain the exclusive property
     of Landlord, and shall not constitute property of Tenant or the estate of
     Tenant within the meaning of the Bankruptcy Code. Any and all monies or
     other considerations constituting Landlord's property under the preceding
     sentence not paid or delivered to Landlord shall be held in trust for the
     benefit of Landlord and shall be promptly paid or delivered to Landlord;
     and

               (b) Any person or entity to which this Lease is assigned pursuant
     to the provisions of the Bankruptcy Code shall be deemed without further
     act or deed to have assumed all of the obligations arising under this Lease
     on and after the date of such


                                      -22-



     assignment. Any such assignee shall upon demand execute and deliver to
     Landlord an instrument confirming such assumption.

          10.4.5 MEASURE OF DAMAGES: 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
for the purpose of Section 502(b)(6) of the Bankruptcy Code.

     10.5 SURVIVE LEASE: The provisions of Article 10 hereof shall survive the
expiration or earlier termination of the Lease.

                                 ARTICLE ELEVEN
                              OBLIGATION OF LESSEE

     11.1 COMPLIANCE WITH LAWS, ETC.: Tenant shall comply with all statutes,
ordinances, rules and regulations, of all Federal, state, municipal, or other
governmental or quasi-governmental authorities having jurisdiction over the
Premises or any part thereof and the use and occupation thereof by Tenant, and
tenant shall so comply, whether or not such statutes, ordinances, rules and
regulations, shall hereafter be enacted, and whether or not the same may be said
to be within the present contemplation of the parties hereto. Landlord
represents that the Premises (i.e. Existing Building and related Property areas)
are presently in compliance with all such statutes, ordinances, rules and
regulations.

     In the event compliance requires Alterations to the Premises, Landlord
shall, at Tenant's request, contest or seek relief, but nothing herein shall
relieve Tenant of the obligation, at Tenant's expense, to comply whenever
Landlord shall so direct.

     Notwithstanding anything herein to the contrary, Tenant shall not be
required to make structural changes or changes to building systems unless
required of Tenant's own particular use, in which case any and all such changes
shall be at Tenant's sole cost and expense.

     11.2 PERMANENT SIGNAGE: Tenant shall install corporate identity signs in
accordance with the terms of the Zoning Board of Appeals of Billerica, only
after obtaining any and all requisite permits and approvals therefor. Tenant
agrees that it shall not erect nor cause to be erected any permanent signs,
notices, or advertisements upon the Premises or affix such thereto without the
prior written consent of Landlord, which shall not be unreasonably withheld, and
unless such signs, notices or advertisements shall be erected and affixed
according to all laws, local regulations and ordinances, and shall advertise
only a business or use of the Premises specifically authorized by this lease.
Tenant shall not erect any sign that by reason of its weight or size might
damage the Premises, nor shall Tenant paint any signs, notices, or advertising
on the exterior walls of the building or buildings without Landlord's prior
written consent. Signs placed on the Premises by Tenant shall be removed by it
not later than the end of the Term of this Lease as it may be extended
hereunder, or any sooner termination thereof, unless Landlord and Tenant agree
otherwise, and upon removal of any such signs, Tenant shall repair any damage to
the Premises caused thereby.

     11.3 SECURITY: Tenant shall be solely responsible for security of the
Premises, and shall use such means and methods of assuring security for the
premises as are reasonably


                                      -23-



acceptable to the Landlord and appropriate for its business; and Tenant agrees
to indemnify and hold harmless Landlord from and against any and all claims,
losses, liabilities and damages arising from any breaches, lapses, or failure to
provide adequate security for the persons and property on the Premises
(including damage to the Premises itself).

     11.4 INDEMNIFICATION: Tenant shall defend, indemnify and save harmless,
Landlord and its officers, stockholders, directors, employees, or agents of
Landlord (collectively "Indemnified Parties"), from (a) all liabilities, claims,
causes of action, suits, damages, and expenses (collectively "Claims") arising
from (i) any work or thing whatsoever done for or by Tenant, or any condition
created in or about the Premises during the Term by Tenant; (ii) any use,
nonuse, possession, occupation, alteration, repair, condition, operation,
management, or maintenance of the Premises or any part thereof, or of any
street, alley, sidewalk, curb, vault, passageway, common area or space,
comprising a part thereof or adjacent thereto by Tenant; (iii) any negligent or
otherwise wrongful act or omission of Tenant or its employees, agents, or
contractors; (iv) any accident, injury (including death) or damage to any person
or property occurring in, on or about the Premises, or any part thereof or in,
on or about any street, alley, sidewalk, curb, vault, passageway, common area or
space comprising a part thereof or adjacent thereto, not attributable to acts or
omissions to act by Landlord; (v) any contest of matters permitted by the Lease;
and (vi) any breach, violation, or nonperformance of any covenant, condition or
agreement in the Lease to be observed or performed by Tenant; and (b) all costs,
expenses, and liabilities incurred, including reasonable attorney fees and
disbursements through and including appellate proceedings, in or in connection
with any of such Claims. If any action or proceeding shall be brought against
any of the Indemnified Parties by reason of any such Claims, Tenant, upon notice
from any of the Indemnified Parties, shall resist and defend such action, at its
sole cost and expense by counsel chosen by Tenant who shall be reasonably
satisfactory to such Indemnified Party. Tenant or its counsel shall keep each
Indemnified Party fully apprised at all time of the status of such defense. The
provisions of this Section 11.4 shall survive the expiration or earlier
termination of the Lease.

     11.5 LANDLORD NOT LIABLE FOR LOSS OF TENANT'S PROPERTY: Neither Landlord
nor its agents shall be liable for any loss of or damage to the property of
Tenant or others by reason of casualty, theft, or otherwise, or for any injury
or damage to any persons or property resulting from any cause unless due to the
gross negligence or willful misconduct or Landlord, its agents, servants or
employees acting with the scope of their employment.

                                 ARTICLE TWELVE
                                DEFAULT BY TENANT

     12.1 EVENTS OF DEFAULT: Each of the following shall be deemed an event of
default ("Event of Default") and a breach of the Lease by Tenant.

               (a) If the Fixed Rent shall not be paid when due and payable,
     provided that said default is not cured within ten (10) days after written
     notice (provided however, Landlord shall not be required to give written
     notice more than one time any any twelve month period).


                                      -24-



               (b) If Tenant shall fail to pay any Additional Rent required
     hereunder when due and payable, provided that said default is not cured
     within ten (10) days after written notice (provided however, Landlord shall
     not be required to give written notice more than one time any any twelve
     month period).

               (c) If Tenant shall default in the performance or observance of
     any of the other terms of the Lease, and such default shall continue for
     thirty (30) days after written notice by Landlord to Tenant, or (if default
     is such a nature that it cannot be completely remedied within said thirty
     (30) day period) Tenant shall not commence within said thirty (30) day
     period to remedy such default and thereafter diligently prosecute the same
     to completion.

               (d) If Tenant vacates or abandons the Premises, except pursuant
     to an assignment or sublease permitted by the terms of this Lease.

               (e) If Landlord declares an Event of Default as permitted in
     Article Ten in the event of Tenant's Bankruptcy or insolvency.

               (f) If Tenant shall cease to exist as a corporation in good
     standing in the state of its incorporation.

               (g) If Tenant uses the Premises for any purpose other than the
     permitted use under this Lease. 12.2 REMEDIES:

          12.2.1 RE-ENTRY AND POSSESSION: Upon the occurrence of an Event of
Default, Landlord, without further notice to Tenant, may declare this Lease
and/or Tenant's right of possession at an end and may re-enter the Premises by
process of law, in which event Landlord shall have the right to recover from
Tenant the following:

               (a) The worth at the time of award of the unpaid Rent which has
     been earned at the time of termination;

               (b) The worth at the time of award of the amount by which the
     unpaid Rent which would have been earned after termination of this Lease
     until the time the award exceeds the amount of such rental loss the Tenant
     proves could have been reasonably avoided;

               (c) Any other amount necessary to compensate Landlord for all
     detriment proximately caused by Tenant's failure to perform its obligations
     under this Lease or which, in the ordinary course of things, would be
     likely to result therefrom, including, but not limited to, the reasonable
     cost of recovering possession of the Premises, expenses of reletting
     including necessary renovations and alterations, reasonably attorney fees
     and real estate brokerage commissions. The "worth at the time of the
     award," as used in (a) and (b) of this Article 12.2.1, is to be computed by
     allowing interest at the rate of twelve (12%) percent per annum.
     Notwithstanding the foregoing, in no event shall Landlord be entitled to
     consequential damages.


                                      -25-



               No receipt of monies by Landlord from Tenant after termination of
the Lease, or after the giving of any notice of the termination of the Lease,
shall reinstate, continue or extend the Initial Term, or affect any prior notice
given to Tenant, or operate as a waiver of the right of Landlord to enforce the
payment of Rent payable by Tenant, or operate as a waiver of the right of
Landlord to recover possession of the Premises, except herein provided. Except
as provided herein or as prohibited by law, Tenant waives any right of
redemption provided by any law now in force or hereafter enacted, or re-entry or
repossession.

          12.2.2 CONTINUATION OF LEASE: Upon the occurrence of an Event of
Default Landlord may, at its option, continue this Lease in full force and
effect without termination Tenant's right of possession, and collect Rent,
Additional Rent, and other monetary charges when due. Landlord shall have the
right to take the following action which shall not constitute a termination of
Tenant's right of possession: (1) acts necessary to maintain, repair and
preserve the Premises; (2) efforts to relet the Premises, or any part thereof,
to third parties for Tenant's account; and (3) the appointment of a receiver to
protect Landlord's interest in this Lease.

          12.2.3 REMEDIES CUMULATIVE: These remedies of Landlord are cumulative
and in addition to and not exclusive of any other remedy of Landlord herein
given or which maybe permitted by law. These remedies may be exercised jointly
or severally without constituting an election of remedies.

     12.3 WAIVER: No failure by Landlord to require strict performance of any
covenant or term of the Lease, or to exercise any right or remedy upon a breach,
and no acceptance of full or partial Rent during any such breach, shall
constitute a waiver of any such breach. No term of the Lease to be performed or
complied with by Tenant, and no breach thereof, shall be waived or modified
except in writing by Landlord. No waiver of any breach shall affect the Lease.

     12.4 RIGHT TO CURE TENANT'S DEFAULT: If any Event of Default occurs, or if
Tenant shall fail to comply with the Lease, Landlord shall have the right but
not the obligation (a) to perform for Tenant if the same arises out of any
obligation owed by Tenant to a third-party or (b) to make any expenditure or
incur any obligation for the payment of money for any obligation owed to
Landlord, including, but not limited to, reasonable attorney fees and
disbursements in instituting, prosecuting or defend in any action, with interest
thereon at eighteen percent (18) per annum or the maximum rate permitted by law
("Applicable Rate"). Such amounts shall be Additional Rent and shall be paid by
Tenant to Landlord immediately.

                                ARTICLE THIRTEEN
                                 QUIET ENJOYMENT

     Upon payment of Rents and performance of all terms of the Lease, Tenant
may, during the Term or any Renewal Term, peaceably and quietly have, hold and
enjoy the Premises without any manner of suit, trouble or hindrance from any
person claiming through Landlord subject to the terms of the Lease.


                                      -26-



                                ARTICLE FOURTEEN
                            MISCELLANEOUS PROVISIONS

     14.1 NOTICE: All notices required or permitted hereunder shall be in
writing and shall be given either by personal delivery, or by first class,
certified mail, or by reliable overnight delivery service which provides
receipts evidencing sending and delivery. If such notice is served personally,
the notice shall be deemed made at the time of delivery, but only if a receipt
evidencing delivery of the notice is obtained. If notice is by mail, the notice
shall be deemed given five (5) days after the date when deposited in the United
States mail, certified, return receipt requested, and postage prepaid. If notice
is by overnight delivery service, the notice shall be deemed given one business
day following the date such notice is deposited with the delivery service, all
fees prepaid.

     Any such notice shall be addressed to the parties as follows:

               Landlord:       Progress Road LLC
                               10 Waltham Street
                               Wilmington, Mass. 01887
                               Attn: Michael Vetrano, CFO

               with a copy to: Paul A. Hedstrom, Esquire
                               Hinckley, Allen & Snyder
                               One Financial Center, Suite 4600
                               Boston, MA 02111-2625

               Tenant:         Terry Massood
                               PRI Automation
                               17 Progress Road
                               Billerica, Mass. 01821

               with a copy to: Attorney Jacob Politan
                               Foley Hoag & Eliot
                               One Post Office Square
                               Boston, Massachusetts 02109

Any party may change its address, or change or designate additional persons to
receive such notices, by written notice as provided herein.

     14.2 HOLDING OVER: Tenant acknowledges that possession of the Premises must
be surrendered to Landlord at the expiration or sooner termination of the Term
of the Lease, whichever is later. The parties agree that the damage to Landlord
to timely surrender possession of the Premises as aforesaid will be substantial,
will exceed the amount of the Fixed Rent and Additional Rent payable, and will
be impossible to accurately measure. Tenant therefore agrees that if possession
of the Premises is not surrendered to Landlord as required, then Tenant shall
pay Landlord as liquidated damages for each month and each portion of any month
during which Tenant holds over in the Premises in addition to any sums payable
pursuant to the foregoing indemnity, a sum equal to two (2) times the aggregate
of the Fixed Rent and Additional Rent which was payable for the last month of
the Term. Nothing herein shall permit Tenant to retain


                                      -27-



possession of the Premises after the expiration or sooner termination of the
Term of the Lease. If Tenant holds over in possession after the expiration or
sooner termination of the Term of the Lease, whichever is later, this shall not
extend the term or renew the Lease, but the tenancy shall continue as a tenancy
from month-to-month upon the terms and conditions of the Lease at the Fixed Rent
and Additional Rent as herein increased. This provision shall survive the
expiration or earlier termination of the Lease.

     14.3 LANDLORD'S ACCESS TO PREMISES: In addition to the right of inspection
described in Article Six, Landlord shall at all times during the Term have the
right to enter the Premises at reasonable times and upon reasonable notice under
the circumstances to inspect or to show to prospective purchasers. Landlord
shall also have the right during the Term to display the customary "For Sale"
sign on the Premises, provided that Landlord indicates that Tenant's business is
not for sale. During the last nine (9) months of the Term, Landlord shall have
the right to enter the Premises at reasonable times and upon reasonable notice
to show to prospective new tenants and to display the customary "For Rent" signs
on the Premises.

     Further, Landlord shall at all times during the Term have the right to
enter the Premises at reasonable times and upon reasonable prior notice to
Tenant under the circumstances to make such repairs or alterations as Landlord
deems necessary or advisable, but such right shall not be construed as
obligating Landlord to make any repairs or inspections of the Premises. Landlord
agrees to use reasonable efforts not to materially interfere with Tenant under
the foregoing circumstances.

     14.4 PROVISIONS RELATING TO LANDLORD

     A. DEFINITION OF "LANDLORD": As used in this Lease, the term "Landlord"
shall mean the owner or a mortgagee in possession, as the case may be. Nothing
herein shall permit Tenant to retain possession of the Premises after the
expiration or sooner termination of the Term of the Lease.

     B. SUBORDINATION: On Landlord's demand, Tenant agrees to subordinate its
rights hereunder to the lien of any mortgage or any other method of financing or
refinancing, now or hereafter placed against all or any portion of the Premises
and/or any improvements now or hereafter built by Landlord on the Premises, and
to any and all advances made or to, be made thereunder, and to the interest
thereon, and to all renewals, replacements, consolidations and extensions
thereof by Landlord. Within ten (10) days after such demand, Tenant shall
execute, acknowledge and deliver all instruments necessary or proper to effect
such subordination; provided, however, that notwithstanding any such
subordination, Tenant's rights under this Lease shall remain in full force and
effect so long as Tenant is not in default beyond any applicable notice, grace
and cure periods, but if proceedings are brought for foreclosure or to exercise
a power of sale or the like, Tenant shall attorn to the purchaser. If Tenant
shall fail, neglect or refuse to execute and deliver any such document within
ten (10) days after receipt of written notice to so do and the receipt by Lessee
of the document to be executed by it, Tenant hereby appoints Landlord, its
successors and assigns, the attorney-in-fact of Tenant, irrevocably to execute
and deliver any and all such documents for and on behalf of Tenant.
Notwithstanding anything to the contrary herein, Landlord shall execute and
deliver to Tenant no later than the Commencement Date, a Subordination
Non-Disturbance and Attornment Agreement, executed


                                      -28-



by Landlord's lender on its standard form, for Tenant's execution and return to
Landlord for recording.

     C. COLLECTION OF JUDGMENTS: Tenant shall look first to Landlord's interest
in the Premises for the collection of any judgment requiring the payment of
money by Landlord because of any default by Landlord under the Lease. In no case
shall Tenant seek collection against the assets of Landlord greater in the
aggregate than the fair market value of the Premises without deduction for any
liens, mortgages, or encumbrances thereon. Neither Landlord's affiliates nor the
officers, directors, stockholders, or employees of Landlord or its affiliates,
shall be subject to levy execution or other procedure for the satisfaction of
Tenant's remedies under the Lease. However, nothing contained herein shall be
construed to permit Tenant to offset, and Tenant agrees that it shall not offset
against the rents due a successor Landlord, for any judgment requiring the
payment of money by reason of any default of a prior Landlord.

     14.5 WAIVE JURY: INTENTIONALLY DELETED

     14.6 NO BROKERS: Landlord agrees to pay a brokerage fee to the Stubblebine
Company as broker in this transaction, pursuant to a separate written agreement
between them. The parties acknowledge this is the only brokerage fee due from
Landlord arising from this Lease. Tenant agrees to indemnify and save Landlord
harmless from all claims from brokerage commission by any person or entity
claiming to have brought about this Lease transaction, other than the
Stubblebine Company. This Article shall survive the expiration or earlier
termination to the Lease.

     14.7 RECORDING: This Lease shall not be recorded, but the parties agree to
execute and deliver for recording a Memorandum of Lease incorporating the basic
terms and conditions hereof, but deleting any mention of the rental payments.

     14.8 ATTORNEY FEES: Should either party hereto institute any action or
proceeding in court to enforce any provision hereof or for damages by reason of
an alleged breach of any provision of this Lease, the prevailing party shall be
entitled to receive from the losing party such amount as the court may adjudge
to be reasonable attorney fees for the services rendered the prevailing party in
such action or proceeding.

     14.9 ENFORCEABILITY: If any provision of the Lease shall be invalid or
unenforceable, the remainder of the Lease shall not be affected and every
provision of the Lease shall be enforceable to the fullest extent.

     14.10 SUCCESSORS AND ASSIGNS: This Lease shall bind and inure to the
benefit of Landlord and Tenant and their respective successors and, except as is
otherwise provided herein, their assigns.

     14.11 GOVERNING LAW: The Lease shall be governed by and construed in
accordance with laws of the Commonwealth of Massachusetts.

     14.12 ENTIRE AGREEMENT: This Lease contains the entire agreement between
the parties and may not be extended, terminated or modified except in writing
executed by the parties hereto. All prior understandings and agreements between
the parties and all working drafts are


                                      -29-



merged in the Lease. The parties agree that no inferences shall be drawn from
changes from any working drafts of the Lease.

     14.13 HEADINGS: The headings are only for convenience and in no way define,
limit or describe the scope nor in any way affect the Lease.

     14.14 LANDLORD'S RULES AND REGULATIONS: Landlord shall be entitled to
promulgate, and Tenant shall abide by all reasonable rules and regulations
governing the Premises and access thereto, (particularly during the period of
Landlord's Build-Out of the Proposed Building) provided Tenant's rights under
this Lease or its use of the Premises are not materially impaired thereby.

     14.15 FORCE MAJEURE: In any case where either party is required to do any
act other than the payment of money, delays caused by or resulting from acts of
god; war; civil commotion; fire; flood or other casualty; labor difficulties;
shortages of labor, materials or equipment; unusual or onerous government
regulations; unusually severe weather or other causes of a like catastrophic
nature and beyond such party's reasonable control ("Force Majeure"), shall not
be counted in determining the time during which such act shall be completed and
such time shall be deemed to be extended by the period of such delay.

                                 ARTICLE FIFTEEN
                          TENANT'S RIGHT OF FIRST OFFER

     Landlord hereby grants to Tenant the following "right of first offer" to
acquire fee ownership of the Premises provided: (i) that Tenant has not been in
material default under this Lease beyond any applicable notice grace and cure
periods and (ii) that this Lease is in existence and in full force and effect.
Prior to the execution of any final binding agreement for the sale of the
Premises, Landlord shall first offer the Premises to the Tenant, in writing,
stating Landlord's offering price, term and conditions; whereupon Tenant shall
have a period of ten (10) business days to enter into a binding final agreement
with Landlord to acquire the Premises on the price, terms and conditions set
forth in Landlord's written notice. If Tenant fails to execute such binding
final agreement, then the rights under this Section shall lapse and be deemed
null and void; Landlord shall not be required to re-offer the Premises to Tenant
(unless Landlord accepts an offer within the next six (6) months at a price
which is more than ten (10%) percent less than that which was rejected by
Tenant); and Landlord may convey the Premises to any party, at any time, on
price, terms and conditions acceptable to Landlord.

     IN WITNESS WHEREOF, the parties have executed this Lease under seal the day
first written above.

WITNESS:                                PROGRESS ROAD LLC
                                        (Landlord)


/s/ [ILLEGIBLE]                         By /s/ [ILLEGIBLE]
- -------------------------------------      -------------------------------------


                                      -30-



WITNESS:                                PRI AUTOMATION
                                        (TENANT)


/s/ [ILLEGIBLE]                         By /s/ Cosmo S. Trapani
- -------------------------------------      -------------------------------------
Attach Corporate Resolution/Evidence
of Authority


                                      -31-

EX-10.30

                                                                   Exhibit 10.30

                            FIRST AMENDMENT TO LEASE

     This First Amendment to Lease dated as of March 21, 2001, PROGRESS ROAD
LLC, a Massachusetts limited liability company with a principal place of
business at 10 Waltham Street, Wilmington, Massachusetts 01887, as Landlord
("Landlord"), and PRI AUTOMATION, a Massachusetts corporation with its principal
place of business at 17 Progress Road, Billerica, Massachusetts as tenant
("Tenant").

                                   WITNESSETH:

     WHEREAS, Landlord and Tenant entered into that certain lease dated as of
October 12, 2000, (the "Lease") of that certain Building located at 17 Progress
Road, Billerica, Massachusetts, as more particularly described in the Lease (the
"Premises"); and

     WHEREAS, in connection with the Landlord's construction of the Proposed
Building, Tenant has INTER ALIA requested certain revisions and additions in the
Proposed Building and changes to the existing Building which changes require
modification to the Lease as are hereafter set forth.

     NOW THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Landlord and the Tenant hereby agree to amend the Lease as follows:

     1. Section 1.1. of the Lease is amended by deleting the following words in
subsection (a) "57,000 +/- rentable square feet of space" replacing the same
with the following: "58,250 rentable square feet of space which includes 1,250
feet of space in the catwalk to be constructed in the Premises at the same time
as the construction of the Proposed Building as hereinafter defined."

     2. Section 1.1 of the Lease is hereby further amended by deleting the
following words in subsection (b) "61,543 +/- rentable square feet of space" and
replacing the same with the following: "61,948 rentable square feet of space
including 7,948 square feet of space on the mezzanine".

     3. Section 1.1 of the Lease is hereby further amended by deleting the words
"118,543 rentable square feet of space" and replacing with "120,198 rentable
square feet of space."

     4. Section 1.2 A is hereby amended by inserting the following paragraph
between the existing second and third paragraphs thereof

          "Landlord and Tenant acknowledge and agree that as of the date hereof
     the Tenant has requested certain revisions to the Proposed Building to be
     constructed by Landlord which are in excess of the costs and the scope of
     the work set forth in Exhibit B to the Lease. The parties have agreed, by
     correspondence dated January 30, 2001, as modified by correspondence dated
     March 16, 2001, copies of which are attached hereto as Exhibit 1 and
     incorporated herein, the Landlord will include certain items denoted with
     the letter X under the column labeled Colrane Company in the scope of the
     work the


                                      -1-






     Landlord will complete under this Lease and for the items listed with a
     dollar amount shown as Numbers 5 and 8 the Landlord agrees to expend up to
     such amount listed therein as an allowance, but not a guarantee of the
     total cost of such item with the Tenant agreeing to pay for the cost of any
     overage for such item(s). Tenant agrees that the items which have been
     marked with an X will be paid for by the Tenant in addition to other sums
     due and owing by the Tenant pursuant to the Lease. The Tenant will pay
     these sums either directly to the contractor completing such work or to
     Landlord upon presentation of an invoice therefore, but in any event prior
     to taking occupancy of the Proposed Building. Additionally, Landlord and
     Tenant agree to delete the current Exhibit B to the Lease and replace the
     same with Exhibit B-1 attached hereto and incorporated herein."

     5. Section 3.2B(ii) is hereby amended by deleting the words "June l, 2001"
and replacing the same with "September 15, 2001".

     6. Section 3.2B(iii) is hereby deleted in its entirety and replaced with
the following:

     Notwithstanding any provision of this Lease to the contrary, in the event
     that the Proposed Building is not substantially completed as provided in
     Section 3.2(c) hereof on or prior to the Deferred Delivery Date (as such
     date may be extended for reasons due to Force Majeure and/or to Tenant's
     Delay), then Tenant may elect to receive from Landlord as liquidated
     damages an abatement of Fixed Rent for the Proposed Building only
     (following the commencement of rental obligations pursuant to Section 4.1
     hereof) equal to (a) one hundred percent (100%) of the Fixed Rent due for
     the Proposed Building for each day the Proposed Building is not
     substantially completed as provided in Section 3.2(c) hereof beyond the
     Deferred Delivery Date, as such date may be extended as aforesaid. The
     foregoing remedies shall be Tenant's sole and exclusive remedies for not
     having the Proposed Building not being ready for occupancy as required
     hereunder. For purposes hereof, the Deferred Delivery Date shall be
     September 15, 2001 as such date may be extended for a period equal to that
     of (i) any delays due to Force Majeure, (ii) the number of delay days
     caused by a Tenant's Delay as hereinbefore determined.

     7. Section 3.3 is hereby deleted in its entirety.

     8. Section 4.2.2 is hereby deleted in its entirety and replaced with the
following:

          "4.2.2 FIXED RENT FOR THE INITIAL TERM: The Fixed Rent for the each
Lease Year of the initial Term of this Lease shall be as follows:

          A.   FIXED RENT AS TO EXISTING BUILDING AND RELATED PROPERTY AREAS:

                                    
1st Lease Year:    $ 404,837.50/annual;   $ 33,736.46/mo.
2nd Lease Year:    $ 404,837.50/annual;   $ 33,736.46/mo.
3rd Lease Year:    $ 413,575.00/annual:   $ 34,464.58/mo.
4th Lease Year:    $ 413,575.00/annual:   $ 34,464.58/mo.
5th Lease Year:    $ 422,312.50/annual:   $ 35,192.71/mo.
6th Lease Year:    $ 422,312.50/annual:   $ 35,192.71/mo.
7th Lease Year:    $ 431,050.00/annual:   $ 35,920.83/mo.
8th Lease Year:    $ 431,050.00/annual:   $ 35,920.83/mo.
9th Lease Year:    $ 431,050.00/annual:   $ 35,920.83/mo.
10th Lease Year:   $ 431,050.00/annual:   $ 35,920.83/mo.




                                      -2-






          B.   FIXED RENT AS TO PROPOSED BUILDING AND RELATED PROPERTY AREAS:

          Subject to the completion and delivery of the Proposed Building as
contemplated in Section 3.2 hereof, Tenant shall pay to Landlord Fixed Rent
attributable to the Proposed Building and related Property areas as follows:

                                  
1st Lease Year:    $486,291.80/annual:   $ 40,524.82/mo.
2nd Lease Year:    $486,291.80/annual:   $ 40,524.82/mo.
3rd Lease Year:    $495,584.00/annual:   $ 41,298.67/mo.
4th Lease Year:    $495,584.00/annual:   $ 41,298.67/mo.
5th Lease Year:    $504,876.20/annual:   $ 42,073.00/mo.
6th Lease Year:    $504,876.20/annual:   $ 42,073.00/mo
7th Lease Year:    $514,168.40/annual:   $ 42,847.37/mo.
8th Lease Year:    $514,168.40/annual:   $ 42,847.37/mo.
9th Lease Year:    $514,168.40/annual:   $ 42,847.37/mo.
10th Lease Year:   $514,168.40/annual:   $ 42,847.37/mo."

 

     9. This First Amendment to Lease may be executed in two (2) or more
counterparts, each of which shall be an original but such counterparts together
shall constitute one and the same instrument notwithstanding that both Landlord
and Tenant are not signatories to the same counterpart. Delivery of an executed
counterpart of this First Amendment to Lease by telefacsimile shall be equally
as effective as delivery of any original executed counterpart. Any party
delivering an executed counterpart of this First Amendment to Lease by
telefacsimile also shall deliver an original executed counterpart of this First
Amendment to Lease, but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability and binding effect of this First
Amendment to Lease. Signature and acknowledgement pages may be detached from the
counterparts and attached to a single copy of this First Amendment to Lease to
physically form one (1) document.

     10. All other terms, conditions, covenants and provisions as appear in the
Lease are hereby ratified and confirmed and shall remain unchanged.

     WITNESS OUR HANDS AND SEAL AS OF THIS 21st DAY OF MARCH 2001.

TENANT:                                 LANDLORD:
PRI AUTOMATION                          PROGRESS ROAD LLC


By:                                     By:
    ---------------------------------       -----------------------------
Its:                                    Its:
     --------------------------------        ----------------------------


                                      -3-

EX-10.31

                                                                   Exhibit 10.31

                                      LEASE

                               Boulder Tech Center

      THIS LEASE ("Lease"), dated May 14, 1999, is between MUM IV, LLC, a
Colorado limited liability company ("Landlord") and Helix Technology
Corporation, a Delaware corporation ("Tenant").

      For and in consideration of the covenants and agreements herein contained,
Landlord and Tenant hereby agree as follows:

      Section 1. ADDITIONAL DEFINED TERMS

      In addition to those terms defined in the introductory paragraph of this
Lease, the following terms shall have the following meanings when used in this
Lease:

      (a) Estimated Operating Cost: An amount equal to Two Dollars and
Forty-five Cents ($2.45) per square foot per calendar year, which represents an
estimate of the Operating Cost for the entire year in which the Term of this
Lease begins.

      (b) Base Rent: The annual amount of rent payable with respect to each
Lease Year during the term of this Lease payable as set forth in Section 4(a).
The amount of the Base Rent for the first Lease Year shall be Eight Dollars and
Ninety-Five Cents ($8.95) per square foot of Rentable Area of the Premises. The
amount of the Base Rent for all Lease Years after the first Lease Year shall be
calculated in the manner set forth in Section 4(a). During each Lease Year, Base
Rent shall include the previous year's Base Rent and any rental increase from
the previous year.

      (c) Building: The building to be constructed by Landlord upon the Premises
pursuant to Section 10 of this Lease, the plans and specifications for which are
shown on Exhibit B attached hereto, which building shall contain approximately
60,906 (sixty thousand nine hundred six) Rentable Square Feet and shall have two
(2) floors.

      (d) Commencement Date: The date the Term of this Lease commences as
determined in accordance with provisions of Section 30.

      (e) Default Rate: An annual rate of interest equal to fifteen percent
(15%).

      (f) Lease Year:

            (i) For the First Lease Year, the period beginning on the
Commencement Date and ending on the last day of the same calendar month in which
the Commencement Date occurred in the next calendar year; and

            (ii) For Lease Years after the First Lease Year, the twelve-month
period beginning on the next day following the expiration of the preceding Lease
Year.

      (g) Operating Cost: As defined in Section 6(b).

      (h) Parking Lot: The on-grade parking lot to be constructed by



Landlord upon the Premises pursuant to Section 10 of this Lease and as shown on
Exhibit B attached hereto, containing not less than 150 parking spaces for use
by passenger motor vehicles.

      (i) Premises: That certain parcel of real property described as: Lot 2E,
Block 3, REPLAT E, BOULDER TECH CENTER, County of Boulder, State of Colorado, as
shown on the recorded plat attached hereto as Exhibit A and incorporated herein
(such plat has been recorded on Planfile P-39, F-1, #23) together with the
Building, the Parking Lot and all other improvements from time to time hereafter
located on such parcel of real property and any and all appurtenant rights
relating thereto.

      (j) Term: The period beginning at noon on the Commencement Date and ending
at 11:59 p.m. on the last day of the calendar month in which the fifteenth
(15th) anniversary of the Commencement Date occurs.

      (k) Rentable Area or Rentable Square Feet: The sum of the area of each
story of the Building expressed in square feet measured from the outside of the
exterior walls.

      Section 2. LEASE OF PREMISES

      Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord,
the Premises. The Premises are leased on the terms and conditions set forth in
this Lease.

      Section 3. TERM

      The term of this Lease shall be as set forth in Section 1(j), unless
sooner terminated or extended pursuant to the terms of this Lease.

      Section 4. RENT

      (a) Tenant shall pay Landlord during each Lease Year the Base Rent, in
equal monthly installments in the amount of one-twelfth of the Base Rent on the
Commencement Date and on the first day of each succeeding calendar month during
the Term of this Lease; provided that the rent payable on the Commencement Date
shall be prorated for the remaining days left in the calendar month in which the
Commencement Date occurs. Except as expressly set forth in this Lease to the
contrary, all payments of Base Rent shall be paid in advance, without notice,
set-off or deduction, in lawful money of the United States, at the address of
Landlord set forth in Section 40 of this Lease, or at such other place as
Landlord may from time to time designate in writing.

      The amount of the Base Rent for each year after the first Lease Year shall
be increased. The Base Rent shall increase at such times by an amount determined
by multiplying the amount of the Base Rent in effect for the preceding Lease
Year by an escalation factor which factor shall be calculated in the following
manner.

            (i) For the Lease Years two through 5 of the term of the Lease the
escalation factor shall be two percent (2%) annually.

            (ii) For the 6th through the 10th years of the Lease the escalation
factor for each Lease Year shall be calculated in the following manner: 1)
Calculate the average annual change in Lease Years 3, 4 and 5 of the All Items
Revised Consumer Price Index for All Urban Consumers, CPI-U, Denver

                                       2


(1982-84 equals 100), as determined by the United States Department of Labor,
Bureau of Labor Statistics ("CPI"). 2) Add the annual increase used for the
initial five Lease Years (two percent (2%)) to the average increase calculated
in 1) above, but if the average increase calculated in (1) above is higher than
10%, use 10% as the calculation of (1) above; 3) Divide the sum by two. This
result will be the escalation factor for Lease Years 6 through 10. By way of
example, if the average annual CPI increase during Lease Years 3, 4 and 5 was
1%, you would add 2% to 1% for a sum of 3%, then divide that sum by two, for an
annual increase in the rental rate for Lease Years 6 through 10 of 1 1/2 % per
year.

            (iii) For the 11th through the 15th Lease Years of the Lease the
escalation factor for each Lease Year shall be calculated in the following
manner: 1) Calculate the average annual change in Lease Years 8, 9 and 10 of the
All Items Revised Consumer Price Index for All Urban Consumers, CPI-U, Denver
(1982-84 equals 100), as determined by the United States Department of Labor,
Bureau of Labor Statistics. 2) Add the annual increase used for the Lease Years
6 through 10 to the average increase calculated in 1) above, but if the average
increase calculated in (1) above is higher than 10%, use 10% as the calculation
of (1) above; 3) Divide the sum by two. This result will be the escalation
factor for Lease Years 11 through 15. By way of example, if the average annual
CPI increase in Lease Years 8, 9 and 10 was 20% and using the previous example's
result where the annual increase for Lease Years 6-10 was 1 1/2%, you would add
1 1/2% to 10% for a sum of 11 1/2%, then divide that sum by two, for an annual
increase in the rental rate for Lease Years 11-15 of 5 3/4%.

      In no event shall the Base Rent for any Lease Year ever decrease below any
previous Lease Year's Base Rent.

      (b) If the index specified in Section 4(a) above is discontinued in its
current form, or if the basis on which it was calculated should be revised, an
appropriate conversion of the revised index to a common base will be made upon
conversion factors published by the Bureau of Labor Statistics or upon
conversion factors otherwise made available.

      (c) For Lease Years 6 through 15, in the event that Tenant has not been
notified of the escalation factor and the resulting adjustment in Base Rent by
the first day of a Lease Year, the first monthly rental payment of Base Rent
which includes new increased rent shall also include the new increased rent, if
any, for each month in the then current Lease Year which elapsed prior to
Tenant's receipt of Landlord's notice. The Base Rent due hereunder shall be
apportioned for any fractional calendar months at the beginning and end of the
Term of this Lease and any renewals and extensions thereof.

      (d) In addition to the Base Rent (as increased each Lease Year), Tenant
shall pay Landlord in monthly installments simultaneously with payments of the
Base Rent, one-twelfth (1/12th) of the Estimated Operating Cost (or new estimate
of Operating Cost) determined as set forth in Section 6, and such other charges
as are required by the terms of this Lease to be made by Tenant, including, but
not limited to, 100% of the Operating Cost adjustment. Any such adjustment or
charge shall be deemed to be additional rent and shall be payable in the manner
provided for the payment of Base Rent and shall be recoverable as Base Rent, and
Landlord shall have all rights against Tenant for default in payment thereof as
in the case of arrears of Base Rent.

      (e) In the event the Building as constructed by Landlord is not
substantially in accordance with the plans and specifications provided in

                                       3


Exhibit B and as a result the Rentable Area of the Building is less than 60,906
Rentable Square Feet, Tenant shall have the right within thirty (30) days
following the Commencement Date to cause the Rentable Area of the Building to be
measured by the Architect (as defined in Section 10), at Landlord's expense, and
the Base Rent hereunder shall be reduced on a pro rata basis by the same
percentage amount by which the Rentable Area is less than 60,906 square feet.
Promptly after such measurement, Landlord and Tenant shall enter into an
amendment to this Lease documenting the Base Rent to be paid hereunder.

      Section 5. USE

      (a) Tenant shall use and occupy the Premises for manufacturing,
warehousing, offices and other uses incidental thereto and for no other purpose
without Landlord's consent, which shall not be unreasonably withheld, delayed or
conditioned and shall be deemed to be given if Landlord has not responded within
ten (10) days of Tenant's request for such consent. Tenant shall use the
Premises in a careful, safe and proper manner and shall not use or permit the
Premises to be used for any purpose prohibited by the certificate of occupancy
issued for the Premises or the laws of the United States or the State of
Colorado, or the ordinances of the County of Boulder. Neither Tenant nor
Landlord shall do or permit to be done any act or thing upon the Premises which
shall or might subject the other to any liability or responsibility for injury
to any person or persons or to property by reason of any business or operation
carried on upon the Premises or for any reason.

      (b) In the event that any official shall hereafter at any time contend or
declare by notice, violation, order or in any other manner whatsoever that the
Premises are used for a purpose which is a violation of any permit, certificate
of occupancy, statute, ordinance or other requirement of law applicable to the
Premises, Tenant shall, upon ten (10) days' written notice from Landlord,
immediately discontinue such use of the Premises.

      (c) Tenant, at its sole expense, shall comply with all laws, orders and
regulations of federal, state, county and municipal authorities, and with any
direction of any public officer or officers, pursuant to law, which shall
declare any violation or impose any order or duty upon Landlord or Tenant with
respect to the Premises, or the use or occupation thereof. Notwithstanding the
foregoing, Tenant shall not be obligated to comply with any such laws, orders,
or regulations, including but not limited to the Americans With Disabilities
Act, which (a) relate to the design or construction of the Premises, (b) relate
to the structural portions of the Premises, or (c) may require structural
alterations, structural changes, structural repairs or structural additions, all
of which shall be the obligation of Landlord at its sole cost and expense;
provided, however, if such laws, orders or regulations relate to the specific
type or nature of the business being conducted or to be conducted by Tenant upon
the Premises or to the specific accommodations made or to be made for certain of
Tenant's employees as opposed to being related to industrial or office
buildings, generally, Tenant shall nevertheless be required to comply with them.
Without limiting the generality of the foregoing, but subject to the proviso in
the preceding sentence, Landlord, at it sole cost and expense, shall be
responsible for complying with the applicable provisions of the Americans With
Disabilities Act and the regulations and Accessibility Guidelines for Buildings
and Facilities issued pursuant thereto, as same may be amended (collectively,
the "ADA"), relating to (i) the design and construction of the Premises and the
work within the Premises to be performed by Landlord pursuant to this Lease, and
(ii) the structural portions of the Premises (collectively, "Landlord's Work").

                                       4


      Section 6. OPERATING COST ADJUSTMENT

      (a) If in any calendar year the Operating Cost is greater than the
Estimated Operating Cost, Tenant shall pay to Landlord as additional rent an
amount equal to such excess. Any amount payable by Tenant to Landlord under this
Section 6 shall be paid within thirty (30) days after written notice thereof by
Landlord, such notice to be given by Landlord not later than March 31 of each
calendar year. Landlord may, either prior to the beginning of or during any
calendar year, compute a bona fide estimate of Operating Cost for such calendar
year. Upon receipt of written notice thereof, Tenant shall pay to Landlord, in
monthly installments simultaneously with payments of Base Rent under Section
4(a), one-twelfth of such new estimate of Operating Cost. An annual adjustment
shall be made between the parties within thirty (30) days after Landlord's
determination of Operating Cost. Any amounts of excess estimated Operating Cost
which Landlord is required to return may be offset by accrued amounts payable by
Tenant to Landlord. If the term of this Lease ends before the end of a calendar
year, any amount payable by Tenant or Landlord in respect of that year under
this Section 6 shall be adjusted proportionately on a daily basis utilizing the
previous year's determination of Operating Costs and the obligation to pay such
amount shall survive the expiration or earlier termination of this Lease.

      (b) As used in this Lease, "Operating Cost" means an amount per calendar
year (projected to an annual figure for the calendar year in which the Premises
is first occupied) which represents the actual Operating Cost for any calendar
year during the Term of this Lease. The Operating Cost shall be determined by
Landlord and shall be equal to the sum of the items of cost listed in Section
6(b)(i) and Section 6(b)(ii) but not the items listed in Section 6(b)(iii) in
respect of a calendar year:

            (i) All general and special real estate taxes, special assessments,
assessments for improvements, special district or improvement district
assessments, water charges, sewer charges, vault charges and other ad valorem
taxes, rates, levies and assessments payable in respect of the Term upon or in
respect of the Premises imposed by any governmental or quasi-governmental
authority and all taxes specifically imposed in lieu of any such taxes, but
excluding any inheritance, estate, succession, transfer, gift, franchise,
corporation, income, rental or profit tax or capital levy imposed on Landlord
("Taxes"). If due to a future change in the method of taxation, any franchise,
income, profit or other tax shall be levied against Landlord in whole or in part
in lieu of any tax which would otherwise constitute one of the foregoing taxes
or charges or if there shall be levied against Landlord a tax or license fee
measured by gross rents, such franchise, income, profit or other tax or license
fee shall be deemed to be a real estate tax for the purposes hereof. The taxes
described in this Section 6(b)(i) shall also include all of Landlord's expenses,
including, but not limited to, attorney's fees, incurred by Landlord in any
effort to minimize such taxes, whether by contesting proposed increases in
assessments or by any other means or procedures appropriate in the
circumstances; provided that Landlord and Tenant shall agree to the procedures
to be taken prior to Landlord taking such procedures. If Landlord secures an
abatement or refund of any Taxes, Landlord shall pass such abatement through to
the Tenant as a credit to be applied against rent next becoming due, or if no
further rent is due by Tenant, by cash payment from Landlord to Tenant.

            (ii) Except as otherwise set forth in this Lease, all costs, charges
and expenses (not directly reimbursed by insurance proceeds) which are
attributable to the ownership, operation, maintenance and repair of the
Premises, including, but not limited to, reasonable management fees that fall

                                       5


within industry standards for the Boulder area, building supplies, window
cleaning services, normal maintenance and repair of the Premises, including but
not limited to, heating and air conditioning systems, electrical and plumbing
systems, elevator system, landscaping, snow removal, Parking Lot repair and
maintenance, insurance (including boiler and machinery, loss of rent, accidental
and direct physical loss, all risk, public liability and other insurance as
provided in Section 20) and labor costs incurred in the operation or maintenance
of the Premises. Except as provided in Section 6(a)(iii), and except for repairs
and replacements for which Landlord is reimbursed from insurance proceeds, all
repairs and replacements shall either be made by Tenant directly or shall be
made by Landlord at Tenant's expense as an Operating Cost.

      Operating Costs shall be based upon competitive charges for similar
services and materials that are available in the general vicinity of the
Premises. Operating Costs shall be reduced by the proceeds of insurance or
eminent domain awards of settlement received by Landlord with respect to items
of Operating Cost (or the amount of any proceeds or awards which would have been
received if Landlord had carried the insurance required by this Lease or
diligently pursued its rights, as the case may be) or recoveries from warranty
claims. Landlord shall not be permitted to recover more than the actual
out-of-pocket cost incurred by Landlord on a non-profit basis for the Operating
Cost. The Operating Cost shall be determined on a "cash basis" and costs which
may be paid in installments without finance charges shall be paid in
installments. Promptly upon receipt thereof, Landlord shall pay Tenant any
refund or recovery made with respect to any Operating Cost previously paid by
Tenant.

            (iii) The following expenses and costs shall not be included within
the "Operating Costs" for the Premises: Costs incurred in connection with the
original construction of the Premises or in connection with any major change in
the Premises; depreciation, interest and principal payments on mortgages and
other debt costs, if any; costs of correcting patent and/or latent defects in,
or design errors relating to the design, or construction of the Building located
on the Premises; costs for which the Landlord is reimbursed by insurance
proceeds; costs associated with the operation of the business of the Landlord as
a separate entity, as the same are distinguished from the cost of operating the
Premises; the wages and benefits of any executive or other employee at or above
the level of building manager, or any employee who does not devote substantially
all of his or her employee time to the Premises unless such wages and benefits
are prorated to reflect time spent on operating and managing the Premises;
fines, penalties and interests; tax penalties incurred as a result of the
Landlord's negligence, inability, or unwillingness to make payments when due;
any expense resulting from the negligence of, or any violation of law by,
Landlord or its agents, contractors, employees or invitees; and Landlord's
general overhead and general administrative expenses. Except where the need for
repair or replacement results from the negligence of Tenant or its agents,
employees or invitees, or as a result of the operations of Tenant's business,
Landlord shall, upon reasonable notice from Tenant and at its expense and
without reimbursement by Tenant (other than from insurance proceeds from
insurance provided by Tenant), perform all replacement of, and structural
repairs to the structural portions of the Premises as are necessary to keep the
same in first class order, condition and repair, reasonable wear and tear
excepted. For purposes of this Lease, "structural portions" of the Premises
shall mean the foundation, supporting members of the roof, floor slabs, exterior
walls, structural girders and columns, load-bearing walls and columns. (It is
acknowledged that movement of floor slabs is normal and not generally repaired
in first class industrial buildings, unless the movement is excessive.)

                                       6


      (c) Tenant shall have the right to inspect all documents reflecting any
part of the Operating Costs and the calculations of any amount payable under
Section 6(a) of this Lease, and Landlord shall provide written receipts and
accounting records supporting its itemized statements and calculations of
Operating Costs and the amounts due under Section 6(a) once each year upon
request by Tenant. If Tenant wishes to dispute the determination of Operating
Costs under Section 6(a) or the calculation of any amount payable under Section
6(a), Tenant shall give Landlord written notice of such dispute within ninety
(90) days after receipt of notice from Landlord of the matter giving rise to the
dispute. If Tenant does not provide Landlord such notice within such time,
Tenant shall have waived its right to dispute such determination or calculation.
Promptly after the giving of such written notice, Tenant shall cause to be made
a complete audit of Landlord's records relating to the matter in dispute by a
nationally recognized firm of independent certified public accountants mutually
agreed upon by Landlord and Tenant. The cost of such audit shall be borne by
Tenant unless such audit discloses an error which overstated Operating Cost by
more than two percent (2%) of the amount determined by the audit, in which event
Landlord shall bear the cost of such audit. If such audit reveals that the
amount previously determined by Landlord was incorrect, a correction shall be
made and either Landlord shall promptly return to Tenant any overpayment or
Tenant shall promptly pay to Landlord any underpayment which was based on such
incorrect amount. Notwithstanding the pendency of any dispute hereunder, Tenant
shall make payments based upon Landlord's determination or calculation until
such determination or calculation has been established hereunder to be
incorrect.

      Section 7. UTILITIES & CLEANING.

      Tenant shall directly contract for and pay for all utilities serving the
Premises, including, but not limited to, gas, steam, water, fuel oil,
electricity, sewer charges, telephone and communications systems and the like;
and Landlord shall not be responsible for or involved in the payment of or the
contracting for any said utilities. Likewise, Tenant shall directly contract for
and pay for janitorial services and interior window cleaning and Landlord shall
not be responsible for or involved in the payment of or contracting for any of
said services.

      Section 8. TAXES

      Tenant shall pay before delinquency any and all taxes, assessments,
license taxes and other charges levied, assessed or imposed and which become
payable during the Term of this Lease upon Tenant's operations at, occupancy of,
or conduct of business at the Premises or upon equipment, furniture, appliances,
trade fixtures and other personal property of any kind installed or located at
the Premises; provided, however, Tenant may pay such amounts after delinquency
to the extent that such delay is necessary to Tenant's good faith and diligent
contest of such amounts, but only so long as there is no risk of Tenant having
any of its assets or Landlord's assets foreclosed upon or seized by the taxing
authority.

      Section 9. QUIET ENJOYMENT

      Landlord covenants and agrees with Tenant that upon Tenant paying the Base
Rent and additional rent hereunder and observing and performing all the terms,
covenants and conditions of this Lease on Tenant's part to be observed and
performed, Tenant may peaceably and quietly enjoy the Premises subject,

                                       7


nevertheless, to the terms and conditions of this Lease and the matters shown as
items 8-20 on Schedule B to the Landlord's title policy, a copy of which is
attached hereto as Exhibit D.

      Section 10. PREPARATION OF PREMISES

      (a) Landlord shall Substantially Complete (as defined in Section 30) the
work in the Premises required to be done by Landlord as specified in Exhibit B
attached hereto ("Landlord's Work"). All Landlord's Work shall be performed in a
good and workmanlike manner with new, first quality materials in compliance with
all laws, codes and all regulations. Landlord will obtain a fifteen (15) year
warranty on the roof naming the Landlord and Tenant on all related warranties.
Landlord represents that the Premises will be in compliance with the ADA. If
Landlord's Work is not performed as herein required, or if such work or the
Premises in not in compliance with all laws, codes or other regulations,
Landlord shall perform the necessary remedial work at its sole cost and expense.
Landlord and Tenant agree that Wyatt Construction Company shall be the general
contractor (the "Contractor") and RVP Architecture shall be the architect (the
"Architect") used by the parties for the purposes of performing Landlord's Work
subject to change in the event of failure or inability to perform. Landlord
shall exercise due diligence in pursuit of completing Landlord's Work. Landlord
shall permit Tenant to have access to the Premises prior to the commencement of
the Lease for purposes of inspecting Landlord's Work or with Contractor's
consent, for performing work in the Premises. Landlord agrees to proceed with
due diligence to complete any portion of Landlord's Work that shall not have
been completed as of the date of Substantial Completion of the foregoing by not
later than thirty (30) days after the date of Substantial Completion (excluding
seasonal landscaping, which shall be completed promptly as soon as the season
permits).

      (b) Except for minor changes to comply with applicable law or to correct
any mistakes in the plans or specifications, no change orders from the plans and
specifications set forth on Exhibit B shall be permitted, unless duly authorized
representatives of both Tenant and Landlord shall agree to the change order in
writing. Each change order shall set forth the changes in the plans and
specifications and an estimate of the increase in the price to be charged by the
Contractor and any delay in the construction schedule. Thereafter, within thirty
(30) days after receipt of documentation showing the amount charged to Landlord
by the Contractor for the change order, Tenant shall reimburse Landlord for such
amount, unless such amount is more than 10% more than the estimate set forth in
the change order, in which event Tenant shall pay Landlord the amount of the
estimate plus 10% of the amount of the estimate.

