Exhibit 10.1

SUBLEASE

          THIS SUBLEASE (this “Sublease”) is made as of the ___ day of
_________, 2006, by and between SBC Telecom, Inc., a Delaware corporation
(“Sublessor”) and ITEX Corporation, a Nevada corporation (“Sublessee”).

WITNESSETH:

          WHEREAS, Sublessor leases from Kenyon Center, LLC, as landlord (the
“Landlord”), 7,035 rentable square feet on the first (1st) floor (the
“Premises”) of the building commonly known as Kenyon Center, located at 3326
160th Avenue NE, Bellevue, Washington, 98008 (the “Building”) pursuant to that
certain Net Office Lease dated January 28, 2000, as amended by that certain
First Modification of Lease dated October 8, 2002, and by that certain Second
Amendment to Lease dated February 15, 2005 (the “Second Amendment”) (as amended,
the “Lease”), which said Lease is attached hereto as Exhibit A; and

          WHEREAS, Sublessee desires to sublet from Sublessor the entire
Premises consisting of 7,035 rentable square feet, as shown on Exhibit B
attached hereto and made a part hereof (the “Sublet Premises”); and

          WHEREAS, Sublessor desires to sublet the Sublet Premises to Sublessee
and Sublessee desires to Sublet the Sublet Premises from Sublessor upon the
terms and conditions contained herein.

          NOW, THEREFORE, the parties hereto, for themselves and their
respective successors and assigns, in consideration of the premises and the
covenants hereinafter contained and the sum of TEN DOLLARS ($10.00) to each
party paid by the other, the receipt and sufficiency of which is hereby
acknowledged, do covenant and agree as follows:

          1.            Term.  Sublessor hereby sublets to Sublessee and
Sublessee hereby sublets from Sublessor the Sublet Premises on the terms and
conditions set forth in this Sublease for the term (the “Term”) commencing on
the later to occur of (i) February 1, 2007; (ii) the date when this Sublease has
been fully executed and delivered by both Sublessor and Sublessee; and (iii) the
date Landlord has executed and delivered to Sublessor any landlord consent
agreement which may be required by either Sublessor or Landlord (the
“Commencement Date”), and ending on April 30, 2010 (the “Expiration Date”),
unless sooner terminated under the terms of the Lease or this Sublease.
Sublessor and Sublessee agree to execute a document in the form substantially
similar to that annexed hereto as Exhibit C which will delineate the following:
the Commencement Date, the Expiration Date, and such other information as deemed
reasonably required by Sublessor. Such amendment shall be executed within thirty
(30) days after the Commencement Date.  Provided Sublessee is not in default of
this Sublease beyond any applicable notice and cure period, Sublessor agrees it
will not exercise its right to early termination under Section 2(f) of the
Second Amendment.

          2.           Rent.

 

(a)

Beginning on the Commencement Date, Sublessee covenants and agrees to pay
Sublessor during the Term of this Sublease base rent (the “Base Rent”), without
deduction or offset and without notice or demand, at the Sublessor’s address, as
set forth in Paragraph 14 hereof, or to such other entity or at such other place
as Sublessor may from time to time designate in writing as follows:

 

 

 

 

 

 

 

 

Monthly Base Rent Installment

Base Rent/RSF/Year

 

 

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$12,897.50

$22.00

 

 

 

 

 

(b)

In addition to Base Rent, in the event that, under any provision of the Lease,
any additional rent or other charge shall be payable by Sublessor to Landlord
because of extra services ordered by or activities undertaken by or on behalf of
Sublessee with respect to the Sublet Premises (including but not limited to
after hours HVAC costs or extra janitorial services) or on account of
Sublessee’s default hereunder, then Sublessee shall pay to Sublessor such
additional rent or other charge on demand by Sublessor (collectively, the
“Additional Rent”).  The Base Rent and Additional Rent are collectively referred
to hereinafter as the “Rent.”  Sublessee hereby agrees that any and all such
requests for extra services and/or activities for the benefit of Sublessee shall
be made by Sublessee in writing to Landlord, with a copy to Sublessor.  In no
event shall Sublessor be responsible for any matter associated with the
provision, or lack of provision, of any such extra services or activities. 
Sublessor shall have the right to require that Sublessee provide a cash security
deposit sufficient to cover the cost of such services prior to Landlord’s
providing such services.

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Without limiting the foregoing: (i) Sublessee shall not otherwise be responsible
for Sublessor’s “Pro Rata Percent” of “Operating Costs,” as these terms are
defined in the Lease, including, without limitation, Sublessor’s pro rata share
of taxes and operating expenses of the Building which Landlord pays during any
calendar or fiscal year, any portion of which is applied to the Premises during
the Term because of or in connection with the ownership, leasing, or operation
of the Premises; and (ii) the term “Additional Rent” as used in this Paragraph
2(b) shall not be construed to include Sublessor’s “Pro Rata Percent” of
“Operating Costs,” and Sublessor shall remain fully liable and responsible to
Landlord under the Lease for these costs.

 

 

 

 

(c)

The Rent shall be paid in advance, on the first day of each and every month
throughout the Term of this Sublease. If Sublessee fails to pay any installment
of Rent within ten (10) days after same is due, such unpaid amount shall bear
interest from the due date until paid in full at a rate equal to the lesser of: 
(a) the highest rate announced from time to time as the prime interest rate by
Citibank, N.A. plus three (3) percentage points; or (b) the maximum legal rate
allowed by law.  If Sublessee makes two (2) consecutive payments of Base Rent
which are returned to Sublessor by Sublessee’s financial institution for
insufficient funds, Sublessor may require, by giving written notice to
Sublessee, that all future payments of Rent shall be made in cashier’s check or
by money order.  The foregoing is in addition to any other remedies of Sublessor
hereunder, at law or in equity.

