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EXHIBIT 10.5
 
INDUSTRIAL LEASE
 
TORRANCE COMMERCE CENTER
 
Dated: January 22, 2010
 
1.   BASIC LEASE TERMS. For purposes of this Lease, the following terms have the
following definitions and meanings:
 
(a)   Landlord: KOLL/PER TORRANCE COMMERCE CENTER, LLC, a Delaware limited
liability company
 
Landlord's Address (For Notices):
 
KOLL/PER TORRANCE COMMERCE CENTER, LLC
c/o The Koll Company
17755 Sky Park East, Suite 100
Irvine, California 92614
Attention: Cynthia Wityak, Senior Manager
 
With a copy to:
 
The Koll Company
4343 Von Karman Avenue, Suite 150
Newport Beach, California 92660
Attn: Regional Asset Manager - Torrance.
 
Landlord's Address (For Payment of. Rent):
 
Koll/PER TORRANCE COMMERCE CENTER, LLC
Dept. 2619-78
Los Angeles, CA 90084-2619
 
(b)   Tenant: ACUNETX, INC., a Nevada corporation
 
Tenant's Trade Name: AcuNetx
 
Tenant's Address for Notices (Premises):
 
2301 W. 205t1 Street, Suite 102
Torrance, CA 90501-1449
 
(c)   Premises: Suite 102 of Building 2301 (the "Building") of TORRANCE COMMERCE
CENTER (the "Project"), located at 2301 W. 205th Street in the City of Torrance
("City"). County of Los Angeles ("County"), State of California ("State") as
shown on Exhibit "A-I". The Premises contain approximately 1,620 Rentable Square
Feet (subject to adjustment as provided in this Lease).
  
(e)   Term: Twelve (12) calendar months
 
(f)   Commencement Date: February 1, 2010
 
(g)   Expiration Date: January 31, 2011
 
(i)   Monthly Base Rent :

  
PERIOD COVERED:
MONTHLY BASE RENT:
02/01/10 — 01/31/11
$1,888.00

  
(I)    Monthly Operating Expense Charge:
  
PERIOD COVERED:
MONTHLY OPERATING EXPENSE CHARGE:
02/01/10 — 01/31/11
$162.00

  
to adjustment as provided in this Lease).
 
(d)   Tenant's Share of Operating Expenses: 1.45% based on 111,981 Rentable
Square Feet in the Project and 1,620 Rentable Square Feet in the Premises
 
(j)   Security Deposit: $2,190.00 (see Paragraph #7)
 
(k)   Non-Refundable Cleaning Fee Portion of Security Deposit: Waived
 
(l)   Permitted Use: General office and warehouse for a medical diagnostics
equipment company and no other use without the express written consent of
Landlord, which consent Landlord may withhold in its sole and absolute
discretion.
 
(m)   Broker(s): Grubb & Ellis representing Landlord and Tenant.
 
(n)   Guarantor(s): None.
 
(o)   Interest Rate: The greater of ten percent (10%) per annum or two percent
(2%) in excess of the prime lending or reference rate of Wells Fargo Bank N.A.,
or any successor bank in effect on the twenty-fifth (25th) day of the calendar
month immediately prior to the event giving rise to the Interest Rate
imposition; provided, however, the Interest Rate will in no event exceed the
maximum interest rate permitted to be charged by applicable law.
 

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(p)   Exhibits: Exhibit "A-1" and Exhibit "C" through Exhibit "G", inclusive,
which Exhibits are attached to this Lease and incorporated herein by this
reference.
 
This Paragraph 1 represents a summary of the basic terms and definitions of this
Lease. In the event of any inconsistency between the terms contained in this
Paragraph 1 and any specific provision of this Lease, the terms of the more
specific provision shall prevail.

2.    PREMISES AND COMMON AREAS.
 
(a)   Premises. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the Premises upon and subject to the terms, covenants and conditions
contained in this Lease to be performed by each party.
 
(b)   Tenant's Use of Common Areas. During the Term of this Lease, Tenant shall
have the nonexclusive right to use in common with all other occupants of the
Project, the following common areas of the Project (collectively, the "Common
Areas"): the parking facilities of the Project which serve the Building, loading
and unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways, landscaped areas, and similar areas and facilities situated within
the Project and appurtenant to the Building which are not reserved for the
exclusive use of any Project occupants.
 
(c)   Landlord's Reservation of Rights. Provided that Landlord uses commercially
reasonable efforts to not materially and adversely interfere with Tenant's use
of the Premises, Landlord reserves for itself and for all other owner(s) and
operator(s) of the Common Areas and the balance of the Project, the right from
time to time to: (i) install, use, maintain, repair, replace and relocate pipes,
ducts, conduits, wires and appurtenant meters and equipment above the ceiling
surfaces, below the floor surfaces and within the walls of the Building; (ii)
make changes to the design and layout of the Project, including, without
limitation, changes to buildings, driveways, entrances, loading and unloading
areas, direction of traffic, landscaped areas and walkways, parking spaces and
parking areas; and (iii) use or close temporarily the Common Areas, and/or other
portions of the Project while engaged in making improvements, repairs or
alterations to the Building, the Project, or any portion thereof.

3.   TERM. The term of this Lease ("Term") will be for the period designated in
Subparagraph 1(e), commencing on the Commencement Date, and ending on the
Expiration Date. Each consecutive twelve (12) month period of the Term of this
Lease, commencing on the Commencement Date, will be referred to herein as a
"Lease Year".
 
4.    POSSESSION.
 
(a)   Existing Tenancy. Tenant currently occupies the Premises pursuant to that
certain Standard Industrial/Commercial Multi-Tenant Lease — Gross dated January
9, 2003 which was amended by the First Amendment to Lease dated July 27, 2005
and the Second Amendment to Lease dated December 19, 2007 (as amended, the
"Prior Lease") originally entered into by AMB Property, L.P. a Delaware limited
partnership ("Original Lessor") as Lessor, and Tenant, as Lessee. Landlord has
succeeded to the interest of Original Lessor under the Lease. The term of the
Prior Lease expires on January 31, 2010. Landlord and Tenant agree that this
Lease supersedes the Prior Lease and the Prior Lease is hereby deemed terminated
as of the Commencement Date; provided however, notwithstanding the expiration of
the Prior Lease, Tenant shall remain liable for, and shall indemnify and hold
Landlord and the Landlord Indemnified Parties harmless from and against, any and
all Indemnified Claims [as defined in Paragraph 18(b)] which may have accrued,
arisen or occurred during the term of the Prior Lease.
 
(b)   Condition of Premises. Landlord shall have no obligation whatsoever to
improve or otherwise fund any improvements to the Premises in conjunction with
this Lease. By taking possession of the Premises, Tenant will be deemed to have
accepted the Premises in its "as-is" condition on the date of delivery of
possession. Tenant acknowledges that neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the Premises, the
Building, the Project or any portions thereof or with respect to the suitability
of same for the conduct of Tenant's business and Tenant further acknowledges
that Landlord will have no obligation to construct or complete any additional
buildings or improvements within the Project.
 
(c)    Lease Confirmation. Concurrently with the delivery of the Premises by
Landlord, Landlord shall deliver to Tenant and Tenant shall execute a written
statement in the form attached hereto as Exhibit "G", attached hereto (the
"Tenant Commencement Certificate") confirming the Commencement Date of the Lease
and the Expiration Date of the Lease. If Tenant fails to sign and return the
Tenant Commencement Certificate to Landlord upon the delivery of the Premises by
Landlord, the Tenant Commencement Certificate as sent by Landlord shall be
deemed to have correctly set forth the Commencement Date and the other matters
addressed in the Certificate. The form of certificate shown in Exhibit "G" may
also be used in conjunction with amendments to this Lease, if any, and Tenant
shall execute the same within ten (10) days after receipt of a request therefor
from Landlord.
 
5.    RENT
 
(a)   Monthly Base Rent. Tenant agrees to pay Landlord the Monthly Base Rent for
the Premises (subject to adjustment as hereinafter provided) in advance on the
first day of each calendar month during the Term without prior notice or demand,
except that Tenant agrees to pay the Monthly Base Rent for the first month of
the Term directly to Landlord concurrently with Tenant's delivery of the
executed Lease to Landlord. The obligation of Tenant to pay Monthly Base Rent
and other sums to Landlord and the obligations of Landlord under this Lease are
independent obligations. All rent must be paid to Landlord, without any
deduction or offset, in lawful money of the United States of America, at the
address designated by Landlord or to such other person or at such other place as
Landlord may from time to time designate in writing. Monthly Base Rent will be
adjusted during the Term of this Lease as provided in Subparagraph 1(h)  of this
Lease.
 
(b)   Additional Rent. All amounts and charges to be paid by Tenant hereunder,
including, without limitation, payments for Operating Expenses, insurance and
repairs, will be considered additional rent for purposes of this Lease, and the
word "rent" as used in this Lease will include all such additional rent unless
the context specifically or clearly implies that only Monthly Base Rent is
intended.
 
(c)   Late Payments. Late payments of Monthly Base Rent and/or any item of
additional rent will be subject to interest and a late charge as provided in
Subparagraph 22(f) below.
 
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6.    OPERATING EXPENSES.
 
(a)   Operating Expenses. Throughout the Term of this Lease, commencing on the
Commencement Date, Tenant agrees to pay Landlord as additional rent in
accordance with the terms of this Paragraph 6, Tenant's Share of Operating
Expenses for the taxes and insurance for the Project and all costs and expenses
for the operation, maintenance, repair, and replacement of the Project
including, without limitation: (i) any form of real property tax assessment,
license fee, license tax, business license fee, commercial rental tax, levy,
charge, improvement bond or similar imposition of any kind or nature imposed by
any authority having the direct power to tax, including any city, county, state
or federal government, or any school, agricultural, lighting, drainage or other
improvement or special assessment district thereof, including, without
limitation, any new taxes which are in substitution for or in addition to any
current taxes payable hereunder; (ii) any and all assessments under any
covenants, conditions and restrictions affecting the Project; (iii) water, sewer
and other utility charges; (iv) costs of insurance obtained by Landlord pursuant
to Paragraph 19 of the Lease; (v) waste disposal and janitorial services; (vi)
security; (vii) labor; (viii) management costs including, without limitation:
(A) wages and salaries (and payroll taxes and similar charges ) of property
management employees, and (B) management office rental, supplies, equipment and
related operating expenses and management fees; (ix) supplies, materials,
equipment and tools including rental of personal property; (x) repair and
maintenance of the structural portions of the buildings with the Project,
including the plumbing, heating, ventilating, air-conditioning and electrical
systems installed or furnished by Landlord; (xi) maintenance, costs and upkeep
of all parking and other Common Areas; (xii) depreciation on a straight line
basis and rental of personal property used in maintenance: (xiii) amortization
on a straight line basis over the useful life [together with interest at the
Interest Rate on the unamortized balance) of all capitalized expenditures which
are: (A) reasonably intended to produce a reduction in operating charges or
energy consumption; or (B) required under any governmental law or regulation
that was not applicable to the Project at the time it was originally
constructed; or (C) for replacement of any Project equipment needed to operate
the Project at the same quality levels as prior to the replacement; (xiv)
gardening and landscaping; (xv) maintenance of signs (other than signs of
tenants of the Project); (xvi) personal property taxes levied on or attributable
to personal property used in connection with the Common Areas; (xvii) reasonable
accounting, audit, verification, legal and other consulting fees; and (xviii)
costs and expenses of repairs, resurfacing, repairing, maintenance, painting,
lighting, cleaning, refuse removal, security and similar items, including
appropriate reserves.
 
(b)   Determination of Tenant's Monthly Operating Expense Charge. Tenant's
Monthly Operating Expense Charge shall be determined as provided in Subparagraph
1(i) of this Lease. If Tenant's Monthly Operating Expense Charge is scheduled
for each year of the Lease Term, as shown in Subparagraph 1(i), then
Subparagraph 6(c), Subparagraph 6(d) and Subparagraph 6(e) below will not apply.
 
(c)   Estimate Statement. Prior to the Commencement Date and on or about March
1st of each subsequent calendar year during the Term of this Lease, Landlord
will endeavor to deliver to Tenant a statement ("Estimate Statement") wherein
Landlord will estimate both the Operating Expenses and Tenant's Monthly
Operating Expense Charge for the then current calendar year. Tenant agrees to
pay Landlord, as additional rent, Tenant's estimated Monthly Operating Expense
Charge each month thereafter, beginning with the next installment of rent due,
until such time as Landlord issues a revised Estimate Statement or the Estimate
Statement for the succeeding calendar year; except that, concurrently with the
regular monthly rent payment next due following the receipt of each such
Estimate Statement, Tenant agrees to pay Landlord an amount equal to one monthly
installment of Tenant's estimated Monthly Operating Expense Charge (less any
applicable Operating Expenses already paid) multiplied by the number of months
from January, in the current calendar year, to the month of such rent payment
next due, all months inclusive. If at any time during the Term of this Lease,
but not more often than quarterly, Landlord reasonably determines that Tenant's
Share of Operating Expenses for the current calendar year will be greater than
the amount set forth in the then current Estimate Statement, Landlord may issue
a revised Estimate Statement and Tenant agrees to pay Landlord, within ten (10)
days of receipt of the revised Estimate Statement, the difference between the
amount owed by Tenant under such revised Estimate Statement and the amount owed
by Tenant under the original Estimate Statement for the portion of the then
current calendar year which has expired. Thereafter Tenant agrees to pay
Tenant's Monthly Operating Expense Charge based on such revised Estimate
Statement until Tenant receives the next calendar year's Estimate Statement or a
new revised Estimate Statement for the current calendar year.
 