      (c) Landlord acknowledges that it is a material provision of this Lease
that Landlord deliver the Premises to Tenant by the date Landlord sets forth in
its Official Estimate (defined below) and in the condition provided herein. An
Initial Estimate date shall be provided by Landlord to Tenant within fifteen
(15) days after the appropriate building permit has been issued by the
government authorities. In no case shall the Initial Estimate date be later than
the Substantially Complete date set forth in Section 30 herein. In recognition
thereof, Landlord agrees to provide Tenant with preliminary written statements
signed by both Landlord and the Contractor on the first day of each month, from
and after the commencement of construction until the Commencement Date of the
Lease, detailing the status of Landlord's Work compared to the Initial Estimate
date and/or the Official Estimate date and the estimated date of substantial
completion of Landlord's Work. Landlord's preliminary estimates may change the
Initial Estimate date of substantial completion of Landlord's work (reference

                                       8


Section 30); provided that once Landlord's estimate of such date falls within
ninety (90) days of the date of the Substantial Completion date, it shall be
referred to as the "Official Estimate". In the event that the Commencement Date
occurs on or after that date which is fifteen (15) days plus any days of delay
caused by change orders or Tenant's work on the Premises after the Commencement
Date set forth in the Official Estimate, Tenant shall be entitled to a rent
reduction equal to $750.00 times the number of days after the fifteenth day plus
any days of delay caused by change orders or Tenant's work on the Premises after
the Commencement Date set forth in the Official Estimate, but before the actual
Commencement Date.

      Section 11. ACCEPTANCE OF PREMISES

      Taking possession of the Premises by Tenant shall be conclusive evidence
as against Tenant that the Premises were in good and satisfactory condition when
Possession was taken subject to correction (by Landlord at its expense) of punch
list or other defective items disclosed to Landlord prior to taking of
possession of the Premises by Tenant, defects not reasonably discoverable prior
to taking possession and disclosed to Landlord within a reasonable period of
time after discovery of same by Tenant, but no later ninety (90) days after
taking possession of the Premises, and latent defects disclosed to Landlord
within a reasonable time after discovery of same by Tenant.

      Section 12. ACCESS TO PREMISES

      Landlord and Tenant acknowledge that Tenant shall be performing
confidential work within the Premises, which confidential work shall not be
accessible to Landlord. Accordingly, Landlord agrees that it will cooperate with
Tenant so as to preserve the confidentiality of Tenant's work (and such
cooperation shall include, but not be limited to, if requested by Tenant, the
execution of confidentiality agreements by Landlord and its agents, assigns,
employees and contractors, and other reasonable measures to preserve Tenant's
confidentiality). Unless Tenant shall consent to a shorter time, Landlord will
provide at least twenty-four (24) hours advance notice to Tenant prior to
entering the Building, will schedule with Tenant the time and place of all entry
by Landlord or its agents, assigns, employees or contractors, and will only
enter upon the Building with a duly-authorized representative of Tenant, except
in the event of an emergency. Landlord agrees to use its best efforts not to
interfere unreasonably with the Tenant or the Tenant's business in the course of
exercising its rights under this paragraph.

      Section 13. ALTERATIONS BY TENANT

      (a) Other than interior, non-structural alterations, for which Landlord's
consent is not required, Tenant shall make no alterations, decorations,
installations, additions or improvements in or to the Premises without first
obtaining the written consent of Landlord. Tenant understands that Landlord's
consent will be conditioned on Tenant's compliance with Landlord's requirements
as in effect at the time permission is requested, which requirements will
include, but not be limited to Landlord's approval of plans, specifications,
contractors, insurance, and hours of construction. Prior to the commencement of
any work in or to the Premises by Tenant's contractor, Tenant shall comply with
all applicable laws (for example, by obtaining a building permit if required),
and Tenant shall on request deliver to Landlord certificates issued by
applicable insurance companies evidencing that workmen's compensation and public
liability insurance and property damage insurance, all in amounts and with
companies, and on forms reasonably satisfactory to Landlord,

                                       9


are in force and effect and maintained by all contractors and subcontractors
engaged by Tenant to perform such work. Each such certificate shall provide that
it may not be cancelled without ten days' prior written notice to Landlord.

      (b) All articles of personal property, and all movable business and trade
fixtures, machinery and equipment, cabinetwork, furniture and movable partitions
owned or installed by Tenant at its sole expense (and with respect to which no
credit or allowance was granted to Tenant by Landlord) in the Premises shall
remain the property of Tenant and may be removed by Tenant at any time, provided
that Tenant, at its expense, shall repair any damage to the Premises caused by
such removal. All alterations, decorations, installations, additions or
improvements in or to the Premises other than those specified in the first
sentence of this Section 13(b) shall, upon the completion thereof, become the
property of Landlord and shall be surrendered to Landlord upon the expiration or
other termination of the Term of this Lease. Landlord may elect to require
Tenant to remove all or any part of the property described in the first sentence
of this Section 13(b) at the expiration or other termination of the Term of this
Lease, in which event such removal shall be done at Tenant's expense, and Tenant
shall, at its expense, repair any damage to the Premises caused by such removal.

      (c) Tenant shall be solely responsible for the consequences of Tenant's
repairs and alterations on the Premises' structure and on the operation of its
systems, such as heating, air conditioning, ventilating, electrical and
plumbing, whether or not Tenant had received Landlord's consent to such repairs
or alterations pursuant to this Section 13.

      Section 14. MAINTENANCE AND REPAIRS

      (a) Except for the maintenance, repairs and replacements Landlord is
required to make pursuant to Section 13(b) of this Lease, and except for items
expressly excluded from Operating Costs under Section 6(b)(iii), Tenant shall
take good care of the Premises and the fixtures and improvements therein, and,
at its sole cost and expense, make repairs, restorations or replacements as and
when needed to keep the Premises in first class order, condition, and repair,
reasonable wear and tear excepted. If Tenant fails, after notice to Tenant and
the lapse of applicable grace periods in accordance with Section 31(b) of this
Lease, to make any repairs, restorations or replacements required by this Lease,
Landlord may (but without any obligation to do so) make such repairs,
restorations, or replacements at the reasonable expense of Tenant and such
expense shall be due within thirty (30) days of receipt by Tenant of written
notice by Landlord, as additional rent. Tenant shall comply with all provisions
of Section 13 and Section 15 of this Lease in connection with such repairs,
restorations and replacements.

      (b) Subject to Section 14(c), (d) and (e) hereof, and subject to Tenant's
reimbursement of Landlord as provided in Section 6(b) hereunder, Landlord shall
act as property manager for the Premises and, in such capacity, shall be
responsible for the operation, maintenance and repair of the Premises, including
but not limited to: Building maintenance, exterior window cleaning, normal
maintenance and repair of the Premises (including heating and air conditioning
systems, electrical and plumbing systems, landscaping, roof, roof membrane,
elevator system, utility systems, Parking Lot, and snow removal) and security
outside of the Building. In addition, Landlord shall make the structural repairs
and replacements to the structural portion of the Premises that Landlord is
required to make, at Landlord's cost and expense, without reimbursement from
Tenant, pursuant to Section 6(b)(iii) of this Lease.

                                       10


      (c) Landlord agrees not to assign its responsibilities as property manager
of the Premises to any other person or entity without first providing written
notice to Tenant and obtaining Tenant's written consent to such assignment.

      (d) Landlord agrees, by not later than 45 days prior to the Commencement
Date, to provide Tenant's Facilities Manager with a detailed property management
plan for the Premises, including proposed staffing levels and standards of
management and maintenance of the Premises. Tenant shall respond with its
comments or approval of such plan within thirty (30) days of receipt of the
management plan and to any revised submittal within ten (10) days of its receipt
of the same. Landlord and Tenant shall discuss who Landlord shall hire or
contract with as major service providers for the Premises. Landlord shall have
yearly inspections of the roof as required by the terms of the roof warranty and
Landlord and Tenant shall cooperate in the enforcement of the roof warranty.
Landlord shall advise Tenant in advance of any repair or maintenance cost
believed to be in excess of $10,000. In the event Landlord or Tenant shall
disagree about such plans, the need for such maintenance or repairs, or whom to
hire as service providers, then Landlord and Tenant shall agree to a third party
property manager, which third party property manager shall informally arbitrate
such disputes.

      (e) Except as provided elsewhere in this Lease to the contrary, there
shall be no allowance to Tenant for a diminution of rental value and no
liability on the part of Landlord, by reason of inconvenience, annoyance or
injury to, or interruption of business, arising from Landlord, Tenant or others
making any repairs, restorations, replacements, alterations, additions or
improvements in or to any portion of the Premises, or in or to fixtures,
appurtenances or equipment thereof; provided that such repairs, restorations,
etc. do not prevent Tenant from operating in the Premises as anticipated
hereunder for more than twenty-four hours. In such case, Rent hereunder shall be
abated in proportion to the untenantable space in the Premises. Notwithstanding
the provisions of Section 12, Section 14 or Section 21 or any other provision of
this Lease to the contrary, in exercising its rights pursuant to this Lease,
Landlord shall not unreasonably interfere with the access to the Premises or
Tenant's business operations therein.

      Section 15. MECHANIC'S LIENS

      (a) Tenant shall, at Tenant's option, pay or cause to be paid or provide
bond for all costs for work done by it or caused to be done by it on the
Premises of a character which will or may result in liens on Landlord's interest
therein and Tenant will keep the Premises free and clear of all mechanic's
liens, and other liens on account of work done for Tenant or persons claiming
under it. Tenant shall indemnify and hold Landlord harmless against any
liability, loss, damage, costs or expenses, including reasonable attorney's
fees, on account of any claims of any nature whatsoever, including claims of
liens of laborers or materialmen or others for work performed for, or materials
or supplies furnished to Tenant or persons claiming under Tenant.

      (b) Should any liens be filed or recorded against the Premises or any
action affecting the title thereto be commenced due to Tenant's contracts with
third parties, Tenant shall give Landlord written notice thereof. Tenant shall
thereafter cause such liens to be removed of record within ten days after the
filing of the liens. If a final judgment establishing the validity or existence
of a lien for any amount is entered, Tenant shall pay and satisfy the same at
once. If Tenant shall be in default in paying any charge for which a mechanic's

                                       11


lien or suit to foreclose the lien has been recorded or filed, Landlord may (but
without being required to do so) pay such lien or judgment and any costs, and
the amount so paid, together with reasonable attorney's fees incurred in
connection therewith, shall be immediately due from Tenant to Landlord with
interest at the Default Rate from the dates of Landlord's payments. Landlord
shall be responsible for the payment for all work (including Landlord's Work),
and the removal of all liens of record relating to work of Landlord occurring
prior to the Commencement Date, or, thereafter, work performed by Landlord or
its contractors.

      (c) At least five days prior to the commencement of any work permitted to
be done by persons requested by Tenant on the Premises in excess of $10,000.00,
Tenant shall notify Landlord of the proposed work and the names and addresses of
the persons supplying labor and materials for the proposed work so that Landlord
may avail itself of the provisions of statutes such as Section 38-22-105(2) of
Colorado Revised Statutes (1973, as amended). During any such work on the
Premises, Landlord and its representatives shall have the right to go upon and
inspect the Premises at all reasonable times, and shall have the right to post
and keep posted thereon notices such as those provided for by Section
38-22-105(2).

      Section 16. CASUALTY

      (a) If the Building or the Parking Lot or means of access or ingress to
the Premises shall be so damaged by fire or other casualty as to render the
Premises untenantable, and if such damage shall be so great that an architect
selected by Landlord and agreed to by Tenant shall certify in writing to
Landlord and Tenant that the Premises with the exercise of reasonable diligence,
but without the payment of overtime or other premiums cannot be made tenantable
within 90 days from the happening of the fire or other casualty, or if the
damage shall be such that Landlord's architect shall certify that the Premises
can be made tenantable within the 90-day period from the happening of the fire
or other casualty, but insurance proceeds are not made available to Landlord for
repair of such damage, then Landlord or Tenant may terminate this Lease. If
neither Landlord nor Tenant terminates this Lease as set forth above, then,
except as hereinafter provided, Landlord shall with reasonable promptness,
repair the damage so done except that Landlord shall not be required to repair,
replace or restore any personal property of Tenant specified in the first
sentence of Section 13(b). Until such repair is substantially completed, the
Base Rent shall be abated in proportion to the part of the Premises which is
unusable by Tenant in the reasonable conduct of its business or profession.
There shall be no abatement of Base Rent by reason of any portion of the
Premises being unusable for a period of one day or less, unless covered by
Landlord's loss of rent insurance. If the damage is due to the fault or
negligence of Tenant or Tenant's employees, agents or invitees, there shall be
no abatement of Base Rent, unless covered by Landlord's loss of rent insurance.

      (b) If the Premises shall be damaged by fire or other casualty, but not so
as to render the entire Building untenantable, Landlord shall cause the damage
to be repaired with reasonable promptness and, if not repaired sufficiently that
the entire Premises is tenantable within one day, there shall be an abatement of
Base Rent and all other amounts due under this Lease in proportion to the
Rentable Square Footage of the Premises rendered untenantable. If the fire or
other casualty causing damage to the Premises shall have been caused by the
negligence of Tenant, or Tenant's employees, agents or invitees, such damage
shall be repaired by Landlord and the amount paid for such repair shall be due
from Tenant to Landlord with interest at the Default Rate from the

                                       12


dates of Landlord's payments, unless Landlord is paid for such loss by
insurance.

      Section 17. EMINENT DOMAIN

      (a) If any portion of the Premises shall be taken by right of eminent
domain or shall be conveyed in lieu of any such taking, which shall render the
Premises untenantable, then this Lease, at the option of either Landlord or
Tenant exercised by either party giving written notice to the other of such
termination within thirty (30) days after such taking or conveyance, shall
forthwith cease and terminate and the Base Rent and all other sums payable
hereunder shall be duly apportioned as of the date of such taking or conveyance.
Tenant thereupon shall surrender to Landlord the Premises and all interest
therein under this Lease, and Landlord may re-enter and take possession of the
Premises and remove Tenant therefrom. If neither party exercises the option to
terminate this Lease, Landlord shall make an equitable adjustment of the Base
Rent payable by Tenant for the tenantable portion of the Premises.

      (b) In the event of any taking or conveyance described above, Landlord
shall receive the entire award or consideration for the lands and improvements
so taken and Tenant hereby waives all claims against Landlord and assigns to
Landlord all claims against the condemnor for or on account of or incident to
such taking or conveyance, except that Tenant may separately claim and recover
from the condemnor, the value of any personal property of Tenant which Tenant
was entitled to remove pursuant to this Lease, as well as compensation for loss
of leasehold estate, and leasehold improvements done and paid for by Tenant
without contribution from Landlord, relocation expenses and lost profits.

      Section 18. INJURY TO PERSON OR PROPERTY

      (a) Subject to Section 19(a), Landlord hereby agrees to indemnify, defend
and hold harmless Tenant from and against any and all demands, claims, causes of
action, liabilities or judgments and any and all expenses (including, without
limitation, reasonable attorney fees) incurred by Tenant, arising from (i) the
neglect or fault of Landlord, its employees, contractors or agents; or (ii)
Landlord's breach of its obligations under this Lease.

      (b) Tenant shall neither hold nor attempt to hold Landlord or Landlord's
employees or agents liable for, and subject to Section 19(a), Tenant shall hold
harmless and indemnify Landlord and Landlord's employees or agents from and
against, any and all demands, claims, causes of action, liabilities, or
judgments, and any and all expenses (including, without limitation, reasonable
attorney's fees) incurred by Landlord in investigating and resisting the same,
arising from any of the following:

            (i) Any injury or damage to the person or property of Tenant or to
any other person rightfully on the Premises for any purpose whatsoever, to the
extent the injury or damage is caused by the neglect or fault of Tenant or
Tenant's employees, agents or invitees, or to the extent such injuries are the
result of the violation of laws or ordinances, governmental orders of any kind,
or of the provisions of this Lease including the rules and regulations provided
for in Section 27 of this Lease, by any of such persons;

            (ii) Any injury or damage of any nature suffered by Tenant or
Tenant's employees, agents or invitees to the extent the injury or damage is
caused by the loss or destruction by any person of furniture, inventory,
valuables, files or any other property kept or stored on the Premises; and

                                       13


            (iii) Any injury or damage not specified above to the person or
property of Tenant, or Tenant's employees, agents or invitees, to the extent the
injury or damage is caused by any reason other than the fault or negligence of
Landlord or Landlord's employees or agents, or breach of this Lease by Landlord,
including, but not limited to any injury or damage resulting from fire,
explosion, falling plaster or glass, steam, gas, electricity, water, rain or
snow or leaks from any part of the Building, or from the pipes, appliances or
plumbing works or from the roof, street, subsurface or from any other place or
by dampness.

      Section 19. TENANT'S INSURANCE

      (a) At all times during the Term of this Lease, Tenant shall, at its own
expense, maintain (i) public liability insurance for claims for personal injury
or death and property damage with limits of not less than $1,000,000 combined
single limit of liability plus umbrella coverage of not less than $5,000,000;
and (ii) fire and extended coverage insurance on all property described in the
first sentence of Section 13(b) to the extent of at least 90 percent of their
insurable value. All such policies described in subsection (a)(i) only shall
name Landlord as an additional insured and shall be with insurance companies and
on forms reasonably satisfactory to Landlord. Tenant shall, prior to Tenant's
occupancy of the Premises and thereafter at Landlord's request, furnish Landlord
with certificates of all insurance to be maintained by Tenant and with evidence
of payment of the premiums thereon. All such policies shall contain a clause or
endorsement to the effect that they may not be terminated or amended during the
Term of this Lease except after thirty days' written notice thereof to Landlord.
All insurance policies maintained by or on behalf of Landlord and Tenant with
respect to the Premises shall include a waiver of subrogation against Landlord
and Tenant on the part of the respective insurance carriers and each of the
parties hereby releases the other, to the extent of the releasing party's
insurance coverage, from any and all liability for any loss or damage covered by
such insurance which may be inflicted upon the property of such party even if
such loss or damage shall be brought about by the fault or negligence of the
other party, its agents or employees; provided, however, that this release shall
be effective only with respect to loss or damage occurring during such time as
the appropriate policy of insurance shall contain a clause to the effect or
otherwise provide that this release shall not affect said policy or the right of
the insured to recover thereunder.

      (b) Tenant shall not use or suffer or permit any other firm or person to
use the Premises for any hazardous purpose or in any manner that will violate,
suspend, void, make inoperative or increase the rate of any policies of
insurance of any kind at any time carried by Landlord upon the Premises and the
Building, fixtures and property therein. Tenant at Tenant's sole expense shall
comply with all rules, orders, regulations or requirements of the board of fire
underwriters, or any other similar body, having jurisdiction over the Premises.
Any increase in the cost of any insurance carried by Landlord attributable to
Tenant's activities on the Premises or Tenant's failure to perform and observe
Tenant's obligations and covenants hereunder shall be borne by Tenant and
payable to Landlord, from time to time, on demand.

                                       14


      Section 20. LANDLORD'S INSURANCE

      At all times during the Term of this Lease, Landlord shall maintain public
liability insurance for claims for personal liability or death and property
damage with limits of not less than $5,000,000. Landlord, with respect to all
structures and improvements on the Premises, including leasehold improvements,
shall, during the Term of this Lease, carry full and adequate insurance under a
so-called all-risk policy, which shall include but not be limited to coverage
for boiler and machinery, accidental and direct physical loss. Landlord's
insurance shall also include rental value insurance for the protection of
Landlord, which insurance shall provide for payment of net rental and other
charges due hereunder for a minimum period of one (1) year following a casualty,
such policy providing that payments will be made to Landlord regardless of
whether this Lease is terminated as a result of such casualty.

      During the period Landlord is performing Landlord's Work (and for any
additional period prior to delivery of the Premises to Tenant), Landlord shall
maintain, or cause its Contractor to maintain, property insurance under an all
risk form or builder's risk coverage in amounts and in a form acceptable to
Tenant. Landlord shall also require the Architect to carry errors and omissions
coverage in an amount of not less than $1,000,000. Landlord's insurance policies
shall be deposited with the Tenant and renewals thereof shall be deposited not
less than ten (10) days prior to the expiration date of the then expiring
policy. All such policies maintained by Landlord shall provide that the same
shall not be amended or canceled without at least thirty (30) days' prior
written notice to the Tenant.

      Section 21. SERVICES PROVIDED BY LANDLORD

      (a) Pursuant to Section 10 above, Landlord shall furnish or cause to be
furnished on or before the Commencement Date the following services:

            (i) Heating or air conditioning; provided that Tenant will be solely
responsible to pay for the power to operate such heating and air conditioning on
the Premises;

            (ii) Domestic running water for the operation of lavatories,
ordinary drinking fountains at all times (but paid for by Tenant);

            (iii) 110-volt electric current for the office, warehouse and
manufacturing portions of the Premises and 220-volt or 408-volt electric current
for the manufacturing portion of the Premises, all as shown on Exhibit B;
provided that Tenant will be solely responsible to pay the electric bill to
operate such systems on the Premises; After the Commencement Date, the costs of
maintaining the availability of such utilities shall be Operating Costs pursuant
to Section 6(b)(ii).

      (b) Tenant covenants and agrees that at all times its use of electric
current shall never exceed the capacity of any wiring installation in or to the
Premises.

      (c) Landlord shall not be liable to Tenant or any other person, for direct
or consequential damage, or otherwise, for breach of Section 21(a) above when
Landlord uses reasonable diligence to supply such services. Landlord reserves
the right temporarily to discontinue such services, or any of them, at such
times as may be necessary by reason of accident, unavailability of employees,
repairs, alterations or improvements, strikes, lockouts, riots, acts

                                       15


of God, governmental preemption in connection with a national or local
emergency, any rule, order or regulation of any governmental agency, conditions
of supply and demand, Landlord's compliance with any mandatory governmental
energy conservation or environmental protection program or any other happening
beyond the control of Landlord. Landlord shall not be liable for damages to
person or property or for injury to, or interruption of, business for any
discontinuance permitted under this Section 21, nor shall such discontinuance in
any way be construed as an eviction of Tenant or cause an abatement of rent or
operate to release Tenant from any of Tenant's obligations hereunder, unless
Landlord is negligent in its duties to maintain the heating and air conditioning
system, the plumbing, and the electrical system.

      Section 22. ASSIGNMENT AND SUBLETTING

      (a) Tenant shall not assign this Lease or any interest herein or sublet
all or any part of the Premises, or suffer or permit the Premises or any part
thereof to be occupied by others, without the prior written consent of Landlord
in each instance, which consent shall not be unreasonably withheld. Any such
attempted assignment, subletting, or occupancy without Landlord's prior written
consent shall be void and shall confer no rights whatsoever on any party. Tenant
will notify Landlord in writing of any interest in this Lease which Tenant
wishes to assign or any portion of the Premises which Tenant wishes to sublet or
permit others to occupy which notice shall specify the terms and conditions of
such transaction and shall be accompanied by such information as Landlord may
require with respect to the proposed assignee, sublessee or occupant. Upon
receipt of such notice and information, Landlord shall have the right in its
discretion, reasonably exercised, to either:

            (i) Consent to such assignment, subletting or occupancy in which
event one-half (1/2) of any rent or other consideration realized by Tenant under
any such assignment, subletting or occupancy in excess of the Base Rent and
other sums payable hereunder reasonably attributable to the space subject to the
assignment, subletting or occupancy arrangement, after amortization of the
reasonable costs incurred by Tenant for leasing commissions and leasehold
improvements in connection with such assignment, subletting or occupancy over
the term of such assignment, subletting or occupancy, shall be paid to Landlord
by Tenant; or

            (ii) Refuse to consent to such assignment, subletting or occupancy
setting forth its reasons for such refusal in writing. If Landlord does not
deliver written notice as to Landlord's election of one of the options referred
to above within thirty (30) days after its receipt of the notice and information
from Tenant, Landlord shall be deemed to have consented to the proposed
assignment, subletting or occupancy. If this Lease or any interest herein is
assigned, or if the Premises or any part thereof be sublet or occupied by
anybody other than Tenant, with or without the consent of Landlord having first
been obtained, Landlord may, after default by Tenant, collect rent from the
assignee, subtenant or occupant, and apply the net amount collected to the Base
Rent and other sums due hereunder, but no collection shall be deemed a waiver of
this covenant, or the acceptance of the assignee, subtenant or occupancy as the
tenant hereof or a release of Tenant from the further performance by Tenant of
covenants on the part of Tenant contained in this Lease. The consent by Landlord
to an assignment, subletting, or occupancy arrangement shall not relieve Tenant
from primary liability hereunder or from the obligation to obtain the express
consent in writing of Landlord to any further assignment, subletting, or
occupancy arrangement.

                                       16


      (b) Notwithstanding anything contained in this Lease to the contrary and
provided the assignee assumes this Lease, none of the following, nor any
assignments or transfers of this Lease resulting from the following, shall
require Landlord's prior written consent or the payment by Tenant of any fees or
charges of any kind: (a) a transfer of stock or other ownership interests in
Tenant; (b) the merger, consolidation or amalgamation of Tenant with a third
party or the sale of all or substantially all of the stock or assets of Tenant;
or (c) a transfer to a parent, subsidiary or "affiliate" of Tenant. An
"affiliate" shall mean any trust, corporation, partnership or limited liability
company (i) which owns or "controls" the majority of the ownership interest of
Tenant, either directly or indirectly through other entities; (ii) the majority
of whose ownership interests is owned or "controlled" by Tenant; or (iii) which
owns or "controls" a majority of the ownership interests of Tenant. As used
herein, the word "control" shall mean the right or power to direct or cause the
direction of the management and policies of the entity in question.

      Section 23. END OF TERM

      Upon the expiration or other termination of the Term of this Lease, Tenant
shall promptly quit and surrender to Landlord the Premises broom-clean, in good
order and condition, ordinary wear, condemnation, casualty and Landlord's repair
obligations excepted, and Tenant shall remove all of its movable furniture and
other effects and such alterations, additions and improvements as Landlord shall
require Tenant to remove pursuant to Section 13. For purposes of the foregoing
sentence, items which are partially worn from normal use, but not yet in need of
repair, shall be considered to be in good condition. Likewise, items which are
worn from normal use and have been in such condition without Landlord repairing
them shall be considered to be in good condition. All movable furniture and
other effects and alterations, additions and improvements not so removed shall
conclusively be deemed to have been abandoned and may be appropriated, sold,
stored, destroyed or otherwise disposed of by Landlord without notice to Tenant
or any other person and without obligation to account therefor; and Tenant shall
pay Landlord all reasonable expenses incurred in connection with such property,
including, but not limited to, the cost of repairing any damage to the Building
or Premises caused by removal of such property. Tenant's obligation to observe
or perform this covenant shall survive the expiration or other termination of
this Lease.

      Section 24. HOLDOVER

      If Tenant or any party claiming through or under Tenant shall remain or
continue to be in possession of the Premises or any part thereof after the
termination of this Lease, and Landlord continues to accept rent payments,
Tenant or such party or both shall be deemed to be a month to month tenant of
the Premises on all the terms and conditions of this Lease, except that the Base
Rent shall be 110% of the amount of the Base Rent for the final Lease Year.
Nothing herein contained shall be construed to limit Landlord's right to obtain
possession of the Premises upon termination of this Lease by unlawful detainer
proceedings or otherwise in the event that Landlord does not continue to accept
rent payments after termination of this Lease.

      Section 25. SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE

      (a) This Lease is subordinate to all mortgages, trust indentures and other
encumbrances which may now or hereafter affect such leases or all or any portion
of the Premises and to all renewals, modifications, consolidations, replacements
and extensions thereof. This clause shall be self-operative and no

                                       17


further instrument or subordination shall be required in order to effectuate it.
Tenant covenants and agrees nevertheless, to execute and deliver promptly any
certificate or other assurance in confirmation of such subordination reasonably
requested by any mortgagee.

      (b) Tenant agrees that in the event any proceedings are brought for the
foreclosure of any mortgage to which this Lease is subordinate, Tenant will
attorn to the purchaser at any such foreclosure sale and will recognize such
purchaser as its landlord under this Lease. Any attornment to a purchaser
pursuant to this Section 25 shall occur automatically, but Tenant shall on
request by and without cost to Landlord or any purchaser execute and deliver any
reasonable instruments evidencing such attornment.

      (c) Notwithstanding the foregoing, no subordination or attornment pursuant
to the provisions of this Section 25 shall be effective unless prior to the date
any party desiring such subordination or attornment obtains title to the
Premises, such party has acknowledged by written notice to Tenant that this
Lease and Tenant's rights hereunder shall continue undisturbed while Tenant is
not in default hereunder; except that party shall not be:

            (i) Liable for any act or omission of any prior Landlord; provided,
however, such party shall not be released from liability if such act or omission
constitutes a breach of the Landlord's obligations under the Lease and continues
after the lender or purchaser succeeds to the interest of the Landlord under the
Lease; or

            (ii) Subject to any offsets or defenses which Tenant might have
against any prior Landlord; or

            (iii) Bound by any Base Rent which Tenant might have paid for more
than one month in advance to any prior Landlord.

      In addition, and notwithstanding the provisions of this Section 25, any
subordination of this Lease or attornment by Tenant shall be subject to Tenant's
receipt of written assurance from the mortgagee or deed of trust holder that (a)
Tenant's possession and this Lease, including any options to extend the Lease,
will not be disturbed so long as Tenant is not in default hereunder beyond any
applicable notice and cure periods and attorns to the record owner of the
Premises; and (b) in the event of foreclosure or sale, the Lease shall continue
in full force and effect in accordance with its terms as a direct lease between
Tenant and such mortgagee, deed of trust holder, or other purchaser; provided
that such rights of Tenant shall be subject to the provisions of Section
25(c)(i) through (iii) above.

      (d) In the event a foreclosure is commenced against the Premises, Landlord
will give Tenant notice of such commencement at least thirty (30) days prior to
the foreclosure sale.

      Section 26. STATEMENT OF PERFORMANCE

      Each party agrees at any time and from time to time, to execute and
deliver to the other, within twenty (20) days following a request therefor, a
statement in writing certifying that this Lease is in full force and effect, and
unmodified (or specifying any modifications), that the requesting party is not
in default hereunder (or specifying any alleged defaults by the requesting
party), and any further information about this Lease or the Premises which the

                                       18


requesting party may reasonably request. Each party understands that prospective
purchasers, mortgagees or lessors of the Building and prospective assignees of
this Lease or prospective subleases or occupants of the Building will rely on
such certificates. Any failure by either party to respond to a request within
twenty (20) days after receipt of the request shall constitute an admission that
the matters set forth in the requested certificate are true.

      Section 27. RULES AND REGULATIONS

      The rules and regulations set forth on Exhibit C attached hereto are
hereby made a part of this Lease. Landlord may from time to time amend, modify,
delete or add new and additional reasonable rules and regulations for the use,
safety, cleanliness and care of the Premises. Such new or modified rules and
regulations shall be effective upon notice to Tenant from Landlord thereof.
Tenant and Tenant's employees, agents and invitees, shall at all times observe
faithfully and comply strictly with, the rules and regulations set forth on
Exhibit C or as hereinafter modified by Landlord. In the event of any breach of
any rules or regulations set forth on Exhibit C or any amendments or additions
thereto, Landlord shall have all remedies in this Lease provided for in the
event of default by Tenant and shall, in addition have any remedies available at
law or in equity including the right to enjoin any breach of such rules and
regulations. In the event of any conflict between the terms of this Lease and
the terms of any rules and regulations issued by Landlord, including those set
forth in Exhibit C, the terms of this Lease shall control.

      Section 28. INTENTIONALLY LEFT BLANK.

      Section 29. INDEMNITY; WAIVER

      (a) Tenant shall indemnify and hold Landlord harmless from any and all
demands, claims, causes of action, liabilities, judgments, fines and expenses
(including, without limitation, reasonable attorney's fees) incurred or suffered
by Landlord by reason of any breach of this Lease (beyond applicable grace and
cure periods) by Tenant or Tenant's employees, agents or invitees of any
covenant or provision of this Lease.

      (b) Landlord has no knowledge of any present violations of applicable
federal, state, or local laws and regulations, including all laws related to
toxic hazardous waste and hereby agrees to indemnify and hold harmless Tenant
from liability for any such hazardous waste existing prior to Tenant's occupancy
of the Premises. The Tenant shall comply with all applicable federal, state, and
local laws and regulations, including but not limited to the Federal Water
Pollution Control Act, 33 U.S.C. ss.1251, et seq., the Oil Pollution Act, 33
U.S.C. ss.2701 et seq., the Clean Air Act, 42 U.S.C. ss.7401, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. ss.6901, et seq., and the
Comprehensive Environmental Response, Control, and Liability Act, 42 U.S.C.
ss.9601, et seq., as subsequently amended. Prior to the date that is thirty (30)
days from the date hereof, Landlord agrees, as a material condition of this
Lease, to provide Tenant with an environmental assessment of the Premises, in
form and substance satisfactory to Tenant, certified by a third-party
environmental consultant licensed to practice in the State of Colorado and
reasonably acceptable to Tenant, which report shows to Tenant's satisfaction
that the Premises are free and clear of Hazardous Materials and the Premises are
not in violation of any environmental laws, rules, regulations or enactments
(the "Environmental Assessment"). In the event Landlord is unable to timely
deliver such report, Tenant shall be entitled to terminate this Lease upon
written notice to Landlord delivered no later than July 1, 1999. The Tenant

                                       19


shall indemnify, defend, and hold the Landlord harmless for any violations
incurred under any such laws and regulations or for any costs, damages, claims,
liabilities, and judgments to the extent arising from past, present, and future
acts or omissions of the Tenant in connection with the use and/or occupancy
authorized by the Lease or other acts of Tenant or its agents. This
indemnification and hold harmless agreement includes, but is not limited to,
acts and omissions of the Tenant in connection with the use and/or occupancy
authorized by the Lease which result in: (1) violations of the above or any
applicable laws and regulations; (2) judgments, claims, or demands assessed
against the Landlord; (3) reasonable costs, expenses, and damages incurred by
the Landlord; or (4) other releases or threatened releases on or into the land,
property, and other interest of the Landlord by solid waste and/or hazardous
substance(s).

      (c) The Tenant's indemnification of the Landlord shall also include any
damages to life or property arising from the Tenant's occupancy or use of land,
property, and other interest of the Landlord. The Landlord has no duty to
inspect leasehold area or to warn of hazards and, if the Landlord does inspect
the area, it shall incur no additional duty nor liability for identified or
non-identified hazards. This covenant may be enforced by the Landlord in a court
of competent jurisdiction. This, and all other Tenant indemnifications of
Landlord and Landlord indemnifications of Tenant under this Lease, shall survive
the expiration or termination of this Lease.

      (d) LANDLORD AND TENANT HEREBY MUTUALLY WAIVE TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THEM AGAINST THE OTHER ON ANY
MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES,
OR ANY CLAIM OF INJURY OR DAMAGE, OTHER THAN CLAIMS FOR PERSONAL INJURY OR
DEATH.

      (e) Binding Arbitration.

            (i) Any controversy, claim or dispute arising out of or relating to
the construction provisions of this Lease (Section 10) or the breach,
termination, enforceability or validity thereof, other than claims for personal
injury or death, shall be determined exclusively by binding arbitration in
Boulder County before three arbitrators. The arbitration shall be governed by
the American Arbitration Association under its Commercial Arbitration Rules,
provided that at least one member of the panel shall have relevant knowledge of
or experience in the commercial real estate industry.

            (ii) No provision of, nor the exercise of any rights under Section
29(e) shall limit the right of any party: (A) to bring a forcible entry and
detainer, unlawful detainer, or eviction or constructive eviction action; (B) to
exercise self-help remedies provided for in this Lease or by law; or (C) to
request and obtain from a court having jurisdiction before, during or after the
pendency of any arbitration, provisional or ancillary remedies and relief
including, but not limited to, injunctive or mandatory relief or the appointment
of a receiver. The institution and maintenance of an action or judicial
proceeding for, or pursuit of, provisional or ancillary remedies or exercise of
self-help remedies shall not constitute a waiver of the right of any party
hereto, even if such party is the plaintiff, to submit the dispute to
arbitration if such party would otherwise have such right.

            (iii) At any such arbitration proceeding, the arbitrator shall not
have the power or authority to award punitive damages to any party. Judgment

                                       20


upon the award rendered may be entered in any court having jurisdiction.

            (iv) Each of the parties shall, subject to the award of the
arbitrators, pay an equal share of the arbitrators' fees.

      (f) Landlord represents and warrants to Tenant as follows:

            (i) Neither Landlord nor any of its agents, officers, employees or
consultants has any knowledge of any (a) hazardous or toxic materials, wastes or
substances ("Hazardous Materials") which are located in or which have been
treated, stored, generated or disposed of upon the Premises; or (b) violation of
any state, federal or local law enacted for the protection of the environment or
the safety of workers at the Premises.

            (ii) Tenant shall not have any responsibility or obligation for
clean-up, remediation, defense or indemnification with respect to any
environmental pollution, environmental impairment or Hazardous Materials not
caused by Tenant, its suppliers, agents, contractors, employees, invitees, or as
a result of Tenant's operations at the Premises.

      Section 30. COMMENCEMENT OF THE TERM

      Subject to Section 10 above, the Term of this Lease shall commence on
whichever of the following dates shall first occur:

      (a) The date on or after December 15, 1999 on which the Premises are
"Substantially Complete" (which shall mean that (i) Landlord shall have
substantially completed the work in the Premises required to be completed by
Landlord as specified in Exhibit B (including the Building, the Parking Lot and
all necessary access and egress thereto), exclusive of minor "punch list" items
of mechanical and cosmetic adjustment that do not prevent Tenant from using or
enjoying the Premises for the use intended hereunder, (ii) Landlord has
furnished to Tenant a final unconditional certificate of occupancy for the
Premises, and (iii) Landlord has delivered to Tenant an Environmental Assessment
for the Premises (as defined in Section 29 herein) in form and substance
satisfactory to Tenant; provided that, in the event Landlord shall be delayed in
completing Landlord's Work by any interference with or hindrance of such work by
Tenant, Tenant's contractor or any of their employees, servants or agents or by
any changes in such work requested by Tenant and agreed to by Landlord
("Tenant-Caused Delays"), the Premises shall be deemed to have been
Substantially Complete on the date on which Landlord would have Substantially
Completed Landlord's Work had such Tenant-Caused Delay not occurred); or

      (b) The date on which Tenant shall take possession and occupy the
Premises.

Landlord and Tenant shall execute and record an agreement specifying the date,
determined in the manner specified above, on which the term of this Lease
commenced, which date shall be the Commencement Date for all purposes under this
Lease.

      Section 31. TENANT'S DEFAULT

      The following shall constitute defaults of Tenant hereunder:

      (a) Tenant shall fail to pay when due any installment of Base Rent or any
other sum payable by Tenant under terms of this Lease, and Tenant shall fail

                                       21


to remedy such failure within ten (10) days after Landlord shall have given
Tenant written notice specifying such failure;

      (b) Tenant shall neglect or fail to perform or observe any of the
covenants herein contained on Tenant's part to be performed or observed and
Tenant shall fail to remedy such default within thirty (30) days after Landlord
shall have given to Tenant written notice specifying such neglect or failure (or
within such period, if any, as may be reasonably required to cure such default
if it is of such nature that it cannot be cured within such thirty-day period
and Tenant proceeds with reasonable diligence thereafter to cure such default);

      (c) This Lease or the Premises or any part thereof shall be taken upon
execution or by other process of law directed against Tenant, or shall be taken
upon or subject to any attachment at the instance of any creditor of or claimant
against Tenant, and such, attachment shall not be discharged or disposed of
within ninety (90) days after the levy thereof;

      (d) Tenant shall lock the Premises so as to prevent the entry therein of
Landlord or Landlord's representatives as permitted by the terms of this Lease
and the same is not corrected within three (3) days of written notice by
Landlord to Tenant;

      (e) Tenant shall:

            (i) Make an assignment of all or a substantial part of Tenant's
property for the benefit of creditors;

            (ii) Apply for or consent to or acquiesce in the appointment of a
receiver, trustee or liquidator of Tenant or of all or a substantial part of
Tenant's property or of the Premises or of Tenant's interest in this Lease; or

            (iii) File a voluntary petition in bankruptcy or a petition or an
answer seeking reorganization under any bankruptcy or insolvency law or an
arrangement with creditors, or take advantage of any insolvency law or file an
answer admitting the material allegations of a petition filed against Tenant in
any bankruptcy, reorganization or insolvency proceedings; or

      (f) The entry of a court order, judgment or decree without the
application, approval or consent of Tenant, approving a petition seeking
reorganization of Tenant under any bankruptcy or insolvency law or appointing a
receiver, trustee or liquidator of Tenant or of all or a substantial part of
Tenant's property or of the Premises or of Tenant's interest in this Lease, or
adjudicating Tenant as bankrupt or insolvent, and such order, judgment or decree
shall not be vacated, set aside or stayed within ninety (90) days from the date
of entry.

      Section 32. REMEDIES

      If Tenant shall default under this Lease as set forth in Section 31,
Landlord shall have the following rights and remedies in addition to all other
remedies at law or equity, and none of the following, whether or not exercised
by Landlord, shall preclude the exercise of any other right or remedy whether
herein set forth or existing at law or equity:

      (a) Landlord shall have the right to terminate this Lease by giving Tenant
notice in writing, and upon the giving of such notice, this Lease and the

                                       22


Term hereof as well as the right, title and interest of Tenant under this Lease
shall wholly cease and expire in the same manner and with the same force and
effect (except as to Tenant's liability on the date specified in such notice as
if such date were the expiration date of the Term of this Lease) without the
necessity of re-entry or any other act on Landlord's part. Upon any termination
of this Lease, Tenant shall quit and surrender to Landlord the Premises as set
forth in Section 23. If this Lease is terminated, Tenant shall remain liable to
Landlord for all Base Rent accrued and unpaid and other sums due hereunder to
the date of termination of this Lease. Landlord shall also be entitled to
recover from Tenant the worth at the time of such termination of the excess, if
any, of the amount of Base Rent reserved in this Lease for the balance of the
Term of this Lease (which shall be calculated using a reasonable discount rate
determined at that time) over the then reasonable rental value of the Premises
for the same period.

      (b) To the extent permitted in accordance with applicable law, Landlord
may without demand or notice, re-enter and take possession of the Premises or
any part thereof, and repossess the same as of Landlord's former estate and
expel Tenant and those claiming through or under Tenant, and remove the effects
of any and all such persons (forcibly, if necessary) without being deemed guilty
of any manner of trespass and without prejudice to any remedies for arrears of
rent or preceding breach of covenants. Should landlord elect to re-enter as
provided in this Section 32(b), or should Landlord take possession pursuant to
legal proceedings or pursuant to any notice provided for by law, Landlord may,
from time to time, without terminating this Lease, relet the Premises or any
part thereof for such term or terms and at such rental or rentals, and upon such
other conditions as Landlord may deem advisable, with the right to make
alterations and repairs to the Premises. No such re-entry or repossession of the
Premises by Landlord shall be construed as an election on Landlord's part to
terminate this Lease unless a written notice of termination is given to Tenant
by Landlord. No such re-entry or repossession of the Premises shall relieve
Tenant of its liability and obligation under this Lease, all of which shall
survive such re-entry or repossession. Upon the occurrence of such re-entry or
repossession, Landlord shall be entitled to the amount of the monthly Base Rent,
and any other sums, which would be payable hereunder if such re-entry or
repossession had not occurred, less the net proceeds, if any, of any reletting
of the Premises after deducting all of Landlord's expenses in connection with
such reletting, including but without limitation, all repossession costs,
brokerage commissions, legal expenses, reasonable attorney's fees, expenses of
employees, alteration costs and expenses of preparation for such reletting.
Tenant shall pay such amount to Landlord on the days on which the Base Rent or
any other sums due hereunder would have been payable hereunder if possession had
not been retaken. In no event shall Tenant be entitled to receive the excess, if
any, of net rent collected by Landlord as a result of such reletting over the
sums payable by Tenant to Landlord hereunder. Notwithstanding the provisions of
this Section 32 or any other provision of this Lease to the contrary, (a)
Landlord shall not have the right to accelerate the rent and other charges due
hereunder so long as Tenant is not in default in the payment of any rent or
charges due under this Lease for a period of more than thirty (30) days; (b) any
costs and expenses incurred by Landlord in attempting to relet the Premises
(including renovation expenses, reasonable attorney fees and any free rent
granted to a new tenant) shall be spread over the entire term of the new lease,
and the rent to be received by Landlord shall be likewise determined at an
average annual rate over the entire term of such lease, and Tenant shall be
obligated only for the expenses attributable to the balance of the Term and
Tenant shall receive credit for such rent attributable to the Term; and (c) in

                                       23


exercising its remedies pursuant to this Lease, Landlord shall use commercially
reasonable efforts to mitigate its damages.

      (c) If Tenant shall default in making any payment required to be made by
Tenant (other than payments of Base Rent) or shall default in performing any
other obligations of Tenant under this Lease (after applicable grace and cure
periods), Landlord may, but shall not be obligated to, make such payment or on
behalf of Tenant, expend such sum as may be necessary to perform such
obligation. All sums so expended by Landlord with interest thereon at the
Default Rate shall be repaid by Tenant to Landlord as additional rent. No such
payment or expenditure by Landlord shall be deemed a waiver of Tenant's default
nor shall it affect any other remedy of Landlord by reason of such default.

      If Tenant shall fail to pay by the fifth day of the month any installment
of Base Rent due on the first of the month (even if such failure is timely
cured), Landlord may charge and Tenant shall pay upon demand interest thereon at
the Default Rate from the first day of the month and a collection charge (in
addition to any reasonable attorney's fees incurred) equal to five percent (5%)
of the amount of said late payment. If either party shall fail to pay when due
any sum other than Base Rent due under this Lease (even if such failure is
timely cured), the receiving party may charge and the paying party shall pay
upon demand interest thereon at the Default Rate, and if any such amount is not
paid within ten (10) days after written notice of delinquency, a collection
charge (in addition to any reasonable attorney's fees incurred) equal to five
percent (5%) of the amount of said late payment.

      Section 33. LANDLORD'S DEFAULT

      If Landlord defaults in the performance of any of its obligations,
covenants and warranties hereunder and such default continues for a period of
thirty (30) days after written notice thereof to Landlord from Tenant specifying
the nature of such default, or such additional period as Landlord may reasonably
require to cure the same (except in an emergency that Landlord shall fail to
cure immediately), in addition to all other rights and remedies available to
Tenant, Tenant may, at its option, cure the same on behalf of Landlord,
whereupon the cost of such curing plus interest thereon at the Default Rate
shall be immediately due and payable to Tenant from Landlord upon written demand
therefor by Tenant. Failure of Landlord to reimburse Tenant shall entitle Tenant
to deduct the costs thereof from the next subsequent rents due hereunder. Tenant
shall not have the remedy of termination of this Lease unless Landlord's default
is so substantial as to make the Premises untenantable, or Landlord is
repeatedly in default in a persistent manner on a subject of a substantial
nature; provided, however; any Tenant right of termination in such instances
shall still be subject to Landlord's right to cure.

      Section 34. LANDLORD'S WARRANTIES

      Landlord represents, covenants and warrants (i) that it has lawful title
to the Premises and has full right, power and authority to enter into this
Lease; (ii) that in the construction of the Building, the Parking Lot and all
other improvements on the Premises, it shall comply with all applicable laws,
ordinances, regulations and requirements of governmental authorities having
jurisdiction thereof; and (iii) the Premises will be developed, managed and
maintained in a neat, attractive and reputable manner.

                                       24




      Section 35. NO IMPLIED SURRENDER OR WAIVER

      The failure of either party to seek redress for violation of, or to insist
upon the strict performance of, any covenant or condition of this Lease or any
of the rules and regulations set forth in Exhibit C to this Lease or hereafter
adopted by Landlord shall not prevent a subsequent act, which would have
originally constituted a violation, from having all the force and effect of an
original violation. The receipt by either party of any sums due hereunder with
knowledge of the breach of any covenant of this Lease shall not be deemed a
waiver of such breach. The failure of Landlord to enforce any of the rules and
regulations set forth in Exhibit C, or hereafter adopted, against Tenant shall
not be deemed a waiver of such rules and regulations or any part thereof. Except
as set forth in this Lease, no provisions of this Lease shall be deemed to have
been waived by either party hereto unless such waiver is in writing signed by
such party. No act or thing done by Landlord or Landlord's agents during the
Term of this Lease shall be deemed an acceptance of a surrender of the Premises,
and no agreement to accept such surrender shall be valid unless in writing
signed by Landlord. No employees of Landlord or of Landlord's agents shall have
any power to accept the keys of the Premises prior to the termination of this
Lease. The delivery of keys to any employee of Landlord, or of Landlord's
agents, shall not operate as a termination of this Lease or a surrender of the
Premises. No payment by one party, or receipt by the other party, of a lesser
amount than any sums due hereunder, shall be deemed to be other than on account
of the earliest stipulated amount, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as rent be deemed an
accord and satisfaction, and the receiving party may accept such check or
payment without prejudice to such party's right to recover the balance of such
amount or pursue any other remedy available to such party. Whenever the consent
or approval of a party is required under this Lease, such consent or approval
shall not be unreasonably withheld, delayed or conditioned unless expressly
provided herein to the contrary, and shall be deemed given if such party has not
responded within ten (10) days of the other party's request for the same if such
request reminds the recipient that the request is deemed given if there is no
response within ten (10) days. Further, in the event any costs or expenses
(including attorney fees) are to be reimbursed by one party to the other, such
expenses shall be reasonable in amount and the incurring of such expenses shall
be reasonable. In the event either party commences arbitration or litigation in
order to enforce its rights under this Lease or as a result of a default by the
other party, the losing party shall pay the reasonable attorney fees and
expenses incurred by the prevailing party.

      Section 36. TIME IS OF THE ESSENCE

      Time is of the essence hereof.

      Section 37. PAYMENTS AFTER TERMINATION

      No payment of money by Tenant to Landlord after the termination of this
Lease, in any manner, or after the giving of any notice (other than a demand for
payment of money) by Landlord to Tenant, shall reinstate, continue, or extend
the Term of this Lease or make ineffective any notice given to Tenant prior to
the payment of such money. After the service of notice or the commencement of a
suit or after final judgment granting Landlord possession of the Premises,
Landlord may receive and collect any sums due hereunder, and the payment of such
sums shall not make ineffective any notice, or in any manner affect any pending
suit or any judgment theretofore obtained.

                                       25



      Section 38. NO REPRESENTATIONS; ENTIRE AGREEMENT

      Landlord, Tenant and their respective agents have made no representations,
warranties, agreements or promises with respect to the Premises except such as
are expressed herein. The entire contract of the parties is contained herein,
and there are no promises, agreements, representations, warranties, conditions
or understandings, either oral or written, between them, other than as are
herein set forth.

      Section 39. BROKERAGE

      Except that Landlord has dealt with Callan and Company and has agreed to
pay its brokerage fee in connection with this Lease, each party represents and
warrants that it has dealt only with Landlord or Tenant, respectively, in
connection with this Lease and that no broker negotiated this Lease or is
entitled to any commission in connection herewith. Each party further agrees to
indemnify and hold harmless the other party with respect to any claim for
broker's commission or similar compensation brought by any person by reason of
the indemnifying party's acts.

      Section 40. NOTICE

      Any notice, demand or communications concerning the Lease by Landlord to
Tenant shall be in writing and shall be deemed sufficiently given or rendered if
delivered personally to Tenant or any of its officers, or three days after
having been sent by United States certified or registered mail, return receipt
requested, postage prepaid, or one (1) business day after having been sent by a
nationally recognized overnight delivery service, addressed to Tenant at the
most current address of Tenant known by Landlord, or, after commencement of the
Term of this Lease, at the Premises. Any notice, demand or communication
concerning this Lease by Tenant to Landlord shall be in writing and must be
served by certified or registered United States mail, postage prepaid, or sent
by a nationally recognized overnight delivery service, addressed to Landlord at
6676 Gunpark Drive, Suite D, Boulder, Colorado 80301. Either party shall have
the right to designate in writing, served as above, a different address to which
any notice, demand or communication is to be mailed.

      Section 41. AMENDMENT OR MODIFICATION

      Except as herein otherwise provided, no amendment, alteration,
modification of or addition to this Lease shall be valid or binding unless
expressed in writing and signed by the party or parties to be bound thereby.

      Section 42. DEFINITION OF LANDLORD

      The term "Landlord" as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and
include only the owner or owners at the time in question of the Premises. In the
event that the interest of the Landlord herein named in the Premises is
transferred, whether by sale, lease or sublease, foreclosure, or otherwise, the
named Landlord shall be and hereby is entirely freed and relieved of all
covenants and obligations of Landlord hereunder, and it shall be deemed and
construed without further agreement between the parties or their successors in
interest, or between the parties and any such transferee that such transferee
has assumed and agreed to carry out any and all covenants and obligations of the

                                       26


named Landlord, whether accruing before or after the transfer, and is the
Landlord hereunder.