          3.          Personal Property Taxes.  In addition to its obligations
for payment of Rent, Sublessee shall pay, prior to delinquency, all taxes
assessed against and levied upon trade fixtures, furnishing, equipment and all
other personal property of Sublessee contained in the Sublet Premises. 
Sublessee shall cause said trade fixtures, furnishings, equipment and all other
personal property to be assessed and billed in Sublessee’s name, separately from
the real and/or personal property of Sublessor or Landlord. If any of
Sublessee’s said personal property shall be assessed with Sublessor’s property
or Landlord’s property, then Sublessee shall pay the taxes attributable to
Sublessee’s property within ten (10) days after receipt of a written statement
setting forth the taxes applicable thereto. Sublessee covenants to promptly
furnish to Sublessor proof of the payment of any such personal property taxes
which are payable by Sublessee as provided in this Paragraph 3.

          4.          Security.  Simultaneously with its execution and delivery
hereof, Sublessee shall deliver to Sublessor prepaid first month’s Rent in the
amount of $12,897.50 and a cash security deposit in the amount of  $12,897.50
(the “Cash Security Deposit”).  The Cash Security Deposit shall be held by
Sublessor as additional security for faithful and prompt performance of
Sublessee’s obligations under this Sublease. In the event of a default under
this Sublease, beyond all applicable notice and cure periods, Sublessor may, but
shall not be obligated to, draw upon the Cash Security Deposit solely to the
extent necessary to make good any arrearages in Rent and any other actual
damage, injury, expense or liability caused to Sublessor by such default.  If
Sublessor expends all or any part of the Cash Security Deposit to cure a
default, then on notice from Sublessor to Sublessee, Sublessee shall immediately
increase the amount of the Cash Security Deposit in an amount equal to the
amount drawn by Sublessor.  The Cash Security Deposit shall not be deemed an
advance payment of Rent or a measure of Sublessor’s damages for any default
hereunder by Sublessee. To the extent Sublessor has not applied all of the Cash
Security Deposit, as applicable, to cure one or more defaults under this
Sublease then the Cash Security Deposit, as the same may have been drawn upon,
shall be returned to Sublessee within forty-five (45) days after the expiration
or earlier termination of this Sublease. In the event of any assignment of
Sublessor’s interest in the Lease, Sublessor shall transfer the Cash Security
Deposit to the assignee and Sublessor shall, thereupon, be released by Sublessee
from all liability for the return of the Cash Security Deposit and, in such
event, Sublessee agrees to look solely to the new Sublessor for the return of
the Cash Security Deposit. 

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          Sublessee further covenants that it will not assign or encumber, or
attempt to assign or encumber, its interest in the Cash Security Deposit and
that neither Sublessor nor its successors or assigns shall be bound by any such
assignment or encumbrance, or attempted assignment or attempted encumbrance.

          5.          Sublease and Assignment.  Sublessee shall not have the
right to sublease or assign this Sublease or any part thereof, or suffer or
permit the Sublet Premises or any part thereof to be occupied by others, by
operation of law or otherwise, without the prior written consent of Sublessor
and Landlord.  Any attempt by Sublessee to sublease or assign its interests
under the Sublease without such prior written consent shall be void, of no
effect, and constitute an Event of Default hereunder.  The consent of Sublessor
shall not be unreasonably withheld, conditioned or delayed and Sublessor shall
cooperate with Sublessee in pursuing Landlord’s consent.  If Sublessee should
desire to assign this Sublease or sublease the Sublet Premises or any portion
thereof, Sublessee shall give Sublessor written notice of such desire to make
such assignment or effect such sublease.  At the time of giving such notice,
Sublessee shall provide Sublessor with a copy of the proposed assignment or
sublease document, and such information as Sublessor and Landlord may reasonably
request concerning the proposed assignee or sublessee to assist Sublessor and
Landlord in making an informed judgment regarding the financial condition,
reputation, operation, and general desirability of the proposed assignee or
sublessee.  Sublessor shall then have a period of thirty (30) days following
receipt of such notice and such information within which to notify Sublessee in
writing of whether Sublessor approves or disapproves of such request to sublease
or assign its interest in the Sublease.

          Sublessor and Sublessee agree that, in the event of any approved
assignment or subletting, the rights of any such assignee or sublessee of
Sublessee herein shall be subject to all of the terms, conditions, and
provisions of this Sublease and the Lease.  Sublessor may collect Rent directly
from such assignee or sublessee and apply the amount so collected to the Rent
herein reserved.  No such consent to or recognition of any such assignment or
subletting shall constitute a release of Sublessee from further performance by
Sublessee of covenants undertaken to be performed by Sublessee herein.  Further,
Sublessee shall remain liable and responsible for all Rent and other obligations
herein imposed upon Sublessee.  Sublessee shall pay all of Sublessor’s
reasonable costs in connection with any such assignment or subletting,
including, without limitation, reasonable attorneys fees, but in no event will
such costs exceed $1,000.00 per assignment or sublet.  Consent by Sublessor to a
particular assignment, sublease, or other transaction shall not be deemed a
consent to any other or subsequent transaction.   If any Rent payable to
Sublessee by any sublessee, assignee, licensee, or other transferee exceeds the
Rent reserved herein, then Sublessee shall be bound and obligated to pay
Sublessor one hundred percent (100%) of all such excess Rent within ten (10)
days following receipt thereof by Sublessee from such sublessee, assignee,
licensee, or other transferee, as the case might be, as Additional Rent.

          6.          Alterations.  Sublessee shall not make or suffer to be
made any alterations, additions, or improvements, or attach any fixtures or
equipment in, on, or to the Sublet Premises or any part thereof (“Alterations”),
without the prior written consent of Sublessor and Landlord.  With respect to
Sublessor’s consent, the same shall not be unreasonably withheld, conditioned or
delayed.  Sublessor shall cooperate with Sublessee in pursuing Landlord’s
consent.  When applying for such consent, Sublessee shall, at its own expense,
if requested by either Sublessor or Landlord, furnish complete plans and
specifications for such Alterations.