(d)   Actual Statement. By March 1st of each calendar year during the Term of
this Lease, Landlord will also endeavor to deliver to Tenant a statement
("Actual Statement") which states Tenant's Share of the actual Operating
Expenses for the preceding calendar year. If the Actual Statement reveals that
Tenant's Share of the actual Operating Expenses is more than the total
Additional Rent paid by Tenant for Operating Expenses on account of the
preceding calendar year, Tenant agrees to pay Landlord the difference in a lump
sum within ten (10) days of receipt of the Actual Statement. If the Actual
Statement reveals that Tenant's Share of the actual Operating Expenses is less
than the Additional Rent paid by Tenant for Operating Expenses on account of the
preceding calendar year, Landlord will credit any overpayment toward the next
monthly installment(s) of Tenant's Share of the Operating Expenses due under
this Lease.
 
(e)   Miscellaneous. Any delay or failure by Landlord in delivering any Estimate
Statement or Actual Statement pursuant to this Paragraph 6 will not constitute a
waiver of its right to require an increase in rent nor will it relieve Tenant of
its obligations pursuant to this Paragraph 6, except that Tenant will not be
obligated to make any payments based on such Estimate Statement or Actual
Statement until ten (10) days after receipt of such Estimate Statement or Actual
Statement. If Tenant does not object to any Estimate Statement or Actual
Statement within thirty (30) days after Tenant receives any such statement, such
statement will be deemed final and binding on Tenant. Even though the Term has
expired and Tenant has vacated the Premises, when the final determination is
made of Tenant's Share of the actual Operating Expenses for the year in which
this Lease terminates, Tenant agrees to promptly pay any increase due over the
estimated expenses paid and, conversely, any overpayment made in the event said
expenses decrease shall promptly be rebated by Landlord to Tenant. Such
obligation will be a continuing one which will survive the expiration or
termination of this Lease. Prior to the expiration or sooner termination of the
Lease Term and Landlord's acceptance of Tenant's surrender of the Premises,
Landlord will have the right to estimate the actual Operating Expenses for the
then current Lease Year and to collect from Tenant prior to Tenant's surrender
of the Premises, Tenant's Share of any excess of such actual Operating Expenses
over the estimated Operating Expenses paid by Tenant in such Lease Year.
 
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7.    SECURITY DEPOSIT AND CLEANING FEE. Landlord is currently holding $2,190.00
as security deposit under the Prior Lease (the "Prior Lease Deposit"). Tenant
hereby consents to the transfer of the Prior Lease Deposit to Tenant's account
as part of the Security Deposit hereunder. The Security Deposit will be held by
Landlord as security for the full and faithful performance by Tenant of all of
the terms, covenants, and conditions of this Lease to be kept and performed by
Tenant during the Term hereof. The Security Deposit is not, and may not be
construed by Tenant to constitute, rent for the last month or any portion
thereof. If Tenant defaults with respect to any provisions of this Lease
including, but not limited to, the provisions relating to the payment of rent or
additional rent, Landlord may (but will not be required to) use, apply or retain
all or any part of the Security Deposit for the payment of any rent or any other
sum in default, or for the payment of any other amount which Landlord may spend
by reason of Tenant's default or to compensate Landlord for any loss or damage
which Landlord may suffer by reason of Tenant's default. If any portion of the
Security Deposit is so used or applied, Tenant agrees, within ten (10) days
after Landlord's written demand therefor, to deposit cash with Landlord in an
amount sufficient to restore the Security Deposit to its original amount and
Tenant's failure to do so shall constitute a default under this Lease. Landlord
is not required to keep Tenant's Security Deposit separate from its general
funds, and Tenant is not entitled to interest 'on such Security Deposit. If
Tenant is not in default at the expiration or termination of this Lease,
Landlord will return the Security Deposit to Tenant, less the non-refundable
Cleaning Fee portion designated in Subparagraph 1(k). Landlord's obligations
with respect to the Security Deposit are those of a debtor and not of a trustee.
Tenant hereby waives the provisions of Section 1950.7 of the California Civil
Code and agrees that the provisions of this Section 7 shall govern the treatment
of Tenant's Security Deposit in all respects for this Lease.
 
8.    USE.
 
(a)   Tenant's Use of the Premises. The Premises may be used for the use or uses
set forth in Subparagraph 1(I) only, and Tenant will not use or permit the
Premises to be used for any other purpose without the prior written consent of
Landlord, which consent Landlord may withhold in its sole and absolute
discretion. Nothing in this Lease will be deemed to give Tenant any exclusive
right to such use in the Project.
 
(b)   Compliance. At Tenant's sole cost and expense, Tenant agrees to procure,
maintain and hold available for Landlord's inspection, all governmental licenses
and permits required for the proper and lawful conduct of Tenant's business from
the Premises, if any. Tenant agrees not to use, alter or occupy the Premises or
allow the Premises to be used, altered and occupied in violation of, and Tenant,
at its sole cost and expense, agrees to use and occupy the Premises, and cause
the Premises to be used and occupied, in compliance with: (i) any and all laws,
statutes, zoning restrictions, ordinances, rules, regulations, orders and
rulings now or hereafter in force and any requirements of any insurer, insurance
authority or duly constituted public authority having jurisdiction over the
Premises, the Building or the Project now or hereafter in force, (ii) the
requirements of the Board of Fire Underwriters and any other similar body, (iii)
the Certificate of Occupancy issued for the Building, and (iv) any recorded
covenants, conditions and restrictions and similar regulatory agreements, if
any, which affect the use, occupation or alteration of the Premises, the
Building and/or the Project. Tenant agrees to comply with the Rules and
Regulations referenced in Paragraph 28 below. Tenant agrees not to do or permit
anything to be done in or about the Premises which will in any manner obstruct
or interfere with the rights of other tenants or occupants of the Project, or
injure or unreasonably annoy them, or use or allow the Premises to be used for
any unlawful or unreasonably objectionable purpose. Tenant agrees not to place
or store any articles or materials outside of the Premises or to cause, maintain
or permit any nuisance or waste in, on, under or about the Premises or elsewhere
within the Project. Tenant shall not use or allow the Premises to be used for
lodging, bathing or the washing of clothes.
 
(c)   Hazardous Materials. Except for ordinary and general office supplies, such
as copier toner, liquid paper, glue, ink and common household cleaning materials
(some or all of which may constitute "Hazardous Materials" as defined in this
Lease), Tenant agrees not to cause or permit any Hazardous Materials to be
brought upon, stored, used, handled, generated, released or disposed of on, in,
under or about the Premises, the Building, the Common Areas or any other portion
of the Project by Tenant, its agents, employees, subtenants, assignees,
licensees, contractors or invitees (collectively, "Tenant's Parties"), without
the prior written consent of Landlord, which consent Landlord may withhold in
its sole and absolute discretion. Concurrently with the execution of this Lease
and annually thereafter, within ten (10) days of written request from Landlord,
Tenant agrees to complete and deliver to Landlord an Environmental Questionnaire
in the form of Exhibit "F" attached hereto. Upon the expiration or earlier
termination of this Lease, Tenant agrees to promptly remove from the Premises,
the Building and the Project, at its sole cost and expense, any and all
Hazardous Materials, including any equipment or systems containing Hazardous
Materials which are installed, brought upon, stored, used, generated or released
upon, in, under or about the Premises, the Building and/or the Project or any
portion thereof by Tenant or any of Tenant's Parties. To the fullest extent
permitted by law, Tenant agrees to promptly indemnify, protect, defend and hold
harmless Landlord and Landlord's partners, officers, directors, employees,
agents, successors and assigns (collectively, "Landlord Indemnified Parties")
from and against any and all claims, damages, judgments, suits, causes of
action, losses, liabilities, penalties, fines, expenses and costs (including,
without limitation, clean-up, removal, remediation and restoration costs, sums
paid in settlement of claims, attorneys' fees, consultant fees and expert fees
and court costs) which arise or result from the presence of Hazardous Materials
on, in, under or about the Premises, the Building or any other portion of the
Project and which are caused or permitted by Tenant or any of Tenant's Parties.
Tenant agrees to promptly notify Landlord of any release of Hazardous Materials
in the Premises, the Building or any other portion of the Project which Tenant
becomes aware of during the Term of this Lease, whether caused by Tenant or any
other persons or entities. In the event of any release of Hazardous Materials
caused or permitted by Tenant or any of Tenant's Parties, Landlord shall have
the right, but not the obligation, to cause Tenant to immediately take all steps
Landlord deems necessary or appropriate to remediate such release and prevent
any similar future release to the satisfaction of Landlord and Landlord's
mortgagee(s). At all times during the Term of this Lease, Landlord will have the
right, but not the obligation, to enter upon the Premises to inspect,
investigate, sample and/or monitor the Premises to determine if Tenant is in
compliance with the terms of this Lease regarding Hazardous Materials. As used
in this Lease, the term "Hazardous Materials" shall mean and include any
hazardous or toxic materials, substances or wastes as now or hereafter
designated under any law, statute, ordinance, rule, regulation, order or ruling
of any agency of the State, the United States Government or any local
governmental authority, including, without limitation, asbestos, petroleum,
petroleum hydrocarbons and petroleum based products, urea formaldehyde foam
insulation, polychlorinated biphenyls ("PCBs"), and freon and other
chlorofluorocarbons. The provisions of this Subparagraph 8(c) will survive the
expiration or earlier termination of this Lease.
 
(d)   Refuse and Sewage. Tenant agrees not to keep any trash, garbage, waste or
other refuse on the Premises except in sanitary containers and agrees to
regularly and frequently remove same from the Premises. Tenant shall keep all
containers or other equipment used for storage of such materials in a clean and
sanitary condition. Tenant shall properly dispose of all sanitary sewage and
shall not use the sewage disposal system for the disposal of anything except
sanitary sewage. Tenant shall keep the sewage disposal system free of all
obstructions and in good operating condition. If the volume of Tenant's trash
becomes excessive in Landlord's judgment, Landlord shall have the right to
charge Tenant for additional trash disposal services and/or to require that
Tenant contract directly for additional trash disposal services at Tenant's sole
cost and expense.

 
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9.   NOTICES. Any notice required or permitted to be given hereunder must be in
writing and may be given by personal delivery (including delivery by overnight
courier or an express mailing service) or by mail, if sent by registered or
certified mail. Notices to Tenant shall be sufficient if delivered to Tenant at
the Premises and notices to Landlord shall be sufficient if delivered to
Landlord at the address designated in Subparagraph 1(a). Either party may
specify a different address for notice purposes by written notice to the other,
except that the Landlord may in any event use the Premises as Tenant's address
for notice purposes.
 
10.   BROKERS. The parties acknowledge that the broker(s) who negotiated this
Lease are stated in Subparagraph 1(m). Landlord and Tenant each agree to
promptly indemnify, protect, defend and hold harmless the other from and against
any and all claims, damages, judgments, suits, causes of action, losses,
liabilities, penalties, fines, expenses and costs (including attorneys' fees and
court costs) resulting from any breach by the indemnifying party of the
foregoing representation, including, without limitation, any claims that may be
asserted by any broker, agent or finder undisclosed by the indemnifying party.
The foregoing mutual indemnity shall survive the expiration or earlier
termination of this Lease. Tenant agrees that Landlord will not recognize or
compensate any third party broker with regards to any renewals and/or
expansions.
 
11.    SURRENDER; HOLDING OVER.
 
(a)   Surrender. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, shall not constitute a merger, and shall, at the
option of Landlord, operate as an assignment to Landlord of any or all subleases
or subtenancies. Upon the expiration or earlier termination of this Lease,
Tenant agrees to timely and peaceably surrender the Premises to Landlord broom
clean and in a state of good order, repair and condition, ordinary wear and tear
and casualty damage excepted, with all of Tenant's personal property and
alterations removed from the Premises to the extent required under Paragraph 13
and all damage caused by such removal repaired as required by Paragraph 13. The
delivery of keys to any employee of Landlord or to Landlord's agent or any
employee thereof alone will not be sufficient to constitute a termination of
this Lease or a surrender of the Premises.
 