      Section 43. SEVERABILITY

      If any clause or provision of this Lease is illegal, invalid or
unenforceable under present or future laws effective during the Term of this
Lease, then and in that event, it is the intention of the parties hereto that
the remainder of this Lease shall not be affected thereby. 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, there be added as a
part of this Lease a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible and be legal,
valid and enforceable.

      Section 44. CAPTIONS; GENDER AND NUMBER

      The caption of each Section is added as a matter of convenience only and
shall be considered of no effect in the construction of any provision or
provisions of this Lease. The term "Tenant" herein, or any pronoun used in place
thereof, shall include the masculine, feminine, singular, plural, individuals,
partnerships or corporations where applicable.

      Section 45. SUCCESSORS, ASSIGNS; JOINT AND SEVERAL LIABILITY

      The covenants, conditions and agreements contained in this Lease shall
bind and inure to the benefit of Landlord and Tenant and their respective heirs,
distributees, executors, administrators, and successors.

      Section 46. GOVERNING LAW

      This Lease shall be governed by and interpreted in accordance with the
laws of the State of Colorado.

      Section 47. MEMORANDUM

      This Lease shall not be recorded, but Landlord and Tenant shall execute
and record, at Tenant's option and expense, a memorandum of this Lease
(including the right of first refusal) in the office of the Boulder County Clerk
and Recorder.

      Section 48. OPTIONS TO EXTEND

      (a) Grant of First Option. Tenant shall have the option to extend the Term
of this Lease for an additional five (5) years (the "First Option"); provided
that Tenant is not in default under this Lease beyond any applicable notice and
cure periods.

      (b) Exercise of First Option. Tenant may only exercise its First Option by
written notice to Landlord served upon Landlord during the time period between
twelve (12) months and six (6) months prior to the end of the original Term.
Once such notice is served, the Term of the Lease shall automatically be
modified so that the Term of the Lease shall end at 11:59 p.m. on the last day
of the calendar month in which the twentieth anniversary of the Commencement
Date occurs.

                                       27


      (c) Grant of Second Option. Provided that Tenant has exercised its First
Option, Tenant shall have the option to extend the Term of this Lease for
another five (5) year additional period (the "Second Option"); provided that
Tenant is not in default under this Lease beyond any applicable notice and cure
periods, at the time the Second Option is exercised, the First Option and the
Second Option shall also be referred to herein separately as the "Option Term"
and together as the "Option Terms".

      (d) Exercise of Second Option. Tenant may only exercise its Second Option
by written notice to Landlord served upon Landlord during the time period
between twelve (12) months and six (6) months prior to the end of the Term as
modified by the exercise of the First Option. Once such notice is served, the
Term of the Lease shall be automatically modified so that the Lease will end at
11:59 p.m. on the last day of the calendar month in which the twenty-fifth
anniversary of the Commencement Date occurs.

      (e) Option Rent. If Tenant exercises its option to extend in accordance
with the provisions of this Section 48, this Lease shall be extended for the
applicable Option Term at an annual Base Rent, as determined by agreement
between Landlord and Tenant or, if no agreement is reached, equal to the market
rental value of the Premises for the five-year Option Term as of the
commencement date of the applicable Option Term as determined by appraisal in
accordance with the provisions of this Section 48, provided, however, that such
annual Base Rent for the Option Term shall not in any event be less than the
annual Base Rent in effect as of the last day of the immediately preceding Term
or Option Term.

      After receipt of notice of Tenant's exercise of its option to extend, and
after verbal discussion with Tenant as to the appropriate Base Rent, Landlord
shall deliver to Tenant Landlord's proposed annual Base Rent for the applicable
Option Term. If Tenant disagrees with Landlord's proposed annual Base Rent for
the Option Term, and if the parties cannot agree upon an annual Base Rent by the
date that is five (5) months prior to the expiration of then current Term or
Option Term, then the annual Base Rent for the Option Term shall be determined
as follows:

      Landlord and Tenant will each promptly choose one disinterested commercial
real estate appraisal firm of recognized competence and experience in the
Boulder market and each firm shall designate an appraiser, who must have at
least ten years of commercial appraising experience in eastern Colorado and who
must be either a Senior Real Property Appraiser of the Society of Real Estate
Appraisers or a member of the American Institute of Real Estate Appraisers, to
perform an appraisal of the fair market rental value of the Premises for the
applicable Option Term. By that date which is four (4) months prior to the
expiration of the initial Term or Option Term, as the case may be, at a mutually
agreeable time and place, Landlord and Tenant shall simultaneously exchange in
writing the two fair market rental value appraisals of the Premises. If the two
fair market rental values of the Premises, as determined by such appraisal
firms, are within ten percent (10%) of each other (i.e., if the lower of the two
appraised values, on a present value basis, is at least 90% of the higher of the
two appraised values, on a present value basis), the fair market value of the
Premises for the Option Term shall be deemed to be the average of such appraised
rent values. Such average appraised rental values shall be final and
conclusively binding on the two parties. Prior to submitting their appraisals,
the two appraisal firms shall select (subject to the approval of Landlord and
Tenant) a third disinterested commercial real estate appraisal firm of
comparable qualifications to perform the same appraisal, if necessary. If the

                                       28


two fair market rental values shown by the two appraisal firms are not within
10% of each other, then the third appraisal firm shall, within thirty (30) days
after the exchange of the two fair market rental value appraisals, determine
which of the two appraisals is closest to its opinion as to the fair market
rental value of the Premises for the applicable Option Term in accordance with
the foregoing instructions and such third appraisal firm shall notify Landlord
and Tenant of its determination. The appraisal so chosen by the third appraisal
firm shall be final and conclusively binding on the parties as to the fair
market rental value of the Premises for the applicable Option Term. Landlord and
Tenant will be responsible for compensating the appraisal firm selected by each,
and the third appraisal firm, if any, shall be compensated equally by the
parties.

      In the event the annual Base Rent for the Option Term is not determined
until after the commencement date of the applicable Option Term, Tenant shall
continue paying the annual Base Rent payable under the Lease for the preceding
Lease Year and, at such time as any increase in the annual Base Rent is
determined, (i) the annual Base Rent shall be retroactively adjusted to the
commencement date of the applicable Option Term, (ii) Tenant shall (within
thirty (30) days of Landlord's written demand) pay to Landlord the increased
annual Base Rent for the period between the commencement date of the applicable
Option Term and the last day of the month in which Landlord's demand for such
payment is made, and (iii) commencing on the first day of the month following
the month in which such demand for the lump sum payment is made by Landlord,
Tenant shall start making payments of monthly installments of annual Base Rent
in the recomputed amount. Once annual Base Rent for the Option Term has been
established, each of the parties agree, on the demand of the other, to execute
an appropriate amendment to the Lease to incorporate the annual Base Rent
established.

      (f) All Other Provisions of the Lease to Remain the Same During Option
Periods. All the provisions of the Lease shall remain the same during the
extended Terms in the event either or both of the options granted hereunder are
exercised (including the payment of Operating Costs), except for Option Rent, as
provided in Section 48(d) above. If the Term of the Lease is extended as herein
provided, the term "Term" as used herein shall include such Option Term or
Terms.

      Section 49. RIGHT OF FIRST REFUSAL

      (a) Right of First Refusal. If at any time during the Term Landlord
proposes to sell the Premises (for example, where Landlord receives an
unsolicited offer it proposes to accept) or list them for sale, Landlord shall
first make a written offer to sell the Premises to Tenant on the same terms and
conditions on which the Landlord proposes to transfer or list the Premises.

      (b) Acceptance of Offer. The Tenant shall have the right for a period of
thirty (30) days after receipt of the offer from the Landlord to elect to
purchase the Premises, during which time Tenant may conduct any and all
inspections of the Premises. The making of a counteroffer by Tenant shall not be
deemed a rejection of Landlord's offer or otherwise shorten Tenant's thirty (30)
day period to accept Landlord's offer. To exercise this right of first refusal,
the Tenant shall give written notice to the Landlord within said thirty-day
period. Upon exercise of the right of first refusal, the sale shall be closed
and payment made on the terms set forth in the offer made to Tenant pursuant to
Section 49(a), except that Tenant shall be entitled to a credit against the
purchase price in the amount of one-half of the amount of the brokerage
commission Landlord would have paid but avoided by selling to Tenant, and except
for the

                                       29


time for closing which shall be conducted at a time and place acceptable to the
parties, but in no event later than one hundred twenty (120) days after receipt
by Tenant of Landlord's offer.

      (c) Failure to Accept Offer. If Tenant does not elect to purchase the
Premises in accordance with Section 49(b) above, or if the purchase is not
closed, then Landlord may transfer the Premises within six (6) months after
making the offer to Tenant to an unaffiliated third party pursuant to a bona
fide arm's length agreement at a price not less than ninety percent (90%) of the
price offered to Tenant or at a price not less than the Tenant's last
counter-offer to Landlord, whichever is greater, and Tenant's first right of
refusal shall thereupon terminate. In the event Landlord does not so transfer
the Premises within such six (6) month period, then Tenant's first right of
refusal shall continue. In any event, Tenant's first right of refusal shall
terminate at the end of the Term or earlier termination of this Lease.

      (d) Trade. The sale that Landlord may make after Tenant does not elect to
purchase the Premises under Section 49(c), or such a purchase is not closed may
be pursuant to a trade for other property so long as such other property has a
fair market value of at least ninety percent (90%) of the price offered to
Tenant pursuant to Section 49(a) above, or not less than the Tenant's last
counter-offer to Landlord, whichever is greater.

      (e) Transfer to Related Entity. The Tenant's right of first refusal
granted under this Section 49 shall not apply to any transaction whereby
Landlord transfers the Premises to Landlord's Members or relatives of the
Members of Landlord or to an entity in which any of them own beneficial
interests; provided, however, that in such event the first right of refusal
shall continue and the interest of the transferee partnership or limited
liability company shall be subject to this first right of refusal.

      (f) Tenant's Rights. Landlord hereby agrees not to grant purchase, option
or first refusal rights of any kind with respect to the Premises or any part
thereof or any interest therein, to any person or party other than Tenant,
unless the same are expressly made subject to the rights of Tenant hereunder.

      (g) Sale of Property to a Third Party. If Tenant elects not to exercise
its right of first refusal and the Premises are sold to a third-party, the sale
shall be subject to this Lease except that this first right of refusal shall
have terminated.

      (h) Part of Premises. Tenant's first right of refusal shall also apply
when Landlord proposes to sell or list a part of the Premises, in which event
Landlord shall offer the part of the Premises it proposes to list or sell to
Tenant and the provisions of this Section 49 shall also govern such offer and
first right of refusal.

      Section 50: LENDERS PROTECTION CLAUSE

      Tenant agrees to give each holder of a mortgage, deed of trust or other
encumbrance secured by the Premises, by certified or registered mail, or
nationally recognized overnight delivery service, a copy of any notice of
default served upon the Landlord, provided that prior to such notice Tenant has
been notified in writing of the address of such holder. Tenant further agrees
that all of such holders shall have thirty (30) days from the date of such
notice within which to cure such default or if such default cannot be cured
within that time, then in such additional time as may be necessary if within

                                       30


such thirty (30) days, such holder has commenced and is diligently pursuing, the
remedies necessary to cure such default (including, but not limited to,
commencement of foreclosure proceedings, if necessary, to effect such cure) in
which event this Lease shall not be terminated while such remedies are being so
diligently pursued. The preceding sentence is not intended to alter or delay any
rights the Tenant may have hereunder or by law, except to prohibit any Tenant
right to terminate this Lease until the notice and cure opportunity set forth in
the preceding sentence have been given.

      EXECUTED as of the date first set forth above.

LANDLORD:                            TENANT:

MUM IV, LLC                          HELIX TECHNOLOGY CORPORATION

By /s/ Donald W. Unkefer             By /s/ Michael El-Hillow
   -------------------------            ---------------------------
   Donald W. Unkefer                    Michael El-Hillow
   General Manager                      Senior Vice President and
                                        Chief Financial Officer

                                       31


                                    EXHIBIT A

                          Recorded Plan of the Premises

                                       32


                                    EXHIBIT B

                        Building Plans and Specifications

                                       33


                                    EXHIBIT C

                              Rules and Regulations

      The Rules and Regulations set forth in this Exhibit shall be and hereby
are made a part of the Lease to which they are attached. Whenever the term
"Tenant" is used in these rules and regulations, it shall be deemed to include
Tenant, its employees, agents, or invitees. The following rules and regulations
may from time to time be modified by Landlord in the manner set forth in Section
27 of the Lease.

      1. Use of the Water Fixtures. Water closets and other water fixtures shall
not be used for any purpose other than that for which they are intended, and any
damage resulting to such fixtures from misuse on the part of the Tenant shall be
paid for by Tenant, except to the extent such payment is made from proceeds of
insurance to Landlord.

      2. Trash. All trash shall be placed in receptacles provided by Tenant on
the Premises.

      3. Hazardous Operations and Items. Tenant shall not bring or permit to be
brought or kept in or on the Premises by hazardous, flammable, combustible or
explosive fluid, material, chemical or substance except those that shall be
handled in a safe manner according to OSHA standards and the environmental laws
set forth in Section 29.

      4. Outside Storage. There shall be no outside storage of any articles of
any nature unless it is screened from adjacent rights of way or other building
sites in the subdivision in a manner approved by Landlord.

      5. Captions. The caption for each of these rules and regulations is added
as a matter of convenience only and shall be considered of no effect in the
construction of any provision or provisions of these rules.

                                       34


                                    EXHIBIT D

                           Covenants and Restrictions

                                       35

EX-10.32

                                                                   Exhibit 10.32

                                 FIRST AMENDMENT
                                       TO
                    MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE

     THIS FIRST AMENDMENT (the "First Amendment") is made and entered into this
30 day of June, 2006, by and between CATELLUS OPERATING LIMITED PARTNERSHIP, a
Delaware Limited Partnership, successor in interest to Catellus Development
Corporation ("Landlord"), and SYNETICS SOLUTIONS, INC., an Oregon corporation
("Tenant").

                                    RECITALS

     A. Landlord and Tenant entered into a Multi-Tenant Industrial Triple Net
Lease dated as of December 15, 2000 (the "Lease"), pursuant to which Landlord
leased to Tenant certain premises located at Southshore Corporate Park -
Building C, 4293 NE 185th Avenue; Gresham, Oregon 97230, as more particularly
described in the Lease.

     B. Landlord and Tenant desire to amend the Lease and provide for a Security
Deposit in the amount of $23,564.42 and delete from the Lease, Section 3.3
Letter of Credit, to become effective on June 30, 2006; on the terms and
conditions below

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties, intending to be legally bound, agree as follows:

     1. Amendment to Section 3.3. Subject to the terms and conditions stated,
Section 3.3 Letter of Credit of the Lease is deleted and replaced with the
following:

          "3.3 Security Deposit. Upon the execution of this First Amendment,
     Tenant shall pay to Landlord the Security Deposit, in the amount of
     $23,564.42. The Security Deposit shall secure the full and faithful
     performance of each provision of the Lease to be performed by Tenant.
     Landlord shall not be required to pay interest on the Security Deposit or
     to keep the Security Deposit separate from Landlord's own funds. If Tenant
     fails to perform fully and timely on all or any of Tenant's covenants and
     obligations hereunder, Landlord may, but without obligation, apply all or
     any portion of the Security Deposit toward fulfillment of Tenant's
     unperformed covenants and/or obligations. If Landlord does so apply any
     portion of the Security Deposit, Tenant shall immediately pay Landlord
     sufficient cash to restore the Security Deposit to the amount of the then
     current Base Rent per month. After Tenant vacates the Premises, upon the
     expiration or sooner termination of this Lease, if Tenant is not then in
     default, Landlord shall return to Tenant any unapplied balance of the
     Security Deposit. If a change in control of Tenant occurs during this Lease
     and following such change the financial condition of Tenant is, in
     Landlord's reasonable judgment, reduced, Tenant shall deposit such
     additional monies with Landlord as Landlord and Tenant shall agree in good
     faith to be sufficient to cause the Security Deposit to be at a
     commercially reasonable level based on said change in financial condition."

     2. Effect of Lease. Except as expressly amended herein, all other terms,
conditions and covenants of the Lease shall remain binding and in full force
and effect.

     IN WITNESS WHEREOF, the parties have caused this First Amendment to be
executed on the respective dates set forth below, effective of the day and year
first above written.

LANDLORD:                               TENANT:

CATTELLUS OPERATING LIMITED             SYNETICS SOLUTIONS, INC., an Oregon
PARTNERSHIP,                            corporation
A DELAWARE LIMITED PARTNERSHIP


BY: PALMTREE ACQUISITION CORPORATION,   BY: /s/ Akira Hijikuro
A DELAWARE CORPORATION, ITS GENERAL         ------------------------------------
PARTNER SUCCESSOR IN INTEREST TO        NAME: Akira Hijikuro
CATELLUS DEVELOPMENT CORPORATION,       TITLE: TreasureR
                                        DATE:
                                              --------------------




BY: /s/ W. Scott Lamson
    ---------------------------------
NAME: W. SCOTT LAMSON
TITLE: SENIOR VICE PRESIDENT
DATE:
      -------------------


      Page 2 - FIRST AMENDMENT TO MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE



                                 LEASE GUARANTY

     The undersigned (collectively the "Guarantor") hereby absolutely and
unconditionally, jointly and severally, guarantees the prompt, complete, and
full and punctual payment, observance, and performance of all the terms,
covenants, and conditions provided to be paid, kept, and performed by the tenant
under that certain Lease Agreement (such lease, as amended, being herein
referred to as the "Lease"), dated July 20, 2000, between Catellus Operating
Limited Partnership, a Delaware Limited Partnership, as Landlord ("Landlord"),
and Synetics Solutions Inc., an Oregon Corporation, as Tenant ("Tenant"),
covering the premises located at 18870 NE Riverside Parkway, Gresham, OR 97230.
United States of America and all renewals, amendments, expansions, and
modifications of the Lease. This Guaranty shall include any liability of Tenant
which shall accrue under the Lease for any period preceding as well as any
period following the term of the Lease.

     The obligation of the Guarantor is primary and independent of Tenant's
obligations under the Lease and may be enforced directly against the Guarantor
independently of and without proceeding against the Tenant or exhausting or
pursuing any remedy against Tenant or any other person or entity. Guarantor
waives any requirement that Landlord mitigate damages under the Lease.

     This instrument may not be changed, modified, discharged, or terminated
orally or in any manner other than by an agreement in writing signed by
Guarantor and the Landlord.

     The obligations of Guarantor under this Guaranty shall not be released or
otherwise affected by reason of any sublease, assignment, or other transfer of
the Tenant's interest under the Lease, whether or not Landlord consents to such
sublease, assignment, or other transfer.

     Any act of Landlord, or the successors or assigns of Landlord, consisting
of a waiver of any of the terms or conditions of said Lease, or the giving of
any consent to any manner or thing relating to said Lease, or the granting of
any indulgences or extensions of time to Tenant, may be done without notice to
Guarantor and without releasing the obligations of Guarantor hereunder.

     The obligations of Guarantor hereunder shall not be released by Landlord's
receipt, application, or release of security given for the performance and
observance of covenants and conditions in said Lease contained on Tenant's part
to be performed or observed nor by any modification of such Lease; but in case
of any such modification, the liability of Guarantor shall be deemed modified in
accordance with the terms of any such modification of the Lease.

     Guarantor waives any defense or right arising by reason of any disability
or lack of authority or power of Tenant and shall remain liable hereunder if
Tenant or any other party shall not be liable under the Lease for such reason.

     Until all the covenants and conditions in said Lease on Tenant's part to be
performed and observed are fully performed and observed, Guarantor (i) shall
have no right of subrogation against Tenant by reason of any payments or acts of
performance by the Guarantor, in compliance with the obligations of the
Guarantor hereunder; (ii) waives any right to enforce any remedy which Guarantor
now or hereafter shall have against Tenant by reason of any one or more payments
or acts of performance in compliance with the obligations of Guarantor
hereunder; and (iii) subordinates any liability or indebtedness of Tenant now or
hereafter held by Guarantor to the obligations of Tenant to the Landlord under
said Lease.

     The liability of Guarantor hereunder shall not be released or otherwise
affected by (i) the release or discharge of Tenant in any insolvency,
bankruptcy, reorganization, receivership, or other debtor relief proceeding
involving Tenant (collectively "proceeding for relief); (ii) the impairment,
limitation, or modification of the liability of Tenant or the estate of the
Tenant in any proceeding for relief, or of any remedy for the enforcement of
Tenant's liability under the Lease, resulting from the operation of any law
relating to bankruptcy, insolvency, or similar proceeding or other law or from
the decision in any court; (iii) the rejection or disaffirmance of the Lease in
any proceeding for relief; or (iv) the cessation from any cause whatsoever of
the liability of Tenant.

     This Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment by Tenant to Landlord under the Lease is
rescinded or must otherwise be returned by Landlord upon the insolvency,
bankruptcy, reorganization, receivership, or other debtor relief proceeding
involving Tenant, all as though such payment had not been made.

     This Guaranty is executed and delivered for the benefit of Landlord and its
successors and assigns, and is and shall be binding upon Guarantor and its
successors and assigns, but Guarantor may not assign its obligations hereunder
without the prior written consent of Landlord, which may be withheld in
Landlord's sole discretion.

     GUARANTOR AND LANDLORD WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN
LANDLORD AND GUARANTOR ARISING OUT OF THIS GUARANTY OR ANY OTHER DOCUMENT OR
INSTRUMENT EXECUTED IN CONNECTION HEREWITH OR ANY TRANSACTION RELATED TO THIS
GUARANTY.

     Guarantor agrees to pay all costs and expenses, including reasonable
attorneys' fees, incurred by Landlord in enforcing the terms of this Guaranty.

     This Guaranty shall be governed by and construed in accordance with the
internal laws of the State which governs the Lease excluding any principles of
conflicts of laws. For the purpose solely of litigating any dispute under this
Guaranty, the undersigned submits to the jurisdiction of the courts of said
state.



if the Guarantor is more than one person or entity, the liability of each such
Guarantor shall be joint and several.

WITNESS THE EXECUTION hereof this _____ day of June, 2006.

                                        GUARANTOR:

                                        Brooks Automation, Inc.


                                        By: /s/ Edward C. Grady
                                            ------------------------------------
                                        Name: Edward C. Grady
                                        Title: President & CEO



                               FIRST AMENDMENT TO
                    MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE
                        AND COMMENCEMENT DATE MEMORANDUM

     THIS FIRST AMENDMENT TO MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE AND
COMMENCEMENT DATE MEMORANDUM ("Amendment") is made and entered into as of the
19th day of December, 2000, by and between CATELLUS DEVELOPMENT CORPORATION, a
Delaware corporation ("Landlord"), and SYNETICS SOLUTIONS, INC., an Oregon
corporation ("Tenant").

                                    RECITALS:

     A. Landlord and Tenant are parties to that certain Multi-Tenant Industrial
Triple Net Lease dated as of July 20, 2000 (the "Lease"), pursuant to which
Landlord leased to Tenant certain premises located at Southshore Corporate Park
- - Building A, 18870 NE Riverside Parkway, Gresham, Oregon, as more particularly
described in the Lease.

     B. Landlord and Tenant desire (a) to acknowledge, among other things, the
Commencement Date (as such term is defined in the Lease) and the rentable square
footage of the Premises and (b) to amend the Lease on the terms and conditions
set forth below.

                                   AGREEMENT:

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby amend
the Lease and Landlord and Tenant agree as follows:

     1. INCORPORATION; DEFINED TERMS. The Lease, including all exhibits and
schedules attached thereto, is incorporated into this Amendment by this
reference. All capitalized terms used and not otherwise defined in this
Amendment, but defined in the Lease, shall have the meaning set forth in the
Lease.

     2. CONFIRMATION OF COMMENCEMENT DATE AND BASE RENT. Notwithstanding any
provision to the contrary contained in the Lease, Tenant's obligation to pay
Shell Base Rent (as set forth in the Basic Lease Information) under the Lease,
but subject to the terms of this Paragraph 2, commenced on December 12, 2000.
Concurrently with the execution of this Amendment, Tenant shall pay to Landlord
the amount of Twenty Two Thousand Two Hundred Twenty Nine and 38/100 Dollars
($22,229.38) as Shell Base Rent for the month of December 2000. Tenant shall be
under no obligation to pay the First Allowance Rent or the Second Allowance Rent
for December 2000. In no event shall Landlord's acceptance of Shell Base Rent
for the month of December accelerate the Commencement Date which shall be



conclusively deemed to be January 1, 2001, and, notwithstanding any provision to
the contrary contained in the Lease, the Term of the Lease shall commence on
such date. In accordance with the foregoing, rather than enter into a separate
Commencement Date Memorandum ("Memorandum"), as contemplated in Section 2 of the
Lease, the parties desire to incorporate the provisions of the Memorandum herein
as follows:

               (a) The Commencement Date, as defined in the Lease, is January 1,
     2001.

               (b) The Premises contains 109,906 rentable square feet.

               (c) Base Rent is payable on the Commencement Date (i.e., January
     1, 2001) in accordance with the following rent schedule:



  Months    Shell Base Rent   First Allowance Rent   Second Allowance Rent*   Total Base Rent
  ------    ---------------   --------------------   ----------------------   ---------------
                                                                  
  1-24         $36,269.00           $5,343.00               $11,535.00           $53,147.00
 25-48         $38,487.00           $5,343.00               $11,535.00           $55,365.00
 49-72         $40,821.00           $5,343.00               $11,535.00           $57,699.00
 73-96         $43,307.00           $5,343.00               $11,535.00           $60,185.00
97 -120        $45,944.00           $5,343.00               $11,535.00           $62,822.00
121-144+       $48,742.00           $       0               $        0           $48,742.00
145-168+       $51,710.00           $       0               $        0           $51,710.00
169-180+       $54,859.00           $       0               $        0           $54,859.00


*    Subject to prepayment pursuant to Section 9(d) of the Work Letter

+    Subject to the provisions of the Option to Extend set forth in Section 19
     of the Addendum to Lease

     3. RIGHT OF FIRST OFFER ON ADJACENT SPACE. A new Section 20 is hereby added
to the Addendum to Lease as follows:

          "20. Right of First Offer

               20.1 Provided that (i) no Event of Default has occurred and is
          continuing under the Lease, (ii) Tenant is in occupancy of at least
          ninety percent (90%) of the Premises, (iii) Landlord has not given
          more than two (2) notices of default in any twelve (12) month period
          for nonpayment of monetary obligations, if at any time prior to the
          last twelve (12) months of the Term Landlord intends to offer the
          approximately 55,094 square feet portion of the Building not occupied
          by Tenant pursuant to the Lease (the "Additional Premises") for lease
          to third parties or to accept an offer of a third party to lease the
          Additional Premises, Landlord shall first give written notice to
          Tenant of the rental rate and other material terms upon which Landlord
          is willing to lease the Additional Premises ("Landlord's Lease
          Notice"). Landlord's Lease Notice shall constitute an offer to lease
          the Additional Premises to Tenant at the rental rate and upon the
          terms and conditions contained in Landlord's Lease Notice and shall
          state the anticipated date of availability of the Additional Premises.
          Tenant shall have five (5)


                                       -2-



          business days after receipt of Landlord's Lease Notice to accept such
          offer. Tenant shall accept such offer, if at all, only by delivery to
          Landlord of Tenant's irrevocable written commitment to lease the
          Additional Premises at the rental rate and upon the terms and
          conditions contained in Landlord's Lease Notice (the "Expansion
          Commitment"). Notwithstanding the foregoing, such first offer right of
          Tenant shall commence only following the expiration or earlier
          termination of the initial lease of the Additional Premises, including
          any renewal, extension or expansion rights set forth in such leases,
          regardless of whether such renewal, extension or expansion rights are
          executed strictly in accordance with their terms, or pursuant to a
          lease amendment or a new lease (collectively, the "Superior Right
          Holders") with respect to such Additional Premises. Tenant's right of
          first offer shall be on the terms and conditions set forth in this
          Section 20.

               20.2 Provided that no Superior Right Holder wishes to lease the
          Additional Premises, if Tenant delivers to Landlord the Expansion
          Commitment within such five (5) business day period, all (but not
          part) of the Additional Premises shall be leased to Tenant commencing
          on the date Landlord delivers possession of the Additional Premises to
          Tenant and continuing for a period of time coterminous with the
          remaining Term of the Lease, including any options to extend the Term.
          Tenant shall lease the Additional Premises upon the same terms,
          conditions and covenants as are contained in the Lease except that (i)
          the Base Rent for the Additional Premises shall be at the rate set
          forth in Landlord's Lease Notice, and (ii) any terms and conditions
          set forth in Landlord's Lease Notice that are inconsistent with the
          terms and conditions of the Lease shall control.

               20.3 Except as otherwise set forth in Landlord's Lease Notice,
          possession of the Additional Premises shall be delivered to Tenant on
          an "as-is" basis and the construction of improvements in the
          Additional Premises shall comply with the terms of Section 10 and
          Exhibit G of this Lease. Landlord shall prepare and Landlord and
          Tenant shall execute and deliver a written agreement modifying and
          supplementing the Lease and specifying that the Additional Premises
          are part of the Premises and, except as otherwise specified in
          Landlord's Lease Notice, subject to all of the terms and conditions of
          the Lease.

               20.4 Time is of the essence with respect to the exercise by
          Tenant of its rights granted hereunder. In the event Tenant fails to
          deliver to Landlord Tenant's Expansion Commitment within the five (5)
          business day period prescribed above, all rights of Tenant to lease
          the Additional Premises shall terminate and Landlord shall have no
          further obligation to notify Tenant of any proposed leasing of the
          Additional Premises, and Landlord shall thereafter have the
          unconditional right to lease the Additional Premises to third parties
          or to accept offers from third parties to lease the Additional
          Premises without further obligation to Tenant. The rights granted to
          Tenant under this Section shall not apply to any sales or similar
          transfers of the Additional Premises. Notwithstanding anything to the
          contrary contained herein, Tenant must elect to exercise its right of
          first offer, if at all, with


                                       -3-



          respect to all of the space offered by Landlord to Tenant at any
          particular time, and Tenant may not elect to lease only a portion
          thereof.

               20.5 The rights granted to Tenant under this Section 20 are
          personal to Tenant, may not be exercised by or assigned to any person
          or entity other than Tenant, and shall terminate and be of no
          further force or effect upon any assignment of this Lease or
          subletting of the Premises unless specifically agreed and consented to
          in writing by Landlord in connection with any such sublease or
          assignment."

     4. PAYMENT OF ABOVE-STANDARD TENANT IMPROVEMENT COSTS. Pursuant to Section
5(b) of the Work Letter, Landlord and Tenant have previously approved the Work
Cost Estimate dated December 18, 2000, attached hereto as Exhibit A (the "Work
Cost Statement"). The Work Cost Statement provides that the total costs
associated with the completion of the Tenant Improvements are to be
approximately Six Million Six Hundred Eighty Thousand Nine Hundred Twenty Seven
Dollars ($6,680,927.00) (the "Total TI Costs"). In connection with the payment
of the Total TI Costs, Landlord and Tenant hereby acknowledge that (i) the
Allowance of One Million Two Hundred Thousand Dollars ($1,200,000.00) has been
applied toward the Total TI Costs, and (ii) Tenant has previously paid to
Landlord the Tenant Contribution pursuant to Section 9(a) of the Work Letter in
the amount of Five Million Dollars ($5,000,000.00) which has also been applied
toward the Total TI Costs. As of the date of this Amendment, the unpaid balance
of the Total TI Costs set forth in the approved Work Cost Statement is Four
Hundred Eighty Thousand Nine Hundred Twenty Seven Dollars ($480,927.00).
Landlord and Tenant hereby agree that, notwithstanding any provision to the
contrary contained in the Lease (including, without limitation, Section 9(b) of
the Work Letter), Tenant shall pay to Landlord the balance of the Total TI Costs
(which the parties estimate to be approximately $480,927.00) in accordance
with the following schedule:

               (a) On or before January 15, 2001, Tenant shall pay to Landlord
     in Immediately Available Funds the amount of Four Hundred Twenty Thousand
     Nine Hundred Twenty Seven Dollars ($420,927.00).

               (b) On or about February 15, 2001, Tenant shall pay to Landlord
     in Immediately Available Funds the balance of the Total TI Costs, which the
     parties currently estimate to be approximately Sixty Thousand Dollars
     ($60,000.00), all in accordance with the terms and conditions set forth in
     the Lease; provided, however, any cost savings or cost increases shall be
     reconciled in connection with this final installment of the Total TI Costs.

If an any time Tenant does not timely make any installment of the outstanding
Total TI Costs to Landlord in accordance with the foregoing, such failure shall
constitute a Tenant Delay and Landlord may, but shall not be obligated to,
instruct the Contractor to stop all Work until such time as Tenant has fulfilled
its obligations hereunder to make payment(s) to Landlord. Tenant's failure to
pay any installment of the Total TI Costs in accordance with schedule set forth
above shall constitute an Event of Default under the Lease.


                                       -4-



     5. MISCELLANEOUS.

          (a) Effect of Amendments. Except to the extent the Lease is modified
by this Amendment, the remaining terms and provisions of the Lease shall remain
unmodified and in full force and effect. In the event of conflict between the
terms of the Lease and the terms of this Amendment, the terms of this Amendment
shall prevail.

          (b) Entire Agreement. This Amendment embodies the entire understanding
between Landlord and Tenant with respect to its subject matter and can be
changed only by an instrument in writing signed by Landlord and Tenant.

          (c) Counterparts. This Amendment may be executed in counterparts, each
of which shall be deemed an original, but all of which, together, shall
constitute one in the same Amendment.

          (d) Corporate and Partnership Authority. If Tenant is a corporation or
partnership, or is comprised of either or both of them, each individual
executing this Amendment for the corporation or partnership represents that he
or she is duly authorized to execute and deliver this Amendment for the
corporation or partnership and that this Amendment is binding upon the
corporation or partnership in accordance with its terms.

          (e) Attorneys' Fees. The provisions of the Lease respecting payment of
attorneys' fees shall also apply to this Amendment.

"LANDLORD"                              "TENANT"

CATELLUS DEVELOPMENT                    SYNETICS SOLUTIONS, INC.,
CORPORATION, a Delaware corporation     an Oregon corporation


By: Catellus Commercial Group, LLC,     By: /s/ Greg Marvell
    a Delaware limited liability            ------------------------------------
    company                             Name: GREG MARVELL
    Its: Duly Authorized Agent          Its: PRESIDENT


By:                                     By: /s/ Koki Nakamura
    ---------------------------------       ------------------------------------
Name: Ted Antenucci                     Name: KOKI NAKAMURA
Its: Executive Vice President           Its: Chairman & CEO


                                       -5-



SYNETICS
WORK COST ESTIMATE FOR LEASED PREMISES
LOCATED AT 18870 NE RIVERSIDE PARKWAY, GRESHAM, OR



                                                                        6/14/00         12/18/00
                                                                     -------------   -------------
                                                                               
ARCHITECTURAL/ENGINEERING GROUP MACKENZIE/INTERFACE ENG.
Architectural/Interiors                                              $   87,000.00   $   87,000.00
Structural                                                           $   27,000.00   $   27,000.00
Mechanical/Electrical                                                $  132,000.00   $  132,000.00
Reimbursable Expenses(prints, copying, faxing, mileage)              $   16,500.00   $   16,500.00
Add. Design/Project mgmt. Fees(attached letter of 07/18/00)          $   24,220.00   $   24,220.00
Interior design and finish services                                                  $    9,100.00
Delete powder coat and metal fab. Misc. revisions                                    $   11,700.00
SUBTOTAL                                                             $  286,720.00   $  307,520.00
PRELIM. PERMIT FEES(ACTUAL FEES MAY VARY)
Building                                                             $   20,939.00   $   20,939.00
Mechanical                                                           $    6,176.00   $    6,176.00
Plumbing                                                             $    1,815.00   $    1,930.00
Electrical                                                           $    6,066.00   $    5,427.00
Fire Alarm                                                           TBD             TBD
Low Voltage                                                          $       43.00   $      475.00
Fire Sprinklers                                                      $      532.00   $      533.00
Traffic Impact Fee- add. 2nd floor                                   $   19,373.00   $   19,373.00
SUBTOTAL                                                             $   54,944.00   $   54,853.00
CDC ADMINISTRATIVE AND COORDINATION FEE
5% of design, permit and construct Tenant Improvement Work           $  286,817.00   $  316,567.95
CONSTRUCTION COST FROM MCCORMACK PACIFIC                             $5,187,177.00   $5,217,821.00
Allowance for Powder Coat, Metal Fab and Mech Systems                $  200,000.00        N.A.
Change order No. 1 Approved 8/24/00                                                  $  148,686.00
Change order No. 2 Approved 9/30/00                                                  $  344,934.00
Change order No. 3 Approved 10/26/00                                                 $  188,222.00
Change order No. 4 Approved 11/13/00                                                 $   20,643.00
Change order No. 5 Approved 11/28/00                                                 $  (24,505.00)
Contingency                                                          $  259,358.00   $   60,000.00
Testing and Inspections                                              $    7,500.00   $   13,185.00
Subtotal                                                             $5,654,035.00   $5,968,986.00
POTENTIAL ADDITIONAL COST
Front Entry Allowance (formerly carried at $100,000)                                 By Synetics
Misc. revisions still being estimated (Allowance)                                    $   33,000.00
Subtotal                                                                             $   33,000.00
Est. Total Work Cost: Design, permits, Const., CDC. Poten. Costs     $6,282,516.00   $6,680,926.95
Synetics'$5MM prog. pay received and Catellus $1.2MM contribution                      ($6,200,000)
Amount due per terms of lease                                                        $  480,926.95
                                                                                     -------------
Partial progress payment for project work completed                                  $     420,927
                                                                                     -------------
Synetics to pay any remaining balance upon final const. accounting   Approx.         $   60,000.00
                                                                                     -------------
Final costs should be done in early Feb.2001


                                    EXHIBIT A



                                    EXHIBIT I

                     FORM OF SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

RECORDING REQUESTED BY                )
AND WHEN RECORDED MAIL TO:            )
Beneficiary
Metropolitan Life Insurance Company
c/o Preston Gates and Ellis, LLP
One Maritime Plaza, Suite 2400
San Francisco, California 94111
Attn: Susan Reid, Esq.                )

                                                  Space above for Recorder's Use

                          SUBORDINATION, NONDISTURBANCE
                            AND ATTORNMENT AGREEMENT

     NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS
     IN YOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE
     LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.

     This Subordination, Nondisturbance and Attornment Agreement ("Agreement")
is entered into as of the ________ day of March, 2001 by and among SYNETICS
SOLUTIONS INC., an Oregon corporation ("Tenant"), Catellus Development
Corporation, a Delaware corporation ("Borrower") and Metropolitan Life Insurance
Company (Beneficiary).

                               FACTUAL BACKGROUND

     A. Borrower owns certain real property in the County of Multnomah, State of
Oregon, more particularly described in the attached Schedule 1 term "Property"
herein means that real property together with all improvements (the
"Improvements") located on it.

     B. Beneficiary has made or agreed to make a loan to Borrower in the
principal amount of Two Hundred Million and no/100 Dollars ($200,000,000.00)
(the "Loan") as provided in a loan application (the "Loan Application"). The
Loan is or will be evidenced by a promissory note (the "Note") which is or will
be secured by a deed of trust encumbering the Property (the "Deed of Trust")
with an assignment of rents. The Note, the Deed of Trust, this Agreement and all
other documents and instruments identified in the Deed of Trust as "Loan
Documents" shall be collectively referred to herein as the "Loan Documents".

     C. Tenant and Borrower (as landlord) entered into a lease dated December
15, 2000 (the "Lease") under which Borrower leased to Tenant a portion of the
Improvements located within the Property and more particularly described in the
Lease (the "Premises").

     D. It is a requirement of the Loan to Borrower that Tenant agree, among
other things, to subordinate Tenant's rights under the Lease to the lien of the
Loan Documents and to attorn to Beneficiary on the terms and conditions of this
Agreement. Tenant is willing to agree to such subordination and attornment and
other conditions, provided that Beneficiary agrees to a nondisturbance
provision, all as set forth more fully below.

                                    EXHIBIT I


                                       -1-



                                    AGREEMENT:

     Therefore, the parties agree as follows:

     1. Subordination. The Loan Documents and all supplements, amendments,
modifications, renewals, replacements and extensions of and to them shall
unconditionally be and remain at all times a lieu on the Property prior and
superior to the Lease, to the leasehold estate created by it, and to all rights
and privileges of Tenant under it. The Lease and leasehold estate, together with
all rights and privileges of Tenant under that Lease, are hereby unconditionally
made subordinate to the lien of the Loan Documents in favor of Beneficiary.
Tenant consents to Borrower and Beneficiary entering into the Deed of Trust and
the other Loan Documents. Tenant further declares, agrees and acknowledges that
in making disbursements under the Loan Documents Beneficiary has no obligation
or duty to, nor has Beneficiary represented that it will, see to the application
of such proceeds by the person or persons to whom they are disbursed by
Beneficiary, and any application or use of such proceeds for purposes other than
those provided for in the Loan Documents shall not defeat the subordination made
in this Agreement, in whole or in part.

     2. Definitions of "Transfer of the Property" and "Purchaser". As used
herein, the term "Transfer of the Property" means any transfer of Borrower's
interest in the Property by foreclosure, trustee's sale or other action or
proceeding for the enforcement of the Deed of Trust or by deed in lieu thereof.
The term "Purchaser", as used herein, means any transferee, including
Beneficiary, of the interest of Borrower as a result of any such Transfer of the
Property and also includes any and all successors and assigns, including
Beneficiary, of such transferee.

     3. Nondisturbance. The enforcement of the Deed of Trust shall not terminate
the Lease or disturb Tenant in the possession and use of the Premises unless at
the time of foreclosure Tenant is in significant default under the Lease or this
Agreement beyond any applicable grace or cure periods, and Beneficiary or
Purchaser so notifies Tenant in writing by the later of (i) 120 days prior to or
after the Transfer of the Property, or (ii) if Beneficiary and Purchaser did not
have notice of the pre-foreclosure default, within 120 days of notice of the
default that the Lease will be terminated by foreclosure because of such
default. The nondisturbance herein granted is subject to Section 5 below. To the
extent that the Lease is extinguished by law as a result of the foreclosure, a
new lease shall automatically go into effect upon the same provisions as
contained in the Lease, as modified by this Agreement, for the unexpired term of
the Lease. This nondisturbance applies to any option to extend or renew the
Lease term which is set forth in the Lease as of the date of this Agreement.

     4. Attornment. Subject to Section 3 above, if any Transfer of the Property
should occur, Tenant shall and hereby does attorn to Purchaser, including
Beneficiary if it should be the Purchaser, as the landlord under the Lease, and
Tenant shall be bound to Purchaser under all of the terms, covenants and
conditions of the Lease for the balance of the Lease term and any extensions or
renewals of it which may then or later be in effect under any validly exercised
extension or renewal option contained in the Lease, all with the same force and
effect as if Purchaser had been the original landlord under the Lease. This
attornment shall be effective and self-operative without the execution of any
further instruments upon Purchaser's succeeding to the interest of the landlord
under the Lease.

     5. Subordination of Options and Rights of First Refusal. The Loan Documents
and all supplements, amendments, modifications, renewals, replacements and
extensions of and to them shall unconditionally be and remain at all times a
lien on the Property prior and superior to any existing or future right of
Tenant, whether arising out of the Lease or otherwise, to exercise any option or
right of first refusal to:

     (a)  purchase the Premises or the Property or any interest or portion in or
          of either of them; or

     (b)  expand into other space in the Improvements.

     Tenant specifically agrees and acknowledges that upon any Transfer of the
Property, any such purchase or expansion option or right of first refusal,
whether now existing or in the future arising, shall terminate and be
inapplicable to the Property notwithstanding the nondisturbance granted to
Tenant in Section 3 above. If any option or right of first refusal to purchase
is exercised prior to a Transfer of the Property, any title so acquired to all
or any part of the Property shall be subject to the lien of the Loan Documents,
which lien shall in no way be impaired by

                                    EXHIBIT I


                                       -2-



the exercise of such option or right of first refusal. Beneficiary specifically
reserves all of its rights to enforce any accelerating transfer, due on sale,
due on encumbrance or similar provision in the Deed of Trust or any other Loan
Document.

     6. Notices of Default; Material Notices; Beneficiary's Rights to Cure
Default. Tenant shall send a copy of any notice of default or similar statement
with respect to the Lease to Beneficiary at the same time such notice or
statement is sent to Borrower. In the event of any act or omission by Borrower
which would give Tenant the right to terminate the Lease or to claim a partial
or total eviction, Tenant shall not exercise any such right or make any such
claim until it has given Beneficiary written notice of such act or omission and
has given Beneficiary either thirty (30) days to cure the default if the default
is monetary or a reasonable time for Beneficiary to cure the default if the
default is nonmonetary. Nothing in this Agreement, however, shall be construed
as a promise or undertaking by Beneficiary to cure any default of Borrower.

     7. Limitation on Beneficiary's Performance. Nothing in this Agreement shall
be deemed or construed to be an agreement by Beneficiary to perform any covenant
of Borrower as landlord under the Lease. Tenant agrees that if Beneficiary
becomes Purchaser then, upon subsequent transfer of the Property by Beneficiary
to a new owner, Beneficiary shall have no further liability under the Lease
after said transfer.

     8. Limitation on Liability. No Purchaser who acquires title to the Property
shall have any obligation or liability beyond its interest in the Property.
Purchaser shall not have any obligations or liability with respect to the
completion of improvements which were part of the initial tenant improvements at
the commencement of the Lease.

     9. Tenant's Covenants. Tenant agrees that during the term of the Lease,
without Beneficiary's prior written consent, Tenant shall not:

          (a) pay any rent or additional rent more than one month in advance to
     any landlord including Borrower; or

          (b) cancel, terminate or surrender the Lease, except at the normal
     expiration of the Lease term or as provided in Section 6 above; or

          (c) enter into any material amendment, modification or other agreement
     relating to the Lease; or

          (d) assign or sublet any portion of the Lease or the Premises, except
     as expressly permitted in the Lease.

     10. Beneficiary Not Obligated. Beneficiary, if it becomes the Purchaser or
if it takes possession under the Deed of Trust, and any other Purchaser shall
not (a) be liable for any damages or other relief attributable to any act or
omission of any prior Landlord under the Lease including Borrower; or (b) be
subject to any offset or defense which Tenant may have against any prior
landlord under the Lease; or (c) be bound by any prepayment by Tenant of more
than one month's installment of rent; or (d) be obligated for any security
deposit not actually delivered to Purchaser; (e) be bound by any modification or
amendment of or to the Lease unless the amendment or modification shall have
been approved in writing by Beneficiary or (f) be liable to Tenant or any other
party for any conflict between the provisions of the Lease and the provisions of
any other lease affecting the Property which is not entered into by Purchaser;
or (g) be liable with respect to any representation, warranty or indemnity not
made by Purchaser. Borrower agrees to deliver to Purchaser any security deposits
in its possession at the time Purchaser takes possession of the Property.

     11. Tenant's Estoppel Certificate.

          (a) True and Complete Lease. Tenant represents and warrants to
     Beneficiary that Schedule 2 accurately identifies the Lease and all
     amendments, supplements, side letters and other agreements and memoranda
     pertaining to the Lease, the leasehold and/or the Premises.

                                    EXHIBIT I


                                       -3-



          (b) Tenant's Option Rights. Tenant has no right or option of any
     nature whatsoever, whether arising out of the Lease or otherwise, to
     purchase the Premises or the Property, or any interest or portion in or of
     either of them, to expand into other space in the Improvements or to extend
     or renew the term of the Lease, except as described in the attached
     Schedule 3.

          (c) No Default. As of the date of this Agreement, Tenant represents
     and warrants that to the best of Tenant's knowledge there exist no events
     of default or events that with notice or the passage of time or both would
     be events of default under the Lease on either the Tenant's part or the
     Borrower's, nor is there any right of offset against any of Tenant's
     obligations under the Lease, except as described in the attached Schedule
     4. Tenant represents and warrants that the Lease is in full force and
     effect as of the date of this Agreement.

          (d) Hazardous Substances. Tenant represents and warrants that it has
     not used, generated, released, discharged, stored or disposed of any
     Hazardous Substances on, under, in or about the Property other than
     Hazardous Substances used in the ordinary and commercially reasonable
     course of Tenant's business in compliance with all applicable laws. Except
     for such legal and commercially reasonable use by Tenant, Tenant has no
     actual knowledge that any Hazardous Substance is present or has been used,
     generated, released, discharged, stored or disposed of by any party on,
     under, in or about the Property. As used herein "Hazardous Substance" means
     any substance, material or waste (including petroleum and petroleum
     products), which is designated, classified or regulated as being "toxic" or
     "hazardous" or a "pollutant" or which is similarly designated, classified
     or regulated under any federal, state or local law, regulation or
     ordinance.

     12. Integration; Etc. This Agreement integrates all of the terms and
conditions of the parties' agreement regarding the subordination of the Lease to
the Loan Documents, attornment, nondisturbance and the other matters contained
herein. This Agreement supersedes and cancels all oral negotiations and prior
and other writings with respect to (a) such subordination (only to such extent,
however, as would affect the priority between the Lease and the Loan Documents),
including any provisions of the Lease which provide for the subordination of the
Lease to a deed of trust or to a mortgage and (b) such attornment,
non-disturbance and other matters contained herein. If there is any conflict
between the terms, conditions and provisions of this Agreement and those of any
other agreement or instrument, including the Lease, the terms, conditions and
provisions of this Agreement shall prevail. This Agreement may not be modified
or amended except by a written agreement signed by the parties or their
respective successors in interest. This Agreement may be executed in
counterparts, each of which is an original but all of which shall constitute one
and the same instrument.

     13. Notices. All notices given under this Agreement shall be in writing and
shall be given by personal delivery, overnight receipted courier or by
registered or certified United States mail, postage prepaid, sent to the party
at its address appearing below. Notices shall be effective upon receipt (or on
the date when proper delivery is refused). Addresses for notices may be changed
by any party by notice to all other parties in accordance with this Section.
Service of any notice on any one Borrower shall be effective service on Borrower
for all purposes.

          To Beneficiary:   Metropolitan Life Insurance Company
                            400 South El Camino Real, 8th Floor
                            San Mateo, California 94402
                            Attn: Vice President-Real Estate
                                  Investments

          To Borrower:      Catellus Development Corporation
                            201 Mission Street
                            San Francisco, California 94105
                            Attn: Asset Management

                                    EXHIBIT I


                                       -4-



          To Tenant:        Synetics Solutions Inc.
                            18870 NE Riverside Pkwy.
                            Tigard, Oregon 97224
                            Attn: Koki Nakamura

     14. Attorneys' Fees. If any lawsuit, judicial reference or arbitration is
commenced which arises out of or relates to this Agreement, the prevailing party
shall be entitled to recover from each other party such sums as the court,
referee or arbitrator may adjudge to be reasonable attorneys' fees, including
the costs for any legal services by in-house counsel, in addition to costs and
expenses otherwise allowed by law.

     15. Miscellaneous Provisions. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors and assigns.
This Agreement is governed by the laws of the State of Oregon without regard to
the choice of law rules of that State. This Agreement satisfies any condition or
requirement in the Lease relating to the granting of a nondisturbance agreement
by Beneficiary. As used herein, the word "include(s)" means "inciude(s) without
limitation," and the word "including" means "including but not limited to."
Beneficiary, at its sole discretion, may but shall not be obligated to record
this Agreement.

                                    EXHIBIT I


                                       -5-



     NOTICE: THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON
OBLIGATED ON YOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR
PURPOSES OTHER THAN IMPROVEMENT OF THE PROPERTY.

"TENANT"                                SYNETICS SOLUTIONS INC.,
                                        an Oregon corporation


                                        By: /s/ Koki Nakamura
                                            ------------------------------------
                                        Name: Koki Nakamura
                                        Title: CEO & Chairman


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


"BORROWER"                              CATELLUS DEVELOPMENT CORPORATION,
                                        a Delaware corporation

                                        By: Catellus Commercial Group, LLC,
                                            a Delaware limited liability company
                                            Its: Duly Authorized Agent


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

"BENEFICIARY"                           Metropolitan Life Insurance Company,
                                        a New York corporation


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                    EXHIBIT I


                                       -6-



STATE OF Oregon       )
                      )ss.
COUNTY OF Multnomah   )

     On March 27, 2001, before me, Sarah Culver, a Notary Public in and for said
state, personally appeared Koki Nakamura, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.