          In connection with any Alterations, Sublessee shall comply with all
applicable provisions of the Lease in making any such Alterations, including,
but not limited to any restoration obligations imposed thereunder; the same
shall be constructed in accordance with all government laws, ordinances, rules
and regulations. In addition, prior to construction of any such Alterations,
Sublessee shall provide all such assurances to Landlord, including but not
limited to, waivers of lien, surety company performance bonds and personal
guaranties of individuals of substance as Landlord or Sublessor shall require to
assure payment of the costs thereof and to protect Landlord and the Building and
appurtenant land against any loss from any mechanic’s, materialmen’s or other
liens.

          7.          Insurance.  Sublessee shall maintain, at its sole cost and
expense, insurance coverages in such amounts, and with such an insurer holding
such a Best’s Rating, which coverages and rating are as follows:

Coverages with an insurer(s) holding a Best’s Rating of A+ or higher with
Financial Size of Class X or higher, and reasonably acceptable to Sublessor and
Landlord, and in the following coverage amounts:

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(i)

ISO Simplified Commercial General Liability Insurance.  The limits of liability
of such insurance shall be an amount not less than Two Million and 00/100
Dollars ($2,000,000.00) per occurrence, Bodily Injury including death and Two
Million and 00/100 Dollars ($2,000,000.00) per occurrence, Property Damage
Liability or Two Million and 00/100 Dollars ($2,000,000.00) combined single
limit for Bodily Injury and Property Damage Liability.  Such policies shall name
Landlord and Sublessor as additional insureds with respect to this Sublease and
the Lease; and

 

 

 

 

(ii)

Property insurance on Sublessee’s personal property, on a Special Causes of
Loss-Replacement Cost basis.  This insurance shall include, but shall not be
limited to, fire and extended coverage perils.  Such property insurance policy
shall contain appropriate endorsements waiving the insurer’s right of
subrogation against Sublessor and Landlord.

 

 

 

 

(iii)

Rental Value insurance in the name of Sublessor with loss payable to Sublessor,
insuring the loss of the full Rent for one year with an extended period of
indemnity for an additional 180 days.  Said insurance shall contain an agreed
upon valuation provision in lieu of any coinsurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected Rent otherwise
payable by Sublessee for the next twelve (12) month period;

 

 

 

 

(iv)

Loss of income and extra expense insurance in amounts as will reimburse
Sublessee for direct or indirect loss of earnings attributable to all perils
commonly insured against by prudent lessees in the business of Sublessee or
attributable to prevention of access to the Premises as a result of such perils;
and

Each policy will provide that Landlord and Sublessor shall receive at least
thirty (30) days’ prior written notice of cancellation or non-renewal of the
policy.  Concurrently with its execution of this Sublease, Sublessee shall
deliver to Sublessor a certificate of insurance evidencing the insurance
coverage required hereunder.

          8.          Obligations.  Excluding the matters contained herein which
will be governed by this Sublease, Sublessee agrees (i) to be bound by the terms
and conditions of the Lease, (ii) to perform Sublessor’s obligations with
respect to the Sublet Premises as set forth in the Lease with respect to periods
on and after the Commencement Date, and (iii) to be subject to the terms and
conditions of any Landlord consent to this Sublease. Sublessor shall in no event
be obligated to perform Landlord’s obligations under the Lease or to enforce the
terms, covenants, obligations and conditions on the part of, or to be performed
by, Landlord under the Lease. With respect to the performance of obligations
required of Landlord under the Lease, Sublessor’s sole obligation with respect
thereto shall be to request the same for Sublessee, upon written request from
Sublessee, and to use reasonable efforts to obtain the same from Landlord, but
in no event shall Sublessor be obligated to incur any expense associated with
such effort. Sublessor shall not be liable in damages, nor shall rent abate
hereunder, for or on account of any failure by Landlord to perform the
obligations and duties imposed on it under the Lease. No rights of Sublessor
arising from the Lease are granted or assigned to Sublessee, including, but not
limited to, any rights to renew, extend, surrender or terminate the Lease.

          9.          Condition and Use of the Sublet Premises; Preparation of
Sublet Premises.

 

(a)

Sublessee agrees to accept the Sublet Premises in “AS IS” condition, and
Sublessee agrees that it has inspected the Sublet Premises and acknowledges that
no representations, express or implied, of any kind, with respect to the
condition thereof have been made to Sublessee by Sublessor.

 

 

 

 

(b)

The Sublet Premises are to be used solely for general office purposes. Sublessee
shall not do or permit anything to be done in or about the Sublet Premises which
will in any way obstruct or interfere with the rights of other tenants or
occupants of the Building or injure, annoy, or disturb them or allow the Sublet
Premises to be used for any improper, immoral, unlawful, or objectionable
purpose. Sublessee shall comply with all governmental laws, ordinances and
regulations applicable to the use of the Sublet Premises and its occupancy and
shall promptly comply with all governmental orders and directions for the
correction, prevention and abatement of any violations in or upon, or in
connection with, the Sublet Premises, all at Sublessee’s sole expense. Sublessee
shall not do or permit anything to be done on or about the Sublet Premises or
bring or keep anything into the Sublet Premises which will in any way increase
the rate of, invalidate or prevent the procuring of any insurance protecting
against loss or damage to the Building or any of its contents by fire or other
casualty or against liability for damage to property or injury to persons in or
about the Building or any part thereof. Sublessee shall use the Sublet Premises
and any common areas of the Building in a careful, safe and proper manner and
shall keep the Sublet Premises in a neat and sanitary condition and shall not
commit or permit any nuisance or waste on or in, or about the Sublet Premises. 
Sublessee shall dispose of all debris, trash and waste in compliance with all
applicable laws and regulations.