(b)   Holding Over. If Tenant holds over after the expiration or earlier
termination of the Term, Landlord may, at its option, treat Tenant as a tenant
at sufferance only, and evict Tenant immediately, or consent in writing to the
continued occupancy by Tenant which shall be subject to all of the terms,
covenants and conditions of this Lease, so far as applicable, including the
payment of Operating Expenses, except that the Monthly Base Rent for any month
or partial month during which Tenant holds over shall be equal to two hundred
percent (200%) of the Monthly Base Rent in effect under this Lease immediately
prior to such holdover. Acceptance by Landlord of rent after such expiration or
earlier termination will not result in a renewal of this Lease. If Tenant fails
to surrender the Premises upon the expiration of this Lease in accordance with
the terms of this Paragraph 11 despite demand to do so by Landlord, Tenant
agrees to promptly indemnify, protect, defend and hold Landlord harmless from
all claims, damages, judgments, suits, causes of action, losses, liabilities,
penalties, fines, expenses and costs (including attorneys' fees and costs),
including, without limitation, costs and expenses incurred by Landlord in
returning the Premises to the condition in which Tenant was to surrender it and
claims made by any succeeding tenant founded on or resulting from Tenant's
failure to timely surrender the Premises in accordance with the terms of this
Lease. The provisions of this Subparagraph 11(b) will survive the expiration or
earlier termination of this Lease.
 
12.    TAXES ON TENANT'S PROPERTY. Tenant agrees to pay before delinquency, all
taxes and assessments (real and personal) levied against Tenant's business
operations or any personal property, improvements, alterations, trade fixtures
or merchandise placed by Tenant in or about the Premises.
 
13.   ALTERATIONS. Tenant shall not make any alterations to the Premises or any
other aspect of the Project, without Landlord's prior written consent, which
consent Landlord may withhold in its reasonable but subjective discretion.
Notwithstanding the foregoing to the contrary, Tenant shall not make (i) any
structural alterations, improvements or additions to the Premises, or (ii) any
alterations, improvements or additions to the Premises which (a) will adversely
impact the Building's mechanical, electrical or heating, ventilation or air
conditioning systems, or (b) will adversely impact the structure of the
Building, or (c) are visible from the exterior of the Premises, or (d) which
will result in the penetration or puncturing of the roof or floor, without, in
each case, first obtaining Landlord's prior written consent or approval to such
Alterations (which consent or approval shall be in the Landlord's sole and
absolute discretion). All permitted alterations must be performed in compliance
with Landlord's standard rules and regulations regarding alterations. All
alterations will become the property of Landlord and will remain upon and be
surrendered with the Premises at the end of the Term of this Lease; provided,
however, Landlord may require Tenant to remove any or all alterations at the end
of the Term of this Lease. If Tenant fails to remove by the expiration or
earlier termination of this Lease all of its personal property, or any
alterations identified by Landlord for removal, Landlord may, at its option,
treat such failure as a hold-over pursuant to Subparagraph 11(b) above, and/or
Landlord may (without liability to Tenant for loss thereof) treat such personal
property and/or alterations as abandoned and, at Tenant's sole cost and expense
and in addition to Landlord's other rights and remedies under this Lease, at law
or in equity: (a) remove and store such items; and/or (b) upon ten (10) days'
prior notice to Tenant, sell, discard or otherwise dispose of all or any such
items at private or public sale for such price as Landlord may obtain or by
other commercially reasonable means. Tenant shall be liable for all costs of
disposition of Tenant's abandoned property and Landlord shall have no liability
to Tenant with respect to any such abandoned property. Landlord agrees to apply
the proceeds of any sale of any such property to any amounts due to Landlord
under this Lease from Tenant (including Landlord's attorneys' fees and other
costs incurred in the removal, storage and/or sale of such items), with any
remainder to be paid to Tenant.
  
14.   REPAIRS.
 
(a)    Landlord agrees to repair and maintain the structural portions of the
Building, including the foundations, bearing and exterior walls (excluding
glass), subflooring and roof (excluding skylights), and the unexposed
electrical, plumbing and sewer systems, including those portions of such systems
which are outside the Premises, gutters and downspouts on the Building and the
heating, ventilating and air conditioning systems (HVAC) which serve the
Premises, unless such maintenance and repairs are caused in part or in whole by
the act, neglect or omission of any duty by Tenant, its agents, servants,
employees or invitees, in which case Tenant will pay to Landlord, as additional
rent, the reasonable cost of such maintenance and repairs. The costs of
maintenance, repairs or replacement of HVAC unit performed by Landlord will be
included in Operating Expenses. Except as provided in this Subparagraph 14(a),
Landlord has no obligation to alter, remodel, improve, repair, decorate or paint
the Premises or any part thereof. Landlord will not be liable for any failure to
make any such repairs or to perform any maintenance unless such failure shall
persist for an unreasonable time after written notice of the need of such
repairs or maintenance is given to Landlord by Tenant. Tenant will not be
entitled to any abatement of rent and Landlord will not have any liability by
reason of any injury to or interference with Tenant's business arising from the
making of any repairs, alterations or improvements in or to any portion of the
Building or the Premises or in or to fixtures, appurtenances and equipment
therein. Tenant waives the right to make repairs at Landlord's expense under any
law, statute, ordinance, rule, regulation, order or ruling (including, without
limitation, to the extent the Premises are located in California, the provisions
of California Civil Code Sections 1941 and 1942 and any successor statutes or
laws of a similar nature).
 
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(b)   Tenant's Obligations. Tenant agrees to keep, maintain and preserve the
Premises in a state of condition and repair consistent with the Building and,
when and if needed, at Tenant's sole cost and expense, to make all repairs to
the Premises and every part thereof including, without limitation, all walls,
storefronts, floors, ceilings, interior and exterior doors and windows and
fixtures interior plumbing. Regarding HVAC (heating ventilation, and air
conditioning) systems and equipment, Tenant will be responsible for up to
$200.00 cost and expense of any HVAC repairs or service calls and Landlord will
be responsible for the costs and expenses exceeding $200.00. Any such
maintenance and repairs will be performed by Landlord's contractor, or at
Landlord's option, by such contractor or contractors as Tenant may choose from
an approved list to be submitted by Landlord. Tenant agrees to pay all costs and
expenses incurred in such maintenance and repair within seven (7) days after
billing by such contractor or contractors. If Tenant refuses or neglects to
repair and maintain the Premises properly as required hereunder to the
reasonable satisfaction of Landlord, Landlord, at any time following ten (10)
days from the date on which Landlord makes a written demand on Tenant to effect
such repair and maintenance, may enter upon the Premises and make such repairs
and/or maintenance, and upon completion thereof, Tenant agrees to pay to
Landlord as additional rent, Landlord's costs for making such repairs plus an
amount not to exceed ten percent (10%) of such costs for overhead, within ten
(10) days of receipt from Landlord of a written itemized bill therefor. Any
amounts not reimbursed by Tenant within such ten (10) day period will bear
interest at the Interest Rate until paid by Tenant.
 
15.   LIENS. Tenant agrees not to permit any mechanic's, materialmen's or other
liens to be filed against all or any part of the Project, the Building or the
Premises, nor against Tenant's leasehold interest in the Premises, by reason of
or in connection with any repairs, alterations, improvements or other work
contracted for or undertaken by Tenant or any other act or omission of Tenant or
Tenant's agents, employees, contractors, licensees or invitees. At Landlord's
request, Tenant agrees to provide Landlord with enforceable, conditional and
final lien releases (or other evidence reasonably requested by Landlord to
demonstrate protection from liens) from all persons furnishing labor and/or
materials at the Premises. Landlord will have the right at all reasonable times
to post on the Premises and record any notices of non- responsibility which it
deems necessary for protection from such liens. If any such liens are filed,
Tenant will, at its sole cost and expense, promptly cause such liens to be
released of record or bonded so that it no longer affects title to the Project,
the Building or the Premises. If Tenant fails to cause any such liens to be so
released or bonded within ten (10) days after filing thereof, such failure will
be deemed a material breach by Tenant under this Lease without the benefit of
any additional notice or cure period described in Paragraph 22 below, and
Landlord may, without waiving its rights and remedies based on such breach, and
without releasing Tenant from any of its obligations, cause such liens to be
released by any means it shall deem proper, including payment in satisfaction of
the claims giving rise to such liens. Tenant agrees to pay to Landlord within
ten (10) days after receipt of invoice from Landlord, any sum paid by Landlord
to remove such liens, together with interest at the Interest Rate from the date
of such payment by Landlord. Tenant shall also indemnify each and all of the
Landlord Indemnified Parties against any damages, losses or costs arising out of
any such mechanic's, materialmen's or other liens filed against all or any part
of the Project, Building or the Premises by reason of or in connection with any
repairs, alterations, improvements or other work contracted for or undertaken by
Tenant or any other act or omission of Tenant or Tenant's agents, employees,
contractors, licensees or invitees.
 
16.   ENTRY BY LANDLORD. Landlord and its employees and agents will at all
reasonable times have the right to enter the Premises to inspect the same, to
show the Premises to prospective purchasers or tenants, to post notices of
non-responsibility, and/or to repair the Premises as permitted or required by
this Lease. In exercising such entry rights, Landlord will endeavor to minimize,
as reasonably practicable, the interference with Tenant's business, and will
provide Tenant with reasonable advance notice of any such entry (except in
emergency situations). Landlord will at all times have and retain a key with
which to unlock all doors in the Premises, excluding Tenant's vaults and safes.
Tenant shall not alter any lock or install any new or additional locks or bolts
on any door of the Premises without Landlord's prior written consent and without
providing Landlord with a key to all such locks. Except in the case of the gross
negligence or willful misconduct of Landlord, any entry to the Premises obtained
by Landlord will not be construed or deemed to be a forcible or unlawful entry
into the Premises, or an eviction of Tenant from the Premises and Landlord will
not be liable to Tenant for any damages or losses resulting from any such entry.
 
17.    UTILITIES AND SERVICES.
 
(a)   Throughout the Term of this Lease, Tenant shall pay directly to the
utility company providing such service all costs for gas, heat, light, power,
electricity, telephone and other services metered, chargeable or provided to the
Premises. Landlord will not be liable to Tenant for any failure to furnish any
of the foregoing utilities and services if such failure is caused by all or any
of the following: (i) accident, breakage or repairs; (ii) strikes, lockouts or
other labor disturbance or labor dispute of any character; (iii) governmental
regulation, moratorium or other governmental action or inaction; (iv) inability
despite the exercise of reasonable diligence to obtain electricity, water or
fuel; or (v) any other cause beyond Landlord's reasonable control. In addition,
in the event of any stoppage or interruption of services or utilities, Tenant
shall not be entitled to any abatement or reduction of rent (except as expressly
provided in Subparagraph 20(f) or Subparagraph 21(b) if such failure results
from a damage or taking described therein), no eviction of Tenant will result
from such failure and Tenant will not be relieved from the performance of any
covenant or agreement in this Lease because of such failure. In the event of any
failure; stoppage or interruption thereof, Landlord agrees to diligently attempt
to resume service promptly.
 
(b)   The electricity for the Premises is currently in Landlord's name. Tenant
agrees to contact Southern California Edison within ten (10) days from the date.
Tenant takes possession of the Premises and have the bill for electricity put
into Tenant's name. Tenant shall reimburse Landlord for any interim charges
actually billed to Landlord for electricity from the date Tenant takes
possession of the Premises until the date the bill is put into Tenant's name. In
the event Tenant fails to put the bill for electricity in Tenant's name within
ten (10) days from the date Tenant takes possession of the Premises, Landlord
shall have the right to contact Southern California Edison on the eleventh
(11th) day after Tenant takes possession of the Premises and have the
electricity for the Premises turned off. Tenant hereby acknowledges that Tenant
has the absolute responsibility to contact Southern California Edison and have
electrical service put into Tenant's name. In the event Tenant fails to put the
bill for electrical service into Tenant's name as required hereinabove and
Landlord has electrical service turned off, Tenant understands that there will
be no electrical service to the Premises. In such event, Tenant releases and
holds Landlord harmless from any claims, demands, liabilities, damages,
expenses, actions and causes of action based on, arising out of, or related
thereto. Tenant waives the right to additional notice of any kind from Landlord
and/or Southern California Edison and specifically waives any rights or remedies
provided by Civil Code Section 789.3.
 
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18.    ASSUMPTION OF RISK AND INDEMNIFICATION.
 