     WITNESS my hand and official seal.


                                        /s/ Sarah M. Culver
                                        ----------------------------------------
                                        Notary Public in and for said State

(STAMP)
(SEAL)

STATE OF _________________    )
                              )ss.
COUNTY OF _________________   )

     On _____________________, before me, _____________________________________,
a Notary Public in and for said state, personally appeared _____________________
___________________________________________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.

     WITNESS my hand and official seal.

                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

                                    EXHIBIT I


                                       -7-



STATE OF _________________    )
                              )ss.
COUNTY OF _________________   )

     On ______________, before me, ______________________, a Notary Public in
and for said state, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.

                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

STATE OF _________________    )
                              )ss.
COUNTY OF _________________   )

     On ____________, before me, ____________________, a Notary Public in and
for said state, personally appeared __________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

          WITNESS my hand and official seal.

                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

                                    EXHIBIT I


                                       -8-



STATE OF _________________    )
                              )ss.
COUNTY OF _________________   )

     On _________________, before me, _____________________________, a Notary
Public in and for said state, personally appeared ___________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.

                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

STATE OF _________________    )
                              )ss.
COUNTY OF _________________   )

     On ___________________, before me, ________________________________, a
Notary Public in and for said state, personally appeared _______________________
________________________________________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.

     WITNESS my hand and official seal.

                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

                                    EXHIBIT I


                                       -9-



                                   SCHEDULE 1

                              PROPERTY DESCRIPTION

     Lot 2, Southshore Corporate Park, in the City of Gresham, County of
Multnomah and State of Oregon, Plat Book 1243 Pages 12 through 18 inclusive.

                             SCHEDULE 1 to EXHIBIT I


                                       -1-



                                   SCHEDULE 2

                     IDENTIFY LEASE AND LIST ALL AMENDMENTS,
                 SUPPLEMENTS, SIDE LETTERS AND OTHER AGREEMENTS
             AND MEMORANDA PERTAINING TO LEASE, PREMISES OR PROPERTY

1)   Multi-Tenant Industrial Triple Net Lease dated December 15, 2000 between
     Borrower and Tenant.

                             SCHEDULE 2 to EXHIBIT I


                                       -1-



                                   SCHEDULE 3

                   LIST OF PURCHASE, EXPANSION, FIRST REFUSAL
                          EXTENSION AND RENEWAL OPTIONS

1)   One (1) five (5) year option to extend the term of the Lease pursuant to
     Section 19 of the Addendum to Lease.

                             SCHEDULE 3 to EXHIBIT I


                                       -1-



                                   SCHEDULE 4

                LIST ANY EXISTING DEFAULTS OR OFFSETS UNDER LEASE

None.

                             SCHEDULE 4 to EXHIBIT I


                                       -1-



                                   SCHEDULE 5

                              MODIFIED LEASE TERMS

None

                             SCHEDULE 5 to EXHIBIT I


                                       -1-



                                    EXHIBIT I

                     FORM OF SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

RECORDING REQUESTED BY                )
AND WHEN RECORDED MAIL TO:            )
Beneficiary
Metropolitan Life Insurance Company
c/o Preston Gates and Ellis, LLP
One Maritime Plaza, Suite 2400
San Francisco, California 94111
Attn: Susan Reid, Esq.                )

                                                  Space above for Recorder's Use

                          SUBORDINATION, NONDISTURBANCE
                            AND ATTORNMENT AGREEMENT

     NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS
     IN YOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE
     LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.

     This Subordination, Nondisturbance and Attornment Agreement ("Agreement")
is entered into as of the ______ day of March, 2001 by and among
SYNETICS SOLUTIONS INC., an Oregon corporation ("Tenant"), Catellus Development
Corporation, a Delaware corporation ("Borrower") and Metropolitan Life Insurance
Company (Beneficiary).

                               FACTUAL BACKGROUND

     A. Borrower owns certain real property in the County of Multnomah, State of
Oregon, more particularly described in the attached Schedule 1 term "Property"
herein means that real property together with all improvements (the
"Improvements") located on it.

     B. Beneficiary has made or agreed to make a loan to Borrower in the
principal amount of Two Hundred Million and no/100 Dollars ($200,000,000.00)
(the "Loan") as provided in a loan application (the "Loan Application"). The
Loan is or will be evidenced by a promissory note (the "Note") which is or will
be secured by a deed of trust encumbering the Property (the "Deed of Trust")
with an assignment of rents. The Note, the Deed of Trust, this Agreement and all
other documents and instruments identified in the Deed of Trust as "Loan
Documents" shall be collectively referred to herein as the "Loan Documents".

     C. Tenant and Borrower (as landlord) entered into a lease dated December
15, 2000 (the "Lease") under which Borrower leased to Tenant a portion of the
Improvements located within the Property and more particularly described in the
Lease (the "Premises").

     D. It is a requirement of the Loan to Borrower that Tenant agree, among
other things, to subordinate Tenant's rights under the Lease to the lien of the
Loan Documents and to attorn to Beneficiary on the terms and conditions of this
Agreement. Tenant is willing to agree to such subordination and attornment and
other conditions, provided that Beneficiary agrees to a nondisturbance
provision, all as set forth more fully below.

                                    EXHIBIT I


                                       -1-



                                    AGREEMENT:

     Therefore, the parties agree as follows:

     1. Subordination. The Loan Documents and all supplements, amendments,
modifications, renewals, replacements and extensions of and to them shall
unconditionally be and remain at all times a lien on the Property prior and
superior to the Lease, to the leasehold estate created by it, and to all rights
and privileges of Tenant under it. The Lease and leasehold estate, together with
all rights and privileges of Tenant under that Lease, are hereby unconditionally
made subordinate to the lien of the Loan Documents in favor of Beneficiary.
Tenant consents to Borrower and Beneficiary entering into the Deed of Trust and
the other Loan Documents. Tenant further declares, agrees and acknowledges that
in making disbursements under the Loan Documents Beneficiary has no obligation
or duty to, nor has Beneficiary represented that it will, see to the application
of such proceeds by the person or persons to whom they are disbursed by
Beneficiary, and any application or use of such proceeds for purposes other than
those provided for in the Loan Documents shall not defeat the subordination made
in this Agreement, in whole or in part.

     2. Definitions of "Transfer of the Property" and "Purchaser". As used
herein, the term "Transfer of the Property" means any transfer of Borrower's
interest in the Property by foreclosure, trustee's sale or other action or
proceeding for the enforcement of the Deed of Trust or by deed in lieu thereof.
The term "Purchaser", as used herein, means any transferee, including
Beneficiary, of the interest of Borrower as a result of any such Transfer of the
Property and also includes any and all successors and assigns, including
Beneficiary, of such transferee.

     3. Nondisturbance. The enforcement of the Deed of Trust shall not terminate
the Lease or disturb Tenant in the possession and use of the Premises unless at
the time of foreclosure Tenant is in significant default under the Lease or this
Agreement beyond any applicable grace or cure periods, and Beneficiary or
Purchaser so notifies Tenant in writing by the later of (i) 120 days prior to or
after the Transfer of the Property, or (ii) if Beneficiary and Purchaser did not
have notice of the pre-foreclosure default, within 120 days of notice of the
default that the Lease will be terminated by foreclosure because of such
default. The nondisturbance herein granted is subject to Section 5 below. To the
extent that the Lease is extinguished by law as a result of the foreclosure, a
new lease shall automatically go into effect upon the same provisions as
contained in the Lease, as modified by this Agreement, for the unexpired term of
the Lease. This nondisturbance applies to any option to extend or renew the
Lease term which is set forth in the Lease as of the date of this Agreement.

     4. Attornment. Subject to Section 3 above, if any Transfer of the Property
should occur, Tenant shall and hereby does attorn to Purchaser, including
Beneficiary if it should be the Purchaser, as the landlord under the Lease, and
Tenant shall be bound to Purchaser under all of the terms, covenants and
conditions of the Lease for the balance of the Lease term and any extensions or
renewals of it which may then or later be in effect under any validly exercised
extension or renewal option contained in the Lease, all with the same force and
effect as if Purchaser had been the original landlord under the Lease. This
attornment shall be effective and self-operative without the execution of any
further instruments upon Purchaser's succeeding to the interest of the landlord
under the Lease.

     5. Subordination of Options and Rights of First Refusal. The Loan Documents
and all supplements, amendments, modifications, renewals, replacements and
extensions of and to them shall unconditionally be and remain at all times a
lien on the Property prior and superior to any existing or future right of
Tenant, whether arising out of the Lease or otherwise, to exercise any option or
right of first refusal to:

          (a) purchase the Premises or the Property or any interest or portion
     in or of either of them; or

          (b)  expand into other space in the Improvements.

     Tenant specifically agrees and acknowledges that upon any Transfer of the
Property, any such purchase or expansion option or right of first refusal,
whether now existing or in the future arising, shall terminate and be
inapplicable to the Property notwithstanding the nondisturbance granted to
Tenant in Section 3 above. If any option or right of first refusal to purchase
is exercised prior to a Transfer of the Property, any title so acquired to all
or any part of the Property shall be subject to the lien of the Loan Documents,
which lien shall in no way be impaired by

                                    EXHIBIT I


                                       -2-



the exercise of such option or right of first refusal. Beneficiary specifically
reserves all of its rights to enforce any accelerating transfer, due on sale,
due on encumbrance or similar provision in the Deed of Trust or any other Loan
Document.

     6. Notices of Default; Material Notices; Beneficiary's Rights to Cure
Default. Tenant shall send a copy of any notice of default or similar statement
with respect to the Lease to Beneficiary at the same time such notice or
statement is sent to Borrower. In the event of any act or omission by Borrower
which would give Tenant the right to terminate the Lease or to claim a partial
or total eviction, Tenant shall not exercise any such right or make any such
claim until it has given Beneficiary written notice of such act or omission and
has given Beneficiary either thirty (30) days to cure the default if the default
is monetary or a reasonable time for Beneficiary to cure the default if the
default is nonmonetary. Nothing in this Agreement, however, shall be construed
as a promise or undertaking by Beneficiary to cure any default of Borrower.

     7. Limitation on Beneficiary's Performance. Nothing in this Agreement shall
be deemed or construed to be an agreement by Beneficiary to perform any covenant
of Borrower as landlord under the Lease. Tenant agrees that if Beneficiary
becomes Purchaser then, upon subsequent transfer of the Property by Beneficiary
to a new owner, Beneficiary shall have no further liability under the Lease
after said transfer.

     8. Limitation on Liability. No Purchaser who acquires title to the Property
shall have any obligation or liability beyond its interest in the Property.
Purchaser shall not have any obligations or liability with respect to the
completion of improvements which were part of the initial tenant improvements at
the commencement of the Lease.

     9. Tenant's Covenants. Tenant agrees that during the term of the Lease,
without Beneficiary's prior written consent, Tenant shall not:

          (a) pay any rent or additional rent more than one month in advance to
     any landlord including Borrower; or

          (b) cancel, terminate or surrender the Lease, except at the normal
     expiration of the Lease term or as provided in Section 6 above; or

          (c) enter into any material amendment, modification or other agreement
     relating to the Lease; or

          (d) assign or sublet any portion of the Lease or the Premises, except
     as expressly permitted in the Lease.

     10. Beneficiary Not Obligated. Beneficiary, if it becomes the Purchaser or
if it takes possession under the Deed of Trust, and any other Purchaser shall
not (a) be liable for any damages or other relief attributable to any act or
omission of any prior Landlord under the Lease including Borrower; or (b) be
subject to any offset or defense which Tenant may have against any prior
landlord under the Lease; or (c) be bound by any prepayment by Tenant of more
than one month's installment of rent; or (d) be obligated for any security
deposit not actually delivered to Purchaser; (e) be bound by any modification or
amendment of or to the Lease unless the amendment or modification shall have
been approved in writing by Beneficiary or (f) be liable to Tenant or any other
party for any conflict between the provisions of the Lease and the provisions of
any other lease affecting the Property which is not entered into by Purchaser;
or (g) be liable with respect to any representation, warranty or indemnity not
made by Purchaser. Borrower agrees to deliver to Purchaser any security deposits
in its possession at the time Purchaser takes possession of the Property.

     11. Tenant's Estoppel Certificate.

          (a) True and Complete Lease. Tenant represents and warrants to
     Beneficiary that Schedule 2 accurately identifies the Lease and all
     amendments, supplements, side letters and other agreements and memoranda
     pertaining to the Lease, the leasehold and/or the Premises.

                                    EXHIBIT I


                                       -3-



          (b) Tenant's Option Rights. Tenant has no right or option of any
     nature whatsoever, whether arising out of the Lease or otherwise, to
     purchase the Premises or the Property, or any interest or portion in or of
     either of them, to expand into other space in the Improvements or to extend
     or renew the term of the Lease, except as described in the attached
     Schedule 3.

          (c) No Default. As of the date of this Agreement, Tenant represents
     and warrants that to the best of Tenant's knowledge there exist no events
     of default or events that with notice or the passage of time or both would
     be events of default under the Lease on either the Tenant's part or the
     Borrower's, nor is there any right of offset against any of Tenant's
     obligations under the Lease, except as described in the attached Schedule
     4. Tenant represents and warrants that the Lease is in full force and
     effect as of the date of this Agreement.

          (d) Hazardous Substances. Tenant represents and warrants that it has
     not used, generated, released, discharged, stored or disposed of any
     Hazardous Substances on, under, in or about the Property other than
     Hazardous Substances used in the ordinary and commercially reasonable
     course of Tenant's business in compliance with all applicable laws. Except
     for such legal and commercially reasonable use by Tenant, Tenant has no
     actual knowledge that any Hazardous Substance is present or has been used,
     generated, released, discharged, stored or disposed of by any party on,
     under, in or about the Property. As used herein "Hazardous Substance" means
     any substance, material or waste (including petroleum and petroleum
     products), which is designated, classified or regulated as being "toxic" or
     "hazardous" or a "pollutant" or which is similarly designated, classified
     or regulated under any federal, state or local law, regulation or
     ordinance.

     12. Integration; Etc. This Agreement integrates all of the terms and
conditions of the parties' agreement regarding the subordination of the Lease to
the Loan Documents, attornment, nondisturbance and the other matters contained
herein. This Agreement supersedes and cancels all oral negotiations and prior
and other writings with respect to (a) such subordination (only to such extent,
however, as would affect the priority between the Lease and the Loan Documents),
including any provisions of the Lease which provide for the subordination of the
Lease to a deed of trust or to a mortgage and (b) such attornment,
non-disturbance and other matters contained herein. If there is any conflict
between the terms, conditions and provisions of this Agreement and those of any
other agreement or instrument, including the Lease, the terms, conditions and
provisions of this Agreement shall prevail. This Agreement may not be modified
or amended except by a written agreement signed by the parties or their
respective successors in interest. This Agreement may be executed in
counterparts, each of which is an original but all of which shall constitute one
and the same instrument.

     13. Notices. All notices given under this Agreement shall be in writing and
shall be given by personal delivery, overnight receipted courier or by
registered or certified United States mail, postage prepaid, sent to the party
at its address appearing below. Notices shall be effective upon receipt (or on
the date when proper delivery is refused). Addresses for notices may be changed
by any party by notice to all other parties in accordance with this Section.
Service of any notice on any one Borrower shall be effective service on Borrower
for all purposes.

          To Beneficiary:   Metropolitan Life Insurance Company
                            400 South El Camino Real, 8th Floor
                            San Mateo, California 94402
                            Attn: Vice President-Real Estate Investments

          To Borrower:      Catellus Development Corporation
                            201 Mission Street
                            San Francisco, California 94105
                            Attn: Asset Management

                                    EXHIBIT I


                                       -4-



          To Tenant:        Synetics Solutions Inc.
                            18870 NE Riverside Pkwy.
                            Tigard, Oregon 97224
                            Attn: Koki Nakamura

     14. Attorneys' Fees. If any lawsuit, judicial reference or arbitration is
commenced which arises out of or relates to this Agreement, the prevailing party
shall be entitled to recover from each other party such sums as the court,
referee or arbitrator may adjudge to be reasonable attorneys' fees, including
the costs for any legal services by in-house counsel, in addition to costs and
expenses otherwise allowed by law.

     15. Miscellaneous Provisions. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors and assigns.
This Agreement is governed by the laws of the State of Oregon without regard to
the choice of law rules of that State. This Agreement satisfies any condition or
requirement in the Lease relating to the granting of a nondisturbance agreement
by Beneficiary. As used herein, the word "include(s)" means "include(s) without
limitation," and the word "including" means "including but not limited to."
Beneficiary, at its sole discretion, may but shall not be obligated to record
this Agreement.

                                    EXHIBIT I


                                       -5-



     NOTICE: THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON
OBLIGATED ON YOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR
PURPOSES OTHER THAN IMPROVEMENT OF THE PROPERTY.

"TENANT"                                SYNETICS SOLUTIONS INC.,
                                        an Oregon corporation


                                        By: /s/ Koki Nakamura
                                            ------------------------------------
                                        Name: KOKI NAKAMURA
                                        Title: CEO & Chairman


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


"BORROWER"                              CATELLUS DEVELOPMENT CORPORATION,
                                        a Delaware corporation


                                        By: Catellus Commercial Group, LLC,
                                            a Delaware limited liability company
                                            Its: Duly Authorized Agent


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


"BENEFICIARY"                           Metropolitan Life Insurance Company,
                                        a New York corporation


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                    EXHIBIT I


                                       -6-



STATE OF Oregon     )
                    )ss.
COUNTY OF Multnomah )

     On March 27, 2001, before me, Sarah Culver, a Notary Public in and for said
state, personally appeared Koki Nakamura, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.

     WITNESS my hand and official seal.


                                        /s/ Sarah M. Culver
                                        ----------------------------------------
                                        Notary Public in and for said State

(STAMP)
(SEAL)

STATE OF __________ )
                    )ss.
COUNTY OF _________ )

     On ___________, before me, ___________, a Notary Public in and for said
state, personally appeared ______________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.

     WITNESS my hand and official seal.

                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

                                    EXHIBIT I


                                       -7-



STATE OF __________ )
                    )ss.
COUNTY OF _________ )

     On ___________, before me, ___________, a Notary Public in and for said
state, personally appeared ______________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.

     WITNESS my hand and official seal.

                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

STATE OF __________ )
                    )ss.
COUNTY OF _________ )

     On ___________, before me, ___________, a Notary Public in and for said
state, personally appeared ______________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.

     WITNESS my hand and official seal.

                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

                                    EXHIBIT I


                                       -8-



STATE OF __________ )
                    )ss.
COUNTY OF _________ )

     On ___________, before me, ___________, a Notary Public in and for said
state, personally appeared ______________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.

     WITNESS my hand and official seal.

                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

STATE OF __________ )
                    )ss.
COUNTY OF _________ )

     On ___________, before me, ___________, a Notary Public in and for said
state, personally appeared ______________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.

     WITNESS my hand and official seal.

                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

                                    EXHIBIT I


                                       -9-



                                   SCHEDULE 1

                              PROPERTY DESCRIPTION

     Lot 2, Southshore Corporate Park, in the City of Gresham, County of
Multnomah and State of Oregon, Plat Book 1243 Pages 12 through 18 inclusive.

                             SCHEDULE 1 to EXHIBIT I


                                       -1-



                                    SCHEDULE 2

                     IDENTIFY LEASE AND LIST ALL AMENDMENTS,
                 SUPPLEMENTS, SIDE LETTERS AND OTHER AGREEMENTS
             AND MEMORANDA PERTAINING TO LEASE, PREMISES OR PROPERTY

1)   Multi-Tenant Industrial Triple Net Lease dated December 15, 2000 between
     Borrower and Tenant.

                             SCHEDULE 2 to EXHIBIT I


                                       -1-



                                   SCHEDULE 3

                   LIST OF PURCHASE, EXPANSION, FIRST REFUSAL
                          EXTENSION AND RENEWAL OPTIONS

1)   One (1) five (5) year option to extend the term of the Lease pursuant to
     Section 19 of the Addendum to Lease.

                             SCHEDULE 3 to EXHIBIT I


                                       -1-



                                   SCHEDULE 4

                LIST ANY EXISTING DEFAULTS OR OFFSETS UNDER LEASE

None.

                             SCHEDULE 4 to EXHIBIT I


                                       -1-



                                   SCHEDULE 5

                              MODIFIED LEASE TERMS

None

                             SCHEDULE 5 to EXHIBIT I


                                       -1-



                           TENANT ESTOPPEL CERTIFICATE

                                __________, 2001

Metropolitan Life Insurance Company
400 S. El Camino Real, 8th Floor
San Mateo, California 94402

Gentlemen:

          The undersigned, Synetics Solutions, Inc., an Oregon corporation
("Tenant"), as tenant under a lease (the "Lease") of certain premises dated July
20, 2000 executed by Tenant and Catellus Development Corporation, a Delaware
corporation, ("Landlord"), does hereby state, declare, represent and warrant as
follows:

          1. The copy of the Lease attached hereto as Exhibit A is a true and
correct copy of the Lease and the Lease is in full force and effect and has not
been amended, supplemented or changed, except as follows [if none, so state]:
First Amendment to Lease dated December 19, 2000.

          2. Tenant has accepted possession of the premises demised under the
Lease, and all items of an executory nature have been completed under the terms
of the Lease, including, but not limited to, completion of construction of the
demised premises (and all other improvements required under the Lease) in
accordance with applicable plans and specifications and within the time periods
set forth in the Lease and otherwise in accordance with the Lease, and payment
of any improvement allowance or other funds owing by Landlord to Tenant. Tenant
further acknowledges that the term commenced on January 1, 2001 and shall expire
on December 31, 2010 unless sooner terminated or extended in accordance with the
terms of the Lease.

          3. No default or event that with the passing of time or the giving of
notice, or both, would constitute a default (referred to herein collectively as
a "default") on the part of the undersigned exists under the Lease in the
performance of the terms, covenants and conditions of the Lease required to be
performed on the part of the undersigned.

          4. No default on the part of Landlord exists under the Lease in the
performance of the terms, covenants and conditions of the Lease required to be
performed on the part of Landlord.

          5. Tenant has no option or right to purchase the property of which the
premises are a part, or any part thereof.

          6. No rentals are accrued and unpaid under the Lease.



          7. No prepayments of rentals due under the Lease have been made and no
security or deposits as security have been made thereunder, except as set forth
in the Lease.

          8. The undersigned has no defense as to its obligations under the
Lease and claims no setoff or counterclaim against Landlord.

          9. The undersigned has not received notice of any assignment,
hypothecation, mortgage, or pledge of Landlord's interest in the Lease or the
rents or other amounts payable thereunder.

          10. The undersigned agrees to notify you of any default on the part of
Landlord under the Lease which would entitle the undersigned to cancel the Lease
or to abate the rent payable thereunder, and further agrees that,
notwithstanding any provisions of the Lease, no notice or cancellation thereof
shall be effective unless you have received said notice and have failed within
thirty (30) days after the expiration of the cure period provided to Landlord
under the Lease to cure or commence to cure the default which gave rise to the
notice of cancellation.

          11. The undersigned understands and acknowledges that you are about to
make a loan to Landlord and receive as part of the security for such loan (i) a
Deed of Trust, Security Agreement and Fixture Filing encumbering Landlord's fee
interest in the property of which the leased premises are a portion and the
rents, issues and profits of the Lease and (ii) an Assignment of Leases which
affects the Lease, and that you are relying upon the representations and
warranties contained herein in making such loan.

                                        Synetics Solutions, Inc.,
                                        An Oregon corporation


                                        By /s/ Koki Nakamura
                                           -------------------------------------
                                        Name: KOKI NAKAMURA
                                        Its: CEO & Chairman


                                        By
                                           -------------------------------------
                                        Name:
                                              ----------------------------------
                                        Its:
                                             -----------------------------------


                                        2



                                    EXHIBIT A

                         TO TENANT ESTOPPEL CERTIFICATE

                      Copy of Lease and Amendments to Lease


                                        4



                           TENANT ESTOPPEL CERTIFICATE

                                __________, 2001

Metropolitan Life Insurance Company
400 S. El Camino Real, 8th Floor
San Mateo, California 94402

Gentlemen:

          The undersigned, Synetics Solutions, Inc., an Oregon corporation
("Tenant"), as tenant under a lease (the "Lease") of certain premises dated
December 15, 2000 executed by Tenant and Catellus Development Corporation, a
Delaware corporation, ("Landlord"), does hereby state, declare, represent and
warrant as follows:

          1. The copy of the Lease attached hereto as Exhibit A is a true and
correct copy of the Lease and the Lease is in full force and effect and has not
been amended, supplemented or changed, except as follows [if none, so state]:
None

          2. Tenant has accepted possession of the premises demised under the
Lease, and all items of an executory nature have been completed under the terms
of the Lease, including, but not limited to, completion of construction of the
demised premises (and all other improvements required under the Lease) in
accordance with applicable plans and specifications and within the time periods
set forth in the Lease and otherwise in accordance with the Lease, and payment
of any improvement allowance or other funds owing by Landlord to Tenant. Tenant
further acknowledges that the term commenced on January 1, 2001 and shall expire
on December 31, 2011 unless sooner terminated or extended in accordance with the
terms of the Lease.

          3. No default or event that with the passing of time or the giving of
notice, or both, would constitute a default (referred to herein collectively as
a "default") on the part of the undersigned exists under the Lease in the
performance of the terms, covenants and conditions of the Lease required to be
performed on the part of the undersigned.

          4. No default on the part of Landlord exists under the Lease in the
performance of the terms, covenants and conditions of the Lease required to be
performed on the part of Landlord.

          5. Tenant has no option or right to purchase the property of which the
premises are a part, or any part thereof.

          6. No rentals are accrued and unpaid under the Lease.



          7. No prepayments of rentals due under the Lease have been made and no
security or deposits as security have been made thereunder, except as set forth
in the Lease.

          8. The undersigned has no defense as to its obligations under the
Lease and claims no setoff or counterclaim against Landlord.

          9. The undersigned has not received notice of any assignment,
hypothecation, mortgage, or pledge of Landlord's interest in the Lease or the
rents or other amounts payable thereunder.

          10. The undersigned agrees to notify you of any default on the part of
Landlord under the Lease which would entitle the undersigned to cancel the Lease
or to abate the rent payable thereunder, and further agrees that,
notwithstanding any provisions of the Lease, no notice or cancellation thereof
shall be effective unless you have received said notice and have failed within
thirty (30) days after the expiration of the cure period provided to Landlord
under the Lease to cure or commence to cure the default which gave rise to the
notice of cancellation.

          11. The undersigned understands and acknowledges that you are about to
make a loan to Landlord and receive as part of the security for such loan (i) a
Deed of Trust, Security Agreement and Fixture Filing encumbering Landlord's fee
interest in the property of which the leased premises are a portion and the
rents, issues and profits of the Lease and (ii) an Assignment of Leases which
affects the Lease, and that you are relying upon the representations and
warranties contained herein in making such loan.

                                        Synetics Solutions. Inc.,
                                        An Oregon corporation


                                        By /s/ Koki Nakamura
                                           -------------------------------------
                                        Name: KOKI NAKAMURA
                                        Its: CEO & Chairman


                                        By
                                           -------------------------------------
                                        Name:
                                              ----------------------------------
                                        Its:
                                             -----------------------------------


                                        2



                                    EXHIBIT A

                         TO TENANT ESTOPPEL CERTIFICATE

                      Copy of Lease and Amendments to Lease


                                        3



                                    EXHIBIT I

                     FORM OF SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

RECORDING REQUESTED BY              )
AND WHEN RECORDED MAIL TO:          )
Beneficiary
Metropolitan Life Insurance Company
c/o Preston Gates and Ellis, LLP
One Maritime Plaza, Suite 2400
San Francisco, California 94111
Attn: Susan Reid, Esq.              )

                                                  Space above for Recorder's Use

                          SUBORDINATION, NONDISTURBANCE
                            AND ATTORNMENT AGREEMENT

     NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS
     IN YOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE
     LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.

     This Subordination, Nondisturbance and Attornment Agreement ("Agreement")
is entered into as of the __________ day of March, 2001 by and among SYNETICS
SOLUTIONS INC., an Oregon corporation ("Tenant"), Catellus Development
Corporation, a Delaware corporation ("Borrower") and Metropolitan Life Insurance
Company (Beneficiary).

                               FACTUAL BACKGROUND

     A. Borrower owns certain real property in the County of Multnomah, State of
Oregon, more particularly described in the attached Schedule 1 term "Property"
herein means that real property together with all improvements (the
"Improvements") located on it.

     B. Beneficiary has made or agreed to make a loan to Borrower in the
principal amount of Two Hundred Million and no/100 Dollars ($200,000,000.00)
(the "Loan") as provided in a loan application (the "Loan Application"). The
Loan is or will be evidenced by a promissory note (the "Note") which is or will
be secured by a deed of trust encumbering the Property (the "Deed of Trust")
with an assignment of rents. The Note, the Deed of Trust, this Agreement and all
other documents and instruments identified in the Deed of Trust as "Loan
Documents" shall be collectively referred to herein as the "Loan Documents".

     C. Tenant and Borrower (as landlord) entered into a lease dated December
15, 2000 (the "Lease") under which Borrower leased to Tenant a portion of the
Improvements located within the Property and more particularly described in the
Lease (the "Premises").

     D. It is a requirement of the Loan to Borrower that Tenant agree, among
other things, to subordinate Tenant's rights under the Lease to the lien of the
Loan Documents and to attorn to Beneficiary on the terms and conditions of this
Agreement. Tenant is willing to agree to such subordination and attornment and
other conditions, provided that Beneficiary agrees to a nondisturbance
provision, all as set forth more fully below.

                                    EXHIBIT I


                                       -1-



                                   AGREEMENT:

     Therefore, the parties agree as follows:

     1. Subordination. The Loan Documents and all supplements, amendments,
modifications, renewals, replacements and extensions of and to them shall
unconditionally be and remain at all times a lien on the Property prior and
superior to the Lease, to the leasehold estate created by it, and to all rights
and privileges of Tenant under it. The Lease and leasehold estate, together with
all rights and privileges of Tenant under that Lease, are hereby unconditionally
made subordinate to the lien of the Loan Documents in favor of Beneficiary.
Tenant consents to Borrower and Beneficiary entering into the Deed of Trust and
the other Loan Documents. Tenant further declares, agrees and acknowledges that
in making disbursements under the Loan Documents Beneficiary has no obligation
or duty to, nor has Beneficiary represented that it will, see to the application
of such proceeds by the person or persons to whom they are disbursed by
Beneficiary, and any application or use of such proceeds for purposes other than
those provided for in the Loan Documents shall not defeat the subordination made
in this Agreement, in whole or in part.

     2. Definitions of "Transfer of the Property" and "Purchaser". As used
herein, the term "Transfer of the Property" means any transfer of Borrower's
interest in the Property by foreclosure, trustee's sale or other action or
proceeding for the enforcement of the Deed of Trust or by deed in lieu thereof.
The term "Purchaser", as used herein, means any transferee, including
Beneficiary, of the interest of Borrower as a result of any such Transfer of the
Property and also includes any and all successors and assigns, including
Beneficiary, of such transferee.

     3. Nondisturbance. The enforcement of the Deed of Trust shall not terminate
the Lease or disturb Tenant in the possession and use of the Premises unless at
the time of foreclosure Tenant is in significant default under the Lease or this
Agreement beyond any applicable grace or cure periods, and Beneficiary or
Purchaser so notifies Tenant in writing by the later of (i) 120 days prior to or
after the Transfer of the Property, or (ii) if Beneficiary and Purchaser did not
have notice of the pre-foreclosure default, within 120 days of notice of the
default that the Lease will be terminated by foreclosure because of such
default. The nondisturbance herein granted is subject to Section 5 below. To the
extent that the Lease is extinguished by law as a result of the foreclosure, a
new lease shall automatically go into effect upon the same provisions as
contained in the Lease, as modified by this Agreement, for the unexpired term of
the Lease. This nondisturbance applies to any option to extend or renew the
Lease term which is set forth in the Lease as of the date of this Agreement.

     4. Attornment. Subject to Section 3 above, if any Transfer of the Property
should occur, Tenant shall and hereby does attorn to Purchaser, including
Beneficiary if it should be the Purchaser, as the landlord under the Lease, and
Tenant shall be bound to Purchaser under all of the terms, covenants and
conditions of the Lease for the balance of the Lease term and any extensions or
renewals of it which may then or later be in effect under any validly exercised
extension or renewal option contained in the Lease, all with the same force and
effect as if Purchaser had been the original landlord under the Lease. This
attornment shall be effective and self-operative without the execution of any
further instruments upon Purchaser's succeeding to the interest of the landlord
under the Lease.

     5. Subordination of Options and Rights of First Refusal. The Loan Documents
and all supplements, amendments, modifications, renewals, replacements and
extensions of and to them shall unconditionally be and remain at all times a
lien on the Property prior and superior to any existing or future right of
Tenant, whether arising out of the Lease or otherwise, to exercise any option or
right of first refusal to:

          (a) purchase the Premises or the Property or any interest or portion
     in or of either of them; or

          (b) expand into other space in the Improvements.

     Tenant specifically agrees and acknowledges that upon any Transfer of the
Property, any such purchase or expansion option or right of first refusal,
whether now existing or in the future arising, shall terminate and be
inapplicable to the Property notwithstanding the nondisturbance granted to
Tenant in Section 3 above. If any option or right of first refusal to purchase
is exercised prior to a Transfer of the Property, any title so acquired to all
or any part of the Property shall be subject to the lien of the Loan Documents,
which lien shall in no way be impaired by

                                    EXHIBIT I


                                       -2-



the exercise of such option, or right of first refusal. Beneficiary specifically
reserves all of its rights to enforce any accelerating transfer, due on sale,
due on encumbrance or similar provision in the Deed of Trust or any other
Loan Document.

     6. Notices of Default; Material Notices; Beneficiary's Rights to Cure
Default. Tenant shall send a copy of any notice of default or similar statement
with respect to the Lease to Beneficiary at the same time such notice or
statement is sent to Borrower. In the event of any act or omission by Borrower
which would give Tenant the right to terminate the Lease or to claim a partial
or total eviction, Tenant shall not exercise any such right or make any such
claim until it has given Beneficiary written notice of such act or omission and
has given Beneficiary either thirty (30) days to cure the default if the default
is monetary or a reasonable time for Beneficiary to cure the default if the
default is nonmonetary. Nothing in this Agreement, however, shall be construed
as a promise or undertaking by Beneficiary to cure any default of Borrower.

     7. Limitation on Beneficiary's Performance. Nothing in this Agreement shall
be deemed or construed to be an agreement by Beneficiary to perform any covenant
of Borrower as landlord under the Lease. Tenant agrees that if Beneficiary
becomes Purchaser then, upon subsequent transfer of the Property by Beneficiary
to a new owner, Beneficiary shall have no further liability under the Lease
after said transfer.

     8. Limitation on Liability. No Purchaser who acquires title to the Property
shall have any obligation or liability beyond its interest in the Property.
Purchaser shall not have any obligations or liability with respect to the
completion of improvements which were part of the initial tenant improvements at
the commencement of the Lease.

     9. Tenant's Covenants. Tenant agrees that during the term of the Lease,
without Beneficiary's prior written consent, Tenant shall not:

          (a) pay any rent or additional rent more than one month in advance to
     any landlord including Borrower; or

          (b) cancel, terminate or surrender the Lease, except at the normal
     expiration of the Lease term or as provided in Section 6 above; or

          (c) enter into any material amendment, modification or other agreement
     relating to the Lease; or

          (d) assign or sublet any portion of the Lease or the Premises, except
     as expressly permitted in the Lease.

     10. Beneficiary Not Obligated. Beneficiary, if it becomes the Purchaser or
if it takes possession under the Deed of Trust, and any other Purchaser shall
not (a) be liable for any damages or other relief attributable to any act or
omission of any prior Landlord under the Lease including Borrower, or (b) be
subject to any offset or defense which Tenant may have against any prior
landlord under the Lease; or (c) be bound by any prepayment by Tenant of more
than one month's installment of rent; or (d) be obligated for any security
deposit not actually delivered to Purchaser; (e) be bound by any modification or
amendment of or to the Lease unless the amendment or modification shall have
been approved in writing by Beneficiary or (f) be liable to Tenant or any other
party for any conflict between the provisions of the Lease and the provisions of
any other lease affecting the Property which is not entered into by Purchaser;
or (g) be liable with respect to any representation, warranty or indemnity not
made by Purchaser. Borrower agrees to deliver to Purchaser any security deposits
in its possession at the time Purchaser takes possession of the Property.

     11. Tenant's Estoppel Certificate.

          (a) True and Complete Lease. Tenant represents and warrants to
     Beneficiary that Schedule 2 accurately identifies the Lease and all
     amendments, supplements, side letters and other agreements and memoranda
     pertaining to the Lease, the leasehold and/or the Premises.

                                    EXHIBIT I


                                       -3-



          (b) Tenant's Option Rights. Tenant has no right or option of any
     nature whatsoever, whether arising out of the Lease or otherwise, to
     purchase the Premises or the Property, or any interest or portion in or of
     either of them, to expand into other space in the Improvements or to extend
     or renew the term of the Lease, except as described in the attached
     Schedule 3.

          (c) No Default. As of the date of (his Agreement, Tenant represents
     and warrants that to the best of Tenant's knowledge there exist no events
     of default or events that with notice or the passage of time or both would
     be events of default under the Lease on either the Tenant's part or the
     Borrower's, nor is there any right of offset against any of Tenant's
     obligations under the Lease, except as described in the attached Schedule
     4. Tenant represents and warrants that the Lease is in full force and
     effect as of the date of this Agreement.

          (d) Hazardous Substances. Tenant represents and warrants that it has
     not used, generated, released, discharged, stored or disposed of any
     Hazardous Substances on, under, in or about the Property other than
     Hazardous Substances used in the ordinary and commercially reasonable
     course of Tenant's business in compliance with all applicable laws. Except
     for such legal and commercially reasonable use by Tenant, Tenant has no
     actual knowledge that any Hazardous Substance is present or has been used,
     generated, released, discharged, stored or disposed of by any party on,
     under, in or about the Property. As used herein "Hazardous Substance" means
     any substance, material or waste (including petroleum and petroleum
     products), which is designated, classified or regulated as being "toxic" or
     "hazardous" or a "pollutant" or which is similarly designated, classified
     or regulated under any federal, state or local law, regulation or
     ordinance.

     12. Integration; Etc. This Agreement integrates all of the terms and
conditions of the parties' agreement regarding the subordination of the Lease to
the Loan Documents, attornment, nondisturbance and the other matters contained
herein. This Agreement supersedes and cancels all oral negotiations and prior
and other writings with respect to (a) such subordination (only to such extent,
however, as would affect the priority between the Lease and the Loan Documents),
including any provisions of the Lease which provide for the subordination of the
Lease to a deed of trust or to a mortgage and (b) such attornment,
non-disturbance and other matters contained herein. If there is any conflict
between the terms, conditions and provisions of this Agreement and those of any
other agreement or instrument, including the Lease, the terms, conditions and
provisions of this Agreement shall prevail. This Agreement may not be modified
or amended except by a written agreement signed by the parties or their
respective successors in interest. This Agreement may be executed in
counterparts, each of which is an original but all of which shall constitute one
and the same instrument.

     13. Notices. All notices given under this Agreement shall be in writing and
shall be given by personal delivery, overnight receipted courier or by
registered or certified United States mail, postage prepaid, sent to the party
at its address appearing below. Notices shall be effective upon receipt (or on
the date when proper delivery is refused). Addresses for notices may be changed
by any party by notice to all other parties in accordance with this Section.
Service of any notice on any one Borrower shall be effective service on Borrower
for all purposes.

          To Beneficiary:

                          Metropolitan Life Insurance Company
                          400 South El Camino Real, 8th Floor
                          San Mateo, California 94402
                          Attn: Vice President-Real Estate Investments

          To Borrower:    Catellus Development Corporation
                          201 Mission Street
                          San Francisco, California 94105
                          Attn: Asset Management

                                    EXHIBIT I


                                       -4-



          To Tenant:      Synetics Solutions Inc.
                          18870 NE Riverside Pkwy.
                          Tigard, Oregon 97224
                          Attn: Koki Nakamura

     14. Attorneys' Fees. If any lawsuit, judicial reference or arbitration is
commenced which arises out of or relates to this Agreement, the prevailing party
shall be entitled to recover from each other party such sums as the court,
referee or arbitrator may adjudge to be reasonable attorneys' fees, including
the costs for any legal services by in-house counsel, in addition to costs and
expenses otherwise allowed by law.

     15. Miscellaneous Provisions. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors and assigns.
This Agreement is governed by the laws of the State of Oregon without regard to
the choice of law rules of that State. This Agreement satisfies any condition or
requirement in the Lease relating to the granting of a nondisturbance agreement
by Beneficiary. As used herein, the word "include(s)" means "include(s) without
limitation," and the word "including" means "including but not limited to."
Beneficiary, at its sole discretion, may but shall not be obligated to record
this Agreement.

                                    EXHIBIT I


                                      -5-



     NOTICE: THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON
OBLIGATED ON YOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR
PURPOSES OTHER THAN IMPROVEMENT OF THE PROPERTY.

"TENANT"                                SYNETICS SOLUTIONS INC.,
                                        an Oregon corporation


                                        By: /s/ Koki Nakamura
                                            ------------------------------------
                                        Name: KOKI NAKAMURA
                                        Title: CEO & Chairman


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


"BORROWER"                              CATELLUS DEVELOPMENT CORPORATION,
                                        a Delaware corporation

                                        By: Catellus Commercial Group, LLC,
                                            a Delaware limited liability company
                                        Its: Duly Authorized Agent


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


"BENEFICIARY"                           Metropolitan Life Insurance Company,
                                        a New York corporation


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                    EXHIBIT I


                                       -6-



STATE OF Oregon         )
                        ) ss.
COUNTY OF Multnomah     )

     On March 27, 2001, before me, Sarah Culver, a Notary Public in and for said
state, personally appeared Koki Nakamura, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.

     WITNESS my hand and official seal.


                                        /s/ Sarah M. Culver
                                        ----------------------------------------
                                        Notary Public in and for said State
(STAMP)
(SEAL)

STATE OF _______________)
                        ) ss.
COUNTY OF ______________)

     On _____________________, before me, _______________________, a Notary
Public in and for said state, personally appeared __________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he/she executed the same in his/her authorized capacity, and that by
his/her signature on the instrument, the person, or the entity upon behalf of
which the person acted, executed the instrument.

     WITNESS my hand and official seal.


                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

                                    EXHIBIT I


                                       -7-



STATE OF _______________)
                        ) ss.
COUNTY OF ______________)

     On _______________________, before me, _____________________, a Notary
Public in and for said state, personally appeared ______________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.


                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

STATE OF _______________)
                        ) ss.
COUNTY OF ______________)

     On  _______________________, before me, _______________________, a Notary
Public in and for said state, personally appeared _______________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument

     WITNESS my hand and official seal.


                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

                                  EXHIBIT I


                                      -8-



STATE OF ___________________________ )
                                     )ss.
COUNTY OF __________________________ )

     On _______________, before me, ____________________, a Notary Public in and
for said state, personally appeared ________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.


                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

STATE OF ___________________________ )
                                     )ss.
COUNTY OF __________________________ )

     On _________________, before me, __________________, a Notary Public in and
for said state, personally appeared ________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.


                                        ----------------------------------------
                                        Notary Public in and for said State

(SEAL)

                                    EXHIBIT I


                                      -9-



                                   SCHEDULE 1

                              PROPERTY DESCRIPTION

     Lot 2, Southshore Corporate Park, in the City of Gresham, County of
Multnomah and State of Oregon, Plat Book 1243 Pages 12 through 18 inclusive.

                             SCHEDULE 1 to EXHIBIT I


                                       -1-



                                   SCHEDULE 2

                     IDENTIFY LEASE AND LIST ALL AMENDMENTS,
                 SUPPLEMENTS, SIDE LETTERS AND OTHER AGREEMENTS
             AND MEMORANDA PERTAINING TO LEASE, PREMISES OR PROPERTY

1)   Multi-Tenant Industrial Triple Net Lease dated December 15, 2000 between
     Borrower and Tenant.

                             SCHEDULE 2 to EXHIBIT I


                                      -1-



                                   SCHEDULE 3

                   LIST OF PURCHASE, EXPANSION, FIRST REFUSAL
                          EXTENSION AND RENEWAL OPTIONS

1)   One (1) five (5) year option to extend the term of the Lease pursuant to
     Section 19 of the Addendum to Lease.

                             SCHEDULE 3 to EXHIBIT I


                                       -1-



                                   SCHEDULE 4

               LIST ANY EXISTING DEFAULTS OR OFFSETS UNDER LEASE

None.

                             SCHEDULE 4 to EXHIBIT I


                                      -1-



                                   SCHEDULE 5

                              MODIFIED LEASE TERMS

None

                             SCHEDULE 5 to EXHIBIT I


                                      -1-



                    MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE

                        Effective Date: December 15, 2000
                (the date set forth below Landlord's signature)

                             BASIC LEASE INFORMATION

Landlord:                CATELLUS DEVELOPMENT CORPORATION,
                         a Delaware corporation

Landlord's Address For   201 Mission Street
   Notice:               San Francisco, California 94105
                         Attn: Asset Management & Office of General Counsel
                         Telephone: (415)974-4500
                         Fax: (415)974-4687

With a Copy to:          CB Richard Ellis
                         1300 SW 5th Avenue, Suite 2600
                         Portland, Oregon 97201
                         Attn: Property Management
                         Telephone: (503)221-1900
                         Fax: (503)221-4873

Landlord's Address For   File # 1918
   Payment of Rent:      P.O. Box 61000
                         San Francisco, California 94161-1918

Tenant:                  SYNETICS SOLUTIONS INC.,
                         an Oregon corporation

Tenant's Address For     7440 S.W. Bonita Avenue
   Notice:               Tigard, Oregon 97224
                         Attn: Koki Nakamura
                         Telephone: (503) 670-9934
                         Fax: (503)639-2264

Project:                 Those portions of "Southshore Corporate Park" located
                         in the City of Gresham, County of Multnomah, State of
                         Oregon. A conceptual plot plan of Southshore Corporate
                         Park (the "Site Plan") is attached hereto as Exhibit
                         A-1 (which indicates thereon the approximate location
                         of the Premises and other parcels of land within
                         Southshore Corporate Park as presently contemplated by
                         Landlord). Tenant acknowledges that Exhibit A-1 is
                         intended to be used only for illustrative purposes and
                         nothing contained therein shall constitute a
                         representation or warranty by Landlord.

Land:                    Approximately 10.2 acre parcel of land shown on the
                         Site Plan attached hereto as Exhibit A-1.


                                       (i)



                              
Building:                        An office/manufacturing/warehouse building
                                 located on the Land and containing
                                 approximately 180,000 rentable square feet.

Premises:                        Approximately 44,930 rentable square feet
                                 located within the Building as shown on Exhibit
                                 A-2.

Premises Address:                Southshore Corporate Park - Building C
   Street:                       4293 NE 189th Avenue
   City and State:               Gresham, Oregon 97230

Term:                            One Hundred Twenty (120) months

Possession Date:                 December 15, 2000

Commencement Date:               January 1, 2001

Monthly Base Rent:                            Monthly
                                 Months      Base Rent
                                 -------   ------------
                                    1-24    $16,399.45
                                   25-48    $17,383.42
                                   49-72    $18,462.42
                                   73-96    $19,532.00
                                  97-120    $20,703.93
                                 121-144+   $21,946.16
                                 145-168+   $23,262.93
                                 169-180+   $24,658.71

                                 +    Subject to the provisions of the Option to
                                      Extend set forth in Section 19 of the
                                      Addendum to Lease

Tenant's Share of Building       24.96%
Operating Expenses:

Tenant's Share of Project        10.01%
Operating Expenses:

Letter of Credit:                $98,394.00, subject to adjustment pursuant to
                                 Section 3.3

Broker:                          Landlord's Broker: CB Richard Ellis
                                 Tenant's Broker: Macadam Forbes, Inc.




                                      (ii)



                              
Lease Year:                      Shall refer to each twelve (12) month period
                                 during the Term commencing on the Commencement
                                 Date.

Permitted Uses:                  The manufacturing, warehousing and distribution
                                 of mini-clean room environment equipment and
                                 other related activities, together with
                                 collateral office space, all to the extent
                                 consistent with the character of the Project as
                                 a first-class industrial project. No other uses
                                 shall be permitted without the prior written
                                 consent of Landlord, which may be given or
                                 withheld in Landlord's sole and absolute
                                 discretion. In no event shall any use of the
                                 Premises violate the Prohibited Uses set forth
                                 in Exhibit E attached hereto or the terms of
                                 the CC&Rs (defined in Section 11 of the Lease)
                                 and all uses of the Premises shall at all times
                                 comply with and be consistent with all of the
                                 provisions of this Lease (including, without
                                 limitation, the Rules and Regulations attached
                                 hereto as Exhibit F) and applicable law.

Parking Spaces:                  Forty-Eight (48) unreserved parking spaces,
                                 subject to the terms of Section 1.4

Rentable Square Feet of          Shall mean (a) the total square footage of the
Premises:                        Premises, measured from the outside of the
                                 exterior walls of the Building and to the
                                 center of any demising walls separating the
                                 Premises from other premises in the Building,
                                 plus (b) a pro rata share of any common utility
                                 rooms and/or electrical vaults located in the
                                 Building that do not exclusively serve the
                                 Premises or other premises leased to other
                                 tenants of the Building (which pro rata share
                                 shall be the same percentage as Tenant's Share
                                 of Building Operating Expenses).

Rentable Square Feet of          Shall mean the total square footage of the
Building:                        Building, measured from the outside of the
                                 exterior walls of the Building to the center
                                 thereof.

Option to Extend:                One (1) five (5) year Option to Extend in
                                 accordance with Section 19 in the Addendum to
                                 Lease.



ADDENDUM

EXHIBITS

A-1   Site Plan
A-2   Premises
B     Work Letter
C     Commencement Date Memorandum
D     Insurance Certificate
E     Prohibited Uses
F     Rules and Regulations
G     Requirements for Improvements or Alterations by Tenant
H     Estoppel Certificate
I     Subordination, Non-Disturbance and Attornment Agreement
J     Arbitration Procedures
K     Form of Letter of Credit


                                      (iii)



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
1.    PREMISES ..........................................................     1
       1.1   Premises ...................................................     1
       1.2   Common Area ................................................     1
       1.3   Reserved Rights ............................................     1
       1.4   Parking ....................................................     1

2.    TERM ..............................................................     2
       2.1   Commencement Date ..........................................     2
       2.2   Intentionally Deleted ......................................     2
       2.3   Early Entry ................................................     2

3.    RENT ..............................................................     2
       3.1   Rent .......................................................     2
       3.2   Late Charge and Interest ...................................     3
       3.3   Letter of Credit ...........................................     3

4.    UTILITIES .........................................................     4

5.    TAXES .............................................................     4
       5.1   Real Property Taxes ........................................     4
       5.2   Definition of Real Property Taxes ..........................     4
       5.3   Personal Property Taxes ....................................     5

6.    OPERATING EXPENSES ................................................     5
       6.1   Operating Expenses .........................................     5
       6.2   Definition of Operating Expenses ...........................     5

7.    ESTIMATED EXPENSES ................................................     6
       7.1   Payment ....................................................     6
       7.2   Adjustment .................................................     6
       7.3   Audit Right ................................................     6

8.    INSURANCE .........................................................     7
       8.1   Landlord ...................................................     7
       8.2   Tenant .....................................................     7
       8.3   General ....................................................     8
       8.4   Indemnity ..................................................     8
       8.5   Exemption of Landlord from Liability .......................     9

9.    REPAIRS AND MAINTENANCE ...........................................     9
       9.1   Tenant .....................................................     9
       9.2   Landlord ...................................................    10
       9.3   Landlord's Failure to Perform ..............................    10

10.   ALTERATIONS .......................................................    11
      10.1   Trade Fixtures; Alterations ................................    11
      10.2   Damage; Removal ............................................    11
      10.3   Liens ......................................................    12
      10.4   Standard of Work ...........................................    12

11.   USE ...............................................................    12

12.   ENVIRONMENTAL MATTERS .............................................    13
      12.1   Hazardous Materials ........................................    13
      12.2   Tenant's Indemnification ...................................    13
      12.3   Pre-existing Conditions and Indemnification ................    14

13.   DAMAGE AND DESTRUCTION ............................................    14
      13.1   Casualty ...................................................    14
      13.2   Tenant's Fault .............................................    16



                                      (v)





                                                                            PAGE
                                                                            ----
                                                                         
      13.3   Uninsured Casualty .........................................    16
      13.4   Waiver .....................................................    16

14.   EMINENT DOMAIN ....................................................    16
      14.1   Total Condemnation .........................................    16
      14.2   Partial Condemnation .......................................    16
      14.3   Award ......................................................    17
      14.4   Temporary Condemnation .....................................    17

15.   DEFAULT ...........................................................    17
      15.1   Events of Defaults .........................................    17
      15.2   Remedies ...................................................    17
      15.3   Cumulative .................................................    18

16.   ASSIGNMENT AND SUBLETTING .........................................    19

17.   ESTOPPEL, ATTORNMENT AND SUBORDINATION ............................    19
      17.1   Estoppel ...................................................    19
      17.2   Subordination ..............................................    20
      17.3   Attornment .................................................    20

18.   MISCELLANEOUS .....................................................    20
      18.1   General ....................................................    20
      18.2   Signs ......................................................    21
      18.3   Waiver .....................................................    21
      18.4   Financial Statements .......................................    21
      18.5   Limitation of Liability ....................................    22
      18.6   Notices ....................................................    22
      18.7   Brokerage Commission .......................................    22
      18.8   Authorization ..............................................    22
      18.9   Holding Over; Surrender ....................................    22
      18.10  Join and Several ...........................................    23
      18.11  Convenants and Conditions ..................................    23
      18.12  Auctions ...................................................    23
      18.13  Consents ...................................................    23
      18.14  Force Majeure ..............................................    23
      18.15  Mortgage Protection ........................................    23
      18.16  Hazardous Substance Disclosure .............................    24
      18.17  ADA Compliance .............................................    24
      18.18  Addenda ....................................................    24



                                      (vi)



1.   PREMISES

     1.1 Premises. Landlord hereby leases to Tenant that portion of the Building
as shown on Exhibit A-2 attached hereto (the "Premises"), but excluding the
Common Area (defined below) and any other portion of the Building, the Land
and/or the Project. Tenant has determined that the Premises are acceptable for
Tenant's use and Tenant acknowledges that, except as set forth in the Work
Letter attached hereto as Exhibit B (the "Work Letter"), neither Landlord nor
any broker or agent has made any representations or warranties in connection
with the physical condition of the Premises or their fitness for Tenant's use
upon which Tenant has relied directly or indirectly for any purpose. By taking
possession of the Premises, Tenant accepts the Premises "AS-IS" and waives all
claims of defect in the Premises, except as set forth herein or in the Work
Letter. Tenant shall be responsible for confirming the street address of
Premises with the City.