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(c)

Sublessee may enter upon the Sublet Premises during the period between the date
hereof and the Commencement Date to complete the improvements as depicted and
described on the attached Exhibit B and Exhibit B-1 and installation of
furniture, equipment and other personal property within the Sublet Premises (the
“Improvements”), which Improvements are approved by Sublessor under this
Sublease and by Landlord under the Lease and shall be completed pursuant to the
terms and conditions of Section 15 of the Lease.  Sublessee’s access to and
activities in the Sublet Premises shall be in strict compliance with this
Sublease and otherwise shall be subject to all of the terms and conditions of
the Lease and this Sublease (including, without limitation, the indemnity and
insurance provisions hereof) excluding however, Sublessee’s obligation to pay
Rent.  Any expenses, permits, plans or municipal approvals required in
connection with said Improvements will be the sole obligation of Sublessee at
its own expense.  Neither review nor approval by Sublessor of any of the
Improvements shall constitute a representation or warranty by Sublessor that
such Improvements comply with applicable laws, ordinances, codes and
regulations, it being expressly agreed by Sublessee that Sublessor assumes no
responsibility or liability whatsoever to Sublessee or to any other person or
entity for such completeness, suitability or compliance.  In the event that all
of the Improvements are completed by January 1, 2007, Subtenant shall have the
right to commence its business operations.

 

 

 

 

(d)

Sublessee and Sublessor hereby agree and acknowledge that Sublessee’s acceptance
of the Sublet Premises shall include the acceptance of all of the workstations
and general office furniture owned by Sublessor and located within the Sublet
Premises as of the Commencement Date and listed on the attached Exhibit D (the
“Furniture”) and that throughout the term of this Sublease, Sublessee shall be
entitled to the use and enjoyment of the Furniture.  Provided that this Sublease
is not terminated prior to the Expiration Date due to a Sublessee default and
provided Sublessee is not in default, Sublessee shall become the owner of said
Furniture just as if by Bill of Sale. Sublessee agrees that it shall accept the
Furniture in its “AS IS” condition and acknowledges that no representation,
express or implied, of any kind, with respect to the condition or suitability of
the Furniture for use thereof have been made to Sublessee by Sublessor. 
Sublessee shall maintain and repair the Furniture, in good and reasonable care
and condition, reasonable wear and tear excepted, throughout the Term. 
Sublessor shall have no obligation for repair or replacement of the Furniture. 
Sublessor hereby acknowledges that Sublessee may desire to remove, discard
and/or reconfigure some or all of the Furniture.  Sublessee may, at its
discretion, reconfigure the Furniture within the Sublet Premises.  In the event
Sublessee desires to remove or discard any portion of the Furniture from the
Premises during the Term (such furniture as is to be removed or discarded
hereinafter referred to as the “Abandoned Furniture”), Sublessee may do so after
giving seven (7) days’ prior written notice to Sublessor.  Sublessor may, at its
discretion, elect to retain the Abandoned Furniture and remove it from the
Sublet Premises, provided however, that such Abandoned Furniture shall be
removed by Sublessor within seven (7) days of receiving notice from Sublessee,
and such removal of the Abandoned Furniture shall be performed by Sublessor at
Sublessor’s sole cost and expense.  Unless Sublessor elects to retain and remove
the Abandoned Furniture as set forth in this Paragraph 9(d), disassembly and
removal of the Furniture shall be performed by Sublessee at its sole cost and
expense.

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          10.        Sublessee Default.  In the event that Sublessee (a) fails
to pay Rent within five (5) business days after such Rent is due under the
Sublease, (b) fails to cure a default of a non-monetary obligation within ten
(10) business days after written notice; (c) fails to perform any of the Lease
obligations with respect to the Sublet Premises that it will be responsible for
pursuant to Paragraph 8 hereof; or (d) shall be adjudged bankrupt or insolvent
or shall make an assignment for the benefit of creditors, or if a receiver or
trustee of Sublessee’s property shall be appointed and not discharged within
sixty (60) days, such occurrence shall be an event of default and Sublessor
shall have any and all rights and remedies set forth in Paragraph 11 hereof, in
addition to all rights and remedies available to it at law and equity, including
the rights of Landlord described in the Lease.

          11.        Sublessor Remedies Upon Sublessee Default. 

 

(a)

Sublessor shall have all rights and remedies of Landlord set forth in the Lease
as against Sublessee, as if Sublessee were tenant under the Lease, and such
rights as may be available at law or in equity.  In addition to such rights and
remedies, and notwithstanding any such rights and remedies which may be contrary
to those of Landlord in the Lease, upon the occurrence of any such event of
default by Sublessee as described in or referred to in Paragraph 10 hereof
(“Sublessee Default”), Sublessor, after providing written notice to Sublessee of
the nature of the default, shall have the option to pursue any one or more of
the following remedies concurrently or consecutively and not alternatively:

 

 

 

 

 

(i)

Sublessor may, at its election, terminate this Sublease or terminate Sublessee’s
right to possession only, without terminating the Sublease.

 

 

 

 

 

 

(ii)

Upon any termination of this Sublease, whether by lapse of time or otherwise, or
upon any termination of Sublessee’s right to possession without termination of
the Sublease, Sublessee shall surrender possession and vacate the Sublet
Premises immediately, and deliver possession thereof to Sublessor, and Sublessee
hereby grants to Sublessor full and free license to enter into and upon the
Sublet Premises in such event and to repossess Sublessor of the Sublet Premises
as of Sublessor’s former estate and to expel or remove Sublessee and any others
who may be occupying or be within the Sublet Premises and to remove Sublessee’s
signs and other evidence of tenancy and all other property of Sublessee
therefrom without being deemed in any manner guilty of trespass, eviction or
forcible entry or detainer, and without incurring any liability for any damage
resulting therefrom, Sublessee waiving any right to claim damages for such
re-entry and expulsion, and without relinquishing Sublessor’s right to rent or
any other right given to Sublessor under this Sublease or by operation of law.