(a)   Assumption of Risk. Tenant, as a material part of the consideration to
Landlord, agrees that neither Landlord nor any Landlord Indemnified Parties (as
defined in Subparagraph 8(c) above) will be liable to Tenant for, and Tenant
expressly assumes the risk of and waives any and all claims it may have against
Landlord or any Landlord Indemnified Parties with respect to, (i) any and all
damage to property or injury to persons in, upon or about the Premises, the
Building or the Project resulting from the act or omission (except for the
grossly negligent or intentionally wrongful act or omission) of Landlord, (ii)
any such damage caused by other tenants or persons in or about the Building or
the Project, or caused by quasi-public work, (iii) any damage to property
entrusted to employees of the Building, (iv) any loss of or damage to property
by theft or otherwise, or (v) any injury or damage to persons or property
resulting from any casualty, explosion, falling plaster or other masonry or
glass, steam, gas, electricity, water or rain which may leak from any part of
the Building or any other portion of the Project or from the pipes, appliances
or plumbing works therein or from the roof, street or subsurface or from any
other place, or resulting from dampness. Neither Landlord nor any Landlord
Indemnified Parties will be liable for consequential damages arising out of any
loss of the use of the Premises or any equipment, property or facilities therein
by Tenant or any Tenant Parties (as defined in Subparagraph 8(c) above) or for
interference with light. Tenant agrees to give prompt notice to Landlord in case
of fire or accidents in the Premises or the Building, or of defects therein or
in the fixtures or equipment.
 
(b)   Indemnification. Tenant will be liable for, and agrees, to the maximum
extent permissible under applicable law, to promptly indemnify, protect, defend
and hold harmless Landlord and all Landlord Indemnified Parties, from and
against, any and all claims, damages, judgments, suits, causes of action,
losses, liabilities, penalties, fines, expenses and costs, including attorneys'
fees and court costs (collectively, "Indemnified Claims"). arising or resulting
from (i) any act or omission of Tenant or any Tenant Parties; (ii) the use of
the Premises and Common Areas and conduct of Tenant's business by Tenant or any
Tenant Parties, or any other activity, work or thing done, permitted or suffered
by Tenant or any Tenant Parties, in or about the Premises, the Building or
elsewhere within the Project; and/or (iii) any default by Tenant of any
obligations on Tenant's part to be performed under the terms of this Lease. In
case any action or proceeding is brought against Landlord or any Landlord
Indemnified Parties by reason of any such Indemnified Claims, Tenant, upon
notice from Landlord, agrees to promptly defend the same at Tenant's sole cost
and expense by counsel approved in writing by Landlord, which approval Landlord
will not unreasonably withhold.
 
(c)   Survival; No Release of Insurers. Tenant's indemnification obligations
under Subparagraph 18(b) will survive the expiration or earlier termination of
this Lease. Tenant's covenants, agreements and indemnification obligation in
Subparagraph 18(a) and Subparagraph 18(b) above, are not intended to and will
not relieve any insurance carrier of its obligations under policies required to
be carried by Tenant pursuant to the provisions of this Lease.

19.    INSURANCE.
 
(a)   Tenant's Insurance. Commencing on the date of final mutual execution and
delivery of this Lease and continuing throughout the entire Term hereof and any
other period of occupancy, Tenant agrees to keep in full force and effect, at
its sole cost and expense, the insurance specified on Exhibit "E" attached
hereto. Landlord reserves the right to require any other form or forms of
insurance as Tenant or Landlord or any mortgagees of Landlord may reasonably
require from time to time in form, in amounts, and for insurance risks against
which, a prudent tenant would protect itself, but only to the extent coverage
for such risks and amounts are available in the insurance market at commercially
acceptable rates. Landlord makes no representation that the limits of liability
required to be carried by Tenant under the terms of this Lease are adequate to
protect Tenant's interests and Tenant should obtain such additional insurance or
increased liability limits as Tenant deems appropriate.
 
(b)   Supplemental Tenant Insurance Requirements. All policies must be in a form
reasonably satisfactory to Landlord and issued by an insurer admitted to do
business in the State. All policies must be issued by insurers with a
policyholder rating of "A" and a financial rating of "X" in the most recent
version of Best's Key Rating Guide. All policies must contain a requirement to
notify Landlord (and Landlord's property manager and any mortgagees or ground
lessors of Landlord who are named as additional insureds, if any) in writing not
less than thirty (30) days prior to any material change, reduction in coverage,
cancellation or other termination thereof. Tenant agrees to deliver to Landlord,
as soon as practicable after placing the required insurance, but in any event
within the time frame specified in Subparagraph 19(a) above, certificate(s) of
insurance and/or if required by Landlord, certified copies of each policy
evidencing the existence of such insurance and Tenant's compliance with the
provisions of this Paragraph 19. Tenant agrees to cause replacement policies or
certificates to be delivered to Landlord not less than thirty (30) days prior to
the expiration of any such policy or policies. If any such initial or
replacement policies or certificates are not furnished within the time(s)
specified herein, Landlord will have the right, but not the obligation, to
obtain such insurance as Landlord deems necessary to protect Landlord's
interests at Tenant's expense. Tenant's insurance under Subparagraph
19(a)(iii)  and Subparagraph 19(a)(iv) must name Landlord and Landlord's
property manager (and at Landlord's request, Landlord's mortgagees and ground
lessors of which Tenant has been informed in writing) as additional insureds and
must also contain a provision that the insurance afforded by such policy is
primary insurance and any insurance carried by Landlord and Landlord's property
manager or Landlord's mortgagees or ground lessors, if any, will be excess over
and non-contributing with Tenant's insurance
 
(c)   Waiver of Right of Recovery. Tenant and Landlord each assumes all risk
with respect to damage to or theft of its respective property located at the
Premises and with respect to Tenant, interruption of its business and agrees to
look solely to its own insurance in the case of any damage to its property or
and with respect to Tenant, interruption to its business. Landlord, Tenant, each
waive any right of recovery against the other and their respective agents,
employees, contractors and managers for any loss or damage with respect to its
property, or the Premises or the Building. Failure of a party to insure shall
not void this waiver. Any fire, extended coverage or property insurance policy
maintained by Tenant or Landlord shall contain a waiver of subrogation
provision. The waivers of right or recovery contained in this provision shall
apply EVEN IF THE LOSS OR DAMAGE TO WHICH THIS PROVISION APPLIES IS CAUSED
SOLELY OR IN PART BY THE NEGLIGENCE OF LANDLORD OR TENANT.
 
(d)   Business Interruption. Landlord shall not be responsible for, and Tenant
releases and discharges Landlord from, and Tenant further waives any right of
recovery from Landlord and its agents, employees, contractors and managers for,
any loss for or from business interruption or loss of use of the Premises or
Property suffered by Tenant in  connection with Tenant's use or occupancy of the
Premises, EVEN IF SUCH LOSS IS CAUSED SOLELY OR IN PART BY THE NEGLIGENCE OF
LANDLORD.
 
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20.    DAMAGE OR DESTRUCTION.
 
(a)   Partial Destruction. If the Premises or the Building are damaged by fire
or other casualty to an extent not exceeding twenty-five percent (25%) of the
full replacement cost thereof, and Landlord's contractor reasonably estimates in
a writing delivered to Landlord and Tenant that the damage thereto may be
repaired, reconstructed or restored to substantially its condition immediately
prior to such damage within one hundred eighty (180) days from the date of such
casualty, and Landlord will receive insurance proceeds sufficient to cover the
costs of such repairs, reconstruction and restoration (including proceeds from
Tenant and/or Tenant's insurance which Tenant is required to deliver to Landlord
pursuant to Subparagraph 20(d) below to cover Tenant's obligation for the costs
of repair, reconstruction and restoration of any portion of the tenant
improvements and any alterations for which Tenant is responsible under this
Lease), then Landlord agrees to commence and proceed diligently with the work of
repair, reconstruction and restoration and this Lease will continue in full
force and effect.
 
(b)   Substantial Destruction. Any damage or destruction to the Premises or the
Building which Landlord is not obligated to repair pursuant to Subparagraph
20(a) above will be deemed a substantial destruction. In the event of a
substantial destruction, Landlord may elect to either: (i) repair, reconstruct
and restore the portion of the Building or the Premises damaged by such
casualty, in which case this Lease will continue in full force and effect,
subject to Tenant's termination right contained in Subparagraph 20(c) below; or
(ii) terminate this Lease effective as of the date which is thirty (30) days
after Tenant's receipt of Landlord's election to so terminate.
 
(c)   Termination Rights. If Landlord elects to repair, reconstruct and restore
pursuant to Subparagraph 20(b)(i) hereinabove, and if Landlord's contractor
estimates that as a result of such damage, Tenant cannot be given reasonable use
of and access to the Premises within two hundred forty (240) days after the date
of such damage, then either Landlord or Tenant may terminate this Lease
effective upon delivery of written notice to the other within ten (10) days
after Landlord delivers notice to Tenant of its election to so repair,
reconstruct or restore; provided, however, Tenant shall have no right to
terminate this Lease if Landlord can relocate Tenant to other comparable
Premises in the Building or the Project within one hundred eighty (180) days
after the date of such damage.
 
(d)   Tenant's Costs and Insurance Proceeds. In the event of any damage or
destruction of all or any part of the Premises, Tenant agrees to immediately (i)
notify Landlord thereof, and (ii) deliver to Landlord all property insurance
proceeds received by Tenant with respect to any tenant improvements installed by
or at the cost of Tenant and any alterations, but excluding proceeds for
Tenant's furniture, fixtures, equipment and other personal property, whether or
not this Lease is terminated as permitted in this Paragraph 20, and Tenant
hereby assigns to Landlord all rights to receive such insurance proceeds. If for
any reason (including Tenant's failure to obtain required insurance), Tenant
fails to receive insurance proceeds covering the full replacement cost of any
tenant improvements and any alterations which are damaged, Tenant will be deemed
to have self-insured the replacement cost of such items, and upon any damage or
destruction thereto, Tenant agrees to immediately pay to Landlord the full
replacement cost of such items, less any insurance proceeds actually received by
Landlord from Landlord's or Tenant's insurance with respect to such items.
 
(e)   Abatement of Rent. In the event of any damage, repair, reconstruction
and/or restoration described in this Paragraph 20, rent will be abated or
reduced, as the case may be, from the date of such casualty in proportion to the
degree to which Tenant's use of the Premises is impaired during such period of
repair until such use is restored. Except for abatement of rent as provided
hereinabove, Tenant will not be entitled to any compensation or damages for loss
of, or interference with, Tenant's business or use or access of all or any part
of the Premises or for lost profits or any other consequential damages of any
kind or nature, which result from any such damage, repair, reconstruction or
restoration.
 
(f)    Damage Near End of Term. Landlord and Tenant shall each have the right to
terminate this Lease if any damage to the Premises or the Building occurs during
the last twelve (12) months of the Term of this Lease where Landlord's
contractor estimates in a writing delivered to Landlord and Tenant that the
repair, reconstruction or restoration of such damage cannot be completed within
sixty (60) days after the date of such casualty. If either party desires to
terminate this Lease under this Subparagraph (f) it shall provide written notice
to the other party of such election within ten (10) days after receipt of
Landlord's contractor's repair estimates.
 
(g)    Waiver of Termination Right. Landlord and Tenant agree that the foregoing
provisions of this Paragraph 20 are to govern their respective rights and
obligations in the event of any damage or destruction and supersede and are in
lieu of the provisions of any applicable law, statute, ordinance, rule,
regulation, order or ruling now or hereafter in force which provide remedies for
damage or destruction of leased premises (including, without limitation, to the
extent the Premises are located in California, the provisions of California
Civil Code Section 1932, Subsection 2, and Section 1933, Subsection 4 and any
successor statute or laws of a similar nature).

21.    EMINENT DOMAIN.
 
(a)   Substantial Taking. If the whole of the Premises, or such part thereof as
shall substantially interfere with Tenant's use and occupancy of the Premises,
as contemplated by this Lease, is taken for any public or quasi-public purpose
by any lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or sold to prevent such taking, either party
will have the right to terminate this Lease effective as of the date possession
is required to be surrendered to such authority.
 
(b)   Partial Taking; Abatement of Rent. In the event of a taking of a portion
of the Premises which does not substantially interfere with Tenant's use and
occupancy of the Premises including any temporary taking of ninety (90) days or
less, then, neither party will have the right to terminate this Lease and
Landlord will thereafter proceed to make a functional unit of the remaining
portion of the Premises (but only to the extent Landlord receives proceeds
therefor from the condemning authority), and rent will be abated with respect to
the part of the Premises which Tenant is deprived of on account of such taking.
Notwithstanding the immediately preceding sentence to the contrary, if any part
of the Building or the Project is taken (whether or not such taking
substantially interferes with Tenant's use of the Premises), Landlord may
terminate this Lease upon thirty (30) days' prior written notice to Tenant if
Landlord also terminates the leases of the other tenants of the Building which
are leasing comparably sized space for comparable lease terms.
 