     1.2 Common Area. Tenant may, subject to rules made by Landlord, use the
following areas on the Land or within the Building ("Building Common Area") in
common with Landlord and other tenants of the Building: hallways, stairwells,
entranceways, restroom facilities, refuse facilities, landscaped areas,
driveways necessary for access to the Premises, parking spaces and other common
facilities located in the Building and/or on the Land designated by Landlord
from time to time for the common use of all tenants of the Building. Tenant may,
subject to the CC&Rs (as defined in Section 11 below) and any rules or
regulations made by Landlord, use the following areas of the Project ("Project
Common Area") in common with Landlord, tenants of the Building and/or other
owners or lawful users of the Project: refuse facilities, landscaped areas,
roads, driveways necessary for access to the Premises, parking spaces, retention
basins and other common facilities designated by Landlord from time to time for
the common use of all tenants and owners of the Project. The Building Common
Area and the Project Common Area are collectively referred to herein as the
"Common Area".

     1.3 Reserved Rights. Landlord reserves the right to enter the Premises for
any reason upon reasonable notice to Tenant (or without notice in case of an
emergency) and/or to undertake the following all without abatement of rent or
liability to Tenant: inspect the Premises and/or the performance by Tenant of
the terms and conditions hereof; make such alterations, repairs, improvements or
additions to the Premises as required or permitted hereunder; change boundary
lines of the Land so long as such change does not materially and adversely
impact Tenant's use of the parking area and/or access to the Premises; install,
use, maintain, repair, alter, relocate or replace any pipes, ducts, conduits,
wires, equipment and other facilities (including, without limitation, cabling
and conduit for telecommunications facilities of any kind) in the Common Area or
the Building; install, maintain and operate conduit cabling within the utility
and/or conduit ducts and risers within the Building, as well as, grant lease,
license or use rights to third parties, to utilize the foregoing grant easements
or licenses on the Land and/or the Project; dedicate for public use portions of
the Land and/or the Project and record covenants, conditions and restrictions
affecting the Land and/or the Project and/or amendments to existing CC&Rs (as
defined below in Section 11 below) which do not unreasonably interfere with
Tenant's use of the Premises or impose additional material monetary obligations
on Tenant; change the name of the Building and/or the Project; affix reasonable
signs and displays on the Building and/or the Land; and, during the last six (6)
months of the Term, place signs for the rental of, and show the Premises to
prospective tenants.

     1.4 Parking. So long as this Lease is in effect and provided Tenant is not
in default hereunder, Landlord grants to Tenant and Tenant's customers,
suppliers, employees and invitees ("Tenant's Authorized Users") a non-exclusive
license to use up to forty-eight (48) parking spaces in the areas designated by
Landlord as parking facilities for the Building. All visitor parking will be on
a non-exclusive, in common basis with all other visitors and guests of the
Project Tenant will not use or allow any of Tenant's Authorized Users to use any
parking spaces which have been specifically assigned by Landlord for other uses
such as visitor parking or which have been designated by any governmental entity
as being restricted to certain uses. Landlord may assign any unreserved and
unassigned parking spaces and/or make all or any portion of such spaces
reserved, if Landlord reasonably determines that it is necessary for orderly and
efficient parking or for any other reasonable reason. Tenant and Tenant's
Authorized Users shall comply with all rules and regulations regarding parking
set forth in Exhibit F attached hereto and Tenant agrees to cause Tenant's
Authorized Users to comply with such rules and regulations. Landlord reserves
the right from time to time to modify and/or adopt such other reasonable and
non-discriminatory rules and regulations for the parking facilities as it deems
reasonably necessary for the operation of the parking facilities, but in no
event shall Landlord be entitled to charge fees for parking without the prior
written consent of Tenant, which is not to be unreasonably withheld or delayed.
Tenant may, at Tenant's sole cost and expense,



provide for the striping of additional parking spaces in the paved areas
adjacent to Tenant's loading docks and the fifty foot (50') wide concrete dock
apron, provided that (i) the addition of such spaces in the loading dock and
apron areas is in compliance with all applicable laws and (ii) any and all costs
associated with providing such parking spaces in the loading dock areas shall be
at Tenant's sole cost and expense, including, without limitation, any
landscaping requirements imposed by the City.

2.   TERM

     2.1 Commencement Date. The Term of the Lease shall commence ("Commencement
Date") on January 1, 2001; provided, however, Tenant's obligation to pay Rent
(as defined in Section 3.1 below) shall commence on December 15, 2000 (the
"Possession Date"). Rent shall be paid for the period between the Possession
Date and the Commencement Date (e.g., December 15 to January 1, 2001) at the
rate stated in the Basic Lease Information, prorated on the basis of a thirty
(30) day month, and shall be due and payable to Landlord on or before the
Possession Date. Concurrently with the execution of this Lease, Tenant shall
execute and deliver to Landlord the Commencement Date Memorandum attached hereto
as Exhibit C acknowledging (i) the Commencement Date, (ii) the Possession Date,
and (iii) the final square footage of the Premises.

     2.2 Intentionally Deleted

     2.3 Early Entry. Subject to the following provisions of this Section 2.3,
Tenant shall have the right to enter the Premises no earlier than fifteen (15)
days prior to the Possession Date to install phone systems, furniture, fixtures
and equipment, etc. and such early entry for such purposes shall not constitute
occupancy for operation of Tenant's business and shall not trigger the
Possession Date or the Commencement Date. Tenant agrees (i) any such early entry
by Tenant shall be at Tenant's sole risk, (ii) Tenant shall not interfere with
Landlord or Landlord's contractors completing work within the Premises or cause
any labor difficulties; Tenant, together with its employees, agents and
independent contractors will be subject to and will work under the direction of
Landlord's contractor, (iii) Tenant shall comply with and be bound by all
provisions of this Lease during the period of any such early entry except for
the payment of Rent, (iv) prior to entry upon the Premises by Tenant, Tenant
agrees to pay for and provide to Landlord certificates evidencing the existence
and amounts of liability insurance carried by Tenant, which coverage must comply
with the provisions of this Lease relating to insurance, (v) Tenant and its
agents and contractors agree to comply with all applicable laws, regulations,
permits and other approvals required to perform its work during the early entry
on the Premises, and (vi) Tenant agrees to indemnify, protect, defend and save
Landlord and the Premises harmless from and against any and all liens,
liabilities, losses, damages, costs, expenses, demands, actions, causes of
action and claims (including, without limitation, attorneys' fees and legal
costs) arising out of the early entry, use, construction, or occupancy of the
Premises by Tenant or its agents, employees or contractors.

3.   RENT

     3.1 Rent. Tenant shall pay to Landlord, at Landlord's Address for Payment
of Rent designated in the Basic Lease Information, or at such other address as
Landlord may from time to time designate in writing to Tenant for the payment of
Rent, the Base Rent, without notice, demand, offset or deduction, in advance, on
the first day of each calendar month. Landlord shall have no obligation to
notify Tenant of any increase in Rent and Tenant's obligation to pay all Rent
(and any increases) when due shall not be modified or altered by such lack of
notice from Landlord. It is intended that this Lease be a "triple net lease,"
and that the Rent to be paid hereunder by Tenant will be received by Landlord
without any deduction or offset whatsoever by Tenant, foreseeable or
unforeseeable. Except as expressly provided to the contrary in this Lease,
Landlord shall not be required to make any expenditure, incur any obligation, or
incur any liability of any kind whatsoever in connection with this Lease or the
ownership, construction, maintenance, operation or repair of the Premises or the
Project Upon the execution of this Lease, Tenant shall pay to Landlord the first
month's Base Rent. If the Term commences (or ends) on a date other than the
first (or last) day of a month, Base Rent shall be prorated on the basis of a
thirty (30) day month. All sums other than Base Rent which Tenant is obligated
to pay under this Lease shall be deemed to be additional rent due hereunder
("Additional Rent"), whether or not such sums are designated Additional Rent
and, together with the Base Rent, shall be due and payable to Landlord
commencing on the Possession Date. The term "Rent" means the Base Rent and all
Additional Rent payable hereunder.


                                       -2-



     3.2 Late Charge and Interest. The late payment of any Rent will cause
Landlord to incur additional costs, including administration and collection
costs and processing and accounting expenses and increased debt service
("Delinquency Costs"). If Landlord has not received any installment of Rent
within five (5) days after such amount is due, Tenant shall pay a late charge of
five percent (5%) of the delinquent amount, which is agreed to represent a
reasonable estimate of the Delinquency Costs incurred by Landlord. In addition,
all such delinquent amounts shall bear interest from the date such amount was
due until paid in full at a rate per annum ("Applicable Interest Rate") equal to
the lesser of (a) the maximum interest rate permitted by law or (b) five
percent (5%) above the rate publicly announced by Bank of America, N.A. (or if
Bank of America, N.A. ceases to exist, the largest bank then headquartered in
the State of California) ("Bank") as its "Reference Rate". If the use of the
announced Reference Rate is discontinued by the Bank, then the term Reference
Rate shall mean the announced rate charged by the Bank which is, from time to
time, substituted for the Reference Rate. Landlord and Tenant recognize that the
damage which Landlord shall suffer as a result of Tenant's failure to pay such
amounts is difficult to ascertain and said late charge and interest are the best
estimate of the damage which Landlord shall suffer in the event of late payment.
If a late charge becomes payable for any three (3) installments of Rent within
any twelve (12) month period, then the Rent shall automatically become due and
payable quarterly in advance.

     3.3 Letter of Credit

          3.3.1 Form of Letter of Credit. Concurrently with Tenant's execution
and delivery of this Lease, Tenant shall deliver to Landlord an unconditional,
irrevocable, standby letter of credit (the "Letter of Credit") with an
expiration date no earlier than twelve (12) months from the date of issuance in
the amount of Ninety Eight Thousand Three Hundred Ninety Four and No/100 Dollars
($98,394.00). The Letter of Credit shall be in the same form as Exhibit K
attached hereto. The Letter of Credit shall secure the full and faithful
performance of each provision of this Lease to be performed by Tenant. The
Letter of Credit shall be issued by a money-center bank, or another financial
institution acceptable to Landlord in its sole discretion. The Letter of Credit
must be presentable in San Francisco, California. If Tenant fails to pay Rent or
otherwise defaults with respect to any provision of this Lease and fails to cure
any such default within any applicable notice and cure period provided in this
Lease, then Landlord may execute one or more drafts on the Letter of Credit for
the payment of any Rent, or for the payment of any other sum for which Landlord
may become obligated by reason of Tenant's default, or for any payment to which
Landlord may become entitled by reason of Tenant's default, or for payment to
Landlord for any loss or damage which Landlord may suffer thereby. The Letter of
Credit shall contain language allowing Landlord to draw upon the Letter of
Credit upon presentation to the issuer of the Letter of Credit of Landlord's
written statement that Landlord is entitled to the funds represented by such
Letter of Credit in accordance with the terms hereof. If Landlord so uses or
applies all or any portion of the amount represented by the Letter of Credit,
then Tenant shall, within ten (10) days after written demand therefor, at
Landlord's sole option, (i) deposit cash with Landlord in lieu of the Letter of
Credit in the amount drawn, or (ii) deliver a replacement letter of credit in
the amount drawn so that the total amounts represented by the Letter of Credit
and the replacement letter of credit equals Ninety Eight Thousand Three Hundred
Ninety Four and No/100 Dollars ($98,394.00), and Tenant's failure to do so shall
be an Event of Default

          3.3.2 Annual Renewals. The Letter of Credit shall provide for
automatic annual renewals throughout the Term of this Lease unless, at least
sixty (60) days prior to any such date of expiration, the issuing bank shall
have given written notice to Landlord, by certified mail, return receipt
requested and at the Landlord's Address stated in the Basic Lease Information or
such other address as Landlord shall have given to the issuing bank, that the
Letter of Credit will not be renewed. Tenant shall, no later than thirty (30)
days prior to the expiration of the Letter of Credit or any replacement or
renewal thereof, deliver a new Letter of Credit substantially in the same form
as the then existing Letter of Credit except that the expiration date set forth
in such new Letter of Credit shall not be earlier than twelve (12) months after
the expiration date set forth in the Letter of Credit which is then being
replaced, and the issuer may be changed by Tenant to a financial institution
acceptable to Landlord in its sole discretion. If Tenant fails to deliver a new
Letter of Credit as required herein, then Landlord shall have the right, at its
sole option, to draw upon and present the then existing Letter of Credit for the
entire amount available thereunder. Until such time as Tenant shall thereafter
deliver a new Letter of Credit in the form and substance required hereunder,
Landlord shall retain possession of the funds so drawn as a security deposit to
secure Tenant's obligations under this Lease. Any such replacement Letter of
Credit shall satisfy and be subject to the provisions set forth in subparagraph
(a) above. Should the Letter of Credit then in effect be revoked or should the
creditworthiness of the issuer of the Letter of Credit then in effect become
impaired (in Landlord's sole judgment), then Tenant shall deliver a replacement
Letter of Credit in the form and substance required hereunder.


                                       -3-



          3.3.3 Changes. If the Permitted Use is amended (in Landlord's sole and
absolute discretion) to accommodate a change in the business of Tenant or to
accommodate a subtenant or assignee approved by Landlord, Landlord shall have
the right to increase the amount of the Letter of Credit to the extent
necessary, in Landlord's reasonable judgment, to account for any increased risk
to the Premises or increased wear and tear that the Premises may suffer as a
result thereof. If a change in control of Tenant occurs during this Lease and
following such change the financial condition of Tenant is, in Landlord's
reasonable judgment, reduced, Tenant shall cause the amount of the Letter of
Credit to be increased to an amount reasonably determined by Landlord based on
said change in financial condition.

          3.3.4 Return of Letter of Credit. After Tenant vacates the Premises,
upon the expiration or sooner termination of this Lease, if Tenant is not then
in default or breach of any provision of this Lease, Landlord shall return to
Tenant the Letter of Credit and any unapplied cash balance of the Letter of
Credit that bad been previously drawn upon.

4. UTILITIES. Tenant shall pay all charges for heat, water, gas, electricity,
telephone and any other utilities used on or provided to the Premises. Landlord
shall not be liable to Tenant for interruption in or curtailment of any utility
service, nor shall any such interruption or curtailment constitute constructive
eviction or grounds for rental abatement. In the event the Premises is not
separately metered, Tenant shall have the option, subject to Landlord's prior
written consent and the terms of this Lease, to cause the Premises to be
separately metered at Tenant's cost and expense. If Tenant does not elect to
cause the Premises to be separately metered, Tenant shall pay a reasonable
proration of utilities, as determined by Landlord. Notwithstanding any provision
to the contrary contained in this Lease, in no event shall Tenant use or be
entitled to use more than 3,000 amps of power within the Premises.
Notwithstanding any provision of this Lease to the contrary, Landlord shall be
under no obligation to provide or cause to be provided any electrical service to
the Premises prior to the Commencement Date.

5.   TAXES

     5.1 Real Property Taxes. Tenant shall pay to Landlord Tenant's Share of
Real Property Taxes (as defined in Section 5.2) as a part of Operating Expenses
for each full or partial calendar year during the Lease Term in accordance with
the terms and provisions of Section 7.1 below.

     5.2 Definition of Real Property Taxes. "Real Property Taxes" shall be the
sum of the following: all real property taxes, assessments, supplementary taxes,
escape taxes, possessory-interest taxes, business or license taxes or fees,
service payments in lieu of such taxes or fees, annual or periodic license or
use fees, excises, transit and traffic charges, housing fund assessments, open
space charges, childcare fees, school, sewer and parking fees or any other
assessments, levies, fees, exactions or charges, general and special, ordinary
and extraordinary, unforeseen as well as foreseen (including fees "in-lieu" of
any such tax or assessment) which are assessed, levied, charged, conferred or
imposed by any public authority upon the Land, the Building or any other
improvements located on the Land and/or Project (or any real property comprising
any portion thereof) or its operations, together with all taxes, assessments or
other fees imposed by any public authority upon or measured by any Rent or other
charges payable hereunder, including any gross receipts tax or excise tax levied
by any governmental authority with respect to receipt of rental income, or upon,
with respect to or by reason of the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof, or documentary transfer taxes upon this transaction or any
document to which Tenant is a party creating or transferring an interest in the
Premises, together with any tax imposed in substitution, partially or totally,
of any tax previously included within the aforesaid definition or any additional
tax the nature of which was previously included within the aforesaid definition,
together with any and all costs and expenses (including, without limitation,
attorneys', administrative and expert witness fees and costs) of challenging any
of the foregoing or seeking the reduction in or abatement, redemption or return
of any of the foregoing, but only to the extent of any such reduction,
abatement, redemption or return. All references to Real Property Taxes during a
particular year shall be deemed to refer to taxes accrued during such year,
including supplemental tax bills regardless of when they are actually assessed
and without regard to when such taxes are payable. Real Property Taxes shall
expressly include One Hundred Percent (100%) of any increase or supplemental
assessments accruing as a result of the construction of the Building, or any
other improvements located on the Land. In addition to Tenant's Share of Real
Property Taxes (paid as a part of Operating Expenses), Tenant shall pay to
Landlord One Hundred Percent (100%) of any increase in the assessed value of the
Land directly attributable to the value of any Tenant Improvements (as defined
in the Work Letter, if


                                       -4-



any). The obligation of Tenant to pay Real Property Taxes (including any
supplemental taxes) for the last full and/or partial year(s) of the Term shall
survive the expiration or early termination of this Lease. In no event shall
Tenant or any Tenant Party (as defined in Section 12.1) be entitled to file any
property tax assessment appeal; provided, however, Tenant may appeal any
personal property taxes assessed on personal property which (x) is owned by
Tenant, (y) is not affixed to any portion of the Premises and (z) is not deemed
to be a fixture under the laws of the State of Oregon. Nothing contained in this
Lease shall require Tenant to pay any franchise, corporate, estate or
inheritance tax of Landlord, or any income, profits or revenue tax or charge
upon the net income of Landlord. Subject to the terms of this Section 5.2, Real
Property Taxes for partial years, if any, falling within the Term shall be
prorated.

     5.3 Personal Property Taxes. Prior to delinquency, Tenant shall pay all
taxes and assessments levied upon trade fixtures, alterations, additions,
improvements, inventories and other personal property located and/or installed
on the Premises by Tenant; and Tenant shall provide Landlord copies of receipts
for payment of all such taxes and assessments. To the extent any such taxes are
not separately assessed or billed to Tenant, Tenant shall pay the amount thereof
as invoiced by Landlord.

6. OPERATING EXPENSES

     6.1 Operating Expenses. Tenant shall pay to Landlord Tenant's Share of the
Building Operating Expenses and Tenant's Share of Project Operating Expenses for
each full or partial calendar year during the Lease Term, as provided in Section
7.1 below.

     6.2 Definition of Operating Expenses. "Operating Expenses" shall mean
collectively the "Building Operating Expenses" and the "Project Operating
Expenses" as defined in this Section 6.2.

          6.2.1 "Building Operating Expenses" means the total costs and expenses
incurred by Landlord in the ownership, operation, maintenance, repair and
management of the Building, the Land and/or the Building Common Area, including,
but not limited to: (a) repair, replacement, maintenance, utility costs and
landscaping of the Building Common Area, including, but not limited to, any and
all costs of maintenance, repair and replacement of all parking areas (including
bumpers, sweeping, striping and slurry coating), common driveways, loading and
unloading areas, trash areas, outdoor lighting, sidewalks, walkways,
landscaping, irrigation systems, fences and gates and other costs which are
allocable to the Building and/or the Land including any costs under the terms of
any CC&Rs affecting the real property, (b) non-structural maintenance, repair
and replacement of the roof (and roof membrane), skylights and exterior walls of
the Premises (including painting); (c) insurance deductibles and the costs
relating to the insurance maintained by Landlord as described in Section 8.1
below, including, without limitation, Landlord's cost of any deductible or self
insurance retention; (d) maintenance contracts for, and the repair and
replacement of, the heating, ventilation and air-conditioning (HVAC) systems and
elevators, if any; (e) maintenance, repair, replacement, monitoring and
operation of the fire/life safety and sprinkler system (to the extent Landlord
is obligated to do so pursuant to Section 9.2); (f) trash collection; (g)
capital improvements or capital replacements (excluding the roof structure) made
to or capital assets acquired for the Building or the Land after the
Commencement Date that in Landlord's good faith judgment are intended to reduce
Building Operating Expenses or are reasonably necessary for the health and
safety of the occupants of the Building or are required under any governmental
law or regulation, which capital costs, or an allocable portion thereof, shall
be amortized over the period determined by Landlord, together with interest on
the unamortized balance at the Applicable Interest Rate, all in accordance with
"generally accepted accounting principles" ("GAAP") consistently applied; (h)
commercially reasonable reserves set aside for maintenance and repair; (i) Real
Property Taxes attributable to the Land; and (j) any other costs, except as
noted in this Lease, incurred by Landlord related to the Building and/or the
Land and not related to the Project as a whole. Notwithstanding any provision to
the contrary contained in this Section 6.2.1, Tenant shall pay to Landlord an
amount equal to three percent (3%) of Rent for the costs and fees incurred by
Landlord in connection with the management of this Lease, the Premises, the
Building and/or the Land including the cost of those services which are
customarily performed by a property management services company, whether
performed internally or through an outside management company. Building
Operating Expenses shall not include (i) replacement of or structural repairs to
the roof, slab or the exterior walls; (ii) repairs to the extent covered by
insurance proceeds, or paid by Tenant or other third parties; (iii) alterations
solely attributable to tenants of the Project other than Tenant; (iv) marketing
and legal expenses; (v) any cost or expense associated with compliance with any
laws, ordinances, rules or regulations regarding any condition existing in the
Building or on the Land if


                                       -5-



such condition existed prior to the Commencement Date, including, but not
limited to removal of any and all asbestos and other toxic and hazardous
substances located in the Premises; and (vi) any costs or expenses being charged
directly and solely to other tenants in the Building (other than pursuant to the
operating expenses clauses of the lease(s) of such other tenant(s)).

          62.2 Project Operating Expenses. "Project Operating Expenses" shall
include all reasonable and necessary expenses incurred by Landlord in the
ownership, operation, maintenance, repair and management of the Project Common
Area, including, without limitation, Real Property Taxes attributable to the
Project Common Area; provided, however that all improvements or replacements
made to or assets acquired for the Project after the Commencement Date that are
reasonably expected to reduce Project Operating Expenses or are reasonably
necessary for the health and safety of the occupants of the Project or required
under any government of law or regulation, which costs, or an allocable portion
thereof, shall be amortized over the period determined by Landlord, together
with interest on the unamortized balance at the Applicable interest Rate
actually paid to third party lenders, all in accordance with GAAP consistently
applied.

7. ESTIMATED EXPENSES

     7.1 Payment. "Estimated Expenses" for any particular year shall mean
Landlord's estimate of Operating Expenses for a calendar year. Tenant shall pay
Tenant's Share of the Estimated Expenses with installments of Base Rent in
monthly installments of one-twelfth (l/12th) thereof on the first day of each
calendar month during such year. If at any time Landlord determines that
Operating Expenses are projected to vary from the then Estimated Expenses,
Landlord may, by notice to Tenant, revise such Estimated Expenses, and Tenant's
monthly installments for the remainder of such year shall be adjusted so that by
the end of such calendar year Tenant has paid to Landlord Tenant's Share of the
revised Estimated Expenses for such year.

     7.2 Adjustment. "Operating Expenses Adjustment" (or "Adjustment") shall
mean the difference between Tenant's Share of Estimated Expenses and Tenant's
Share of Operating Expenses for any calendar year. After the end of each
calendar year, Landlord shall deliver to Tenant a statement of Tenant's Share of
Operating Expenses for such calendar year, accompanied by a computation in
sufficient detail of the Adjustment. If Tenant's payments are less than Tenant's
Share, then Tenant shall pay the difference within twenty (20) days after
receipt of such statement Tenant's obligation to pay such amount shall survive
the expiration or termination of this Lease. If Tenant's payments exceed
Tenant's Share, then (provided that Tenant is not in material default), Landlord
shall credit such excess amount to future installments of Tenant's Share for the
next calendar year. If Tenant is in material default, Landlord may, but shall
not be required to, credit such amount to Rent arrearages.

     7.3 Audit Right. In the event of any dispute as to the amount of Tenant's
Share of Operating Expenses, Tenant or an accounting firm selected by Tenant and
reasonably satisfactory to Landlord will have the right, by prior written notice
("Audit Notice") given within ninety (90) days ("Audit Period") following
receipt of an actual statement of Operating Expenses ("Actual Statement") and at
reasonable times during normal business hours, to audit Landlord's accounting
records with respect to Operating Expenses relative to the year to which such
Actual Statement relates at the office of Landlord at which records are kept or,
at Landlord's election, the office of Landlord's property manager (if any). In
no event will Landlord or its property manager be required to (i) photocopy any
accounting records or other items or contracts, (ii) create any ledgers or
schedules not already in existence, (iii) incur any costs or expenses relative
to such inspection, or (iv) perform any other tasks other than making available
such accounting records as aforesaid. Neither Tenant nor its auditor may leave
the office of Landlord with originals of any materials supplied by Landlord.
Tenant must pay Tenant's Share of Operating Expenses when due pursuant to the
terms of this Lease and may not withhold payment of Operating Expenses or any
other rent pending results of the audit or during a dispute regarding Operating
Expenses. The audit must be completed within sixty (60) days of the date of
Tenant's Audit Notice and the results of such audit shall be delivered to
Landlord within seventy-five (75)days of the date of Tenant's Audit Notice. If
Tenant does not comply with any of the aforementioned time frames, then such
Actual Statement will be conclusively binding on Tenant. If such audit or review
correctly reveals that Landlord has overcharged Tenant, then within thirty (30)
days after the results of such audit are made available to Landlord, the amount
of such overcharge shall be deducted from the installments of Tenant's Share of
Operating Expenses next becoming due. If the audit reveals that Tenant was
undercharged, then within thirty (30) days after the results of the audit are
made available to Tenant, Tenant agrees to reimburse Landlord the amount of such
undercharge. Tenant agrees to pay the cost of such audit, provided that if the
audit


                                       -6-



reveals that Landlord's determination of Tenant's Share of Operating Expenses as
set forth in the relevant Actual Statement was in error in Landlord's favor by
more than five percent (5%) of the amount charged by Landlord to Tenant pursuant
to such Actual Statement, then Landlord agrees to pay the reasonable,
third-party cost of such audit incurred by Tenant. To the extent Landlord must
pay the cost of such audit, such cost shall not exceed a reasonable hourly
charge for a reasonable amount of hours spent by such third-party in connection
with the audit. Tenant agrees to keep the results of the audit confidential and
will cause its agents, employees and contractors to keep such results
confidential. To that end, Landlord may require Tenant and its auditor to
execute a confidentiality agreement provided by Landlord.

8. INSURANCE

     8.1 Landlord. Landlord shall maintain insurance through individual or
blanket policies insuring the Building against fire and extended coverage
(including, if Landlord elects, "all risk" coverage, earthquake/volcanic action,
flood and/or surface water insurance) for the full replacement cost of the
Building, with deductibles and the form and endorsements of such coverage as
selected by Landlord, together with rental abatement insurance against loss of
Rent in an amount equal to the amount of Rent for a period of at least twelve
(12) months commencing on the date of loss. Landlord may also carry such other
insurance as is commercially reasonable (when compared to insurance customarily
carried by sophisticated, institutional landlords for the protection of such
landlords and the production of properties similar to the Premises), including,
without limitation, liability insurance in such amounts and on such terms as
Landlord shall determine. Tenant shall pay to Landlord, as a portion of the
Operating Expenses, the costs of the insurance coverages described herein,
including, without limitation, Landlord's cost of any self-insurance deductible
or retention.

     8.2 Tenant. Tenant shall, at Tenant's expense, obtain and keep in force at
all times the following insurance:

          8.2.1 Commercial General Liability Insurance (Occurrence Form). A
policy of commercial general liability insurance (occurrence form) having a
combined single limit of not less than Two Million Dollars ($2,000,000) per
occurrence and Two Million Dollars ($2,000,000) aggregate per location if Tenant
has multiple locations, providing coverage for, among other things, blanket
contractual liability, premises, products/completed operations with an
"Additional Insured-Managers or Lessors of Premises Endorsement" and containing
the "Amendment of the Pollution Exclusion Endorsement" for damage caused by
heat, smoke or fumes from a hostile fire, and personal and advertising injury
coverage, with deletion of the exclusion for operations within fifty (50) feet
of a railroad track (railroad protective liability), if applicable, and if
applicable, and, if necessary, Tenant shall provide for restoration of the
aggregate limit, and provided that the policy shall not contain any
intra-insured exclusions as between insured persons or organizations, but shall
include coverage for liability assumed under this Lease as an "insured contract"
for the performance of Tenant's indemnity obligations under this Lease;

          8.2.2 Automobile Liability Insurance. Business automobile liability
insurance having a combined single limit of not less than Two Million Dollars
($2,000,000) per occurrence and insuring Tenant against liability for claims
arising out of ownership, maintenance, or use of any owned, hired or non-owned
automobiles;

          8.2.3 Workers' Compensation and Employer's Liability Insurance.
Workers' compensation insurance having limits not less than those required by
state statute and federal statute, if applicable, and covering all persons
employed by Tenant in the conduct of its operations on the Premises (including
the all states endorsement and, if applicable, the volunteers endorsement),
together with employer's liability insurance coverage in the amount of at least
One Million Dollars ($1,000,000);

          8.2.4 Property Insurance. "All risk" property insurance including
boiler and machinery comprehensive form, if applicable, covering damage to or
loss of any of Tenant's personal property, fixtures, equipment and alterations,
including electronic data processing equipment (collectively "Tenant's
Property") (and coverage for the full replacement cost thereof including
business interruption of Tenant), together with, if the property of Tenant's
invitees is to be kept in the Premises, warehouser's legal liability or bailee
customers insurance for the full replacement cost of the property belonging to
invitees and located in the Premises; and


                                       -7-



          8.2.5 Business Interruption. Loss of income and extra expense
insurance in amounts as will reimburse Tenant for direct or indirect loss of
earnings attributable to all peril commonly insured against by prudent lessees
in the business of Tenant or attributable to prevention of access to the
Premises as a result of such perils.

     8.3 General

          8.3.1 Insurance Companies. Insurance required to be maintained by
Tenant shall be written by companies licensed to do business in the state in
which the Premises are located and having a "General Policyholders Rating" of at
least "A-/VIII" (or such higher rating as may be required by a lender having a
lien on the Premises) as set forth in the most current issue of "Best's
Insurance Guide."

          8.3.2 Certificates of Insurance. Tenant shall deliver to Landlord
certificates of insurance for all insurance required to be maintained by Tenant
in the form of Exhibit D, attached hereto (or in a form acceptable to Landlord
in its sole discretion), no later than seven (7) days prior to the date of
possession of the Premises. Tenant shall, at least ten (10) days prior to
expiration of the policy, furnish Landlord with certificates of renewal or
"binders" thereof. Each certificate shall expressly provide that such policies
shall not be cancelable or otherwise subject to modification except after sixty
(60) days prior written notice to the parties named as additional insureds in
this Lease (except in the case of cancellation for nonpayment of premium in
which case cancellation shall not take effect until at least ten (10) days'
notice has been given to Landlord). If Tenant fails to maintain any insurance
required in this Lease, Tenant shall be liable for all losses and costs suffered
or incurred by Landlord (including litigation costs and attorneys' fees and
expenses) resulting from said failure.

          8.3.3 Additional Insureds. Landlord, Landlord's lender, if any, and
any property management company of Landlord for the Premises shall be named as
additional insureds on a form approved by Landlord under all of the policies
required by Section 8.2.1. The policies required under Section 8.2.1 shall
provide for severability of interest.

          8.3.4 Primary Coverage. All insurance to be maintained by Tenant
shall, except for workers' compensation and employer's liability insurance, be
primary, without right of contribution from insurance of Landlord. Any umbrella
liability policy or excess liability policy (which shall be in "following form")
shall provide that if the underlying aggregate is exhausted, the excess coverage
will drop down as primary insurance. The limits of insurance maintained by
Tenant shall not limit Tenant's liability under this Lease.

          8.3.5 Mutual Waiver of Subrogation. Subject to Section 13.2, whenever
(a) any loss, cost, damage or expense resulting from fire, explosion or any
other casualties incurred by either Landlord or Tenant or by anyone claiming by,
through or under Landlord or Tenant in connection with the Premises, and (b)
such party is covered in whole or in part by insurance (or would have been
covered but for such party's failure to maintain the coverage required in this
Section 8) with respect to such loss, cost, damage or expense or as required
under this Lease to be self-insured, then the party so insured (or so required)
hereby waives (on its own behalf and on behalf of its insured) any claims
against and releases the party from any liability said other party may have on
account of such loss, cost, damage or expense. All insurance which is carried by
either party to insure against damage or loss to property shall include
provisions denying to each respective insurer rights of subrogation and recovery
against the other party.

          8.3.6 Notification of Incidents. Tenant shall notify Landlord within
twenty-four (24) hours after the occurrence of any accidents or incidents in the
Premises, the Building, Common Areas or the Project which could give rise to a
claim under any of the insurance policies required under this Section 8.

     8.4 Indemnity. Tenant shall indemnify, protect, defend (by counsel
acceptable to Landlord) and hold harmless Landlord and Landlord's affiliated
entities, and each of their respective members, managers, partners, directors,
officers, employees, shareholders, lenders, agents, contractors, successors and
assigns from and against any and all claims, judgments, causes of action,
damages, penalties, costs, liabilities, and expenses, including all costs,
reasonable attorneys' fees, expenses and liabilities incurred in the defense of
any such claim or any action or proceeding brought thereon, arising at any time
during or after the Term as a result (directly or indirectly) of or in
connection with (i) any default in the performance of any obligation on Tenant's
part to be performed under the terms of this Lease, or (ii) Tenant's use of the
Premises, the conduct of Tenant's business or any activity, work or


                                       -8-



things done, permitted or suffered by Tenant or any Tenant Party in or about the
Premises, the Building, the Common Area or other portions of the Project, except
for claims caused solely by Landlord's gross negligence or willful misconduct.
The obligations of Tenant under this Section 8.4 shall survive the termination
of this Lease with respect to any claims or liability arising prior to such
termination. Landlord shall indemnify, protect, defend (by counsel reasonably
acceptable to Tenant) and hold harmless Tenant and Tenant's affiliated entities,
and each of their respective members, managers, partners, directors, officers,
employees, shareholders, lenders, agents, contractors, successors and assigns
from and against any and all claims, judgments, causes of action, damages,
penalties, costs, liabilities, and expenses, including all costs, reasonable
attorney's fees, expenses and liabilities incurred in the defense of any such
claim or any action or proceeding brought thereon caused solely by Landlord's
gross negligence or willful misconduct. The obligations of Landlord under this
Section 8.4 shall survive the termination of this Lease with respect to any
claims or liability arising prior to such termination.

     8.5 Exemption of Landlord from Liability. Tenant, as a material part of the
consideration to Landlord, hereby assumes all risk of damage to property
including, but not limited to, Tenant's fixtures, equipment, furniture and
alterations or illness or injury to persons in, upon or about the Premises, the
Building, the Land, the Common Area or other portions of the Project arising
from any cause, and Tenant hereby expressly releases Landlord and waives all
claims in respect thereof against Landlord, except only such claims which are
caused solely by Landlord's gross negligence or willful misconduct or which are
expressly provided for in Section 12.3 hereof. Tenant hereby agrees that
Landlord shall not be liable for injury to Tenant's business or any loss of
income therefrom. Tenant hereby further agrees that Landlord shall not be liable
for damage to the property of Tenant, or injury to or illness or death of Tenant
or any Tenant Party or any other person in or about the Premises, the Building,
the Common Area or the Project, whether such damage, illness or injury is caused
by fire, steam, electricity, gas, water or rain, or from the breakage, leakage
or other defects of sprinklers, wires, appliances, ventilation, plumbing, air
conditioning or lighting fixtures, or from any other cause, and whether said
damage, illness or injury results from conditions arising upon the Premises,
upon other portions of the Building or from other sources or places, and
regardless of whether the cause of such damage, illness or injury or the means
of repairing the same is inaccessible to Tenant, except only damage, illness or
injury caused solely by Landlord's gross negligence or willful misconduct or
which is expressly provided to the contrary in Section 12.3 hereof. Landlord
shall not be liable for any damages arising from any act or neglect of any
contractor or other tenant, if any, of the Building or the Project or Landlord's
failure to enforce the terms of any agreements with parties other than Tenant;
provided that Landlord shall use its commercially reasonable efforts to enforce
the terms of any agreements with parties other than Tenant.

9. REPAIRS AND MAINTENANCE

     9.1 Tenant. Tenant, at Tenant's sole cost and expense, shall keep and
maintain the Premises (interior and exterior, excluding roofing and painting),
including, without limitation, loading docks, roll up doors and ramps, floors,
subfloors and floor coverings, walls and wall coverings, doors, windows, glass,
plate glass, locks, ceilings, skylights, lighting systems, interior plumbing,
electrical and mechanical systems and wiring, appliances and devices using or
containing refrigerants, fixtures and equipment in good repair and in a clean
and safe condition, and repair and/or replace any and all of the foregoing in a
clean and safe condition, in good order, condition and repair. Without limiting
the foregoing, Tenant shall, at Tenant's sole expense, immediately replace all
broken glass in the Premises with glass equal to or in excess of the
specification and quality of the original glass; and repair any area damaged by
Tenant, Tenant's agents, employees, invitees and visitors, including any damage
caused by any roof penetration, whether or not such roof penetration was
approved by Landlord. All repairs and replacements by Tenant shall be made and
performed: (a) at Tenant's cost and expense and at such time and in such manner
as Landlord may designate, (b) by contractors or mechanics approved by Landlord,
(c) so that same shall be at least equal in quality, value and utility to the
original work or installation, (d) in a manner and using equipment and materials
that will not interfere with or impair the operations, use or occupation of the
Building or any of the mechanical, electrical, plumbing or other systems in the
Building or the Project, and (e) in accordance with the Rules and Regulations
and all Applicable Laws (as defined in Section 11). In the event Tenant fails,
in the reasonable judgment of Landlord, to maintain the Premises in accordance
with the obligations under the Lease, which failure continues at the end of
fifteen (15) days following Tenant's receipt of written notice from Landlord
stating the nature of the failure, or in the case of an emergency immediately
without prior notice, Landlord shall have the right to enter the Premises and
perform such maintenance, repairs or refurbishing at Tenant's sole cost and
expense (including a sum for overhead to Landlord equal to ten percent (10%) of
the costs of maintenance, repairs or refurbishing). Tenant shall maintain
written records of maintenance and repairs, as required by any Applicable


                                       -9-



Law, and shall use certified technicians to perform such maintenance and
repairs, as so required. Tenant shall deliver full and complete copies of all
service or maintenance contracts entered into by Tenant for the Premises to
Landlord within one hundred twenty (120) days after the Commencement Date.

     9.2 Landlord. Landlord shall, subject to the following limitations, repair
damage to structural portions of the roof, foundation and load-bearing portions
of walls (excluding wall coverings, painting, glass and doors) of the Building,
and damage to the exterior walls and other structural portions of the Building;
provided, if such damage is caused by an act or omission of Tenant, or any
Tenant Party, then such repairs shall be at Tenant's sole expense. Landlord
shall not be required to make any repair resulting from (i) any alteration or
modification to the Building or to mechanical equipment within the Building
performed by, for or because of Tenant or to special equipment or systems
installed by, for or because of Tenant, (ii) the installation, use or operation
of Tenant's property, fixtures and equipment, (iii) the moving of Tenant's
property in or out of the Building or in and about the Premises, (iv) Tenant's
use or occupancy of the Premises in violation of Section 11 of this Lease or in
the manner not contemplated by the parties at the time of the execution of this
Lease, (v) the acts or omissions of Tenant or any Tenant Party, (vi) fire and
other casualty, except as provided by Section 13 of this Lease or (vii)
condemnation, except as provided in Section 14 of this Lease. Landlord shall
have no obligation to make repairs under this Section 9.2 until a reasonable
time after receipt of written notice from Tenant of the need for such repairs.
Subject to Section 9.3, there shall be no abatement of Rent during the
performance of such work, provided that neither the access to nor use of the
Premises is materially impaired in which case Tenant's exclusive remedy shall be
determined in accordance with Section 9.3 below. Landlord shall not be liable to
Tenant for injury or damage that may result from any defect in the construction
or condition of the Premises, nor for any damage that may result from
interruption of Tenant's use of the Premises during any repairs by Landlord,
provided that Landlord shall use its commercially reasonable efforts to enforce
the terms of any agreements with parties other than Tenant. Tenant waives any
right to repair the Premises, the Building and/or the Common Area at the expense
of Landlord under any Applicable Law.

     9.3 Landlord's Failure to Perform. In the event Landlord fails to commence
the repair of the Premises as required by Section 9.2 above ("Landlord Repair
Obligations") and such failure to commence such repair(s) continues at the end
of thirty (30) days following Landlord's receipt of written notice from Tenant
stating with particularity the nature of such failure, Tenant shall
simultaneously give Landlord and Landlord's mortgagee (provided Tenant has been
provided written notice of the address of such mortgagee) written notice
specifying such default and containing the following phrase (or substantially
similar to the following phrase) on page 1 of the notice in all capital letters
and boldface type (or it shall not be deemed validly given to Landlord) "YOUR
FAILURE TO COMMENCE THE CURE OF LANDLORD'S REPAIR OBLIGATIONS SET FORTH IN THIS
NOTICE WITHIN TEN (10) BUSINESS DAYS SHALL ENTITLE THE UNDERSIGNED TO CURE SUCH
DEFAULT AT LANDLORD'S EXPENSE WITHOUT FURTHER NOTICE". Landlord shall thereupon
have ten (10) business days in which to commence to cure the applicable Landlord
Repair Obligation. In addition, Landlord's mortgagee shall have the right (but
not the obligation) to cure or remedy Landlord's Repair Obligations upon the
terms and conditions of any SNDA (as defined in Section 17.2 below) entered into
by and between Tenant and any such lender, and if no such SNDA exists, then upon
the terms and conditions described in Section 18.15. In the event Landlord fails
to commence to cure the applicable Landlord Repair Obligation within said ten
(10) business day period and Tenant undertakes a Landlord Repair Obligation,
Tenant shall use a qualified, licensed and bondable contractor which normally
and regularly performs similar work on concrete tilt-up industrial buildings. If
Tenant thereafter delivers to Landlord an invoice by Tenant of its costs of
taking action which Tenant claims should have been taken by Landlord (the
"Tenant Invoice"), and if such Tenant Invoice sets forth a reasonably
particularized breakdown of its costs and expenses in connection with
undertaking such Landlord Repair Obligation, then Tenant shall be entitled to
offset against Base Rent the amount set forth in such Tenant Invoice following
delivery of the additional written notice described below; provided, however,
the amount of offset during any single month shall not exceed the greater of (A)
fifteen percent (15%) of the total Base Rent payable by Tenant to Landlord for
each applicable month or (B) the amount necessary to amortize fully Tenant's
costs of cure (plus interest at ten percent (10%) per annum on such costs) from
the date of completion of such cure to the expiration date of the Lease Term
(without regard to any unexercised renewal options), but in no event greater
than twenty percent (20%) of the total monthly Base Rent for any one month. The
unpaid balance of the Tenant's Invoice, if any, shall bear interest at an annual
rate of ten percent (10%). If, at any time, Landlord delivers to Tenant a
written objection to Tenant's claim that a particular Landlord Repair Obligation
is not required under the terms of this Lease, setting forth with reasonable
particularity Landlord's reasons for its claim that such repair action did not
have to be taken by Landlord


                                      -10-



pursuant to the terms of this Lease, then Tenant shall not be entitled to such
offset, but as Tenant's sole remedy, Tenant may proceed to claim a Landlord
default and, if elected by either Landlord or Tenant, the matter shall proceed
to resolution by arbitration pursuant to the arbitration procedures set forth in
attached Exhibit J. The costs of such arbitration (including reasonable
attorneys fees and costs awarded to the prevailing party, if any) shall be paid
to the prevailing party in the arbitration if and to the extent awarded by the
arbitrator. In the event that Landlord fails to pay any amount to Tenant within
twenty (20) days following delivery of the Tenant Invoice, then Tenant may
provide to Landlord a written demand therefor ("Final Demand") which contains
the following phrase (or substantially similar to the following phrase) on page
1 of the notice in all capital letters and boldface type (or it shall not be
deemed validly delivered to Landlord) "YOUR FAILURE TO REIMBURSE TENANT AS
REQUIRED HEREIN WITHIN FIFTEEN (15) DAYS SHALL ENTITLE THE UNDERSIGNED TO
EXERCISE CERTAIN OFFSET RIGHTS AS SET FORTH IN THE LEASE WITHOUT FURTHER
NOTICE." If Landlord fails to pay to Tenant the amount due to Tenant within
fifteen (15) days following Landlord's receipt of the Final Demand or if
Landlord fails to pay any award granted to Tenant pursuant to an arbitration
proceeding in the manner described above within the time frame established
pursuant to any such proceeding, then Tenant may offset from the next
installments of rent and other charges coming due under this Lease the full
amount owed by Landlord to Tenant (together with all accrued interest).

10. ALTERATIONS

     10.1 Trade Fixtures; Alterations. Tenant may install necessary trade
fixtures, equipment and furniture in the Premises, provided that such items are
installed and are removable without structural or material damage to the
Premises, or the Building. Without limiting the generality of the foregoing,
Landlord and Tenant hereby acknowledge that Tenant intends to install within the
Premises certain trade fixtures and equipment related to Tenant's Permitted Use
including, without limitation, powder coat room equipment ("Tenant's
Equipment"). Notwithstanding the foregoing, Tenant shall, prior to the
installation of Tenant's Equipment, deliver to Landlord for Landlord's review
and approval, which approval shall not be unreasonably withheld or delayed, an
inventory of Tenant's Equipment, the proposed location of such equipment within
the Premises and the specifications related to such items (including the gross
weight of each item included in Tenant's Equipment). Tenant shall not install or
locate any of Tenant's Equipment within the Premises unless and until Landlord
has approved the same in accordance with the preceding sentence. Tenant shall
not construct, nor allow to be constructed, any alterations or physical
additions in, about or to the Premises without obtaining the prior written
consent of Landlord, which consent shall be conditioned upon Tenant's compliance
with the provisions of Exhibit G and any other applicable requirements of
Landlord regarding construction of improvements and alterations. If Landlord
does not respond to a written request from Tenant made in accordance with
Exhibit G within ten (10) business days, then Landlord shall be deemed to
disapprove such request. In the event Tenant makes any alterations to the
Premises that trigger or give rise to a requirement that the Building or the
Premises come into compliance with any governmental laws, ordinances, statutes,
orders and/or regulations (such as ADA requirements), Tenant shall be fully
responsible for complying, at its sole cost and expense, with same. Tenant shall
file a notice of completion after completion of such work and provide Landlord
with a copy thereof.

     10.2 Damage; Removal. Tenant shall repair all damage to the Premises, the
Building, the Common Area or the Project caused by the Installation or removal
of Tenant's fixtures, equipment, furniture or alterations. Upon the expiration
or earlier termination of this Lease, Tenant shall remove any or all trade
fixtures, alterations, additions, improvements (including the Tenant
Improvements [as defined in the Work Letter]) and partitions ("Alteration(s)")
made or installed by or on behalf of Tenant; provided, however, Landlord has the
absolute right to require Tenant to have all or any portion of such items
designated by Landlord to remain on the Premises, in which event they shall be
and become the property of Landlord upon the termination of this Lease. Should
Tenant make any Alterations without the prior written approval of Landlord,
Landlord may require that Tenant remove any or all of such Alterations and
repair any damage to the Premises resulting from the installation and/or removal
of such Alterations at any time and from time to time. Subject to the conditions
set forth above, Tenant shall restore the Premises to its condition existing
prior to the construction of any Alterations. Tenant shall further patch and
fill all holes within the Premises. All penetrations of the roof shall be
resealed to a water tight condition. In no event shall Tenant remove from the
Building any mechanical or electrical systems or any wiring or any other aspect
of any systems within the Premises, unless Landlord specifically permits such
removal in writing. All such removals and restoration shall be accomplished in a
good and workmanlike manner and so as not to cause any damage to the Premises,
the Building, the Common Area or the Project whatsoever.


                                      -11-



     10.3 Liens. Tenant shall promptly pay and discharge all claims for labor
performed, supplies furnished and services rendered at the request of Tenant and
shall keep the Premises free of all mechanics' and materialmen's liens in
connection therewith. Tenant shall provide at least ten (10) days prior written
notice to Landlord before any labor is performed, supplies furnished or services
rendered on or at the Premises and Landlord shall have the right to post on the
Premises notices of non-responsibility. If any lien is filed, Tenant shall cause
such lien to be released and removed within ten (10) days after the date of
filing, and if Tenant fails to do so, Landlord may take such action as may be
necessary to remove such lien and Tenant shall pay Landlord such amounts
expended by Landlord together with interest thereon at the Applicable Interest
Rate from the date of expenditure.

     10.4 Standard of Work. All work to be performed by or for Tenant pursuant
hereto shall be performed diligently and in a first class, workmanlike manner,
and in compliance with the terms of provisions of Exhibit G, all Applicable
Laws, and/or Tenant and Landlord's insurance carriers. Landlord shall have the
right, but not the obligation, to inspect periodically the work on the Premises
and Landlord may require changes in the method or quality of the work.