 

 

 

 

 

 

(iii)

Upon any termination of this Sublease, whether by lapse of time or otherwise,
Sublessor shall be entitled to recover as damages, all Rent, including any
amounts treated as Additional Rent under this Sublease, and other sums due and
payable by Sublessee on the date of termination, plus Sublessor shall also be
entitled to recover as liquidated damages and not as a penalty, an amount equal
to the sum of: (a)  an amount equal to the then present value of the rent
reserved in this Sublease for the remainder of the stated Term of this Sublease
including any amounts treated as Additional Rent under this Sublease and all
other sums provided in this Sublease to be paid by Sublessee, less any rent
received from a new sublessee, if any;  (b) the value of the time and expense
necessary to obtain a replacement tenant or tenants, and the estimated expenses
relating to recovery of the Sublet Premises, preparation for reletting and for
reletting itself; and (c) the cost of performing any other covenants which would
have otherwise been performed by Sublessee.

 

 

 

 

 

 

(iv)

Upon any termination of Sublessee’s right to possession only without termination
of the Sublease:

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(A)

Neither such termination of Sublessee’s right to possession nor Sublessor’s
taking and holding possession thereof as provided shall terminate the Sublease
or release Sublessee, in whole or in part, from any obligation, including
Sublessee’s obligation to pay the Rent, including any amounts treated as
Additional Rent, under this Sublease for the full Term, plus any other sums
provided in this Sublease to be paid by Sublessee for the remainder of the Term.

 

 

 

 

 

 

 

 

(B)

Sublessor shall use reasonable efforts to relet the Sublet Premises or any part
thereof for such rent and upon such terms as Sublessor, in its sole discretion,
shall determine (including the right to relet the Sublet Premises for a greater
or lesser term than that remaining under this Sublease, the right to relet the
Sublet Premises as a part of a larger area, and the right to change the
character or use made of the Sublet Premises). In connection with or in
preparation for any reletting, Sublessor may, but shall not be required to, make
repairs, alterations and additions in or to the Sublet Premises and redecorate
the same to the extent Sublessor deems necessary or desirable, and Sublessee
shall, upon demand, pay Sublessor’s expenses of reletting, including, without
limitation, any commission incurred by Sublessor. If Sublessor decides to relet
the Sublet Premises or a duty to relet is imposed upon Sublessor by law,
Sublessor and Sublessee agree that nevertheless Sublessor shall at most be
required to use only the same efforts Sublessor then uses to sublease premises
in the Building generally and that in any case that Sublessor shall not be
required to give any preference or priority to the showing or leasing of the
Sublet Premises over any other space that Sublessor may be subleasing or have
available and may place a suitable prospective tenant in any such other space
regardless of when such other space becomes available. Sublessor shall not be
required to observe any instruction given by Sublessee about any reletting or
accept a replacement tenant offered by Sublessee unless such offered tenant has
a credit-worthiness acceptable to Sublessor and leases the entire Sublet
Premises upon terms and conditions including a rate of rent (after giving effect
to all expenditures by Sublessor for subtenant improvements, broker’s
commissions and other subleasing costs) all no less favorable to Sublessor than
as called for in this Sublease.

 

 

 

 

 

 

 

 

(C)

Until such time as Sublessor shall elect to terminate the Sublease and shall
thereupon be entitled to recover the amounts specified in such case herein,
Sublessee shall pay to Sublessor upon demand the full amount of all Rent,
including any amounts treated as Additional Rent under this Sublease and other
sums reserved in this Sublease for the remaining Term, together with the costs
of repairs, and Sublessor’s expenses of reletting and the collection of the rent
accruing therefrom (including attorney’s fees and broker’s commissions), as the
same shall then be due or become due from time to time, less only such
consideration as Sublessor may have received from any reletting of the Sublet
Premises; and Sublessee agrees that Sublessor may file suits from time to time
to recover any sums falling due under this Paragraph 12 as they become due. Any
proceeds of reletting by Sublessor in excess of the amount then owed by
Sublessee to Sublessor from time to time shall be credited against Sublessee’s
future obligations under this Sublease but shall not otherwise be refunded to
Sublessee.

-7-

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(b)

Pursuit of any of the foregoing remedies shall not preclude pursuit of any of
the other remedies provided in this Sublease or any other remedies provided by
law or in equity (all such remedies being cumulative), nor shall pursuit of any
remedy provided in this Sublease constitute a forfeiture or waiver of any Rent
due to Sublessor under this Sublease or of any damages accruing to Sublessor by
reason of the violation of any of the terms, provisions and covenants contained
in this Sublease.

 

 

 

 

(c)

No act or thing done by Sublessor or its agents during the Term shall be deemed
a termination of this Sublease or an acceptance of the surrender of the Sublet
Premises, and no agreement to terminate this Sublease or accept a surrender of
said Sublet Premises shall be valid, unless in writing signed by Sublessor.  No
waiver by Sublessor of any violation or breach of any of the terms, provisions
and covenants contained in this Sublease shall be deemed or construed to
constitute a waiver of any other violation or breach of any of the terms,
provisions and covenants contained in this Sublease. Sublessor’s acceptance of
the payment of Rent or other payments after the occurrence of a Sublessee
Default shall not be construed as a waiver of such Sublessee Default, unless
Sublessor so notifies Sublessee in writing. Forbearance by Sublessor in
enforcing one or more of the remedies provided in this Sublease upon the
occurrence of a Sublessee Default shall not be deemed or construed to constitute
a waiver of such Sublessee Default or of Sublessor’s right to enforce any such
remedies with respect to such Sublessee Default or any subsequent Sublessee
Default.