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(c)   Condemnation Award. In connection with any taking of the Premises or the
Building, Landlord will be entitled to receive the entire amount of any award
which may be made or given in such taking or condemnation, without deduction or
apportionment for any estate or interest of Tenant, it being expressly
understood and agreed by Tenant that no portion of any such award will be
allowed or paid to Tenant for any so-called bonus or excess value of this Lease,
and such bonus or excess value will be the sole property of Landlord. Tenant
agrees not to assert any claim against Landlord or the taking authority for any
compensation because of such taking (including any claim for bonus or excess
value of this Lease); provided, however, if any portion of the Premises is
taken, Tenant will have the right to recover from the condemning authority (but
not from Landlord) any compensation as may be separately awarded or recoverable
by Tenant for the taking of Tenant's furniture, fixtures, equipment and other
personal property within the Premises, for Tenant's relocation expenses, and for
any loss of goodwill or other damage to Tenant's business by reason of such
taking.
 
22.    DEFAULTS AND REMEDIES.
 
(a)   Defaults. The occurrence of any one or more of the following events will
be deemed a default by Tenant:
 
(I)    The abandonment or vacation of the Premises by Tenant.
 
(ii)   The failure by Tenant to make any payment of rent or additional rent or
any other payment required to be made by Tenant hereunder, as and when due,
where such failure continues for a period of three (3) days after written notice
thereof from Landlord to Tenant; provided, however, that any such notice will be
in lieu of, and not in addition to, any notice required under applicable law
(including, without limitation, to the extent the Premises are located in
California, the provisions of California Code of Civil Procedure Section 1161
regarding unlawful detainer actions or any successor statute or law of a similar
nature).
 
(iii)   The failure by Tenant to observe or perform any of the express or
implied covenants or provisions of this Lease to be observed or performed by
Tenant, other than as specified in Subparagraph 22(a)(i) or Subparagraph
22(a)(ii) above, where such failure continues for a period of five (5) days
after written notice thereof from Landlord to Tenant. The provisions of any such
notice will be in lieu of, and not in addition to, any notice required under
applicable law (including, without limitation, to the extent the Premises are
located in California, California Code of Civil Procedure Section 1161 regarding
unlawful detainer actions and any successor statute or similar law). If the
nature of Tenant's default is such that more than five (5) days are reasonably
required for its cure, then Tenant will not be deemed to be in default if
Tenant, with Landlord's concurrence, commences such cure within such five (5)
day period and thereafter diligently prosecutes such cure to completion.
 
(iv)   (A)The making by Tenant of any general assignment for the benefit of
creditors; (B) the filing by or against Tenant of a petition to have Tenant
adjudged a bankrupt or a petition for reorganization or arrangement under any
law relating to bankruptcy (unless, in the case of a petition filed against
Tenant, the same is dismissed within sixty (60) days); (C) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, where possession
is not restored to Tenant within thirty (30) days; or (D) the attachment,
execution or other judicial seizure of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease where such seizure
is not discharged within thirty (30) days.
 
(b)   Landlord's Remedies; Termination. In the event of any default by Tenant,
in addition to any other remedies available to Landlord at law or in equity
under applicable law (including, without limitation, to the extent the Premises
are located in California, the remedies of Civil Code Section 1951.4 and any
successor statute or similar law), Landlord will have the immediate right and
option to terminate this Lease and all rights of Tenant hereunder. If Landlord
elects to terminate this Lease then, to the extent permitted under applicable
law, Landlord may recover from Tenant: (i) the worth at the time of award of any
unpaid rent which had been earned at the time of such termination; plus (ii) the
worth at the time of award of the amount by which the unpaid rent which would
have been earned after termination until the time of award exceeds the amount of
such rent loss that Tenant proves could have been reasonably avoided; plus (iii)
the worth at the time of award of the amount by which the unpaid rent for the
balance of the Term after the time of award exceeds the amount of such rent loss
that Tenant proves could be reasonably avoided; plus (iv) any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this Lease or which, in the
ordinary course of things, results therefrom including, but not limited to:
attorneys' fees and costs; brokers' commissions; the costs of refurbishment,
alterations, renovation and repair of the Premises, and removal (including the
repair of any damage caused by such removal) and storage (or disposal) of
Tenant's personal property, equipment, fixtures, alterations, the tenant
improvements and any other items which Tenant is required under this Lease to
remove but does not remove, as well as the unamortized value of any free rent,
reduced rent, free parking, reduced rate parking and any tenant improvement
allowance or other costs or economic concessions provided, paid, granted or
incurred by Landlord pursuant to this Lease. As used in Subparagraphs 22(b)(i)
and Subparagraphs 22(b)(ii)  above, the "worth at the time of award" is computed
by allowing interest at the Interest Rate. As used in Subparagraph 22(b)(iii)
above, the "worth at the time of award" is 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%).
 
(c)   Landlord's Remedies; Re-Entry Rights. In the event of any default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, Landlord will also have the right, with or without
terminating this Lease, to re-enter the Premises and remove all persons and
property from the Premises; such property may be removed and stored in a public
warehouse or elsewhere and/or disposed of at the sole cost and expense of and
for the account of Tenant in accordance with the provisions of Paragraph 13 of
this Lease or any other procedures permitted by applicable law. No re-entry or
taking possession of the Premises by Landlord pursuant to this Subparagraph
22(c) will be construed as an election to terminate this Lease unless a written
notice of such intention is given to Tenant or unless the termination thereof is
decreed by a court of competent jurisdiction.
 
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(d)   Landlord's Remedies; Re-Letting. If Landlord does not elect to terminate
this Lease, Landlord may from time to time, without terminating this Lease,
either recover all rent as it becomes due or relet the Premises or any part
thereof on terms and conditions as Landlord in its sole and absolute discretion
may deem advisable with the right to make alterations and repairs to the
Premises in connection with such reletting. If Landlord elects to relet the
Premises, then rents received by Landlord from such reletting will be applied:
first, to the payment of any indebtedness other than rent due hereunder from
Tenant to Landlord; second, to the payment of any cost of such reletting; third,
to the payment of the cost of any alterations and repairs to the Premises
incurred in connection with such reletting; fourth, to the payment of rent due
and unpaid hereunder and the residue, if any, will be held by Landlord and
applied to payment of future rent as the same may become due and payable
hereunder. Should that portion of such rents received from such reletting during
any month, which is applied to the payment of rent hereunder, be less than the
rent payable during that month by Tenant hereunder, then Tenant agrees to pay
such deficiency to Landlord immediately upon demand therefor by Landlord. Such
deficiency will be calculated and paid monthly.
 
(e)   Landlord's Remedies; Performance for Tenant. All covenants and agreements
to be performed by Tenant under any of the terms of this Lease are to be
performed by Tenant at Tenant's sole cost and expense and without any abatement
of rent. If Tenant fails to pay any sum of money owed to any party other than
Landlord, for which it is liable under this Lease, or if Tenant fails to perform
any other act on its part to be performed hereunder, and such failure continues
for ten (10) days after notice thereof by Landlord, Landlord may, without
waiving or releasing Tenant from its obligations, but shall not be obligated to,
make any such payment or perform any such other act to be made or performed by
Tenant. Tenant agrees to reimburse Landlord upon demand for all sums so paid by
Landlord and all necessary incidental costs, together with interest thereon at
the Interest Rate, from the date of such payment by Landlord until reimbursed by
Tenant. This remedy shall be in addition to any other right or remedy of
Landlord set forth in this Paragraph 22.
 
(f)   Late Payment. If Tenant fails to pay any installment of rent when due or
if Tenant fails to make any other payment for which Tenant is obligated under
this Lease when due, such late amount will accrue interest at the Interest Rate
until such amount is paid by Tenant to Landlord. In addition, Tenant agrees to
pay to Landlord concurrently with such late payment amount, as additional rent,
a late charge equal to ten percent (10%) of the amount due to compensate
Landlord for the extra costs Landlord will incur as a result of such late
payment. Landlord and Tenant agree that such late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by reason of any such
late payment. Acceptance of any such interest and late charge will not
constitute a waiver of the Tenant's default with respect to the overdue amount,
or prevent Landlord from exercising any of the other rights and remedies
available to Landlord. If Tenant incurs a late charge more than three (3) times
in any period of twelve (12) months during the Lease Term, then,-notwithstanding
that Tenant cures the late payments for which such late charges are imposed,
Landlord will have the right to require Tenant thereafter to pay all
installments of Monthly Base Rent quarterly in advance in the form of a
cashier's check throughout the remainder of the Lease Term. Any payments of any
kind returned for insufficient funds will be subject to an additional handling
charge of $40.00, and thereafter, Landlord may require Tenant to pay all future
payments of rent or other sums due by money order or cashier's check.
 
(g)   Rights and Remedies Cumulative. All rights, options and remedies of
Landlord contained in this Lease will be construed and held to be cumulative,
and no one of them will be exclusive of the other, and Landlord shall have the
right to pursue any one or all of such remedies or any other remedy or relief
which may be provided by law or in equity, whether or not stated in this Lease.
Nothing in this Paragraph 22 will be deemed to limit or otherwise affect
Tenant's indemnification of Landlord pursuant to any provision of this Lease.
 
23.   LANDLORD'S DEFAULT. Landlord will not be in default in the performance of
any obligation required to be performed by Landlord under this Lease unless
Landlord fails to perform such obligation within thirty (30) days after the
receipt of written notice from Tenant specifying in detail Landlord's failure to
perform; provided however, that if the nature of Landlord's obligation is such
that more than thirty (30) days are required for performance, then Landlord will
not be deemed in default if it commences such performance within such thirty
(30) day period and thereafter diligently pursues the same to completion. Upon
any default by Landlord, Tenant may exercise any of its rights provided at law
or in equity, subject to the limitations on liability set forth in Paragraph 35
of this Lease.
 
24.   ASSIGNMENT AND SUBLETTING.
 
(a)   Restriction on Transfer. Except as otherwise expressly provided in this
Paragraph 24, Tenant will not, either voluntarily or by operation of law, assign
or encumber this Lease or any interest herein or sublet the Premises or any part
thereof, or permit the use or occupancy of the Premises by any party other than
Tenant (any such assignment, encumbrance, sublease or the like will sometimes be
referred to as a "Transfer") without the prior written consent of Landlord,
which consent Landlord will not unreasonably withhold. For purposes of this
Paragraph 24, if Tenant is a corporation, partnership or other entity, any
transfer, assignment, encumbrance or hypothecation of fifty percent (50%) or
more (individually or in the aggregate) of any stock or other ownership interest
in such entity, and/or any transfer, assignment, hypothecation or encumbrance of
any controlling ownership or voting interest in such entity, will be deemed a
Transfer and will be subject to all of the restrictions and provisions contained
in this Paragraph 24; provided, however, this provision will not apply to public
corporations, the stock of which is traded through a public stock exchange or
over the counter system.
 
(b)   Transfer Notice. If Tenant desires to effect a Transfer, then at least
thirty (30) days prior to the date when Tenant desires the Transfer to be
effective (the "Transfer Date"), Tenant agrees to give Landlord a notice (the
"Transfer Notice"), stating the name, address and business of the proposed
assignee, sublessee or other transferee (sometimes referred to hereinafter as
"Transferee"), reasonable information (including references) concerning the
character, ownership, and financial condition of the proposed Transferee, the
Transfer Date, any ownership or commercial relationship between Tenant and the
proposed Transferee, and the consideration and all other material terms and
conditions of the proposed Transfer, all in such detail as Landlord may
reasonably require.
 
(c)   Landlord's Options. Within fifteen (15) days of Landlord's receipt of any
Transfer Notice, and any additional information requested by Landlord concerning
the proposed Transferee's financial responsibility, Landlord will notify Tenant
of its election to do one of the following: (i) consent to the proposed Transfer
subject to such reasonable conditions as Landlord may impose in providing such
consent; (ii) refuse such consent, which refusal shall be on reasonable grounds;
or (iii) terminate this Lease as to all or such portion of the Premises which is
proposed to be sublet or assigned and recapture all or such portion of the
Premises for reletting by Landlord.
 
(d)   Additional Conditions. A condition to Landlord's consent to any Transfer
of this Lease will be the delivery to Landlord of a true copy of the fully
executed instrument of assignment, sublease, transfer or hypothecation, in form
and substance reasonably satisfactory to Landlord. Tenant agrees to pay to
Landlord, as additional rent, all sums and other consideration payable to and
for the benefit of Tenant by the assignee or sublessee in excess of the rent
payable under this Lease for the same period and portion of the Premises. In
calculating excess rent or other consideration which may be payable to Landlord
under this paragraph, Tenant will be entitled to deduct commercially reasonable
third party brokerage commissions and attorneys' fees and other amounts
reasonably and actually expended by Tenant in connection with such assignment or
subletting if acceptable written evidence of such expenditures is provided to
Landlord. Notwithstanding anything herein to the contrary, no Transfer will
release Tenant of Tenant's obligations under this Lease or alter the primary
liability of Tenant to pay the rent and to perform all other obligations to be
performed by Tenant hereunder. Landlord may require that any Transferee remit
directly to Landlord on a monthly basis, all monies due Tenant by said
Transferee. Consent by Landlord to one Transfer will not be deemed consent to
any subsequent Transfer. In the event of default by any Transferee of Tenant or
any successor of Tenant in the performance of any of the terms hereof, Landlord
may proceed directly against Tenant without the necessity of exhausting remedies
against such Transferee or successor. If Tenant effects a Transfer or requests
the consent of Landlord to any Transfer (whether or not such Transfer is
consummated), then, upon demand, Tenant agrees to pay Landlord a non-refundable
administrative fee of not less than One Hundred Dollars ($100.00) and not more
than Five Hundred Dollars ($500.00), plus Landlord's reasonable attorneys' fees.
 