11. USE. The Premises shall be used only for the Permitted Uses set forth in the
Basic Lease Information and for no other uses. Tenant's use of the Premises
shall be in compliance with and subject to all applicable laws, statutes, codes,
ordinances, orders, rules, regulations, conditions of approval and requirements
of all federal, state, county, municipal and governmental authorities and all
administrative or judicial orders or decrees and all permits, licenses,
approvals and other entitlements issued by governmental entities, and rules of
common law, relating to or affecting the Project, the Premises or the Building
or the use or operation thereof, whether now existing or hereafter enacted,
including, without limitation, the Americans with Disabilities Act of 1990, 42
U.S.C. 12111 et seg. (the "ADA") as the same may be amended from time to time,
all Environmental Laws (as defined in Section 12.1), and any covenants,
conditions and restrictions encumbering the Land and/or the Project or any
supplement thereto recorded in any official or public records with respect to
the Project or any portion thereof ("Applicable Laws"). From and after the date
hereof Tenant shall use the Premises and permit the Premises to be used solely
for uses permitted by that certain Declaration of Covenants, Conditions and
Restrictions for Southshore Corporate Park executed by Catellus Development
Corporation and recorded in the Official Records of Multnomah County, State of
Oregon on June 7, 1999 as Instrument No. 99113258 (the "CC&Rs"). In addition,
Tenant acknowledges that the Premises are subject to that certain Administrative
Order on Consent made and entered into by and among the United States
Environmental Protection Agency, the State of Oregon Department of Environmental
Quality and Winmar Pacific, Inc. dated effective as of April 16, 1991 (the
"Administrative Order"), which imposes certain covenants, conditions and
restrictions on Southshore Corporate Park. Tenant shall be responsible for
obtaining any permit, business license, or other permits or licenses required by
any governmental agency permitting Tenant's use or occupancy of the Premises. In
no event shall the Premises be used for any of the Prohibited Uses set forth on
Exhibit E attached hereto, as such Exhibit has been modified to conform to
Tenant's proposed use of the Premises. Notwithstanding any provision to the
contrary in this Section 11, in the event that a change in technology or similar
change in circumstances reasonably requires Tenant to use additional chemicals
or increased quantities of the permitted chemicals set forth on Schedule 1 to
Exhibit E (the "Permitted Hazardous Materials") in the manufacturing process
related to Tenant's Permitted Use, Tenant may submit to Landlord a written
request to modify Exhibit E which request shall identify the specific chemicals
and quantities to be used on the Premises (the "Proposed Hazardous Materials").
Landlord shall have ten (10) days from receipt of such a Tenant request to
approve or disapprove Tenant's request to modify the Permitted Hazardous
Materials in which case Landlord and Tenant shall execute an amendment to
Exhibit E of the Lease accordingly, provided, however, Landlord's approval
rights related to the Proposed Hazardous Materials shall be limited to the
Proposed Hazardous Materials' compliance with the CC&Rs and all Applicable Laws.
Subject to Tenant's obligation to comply with all Applicable Laws and the CC&Rs,
Landlord's failure to disapprove Tenant's requested modification to the
Permitted Hazardous Materials within such ten (10) day period shall be deemed
Landlord's approval thereof. Tenant shall comply with the rules and regulations
attached hereto as Exhibit F, together with such additional rules and
regulations as Landlord may from time to time prescribe. Tenant shall not commit
waste, overload the floors or structure of the Building, subject the Premises,
the Building, the Common Area or the Project to any use which would damage the
same or increase the risk of loss or violate any insurance coverage, permit any
unreasonable odors, smoke, dust, gas, substances, noise or vibrations to emanate
from the Premises, take any action which would constitute a nuisance or would
disturb, obstruct or endanger any other tenants, take any action which would
abrogate any warranties, or use or allow the Premises to be used for any
unlawful purpose. Tenant shall have the right in common with other tenants of
Landlord to use the parking facilities of the Project. Tenant agrees not to
overburden the parking facilities and


                                      -12-



agrees to cooperate with Landlord and other tenants in the use of parking
facilities. Landlord shall provide the number of parking spaces set forth in the
Basic Lease Information for use by Tenant. Landlord shall not be responsible for
non-compliance by any other tenant or occupant of the Project with, or
Landlord's failure to enforce, any of the rules or regulations or CC&Rs or any
other terms or provisions of such tenant's or occupant's lease. Tenant shall
promptly comply with the reasonable requirements of any board of fire insurance
underwriters or other similar body now or hereafter constituted. Tenant shall
not do any act which shall in any way encumber the title of Landlord in and to
the Premises, the Building or the Project.

12.  ENVIRONMENTAL MATTERS

     12.1 Hazardous Materials. Except as is specifically permitted pursuant to
Exhibit E (as modified from time to time in accordance with Section 11 of the
Lease), Tenant shall not cause nor permit, nor allow any of Tenant's employees,
agents, customers, visitors, invitees, licensees, contractors, assignees or
subtenants (individually, a "Tenant Party" and collectively, "Tenant's Parties")
to cause or permit, any Hazardous Materials to be brought upon, stored,
manufactured, generated, blended, handled, recycled, treated, disposed or used
on, under or about the Premises, the Building, the Common Area or the Project,
except for the Permitted Hazardous Materials and/or routine office and
janitorial supplies in usual and customary quantities stored, used and disposed
of in accordance with all applicable Environmental Laws. As used herein,
"Hazardous Materials" means any chemical, substance, material, controlled
substance, object, condition, waste, living organism or combination thereof,
whether solid, semi-solid, liquid or gaseous, which is or may be hazardous to
human health or safety or to the environment due to its radioactivity,
ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity,
mutagenicity, phytotoxicity, infectiousness or other harmful or potentially
harmful properties or effects, including, without limitation, tobacco smoke,
petroleum and petroleum products, asbestos, radon, polychlorinated biphenyls
(PCBs), refrigerants (including those substances defined in the Environmental
Protection Agency's "Refrigerant Recycling Rule," as amended from time to time)
and all of those chemicals, substances, materials, controlled substances,
objects, conditions, wastes, living organisms or combinations thereof which are
now or become in the future listed, defined or regulated in any manner by any
Environmental Law based upon, directly or indirectly, such properties or
effects. As used herein, "Environmental Laws" means any and all federal, state
or local environmental, health and/or safety-related laws, regulations,
standards, decisions of courts, ordinances, rules, codes, orders, decrees,
directives, guidelines, permits or permit conditions, currently existing and as
amended, enacted, issued or adopted in the future which are or become applicable
to Tenant, the Premises, the Building, the Common Area or the Project. Tenant
and Tenant's Parties shall comply with all Environmental Laws and promptly
notify Landlord in writing of the violation of any Environmental Law (or the
presence of any Hazardous Materials, other than the Permitted Hazardous
Materials and/or office and janitorial supplies as permitted above), or the
spill and/or release of any Hazardous Materials (including the Permitted
Hazardous Materials), in, on, under or about the Premises or the improvements or
the soil or groundwater thereunder. Landlord shall have the right to enter upon
and inspect the Premises and to conduct tests, monitoring and investigations. If
such tests indicate the presence of any environmental condition caused or
exacerbated by Tenant or any Tenant Party or arising during Tenant's or any
Tenant Party's occupancy, Tenant shall reimburse Landlord for the cost of
conducting such tests. The phrase "environmental condition" shall mean any
adverse condition relating to any Hazardous Materials or the environment,
including surface water, groundwater, drinking water supply, land, surface or
subsurface strata or the ambient air and includes air, land and water
pollutants, noise, vibration, light and odors. In the event of any such
environmental condition, Tenant shall promptly take any and all steps necessary
to rectify the same to the satisfaction of the applicable agencies and Landlord,
or shall, at Landlord's election, reimburse Landlord, upon demand, for the cost
to Landlord of performing rectifying work. The reimbursement shall be paid to
Landlord in advance of Landlord's performing such work, based upon Landlord's
reasonable estimate of the cost thereof; and upon completion of such work by
Landlord, Tenant shall pay to Landlord any shortfall promptly after receipt of
Landlord's bills therefor or Landlord shall promptly refund to Tenant any excess
deposit, as the case may be.

     12.2 Tenant's Indemnification. Tenant shall indemnify, protect, defend (by
counsel acceptable to Landlord) and hold harmless Landlord and Landlord's
affiliated entities, and each of their respective members, managers, partners,
directors, officers, employees, shareholders, lenders, agents, contractors,
successors and assigns (individually and collectively, "Indemnitees") from and
against any and all claims, judgments, causes of action, damages, penalties,
fines, taxes, costs, liabilities, losses and expenses arising at any time during
or after the Term as a result (directly or indirectly) of or in connection with
(a) Tenant and/or any Tenant Party's breach of this Section 12, or (b) the
presence, spill and/or release of Hazardous Materials on, under or about the
Premises or other property


                                      -13-



as a result (directly or indirectly) of Tenant's and/or any Tenant Party's
activities, including, without limitation, those involving any Hazardous
Materials (including the Permitted Hazardous Materials), or failure to act with
respect thereto, in connection with the Premises. This indemnity shall include,
without limitation, the cost of any required or necessary repair, cleanup or
detoxification, and the preparation and implementation of any closure,
monitoring or other required plans, whether such action is required or necessary
prior to or following the termination of this Lease. Neither the written consent
by Landlord to the presence of Hazardous Materials on, under or about the
Premises, nor the strict compliance by Tenant with all Environmental Laws, shall
excuse Tenant from Tenant's obligation of indemnification pursuant hereto.
Tenant's obligations pursuant to the foregoing indemnity shall survive the
expiration or termination of this Lease.

     12.3 Pre-existing Conditions and Indemnification

          12.3.1 Landlord hereby represents to Tenant that, to its actual
knowledge, no environmental condition (as defined in Section 12.1) in violation
of law presently exists as of the Effective Date on, under, or within the
Premises (a "Pre-existing Condition"). For purposes of this Lease, current
"actual knowledge" shall mean the actual, present knowledge of Dan Marcus and
Jim Adams as of the date of this Lease, without investigation or inquiry of any
kind.

          12.3.2 Landlord shall indemnify, protect, defend (by counsel
reasonably acceptable to Tenant) and hold harmless Tenant and its directors,
officers, employees, shareholders, lenders, and each of their respective
successors and assigns, from and against any and all claims, judgments, causes
of action, damages, penalties, fines, taxes, costs, liabilities, losses and
expenses (collectively, a "Claim") arising at any time during or after the Term
to the extent that such Claim results from any Pre-existing Condition which (i)
constitutes a breach of the representation set forth in Section 12.3.1, or (ii)
was authorized by Landlord or caused by the acts or omissions of Landlord (but
not the agents or contractors of Landlord or any other third party). The
indemnity obligation set forth in this Section 12.3.2 is limited to claims and
shall not include any consequential damages including, without limitation, any
relocation expenses, loss of revenue, or other losses incurred by any party.
Landlord's obligations pursuant to the foregoing indemnity shall survive the
termination of this Lease for a period of one (1) year and shall not apply to
any Claim not presented to Landlord in writing within said one (1) year period.

          12.3.3 Landlord shall indemnify, protect, defend (by counsel
reasonably acceptable to Tenant) and hold harmless Tenant and its directors,
officers, employees, shareholders, and lenders, and each of their respective
successors and assigns, from and against any and all orders, penalties, fines,
administrative actions, or other proceedings (collectively, a "Compliance
Obligation") commenced by any governmental agency including, without limitation,
the United States Environmental Protection Agency as a result of any
Pre-existing Condition (except to the extent that such Pre-existing Condition is
caused or aggravated by the act or omission of Tenant and/or Tenant's Parties).
The indemnity obligation set forth in this Section 12.3.3 is limited to
Compliance Obligations and shall not include any consequential damages
including, without limitation, any relocation expenses, loss of revenue, or
other losses incurred by any party. Landlord's obligations pursuant to the
foregoing indemnity shall survive the termination of this Lease for a period of
one (1) year and shall not apply to any Compliance Obligation not presented to
Landlord in writing within said one (1) year period.

          12.3.4 The indemnity obligations of Landlord set forth in Sections
12.3.2 and 12.3.3 above shall not be binding upon any lender acquiring
Landlord's interest in the Premises and/or this Lease pursuant to any
foreclosure proceeding, deed in lieu of foreclosure, or other enforcement action
taken pursuant to a deed of trust or mortgage encumbering the Premises.

13.  DAMAGE AND DESTRUCTION

     13.1 Casualty. If the Premises or Building should be damaged or destroyed
by fire or other casualty, Tenant shall give immediate written notice to
Landlord. Within thirty (30) days after receipt from Tenant of such written
notice, Landlord shall notify Tenant whether, after the date of the issuance of
permits for the necessary repair or reconstruction of the portion of the
Building or the Premises which was damaged, the necessary repairs can reasonably
be made: (a) within ninety (90) days; (b) in more than ninety (90) days but in
less than one hundred eighty (180) days; or (c) in more than one hundred eighty
(180) days.


                                      -14-



          13.1.1 Less Than 90 Days. If the Premises or Building should be
damaged only to such extent that rebuilding or repairs can reasonably be
completed within ninety (90) days after the issuance of permits for the
necessary repair or reconstruction of the portion of the Building or Premises
which was damaged or destroyed, this Lease shall not terminate and, provided
that insurance proceeds are available to fully repair the damage, subject to
Section 13.2 below, Landlord shall repair the Premises, except that Landlord
shall not be required to rebuild, repair or replace Tenant's Property which may
have been placed in, on or about the Premises by or for the benefit of Tenant.
If Tenant is required to vacate all or a portion of the Premises during
Landlord's repair thereof, the Rent payable hereunder shall be abated
proportionately on the basis of the size of the area of the Premises that is
damaged (i.e., the number of square feet of floor area of the Premises that is
damaged compared to the total square footage of the floor area of the Premises)
from the date Tenant vacates all or a portion of the Premises that was damaged
only to the extent rental abatement insurance proceeds are received by Landlord
(or would have been received but for Landlord's failure to carry the insurance
required to be carried by Landlord pursuant to Section 8.1 above) and only
during the period the Premises are unfit for occupancy.

          13.1.2 Greater Than 90 Days. If the Premises or Building should be
damaged only to such extent that rebuilding or repairs can reasonably be
completed in more than ninety (90) days but in less than one hundred eighty
(180) days after the issuance of permits for the necessary repair or
reconstruction of the portion of the Building or Premises which was damaged or
destroyed, then Landlord shall have the option of: (a) terminating the Lease
effective upon the occurrence of such damage, in which event the Rent shall be
abated from the date Tenant vacates the Premises; or (b) electing to repair the
Premises, provided insurance proceeds are available (or such proceeds would have
been available but for Landlord's failure to carry insurance as described in
Section 8.1 above) to fully repair the damage, except that Landlord shall not
be required to rebuild, repair or replace Tenant's Property which may have been
placed in, on or about the Premises by or for the benefit of Tenant. If Tenant
is required to vacate all or a portion of the Premises during Landlord's repair
thereof, the Rent payable hereunder shall be abated proportionately on the basis
of the size of the area of the Premises that is damaged (i.e., the number of
square feet of floor area of the Premises that is damaged compared to the total
square footage of the floor area of the Premises) from the date Tenant vacates
all or a portion of the Premises that was damaged only to the extent rental
abatement insurance proceeds are received by Landlord (or such proceeds would
have been received by Landlord but for Landlord's failure to carry rental
abatement insurance as described in Section 8.1 above) and only during the
period the Premises are unfit for occupancy. In the event that Landlord should
fail to substantially complete such repairs within one hundred eighty (180) days
after the issuance of permits for the necessary repair or reconstruction of the
portion of the Building or Premises which was damaged or destroyed, (such period
to be extended for delays caused by Tenant or because of any items of Force
Majeure, as hereinafter defined) and Tenant has not re-occupied the Premises,
Tenant shall have the right, as Tenant's exclusive remedy, within ten (10) days
after the expiration of such one hundred eighty (180) day period, and provided
that such repairs have not been substantially completed within such ten (10) day
period, to terminate this Lease by delivering written notice to Landlord as
Tenant's exclusive remedy, whereupon all rights hereunder shall cease and
terminate thirty (30) days after Landlord's receipt of such notice.

          13.1.3 Greater Than 180 Days. If the Premises or Building should be so
damaged that rebuilding or repairs cannot be completed within one hundred eighty
(180) days after the issuance of permits for the necessary repair or
reconstruction of the portion of the Building or Premises which was damaged or
destroyed, either Landlord or Tenant may terminate this Lease by giving written
notice within ten (10) days after notice from Landlord specifying such time
period of repair; and this Lease shall terminate and the Rent shall be abated
from the date Tenant vacates the Premises. In the event that neither party
elects to terminate this Lease, Landlord shall promptly commence and diligently
prosecute to completion the repairs to the Building or Premises, provided
insurance proceeds are available (or such proceeds would have been available but
for Landlord's failure to carry insurance as described in Section 8.1 above) to
repair the damage except that Landlord shall not be required to rebuild, repair
or replace Tenant's Property which may have been placed in, on or about the
Premises by or for the benefit of Tenant. If Tenant is required to vacate all or
a portion of the Premises during Landlord's repair thereof, the Rent payable
hereunder shall be abated proportionately on the basis of the size of the area
of the Premises that is damaged (i.e., the number of square feet of floor area
of the Premises that is damaged compared to the total square footage of the
floor area of the Premises), from the date Tenant vacates all or a portion of
the Premises that was damaged only to the extent rental abatement insurance
proceeds are received by Landlord (or such proceeds would have been received by
Landlord but for Landlord's failure to carry rental abatement insurance as
described in Section 8.1 above) and only during the period that the Premises are
unfit for occupancy.


                                      -15-



          13.1.4 Casualty During the Last Year of the Lease term.
Notwithstanding any other provisions hereof, if the Premises or the Building
shall be damaged within the last year of the Lease Term, and if the cost to
repair or reconstruct the portion of the Building or the Premises which was
damaged or destroyed shall exceed Landlord's then-applicable insurance
deductible, then, irrespective of the time necessary to complete such repair or
reconstruction, Landlord shall have the right, in its sole discretion, to
terminate the Lease effective upon the occurrence of such damage, in which event
the Rent shall be abated from the date Tenant vacates the Premises. The
foregoing right shall be in addition to any other right and option of Landlord
under this Section 13.

     13.2 Tenant's Fault. If the Premises or any portion of the Building is
damaged resulting from the negligence or breach of this Lease by Tenant or any
of Tenant's Parties, Rent shall not be reduced during the repair of such damage
and Tenant shall be liable to Landlord for the cost of the repair caused thereby
to the extent such cost is not covered by insurance proceeds received by
Landlord.

     13.3 Uninsured Casualty. Tenant shall be responsible for and shall pay to
Landlord Tenant's Share of any deductible or retention amount payable under the
property insurance for the Building. Notwithstanding Section 13.1, in the event
that the Premises or any portion of the Building is damaged to the extent Tenant
is unable to use the Premises and such damage is not covered by insurance
proceeds received by Landlord or in the event that the holder of any
indebtedness secured by the Premises requires that the insurance proceeds be
applied to such indebtedness, then Landlord shall have the right at Landlord's
option either (i) to repair such damage as soon as reasonably possible at
Landlord's expense, or (ii) to give written notice to Tenant within thirty (30)
days after the date of the occurrence of such damage of Landlord's intention to
terminate this Lease as of the date of the occurrence of such damage. In the
event Landlord elects to terminate this Lease, Tenant shall have the right
within ten (10) days after receipt of such notice to give written notice to
Landlord of Tenant's commitment to pay the cost of repair of such damage, in
which event this Lease shall continue in full force and effect, and Landlord
shall make such repairs as soon as reasonably possible subject to the following
condition: Tenant shall deposit with Landlord Landlord's estimated cost of such
repairs not later man ten (10) days prior to Landlord's commencement of the
repair work. If the cost of such repairs exceeds the amount deposited, Tenant
shall reimburse Landlord for such excess cost within fifteen (15) days after
receipt of an invoice from Landlord. Any amount deposited by Tenant in excess of
the cost of such repairs shall be refunded within thirty (30) days of Landlord's
final payment to Landlord's contractor. If Tenant does not give such notice
within the ten (10) day period, or fails to make such deposit as required, this
Lease shall terminate automatically as of the date of the occurrence of the
damage.

     13.4 Waiver. With respect to any damage or destruction which Landlord is
obligated to repair or may elect to repair, Tenant waives all rights to
terminate this Lease pursuant to rights otherwise presently or hereafter
accorded by law.

14.  EMINENT DOMAIN

     14.1 Total Condemnation. If all of the Premises is condemned by eminent
domain, inversely condemned or sold under threat of condemnation for any public
or quasi-public use or purpose ("Condemned"), this Lease shall terminate as of
the earlier of the date the condemning authority takes title to or possession of
the Premises, and Rent shall be adjusted to the date of termination.

     14.2 Partial Condemnation. If any portion of the Premises or the Building
is Condemned and such partial condemnation materially impairs Tenant's ability
to use the Premises for Tenant's business, Landlord shall have the option of
either (i) relocating Tenant to comparable space within the Project or (ii)
terminating this Lease as of the earlier of the date title vests in the
condemning authority or as of the date an order of immediate possession is
issued and Rent shall be adjusted to the date of termination. In the event of
relocation, Landlord shall pay the cost of constructing tenant improvements in
the new premises that are substantially equivalent to the improvements made
pursuant to the Work Letter, provided that Landlord receive from the condemning
authority proceeds sufficient to construct such improvements. If such partial
condemnation does not materially impair Tenant's ability to use the Premises for
the business of Tenant, Landlord shall promptly restore the Premises to the
extent of any condemnation proceeds recovered by Landlord, excluding the portion
thereof lost in such condemnation, and this Lease shall continue in full force
and effect except that after the date of such title vesting or order of
immediate possession Rent shall be adjusted as reasonably determined by
Landlord.


                                      -16-



     14.3 Award. If the Premises are wholly or partially Condemned, Landlord
shall be entitled to the entire award paid for such condemnation, and Tenant
waives any claim to any part of the award from Landlord or the condemning
authority; provided, however, Tenant shall have the right to recover from the
condemning authority such compensation as may be separately awarded to Tenant in
connection with costs in removing Tenant's merchandise, furniture, fixtures,
leasehold improvements and equipment to a new location, for business
interruption, loss of good will or other consequential damages. No condemnation
of any kind shall be construed to constitute an actual or constructive eviction
of Tenant or a breach of any express or implied covenant of quiet enjoyment.

     14.4 Temporary Condemnation. In the event of a temporary condemnation not
extending beyond the Term, this Lease shall remain in effect, Tenant shall
continue to pay Rent and Tenant shall receive any award made for such
condemnation except damages to any of Landlord's property. If a temporary
condemnation is for a period which extends beyond the Term, this Lease shall
terminate as of the date of initial occupancy by the condemning authority and
any such award shall be distributed in accordance with the preceding section. If
a temporary condemnation remains in effect at the expiration or earlier
termination of this Lease, Tenant shall pay Landlord the reasonable cost of
performing any obligations required of Tenant with respect to the surrender of
the Premises.

15.  DEFAULT

     15.1 Events of Defaults. The occurrence of any of the following events
shall, at Landlord's option, constitute an "Event of Default":

          15.1.1 Abandonment of the Premises for a period of thirty (30)
consecutive days;

          15.1.2 Failure to pay Rent on the date when due and the failure
continuing for a period of five (5) days after such payment is due;

          15.1.3 Failure to perform Tenant's covenants and obligations hereunder
(except default in the payment of Rent) where such failure continues for a
period of thirty (30) days after written notice from Landlord; provided,
however, if the nature of the default is such that more than thirty (30) days
are reasonably required for its cure, Tenant shall not be deemed to be in
default if Tenant commences the cure within ten (10) days after written notice
from Landlord and diligently and continuously prosecutes such cure to
completion;

          15.1.4 The making of a general assignment by Tenant for the benefit of
creditors; the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or discharge the same within sixty (60) days of such
filing; the appointment of a receiver or other custodian to take possession of
substantially all of Tenant's assets or this leasehold; Tenant's insolvency or
inability to pay Tenant's debts or failure generally to pay Tenant's debts when
due; any court entering a decree or order directing the winding up or
liquidation of Tenant or of substantially all of Tenant's assets; Tenant taking
any action toward the dissolution or winding up of Tenant's affairs; the
cessation or suspension of Tenant's use of the Premises; or the attachment,
execution or other judicial seizure of substantially all of Tenant's, assets or
this leasehold;

          15.1.5 The making of any material misrepresentation or omission by
Tenant or any successor in interest of Tenant in any materials delivered by or
on behalf of Tenant to Landlord or Landlord's lender pursuant to this Lease; or

          15.1.6 The occurrence of an Event of Default set forth in Section
15.1.4 or 15.1.5 with respect to any guarantor of this Lease, if applicable.

     15.2 Remedies

          15.2.1 Termination. In the event of the occurrence of any Event of
Default, Landlord shall have the right to give a written termination notice to
Tenant (which notice may be the notice given under Section 15.1 above, if
applicable, and which notice shall be in lieu of any notice required by O.R.S.
Section 105.120 or any other


                                      -17-



Oregon law) and, on the date specified in such notice, this Lease shall
terminate unless on or before such date all arrears of Rent and all other sums
payable by Tenant under this Lease and all costs and expenses incurred by or on
behalf of Landlord hereunder shall have been paid by Tenant and all other Events
of Default at the time existing shall have been fully remedied to the
satisfaction of Landlord.

               15.2.1.1 Repossession. Following termination, without prejudice
to other remedies Landlord may have, Landlord may (i) peaceably re-enter the
Premises upon voluntary surrender by Tenant or remove Tenant therefrom and any
other persons occupying the Premises, using such legal proceedings, or other
procedures permitted by applicable law, as may be available; (ii) repossess the
Premises or relet the Premises or any part thereof for such term (which may be
for a term extending beyond the Term), at such rental and upon such other terms
and conditions as Landlord in Landlord's sole discretion shall determine, with
the right to make reasonable alterations and repairs to the Premises; and (iii)
remove all personal property therefrom.

               15.2.1.2 Unpaid Rent. Landlord shall have all the rights and
remedies of a landlord provided by Applicable Law, including the right to
recover from Tenant: (a) the worth, at the time of award, of the unpaid Rent
that had been earned at the time of termination, (b) the worth, at the time of
award, of the amount by which the unpaid Rent that would have been earned after
the date of termination until the time of award exceeds the amount of loss of
rent that Tenant proves could have been reasonably avoided, (c) the worth, at
the time of award, of the amount by which the unpaid Rent for the balance of the
Term after the time of award exceeds the amount of the loss of rent that Tenant
proves could have been reasonably avoided, and (d) any other amount, and court
costs, necessary to compensate Landlord for all detriment proximately caused by
Tenant's default. The phrase "worth, at the time of award," as used in (a) and
(b) above, shall be computed at the Applicable Interest Rate, and as used in (c)
above, shall be computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).

          15.2.2 Continuation. Even though an Event of Default may have
occurred, this Lease shall continue in effect for so long as Landlord does not
terminate Tenant's right to possession; and Landlord may enforce all of
Landlord's rights and remedies under this Lease allowed by law ("lessor" may
continue the Lease in effect after "lessee's" breach and abandonment and recover
Rent as it becomes due) to recover Rent as it becomes due. Landlord, without
terminating this Lease, may, during the period Tenant is in default, enter the
Premises and relet the same, or any portion thereof, to third parties for
Tenant's account and Tenant shall be liable to Landlord for all costs Landlord
incurs in reletting the Premises, including, without limitation, brokers'
commissions, expenses of remodeling the Premises and like costs. Reletting may
be for a period shorter or longer than the remaining Term. Tenant shall continue
to pay the Rent on the date the same is due. No act by Landlord hereunder,
including acts of maintenance, preservation or efforts to lease the Premises or
the appointment of a receiver upon application of Landlord to protect Landlord's
interest under this Lease, shall terminate this Lease unless Landlord notifies
Tenant that Landlord elects to terminate this Lease. In the event that Landlord
elects to relet the Premises, the rent that Landlord receives from reletting
shall be applied to the payment of, first, any indebtedness from Tenant to
Landlord other than Base Rent and Tenant's Share of Operating Expenses
(including Real Property Taxes); second, all costs, including maintenance,
incurred by Landlord in reletting; and, third, Base Rent and Tenant's Share of
Operating Expenses (including Real Property Taxes) under this. Lease. After
deducting the payments referred to above, any sum remaining from the rental
Landlord receives from reletting shall be held by Landlord and applied in
payment of future Rent as Rent becomes due under this Lease. In no event, and
notwithstanding anything in Section 16 to the contrary, shall Tenant be entitled
to any excess rent received by Landlord. If, on the date Rent is due under this
Lease, the rent received from the reletting is less than the Rent due on that
date, Tenant shall pay to Landlord, in addition to the remaining Rent due, all
costs, including maintenance, which Landlord incurred in reletting the Premises
that remain after applying the rent received from reletting as provided
hereinabove. So long as this Lease is not terminated, Landlord shall have the
right to remedy any default of Tenant, to maintain or improve the Premises, to
cause a receiver to be appointed to administer the Premises and new or existing
subleases and to add to the Rent payable hereunder all of Landlord's reasonable
costs in so doing, with interest at the Applicable Interest Rate from the date
of such expenditure. Landlord shall have no duty to relet the Premises so long
as it has other unleased space available in the Project.

     15.3 Cumulative. Each right and remedy of Landlord provided for herein or
now or hereafter existing at law, in equity, by statute or otherwise shall be
cumulative and shall not preclude Landlord from exercising any other rights or
remedies provided for in this Lease or now or hereafter existing at law or in
equity, by statute or


                                      -18-



otherwise. No payment by Tenant of a lesser amount than the Rent nor any
endorsement on any check or letter accompanying any check or payment as Rent
shall be deemed an accord and satisfaction of full payment of Rent; and Landlord
may accept such payment without prejudice to Landlord's right to recover the
balance of such Rent or to pursue other remedies.

16. ASSIGNMENT AND SUBLETTING. Tenant shall not assign, sublet or otherwise
transfer, whether voluntarily or involuntarily or by operation of law, the
Premises or any part thereof without Landlord's prior written approval, which
shall not be unreasonably withheld; provided, however, Tenant agrees it shall be
reasonable for Landlord to disapprove of a requested sublease or assignment, if
the proposed subtenant or assignee does not have a tangible net worth (as
determined in accordance with generally accepted accounting principles
consistently applied) equal to or greater than that of Tenant as of the date of
the Lease as shown in the financial information provided to Landlord, or if the
proposed subtenant or assignee is currently a tenant in any other space leased
by Landlord or if such proposed subtenant or assignee is in the process of
negotiation with Landlord to lease other space owned or managed by Landlord. The
merger of Tenant with any other entity in which Tenant does not retain a
controlling ownership or beneficial interest or the transfer of any controlling
or managing ownership or beneficial interest in Tenant, or the assignment of a
substantial portion of the assets of Tenant, whether or not located at the
Premises, shall constitute an assignment hereunder. If Tenant desires to assign
this Lease or sublet any or all of the Premises, Tenant shall give Landlord
written notice thereof with copies of all related documents and agreements
associated with the assignment or sublease, including without limitation, the
financial statements of any proposed assignee or subtenant, forty-five (45) days
prior to the anticipated effective date of the assignment or sublease. Tenant
shall pay Landlord's reasonable attorneys' fees incurred in the review of such
documentation plus an administrative fee of Five Hundred Dollars ($500.00) for
each proposed transfer. Landlord shall have a period of thirty (30) days
following receipt of such notice and all related documents and agreements to
notify Tenant in writing of Landlord's approval or disapproval of the proposed
assignment or sublease. If Landlord fails to notify Tenant in writing of such
election, Landlord shall be deemed to have disapproved such assignment or
subletting. This Lease may not be assigned by operation of law. If the proposed
assignment or sublease is for substantially the remainder of the Term, Landlord
may terminate the Lease (or in the case of a partial sublease, terminate the
Lease with respect to the portion of the Premises proposed to be subject to the
sublease) by giving written notice to Tenant within such thirty (30) day period.
Any purported assignment or subletting contrary to the provisions hereof shall
be void and shall constitute an Event of Default hereunder. If Tenant receives
rent or other consideration for any such transfer in excess of the Rent, or in
case of the sublease of a portion of the Premises, in excess of such Rent that
is fairly allocable to such portion, after appropriate adjustments to assure
that all other payments required hereunder are appropriately taken into account,
Tenant shall pay Landlord one hundred percent (100%) of the difference between
each such payment of rent or other consideration and the Rent required
hereunder. Landlord may, without waiving any rights or remedies, collect rent
from the assignee, subtenant or occupant and apply the net amount collected to
the Rent herein reserved and apportion any excess rent so collected in
accordance with the terms of the preceding sentence. Such acceptance of Rent
shall in no event be deemed to imply that Landlord is approving a subtenant or
assignee which Landlord has not approved in writing pursuant to the requirements
of this Section 16. Tenant shall continue to be liable as a principal and not as
a guarantor or surety to the same extent as though no assignment had been made.
Landlord may consent to subsequent assignments or subletting of this Lease or
amendments or modifications to the Lease by assignees of Tenant without
notifying Tenant or any successor of Tenant and without obtaining their consent.
No permitted assignment (but excluding a permitted sublease) shall be effective
until there has been delivered to Landlord a counterpart of the assignment
instrument in which the assignee agrees to be and remain jointly and severally
liable with Tenant for the payment of Rent pertaining to the Premises and for
the performance of all the terms and provisions of this Lease relating thereto
arising on or after the date of the transfer.

17. ESTOPPEL, ATTORNMENT AND SUBORDINATION

     17.1 Estoppel. Within ten (10) days after written request by Landlord,
Tenant shall deliver an estoppel certificate duly executed (and acknowledged if
required by any lender), substantially in the form attached hereto as Exhibit H,
or in such other form as may be acceptable to the lender, which form may include
some or all of the provisions contained in Exhibit H, to any proposed mortgagee,
purchaser or Landlord. Tenant's failure to deliver said statement in such time
period shall be an Event of Default hereunder and shall be conclusive upon
Tenant that (a) this Lease is in full force and effect, without modification
except as may be represented by Landlord; (b) there are no uncured defaults in
Landlord's performance and Tenant has no right of offset, counterclaim or
deduction against Rent hereunder; and (c) no more than one month's Base Rent has
been paid in advance. If any financier


                                      -19-



should require that this Lease be amended (other than in the description of the
Premises, the term, the Permitted Use, the Rent or as will substantially,
materially or adversely affect the rights of Tenant), Landlord shall give
written notice thereof to Tenant, which notice shall be accompanied by a Lease
supplement embodying such amendments. Tenant shall, within ten (10) days after
the receipt of Landlord's notice, execute and deliver to Landlord the tendered
Lease supplement. If Tenant fails to deliver to Landlord the tendered Lease
supplement within ten (10) days after receipt of Landlord's notice, Tenant shall
be deemed to have given Landlord a power of attorney to execute such supplement
on behalf of Tenant.

     17.2 Subordination. This Lease shall be subject and subordinate to all
ground leases, master leases and the lien of all mortgages and deeds of trust
which now or hereafter affect the Premises or the Project or Landlord's interest
therein, and all amendments thereto, provided that Tenant receives a
Subordination, Nondisturbance and Attornment Agreement ("SNDA") in the form
attached hereto as Exhibit I (or such other form as may be commercially
reasonable which form may include some or all of the provisions contained in
Exhibit I, so long as such form of SNDA includes a non-disturbance agreement in
favor of Tenant) or as otherwise may be required by the applicable lender,
ground lessee and/or master lessor (so long as such documentation includes a
non-disturbance agreement in favor of Tenant). If requested, Tenant shall
execute and deliver to Landlord within ten (10) days after Landlord's request
whatever documentation that may reasonably be required to further effect the
provisions of this paragraph including an SNDA in the form attached hereto as
Exhibit I (or such other form as may be commercially reasonable which form may
include some or all of the provisions contained in Exhibit I, so long as such
form of SNDA includes a non-disturbance agreement in favor of Tenant) or as
otherwise may be required by the applicable lender, ground lessee and/or master
lessor (so long as such documentation includes a non-disturbance agreement in
favor of Tenant).

     17.3 Attornment. Tenant hereby agrees that Tenant will recognize as its
landlord under this Lease and shall attorn to any person succeeding to the
interest of Landlord in respect of the land and the buildings governed by this
Lease upon any foreclosure of any mortgage upon such land or buildings or upon
the execution of any deed in lieu of foreclosure in respect to such deed of
trust. If requested, Tenant shall execute and deliver an instrument or
instruments confirming its attornment as provided for herein; provided, however,
that no such beneficiary or successor-in-interest shall be bound by any payment
of Base Rent for more than one (1) month in advance, or any amendment or
modification of this Lease made without the express written consent of such
beneficiary where such consent is required under applicable loan documents.

18. MISCELLANEOUS

     18.1 General

          18.1.1 Entire Agreement. This Lease sets forth all the agreements
between Landlord and Tenant concerning the Premises; and there are no agreements
either oral or written other than as set forth herein.

          18.1.2 Time of Essence. Time is of the essence of this Lease.

          18.1.3 Attorneys' Fees. In any action or proceeding which either
party brings against the other to enforce its rights hereunder, the
nonprevailing party shall pay all costs incurred by the prevailing party,
including reasonable attorneys' fees, which amounts shall be a part of the
judgment in said action or proceeding.

          18.1.4 Severability. If any provision of this Lease or the application
of any such provision shall be held by a court of competent jurisdiction to be
invalid, void or unenforceable to any extent, the remaining provisions of this
Lease and the application thereof shall remain in full force and effect and
shall not be affected, impaired or invalidated.

          18.1.5 Law. This Lease shall be construed and enforced in accordance
with the laws of the state in which the Premises are located.


                                      -20-



          18.1.6 No Option. Submission of this Lease to Tenant for examination
or negotiation does not constitute an option to lease, offer to lease or a
reservation of, or option for, the Premises; and this document shall become
effective and binding only upon the execution and delivery hereof by Landlord
and Tenant.

          18.1.7 Successors and Assigns. This Lease shall be binding upon and
inure to the benefit of the successors and assigns of Landlord and, subject to
compliance with the terms of Section 16, Tenant.

          18.1.8 Third Party Beneficiaries. Nothing herein is intended to create
any third party benefit.

          18.1.9 Memorandum of Lease. On or before fifteen (15) business days
following a written request by either Landlord or Tenant, the parties agree to
execute and record a short form memorandum of this Lease, in a recordable form
reasonably acceptable to Landlord and Tenant. Within five (5) business days
following the expiration or earlier termination of this Lease, Tenant shall
execute (and have properly notarized) and deliver to Landlord a Quitclaim Deed,
in recordable form, quitclaiming, terminating and forever surrendering any and
all right, title or interests Tenant may have in or to the Premises.

          18.1.10 Agency, Partnership or Joint Venture. Nothing contained herein
nor any acts of the parties hereto shall be deemed or construed by the parties
hereto, nor by any third party, as creating the relationship of principal and
agent or of partnership or of joint venture by the parties hereto or any
relationship other than the relationship of landlord and tenant.

          18.1.11 Merger. The voluntary or other surrender of this Lease by
Tenant or a mutual cancellation thereof or a termination by Landlord shall not
work a merger and shall, at the option of Landlord, terminate all or any
existing subtenancies or may, at the option of Landlord, operate as an
assignment to Landlord of any or all of such subtenancies.

          18.1.12 Headings. Section headings have been inserted solely as a
matter of convenience and are not intended to define or limit the scope of any
of the provisions contained therein.

          18.1.13 Security Measures. Tenant hereby acknowledges that Landlord
shall have no obligation to provide a guard service or other security measures
whatsoever. Tenant assumes all responsibility for the protection of the
Premises, Tenant, its agents and invitees and their property from the acts of
third parties.

     18.2 Signs. All signs and graphics of every kind visible in or from public
view or corridors, the Common Areas or the exterior of the Premises (whether
located inside or outside of the Premises) shall be subject to Landlord's prior
written approval (not to be unreasonably withheld) and shall be subject to the
CC&Rs and any applicable governmental laws, ordinances, and regulations and in
compliance with Landlord's signage program (if any). Tenant shall remove all
such signs and graphics prior to the termination of this Lease. Such
installations and removals shall be made in such manner as to avoid injury or
defacement of the Premises; and Tenant shall repair any injury or defacement,
including without limitation, discoloration caused by such installation or
removal.

     18.3 Waiver. No waiver of any default or breach hereunder shall be implied
from any omission to take action on account thereof, notwithstanding any custom
and practice or course of dealing. No waiver by either party of any provision
under this Lease shall be effective unless in writing and signed by such party.
No waiver shall affect any default other than the default specified in the
waiver and then such waiver shall be operative only for the time and to the
extent therein stated. Waivers of any covenant shall not be construed as a
waiver of any subsequent breach of the same.

     18.4 Financial Statements. Tenant shall provide, and cause each Guarantor,
if applicable, to provide to any lender, any purchaser of the Building and/or
the Project or Landlord, within ten (10) days after request, a current,
accurate, audited (or reviewed and certified by Tenant) financial statement for
Tenant and Tenant's business and financial statements for Tenant and Tenant's
business for each of the three (3) years prior to the current financial
statement year prepared under generally accepted accounting principles
consistently applied. Tenant shall also provide within said 10-day period such
other financial information as may be reasonably required by Landlord, any


                                      -21-



purchaser of the Building and/or the Project or any lender; Landlord shall keep
or cause to be kept all such financial information strictly confidential.

     18.5 Limitation of Liability. The obligations of Landlord under this Lease
are not personal obligations of the individual partners, members, managers,
directors, officers, shareholders, agents or employees of Landlord; and, subject
to this Section 18.5, Tenant shall look solely to the Building and the Land for
satisfaction of any liability of Landlord and shall not look to other assets of
Landlord nor seek recourse against the assets of the individual partners,
directors, officers, shareholders, agents or employees of Landlord. Whenever
Landlord transfers its interest, Landlord shall be automatically released from
further performance under this Lease and from all further liabilities and
expenses hereunder and the transferee of Landlord's interest shall assume all
liabilities and obligations of Landlord hereunder from the date of such
transfer, provided, however, Landlord shall remain liable for any unperformed
obligations arising prior to the date of such transfer.

     18.6 Notices. All notices to be given hereunder shall be in writing and
mailed postage prepaid by certified or registered mail, return receipt
requested, or delivered by personal or courier delivery, or sent by facsimile,
electronically confirmed, (immediately followed by one of the preceding
methods), to Landlord's Address and Tenant's Address, or to such other place as
Landlord or Tenant may designate in a written notice given to the other party.
Notices shall be deemed served upon the first attempted delivery by the U.S.
Postal Service, the courier or a recognized overnight delivery service, or upon
receipt of the facsimile prior to 5 p.m. on any business day, or, if after 5
p.m., on the next business day.

     18.7 Brokerage Commission. Landlord shall pay a brokerage commission to
Landlord's Broker specified in the Basic Lease Information in accordance with a
separate agreement between Landlord and Landlord's Broker. Landlord shall have
no further or separate obligation for payment of any commissions or fees to any
other broker or finder. Tenant warrants to Landlord that Tenant's sole contact
with Landlord or with the Premises in connection with this transaction has been
directly with Landlord, Landlord's Broker and Tenant's Broker specified in the
Basic Lease Information, and that no other broker or finder can properly claim a
right to a commission or a finder's fee based upon contacts between the claimant
and Tenant. Any commissions or fees payable to Tenant's Broker with respect to
this transaction shall be paid by Landlord's Broker, and Landlord and Tenant
shall have no obligation with respect thereto. Subject to the foregoing, Tenant
agrees to indemnify and hold Landlord harmless from any claims or liability,
including reasonable attorneys' fees, in connection with a claim by any person
for a real estate broker's commission, finder's fee or other compensation based
upon any statement, representation or agreement of Tenant, and Landlord agrees
to indemnify and hold Tenant harmless from any such claims or liability,
including reasonable attorneys' fees, based upon any statement, representation
or agreement of Landlord.

     18.8 Authorization. Each individual executing this Lease on behalf of
Tenant represents and warrants that he or she is duly authorized to execute and
deliver this Lease on behalf of Tenant and that such execution is binding upon
Tenant.

     18.9 Holding Over: Surrender

          18.9.1 Holding Over. If Tenant holds over the Premises or any part
thereof after expiration of the Term, such holding over shall, at Landlord's
option, constitute a month-to-month tenancy, at a rent equal to one hundred
fifty percent (150%) of the Base Rent in effect immediately prior to such
holding over and shall otherwise be on all the other terms and conditions of
this Lease. This paragraph shall not be construed as Landlord's permission for
Tenant to hold over. Acceptance of Rent by Landlord following expiration or
termination shall not constitute a renewal of this Lease or extension of the
Term except as specifically set forth above. If Tenant fails to surrender the
Premises upon expiration or earlier termination of this Lease, Tenant shall
indemnify and hold Landlord harmless from and against all loss or liability
resulting from or arising out of Tenant's failure to surrender the Premises,
including, but not limited to, any amounts required to be paid to any tenant or
prospective tenant who was to have occupied the Premises after the expiration or
earlier termination of this Lease and any related attorneys' fees and brokerage
commissions.

          18.9.2 Surrender. Upon the expiration or earlier termination of this
Lease, Tenant shall repair any damage to and restore the condition of the
Premises in accordance with Section 10.2. Tenant shall surrender the Premises,
together with all keys, to Landlord broom clean and in as good a condition as
when received, ordinary


                                      -22-



wear and tear and damage by fire or casualty excepted. In addition, Tenant shall
remove any and all debris from the Common Area caused by Tenant and surrender
any portion of the Common Area regularly used by Tenant broom clean and in as
good a condition as when Tenant's use thereof commenced, ordinary wear and tear
and damage by fire or casualty excepted. Conditions existing because of Tenant's
failure to perform maintenance, repairs or replacements shall not be deemed
"reasonable wear and tear."

     18.10 Joint and Several. If Tenant consists of more than one person, the
obligation of all such persons shall be joint and several.

     18.11 Covenants and Conditions. Each provision to be performed by Tenant
hereunder shall be deemed to be both a covenant and a condition.

     18.12 Auctions. Tenant shall not conduct, nor permit to be conducted, any
auction upon the Premises without Landlord's prior written consent. Landlord
shall not be obligated to exercise any standard of reasonableness in determining
whether to permit an auction.

     18.13 Consents. Except as otherwise provided elsewhere in this Lease,
Landlord's actual reasonable costs and expenses (including, but not limited to,
architects', attorneys', engineers' and other consultants' fees) incurred in the
consideration of, or response to, a request by Tenant for any Landlord consent,
including but not limited to, consents to an assignment, a subletting or the
presence or use of a Hazardous Material, shall be paid by Tenant upon receipt of
an invoice and supporting documentation therefor. Landlord's consent to any act,
assignment or subletting shall not constitute an acknowledgment that no Event of
Default or breach by Tenant of this Lease exists, nor shall such consent be
deemed a waiver of any then existing Event of Default or breach, except as may
be otherwise specifically stated in writing by Landlord at the time of such
consent. Except as otherwise set forth herein, the failure to specify herein any
particular condition to Landlord's consent shall not preclude the imposition by
Landlord at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.

     18.14 Force Majeure. "Force Majeure" as used herein means delays resulting
from causes beyond the reasonable control of the other party, including, without
limitation, any delay caused by any action, inaction, order, ruling, moratorium,
regulation, statute, condition or other decision of any private party or
governmental agency having jurisdiction over any portion of the Project, over
the construction anticipated to occur thereon or over any uses thereof, or by
delays in inspections or in issuing approvals by private parties or permits by
governmental agencies, or by fire, flood, inclement weather, strikes, lockouts
or other labor or industrial disturbance (whether or not on the part of agents
or employees of either party hereto engaged in the construction of the
Premises), civil disturbance, order of any government, court or regulatory body
claiming jurisdiction or otherwise, act of public enemy, war, riot, sabotage,
blockage, embargo, failure or inability to secure materials, supplies or labor
through ordinary sources by reason of shortages or priority, discovery of
hazardous or toxic materials, earthquake, or other natural disaster, delays
caused by any dispute resolution process, or any cause whatsoever beyond the
reasonable control (excluding financial inability) of the party whose
performance is required, or any of its contractors or other representatives,
whether or not similar to any of the causes hereinabove stated.

     18.15 Mortgagee Protection. Tenant agrees to give any holder of any
mortgage or deed of trust secured by the Real Property, by registered or
certified mail or nationally recognized overnight delivery service, a copy of
any notice of default served upon the Landlord by Tenant, provided that, prior
to such notice, Tenant has been notified in writing (by way of service on Tenant
of a copy of assignment of rents and leases or otherwise) of the address of such
holder of a mortgage or deed of trust. Tenant further agrees that if Landlord
shall have failed to cure such default within thirty (30) days after such notice
to Landlord (or if such default cannot be cured or corrected within that time,
then such additional time as may be necessary if Landlord has commenced within
such thirty (30) day period and is diligently pursuing the remedies or steps
necessary to cure or correct such default), then the holder of any mortgage or
deed of trust shall have an additional sixty (60) days within which to cure or
correct such default (or if such default cannot be cured or corrected within
that time, then such additional time as may be necessary if such holder of any
mortgage or deed of trust has commenced within such sixty (60) day period and is
diligently pursuing the remedies or steps necessary to cure or correct such
default). Notwithstanding the foregoing, in no event shall any holder of any
mortgage or deed of trust have any obligation to cure any default of the
Landlord.


                                      -23-



     l8.l6 Hazardous Substance Disclosure. Gasoline and other automotive fluids,
asbestos containing materials, maintenance fluids, copying fluids and other
office supplies and equipment, certain construction and finish materials,
tobacco smoke, cosmetics and other personal items may be present on the project.
Gasoline and other automotive fluids are found in the garage and parking areas
of the Project. Cleaning, lubricating and hydraulic fluids used in the operation
and maintenance of the Building are found in the utility areas of the Building
not generally accessible to Building occupants or the public. Many Building
occupants use copy machines and printers with associated fluids and toners, and
pens, markers, inks, and office equipment that may contain Hazardous Materials.
Certain adhesives, paints and other construction materials and finishes used in
portions of the Building may contain Hazardous Materials. The Building may from
time to time be exposed to tobacco smoke. Building occupants and other persons
entering the Building from time to time may use or carry prescription and
non-prescription drugs, perfumes, cosmetics and other toiletries, and foods and
beverages, some of which may contain Hazardous Materials. By its execution of
this Lease, Tenant acknowledges the notice set forth hereinabove.

     18.17 ADA Compliance. Notwithstanding Section 1.1 above, Landlord warrants
to Tenant that on the Commencement Date, the Premises (including any
improvements constructed by Landlord pursuant to the Work Letter) shall comply
with the requirements of the Americans with Disabilities Act [42 U.S.C. Section
12101 et seq.] ("ADA") as in effect and promulgated on the Commencement Date
(the "ADA Warranty"). The ADA Warranty shall not apply to any improvements or
alterations made by or at the request of Tenant (except as specifically set
forth in the Work Letter). Except as otherwise provided in this Lease, if the
Premises do not comply with the ADA Warranty, promptly after Landlord's receipt
of written notice from Tenant given within six (6) months after the
Commencement Date specifying in detail the nature and extent of such
non-compliance, Landlord, at Landlord's sole cost and expense, shall take such
action as is reasonably necessary to remedy such non-compliance.

     18.18 Addenda. The Addenda attached hereto, if any, and identified with
this Lease are incorporated herein by this reference as if fully set forth
herein.

     IN WITNESS WHEREOF, the parties have executed this Lease as of the date set
forth above.


"Landlord"                              "Tenant"

CATELLUS DEVELOPMENT CORPORATION,       SYNETICS SOLUTIONS INC.,
a Delaware corporation                  an Oregon corporation


By: Catellus Commercial Group, LLC,     By: /s/ Koki Nakamura
    a Delaware limited liability            ------------------------------------
    company                             Name: KOKI NAKAMURA
Its: Duly Authorized Agent              Its: CEO


By: /s/ TWA                             Date:
    ---------------------------------         ----------------------------------
Name:
      -------------------------------
Title:
       ------------------------------


Date: 12-20-00                          By: /s/ GREG MARVELL
                                            ------------------------------------
                                        Name: GREG MARVELL
                                        Its: PRESIDENT

                                        Date: 12/9/00


                                      -24-



                                ADDENDUM TO LEASE

     THIS ADDENDUM TO LEASE ("Addendum") is attached to and constitutes an
integral part of the Lease between CATELLUS DEVELOPMENT CORPORATION, as
Landlord, and SYNETICS SOLUTIONS, INC., Inc., as Tenant. The terms of this
Addendum shall be incorporated in the Lease for all purposes. In the event of a
conflict between the provisions of the Lease and the provisions of this
Addendum, this Addendum shall control.