 

 

 

 

(d)

Any and all property which may be removed from the Sublet Premises by Sublessor
pursuant to the authority of this Sublease, the Lease or of law or in equity, to
which Sublessee is or may be entitled, may be handled, removed and/or stored, as
the case may be, by or at the direction of Sublessor, but at the risk, cost and
expense of Sublessee, and Sublessor shall in no event be responsible for the
value, preservation or safekeeping thereof. Sublessee shall pay to Sublessor,
upon demand, any and all expenses incurred in such removal and all storage
charges against such property so long as the same shall be in Sublessor’s
possession or under Sublessor’s control.  Any such property of Sublessee not
retaken by Sublessee from storage within twenty (20) days after removal from the
Sublet Premises shall, at Sublessor’s option, be deemed conveyed by Sublessee to
Sublessor under this Sublease as by a bill of sale without further payment or
credit by Sublessor to Sublessee.

          12.        Waiver of Recovery.  Notwithstanding anything stated in
this Sublease to the contrary, Sublessor and Sublessee, for themselves and for
their respective insurers, do hereby mutually release each other from any and
all claims, demands, actions and causes of action that each may have or claim to
have against the other (including, but not in limitation of the foregoing, all
rights of subrogation accruing to any insurers of the parties) for loss of or
damage to the property of the other, whether real or personal, caused by or
resulting from any casualty of the type covered by fire or extended coverage
insurance, based on coverage for 100% replacement cost, without regard for
whether such insurance is then in effect, and  notwithstanding that any such
loss or damage may be due to or result from the negligence of either of the
parties or their respective officers, employees, or agents.  Sublessor and
Sublessee will each endeavor to secure the inclusion in or an endorsement on any
fire and extended coverage insurance policy insuring their respective property
(whether real or personal) provisions by which a waiver of such subrogation is
effected or authorized to be effected by the insured; provided, however, that a
failure by either party to secure such inclusion or endorsement as aforesaid
shall not in any manner affect the provisions of the above mutual release.

          13.        Indemnification.  Subject to Paragraph 12 above, Sublessee
shall indemnify Sublessor and save Sublessor harmless from and against any and
all claims, liability and expense for loss or damage suffered by Sublessor
because of (i) the negligence, or willful misconduct of Sublessee, its agents,
contractors or employees; (ii) any act or occurrence in the Sublet Premises
unless caused by the negligence or willful misconduct of Sublessor, its agents,
contractors or employees; and (iii) breach of this Sublease by Sublessee, its
agents, contractors or employees including, but not limited to, losses caused to
Sublessor under the Lease by Sublessee’s holdover under the Sublease.  Subject
to Paragraph 12 above, Sublessor shall indemnify Sublessee and save Sublessee
harmless from and against any and all claims, liability and expense, on behalf
of any party for any bodily injury or property damage occurring in or about the
Sublet Premises to the extent the damage or injury was caused by the negligence
of Sublessor, its agents, contractors or employees.  Sublessee’s and Sublessor’s
obligations under this Paragraph 13 shall survive the termination of the
Sublease.

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          14.        Notices.  Any notice, approval, request, consent, bill,
statement or other communication required or permitted to be given, rendered or
made by either party hereto, shall be in writing and shall be sent to the
parties hereto by certified United States mail, postage prepaid, return receipt
requested, or a nationally recognized overnight courier with proof of delivery
at the following addresses:

Sublessor:

SBC Telecom, Inc.

 

 

c/o AT&T Services, Inc.

 

 

100 North Stoneman Avenue, Room 130

 

 

Alhambra, California 91801-3521

 

 

Attention:  Real Property Manager

 

 

 

 

with a copy to:

AT&T Services, Inc.

 

 

175 E. Houston

 

 

San Antonio, Texas 78205

 

 

Attention:  General Attorney – Real Estate

 

 

 

 

Sublessee:

ITEX Corporation

 

 

Attn:  Steven White/CEO

 

 

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

 

Either Sublessor or Sublessee may, by notice to the other, change the
address(es) to which notices are to be sent.  All notices shall be deemed
effective upon receipt or upon refusal to accept delivery.

          15.        Consent.  Sublessee acknowledges that where consent of
Landlord is required under the Lease, Sublessor’s consent is also required,
which consent shall not be unreasonably withheld, or delayed. To the extent that
any of the provisions of the Lease conflict with or are inconsistent with the
provisions of this Sublease, whether or not such inconsistency is expressly
noted herein, the provisions of the Lease shall in all instances prevail over
the Sublease. 

          16.        Access.  Sublessor shall have the right to enter upon or
obtain access to the Sublet Premises or any part thereof without charge at all
reasonable times upon reasonable prior notice to inspect the Sublet Premises, or
to otherwise exercise or perform any of the rights or obligations of Sublessor
under the Lease or this Sublease. At any time during the Term of this Sublease,
Sublessor may, at Sublessor’s option, enter into and upon the Sublet Premises if
Sublessor determines in its sole discretion that Sublessee is not acting within
a commercially reasonable time to maintain, repair or replace anything for which
Sublessee is responsible under this Sublease, or the Lease, and correct the same
after providing written notice, without being deemed in any manner guilty of
trespass, eviction or forcible entry and detainer and without incurring any
liability for any damage or interruption of Sublessee’s business resulting
therefrom. If Sublessee shall have vacated the Sublet Premises, has not paid
Rent and is in default beyond any applicable cure period, Sublessor may at
Sublessor’s option reenter the Sublet Premises at any time during the last six
(6) months of the then current Term of this Sublease and make any and all such
changes, alterations, revisions, additions and tenant and other improvements in
or about the Sublet Premises as Sublessor shall elect, all without any abatement
of any of the Rent otherwise to be paid by Sublessee under this Sublease.

          17.        Severability.  If any term or provision of this Sublease or
the application thereof to any person or circumstance shall to any extent be
invalid or unenforceable, the remainder of this Sublease or the application of
such term or provision to persons or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected thereby; and each term and
provision of this Sublease shall be valid and be enforceable to the fullest
extent permitted by law.