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25.   SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any mortgagee or beneficiary with a deed of trust
encumbering the Building and/or the Project, or any lessor of a ground or
underlying lease with respect to the Building, this Lease will be subject and
subordinate at all times to: (i) all ground leases or underlying leases which
may now exist or hereafter be executed affecting the Building; and (ii) the lien
of any mortgage or deed of trust which may now exist or hereafter be executed
for which the Building, the Project or any leases thereof, or Landlord's
interest and estate in any of said items, is specified as security.
Notwithstanding the foregoing, Landlord reserves the right to subordinate any
such ground leases or underlying leases or any such liens to this Lease. If any
such ground lease or underlying lease terminates for any reason or any such
mortgage or deed of trust is foreclosed or a conveyance in lieu of foreclosure
is made for any reason, at the election of Landlord's successor in interest,
Tenant agrees to attorn to and become the tenant of such successor in which
event Tenant's right to possession of the Premises will not be disturbed as long
as Tenant is not in default under this Lease. Tenant hereby waives its rights
under any law which gives or purports to give Tenant any right to terminate or
otherwise adversely affect this Lease and the obligations of Tenant hereunder in
the event of any such foreclosure proceeding or sale. Tenant covenants and
agrees to execute and deliver, upon demand by Landlord and in the form
reasonably required by Landlord, any additional documents evidencing the
priority or subordination of this Lease and Tenant's attornment agreement with
respect to any such ground lease or underlying leases or the lien of any such
mortgage or deed of trust. If Tenant fails to sign and return any such documents
within ten (10) days of receipt, Tenant will be in default hereunder.
 
26.   ESTOPPEL CERTIFICATE. Within ten (10) days following any written request
which Landlord may make from time to time, Tenant agrees to execute and deliver
to Landlord an estoppel certificate, in Landlord's standard form or as may
reasonably be required by Landlord's lender. Landlord and Tenant intend that any
statement delivered pursuant to this Paragraph 26 may be relied upon by any
mortgagee, beneficiary, purchaser or prospective purchaser of the Building or
any interest therein. Tenant's failure to deliver such statement within such
time will be conclusive upon Tenant (i) that this Lease is in full force and
effect, without modification except as may be represented by Landlord, (ii) that
there are no uncured defaults in Landlord's performance, and (iii) that not more
than one (1) month's rent has been paid in advance. Without limiting the
foregoing, if Tenant fails to deliver any such statement within such ten (10)
day period, Landlord may deliver to Tenant an additional request for such
statement and Tenant's failure to deliver such statement to Landlord within ten
(10) days after delivery of such additional request will constitute a default
under this Lease. Tenant agrees to indemnify and protect Landlord from and
against any and all claims, damages, losses, liabilities and expenses (including
attorneys' fees and costs) attributable to any failure by Tenant to timely
deliver any such estoppel certificate to Landlord as required by this Paragraph
26.
 
27.   BUILDING PLANNING. If Landlord requires the Premises for use in
conjunction with another suite or for other reasons connected with the planning
program for the Building or the Project, Landlord will have the right, upon
thirty (30) days' prior written notice to Tenant, to move Tenant to other space
in the Building of substantially similar size as the Premises, and with tenant
improvements of substantially similar age, quality and layout as then existing
in the Premises. Any such relocation will be at Landlord's cost and expense,
including the cost of providing such substantially similar tenant improvements
(but not any furniture or personal property) and Tenant's reasonable moving,
telephone installation and stationary reprinting costs. If Landlord so relocates
Tenant, the terms and conditions of this Lease will remain in full force and
effect and apply to the new space, except that (a) a revised Exhibit "A" will
become part of this Lease and will reflect the location of the new space, (b)
Paragraph 1 of this Lease will be amended to include and state all correct data
as to the new space, (c) the new space will thereafter be deemed to be the
"Premises", and (d) all economic terms and conditions (e.g. rent, total
Operating Expense Allowance, etc.) will be adjusted on a per square foot basis
based on the total number of rentable square feet of area contained in the new
space. Landlord and Tenant agree to cooperate fully with one another in order to
minimize the inconvenience to Tenant resulting from any such relocation.
 
28.   RULES AND REGULATIONS. Tenant agrees to faithfully observe and comply with
the "Rules and Regulations," a copy of which is attached hereto and incorporated
herein by this reference as Exhibit "D," and all reasonable and
nondiscriminatory modifications thereof and additions thereto from time to time
put into effect by Landlord. Landlord will not be responsible to Tenant for the
violation or non-performance by any other tenant or occupant of the Building of
any of the Rules and Regulations.
 
29.   MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES AND LESSORS. Tenant,
within ten (10) days after request therefor, agrees to execute any reasonable
amendments to this Lease which may be requested by any lender or ground lessor
of the Project, provided any such amendments do not increase the obligations of
Tenant under this Lease or adversely affect the leasehold estate created by this
Lease. In the event of any default on the part of Landlord, Tenant will give
notice by registered or certified mail to any beneficiary of a deed of trust or
mortgage covering the Premises or ground lessor of Landlord whose address has
been furnished to Tenant, and Tenant agrees to offer such beneficiary, mortgagee
or ground lessor a reasonable opportunity to cure the default (including with
respect to any such beneficiary or mortgagee, time to obtain possession of the
Premises, subject to this Lease and Tenant's rights hereunder, by power of sale
or a judicial foreclosure, if such should prove necessary to effect a cure).
 
30.   DEFINITION OF LANDLORD. The term "Landlord," as used in this Lease, so far
as covenants or obligations on the part of Landlord are concerned, means and
includes only the owner or owners, at the time in question, of the fee title of
the Premises or the lessees under any ground lease, if any. In the event of any
transfer, assignment or other conveyance or transfers of any such title (other
than a transfer for security purposes only), Landlord herein named (and in case
of any subsequent transfers or conveyances, the then grantor) will be
automatically relieved from and after the date of such transfer, assignment or
conveyance of all liability as respects the performance of any covenants or
obligations on the part of Landlord contained in this Lease thereafter to be
performed, so long as the transferee assumes in writing all such covenants and
obligations of Landlord arising after the date of such transfer. Landlord and
Landlord's transferees and assignees have the absolute right to transfer all or
any portion of their respective title and interest in the Project, the Building,
the Premises and/or this Lease without the consent of Tenant, and such transfer
or subsequent transfer will not be deemed a violation on Landlord's part of any
of the terms and conditions of this Lease.
 
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31.   WAIVER. The waiver by either party of any breach of any term, covenant or
condition herein contained will not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition herein contained,
nor will any custom or practice which may develop between the parties in the
administration of the terms hereof be deemed a waiver of or in any way affect
the right of either party to insist upon performance in strict accordance with
said terms. The subsequent acceptance of rent or any other payment hereunder by
Landlord will not be deemed to be a waiver of any preceding breach by Tenant of
any term, covenant or condition of this Lease, other than the failure of Tenant
to pay the particular rent so accepted, regardless of Landlord's knowledge of
such preceding breach at the time of acceptance of such rent. No acceptance by
Landlord of a lesser sum than the basic rent and additional rent or other sum
then due will be deemed to be other than on account of the earliest installment
of such rent or other amount due, nor will any endorsement or statement on any
check or any letter accompanying any check be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord's
right to recover the balance of such installment or other amount or pursue any
other remedy provided in this Lease. The consent or approval of Landlord to or
of any act by Tenant requiring Landlord's consent or approval will not be deemed
to waive or render unnecessary Landlord's consent or approval to or of any
subsequent similar acts by Tenant.
 
32.   PARKING. So long as this Lease is in effect and provided Tenant is not in
default hereunder, Landlord grants to Tenant, Tenant's visitors and guests a
non-exclusive license to use the parking areas which serve the Building subject
to the terms and conditions of this Paragraph 32 and the Rules and Regulations
regarding parking contained in Exhibit "D" attached hereto. Tenant will not use
or allow any of Tenant's employees or guests to use any parking spaces which
have been specifically assigned by Landlord to other tenants or occupants or 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 agrees
to cause its employees, subtenants, assignees, contractors, suppliers, customers
and invitees to comply with the 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.
 
33.   FORCE MAJEURE. If either Landlord or Tenant is delayed, hindered in or
prevented from the performance of any act required under this Lease by reason of
strikes, lock-outs, labor troubles, inability to procure standard materials,
failure of power, restrictive governmental laws, regulations or orders or
governmental action or inaction (including failure, refusal or delay in issuing
permits, approvals and/or authorizations which is not the result of the action
or inaction of the party claiming such delay), riots, civil unrest or
insurrection, war, fire, earthquake, flood or other natural disaster, unusual
and unforeseeable delay which results from an interruption of any public
utilities (e.g., electricity, gas, water, telephone) or other unusual and
unforeseeable delay not within the reasonable control of the party delayed in
performing work or doing acts required under the provisions of this Lease, then
performance of such act will be excused for the period of the delay and the
period for the performance of any such act will be extended for a period
equivalent to the period of such delay. Notwithstanding the foregoing, the
provisions of this Paragraph 33 will not operate to excuse Tenant from prompt
payment of rent or any other payments required under the provisions of this
Lease.
 
34.   SIGNS. Landlord will designate the location on the Premises, if any, for
one Tenant identification sign. Tenant has no right to install Tenant
identification signs in any other location in, on or about the Premises or the
Project and will not display or erect any other signs, displays or other
advertising materials that are visible from the exterior of the Building or from
within the Building in any interior or exterior common areas. The size, design,
color and other physical aspects of any and all permitted sign(s) will be
subject to (i) Landlord's written approval prior to installation, which approval
may be withheld in Landlord's discretion, (ii) any covenants, conditions or
restrictions and sign criteria governing the Project, and (iii) any applicable
municipal or governmental permits and approvals. The current sign criteria for
the Project is shown on Exhibit C attached hereto. Tenant will be solely
responsible for all costs for installation, maintenance, repair and removal of
any Tenant identification sign(s). If Tenant fails to remove Tenant's sign(s)
upon termination of this Lease and repair any damage caused by such removal,
Landlord may do so at Tenant's sole cost and expense. Tenant agrees to reimburse
Landlord for all costs incurred by Landlord to effect any installation,
maintenance or removal on Tenant's account, which amount will be deemed
additional rent, and may include, without limitation, all sums disbursed,
incurred or deposited by Landlord including Landlord's costs, expenses and
actual attorneys' fees with interest thereon at the Interest Rate from the date
of Landlord's demand until paid by Tenant. Any sign rights granted to Tenant
under this Lease are personal to Tenant and may not be assigned, transferred or
otherwise conveyed to any assignee or subtenant of Tenant without Landlord's
prior written consent, which consent Landlord may withhold in its sole and
absolute discretion.
 
35.    LIMITATION ON LIABILITY. In consideration of the benefits accruing
hereunder, Tenant on behalf of itself and all successors and assigns of Tenant
covenants and agrees that, in the event of any actual or alleged failure, breach
or default hereunder by Landlord: (a) Tenant's recourse against Landlord for
monetary damages will be limited to Landlord's interest in the Building
including, subject to the prior rights of any Mortgagee, Landlord's interest in
the rents of the Building and any insurance proceeds payable to Landlord; (b)
except as may be necessary to secure jurisdiction of the partnership, no partner
of Landlord shall be sued or named as a party in any suit or action and no
service of process shall be made against any partner, member, shareholder,
officer or director of Landlord; (c) no partner, member, shareholder, officer or
director of Landlord shall be required to answer or otherwise plead to any
service of process; (d) no judgment will be taken against any partner, member,
shareholder, officer or director of Landlord and any judgment taken against any
partner, member, shareholder, officer or director of Landlord may be vacated and
set aside at any time after the fact; (e) no writ of execution will be levied
against the assets of any partner, member, shareholder, officer or director of
Landlord; (f) the obligations under this Lease do not constitute personal
obligations of the individual partners, members, directors, officers or
shareholders of Landlord, and Tenant shall not seek recourse against the
individual partners, members, directors, officers or shareholders of Landlord or
any of their personal assets for satisfaction of any liability in respect to
this Lease; and (g) these covenants and agreements are enforceable both by
Landlord and also by any partner, member, shareholder, officer or director of
Landlord.
 