     The following new Section is hereby added to the Lease which state in their
entirety as follows:

     19. Option to Extend Provided (i) Tenant is not in default under the terms
of this Lease at the time this renewal option is exercised or at the
commencement of the Extension Term (as hereinafter defined), (ii) Tenant is
occupying at least ninety percent (90%) of the Premises, including any expansion
space, and (iii) Landlord has not given more than two (2) notices of default in
any twelve (12) month period for nonpayment of monetary obligations, Tenant
shall have the option to renew this Lease for an additional period of sixty (60)
months ("Extension Term"). The Extension Term shall be on all the terms and
conditions of this Lease, except that Landlord shall have no additional
obligation for free rent, leasehold improvements or for any other tenant
inducements for the Extension Term. Base Rent during the Extension Term shall be
equal to the Base Rent set forth in the Basic Lease Information for one hundred
twenty-first (121st) month through the one hundred eightieth (180th) month of
the Lease Term and the Security Deposit will be increased to reflect any
increase in Base Rent payable under the Lease. There shall be no additional
extension terms beyond the Extension Term set forth herein. Tenant must exercise
its option to extend this Lease by giving Landlord written notice of its
election to do so no later than one hundred eighty (180) nor earlier than three
hundred sixty (360) days prior to the end of the initial Term (i.e. the last day
of the one hundred twentieth (120th) month). Any notice not given in a timely
manner, shall be void, and Tenant shall be deemed to have waived its extension
rights. The extension option set forth herein is personal to Tenant and shall
not be included in any assignment of this Lease.


T.A.                                    K.N.
- -------------------------------------   ----------------------------------------
Landlord's Initials                     Tenant's Initials



                                    CATELLUS

                        (SOUTHSHORE CORPORATE PARK PLAN)

                                   EXHIBIT A-1



                                   (SITE PLAN)

                                   EXHIBIT A-2



                                    EXHIBIT B

                                   WORK LETTER

     THIS WORK LETTER ("Work Letter") is entered into as of this ____ day of
December, 2000, by and between CATELLUS DEVELOPMENT CORPORATION, a Delaware
corporation ("Landlord"), and SYNETICS SOLUTIONS INC., an Oregon corporation
("Tenant").

                                    RECITALS:

     A. Landlord and Tenant have entered into that certain Multi-Tenant
Industrial Triple Net Lease (the "Lease") dated as of the date hereof, covering
certain premises (the "Premises") more particularly described in the Lease. This
Work Letter is attached to the Lease as Exhibit B. The Lease is hereby
incorporated into this Work Letter by this reference. Capitalized terms not
defined in this Work Letter shall have the meanings given to such terms in the
Lease.

     B. In consideration of the mutual covenants contained in the Lease and this
Work Letter, Landlord and Tenant hereby agree as follows:

                                   AGREEMENT:

     1. Definitions. As used in this Work Letter and in the Lease, the term
"Shell" shall mean the completed concrete, precast industrial building
containing approximately 180,000 square feet of floor area (the "Building") of
which the Premises is a part, excluding the Tenant Improvements (as hereinafter
defined). As used in this Work Letter and in the Lease, the term "Tenant
Improvements" shall mean those certain improvements to be constructed in the
Premises set forth on the "Final Plans" (defined in Section 5(c) of this Work
Letter). As used in this Work Letter and in the Lease, "Improvements" shall mean
the Shell and the Tenant Improvements. The construction and installation of the
Tenant Improvements is sometimes referred to herein as the "Work".

     2. Completion of Improvements. Subject to the terms of the Lease and this
Work Letter and any "Tenant Delay" or "Force Majeure Delay" as provided herein,
Landlord shall use its commercially reasonable and diligent efforts to cause the
"Contractor" (defined in Section 7 of this Work Letter) to complete the
construction and installation of the Tenant Improvements in accordance with the
terms of this Work Letter.

     3. Designation of Representatives. With respect to the planning, design and
construction of the Tenant Improvements, Landlord hereby designates Dan Marcus,
Jeffrey Lee and Bill Schmitt as "Landlord's Representatives" and Tenant hereby
designates Phil Coons and Steve Burchett as "Tenant's Representatives". Tenant
hereby confirms that Tenant's Representatives have full authority to act on
behalf of and to bind Tenant with respect to all matters pertaining to the
planning, design and construction of the Tenant Improvements. Landlord hereby
confirms that Landlord's Representatives have limited authority to act on behalf
of Landlord with respect to matters pertaining to the planning, design and
construction of the Improvements. Either party may change its designated
representative upon five (5) days prior written notice to the other party.

     4. Architect. Deutsch & Associates ("Architect") shall act as the architect
with respect to the design and construction of the Tenant Improvements. Landlord
has previously provided to Tenant, and Tenant has approved, the form of contract
to be entered into with Architect for such services (the "Architect Contract").
The parties acknowledge and agree that the Architect Contract entered into with
the Architect will obligate the Architect to issue to both Landlord and Tenant
an architect's certificate ("Architect's Certificate") upon substantial
completion of the Tenant Improvements certifying the substantial completion of
the Improvements in accordance with the Final Plans. Landlord reserves the right
to retain a development consultant to assist Landlord in performing its
obligations

                                    EXHIBIT B


                                       -1-



under this Work Letter and under the Lease. All costs associated with any such
developer shall be included within the cost of the Work.

     5. Improvement Plans

          (a) Preliminary Plans. Attached hereto are the following preliminary
plans, base building specifications and preliminary scope of work for the Tenant
Improvements (collectively, the "Preliminary Plans"), which have been reviewed
and approved by Landlord and Tenant: (i) Schedule 1 is a Tenant Improvement Site
Plan; (ii) Schedule 2 is the "Base Building Specifications" for the Shell of the
Building; and Schedule 3 is the Preliminary Scope of Work Outline for Tenant
Improvements.

          (b) Final Plans. Within ten (10) business days following the Effective
Date of the Lease, the parties shall agree upon final plans and specifications
and the final scope of Landlord's work related to the Tenant Improvements
("Final Plans") which shall be consistent with the Preliminary Plans, except for
the changes, if any, mutually agreed to be made thereto by the parties. Included
in the Final Plans will be the civil, architectural and structural plans for the
Tenant Improvements. The Final Plans shall not include any equipment to be
located or installed in the Premises in accordance with Section 10.2 of the
Lease. When the Final Plans have been approved by Tenant and Landlord, Architect
shall submit the Final Plans to the appropriate governmental agency for plan
checking and the issuance of building permit for the Tenant Improvements.
Architect shall make any and all changes to the Final Plans required by any
applicable governmental entity to obtain a building permit for the Tenant
Improvements.

          (c) Work Cost Estimate. Prior to the commencement of construction of
any of the Tenant Improvements, Landlord shall submit to Tenant a written
estimate of the cost to complete the Tenant Improvements, which written estimate
will be based upon the Final Plans taking into account any modifications which
may be required to reflect changes in the Final Plans required by the
appropriate governmental authorities in connection with the issuance of a
building permit (the "Work Cost Estimate"). Tenant hereby acknowledges that
Tenant has previously reviewed and approved that portion of the Tenant
Improvement costs Telated to the construction of the 300' demising wall and the
installation of an additional 2,000 Amps of electrical service to the Premises,
all as more particularly set forth in that certain letter agreement between
Landlord and Tenant dated November 15, 2000 which is attached hereto as Schedule
5, and that such costs shall be included in the Work Cost Estimate, in addition
to the other costs related to the construction of the Tenant Improvements.
Tenant will either approve the Work Cost Estimate, or disapprove specific items,
and submit to Landlord revisions to the Final Plans in the form of a Change
Order. Submission and approval of the Work Cost Estimate will proceed in
accordance with the work schedule provided by Landlord. Upon Tenant's approval
of the Work Cost Estimate (the "Work Cost Statement"), Landlord will have the
right to purchase materials and to commence the construction of the items
included in the Work Cost Statement. If the total costs reflected in the Work
Cost Statement exceed the Allowance (as such term is defined in Section 9
below), Tenant shall pay such excess to Landlord in cash or by wire transfer of
funds, within ten (10) days after Tenant's approval of the Work Cost Statement.

          (d) No Representations. Notwithstanding anything to the contrary
contained in the Lease or herein, Landlord's participation in the preparation of
the Preliminary Plans, the Final Plans, the cost estimates for the Improvements
and the construction thereof shall not constitute any representation or
warranty, express or implied, that the Improvements, if built in accordance with
the Preliminary Plans and/or the Final Plans, will be suitable for Tenant's
intended purpose. Tenant acknowledges and agrees that the Improvements are
intended for use by Tenant and the specifications and design requirements for
such Improvements are not within the special knowledge or experience of
Landlord. Landlord's sole obligation shall be to arrange the construction of the
Improvements in accordance with the requirements of the Final Plans; and any
additional costs or expense required for the modification thereof to more
adequately meet Tenant's use, whether during or after Landlord's construction
thereof, shall be borne entirely by Tenant except as otherwise provided in this
Work Letter. Notwithstanding the foregoing, Landlord agrees to assign to Tenant
on a non-exclusive basis the benefit of all construction and architectural
warranties pertaining to the Tenant Improvements to the extent that they do not
relate to structural or other portions of the Improvements that Landlord is
required to maintain and repair under the Lease.

     6. Change Orders. After the parties approve the Final Plans and a building
permit for the Tenant Improvements is issued, any further changes to the Final
Plans shall require the prior written approval of Tenant and

                                    EXHIBIT B


                                       -2-



Landlord (not to be unreasonably withheld or delayed), provided that Landlord
shall not need the consent or approval of Tenant for changes to the Final Plans
that do not affect the Tenant Improvements and/or the Premises or materially
alter the character of the Building. If Tenant desires any change in the Final
Plans relative to the Tenant Improvements which is reasonable and practical
(which shall be conclusively determined by the Architect), such changes may only
be requested by the delivery to Landlord by Tenant of a proposed written "Change
Order" specifically setting forth the requested change. Landlord shall have five
(5) business days from the receipt of the proposed Change Order to provide
Tenant with the Architect's disapproval of the proposed change stating the
reason(s) for such disapproval, or if the Architect approves the proposed
change, the following items: (i) a summary of any increase in the cost caused by
such change (the "Change Order Cost"), (ii) a statement of the number of days of
any delay caused by such proposed change (the "Change Order Delay"), and (iii) a
statement of the cost of the Change Order Delay (the "Change Order Delay
Expense"), which Change Order Delay Expense shall be the product of the number
of days of delay multiplied by the estimated daily Base Rent rate. Tenant shall
then have three (3) business days to approve the Change Order Cost, the Change
Order Delay and the Change Order Delay Expense. If Tenant approves these items,
Tenant shall pay to Landlord the Change Order Cost and Change Order Delay
Expense within two (2) business days after Tenant's approval thereof, and
Landlord shall promptly following receipt of such payment execute the Change
Order and cause the appropriate changes to the Final Plans to be made. If Tenant
fails to respond to Landlord within said three (3) business day period, the
Change Order Cost, the Change Order Delay and the Change Order Delay Expense
shall be deemed disapproved by Tenant and Landlord shall have no further
obligation to perform any Work set forth in the proposed Change Order. The
Change Order Cost shall include all costs associated with the Change Order,
including, without limitation, architectural fees, engineering fees and
construction costs, as conclusively determined by the Architect and the
Contractor (defined in Section 7), respectively, together with a five percent
(5%) fee of these costs as reimbursement for the expense of administration and
coordination of such Change Order by Landlord's Representative. The Change Order
Delay shall include all delays caused by the Change Order, including, without
limitation, all design and construction delays, as conclusively determined by
the Architect and the Contractor (defined in Section 7), respectively.

     7. Contractor. McCormack Pacific, a contractor selected by Landlord and
approved by Tenant ("Contractor"), shall be used to construct the Tenant
Improvements.

     8. Construction of the Improvements. Landlord shall enter into a
construction contract with the Contractor on a form reasonably acceptable to
Landlord ("Construction Contract") for the construction and installation of the
Tenant Improvements in accordance with the Final Plans; provided, however, the
Construction Contract shall contain substantially the same provisions set forth
on Schedule 3 attached to this Work Letter and incorporated herein by this
reference.

     9. Payment for Cost of the Tenant Improvements.

          (a) Allowance. Landlord hereby grants to Tenant a tenant improvement
allowance for the work related to the Tenant Improvements described on the Final
Plans of One Hundred Seventy Nine Thousand Seven Hundred Twenty Dollars
($179,720.00) (the "Allowance"). The Allowance may be used only for the
following costs approved by Landlord:

               (i) Payment of the cost of preparing the Preliminary Plans
relative to the Tenant Improvements (including, without limitation, Architect's
costs under the Architect Contract) and the Final Plans, including mechanical,
electrical, plumbing and structural drawings and of all other aspects necessary
to complete the Final Plans.

               (ii) The payment of plan check, permit and license fees relating
to construction of the Tenant Improvements.

               (iii) Construction of the Tenant Improvements as provided in the
Final Plans, including without limitation, the following:

                    (aa) Installation within the Premises of all partitioning,
demising walls, doors, floor coverings, ceilings, wall coverings and painting
and similar items;

                                    EXHIBIT B


                                       -3-



                    (bb) All electrical wiring, lighting fixtures, outlets and
switches, and other electrical work necessary for the Premises including,
without limitation, any electrical distribution work;

                    (cc) The furnishing, installation and screening of all HVAC
units, duct work, terminal boxes, diffusers and accessories necessary for the
heating, ventilation and air conditioning systems within the Premises;

                    (dd) Any additional improvements to the Premises required
for Tenant's use of the Premises including, but not limited to, odor control,
special heating, ventilation and air conditioning, noise or vibration control or
other special systems or improvements;

                    (ee) All fire and life safety control systems such as fire
walls, sprinklers, halon, fire alarms, including piping, wiring and accessories,
necessary for the Premises;

                    (ff) All plumbing, fixtures, pipes and accessories necessary
for the Premises;

                    (gg) Testing and inspection costs; and

                    (hh) Fees for the Contractor and tenant improvement
coordinator including, but not limited to, fees and costs attributable to
general conditions associated with the construction of the Tenant Improvements.

               (iv) The payment of interest and reasonable loan fees incurred in
connection with the Project Loan (defined in Section 11).

               (v) An administrative and coordination fee charged by Landlord
against the Allowance equal to five percent (5%) of the total cost to complete
the design, permit process and construction of the Tenant Improvements.

          In no event will the Allowance be used to pay for Tenant's moving
expenses or for furniture, artifacts, equipment, telephone systems or any other
item of personal property which is not affixed to the Premises.

          (b) Costs in Excess of Allowance. The cost of each item referenced in
Section 9(a) above shall be charged against the Allowance. If the cost of
constructing the Tenant Improvements exceeds the Allowance, such Costs shall be
paid for by Tenant to the extent not already paid for in connection with
Tenant's approval of the Work Cost Estimate within ten (10) days after written
demand from Landlord.

          (c) Unused Allowance Amounts. Any unused portion of the Allowance upon
completion of the Tenant Improvements will not be refunded to Tenant or monies
to which Tenant is entitled.

     10. Payment for Cost of the Shell. Landlord shall pay the cost of designing
and constructing the Shell as provided in the Final Plans.

     11. Financing of Construction of Improvements. Landlord may elect to
finance the construction of the Improvements with the proceeds of a loan
("Project Loan") from a third party lender ("Lender") at the then prevailing
market rate and market terms for similar projects. The documents securing or
given in connection with the Project Loan; if any, are herein collectively
called "Loan Documents." Any Project Loan may be secured by the lien of a deed
of trust encumbering the Land and Improvements. Tenant agrees to execute and/or
provide all documents reasonably required by any Lender in connection with any
Project Loan, including, without limitation, estoppel certificates,
subordination agreements (subject to a commercially reasonable non-disturbance
agreement), consents to the assignment of this Agreement, written confirmation
of the satisfaction of closing conditions, and evidence of the due execution,
validity and enforceability of this Agreement. The costs of any Project Loan
shall be included within the cost of the Allowance for purposes of the
provisions of this Work Letter.

                                    EXHIBIT B


                                       -4-



     12. Commencement of Lease. Notwithstanding any provision to the contrary
contained in this Work Letter, Tenant's obligation to pay Rent, independent and
irrespective of whether the Tenant Improvements have been substantially
completed, shall be governed in accordance with Section 2.1 of the Lease.

     13. Tenant Delays; Force Majeure Delays. As used herein, "Tenant Delays"
means any delay in the completion of the Improvements resulting from any or all
of the following: (1) Tenant's failure to timely perform any of its obligations
pursuant to this Work Letter, including Tenant's failure to process timely the
building permit for the Tenant Improvements and any failure to complete, on or
before the due date therefor, any action item which is Tenant's responsibility
pursuant to this Work Letter, including Tenant's failure to grant approvals
and/or make payments within the time frames described herein; (2) Tenant's
requested modifications to the Preliminary Plans, the Final Plans or any
Tenant-initiated Change Orders; (3) Tenant's request for materials, finishes, or
installations which are not readily available, (4) any delay in any way
whatsoever arising from Tenant's right to conduct "Inspections" under Section 14
below, (5) Change Order Delays, (6) any delay due to Tenant's failure to timely
approve fee plans and specifications and/or the budget related to the Tenant
Improvements, or (7) any other act or failure to act by Tenant, Tenant's
Representative, Tenant's Architect, Tenant's employees, agents, independent
contractors, consultants and/or any other person performing or required to
perform services on behalf of Tenant. "Force Majeure Delays" as used herein
means delays resulting from causes beyond the reasonable control of Landlord or
the Contractor, including, without limitation, any delay caused by any action,
inaction, order, ruling, moratorium, regulation, statute, condition or other
decision of any private party or governmental agency having jurisdiction over
any portion of the project, over the construction of the Improvements or over
any uses thereof, or by delays in inspections or in issuing approvals by private
parties or permits by governmental agencies, or by fire, flood, inclement
weather, strikes, lockouts or other labor or industrial disturbance (whether or
not on the part of agents or employees of either party hereto engaged in the
construction of the Improvements), civil disturbance, order of any government,
court or regulatory body claiming jurisdiction or otherwise, act of public
enemy, war, riot, sabotage, blockage, embargo, failure or inability to secure
materials, supplies or labor through ordinary sources by reason of shortages or
priority, discovery of hazardous or toxic materials, earthquake, or other
natural disaster, delays caused by any dispute resolution process, or any cause
whatsoever beyond the reasonable control (excluding financial inability) of the
party whose performance is required, or any of its contractors or other
representatives, whether or not similar to any of the causes hereinabove stated.

     14. Tenant's Inspection Rights. Landlord shall schedule and attend monthly
progress meetings, walkthroughs and any other meetings with the Architect, the
Contractor and Tenant to discuss the progress of the construction of the Tenant
Improvements ("Meetings"). Landlord shall give Tenant at least twenty-four (24)
hours prior notice (written or telephonic) of all such Meetings. Tenant shall
designate in writing the person or persons appointed by Tenant to attend the
Meetings and such designated party shall be entitled to be present at and to
participate in the discussions during all Meetings; but Landlord may conduct the
Meetings even if Tenant's appointees are not present. Tenant or its agents shall
have the right at any and all reasonable times to conduct inspections, tests,
surveys and reports of work in progress ("Inspections") for the purpose of
reviewing whether the Tenant Improvements are being constructed in accordance
with the Final Plans, as amended by any approved Change Orders or other agreed
upon changes. Tenant agrees to protect, hold harmless and indemnify Landlord
from all claims, demands, costs and liabilities (including reasonable attorneys'
fees) arising from Tenant's or Tenant's agents entry onto the Land for the
purpose of conducting Inspections.

     15. Walk-Through and Punch List. Upon the issuance of the Architect's
Certificate pursuant to Section 4 above, Tenant, Landlord, the Architect shall
jointly conduct a walk-through of the Tenant Improvements and shall jointly
prepare a punch list ("Punch List") of items needing additional work ("Punch
List Items"); provided, however, the Punch List shall be limited to items which
are required by the Construction Contract, the Final Plans, Change Orders and
any other changes agreed to by the parties.

     16. Miscellaneous Construction Covenants.

          (a) Coordination with Lease. Nothing herein contained shall be
construed as (i) constituting Tenant as Landlord's agent for any purpose
whatsoever, or (ii) a waiver by Landlord or Tenant of any of the terms or
provisions of the Lease. Any default by either party with respect to any portion
of this Work Letter, shall be deemed a breach of the Lease for which Landlord
and Tenant shall have all the rights and remedies as in the case of a breach of
the Lease by the other party.

                                    EXHIBIT B


                                       -5-



          (b) Cooperation. Landlord and tenant agree to cooperate with one
another and to cause their respective employees, agents and contractors to
cooperate with one another to coordinate any work being performed by Landlord
and/or Tenant under this Work Letter, and their respective employees, agents and
contractors so as to avoid unnecessary interference and delays with the
completion of the Work.

     17. No Representations. Landlord does not warrant that the Building or any
component thereof will be free of latent defects or that it will not require
maintenance and/or repair within any particular period of time, except as
expressly provided herein. Tenant acknowledges and agrees that it shall rely
solely on the warranty or guaranty, if any, from Contractor, Architect or other
material and/or service providers relative to the proper design and construction
of the Improvements or any component thereof. Notwithstanding the foregoing,
Landlord represents and warrants to Tenant that the construction of the Tenant
Improvements shall be completed in a lien-free condition and workmanlike manner.

     IN WITNESS WHEREOF, this Work Letter is executed as of the date first
written above.

"Landlord"                              "Tenant"

CATELLUS DEVELOPMENT CORPORATION,       SYNETICS SOLUTIONS INC,
a Delaware corporation                  an Oregon corporation


By: Catellus Commercial Group, LLC,     By: /s/ Koki Nakamura
    a Delaware limited liability            ------------------------------------
    company                             Name: KOKI NAKAMURA
    Its: Duly Authorized Agent          Its: CEO

                                        Date: __________________________________
    By: /s/ TWA
        -----------------------------
    Name:                               By: /s/ Greg Marvell
          ---------------------------       ------------------------------------
    Title:                              Name: GREG MARVELL
           --------------------------   Its: PRESIDENT

Date: 12-20-00                          Date: 12/9/00

                                    EXHIBIT B


                                       -6-



                       (BASE BUILDING SPECIFICATION PLAN)


                                   SCHEDULE 1
                                       to
                                   EXHIBIT "B"



                             SCHEDULE 2 to EXHIBIT B

                          BASE BUILDING SPECIFICATIONS

Building Size:                   180,000 SF (300x600)
Clear Height:                    30' clear
Number of Dock Doors:            (62)9'-0"xl0'0"
Number of Drive-in Doors:        (8)12'0"xl4'0"
Concrete Slab:                   6" thick 4,000 psi
Concrete Dock Aprons:            6" thick
Fire Sprinkler System:           ESFR ready (.495/2,000)
Heating:                         Freeze Protection
Sanitary Sewer:                  4"
Roof lnsulation:                 R-19
Over-Door Protection:            Z metal
Column Spacing (Steel Column):   50' x 50'
Smoke Vents:                     75 vents; 1 sf vent/75 sf bldg.

                             SCHEDULE 2 to EXHIBIT B


                                      -1-


                             SCHEDULE 3 to EXHIBIT B

            PRELIMINARY SCOPE OF WORK OUTLINE FOR TENANT IMPROVEMENTS

SCOPE OF LANDLORD'S WORK. THE FOLLOWING ITEMS SHALL BE INCLUDED IN THE SCOPE OF
WORK TO BE PERFORMED BY LANDLORD PURSUANT TO THE WORK LETTER:

1.   Installation of a 300' demising wall and certain electrical work described
     in letter dated November 15, 2000 attached to the Work Letter as Schedule
     5.

2.   3,000 square feet of first floor office per Final Plans.

3.   Electrical distribution to equipment areas; Final electrical hook-up of
     equipment shall be the sole responsibility of Tenant.

4.   Interior demising wall on Gridline E, powder coat staging area and outside
     receiving area.

5.   Permit and plan check fees.

6.   Testing and inspections.

ITEMS EXCLUDED FROM LANDLORD'S SCOPE OF WORK/TENANT IMPROVEMENTS. ALL ITEMS NOT
EXPRESSLY INCLUDED IN LANDLORD'S SCOPE OF WORK ABOVE SHALL BE THE RESPONSIBILITY
OF TENANT AND SHALL BE COMPLETED IN ACCORDANCE WITH SECTION 10 OF THE LEASE AND
EXHIBIT G THERETO, INCLUDING, WITHOUT LIMITATION, THE FOLLOWING:

1.   Architectural and engineering related to the Tenant Improvements including
     the structural, mechanical, electrical and plumbing components thereof.

2.   Manufacturing equipment and fixtures.

3.   Manufacturing equipment hookup.

                             SCHEDULE 3 to EXHIBIT B


                                       -1-



                             SCHEDULE 4 to EXHIBIT B
                        CONSTRUCTION CONTRACT PROVISIONS

     1. Contractor's Warranty. Contractor shall warrant on behalf of itself, and
its subcontractors, materialmen, suppliers and sureties, that all material and
equipment incorporated into the Construction Contract will be new and free from
any and all claims, liens and security interests of any third parties and that
the work required thereunder ("Work") will be of good quality and free from
defects (whether latent or patent) in workmanship and will conform to the
requirements of the Contract Documents (as defined in the Construction Contract)
and that the materials used in the Contractor's express warranty herein shall be
in addition to, and not in lieu of, any other remedies Catellus may have under
the Contract Documents, at law, or in equity for defective or nonconforming
Work. No payment made by Catellus to Contractor, nor any acceptance, use or
occupancy of the Project by Catellus or any other person, shall constitute
acceptance of any defective Work or any Work not in compliance with the Contract
Documents.

     2. Other Warranties. Contractor shall assemble and transmit to Catellus two
complete copies in loose-leaf binders of all applicable warranties and operating
and maintenance data for all equipment furnished under the Construction
Contract, in sufficient detail to allow inspections, testing, operating and
maintenance. All warranties procured by Contractor from its subcontractors and
materialmen shall be properly executed on a form approved by Catellus and shall
be submitted to Catellus prior to the final acceptance of the Work. Whenever
possible, Contractor shall cause such warranties to be made directly to
Catellus, or, if the same shall be made to Contractor, Contractor, if possible,
shall assign the same to Catellus on request. The parties have agreed that
Catellus may assign any such warranties at any time and in its sole discretion
without the consent of Contractor. During the Correction Period (as defined
below), upon written request from Catellus, such warranties as may not be
assignable shall be enforced by Contractor for Catellus' benefit.

     3. Guaranty of Correction. As used herein, the term "Correction Period"
shall mean the period from Substantial Completion (as defined in the
Construction Contract) to the date one year after Substantial Completion, or,
for any portion of the Work which is completed after Substantial Completion, one
year after Final Completion (as defined in the Construction Contract).
Contractor shall, to Catellus' reasonable satisfaction, (i) re-execute or
otherwise remedy any parts of the Work that fail to conform with the
requirements of the Contract Documents and any defects in the Work due to faulty
materials or workmanship and that become apparent during the progress of the
Work or during the Correction Period, and (ii) replace, repair or restore any
other parts of the Project or the furniture, fixtures, equipment and other items
placed therein (whether by Catellus or any other party) that are damaged or
destroyed by any such parts of the Work that do not conform to the requirements
of the Contract Documents or as a result of defects in the Work or the
correction thereof. Contractor shall remove from the Project site portions of
the Work and materials which are not in conformance with the Contract Documents
and which are not either corrected by Contractor or accepted by Catellus. All
such corrective work shall be performed at such times as are acceptable to
Catellus and so as to avoid, to the extent practicable, disruption to the
activities of Catellus or the occupants of the Project. The provisions of this
Section shall apply to Work performed by subcontractors as well as work done
directly by employees of Contractor.

     The cost to Contractor of performing any of its obligations under this
Section shall be paid for by Contractor, and Contractor shall receive no
reimbursement or compensation from Contractor for performing any such corrective
work, and all such work shall be at no cost to Catellus. Contractor's
obligations under this Section are in addition to and not in limitation of its
express warranty above, or any other obligation of Contractor under the Contract
Documents. Enforcement of Contractor's obligations under this Section shall be
in addition to and not in limitation of any other right or remedy of Catellus
under the Contract Documents or otherwise at law or in equity.

     Notwithstanding the foregoing provisions of this Section, Catellus may, at
its option, by notice to Contractor, elect to accept nonconforming or defective
Work instead of requiring its removal or correction, in which case the Contract
Sum shall be reduced by an amount equal to the difference between the value to
Catellus of the Work had it been in conformance with the Contract Documents, and
the value to Catellus of such nonconforming or defective Work. Such election
shall be exercised only by written notice to Contractor and shall not be implied
by any action or inaction of Catellus.

                             SCHEDULE 4 to EXHIBIT B


                                       -1-



     4. Warranties, Guaranties for Substitutions. In addition to the
guarantee/warranties required on all materials, equipment and workmanship (which
shall not be less than one year), Contractor and the material suppliers or
equipment manufacturers, will provide the maximum available extended
guarantee/warranty submitted on Contractor's business stationery and signed by
both Contractor and the supplier and/or manufacturer for each substitution
proposed by Contractor. In all cases in which a manufacturer's name, trade name
or other proprietary designation is used in connection with materials or
articles to be furnished under this Contract, whether or not the phrase "or
equal" is used after such name, Contractor shall furnish the product of the
named manufacturer(s) without substitution, unless a written request for a
substitute has been submitted by Contractor and approved in writing by the
Architect and Catellus.

                             SCHEDULE 4 to EXHIBIT B


                                       -2-



                             SCHEDULE 5 TO EXHIBIT B

                                 (CATELLUS LOGO)

                                    CATELLUS

Date: November 15, 2000                                        DELIVERED BY HAND

To:   Phil Coons
      Synetics Solutions
      7440 SW Bonita Road
      Tigard, OR 97224

RE: Synetics Tenant Improvement to Building C(45,000sf)
    Southshore Corporate Park

Dear Phil:

We are submitting here with the cost estimate for the above referenced job.

DESCRIPTION:

     1.   CONSTRUCTION OF A 300' LONG DEMISING WALL SPLITTING THE 90,000SF
          VACANT SPACE INTO TWO 45,000SF SPACES.

                                
General Conditions                 $  4,800.00
Demolition/Patch                      5,000.00
Landscape Repair                      2,750.00
New Demising Wall                    27,000.00



     2.   INSTALL ONE LAYER OF SHEETROCK TO THE VACANT SIDE OF THE EXISTING
          DEMISING WALL.

                                
One Layer Sheetrock                $  6,000.00



     3.   2,000 AMP SERVICE ADDED TO THE EXISTING BUILDING SERVICE.

                                
Electrical Service                 $ 73,061.00
   Contractor's Fee                $  5,931.00
                                   -----------
   SUBTOTAL:                       $124,542.00
   Catellus Management Fee         $  6,227.00
                                   -----------
   TOTAL COST FOR PROPOSED WORK:   $130,769.00



Please execute this project estimate by signing and returning to catellus within
3 days. Please fax to (415)974-4651 and return original to my attention. Thank
you.

Sincerely,                              Approved & Accepted:
Catellus Development Corporation        Synetics Solutions


/s/ Bill Schmitt                        By: /s/ Phil Coons
- -------------------------------------       ------------------------------------
Bill Schmitt                                Phil Coons
Director Construction Services

                                        DATE: 11/14/00

Cc:

   Jeff Lee, CDC
   Dan Marcus, CDC

          201 MISSION STREET, 2ND FLOOR SAN FRANCISCO, CALIFORNIA 94105
                   - TEL (415) 974-4500 -  FAX (415) 974-4687



                             SCHEDULE 5 TO EXHIBIT B

                                                    A Joint Venture
                                             (PERLO MCCORMACK PACIFIC LOGO)
                                       Construction Managers/General Contractors

                                                         7190, S.W. Sandburg St.
                                                         Portland, Oregon 97223
                                                         F: 503.639.4134
                                                         P: 503.624.2090

November 15, 2000

Mr. Jeffrey Lee
Catellus Development Corporation
201 Mission Street, 2nd Floor
San Francisco, California 94105

Re: Demising Wall and Electrical Services for Synetics at Bldg. 'C'

Gentlemen:

We are pleased to present the following costs to construct a 300 long demising
wall splitting the 90,000 s.f. vacant space into two 45,000 s.f. spaces, and to
install one layer of sheetrock to the vacant side of the existing demising wall
(excluding permits, fees, and architectural costs). In addition, we present the
following costs for a 2,000 Amp service added to the existing building service.
At this time we do not believe there are any additional PGE fees or costs
associated with the additional work. Should this change, an appropriate cost.
change will be required.

With standard delivery, the service will be ready 13 weeks after a notice to
proceed is received.

                                
General Conditions                 $  4,800.00
Demolition/Patch                      5,000.00
Landscape Repair                      2,750.00
New Demising Wall                    27,000.00
One Layer Sheetrock                   6,000.00
Electrical Service                   73,061.00
                                   -----------
                                   $118,611.00
Fee                                   5,931.00
                                   -----------
Total Bid                          $124,542.00



Please review and call should you have any questions.

Very truly yours,

PERLO McCORMACK PACIFIC
Construction Managers/General Contractors


/s/ Gayland R. Looney
- -------------------------------------
GAYLAND R. LOONEY
DIRECTOR OF CONSTRUCTION

GRL/cm

info@perlomccormackpacific.com
CCB# 144525




                                    EXHIBIT C

                          COMMENCEMENT DATE MEMORANDUM

     With respect to that certain Multi-Tenant Triple Net Industrial Lease
("Lease") dated December __, 2000, between Synetics Solutions Inc., an Oregon
corporation ("Tenant"), and Catellus Development Corporation, a Delaware
corporation ("Landlord"), whereby Landlord leased to Tenant and Tenant leased
from Landlord approximately 44,930 rentable square feet of the building located
at 4293 NE 189th Avenue, Gresham, Oregon ("Premises"), Tenant hereby
acknowledges and certifies to Landlord as follows:

     (1)  The Possession Date occurred on December 15, 2000;

     (2)  The Commencement Date occurred on January 1, 2001; and

     (3)  The Premises contains 44,930 Rentable Square Feet (as defined in the
          Basic Lease Information).

     IN WITNESS WHEREOF, this Commencement Date Memorandum is executed this __
day of December, 2000.

     "Tenant"                           SYNETICS SOLUTIONS INC,
                                        an Oregon corporation


                                        By: /s/ Koki Nakamura
                                            ------------------------------------
                                        Its: C.E.O.


                                        By: /s/ Greg Marvell
                                            ------------------------------------
                                        Its: PRESIDENT

                                    EXHIBIT C


                                       -1-



                                               
ACORD. CERTIFICATE OF INSURANCE

PRODUCER                                          THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY
                                                  AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
                                                  CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE
                                                  AFFORDED BY THE POLICIES BELOW.

                                                                 COMPANIES AFFORDING COVERAGE

                                                  COMPANY
                                                     A

INSURED                                           COMPANY
                                                     B

                                                  COMPANY
                                                     C

                                                  COMPANY
                                                     D

COVERAGES

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE SEEN ISSUED TO THE INSURED NAMED ABOVE
FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER
DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE
POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS
SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

                                                    POLICY       POLICY
                                                   EFFECTIVE   EXPIRATION
 CO                                      POLICY      DATE         DATE
LTR            TYPE OF INSURANCE         NUMBER   (MM/DD/YY)   (MM/DD/YY)                LIMITS
- ---   --------------------------------   ------   ----------   ----------   --------------------------------
      GENERAL LIABILITY                                                     GENERAL AGGREGATE            $_____
      [ ] COMMERCIAL GENERAL LIABILITY                                      PRODUCTS-COMP-OP AGG         $_____
      [ ] [ ] CLAIMS MADE [ ] OCCUR                                         PERSONAL & ADV INJURY        $_____
      [ ] OWNERS & CONT PROT                                                EACH OCCURRENCE              $_____
      [ ] _______________                                                   FIRE DAMAGE (ANY ONE PRO)    $_____
      [ ] _______________                                                   MED EXP (ANY ONE PERSON)     $_____

      AUTOMOBILE LIABILITY                                                  COMBINED SINGLE LIMIT        $_____
      [ ] ANY AUTO
      [ ] ALL OWNED AUTOS                                                   BOOILY INJURY                $_____
      [ ] SCHEDULED AUTOS                                                   (Per Person)
      [ ] HIRED AUTOS                                                       BOOILY INJURY                $_____
      [ ] NON-OWNED AUTOS                                                   (Per accident)
      [ ] _______________
      [ ] _______________                                                   PROPERTY DAMAGE              $_____

      GARAGE LIABILITY                                                      AUTO ONLY - EA ACCIDENT      $_____
      [ ] ANY AUTO                                                          OTHER THAN AUTO ONLY:
      [ ] _______________                                                                EACH ACCIDENT   $_____
      [ ] _______________                                                                    AGGREGATE   $_____

      EXCESS LIABILITY
      [ ] UMBRELLA FORM                                                     EACH OCCURRENCE              $_____
      [ ] OTHER THAN UMBRELLA FORM                                          AGGREGATE                    $_____
                                                                                                         $_____

      WORKERS COMPENSATION AND                                              [ ] STATUTORY LIMITS
      EMPLOYERS' LIABILITY                                                  EACH ACCIDENT                $_____
                                                                            DISEASE - POLICY LIMIT       $_____
      THE PROPRIETOR/    [ ] INCL                                           DISEASE - EACH EMPLOYEE      $_____
      PARTNERS/EXECUTIVE
      OFFICERS ARE:      [ ] EXCL
      OTHER

DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS

CERTIFICATE HOLDER                                CANCELLATION

                                                  SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED
                                                  BEFORE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL
                                                  ___ DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO
                                                  THE

                                                  AUTHORIZED REPRESENTATIVE

ACORD 25-S (3/93)                                                                        (C) ACORD CORPORATION



                                    EXHIBIT D



                                    EXHIBIT E

                                 PROHIBITED USES

Subject to the terms of the Lease and this Exhibit E, the following types of
operations and activities are expressly prohibited on the Premises:

1.   automobile/truck/forklift maintenance, repair or fueling; provided,
     however, Tenant may perform routine maintenance with respect to motorized
     material-handling equipment as required in the course of Tenant's
     day-to-day business operations;

2.   battery manufacturing or reclamation;

3.   ceramics and jewelry manufacturing or finishing;

4.   chemical (organic or inorganic) storage, use or manufacturing; provided,
     however, Tenant may use the chemicals listed on Schedule 1 to this Exhibit
     E in an amount not to exceed the quantity specified thereon, all in
     accordance with the Lease and all applicable Environmental Laws;

5.   drum recycling;

6.   dry cleaning;

7.   electronic components manufacturing (distribution of such components is
     permitted); provided, however, Tenant may assemble electronic components so
     long as such assembly does not involve any wet electronic chemical
     processes whatsoever;

8.   electroplating and metal finishing; provided, however, Tenant may perform
     machining, welding, deburring and power coating activities as such
     activities relate to the finishing of Tenant's products;

9.   explosives manufacturing, use or storage;

10.  hazardous waste treatment, storage, or disposal;

11.  leather production, tanning or finishing;

12.  machinery and tool manufacturing; provided, however, Tenant may manufacture
     OEM equipment and tools consistent with Tenant's existing manufacturing
     facilities and the Permitted Use set forth in the Basic Lease Information;

13.  medical equipment manufacturing and hospitals;

14.  metal shredding, recycling or reclamation; provided, however, Tenant shall
     be permitted to recover and recycle naturally occurring materials so long
     as such materials are processed and recovered by an outside vendor. All
     storage and collection of this material will be limited to the inside of
     the Premises;

15.  metal smelting and refining;

16.  mining;

17.  paint, pigment and coating operations; provided, however, Tenant may
     incorporate full powder coating processes, subject to any and all
     applicable governmental laws, rules, regulations and/or requirements;

18.  petroleum refining;

19.  plastic and synthetic materials manufacturing; provided, however, Tenant
     may use machine welding and extracting processes in the ordinary course of
     Tenant's business;

20.  solvent reclamation;

21.  tire and rubber manufacturing;

22.  above- and/or underground storage tanks; provided, however, Tenant shall be
     permitted to transfer a limited amount of process water from the powder
     coat cleaning line to an evaporator tank with a closed loop system. Any
     secondary containment shall be subject to Landlord's prior review and/or
     approval; and

23.  residential use or occupancy.

                                    EXHIBIT E


                                       -1-




                             SCHEDULE 1 to EXHIBIT E

                           CHEMICALS TO BE STORED AND
                              USED ON THE PREMISES*

1.   Isopropyl Alcohol (one 55 gallon drum)

2.   Diphenylmethane Diisocyanate (one 55 gallon drum)

3.   Glycerol Polyether (one 55 gallon drum)

4.   Simple Asphyxiant (Argon 75%, Co(2) 25%), in the quantity set forth in that
     certain Hazardous Substance Information Survey dated October 1, 1999 for
     Facility ID No. 064875 (the "Survey")

5.   Acetylene, in the quantity set forth in the Survey

6.   Ammonia/Air (5000 ppm), in the quantity set forth in the Survey

7.   Gaseous NH(3) in air mixtures in 300 ft(3) cylinders
     (a)  (9)100 ppm
     (b)  (9)1000 ppm
     (c)  (17)5000 ppm

8.   (1) Pure N(2),300 ft(3) cylinder

9.   (1) Pure N(2),80 ft(3) cylinder

10.  (2) NH(3) Permeation tubes (-20 ng/L emission) (2 grams)

11.  N-methyl pyrrolidone permeation tube (-20 ng/L emission) (2 grams)

12.  Dimethyl methylphosphonate (DMMP) permeation tube (2 grams)

13.  (3) Ni63 radiation sources (-15 mCu)

14.  Ammonium hydroxide, 1 gal.

15.  Hydrochloric acid, 1 gal.

16.  Acetone, 1 gal.

17.  Colorimeter (Puremate) tubes
     (a)  Silica gel (2 grams)
     (b)  Phosphoric acid (2 grams)
     (c)  Bromomethyl blue (2 grams)

18.  Trichloroethylene (less than one gallon)

19.  Hydrochloric acid (less than one gallon)

20.  Phosphoric acid (less than one gallon)

21.  Citric acid (less than one gallon)

22.  Nitric acid (less than one gallon)

23.  Hydrofluoric acid (less than one gallon)

24.  Acetic acid (less than one gallon)

25.  Sulfuric acid (less than one gallon)

26.  N-methyl pyrrolidone (less than one gallon)

*    Subject to modification pursuant to Section 11 of the Lease.

                             SCHEDULE 1 to EXHIBIT E


                                       -1-



                                    EXHIBIT F

                              RULES AND REGULATIONS

1.   No automobile, recreational vehicle or any other type of vehicle or
     equipment shall remain upon the Common Area longer than 72 hours and no
     vehicle or equipment of any kind shall be dismantled or repaired or
     serviced on the Common Area. All vehicle parking shall be restricted to
     areas designated and marked for vehicle parking. The foregoing restrictions
     shall not be deemed to prevent temporary parking for loading or unloading
     of vehicles in designated areas.

2.   Signs will conform to sign standards and criteria established from time to
     time by Landlord. No other signs, placards, pictures, advertisements, names
     or notices shall be inscribed, displayed or printed or affixed on or to any
     part of the outside or inside of the building without the written consent
     of Landlord and Landlord shall have the right to remove any such
     non-conforming signs, placards, pictures, advertisements, names or notices
     without notice to and at the expense of Tenant.

3.   No antenna, aerial, discs, dishes or other such device shall be erected on
     the roof or exterior walls of the Premises, or on the grounds, without the
     written consent of the Landlord in each instance. Any device so installed
     without such written consent shall be subject to removal without notice at
     any time.

4.   No loud speakers, televisions, phonographs, radios or other devices shall
     be used in a manner so as to be heard or seen outside of the Premises
     without the prior written consent of the Landlord.

5.   The outside areas immediately adjoining the Premises shall be kept clean
     and free from dirt and rubbish by the Tenant to the satisfaction of
     Landlord and Tenant shall not place or permit any obstruction or materials
     in such areas or permit any work to be performed outside the Premises.

6.   No open storage shall be permitted in the Project.

7.   All garbage and refuse shall be placed in containers placed at the location
     designated for refuse collection, in the manner specified by Landlord.

8.   No vending machine or machines of any description shall be installed,
     maintained or operated upon the Common Area.

9.   Tenant shall not disturb, solicit, or canvass any occupant of the building
     and shall cooperate to prevent same.

10.  No noxious or offensive trade or activity shall be carried on upon any
     units or any part of the Common Area nor shall anything be done thereon
     which would in any way interfere with the quiet enjoyment of each of the
     other tenants of the Project or which would increase the rate of insurance
     or overburden utility facilities from time to time existing in the Project.

11.  Landlord reserves the right to make commercially reasonable amendments to
     these rules and regulations from time to time as are nondiscriminatory and
     not inconsistent with the Lease, provided that Landlord provides Tenant
     with prior notice of any such change or amendment.

                                    EXHIBIT F


                                       -1-



                                    EXHIBIT G

             REQUIREMENTS FOR IMPROVEMENTS OR ALTERATIONS BY TENANT

     If Landlord shall permit Tenant to construct any initial tenant
improvements in the Premises or to have any work performed in the Premises at
any time prior to or during the Lease term by a contractor retained by Tenant
("Tenant's Work"), then Tenant shall comply with the requirements set forth
herein. If tenant's Work has been properly authorized, Tenant will receive
written approval and consent for alterations to the Premises.

     1. SUBMITTAL OF PLANS. Prior to commencing any work in the Premises, Tenant
shall submit to Landlord for approval its proposed plans for the work. Without
limiting the foregoing, Tenant shall provide:

          (a) A separate scale drawing denoting all proposed construction
and/or demolition, if necessary.

          (b) A separate drawing for each trade proposing structural,
electrical, mechanical, civil or landscaping modifications.

          (c) Specify all dimensions and complete references to all work to be
performed in the affected areas.

          (d) If adding extra electrical or mechanical equipment, provide
complete operating and maintenance specifications for each item.

Landlord shall use its commercially reasonable efforts to respond to any written
request from Tenant. Landlord's failure to respond to a written request from
Tenant shall be deemed be Landlord's disapproval of the applicable request for
approval hereunder.

     2. CHECKLIST. With respect to each project, Landlord will provide Tenant
with a checklist listing the items required to be furnished to Landlord in
connection with the proposed work. Tenant shall furnish to Landlord prior to,
during, or upon completion of Tenant's Work, as applicable, each of the
items specified in the checklist attached hereto as Attachment 1.

     3. CONTRACTORS PROVIDING TENANT IMPROVEMENT SERVICES.

          (a) The contractor employed by Tenant and any subcontractors shall be
(i) duly licensed in the state in which the Premises are located, and (ii)
subject to Landlord's prior written approval, which approval shall not be
unreasonably withheld. If more than one trade is employed on a single job, state
law requires the services of a general contractor in addition to contractors for
specialty work being performed.

          (b) Each contractor shall provide proof of licensing as a general or
specialty contractor in accordance with state law. Additionally, each contractor
shall furnish proof of licensing in the city or municipality in which the
construction related activity is to take place.

          (c) Tenant shall use Landlord's subcontractor for mechanical,
electrical, plumbing, roofing and roofing consultant; provided, however, Tenant
may, without the prior consent or approval of, but with notice to Landlord,
engage Current Electric and/or Christenson Electric (collectively, the
"Pre-Approved Electrical Contractors") to serve as the subcontractor(s) to
perform any electrical work related to the Premises. Notwithstanding the
foregoing, all work to be performed by the Pre-Approved Electrical Contractors
shall otherwise comply with all of the terms and conditions of this Exhibit G.

          (d) Tenant and Tenant's contractors shall comply with all Applicable
Laws pertaining to the performance of Tenant's Work and the completed
improvements and all applicable safety regulations established by Landlord or
the general contractor.

                                    EXHIBIT G


                                       -1-



          (e) Prior to commencement of any work in the Premises, Tenant and
Tenant's contractors (and any subcontractors) shall obtain and provide Landlord
with certificates evidencing Workers' Compensation, public liability and
property damage insurance in amounts and forms and with companies satisfactory
to Landlord. Each general contractor (and any subcontractor) employed on the
Premises shall provide Landlord with a current certificate of insurance in
effect for that contractor with a thirty day notice of cancellation or
revocation clause. Insurance requirements are as follows:

               (i) Comprehensive General Liability with a $2,000,000 Combined
Single Limit covering the liability of Landlord and contractor for bodily injury
and property damage arising as a result of the construction of the improvements
and the services performed thereunder. Landlord shall be named as an additional
insured.

               (ii) Comprehensive Automobile Liability with a $2,000,000
Combined Single Limit covering Landlord and vehicles used by contractor (and any
subcontractor) in connection with the construction of the improvements.

               (iii) Workers' Compensation and Employer's Liability as required
by law, for employees of the contractor (and any subcontractors) performing work
on the Premises.

          (f) The following requirements shall be incorporated as "Special
Conditions" into the contract between Tenant and its contractors and a copy of
the contract shall be furnished to Landlord prior to the commencement of
Tenant's Work:

               (i) Prior to start of Tenant's Work, Tenant's contractor shall
provide Landlord with a construction schedule in "bar graph" form indicating the
completion dates of all phases of Tenant's Work.

               (ii) Tenant's contractor shall be responsible for the repair,
replacement or clean-up of any damage done by it to other contractors' work
which specifically includes accessways to the Premises which may be concurrently
used by others.

               (iii) Tenant's contractor shall accept the Premises prior to
starting any trenching operations. Any rework of sub-base or compaction required
after the contractor's initial acceptance of the Premises shall be done by
Tenant's contractor, which shall include the removal from the Project of any
excess dirt or debris.

               (iv) Tenant's contractor shall contain its storage of materials
and its operations within the Premises and such other space as it may be
assigned by Landlord or Landlord's contractor. Should Tenant's contractor be
assigned space outside the Premises, it shall move to such other space as
Landlord or Landlord's contractor shall direct from time to time to avoid
interference or delays with other work.

               (v) Tenant's contractor shall clean up the construction area and
surrounding exterior areas daily. All trash, demolition materials and surplus
construction materials shall be stored within the Premises and promptly removed
from the Premises and the Project and disposed of in an approved sanitation
site.

               (vi) Tenant's contractor shall provide temporary utilities,
portable toilet facilities, and potable drinking water as required for its work
within the Premises and shall pay to Landlord's contractor the cost of any
temporary utilities and facilities provided by Landlord's contractor at Tenant's
contractor's request.

               (vii) Tenant's contractor shall notify Landlord or Landlord's
project manager of any planned work to be done on weekends or other than normal
job hours.

               (viii) Tenant's contractor or subcontractors shall not post signs
on any part of the Project or on the Premises, except for any notices required
to be posted by any applicable federal, state or local law or regulation.

                                    EXHIBIT G


                                       -2-



          (g) Tenant shall provide Landlord with a set of "As-Built" drawings
for any work performed to the Premises.

     4. COSTS.

          (a) Tenant shall promptly pay any and all costs and expenses in
connection with or arising out of the performance of Tenant's Work (including
the costs of permits therefor) and shall furnish to Landlord evidence of such
payment upon request.

          (b) Tenant shall reimburse Landlord for all costs which Landlord may
incur in connection with granting approval to Tenant for any alteration and/or
addition, including any costs or expenses which Landlord may incur in electing
to have outside architects and engineers review said matters. Tenant shall pay
Landlord an amount equal to five percent (5%) of the total hard costs of
construction and installation of Tenant's Work as compensation to Landlord for
review of plans, use of facilities and other miscellaneous costs of Landlord
incurred as a result of such work. Notwithstanding the foregoing, such five
percent (5%) charge shall not apply to the work related to the tenant
improvements contemplated in the Work Letter attached to the Lease as Exhibit B.

     5. CONTRACTOR'S BONDS. Prior to the commencement of construction, Tenant
shall obtain or cause its contractor to obtain and deliver evidence thereof to
Landlord payment and performance bonds covering the faithful performance of the
contract for the construction of the Tenant's Work and the payment of all
obligations arising thereunder. In the alternative, and at Landlord's option,
Tenant may appoint Landlord as its contractor, and in so doing, Tenant shall
deposit with the Landlord a sum of money equal to the entire amount of the
estimated construction cost, as is required for the installation of the Tenant
improvements on the Premises. If Tenant deposits with Landlord monies for
construction costs, it is agreed that Landlord will not be placed in a fiduciary
capacity as a trustee, or any other fiduciary title, for the sums of monies in
Landlord's possession. Tenant agrees to hold Landlord harmless from any and all
claims, for workmanship and installation of improvements, and for
merchantability and quality of goods used for the installation of Tenant's
improvements, as are requested by Tenant. Any bonds obtained pursuant hereto
shall be for the mutual benefit of both Landlord and Tenant as obligees and
beneficiaries.

     6. MECHANIC'S LIENS.

          (a) Tenant shall not suffer or permit to be enforced against the
Premises or any part of the Project any mechanic's, materialman's, contractor's
or subcontractor's lien arising out of any work of improvement, however it may
arise.