-9-

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          18.        Brokers.  Each party represents to the other that, other
than CB Richard Ellis, as Sublessor’s broker (“Sublessor’s Broker”) and Cushman
& Wakefield, as Sublessee’s broker (“Sublessee’s Broker”), no broker
participated in the negotiations leading to Sublessee’s rental of the Sublet
Premises from Sublessor. Sublessor agrees to pay a commission to Sublessor’s
Broker and to Sublessee’s Broker pursuant to separate agreement between
Sublessor and Sublessor’s Broker.   Except as specified above, each party agrees
to indemnify and hold the other party harmless from and against any claim or
demand of any broker or agent who claims that he/she participated with that
party in this transaction.

          19.        Parking.  Sublessor acknowledges and agrees that Sublessee
shall be entitled to the same pro rata allocation of parking spaces that
Landlord provides to Sublessor pursuant to the terms and conditions of the Lease
at no charge therefor, which, per Section II of the Addendum to Lease is 4.4
vehicles per 1,000 usable square feet, which ratio includes four (4) covered
parking stalls.

          20.        Holdover.  Notwithstanding anything stated in the Lease to
the contrary, if Sublessee remains in possession of the Sublet Premises
following the expiration of the term of this Sublease, Sublessee’s tenancy shall
be deemed a tenancy at sufferance, subject to all of the terms, conditions,
provisions and obligations of this Sublease and the Lease, except that during
such period of holdover, the annual Rent shall be two hundred percent (200%) of
the annual Rent for the last year of the Term.  Nothing contained in this
Paragraph 20 shall affect or limit any of Sublessor’s rights or remedies under
any provision of this Sublease, with Sublessee being liable for any damages
incurred by Sublessor as a result of such holdover, including, without
limitation, special and consequential damages.

          21.        Environmental.  During the Term of this Sublease, Sublessee
shall not use, generate, manufacture, process, treat, store, release, or
incorporate “Hazardous Materials” (as defined herein) into the Sublet Premises,
the Premises, the Building, or into, on or under the Property or the land
surrounding the Property, without prior written disclosure to and approval by
Sublessor and Landlord.  Sublessee shall also, at its own cost, comply with all
“Environmental Laws” (as defined herein) applicable to Sublessee and/or to the
Sublet Premises.  For the purposes hereof “Environmental Laws” shall mean any
applicable federal, state, county, regional or local statutes, laws,
regulations, rules, ordinances, codes, standards, orders, licenses and permits
of any governmental authorities relating to environmental, health or safety
matters (including, without limitation, “Hazardous Materials,” as defined
herein).  For the purposes hereof, “Hazardous Materials” shall mean any
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any federal, state, county, regional or local authority or which
even if not so prohibited, limited or regulated, poses a hazard to the health
and safety of the occupants of the Building or the occupants of the area near
the Building.  During the Term of this Sublease, Sublessee shall promptly
provide Sublessor with copies of all summons, citations, directives, information
inquiries or requests, notices of potential responsibility, notices of violation
or deficiency, orders of decrees, claims, complaints, investigations, judgments,
letters, notices of environmental liens or response actions in progress, and
other communications, written or oral, actual or threatened, from any federal,
state, or local agency or authority, or any other entity or individual,
concerning (a) any release of a Hazardous Material; (b) the imposition of any
lien on the Sublet Premises, the Premises, the Building, or the Property; or (c)
any alleged violation of or responsibility under Environmental Laws.

          22.        Surrender of the Premises.  Sublessee, on the Expiration
Date, shall peaceably surrender the Sublet Premises, in broom-clean condition
and otherwise in as good condition as when Sublessee took possession, and in the
condition required by the Lease, except for: (i) reasonable wear and tear, (ii)
loss by fire or other casualty, and (iii) loss by condemnation.  Sublessee, at
its sole cost and expense, shall remove all of its property, and any Alterations
or Improvements required by Landlord to be removed, from the Sublet Premises on
or before the Expiration Date and pay the cost of repairing all damage to the
Sublet Premises or the Building caused by such removal.

          23.        Terms.  All capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Lease.

          24.        Entire Agreement.  This Sublease, the Exhibits attached
hereto, and the Lease, which has been incorporated herein by reference, contain
the entire agreement between the parties concerning the Sublet Premises and
shall supersede any other agreements between the parties concerning this matter,
whether oral or written.  This Sublease shall not be modified, cancelled or
amended except by written agreement, signed by both parties. The submission of
this Sublease or some or all of its provisions for examination does not
constitute an option or an offer to enter into this Sublease, it being
understood and agreed that neither Sublessor nor Sublessee shall be legally
bound hereunder unless and until this Sublease has been executed and delivered
by both Sublessor and Sublessee, and then subject to the conditions hereof.

-10-

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          25.        Counterparts.  This Sublease may be executed in several
counterparts, all of which shall constitute one and the same instrument.  For
the purposes of execution of this Sublease, a facsimile copy of a signed
counterpart shall be deemed an original.

          26.        Binding Effect.  This Sublease shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.

          27.        Governing Law.  This Sublease shall be governed by and
construed in accordance with the internal laws of State or Commonwealth within
which the Sublet Premises is located, except for the portion of such laws having
to do with conflicts of laws.

          28.        Authority of Sublessee.  Sublessee represents and warrants
to Sublessor that (a) it is a valid and existing corporation licensed to do
business in the State or Commonwealth in which the Sublet Premises is located
and (b) it has the power and authority to execute and deliver this Sublease and
perform its obligations hereunder.

          29.        Waivers.  No waiver by any party of a breach of any
provision of this Sublease, and no failure by any party to exercise any right or
remedy relating to a breach of any provision of this Sublease, shall (a)
constitute a waiver or relinquishment for the future of such provision, (b)
constitute a waiver of or consent to any subsequent breach of such provision, or
(c) bar any right or remedy of such party relating to any such subsequent
breach.  The exercise by any party of any right or election under this Sublease
shall not preclude such party from exercising any other right or election that
it may have under this Sublease.

          30.        Time of the Essence.  Time is of the essence with each
provision of this Sublease.

          31.        Signage.  Sublessee shall be entitled, at its sole cost and
expense, to the same building standard directory and interior building signage
that Landlord provides to Sublessor pursuant to the terms and conditions of the
Lease.