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36.   FINANCIAL STATEMENTS. Prior to the execution of this Lease by Landlord and
at any time during the Term of this Lease upon ten (10) days prior written
notice from Landlord, Tenant agrees to provide Landlord with a current financial
statement for Tenant and any guarantors of Tenant and financial statements for
the two (2) years prior to the current financial statement year for Tenant and
any guarantors of Tenant. Such statements are to be prepared in accordance with
generally accepted accounting principles and, if such is the normal practice of
Tenant, audited by an independent certified public accountant.\
 
37.   QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that upon
Tenant paying the rent required under this Lease and paying all other charges
and performing all of the covenants and provisions on Tenant's part to be
observed and performed under this Lease, Tenant may peaceably and quietly have,
hold and enjoy the Premises in accordance with this Lease.
 
38.    MISCELLANEOUS.
 
(a)   Conflict of Laws. This Lease shall be governed by and construed solely
pursuant to the laws of the State, without giving effect to choice of law
principles thereunder.
 
(b)   Successors and Assigns. Except as otherwise provided in this Lease, all of
the covenants, conditions and provisions of this Lease shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns.
 
(c)   Professional Fees and Costs. If either Landlord or Tenant should bring
suit against the other with respect to this Lease, then all costs and expenses,
including without limitation, actual professional fees and costs such as
appraisers', accountants' and attorneys' fees and costs, incurred by the party
which prevails in such action, whether by final judgment or out of court
settlement, shall be paid by the other party, which obligation on the part of
the other party shall be deemed to have accrued on the date of the commencement
of such action and shall be enforceable whether or not the action is prosecuted
to judgment. As used herein, attorneys' fees and costs shall include, without
limitation, attorneys' fees, costs and expenses incurred in connection with any
(i) post judgment motions; (ii) contempt proceedings; (iii) garnishment, levy
and debtor and third party examination; (iv) discovery; and (v) bankruptcy
litigation. Tenant agrees to pay all collection agency fees and attorneys' fees
charged to Landlord in connection with any late payment or non-payment of rent
or any other amounts due under this Lease including, without limitation, a fee
of $75.00 for the preparation of any demand for delinquent rent or any notice to
pay rent or quit.
 
(d)   Terms and Headings. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular. Words used in any gender include
other genders. The paragraph headings of this Lease are not a part of this Lease
and shall have no effect upon the construction or interpretation of any part
hereof.
 
(e)   Time. Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor.
 
(f)   Prior Agreement; Amendments. This Lease constitutes and is intended by the
parties to be a final, complete and exclusive statement of their entire
agreement with respect to the subject matter of this Lease. This Lease
supersedes any and all prior and contemporaneous agreements and understandings
of any kind relating to the subject matter of this Lease. There are no other
agreements, understandings, representations, warranties, or statements, either
oral or in written form, concerning the subject matter of this Lease. No
alteration, modification, amendment or interpretation of this Lease shall be
binding on the parties unless contained in a writing which is signed by both
parties.
 
(g)   Separability. The provisions of this Lease shall be considered separable
such that if any provision or part of this Lease is ever held to be invalid,
void or illegal under any law or ruling, all remaining provisions of this Lease
shall remain in full force and effect to the maximum extent permitted by law.
 
(h)   Recording. Neither Landlord nor Tenant shall record this Lease nor a short
form memorandum thereof without the consent of the other.
 
(i)   Counterparts. This Lease may be executed in one or more counterparts, each
of which shall constitute an original and all of which shall be one and the same
agreement.
 
Nondisclosure of Lease Terms. Tenant acknowledges and agrees that the terms of
this Lease are confidential and constitute proprietary information of Landlord.
Disclosure of the terms could adversely affect the ability of Landlord to
negotiate other leases and impair Landlord's relationship with other tenants.
Accordingly, Tenant agrees that it, and its partners, officers, directors,
employees, agents and attorneys, shall not intentionally and voluntarily
disclose the terms and conditions of this Lease to any newspaper or other
publication or any other tenant or apparent prospective tenant of the Building
or other portion of the Project, or real estate agent, either directly or
indirectly, without the prior written consent of Landlord, provided, however,
that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease.
 
(k)   Non-Discrimination. Tenant acknowledges and agrees that there shall be no
discrimination against, or segregation of, any person, group of persons, or
entity on the basis of race, color, creed, religion, age, sex, marital status,
national origin, or ancestry in the leasing, subleasing, transferring,
assignment, occupancy, tenure, use, or enjoyment of the Premises, or any portion
thereof.
 
(I)   Joint Product. This Lease is the result of arms-length negotiations
between Landlord and Tenant and their respective attorneys. Accordingly, neither
party shall be deemed to be the author of this Lease and this Lease shall not be
construed against either party.
 
39.    EXECUTION OF LEASE.
 
(a)   Joint and Several Obligations. If more than one person executes this Lease
as Tenant, their execution of this Lease will constitute their covenant and
agreement that (i) each of them is jointly and severally liable for the keeping,
observing and performing of all of the terms, covenants, conditions, provisions
and agreements of this Lease to be kept, observed and performed by Tenant, and
(ii) the term "Tenant" as used in this Lease means and includes each of them
jointly and severally. The act of or notice from, or notice or refund to, or the
signature of any one or more of them, with respect to the tenancy of this Lease,
including, but not limited to, any renewal, extension, expiration, termination
or modification of this Lease, will be binding upon each and all of the persons
executing this Lease as Tenant with the same force and effect as if each and all
of them had so acted or so given or received such notice or refund or so signed.
 
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(b)   Tenant as Corporation or Partnership. If Tenant executes this Lease as a
corporation or partnership, then Tenant and the persons executing this Lease on
behalf of Tenant represent and warrant that such entity is duly qualified and in
good standing to do business in California and that the individuals executing
this Lease on Tenant's behalf are duly authorized to execute and deliver this
Lease on its behalf, and in the case of a corporation, in accordance with a duly
adopted resolution of the board of directors of Tenant, a copy of which is to be
delivered to Landlord on execution hereof, if requested by Landlord, and in
accordance with the by-laws of Tenant, and, in the case of a partnership, in
accordance with the partnership agreement and the most current amendments
thereto, if any, copies of which are to be delivered to Landlord on execution
hereof, if requested by Landlord, and that this Lease is binding upon Tenant in
accordance with its terms.
 
(c)   Examination of Lease. Submission of this instrument by Landlord to Tenant
for examination or signature by Tenant does not constitute a reservation of or
option for lease, and it is not effective as a lease or otherwise until
execution by and delivery to both Landlord and Tenant.
 
40.   TELECOMMUNICATIONS LINES: Tenant shall be solely responsible for
contacting the appropriate telephone company and contracting to have telephone
and data lines brought to the Premises and connected to Tenant's
telecommunications equipment. Tenant must obtain prior written approval for the
installation of all such lines from the management office. All work required in
connection with the installation of such telephone and data lines shall be done
by licensed contractors that have been pre-approved in writing by the management
office. Tenant shall be solely responsible for any and all costs connected with
the installation, maintenance and repair of any telephone and data lines. In
addition, Tenant shall be solely responsible for any monthly charge incurred
relative to such telephone and data lines. Once telephone and data lines have
been installed and connected to the Premises, such lines shall, at Landlord's
election, become the property of Landlord. In the event Tenant vacates the
Premises or relocates or expands within the Project, Tenant shall discontinue
service to such lines but may NOT have the lines removed, re-routed or
redirected for Tenant's use without Landlord's prior consent.
 
41.   LEASE GUARANTY. Intentionally omitted.
 
42.    OFAC COMPLIANCE.
 
(a)   Certification. Tenant certifies, represents, warrants and covenants that:
 
(i)   It is not acting and will not act, directly or indirectly, for or on
behalf of any person, group, entity, or nation named by any Executive Order or
the United States Treasury Department as a terrorist, "Specially Designated
National and Blocked Person", or other banned or blocked person, entity, nation
or transaction pursuant to any law, order, rule, or regulation that is enforced
or administered by the Office of Foreign Assets Control; and
 
(ii)   It is not engaged in this transaction, directly or indirectly on behalf
of, or instigating or facilitating this transaction, directly or indirectly on
behalf of, any such person, group, entity or nation.
 
(b)   Indemnity. Tenant hereby agrees to defend (with counsel reasonably
acceptable to Landlord), indemnify and hold harmless Landlord and the Landlord
Indemnified Parties from and against any and all Indemnified Claims arising from
or related to any such breach of the foregoing certifications, representations,
warranties and covenants.
 
 
[SIGNATURES ON NEXT PAGE]
 
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SIGNATURE PAGE TO LEASE
BY AND BETWEEN KOLL/PER TORRANCE COMMERCE CENTER, LLC ("LANDLORD') AND
ACUNETX, INC., A NEVADA CORPORATION ("TENANT")
 
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed by
their duly authorized representatives.
 

 
TENANT:
 
ACUNETX, INC.,
a Nevada corporation

By /s/ Robert Corrigan
      Robert Corrigan, President
LANDLORD:
 
KOLL/PER TORRANCE COMMERCE CENTER, LLC,
a Delaware limited liability company
 
By: Koll/PER LLC,
a Delaware limited liability company, Managing Member
By:  /s/ Diane Scott                          

 
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EXHIBIT "A-I"
 
LOCATION OF PREMISES
 
 
 
 
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EXHIBIT "B"
 
INTENTIONALLY OMITTED
 
 

 
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EXHIBIT "C"
 
SIGN CRITERIA
 
1.   Recitals:
 
Signs and other graphics are an essential element of any community. As such,
their location, number, size and design consistency have a significant influence
upon a community's visual environment and a resultant effect upon a viewer's
perception of that community.
 
In communities where signs have not been property regulated, they have
contributed to visual clutter, unpleasant impressions and even confusion. In
many of these instances signs have failed to achieve their original objective:
Communication of their intended message.
 
Under proper regulation, however, signs and other graphics may be designed and
displayed to effectively communicate their message and at the same time be
appropriate to their surroundings. Signs so designed and displayed can
contribute to community identity, and help create a community which is
efficiently organized and visually attractive. All new leases and renewals will
contain this exhibit and management will strictly enforce its intent.
 
2.    Criteria:
 
Tenant shall be allowed only one sign regardless of size of occupancy. No
advertising placards, merchandise, banners, pennants, names, insignia,
trademarks, or other descriptive material shall be affixed or maintained in a
fashion to be displayed to the exterior of the suite or on the glass panes of
the building, landscaped areas, streets or parking areas. No alarm company
stickers larger than 3-1/2" x 2-1/2" will be allowed. Koll standard U.P.S. signs
are available at the leasing office for the asking. No other U.P.S. signage will
be permissible.
 
3.    Signage Layout Submitted to Landlord for Approval:
 
A layout of each proposed sign showing copy/logo and color samples must be
submitted to the Landlord for approval prior to fabrication and installation.
 
4.    Sign Specification/Method of Building Attachment:
 
The subject premises have an 18" x 72" aluminum receptacle/frame provided by and
at the sole expense of the Landlord for insertion and placement of Tenant
signage. The Tenant's sign/insert shall be constructed at the sole expense of
the Tenant, constructed of white acrylic. If it is necessary to coat the
exterior surface to obtain the desired background color, the entire surface must
be coated the same color with no masking and the coating must have a five (5) to
seven (7) year exterior life expectancy without fading or peeling. All
lettering, legends and logos are to be computer-cut two (2) mil. high
performance black vinyl. Hand painting in not permitted.
 
5.    Window Lettering:
 
No window lettering is permitted except for the Tenant's business name only
which may be placed in the window immediately adjacent to the main entry door.
Tenants with little or no adjacent glass may place their name on the door. Copy
is to be computer cut two (2) mil. high performance white vinyl in 3" helvetica
medium lettering. Lettering is to be centered between the window frames with a
minimum 1-1/2" border on each side. Lettering is not to be condensed more than
75%. Letter height may be reduced up to 1/2" to stay within the other criteria.
If the business name still cannot be accommodated on one line then it may be
placed on two (2) lines using a 2-1/2" letter height and 1-3/4" spacing between
lines. The top edge of the top line is to be 69" above the concrete slab. Any
and all other attachments to the glass will be in non-conformance. Subtenant
names, business services or types, and all other attachments to the glass or
glazing, except as described above, shall be considered non-conforming and
subject to removal.
 
6.    Window Tinting:
 
No mirrored or colored tinting will be authorized. Before any tinting is applied
to the Tenant's windows, a sample must be submitted to the Landlord for written
approval prior to installation.
 
7.    Landlord's Right to Enforce:
 
This criteria establishes the uniform policies for all Tenant sign
identification. This criteria has been established for the purpose of
maintaining the over all appearance of the complex and to provide our tenants
with a consistent quality environment from which to conduct business. Any sign,
graphics or other material installed that does not conform to this criteria may
be brought into conformity by the Landlord without notice. Any cost incurred by
the Landlord to remove non­conforming signs or to correct defacement from
mounting of non-conforming signs shall be the responsibility of Tenant.
 