          (b) Tenant shall notify Landlord at least ten (10) days prior to the
commencement of construction of any Tenant's Work and Landlord shall have the
right to post and record a notice of nonresponsibility in conformity with
applicable law. Within ten (10) days following completion of Tenant's
Work, Tenant shall file a Notice of Completion and deliver to Landlord an
unconditional release and waiver of lien executed by each contractor,
subcontractor and materialman involved in Tenant's Work.

          (c) In the event any lien is filed against the Project or any portion
thereof or against Tenant's leasehold interest therein, Tenant shall obtain the
release and/or discharge of said lien, within ten (10) days after the filing
thereof. In the event Tenant fails to do so, Landlord may obtain the release
and/or discharge of said lien and Tenant shall indemnify Landlord for the costs
thereof, including reasonable attorney's fees, together with interest at the
Applicable Interest Rate from the date of demand. Nothing herein shall prohibit
Tenant from contesting the validity of any such asserted claim, provided Tenant
has furnished to Landlord a lien release bond freeing the Premises from the
effect of the lien claim.

     7. INDEMNITY. The respective indemnity obligations of Landlord and Tenant
created pursuant to Section 8.4 of the Lease shall apply with respect to any and
all of Tenant's Work (whether occurring on or before the Commencement Date) and
with respect to any work to be performed by Landlord under this Exhibit G.
Tenant shall repair or replace (or, at Landlord's election, reimburse Landlord
for the cost of repairing or replacing) any portion of the Building or item of
Landlord's equipment or any of Landlord's real or personal property damaged,
lost or destroyed in the performance of Tenant's Work.

                                    EXHIBIT G


                                       -3-



     8. BUILDING STANDARDS. All work shall conform to Landlord's established
building standards and specifications. Tenant is required to make these
standards part of the construction documents.

     9. ROOF PENETRATIONS. If improvements penetrate the roof membrane, the
penetrations will be sealed per Landlord/IRC roofing specifications and
inspected by IRC to maintain roof warranty. The cost of inspection and all
corrective work shall be borne by Tenant. Tenant shall use Landlord's original
roofing contractor.

     10. BUILDING MODIFICATIONS. Work will only be approved within the confines
of a given space. Tenant will not be allowed without Landlord's written consent
to modify building exterior or mechanical and electrical service as provided to
the building in common with other tenants.

     11. ELECTRICAL WORK. All electrical work shall be approved from the unit
space electrical panel only. Additional service requirements shall be. secured
only by direction of Landlord. Tenant shall use Landlord's original electrical
contractor.

     12. SCHEDULE OF WORK. Tenant may be required to provide a schedule of all
work to be performed, subject to Landlord approval. All costs to produce such
schedule shall be borne solely by Tenant.

     13. CLEAN UP AND DISPOSAL OF CONSTRUCTION DEBRIS. Building trash containers
are provided for office generated trash only and are not to be used for disposal
of construction-related materials and debris. Unapproved usage will result in a
penalty assessment to the Tenant equal to the cost of an extra pick-up service
as provided under the current rate schedule of regular trash removal service.

     14. INSPECTION BY LANDLORD. Landlord reserves the following rights: (i) the
right of inspection prior to, during and at completion of all construction
and/or demolition, (ii) the right to post and record a notice of
nonresponsibility in conformity with Oregon law, and (iii) the right to order a
total stop to all improvements underway for non-compliance with any of the
requirements hereof.

     15. GENERAL PROVISIONS.

          (a) If Landlord has agreed to provide an allowance toward the cost of
tenant improvements, Landlord shall retain from such funds an amount determined
by Landlord until Tenant has fully complied with the requirements hereof.

          (b) All materials, work, installations and decorations of any nature
whatsoever brought on or installed in the Premises before the commencement of
the Term or throughout the Term shall be at Tenant's risk, and neither Landlord
nor any party acting on Landlord's behalf shall be responsible for any damage
thereto or loss or destruction thereof due to any reason or cause whatsoever.

          (c) Nothing contained herein shall make or constitute Tenant as the
agent of Landlord.

                                    EXHIBIT G


                                       -4-



                             ATTACHMENT TO EXHIBIT G

         ITEMS TO BE FURNISHED TO LANDLORD FOR EACH WORK OF IMPROVEMENT

1.   Plan of Alterations for Landlord Approval.

2.   Contractor(s), Address, Telephone Number, Contact Person.

3.   Copy of Contractor's State and City Business License.

4.   Copy of Building Permit.

5.   Copy of Final Inspection and Signed Building Permit Cards.

6.   Copy of Certificate of Insurance Naming Catellus Development Corporation as
     Additional Insured. Insurance to include Comprehensive General Liability,
     Comprehensive Auto, Workers' Compensation and Employer's Liability.

7.   Signed Unconditional Lien Waiver in Favor of Catellus Development
     Corporation.

8.   Schedule of Work.

9.   Copy of Completion and Payment Bond.

10.  Architect's License and Expiration.

11.  Tenant and Architect Agreement.

12.  Tenant and Contractor Agreement.

13.  Copy of Permit Plans.

14.  Copy of As-Builts.

15.  Copy of Recorded Notice of Completion.

16.  Certificate of Occupancy.

17.  Evidence of Insurance for All-Risk/builder's Risk Insurance to the Amount
     of Improvements.

                             ATTACHMENT to EXHIBIT G


                                      -1-



                                    EXHIBIT H

                          TENANT ESTOPPEL CERTIFICATE

To: [Insert name of party to rely on document] ("Relying Party")

    __________________________________________
    __________________________________________
    __________________________________________
    Attn: ____________________________________

Re: Lease Dated:      ________________________
    Current Landlord: ________________________
    Current Tenant:   ________________________
    Square Feet:      Approximately __________
    Floor(s):         ________________________
    Located at:       ________________________

     ("Tenant") hereby certifies that as of ______________, 200_:

     1. Tenant is the present owner and holder of the tenant's interest under
the lease described above, as it may be amended to date (the "Lease") with
__________ as Landlord (who is called "Landlord" for the purposes of this
Certificate). (USE THE NEXT SENTENCE IF THE LANDLORD OR TENANT NAMED IN THE
LEASE IS A PREDECESSOR TO THE CURRENT LANDLORD OR TENANT.) [The original
landlord under the Lease was __________, and the original tenant under the Lease
was __________.] The Lease covers the premises commonly known as __________ (the
"Premises") in the building (the "Building") at the address set forth above.

                (CHOOSE ONE OF THE FOLLOWING SECTION 2(a)s BELOW)

     [2. (a) A true, correct and complete copy of the Lease (including all
modifications, amendments, supplements, side letters, addenda and riders of and
to it) is attached to this Certificate as Exhibit A.]

     [2 (a) The attached Exhibit A accurately identifies the Lease and all
modifications, amendments, supplements, side letters, addenda and riders of and
to it.]

          (b) (IF APPLICABLE) [The Lease provides that in addition to the
Premises, Tenant has the right to use or rent __________ [assigned/unassigned]
parking spaces near the Building or in the garage portion of the building during
the term of the Lease.]

          (c) The term of the Lease commenced on ___________, 200_ and will
expire on ___________, _____, including any presently exercised option or
renewal term. (CHOOSE ONE OF THE FOLLOWING TWO SENTENCES.) [Tenant has no option
or right to renew, extend or cancel the Lease, or to lease additional space in
the Premises or Building, or to use any parking (IF APPLICABLE) [other than that
specified in Section 2(b) above].] [Except as specified in Paragraph(s)
___________ of the Lease (copy attached), Tenant has no option or right to
renew, extend or cancel the Lease, or to lease additional space in the Premises
or Building, or to use any parking (IF APPLICABLE) [other than that specified in
Section 2(b) above].]

                   (CHOOSE ONE OF THE FOLLOWING SECTION 2(d)s)

          [(d) Tenant has no option or preferential right to purchase all or any
part of the Premises (or the land of which the Premises are a part). Tenant has
no right or interest with respect to the Premises or the Building other than as
Tenant under the Lease.]

                                    EXHIBIT H


                                       -1-



          [(d) Except as specified in Paragraph(s) ___________ of the Lease
(copy attached), Tenant has no option or preferential right to purchase all or
any part of the Premises (or the land of which the Premises are a part). Except
for the foregoing, Tenant has no right or interest with respect to the Premises
or the Building other than as Tenant under the Lease.]

          (e) The annual minimum rent currently payable under the Lease is
$__________ and such rent has been paid through ___________, 200_. (IF
APPLICABLE) [The annual percentage rent currently payable under the Lease is at
the rate of ___________ and such rent has been paid through ___________, 200_.]

          (f) (IF APPLICABLE) [Additional rent is payable under the Lease for
(i) operating, maintenance or repair expenses, (ii) property taxes, (iii)
consumer price index cost of living adjustments, or (iv) percentage of gross
sales adjustments (i.e., adjustments made based on underpayments of percentage
rent). Such additional rent has been paid in accordance with Landlord's rendered
bills through ___________, 200_. The base year amounts for additional rental
items are as follows; (1) operating, maintenance or repair expenses
$___________, (2) property taxes $___________, and (3) consumer price index
___________ (please indicate base year CPI level).]

          (g) Tenant has made no agreement with Landlord or any agent,
representative or employee of Landlord concerning free rent, partial rent,
rebate of rental payments or any other similar rent concession (IF APPLICABLE)
[except as expressly set forth in Paragraph(s) ___________ of the Lease (copy
attached)].

          (h) Landlord currently holds a security deposit in the amount of
$___________ which is to be applied by Landlord or returned to Tenant in
accordance with Paragraph(s)___________ of the Lease. Tenant acknowledges and
agrees that Relying Party shall have no responsibility or liability for any
security deposit, except to the extent that any security deposit shall have been
actually received by Relying Party.

     3. (a) The Lease constitutes the entire agreement between Tenant and
Landlord with respect to the Premises, has not been modified changed, altered or
amended and is in full force and effect in the form (CHOOSE ONE) [attached
as/described in] Exhibit A. There are no other agreements, written or oral,
which affect Tenant's occupancy of the Premises.

          (b) All insurance required of Tenant under the Lease has been provided
by Tenant and all premiums have been paid.

          (c) To the best knowledge of Tenant, no party is in default under the
Lease. To the best knowledge of Tenant, no event has occurred which, with the
giving of notice or passage of time, or both, would constitute such a default.

          (d) The interest of Tenant in the Lease has not been assigned or
encumbered. Tenant is not entitled to any credit against any rent or other
charge or rent concession under the Lease except as set forth in the Lease. No
rental payments have been made more than one month in advance.

     4. All contributions required to be paid by Landlord to date for
improvements to the Premises have been paid in full and all of Landlord's
obligations with respect to tenant improvements have been fully performed.
Tenant has accepted the Premises, subject to no conditions other than those set
forth in the Lease.

     5. Neither Tenant nor any guarantor of Tenant's obligations under the Lease
is the subject of any bankruptcy or other voluntary or involuntary proceeding,
in or out of court, for the adjustment of debtor-creditor relationships.

     6. (a) As used here, "Hazardous Substance" means any substance, material or
waste (including petroleum and petroleum products) which is designated,
classified or regulated as being "toxic" or "hazardous" or a "pollutant" or
which is similarly designated, classified or regulated, under any federal, state
or local law, regulation or ordinance.

                                  EXHIBIT H


                                       -2-



          (b) Tenant represents and warrants that it has not used, generated,
released, discharged, stored or disposed of any Hazardous Substances on, under,
in or about the Building or the land on which the Building is located (IF
APPLICABLE) [, other than Hazardous Substances used in the ordinary and
commercially reasonable course of Tenant's business in compliance with all
applicable laws]. (IF APPLICABLE) [Except for such commercially reasonable use
by Tenant,] Tenant has no actual knowledge that any Hazardous Substance is
present, or has been used, generated, released, discharged, stored or disposed
of by any party, on, under, in or about such Building or land.

     7. Tenant hereby acknowledges that Landlord intends to [discuss action to
be taken vis-a-vis Relying Party]. Tenant acknowledges the right of Landlord,
Relying Party and any and all of Landlord's present and future lenders and their
successors and assigns to rely upon the statements and representations of Tenant
contained in this Certificate and further acknowledges that any action taken by
such parties will be made and entered into in material reliance on this
Certificate.

     8. Tenant hereby agrees to furnish Relying Party with such other and
further estoppel as Relying Party may reasonably request.

                                        ----------------------------------------
                                                                               ,
                                        ---------------------------------------
                                        a
                                          --------------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                    EXHIBIT H


                                       -3-



                                    EXHIBIT I

                     FORM OF SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

RECORDING REQUESTED BY                )
AND WHEN RECORDED MAIL TO:            )

Bank of America N.A.                  )
600 Montgomery Street, 22nd Floor     )
San Francisco, CA 94111               )
Attention: Donald H. Moses, Principal )

                                                  Space above for Recorder's Use

                          SUBORDINATION, NONDISTURBANCE
                            AND ATTORNMENT AGREEMENT

     NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS
     IN YOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE
     LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.

     This Subordination, Nondisturbance and Attornment Agreement ("Agreement")
is entered into as of the __________ day of __________, 2000 by and among
SYNETICS SOLUTIONS INC., an Oregon corporation ("Tenant"). Catellus Development
Corporation, a Delaware corporation ("Borrower") and Bank of America National
Trust and Savings Association ("Bank").

                               FACTUAL BACKGROUND

     A. Borrower owns certain real property in the County of Multnomah, State of
Oregon, more particularly described in the attached Schedule 1 term "Property"
herein means that real property together with all improvements (the
"Improvements") located on it.

     B. Bank has made or agreed to make a loan to Borrower in the principal
amount of __________ and _____ /100 Dollars ($__________) (the "Loan") as
provided in a loan agreement (the "Loan Agreement"). The Loan is or will be
evidenced by a promissory note (the "Note") which is or will be secured by a
deed of trust encumbering the Property (the "Deed of Trust") with an assignment
of rents. The Loan Agreement, the Note, the Deed of Trust, this Agreement and
all other documents and instruments identified in the Loan Agreement as "Loan
Documents" shall be collectively referred to herein as the "Loan Documents".

     C. Tenant and Borrower (as landlord) entered into a lease dated
___________, 2000 (the "Lease") under which Borrower leased to Tenant a portion
of the Improvements located within the Property and more particularly described
in the Lease (the "Premises").

     D. It is a requirement of the Loan to Borrower that Tenant agree, among
other things, to subordinate Tenant's rights under the Lease to the lien of the
Loan Documents and to attorn to Bank on the terms and conditions of this
Agreement. Tenant is willing to agree to such subordination and attornment and
other conditions, provided that Bank agrees to a nondisturbance provision, all
as set forth more fully below.

                                    EXHIBIT I


                                       -1-



                                   AGREEMENT:

     Therefore, the parties agree as follows:

     1. Subordination. The Loan Documents and all supplements, amendments,
modifications, renewals, replacements and extensions of and to them shall
unconditionally be and remain at all times a lien on the Property prior and
superior to the Lease, to the leasehold estate created by it, and to all rights
and privileges of Tenant under it. The Lease and leasehold estate, together with
all rights and privileges of Tenant under that Lease, are hereby unconditionally
made subordinate to the lien of the Loan Documents in favor of Bank. Tenant
consents to Borrower and Bank entering into the Deed of Trust and the other Loan
Documents. Tenant further declares, agrees and acknowledges that in making
disbursements under the Loan Documents Bank has no obligation or duty to, nor
has Bank represented that it will, see to the application of such proceeds by
the person or persons to whom they are disbursed by Bank, and any application or
use of such proceeds for purposes other than those provided for in the Loan
Documents shall not defeat the subordination made in this Agreement, in whole or
in part.

     2. Definitions of "Transfer of the Property" and "Purchaser". As used
herein, the term "Transfer of the Property" means any transfer of Borrower's
interest in the Property by foreclosure, trustee's sale or other action or
proceeding for the enforcement of the Deed of Trust or by deed in lieu thereof.
The term "Purchaser", as used herein, means any transferee, including Bank, of
the interest of Borrower as a result of any such Transfer of the Property and
also includes any and all successors and assigns, including Bank, of such
transferee.

     3. Nondisturbance. The enforcement of the Deed of Trust shall not terminate
the Lease or disturb Tenant in the possession and use of the Premises unless at
the time of foreclosure Tenant is in material default under the Lease or this
Agreement beyond any applicable grace or cure periods, and Bank so notifies
Tenant in writing at or prior to the time of the foreclosure sale that the Lease
will be terminated by foreclosure because of such default. The nondisturbance
herein granted is subject to Section 5 below. This nondisturbance applies to any
option to extend or renew the Lease term which is set forth in the Lease as of
the date of this Agreement.

     4. Attornment. Subject to Section 3 above, if any Transfer of the Property
should occur, Tenant shall and hereby does attorn to Purchaser, including Bank
if it should be the Purchaser, as the landlord under the Lease, and Tenant shall
be bound to Purchaser under all of the terms, covenants and conditions of the
Lease for the balance of the Lease term and any extensions or renewals of it
which may then or later be in effect under any validly exercised extension or
renewal option contained in the Lease, all with the same force and effect as if
Purchaser had been the original landlord under the Lease. This attornment shall
be effective and self-operative without the execution of any further instruments
upon Purchaser's succeeding to the interest of the landlord under the Lease.

     5. Subordination of Options and Rights of First Refusal. The Loan Documents
and all supplements, amendments, modifications, renewals, replacements and
extensions of and to them shall unconditionally be and remain at all times a
lien on the Property prior and superior to any existing or future right of
Tenant, whether arising out of the Lease or otherwise, to exercise any option or
right of first refusal to:

          (a)  purchase the Premises or the Property or any interest or portion
               in or of either of them; or

          (b)  expand into other space in the Improvements.

     Tenant specifically agrees and acknowledges that upon any Transfer of the
Property, any such purchase or expansion option or right of first refusal,
whether now existing or in the future arising, shall terminate and be
inapplicable to the Property notwithstanding the nondisturbance granted to
Tenant in Section 3 above. If any option or right of first refusal to purchase
is exercised prior to a Transfer of the Property, any title so acquired to all
or any part of the Property shall be subject to the lien of the Loan Documents,
which lien shall in no way be impaired by the exercise of such option or right
of first refusal. Bank specifically reserves all of its rights to enforce any
accelerating transfer, due on sale, due on encumbrance or similar provision in
the Deed of Trust or any other Loan Document.

                                  EXHIBIT I


                                       -2-



     6. Notices of Default; Material Notices; Bank's Rights to Cure Default.
Tenant shall send a copy of any notice of default or similar statement with
respect to the Lease to Bank at the same time such notice or statement is sent
to Borrower. In the event of any act or omission by Borrower which would give
Tenant the right to terminate the Lease or to claim a partial or total eviction,
Tenant shall not exercise any such right or make any such claim until it has
given Bank written notice of such act or omission and has given Bank either
thirty (30) days to cure the default if the default is monetary or a reasonable
time for Bank to cure the default if the default is nonmonetary. Nothing in
this Agreement, however, shall be construed as a promise or undertaking by Bank
to cure any default of Borrower.

     7. Limitation on Bank's Performance. Nothing in this Agreement shall be
deemed or construed to be an agreement by Bank to perform any covenant of
Borrower as landlord under the Lease. Tenant agrees that if Bank becomes
Purchaser then, upon subsequent transfer of the Property by Bank to a new owner,
Bank shall have no further liability under the Lease after said transfer.

     8. Limitation on Liability. No Purchaser who acquires title to the Property
shall have any obligation or liability beyond its interest in the Property.

     9. Tenant's Covenants. Tenant agrees that during the term of the Lease,
without Bank's prior written consent, Tenant shall not:

          (a) pay any rent or additional rent more than one month in advance to
     any landlord including Borrower; or

          (b) cancel, terminate or surrender the Lease, except at the normal
     expiration of the Lease term or as provided in Section 6 above; or

          (c) enter into any material amendment, modification or other agreement
     relating to the Lease; or

          (d) assign or sublet any portion of the Lease or the Premises, except
     as expressly permitted in the Lease.

     10. Bank Not Obligated. Bank, if it becomes the Purchaser or if it takes
possession under the Deed of Trust, and any other Purchaser shall not (a) be
liable for any damages or other relief attributable to any act or omission of
any prior Landlord under the Lease including Borrower; or (b) be subject to any
offset or defense not specifically provided for in the Lease which Tenant may
have against any prior landlord under the Lease; or (c) be bound by any
prepayment by Tenant of more than one month's installment of rent; or (d) be
obligated for any security deposit not actually delivered to Purchaser; or (e)
be bound by any modification or amendment of or to the Lease unless the
amendment or modification shall have been approved in writing by Bank. Borrower
agrees to deliver to Purchaser any security deposits in its possession at the
time Purchaser takes possession of the Property.

     11. Tenant's Estoppel Certificate.

          (a) True and Complete Lease. Tenant represents and warrants to Bank
     that Schedule 2 accurately identifies the Lease and all amendments,
     supplements, side letters and other agreements and memoranda pertaining to
     the Lease, the leasehold and/or the Premises.

          (b) Tenant's Option Rights. Tenant has no right or option of any
     nature whatsoever, whether arising out of the Lease or otherwise, to
     purchase the Premises or the Property, or any interest or portion in or of
     either of them, to expand into other space in the Improvements or to extend
     or renew the term of the Lease, except as described in the attached
     Schedule 3.

          (c) No Default. As of the date of this Agreement, Tenant represents
     and warrants that to the best of Tenant's knowledge there exist no events
     of default or events that with notice or the passage of time or both would
     be events of default under the Lease on either the Tenant's part or the
     Borrower's, nor is there

                                    EXHIBIT I


                                       -3-



     any right of offset against any of Tenant's obligations under the Lease,
     except as described in the attached Schedule 4. Tenant represents and
     warrants that the Lease is in full force and effect as of the date of this
     Agreement.

          (d) Hazardous Substances. Tenant represents and warrants that it has
     not used, generated, released, discharged, stored or disposed of any
     Hazardous Substances on, under, in or about the Property other than
     Hazardous Substances used in the ordinary and commercially reasonable
     course of Tenant's business in compliance with all applicable laws. Except
     for such legal and commercially reasonable use by Tenant, Tenant has no
     actual knowledge that any Hazardous Substance is present or has been used,
     generated, released, discharged, stored or disposed of by any party on,
     under, in or about the Property. As used herein "Hazardous Substance" means
     any substance, material or waste (including petroleum and petroleum
     products), which is designated, classified or regulated as being "toxic" or
     "hazardous" or a "pollutant" or which is similarly designated, classified
     or regulated under any federal, state or local law, regulation or
     ordinance.

     12. Integration; Etc. This Agreement integrates all of the terms and
conditions of the parties' agreement regarding the subordination of the Lease to
the Loan Documents, attornment, nondisturbance and the other matters contained
herein. This Agreement supersedes and cancels all oral negotiations and prior
and other writings with respect to (a) such subordination (only to such extent,
however, as would affect the priority between the Lease and the Loan Documents),
including any provisions of the Lease which provide for the subordination of the
Lease to a deed of trust or to a mortgage and (b) such attornment,
non-disturbance and other matters contained herein. If there is any conflict
between the terms, conditions and provisions of this Agreement and those of any
other agreement or instrument, including the Lease, the terms, conditions and
provisions of this Agreement shall prevail. This Agreement may not be modified,
or amended except by a written agreement signed by the parties or their
respective successors in interest. This Agreement may be executed in
counterparts, each of which is an original but all of which shall constitute one
and the same instrument.

     13. Notices. All notices given under this Agreement shall be in writing and
shall be given by personal delivery, overnight receipted courier or by
registered or certified United States mail, postage prepaid, sent to the party
at its address appearing below. Notices shall be effective upon receipt (or on
the date when proper delivery is refused). Addresses for notices may be changed
by any party by notice to all other parties in accordance with this Section.
Service of any notice on any one Borrower shall be effective service on Borrower
for all purposes.

          To Bank:     Bank of America N.A.
                       San Francisco Structured Debt Group #9105
                       600 Montgomery Street, 22nd Floor
                       San Francisco, California 94111
                       Attn: Donald H. Moses

          To Borrower: Catellus Development Corporation
                       201 Mission Street
                       San Francisco, California 94105
                       Attn: Asset Management

          To Tenant:   Synetics Solutions Inc.
                       7440 S.W. Bonita Avenue
                       Tigard, Oregon 97224
                       Attn: Koki Nakamura

     14. Attorneys' Fees. If any lawsuit, judicial reference or arbitration
is commenced which arises out of or relates to this Agreement, the prevailing
party shall be entitled to recover from each other party such sums as the court,
referee or arbitrator may adjudge to be reasonable attorneys' fees, including
the costs for any legal services by in-house counsel, in addition to costs and
expenses otherwise allowed by law.

     15. Miscellaneous Provisions. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors and assigns.
This Agreement is governed by the laws of the State of

                                    EXHIBIT I


                                       -4-



California without regard to the choice of law rules of that State. This
Agreement satisfies any condition or requirement in the Lease relating to the
granting of a nondisturbance agreement by Bank. As used herein, the word
"include(s)" means "include(s) without limitation," and the word "including"
means "including but not limited to." Bank, at its sole discretion, may but
shall not be obligated to record this Agreement.

     16. Arbitration; Judicial Reference. Bank and Borrower have agreed in the
Loan Agreement that any dispute shall be resolved by arbitration or judicial
reference. Therefore any controversy or claim between or among the parties
hereto (including Tenant) which arises out of or relates to this Agreement,
including any claim based on or arising from an alleged tort, shall also be
determined by arbitration or judicial reference as set forth below.

          (a) Judicial Reference. In any judicial action between or among the
     parties, including any action or cause of action arising out of or relating
     to this Agreement or based on or arising from an alleged tort, all
     decisions of fact and law shall at the request of any party be referred to
     a referee in accordance with. California Code of Civil Procedure Sections
     638 et seq. The parties shall designate to the court a referee or referees
     selected under the auspices of the American Arbitration Association ("AAA")
     in the same manner as arbitrators are selected in AAA-sponsored
     proceedings. The presiding referee of the panel, or the referee if there is
     a single referee, shall be an active attorney or retired judge. Judgment
     upon the award rendered by such referee or referees shall be entered in the
     court in which such proceeding was commenced in accordance with California
     Code of Civil Procedure Sections 644 and 645.

          (b) Mandatory Arbitration. After the Bank's Deed of Trust has been
     released, fully reconveyed or extinguished, any controversy or claim
     between or among the parties, including those arising out of or relating to
     this Agreement or any claim based on or arising from an alleged tort, shall
     at the request of any party be determined by arbitration. The arbitration
     shall be conducted in accordance with the United States Arbitration Act
     (Title 9, U.S. Code), notwithstanding any choice of law provision in this
     Agreement, and under the Commercial Rules of the AAA. The arbitrator(s)
     shall give effect to statutes of limitation in determining any claim. Any
     controversy concerning whether an issue is arbitrable shall be determined
     by the arbitrator(s). Judgment upon the arbitration award may be entered in
     any court having jurisdiction. The institution and maintenance of an
     action for judicial relief or pursuit of a provisional or ancillary remedy
     shall not constitute a waiver of the right of any party, including the
     plaintiff, to submit the controversy or claim to arbitration if any other
     party contests such action for judicial relief.

          (c) Real Property Collateral. Notwithstanding the provisions of
     Subsection (b), no controversy or claim shall be submitted to arbitration
     without the consent of all parties if, at the time of the proposed
     submission, any obligation of Borrower to Bank is secured by real property
     collateral. If all parties do not consent to submission of such a
     controversy or claim to arbitration, the controversy or claim shall be
     determined by judicial reference as provided in Subsection (a).

          (d) Provisional Remedies, Self-Help and Foreclosure. No provision of
     this Section shall limit the right of any party to this Agreement to
     exercise self-help remedies such as setoff, foreclosure against or sale of
     any real or personal property collateral or security, or to obtain
     provisional or ancillary remedies from a court of competent jurisdiction
     before, after, or during the pendency of any arbitration or other
     proceeding. The exercise of a remedy does not waive the right of a party to
     resort to arbitration or reference. At Bank's option, foreclosure under a
     deed of trust or mortgage may be accomplished either by exercise of power
     of sale under the deed of trust or mortgage or by judicial foreclosure.

          (e) The parties agree that this arbitration and judicial reference
     provision shall not prohibit or limit summary proceedings to obtain
     possession of real property pursuant to Chapter 4 of the California Code of
     Civil Procedure (Section 1159 et, seq.) as amended from time to time, or
     any similar law, statute or ordinance now or hereafter in effect.

                                    EXHIBIT I


                                       -5-



     NOTICE: THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON
OBLIGATED ON YOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR
PURPOSES OTHER THAN IMPROVEMENT OF THE PROPERTY.

"TENANT"                                SYNETICS SOLUTIONS INC.,
                                        an Oregon corporation


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


"BORROWER"                              CATELLUS DEVELOPMENT CORPORATION,
                                        a Delaware corporation

                                        By: Catellus Commercial Group, LLC,
                                            a Delaware limited liability company
                                            Its: Duly Authorized Agent


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


"BANK"                                  BANK OF AMERICA N.A.,
                                        a national banking association


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                    EXHIBIT I


                                       -6-



STATE OF _________________________ )
                                   )ss.
COUNTY OF ________________________ )

          On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.


                                             ___________________________________
                                             Notary Public in and for said State

(SEAL)

STATE OF _________________________ )
                                   )ss.
COUNTY OF ________________________ )

          On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.


                                             ___________________________________
                                             Notary Public in and for said State

(SEAL)

                                    EXHIBIT I


                                       -7-



STATE OF _________________________ )
                                   )ss.
COUNTY OF ________________________ )

          On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.


                                             ___________________________________
                                             Notary Public in and for said State

(SEAL)

STATE OF _________________________ )
                                   )ss.
COUNTY OF ________________________ )

          On ______________________, before me, ______________________, a Notary
Public in and for said State, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

          WITNESS my hand and official seal.


                                             ___________________________________
                                             Notary Public in and for said State

(SEAL)

                                    EXHIBIT I


                                       -8-



STATE OF _________________________ )
                                   )ss.
COUNTY OF ________________________ )

          On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

          WITNESS my hand and official seal.


                                             ___________________________________
                                             Notary Public in and for said State

(SEAL)

STATE OF _________________________ )
                                   )ss.
COUNTY OF ________________________ )

          On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

          WITNESS my hand and official seal.


                                             ___________________________________
                                             Notary Public in and for said State

(SEAL)

                                    EXHIBIT I


                                       -9-



                                   SCHEDULE 1

                              PROPERTY DESCRIPTION

     Lot 2, Southshore Corporate Park, in the City of Gresham, County of
Multnomah and State of Oregon, Plat Book 1243 Pages 12 through 18 inclusive.

                             SCHEDULE 1 to EXHIBIT I


                                       -1-



                                   SCHEDULE 2

                     IDENTIFY LEASE AND LIST ALL AMENDMENTS,
                 SUPPLEMENTS, SIDE LETTERS AND OTHER AGREEMENTS
             AND MEMORANDA PERTAINING TO LEASE, PREMISES OR PROPERTY

1.   Multi-Tenant Industrial Triple Net Lease dated ________, 2000 between
     Borrower and Tenant.

                             SCHEDULE 2 to EXHIBIT I


                                       -1-



                                   SCHEDULE 3

                   LIST OF PURCHASE, EXPANSION, FIRST REFUSAL
                          EXTENSION AND RENEWAL OPTIONS

     One (1) five (5) year option to extend the term of the Lease pursuant to
Section 19 of the Addendum to Lease.

                             SCHEDULE 3 to EXHIBIT I


                                       -1-



                                   SCHEDULE 4

                LIST ANY EXISTING DEFAULTS OR OFFSETS UNDER LEASE

None.

                             SCHEDULE 4 to EXHIBIT I


                                       -1-



                                   SCHEDULE 5

                              MODIFIED LEASE TERMS

None.

                             SCHEDULE 5 to EXHIBIT I


                                       -1-



                                    EXHIBIT J

                             ARBITRATION PROCEDURES

     1.1 In the event of any dispute or disagreement between the parties
concerning a Repair Action and any reimbursement obligation of Landlord to
Tenant pursuant to Section 9.3 of the Lease (hereinafter an "Arbitration
Matter"), the parties shall meet and confer in an effort to resolve such
dispute.

     1.2 Any Arbitration Matter which is not settled between the parties in
accordance with Paragraph 1.1 above shall be decided, at either party's
election, by neutral, binding arbitration and not by court action, except as
provided by law for judicial review of arbitration proceedings, as follows.

          (a) Governing Rules. The arbitration shall be conducted in accordance
     with the rules of either the American Arbitration Association ("AAA"). The
     parties to an arbitration may agree in writing to use different rules
     and/or arbitrator(s).

          (b) Enforcement. The decision of the Arbitrator shall be final and
     binding upon the parties. Judgment upon the award rendered may be entered
     in any competent court having jurisdiction thereof.

          (c) Discovery. The parties shall have the right to propound a demand
     for exchange of documents prior to the arbitration.

          (d) Waiver. The filing of a judicial action to enable the recording of
     a notice of pending action, to comply with mechanic's lien foreclosure
     requirements, for order of attachment, receivership, injunction, or other
     provisional remedies, shall not constitute a waiver of the right to
     arbitrate under this provision.

          (e) Scope of Issue of Decided. The Arbitrator shall be the sole judge
     of whether a dispute is arbitrable under the terms of this Lease.

          (f) Accordance With Law. In rendering its decision and award, the
     Arbitrator shall have no power to modify any of the provisions of this
     Lease. The findings of the Arbitrator shall be in accord with the laws of
     the State of Oregon.

          (g) Venue. The arbitration shall be filed with the office of AAA that
     is located in Portland, Oregon or if no such office exists, then in the
     office of AAA that is geographically nearest to the Premises.

          (h) Attorney's Fees. The Arbitrator shall award reasonable attorneys'
     fees, expert fees, court reporter transcription fees (if any), filing fees
     and arbitrator fees to the prevailing party, if any, as a part of the
     decision.

          (i) Confidentiality. In the event of filing of an arbitration
     proceeding, the parties agree that all documents produced in the proceeding
     shall be returned to the party from whom the documents were obtained. Any
     decision or settlement reached between the parties arising from or
     connected to the resolution of any dispute shall, in the absence of a court
     order, the express written agreement of the parties or as otherwise
     required by law, be considered strictly confidential.

                                    EXHIBIT J


                                       -1-



                                    EXHIBIT K

                      [TO BE PRINTED ON BANK'S LETTERHEAD]


Irrevocable Standby
Letter of Credit No. ___

APPLICANT/ACCOUNT PARTY:                       BENEFICIARY:

____________, a _______________                Catellus Development Corporation,
[insert Tenant's address]                      a Delaware corporation
                                               201 Mission Street
                                               San Francisco, California 94105
                                               Attention: Asset Management

AMOUNT:                                        EXPIRATION DATE:

U.S. Dollars                                                 _____________, 200_

Ninety Eight Thousand Three Hundred Ninety Four
Dollars ($98,394.00)

Gentlemen:

We hereby establish and issue our Irrevocable Standby Letter of Credit No.____
(the "Credit") in your favor. This Credit is available upon draft or demand
presented to us on sight over our counters at any of our offices in the State of
_________ located at _____________. We hereby irrevocably authorize you to draw
upon us in one or more sight drafts up to the aggregate amount of Ninety Eight
Thousand Three Hundred Ninety Four Dollars ($98,340.00).

Your draft must be accompanied by a written certificate stating that:

          "Synthetic Solutions, Inc., a Oregon corporation, or its successors or
          assigns (collectively, "Tenant"), has failed to pay rent or perform
          one or more of its obligations under that certain Multi-Tenant
          Industrial Triple Net Lease (the "Lease") executed by and between
          Tenant and Catellus Development Corporation, a Delaware corporation,
          or Tenant has failed to replace this Letter of Credit as required
          under the terms of the Lease. The amount of the sight draft represents
          monies due and owing by Tenant under the Lease."

Partial drawings will be permitted under this Credit and all drafts hereon must
bear the date and number of this Credit. This Credit is effective immediately
and we hereby engage with you that so long as such drafts are presented on or
before 5:00 P.M. (Pacific time) on the Expiration Date stated on the face of
this Credit (subject to the automatic extensions provided below) and in
conformity with the terms of this Credit, such drafts will be duly honored upon
presentation.

You shall not be required to give notice or make any prior demand or presentment
to Tenant with respect to the payment of any sum as to which a draw is made
hereunder.

                                    EXHIBIT K


                                       -1-

EX-10.33

                                                                   Exhibit 10.33

                        Factory Lease Advanced Agreement

This Factory Lease Advanced Agreement (this "Agreement") is entered into among
Sang Chul Park ("SC Park"), Young Ja Kim ("YJ Kim"), Joon Ho Park ("JH Park")(SC
Park, YJ Kim and JH Park shall be referred to collectively as the "Lessors")
Brooks Automation Asia, Ltd. (the "Lessee") and Brooks Automation Korea, Inc.
("BAK")(collectively, the "Parties").

Article 1. Purpose

The purpose of this Agreement is to set forth the rights and obligations of the
Parties in relation to the performance of the construction by the Lessors as
described in Article 2 below (the "Construction"), the lease agreement to be
entered into between the Lessor and the Lessee for the factory to be made
pursuant to the Construction (the "Factory") and the land upon which the Factory
will be located (the "Lease Agreement"), the amendment of the existing lease
agreement between SC Park and the Lessee, and the existing lease agreement
between SC Park and BAK, and the termination of the existing lease agreement
among SC Park, YJ Kim and the Lessee, pursuant to the Lease Agreement.

Article 2. Construction

(1) The Factory shall be constructed upon the land located at 400-2, Gomae-ri,
Kiheung-eup, Yongin, Kyunggi-do (the "Construction Site"), which is owned by SC
Park and YJ Kim, in order for the Lessors to lease the Factory to the Lessee as
provided in Article 5, and the period for the Construction shall be from April
14 to August 30, 2005 (the "Construction Period").

(2) The detailed matters relating to the Construction shall be in accordance
with the design plan and construction schedule chart separately agreed between
the Lessors and the Lessee, as attached hereto (hereinafter the "DP/CSC"), and
any matters not set forth in the DP/CSC shall be separately agreed between the
Lessors and the Lessee.

Article 3. Performance of Construction By Lessors

(1) In performing the Construction, the Lessors shall faithfully observe the



requirements under the DP/CSC, and shall fully complete the Construction within
the Construction Period provided in Article 2.

(2) In this Agreement, "full completion" of the Construction shall mean that the
Factory has been constructed and has passed inspection by the Lessee as provided
in Article 4, that approval has been granted for use of the Factory by the
relevant governmental authority pursuant to the Construction Act, and that all
governmental permits and licenses have been acquired by the Lessors as required
for land and building owners under relevant laws and regulations.

Article 4. Inspection By Lessee

(1) At any time as deemed necessary in relation to the performance of the
Construction, the Lessee may request the Lessors to confirm whether the
Construction is proceeding in accordance with the DP/CSC, and upon such request,
the Lessors shall forthwith comply with the request in good faith.

(2) In the event the Lessee discovers pursuant to the confirmation under
paragraph (1) above that the Lessors are performing the Construction in a manner
different from that which is set forth in the DP/CSC, and requests correction
thereof, the Lessors shall comply with such request and forthwith take
corrective measures.

(3) The Construction shall be completed in accordance with the details set forth
in the DP/CSC by August 30, 2005, and upon completion, the Lessors shall request
the Lessee in writing to perform inspection of the Construction.

(4) Within 1 week of the date of request made by the Lessors under paragraph 3
above, the Lessee shall perform inspection of the Construction and notify the
Lessors in writing as to the results thereof (inspection passed or supplemental
work necessary).

(5) In the event that the Lessee requests supplemental work on the Construction
to be performed pursuant to paragraph 4 above, the Lessors shall forthwith
perform supplemental work on the Construction as requested, and upon completion
of such supplemental work, the Lessors shall request the Lessee in writing to
re-inspect the Construction. Paragraph 4 shall apply in the same manner in the
case of re-inspection, and if the Lessee shall supplemental work again after
re-inspection, this paragraph 5



shall apply once again.

Article 5. Execution of the Lease Agreement

(1) Forthwith upon full completion of the Construction, the Lessors shall enter
into the Lease Agreement with the Lessee in respect of the Factory and the
Construction Site.

(2) The amount of security deposit under the Lease Agreement shall be 1 billion
Won; provided, however, that 830 million Won of the amount of advanced payment
made pursuant to Articles 6 and 8 shall be applied towards such security deposit
and only the remaining amount of 170 million Won shall be paid at the time of
entering into the Lease Agreement.

(3) The term of lease under the Lease Agreement shall be 10 years.

(4) Prior to the execution of the Lease Agreement, the Lessors shall extinguish
the keun mortgage existing upon the Construction Site, and the building owned by
SC Park and YJ Kim which is to be torn down pursuant to Article 8, which was
established on January 9, 2004 up to maximum amount of 1,040,000,000 Won, and
naming Kookmin Bank as the keun mortgage holder and YJ Kim as the debtor.

(5) Simultaneously with the execution of the Lease Agreement, the Lessors shall
register chonsekwon upon the Factory and the Construction Site for the
protection of the Lessee's rights under the Lease Agreement, naming the Lessee
as the holder of such chonsekwon, in the amount of 1 billion Won and with an
effective period of 10 years.

(6) The amount of rent and other terms and conditions of the Lease Agreement
shall be agreed at a later time upon discussion between the Lessors and the
Lessee.

Article 6. Advanced Payment

(1) In order that the Lessors may perform the Construction smoothly, the Lessee
shall, subject to Article 9, pay 600 million Won of the security deposit under
the Lease Agreement to the Lessors as advanced payment, of which 300 million Won
shall be paid on May ___, 2005 and 300 million Won shall be paid on July 1,
2005.




(2) The Lessors shall not use the amount of advanced payment under paragraph 1
above for any purpose other than the Construction, and such amount of advanced
payment shall be applied towards the security deposit to be paid under the Lease
Agreement upon execution thereof.

Article 7. Amendment of Existing Lease Agreements Between SC Park and the
     Lessee, and BAK

(1) The lease agreement entered into between SC Park and the Lessee with respect
to the 1st, 2nd and 4th floors of the building located at 398-1, Gomae-ri,
Kiheung-eup, Yongin, Kyunggi-do, and the lease agreement entered into between SC
Park and BAK with respect to the 3rd floor of the same building, shall be
amended simultaneously with the execution of the Lease Agreement.

(2) In amending the lease agreements described in paragraph 1 above, the lease
terms thereunder shall be amended such that they are of the same period as the
lease term under the Lease Agreement. Other detailed provisions to be amended
shall be agreed between SC Park and the Lessee, and BAK, and shall be in
accordance with the Lease Agreement.

Article 8. Termination of Existing Lease Agreement Between YJ Kim and the Lessee

(1) Forthwith after the Construction has passed inspection by the Lessee under
Article 4, the Lessors shall tear down the temporary building owned by SC Park
and YJ Kim and existing at the Construction Site, and immediately after such
temporary building has been torn down, shall apply for use approval regarding
the Construction with the relevant governmental authority pursuant to the
Construction Act.

(2) Simultaneously with the commencement of tear down work on the temporary
building described in paragraph 1 above, the existing lease agreement entered
into among SC Park, YJ Kim and the Lessee in relation to such temporary building
shall be terminated; provided, however, that of the security deposit under such
existing lease agreement, 230 million Won shall be regarded as applied towards
the security deposit under the Lease Agreement instead of being returned to the
Lessee, and simultaneously with the termination of the existing lease agreement
stipulated in this paragraph 2, such



amount shall be regarded as paid in advance to the Lessors.

Article 9. Establishment of Keun Mortgage

(1) For the purpose of securing the rights of the Lessee to the advanced
payments under Articles 6 and 8 and other claims that the Lessee acquires
against the Lessors under this Agreement, the Lessors and the Lessee shall
establish a keun mortgage upon the Factory Site naming the Lessee as creditor,
up to the maximum amount of 900 million Won. All costs and expenses relating to
the establishment of such keun mortgage shall be borne by the Lessee.

(2) The Lessors shall transfer all documents needed by the Lessee to establish
the keun mortgage described in paragraph 1 above, simultaneously with the
initial payment of 300 million Won of the advanced payment to be made under
Article 6.

(3) The keun mortgage described in paragraph 1 above shall extinguish
simultaneously with the establishment of chonsekwon upon the Factory and the
Construction Site in favor of the Lessee pursuant to Article 5 paragraph 5.

Article 10. Prohibition on Transfer and Other Disposition

(1) The Lessors shall not, without the prior written consent of the Lessee,
transfer, lease or otherwise dispose of the Factory Site, or allow a mortgage or
any other security interest to be established upon the Factory Site. Further,
the Lessors shall not transfer or otherwise dispose of any of its rights under
this Agreement, or establish a pledge or any other security interest upon such
rights.

(2) The obligations of the Lessors under paragraph 1 above shall remain
effective even after execution of the Lease Agreement.

Article 11. Termination of Agreement

(1) In any of the following cases, the Lessee may terminate this Agreement
forthwith upon written notice thereof to the Lessors, without demand for cure or
any other prior procedures:



     1. In case where a Lessor breaches this Agreement and fails to cure such
     breach within 3 days after a request for cure has been made by the Lessee
     in writing;

     2. In case where either existing lease agreement under Article 7 has not
     been amended in breach thereof, or the temporary building under Article 8
     has not be torn down in breach thereof;

     3. In case where the Construction is not fully completed, or the Lease
     Agreement or amendment of the lease agreement under Article 7 is not
     executed, by September 30, 2005, regardless of the reasons; and

     4. In case where application has been made for attachment, provisional
     attachment, provisional disposition, compulsory auction or other actions of
     similar legal effect of the Factory Site or the Factory, or work-out,
     bankruptcy, commencement of corporate reorganization proceedings or similar
     proceedings with respect to a Lessor.

(2) Forthwith upon termination of this Agreement pursuant to paragraph (1)
above, the Lessors shall return the full amount of advanced payment made by the
Lessee pursuant to Articles 6 and 8.

(3) The termination of this Agreement shall have no effect upon the existing
lease agreements described in Articles 7 and 8.

Article 12. Dispute Resolution

The Seoul Central District Court shall have exclusive jurisdiction over any
dispute arising out of or in relation to this Agreement.



IN WITNESS WHEREOF, this Agreement has been executed by the Parties in 5
original copies, with each Party holding 1 copy.

                                 May ____, 2005

Sang Chul Park [SEAL]


/s/ Sang Chul Park
- ------------------------------------
Resident Registration Number _______

- ------------------------------------
[Address]


Young JA Kim [SEAL]


/s/ Young JA Kim
- ------------------------------------
Resident Registration Number _______

- ------------------------------------
[Address]


Joon Ho Park [SEAL]


/s/ Joon Ho Park
- ------------------------------------
Resident Registration Number _______
400-2, Gomae-ri, Kiheung-eup, Yongin,
Kyunggi-do

Brooks Automation Asia, Ltd.
Representative Director Edward C. Grady [SEAL]
398-2, Gomae-ri, Kiheung-eup, Yongin, Kyunggi-do

Brooks Automation Korea, Inc.
Representative Director Edward C. Grady [SEAL]
Namkang Building, 1340-6, Seocho-dong, Seocho-ku, Seoul

Attachments: design plan and construction schedule chart



(Unit: Won)

- ------------------------------------
Remarks

- ------------------------------------
will be increase 6% annually

Key Money(Refundable Deposit)


- ------------------------------------

EX-12.01

EXHIBIT 12.01

BROOKS AUTOMATION, INC.
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS EXCEPT RATIOS)

	Year ended September 30,
	2006			2005			2004		2003			2002
FIXED CHARGES
Interest expense	$	9,384		$	9,469		$	9,492	$	10,042		$	10,290
Portion of rent expense representative of interest		3,157			3,523			4,838		5,624			2,733
	$	12,541		$	12,992		$	14,330	$	15,666		$	13,023
EARNINGS
Income (loss) from continuing operations before income taxes and minority interests	$	29,907		$	(2,751	)	$	32,398	$	(194,806	)	$	(637,491	)
Minority Interest in pre tax income (loss)		(666	)		141			211		214			(274	)
Fixed charges per above		12,541			12,992			14,330		15,666			13,023
	$	43,114		$	10,100		$	46,517	$	(179,354	)	$	(624,194	)
Ratio of earnings to combined fixed charges and preferred dividends		3.4			0.8			3.2		*			*

*  In fiscal 2003 and 2002, earnings before income taxes plus fixed charges were insufficient to cover fixed charges by $195.0  million
and $637.2 million, respectively.

EX-21.01

                                                                               .
                                                                               .
                                                                               .

                                  EXHIBIT 21.01
                             BROOKS AUTOMATION, INC.
                         SUBSIDIARIES OF THE REGISTRANT



LEGAL ENTITY                                                 JURISDICTION
- ------------                                                 ------------
                                                          
1045060 Ontario Limited                                      Canada
1325949 Ontario Inc                                          Canada
Brooks - PRI Automation Holding Belgium BVBA                 Belgium
Brooks Automation (Canada) Inc.                              Canada
Brooks Automation (Delaware) LLC                             USA
Brooks Automation (France) SAS                               France
Brooks Automation (Germany) GmbH                             Germany
Brooks Automation (Ireland) Ltd                              Ireland
Brooks Automation (Japan) KK                                 Japan
Brooks Automation (Singapore) PTE LTD                        Singapore
Brooks Automation (Taiwan) Company Ltd                       Taiwan
Brooks Automation (the Netherlands) BV                       The Netherlands
Brooks Automation (UK) Ltd                                   UK
Brooks Automation Asia Ltd                                   Korea
Brooks Automation Belgium NV                                 Belgium
Brooks Automation Holding (Germany) GmbH                     Germany
Brooks Automation India Private Limited                      India
Brooks Automation Israel, Inc                                Israel
Brooks Automation Korea Inc.                                 Korea
Brooks Automation Luxembourg SARL                            Luxembourg
Brooks Automation Malaysia SDN BHD                           Malaysia
CTI Nuclear, Inc.                                            USA
CTI-Cryogenics, Inc.                                         VI
Granville -- Phillips Company                                USA
Helix Securities Corp.                                       USA
Brooks Technology GmbH                                       Germany
Helix Technology KK                                          Japan
Brooks Automation Limited                                    Hong Kong
Brooks Technology (Shanghai) Limited                         China
Helix Technology UK Limited                                  UK
Interval Logic Corporation                                   USA
Promis Systems Corporation Singapore PTE LTD                 Singapore
Promis Systems Corporation Singapore PTE LTD Taiwan Branch   Taiwan
Promis Systems Corporation UK Ltd                            UK
Strathmore Corporation                                       USA
Tec - Sem AG (own 19%)                                       Switzerland
Synetics Solutions, Inc.                                     USA
Ulvac Cryogenics Inc. (50% JV in Japan)                      Japan

EX-23.01

EXHIBIT 23.01

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-129724, 333-123242, 333-117029, 333-88190, 333-88160, 333-88154, 333-88158, 333-87764, 333-73682, 333-67432, 333-61928, 333-40848, 333-40842, 333-66457, 333-66455, 333-66429, 333-70854, 333-57974, 333-22717 and 333-07313) of Brooks Automation, Inc. of our report dated December 13, 2006 relating to the financial statements, management’s assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Boston, Massachusetts
December 13, 2006

EX-31.01

EXHIBIT 31.01

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Edward C. Grady, do certify that:

1. I have reviewed this annual report on Form 10-K of Brooks Automation, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ EDWARD C. GRADY  

Edward C. Grady 

Chief Executive Officer 

Date: December 13, 2006

EX-31.02

EXHIBIT 31.02

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert W. Woodbury, Jr., do certify that:

1. I have reviewed this annual report on Form 10-K of Brooks Automation, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ ROBERT W. WOODBURY, JR.  

Robert W. Woodbury, Jr. 

Senior Vice President and
Chief Financial Officer
(Principal Accounting Officer) 

Date: December 13, 2006

EX-32

EXHIBIT 32

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (SUBSECTIONS (A) AND (B) OF SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Brooks Automation, Inc., a Delaware corporation (the “Company”), does hereby certify that:

(1) The Annual Report on Form 10-K for the year ended September 30, 2006 of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Annual Form 10-K fairly presents, in all materials respects, the financial condition and results of operations of the Company.

Dated: December 13, 2006	/s/ EDWARD C. GRADY
	Edward C. Grady
	Director and Chief Executive Officer
	(Principal Executive Officer)
Dated: December 13, 2006	/s/ ROBERT W. WOODBURY, JR.
	Robert W. Woodbury, Jr.
	Senior Vice President and Chief Financial Officer
	(Principal Accounting Officer)

A signed original of this written statement required by Section 906 has been provided to Brooks Automation, Inc. and will be retained by Brooks Automation, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.