          32.        Waiver of Trial by Jury.  Sublessor and Sublessee each
agree to and they hereby do waive trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto against the other on any
matters whatsoever arising out of or in any way connected with this Sublease,
the relationship of Sublessor and Sublessee, Sublessee’s use or occupancy of the
Premises and/or any claim of injury or damage, and any statutory remedy.

          33.        Attorney Fees.  In the event legal proceedings are
initiated to enforce any provision of this Sublease, to recover any rent due
under this Sublease, for the breach of any covenant or condition of this
Sublease, or for the restitution of the Premises to the Sublessor and/or
eviction of the Sublessee, the prevailing party shall be entitled to recover, as
an element of its cost of suit and not as damages, reasonable attorney fees and
costs to be fixed by the court.

(Remainder of page intentionally left blank; signature page to follow)

-11-

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          IN WITNESS WHEREOF, the parties have hereto executed this Sublease on
the date first above written.

 

SUBLESSOR:

 

SBC TELECOM, INC.

 

 

 

 

 

 

 

By:

/s/ Francis C. Bishop

 

 

--------------------------------------------------------------------------------

 

Its:

RE Director

 

 

 

 

 

 

 

SUBLESSEE:

 

ITEX CORPORATION

 

 

 

 

 

 

 

By:

/s/ Steven White

 

 

--------------------------------------------------------------------------------

 

Its:

Chief Executive Officer

 

(Remainder of page intentionally left blank; acknowledgements to follow)

-12-

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STATE OF ________________

:

 

 

 

: ss:

COUNTY OF ______________

:

 

          The foregoing Instrument was acknowledged before me this ___ day of
_______, 2006 by ___________________ the ________________________ of SBC
Telecom, Inc., a Delaware corporation who acknowledged the foregoing as his/her
free act and deed, and that of the corporation. 

 

--------------------------------------------------------------------------------

 

Commissioner of the Superior Court/

 

Notary Public

STATE OF ________________

:

 

 

 

: ss:

COUNTY OF ______________

:

 

          The foregoing Instrument was acknowledged before me this ___ day of
_______, 2006 by ___________________ the ________________________ of ITEX
Corporation, a Nevada corporation who acknowledged the foregoing as his/her free
act and deed, and that of the corporation.

 

--------------------------------------------------------------------------------

 

Commissioner of the Superior Court/

 

Notary Public

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EXHIBIT A

COPY OF LEASE

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EXHIBIT B

SUBLET PREMISES

(on following page)

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EXHIBIT B-1

SUBLESSEE’S IMPROVEMENTS

•

Demise 5 private offices.

•

Relocation and removal of workstations.

•

Construction of a glass relite wall in “Office 1” (as shown on Exhibit B), a
glass panel in the entry door, and a reception station.

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EXHIBIT C

COMMENCEMENT DATE AGREEMENT

          THIS COMMENCEMENT DATE AGREEMENT is made and entered into as of the
______ day of ________________________________,  2006, between Sublessor and
Sublessee named below:

 

Sublessor:

SBC Telecom, Inc.

 

 

 

--------------------------------------------------------------------------------

 

 

 

--------------------------------------------------------------------------------

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

Sublessee:

ITEX Corporation

 

 

 

--------------------------------------------------------------------------------

 

 

 

--------------------------------------------------------------------------------

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

Building:

Kenyon Center

 

 

 

3326 160th Avenue NE

 

 

 

Bellevue, Washington, 98008

 

          WHEREAS, Sublessor and Sublessee executed a Sublease dated
_______________ (the “Sublease”) by which Sublessee subleased 7,035 rentable
square feet located in the Building; and

          WHEREAS, the Commencement Date, as defined in Paragraph 1 of the
Sublease, has occurred; and pursuant to the Lease, Landlord and Tenant desire to
confirm various dates relating to the Sublease.

          NOW, THEREFORE, Sublessor and Sublessee agree and acknowledge that the
information set forth below is true and accurate.

 

Commencement Date:

_______________, 20___

 

 

 

 

Expiration Date:

April 30, 2010

          EXECUTED as a sealed instrument on the date first set forth above.

 

SUBLESSOR:

 

SBC TELECOM, INC.

 

 

 

 

By:

 

 

 

--------------------------------------------------------------------------------

 

Its:

 

 

 

 

 

 

 

 

SUBLESSEE:

 

ITEX CORPORATION

 

 

 

 

By:

 

 

 

--------------------------------------------------------------------------------

 

Its:

 

--------------------------------------------------------------------------------

STATE OF ________________

:

 

 

 

: ss:

COUNTY OF ______________

:

 

          The foregoing Instrument was acknowledged before me this ___ day of
_______, 2006 by ___________________ the ________________________ of SBC
Telecom, Inc., a Delaware corporation who acknowledged the foregoing as his/her
free act and deed, and that of the corporation. 

 

--------------------------------------------------------------------------------

 

Commissioner of the Superior Court/

 

Notary Public

STATE OF ________________

:

 

 

: ss:

 

COUNTY OF ______________

:

 

          The foregoing Instrument was acknowledged before me this ___ day of
_______, 2006 by ___________________ the ________________________ of ITEX
Corporation, a Delaware corporation who acknowledged the foregoing as his/her
free act and deed, and that of the corporation. 

 

--------------------------------------------------------------------------------

 

Commissioner of the Superior Court/

 

Notary Public

-2-

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EXHIBIT D

FURNITURE

•

One (1) conference room table with nineteen (19) leather chairs

•

One (1) round table with four (4) chairs

•

Twenty-two (22) high panel height cubicle workstations with twenty-six (26)
chairs

•

Sixteen (16) low height panel cubicle workstations with ten (10) chairs

•

Seventeen (17) five foot (5’) tall file cabinets

•

Two (2) mobile white boards

•

Server racks and wiring

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