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EXHIBIT "D"
 
RULES AND REGULATIONS
 
A. General. Rules and Regulations. The following rules and regulations govern
the use of the Building and the Common Areas. Tenant will be bound by such rules
and regulations and agrees to cause Tenant's Authorized Users, its employees,
subtenants, assignees, contractors, suppliers, customers and invitees to observe
the same.
 
1.   Except as specifically provided in the Lease to which these Rules and
Regulations are attached, no sign, placard, picture, stickers, banners,
advertisement, name or notice may be installed or displayed on any part of the
outside or inside of the Building without the prior written consent of Landlord.
Landlord will have the right to remove, at Tenant's expense and without notice,
any sign installed or displayed in violation of this rule. All approved signs or
lettering on doors and walls are to be printed, painted, affixed or inscribed at
the expense of Tenant and under the direction of Landlord by a person or company
designated or approved by Landlord.
 
2.   If Landlord objects in writing to any curtains, blinds, shades, screens or
hanging plants or other similar objects attached to or used in connection with
any window or door of the Premises, or placed on any windowsill, which is
visible from the exterior of the Premises, Tenant will immediately discontinue
such use. Tenant agrees not to place anything against or near glass partitions
or doors or windows which may appear unsightly from outside the Premises,
including, without limitation, stickers, tinting materials, foil shades, blinds
or screens.
 
3.   Tenant will not obstruct any sidewalks, passages, exits or entrances of the
Project. The sidewalks, passages, exits and entrances are not open to the
general public, but are open, subject to reasonable regulations, to Tenant's
business invitees. Landlord will in all cases retain the right to control and
prevent access thereto of all persons whose presence in the reasonable judgment
of Landlord would be prejudicial to the safety, character, reputation and
interest of the Project and its tenants, provided that nothing herein contained
will be construed to prevent such access to persons with whom any tenant
normally deals in the ordinary course of its business, unless such persons are
engaged in illegal or unlawful activities. No tenant and no employee or invitee
of any tenant will go upon the roof of the Building.
 
4.   Landlord expressly reserves the right to absolutely prohibit solicitation,
canvassing, distribution of handbills or any other written material or goods,
peddling, sales and displays of products, goods and wares in all portions of the
Project except for such activities as may be expressly permitted under the
Lease. Landlord reserves the right to restrict and regulate the use of the
Common Areas of the Project by invitees of tenants providing services to tenants
on a periodic or daily basis including food and beverage vendors. Such
restrictions may include limitations on time, place, manner and duration of
access to a tenant's premises for such purposes.
 
5.   Landlord reserves the right to prevent access to the Project in case of
invasion, mob, riot, public excitement or other commotion by closing the doors
or by other appropriate action.
 
6.   Landlord reserves the right to approve companies providing cleaning and
janitorial services for the Premises. Tenant will not cause any unnecessary
labor by carelessness or indifference to the good order and cleanliness of the
Premises.
 
7.   Landlord will furnish Tenant, free of charge, with two keys to each
exterior entry door lock to the Premises. Landlord may make a reasonable charge
for any additional keys. Tenant shall not make or have made additional keys, and
Tenant shall not alter any lock or install any new additional lock or bolt on
any door of the Premises. Tenant, upon the termination of its tenancy, will
deliver to Landlord the keys to all doors which have been furnished to Tenant.
 
8.   If Tenant requires telegraphic, telephonic, burglar alarm, satellite
dishes, antennae or similar services, it will first obtain Landlord's approval,
and comply with, Landlord's reasonable rules and requirements applicable to such
services, which may include separate licensing by, and fees paid to, Landlord,
as well as all federal, state, and local regulations. Tenant will not transmit
or receive any electromagnetic, microwave or other radiation which may be
harmful or hazardous to any person or property in or about the Premises or
elsewhere within the Project.
 
9.   No deliveries will be made which impede or interfere with other tenants or
the operation of the Building.
 
10.   Tenant will not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited quantities
necessary for the operation or maintenance of office equipment. Tenant will not
sleep, cook or wash clothes in the Premises or use or permit to be used in the
Premises any foul or noxious gas or substance, or permit or allow the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Building by reason of noise, odors or vibrations, intense
glare, light or heat, nor will Tenant bring into or keep in or about the
Premises any birds or animals.
 
11.   Landlord reserves the right, exercisable without notice and without
liability to Tenant, to change the name and street address of the Building.
Without the written consent of Landlord, Tenant will not use the name of the
Building or the Project in connection with or in promoting or advertising the
business of Tenant except as Tenant's address.
 
12.   The toilet rooms, toilets, urinals, wash bowls and other apparatus will
not be used for any purpose other than that for which they were constructed and
no foreign substance of any kind whatsoever shall be thrown therein. The expense
of any breakage, stoppage or damage resulting from any violation of this rule
will be borne by the tenant who, or whose employees or invitees, break this
rule.
 
13.    Tenant will not sell, or permit the sale at retail of newspapers,
magazines, periodicals, theater tickets or any other goods or merchandise to the
general public in or on the Premises. Tenant will not make any
building-to-building solicitation of business from other tenants in the Project.
Tenant will not use the Premises for any business or activity other than that
specifically provided for in this Lease. Tenant will not conduct, nor permit to
be conducted, either voluntarily or involuntarily, any auction upon the Premises
without first having obtained Landlord's prior written consent, which consent
Landlord may withhold in its sole and absolute discretion.
 
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14.   Except for the ordinary hanging of pictures and wall decorations, Tenant
will not mark, drive nails, screw or drill into the partitions, woodwork or
plaster or in any way deface the Pi-emises or any part thereof, except in
accordance with the provisions of the Lease pertaining to alterations. Landlord
reserves the right to direct electricians as to where and how telephone and
telegraph wires are to be introduced to the Premises. Tenant will not cut or
bore holes for wires. Tenant will not affix any floor covering to the floor of
the Premises in any manner except as approved by Landlord. Tenant shall repair
any damage resulting from noncompliance with this rule.
 
15.   Landlord reserves the right to exclude or expel from the Project any
person who, in Landlord's judgment, is intoxicated or under the influence of
liquor or drugs or who is in violation of any of the Rules and Regulations of
the Building.
 
16.   Tenant will store all its trash and garbage within its Premises or in
other facilities provided by Landlord. Tenant will not place in any trash box or
receptacle any material which cannot be disposed of in the ordinary and
customary manner of trash and garbage disposal. All garbage and refuse disposal
is to be made in accordance with directions issued from time to time by
Landlord.
 
17.   The Premises will not be used for lodging nor shall the Premises be used
for any improper, immoral or objectionable purpose.
 
18.   Tenant agrees to comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
 
19.   Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed. Tenant will not leave or store any
equipment, materials or items of any kind outside the walls of the Premises.
 
20.   Tenant shall use at Tenant's cost such pest extermination and control
contractor(s) as Landlord may direct and at such intervals as Landlord may
reasonably require.
 
21.   To the extent Landlord reasonably deems it necessary to exercise exclusive
control over any portions of the Common Areas for the mutual benefit of the
tenants in the Project, Landlord may do so subject to reasonable,
non­discriminatory additional rules and regulations.
 
22.   Tenant's requirements will be attended to only upon appropriate
application to Landlord's management office for the Project by an authorized
individual of Tenant. Employees of Landlord will not perform any work or do
anything outside of their regular duties unless under special instructions from
Landlord, and no employee of Landlord will admit any person (Tenant or
otherwise) to any office without specific instructions from Landlord.
 
23.   These Rules and Regulations are in addition to, and will not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of the Lease. Landlord may waive any one or more of
these Rules and Regulations for the benefit of Tenant or any other tenant, but
no such waiver by Landlord will be construed as a waiver of such Rules and
Regulations in favor of Tenant or any other tenant, nor prevent Landlord from
thereafter enforcing any such Rules and Regulations against any or all of the
tenants of the Project.
 
24.   Landlord reserves the right to make such other and reasonable and
non-discriminatory Rules and Regulations as, in its judgment, may from time to
time be needed for safety and security, for care and cleanliness of the Project
and for the preservation of good order therein. Tenant agrees to abide by all
such Rules and Regulations herein above stated and any additional reasonable and
non-discriminatory rules and regulations which are adopted. Tenant is
responsible for the observance of all of the foregoing rules by Tenant's
employees, agents, clients, customers, invitees and guests.
 
25.   Tenant is specifically prohibited from smoking (cigarettes, cigars, pipes
or other types of smoking) within the Premises.
 
B.   Parking Rules and Regulations. The following rules and regulations govern
the use of the parking facilities which serve the Building. Tenant will be bound
by such rules and regulations and agrees to cause its employees, subtenants,
assignees, contractors, suppliers, customers and invitees to observe the same:
 
1.   Tenant will not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees,
subtenants, customers or invitees to be loaded, unloaded or parked in areas
other than those designated by Landlord for such activities. No vehicles are to
be left in the parking areas overnight and no vehicles are to be parked in the
parking areas other than normally sized passenger automobiles, motorcycles and
pick-up trucks. No extended term storage of vehicles is permitted.
 
2.   Vehicles must be parked entirely within painted stall lines of a single
parking stall.
 
3.   All directional signs and arrows must be observed.
 
4.   The speed limit within all parking areas shall be five (5) miles per hour.
 
5.   Parking is prohibited: (a) in areas not striped for parking; (b) in aisles
or on ramps; (c) where "no parking" signs are posted; (d) in cross-hatched
areas; and (e) in such other areas as may be designated from time to time by
Landlord or Landlord's parking operator.
 
6.   Landlord reserves the right, without cost or liability to Landlord, to tow
any vehicle if such vehicle's audio theft alarm system remains engaged for an
unreasonable period of time.
 
7.    Washing, waxing, cleaning or servicing of any vehicle in any area not
specifically reserved for such purpose is prohibited.
 
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8.   Landlord may refuse to permit any person to park in the parking facilities
who violates these rules with unreasonable frequency, and any violation of these
rules shall subject the violator's car to removal, at such car owner's expense.
Tenant agrees to use its best efforts to acquaint its employees, subtenants,
assignees, contractors, suppliers, customers and invitees with these parking
provisions, rules and regulations.
 
9.   Landlord reserves the right, without cost or liability to Landlord, to tow
any vehicles which are used or parked in violation of these rules and
regulations.
 
10.    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.
 
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EXHIBIT "E"
 
TENANT'S INSURANCE REQUIREMENTS
 
This outlines the insurance requirements of your Lease. To assure compliance
with these terms, we suggest you send a copy of this Exhibit "E" to your insurer
or agent. Initial Certificates must be provided to Landlord prior to occupancy
of the Premises, renewals ten (10) days before expiration.
 
Commercial General Liability Insurance:
 
$1,000,000 Combined Single Limit, each occurrence
 
Bodily Injury, Property Damage, Personal Injury and Advertising Injury; Blanket
Contractual Liability - Covering Indemnity Paragraph 18(b); Products and
Completed Operations Liability; Landlord as an Additional Insured; Severability
of Interest, permitting Cross liability among insureds; provision stating that
tenant's insurance is primary and non-contributing with any insurance carried by
Landlord.
 
$1,000,000 Aggregate (minimum) this location $1,000,000 Products/Completed
Operations Aggregate $ 50,000 Fire Legal Liability Limit, per fire
 
Tenant's Property Insurance:
 
All Risks coverage of Property owned by Tenant or for which the Tenant is
legally liable; replacement cost basis, covering no less than ninety percent
(90%) of all values. "
 
3.   Tenant's Business Interruption Insurance:
 
All Risks coverage of operations at leased premises; covering one-years business
interruption due to insured peril. "
  
4.   Tenant's Workers' Compensation and Employer's Liability Insurance (if
requested):
 
Statutory Limits and terms required by state of leased premises; $1,000,000
Employer's Liability Limit. 5.Tenant's Automobile Insurance (if requested):
$1,000,000 Combined Limit per accident; covering all owned, non-owned, hired
autos (Symbol 1 - any auto).
All insurance is to be with licensed insurers having a Best's rating of "A 10"
or better, and must include the following:
 
*Waiver of Subrogation in favor of Landlord (property and business interruption)
Thirty (30) day pre-notice of cancellation/non renewal to Landlord
 
PLEASE INCLUDE THE PREMISES ADDRESS AS THE INSURED LOCATION.
SEND CERTIFICATE TO AND NAME THE FOLLOWING AS ADDITIONAL INSUREDS:
 
KOLL/PER TORRANCE COMMERCE CENTER, LLC
KOLL/PER LLC
THE KOLL COMPANY, LLC
KOLL INDUSTRIAL PROPERTIES, LLC
17755 Sky Park East, Suite 100
Irvine, CA 92614
(949) 261-2499
(949) 261-1186 FAX
 
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