Exhibit 10.19
 
STANDARD INDUSTRIAL/COMMERCIAL LEASE - NET

 
1. Basic Provisions ("Basic Provisions")
 
 
1.1  
Parties: This Lease ("Lease"), dated for reference purposes only August 28, 2008
, is made by and between  FKC HIGHLAND LLC, a Delaware limited liability company
 (“Landlord”)  and Fortunet, Inc., a Nevada corporation (“Tenant"),
(collectively the "Parties", or individually a "Party").

 
1.1.  
Premises: That certain portion of the Project (as defined below), including all
improvements therein or to be provided by Landlord under the terms of this
Lease, commonly known by the street address of3000 Highland Drive, Suite
E,located in the City ofLas Vegas,  State of  Nevada , with  zip
code   89109-1063 , as outlined on Exhibit “A” attached hereto ("Premises") and
generally described as (describe briefly the nature of the Premises): 11,618 +/-
rentable square feet industrial / distribution space as part of a multi-tenant
industrial park.

 
1.2.  
In addition to Tenant's rights to use and occupy the Premises as hereinafter
specified, Tenant shall have non-exclusive rights to the Common Areas (as
defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any
rights to the roof, exterior walls or utility raceways of the building
containing the Premises ("Building") or to any other buildings in the Project.
The Premises, the Building, the Common Areas, the land upon which they are
located, along with all other buildings and improvements thereon, are herein
collectively referred to as the "Industrial Project." (See also Paragraph
2).  Notwithstanding anything contained in this Lease to the contrary, the
parties hereto agree and acknowledge that any statement of size, square footage,
or dimension set forth in this Lease or lease proposals that may have been used
in calculating rents or expense recoveries is a reasonable approximation.  All
rents and/or expense recoveries based thereon is not subject to revision or
modification whether or not the actual size is greater or less than stated
herein

 
1.3.  
Parking:  _____15_____("Unreserved Parking Spaces"); and N/A reserved vehicle
parking spaces ("Reserved Parking Spaces"). (See also Paragraph 2.6)

 
1.4.  
    Term: 60 (Lease Months)

 
Commencement Date: 10/1/2008 (“Commencement Date”)
 
Expiration Date: 9/30/2013 (“Expiration Date”)
 
1.5.  
Early Possession: N/A ("Early Possession Date").  (See also Paragraphs 3.2 and
3.3)

 
1.6.  
Base Rent:    Monthly Base Rent is payable in advance on the first day of each
month, per Paragraph 4.1.

 
BASE RENT AMOUNT
FROM
 
TO
Monthly
Annually
10/1/2008
through
9/30/2009
$6,915.00
$82,980.00
10/1/2009
through
9/30/2010
$7,192.00
$86,304.00
10/1/2010
through
9/30/2011
$7,480.00
$89,760.00
10/1/2011
through
9/30/2012
$7,778.00
$93,336.00
10/1/2012
through
9/30/2013
$8,090.00
$97,080.00

 
1.7.  
Tenant's Share of Common Area Operating Expenses: Four and Ninety-Two
One-Hundredths percent (4.92%) ("Tenant's Share").

 
1.8.  
Base Rent and Other Monies Paid Upon Execution:

 
(a) Base Rent: $     See Base Rent Schedule           for the period       
N/A    
 
(b) Common Area Operating Expenses: $     1,600/mo.           for the
period       2008     
 
(c ) Security Deposit: $     6,915.00          ("Security Deposit"). (See also
Paragraph 5)
 
1.9  
Agreed Use: Manufacture, distribution, sales and administration of gaming
equipment and supplies and printing of paper for gaming related uses. (See also
Paragraph 6)

 
1.10  
Insuring Party. Landlord is the "Insuring Party". (See also Paragraph 8)

 
1.11  
Real Estate Brokers: (See also Paragraph 15)

 
1.12  
Representation: The following real estate brokers (the "Brokers") and brokerage
relationships exist in this transaction (check boxes):

 
□      N/A  represents Landlord exclusively ("Landlord's Broker");
 
□      N/A represents Tenant exclusively ("Tenant's Broker"); or
 
X      N/A represents both Landlord and Tenant ("Dual Agency").
 
1.13 
Payment to Brokers: Upon execution and delivery of this Lease by both Parties,
Landlord shall pay to the Brokers the brokerage fee agreed to in a separate
written agreement (or if there is no such agreement, the sum of N/A or  --------
% of the total Base Rent for the brokerage services rendered by the Brokers).

 
1.14 
Guarantor. The obligations of the Tenant under this Lease are to be guaranteed
by   n/a   (See attached Guarantee) ("Guarantor"). (See also Paragraph 37)

 
1.15 
Addenda and Exhibits. Attached hereto is an Addendum or Addenda and
Exhibits     A   through   E    , all of which constitute a part of this Lease.

 
2. Premises.
2. 1 Letting. Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of size set forth in this Lease, or that may have been
used in calculating Rent, is an approximation which the Parties agree is
reasonable and any payments based thereon are not subject to revision whether or
not the actual size is more or less.

2. 2 Condition. Landlord shall deliver that portion of the Premises contained
within the Building ('Unit") to Tenant broom clean and free of debris, “as-is,”
“where-is,” and “all faults accepted” condition upon the Commencement Date or
the Early Possession Date, whichever first occurs ("Start Date"), and, so long
as the required service contracts described in Paragraph 7.1(b) below are
obtained by Tenant and in effect within thirty days following the Start Date,
warrants that the existing electrical, plumbing, fire sprinkler, lighting,
heating, ventilating and air conditioning systems ("HVAC"), loading doors, if
any, and all other such elements in the Unit, other than those constructed by
Tenant, shall be in good operating condition on said date and that the
structural elements of the roof, bearing walls and foundation of the Unit shall
be free of material defects. If a non-compliance with such warranty exists as of
the Start Date, or if one of such systems or elements should malfunction or fail
within the appropriate warranty period, Landlord shall, as Landlord's sole
obligation with respect to such matter, except as otherwise provided in this
Lease, promptly after receipt of written notice from Tenant setting forth with
specificity the nature and extent of such non-compliance, malfunction or
failure, rectify same at Landlord's expense. The warranty periods shall be as
follows: (i) 6 months as to the HVAC systems, and (ii) 30 days as to the
remaining systems and other elements of the Unit. If Tenant does not give
Landlord the required notice within the appropriate warranty period, correction
of any such non-compliance, malfunction or failure shall be the obligation of
Tenant at Tenant's sole cost and expense (except for  the repairs to the fire
sprinkler systems, roof, foundations, and/or bearing walls - see Paragraph 7).

2.3 Compliance. Landlord warrants that the improvements on the Premises and the
Common Areas comply with the building codes that were in effect at the time that
each such improvement, or portion thereof, was constructed, and also with all
applicable laws, covenants or restrictions of record, regulations, and
ordinances in effect on the Start Date ("Applicable Requirements"). Said
warranty does not apply to the use to which Tenant will put the Premises or to
any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made
or to be made by Tenant. NOTE: Tenant is responsible for determining whether or
not the Applicable Requirements, and especially the zoning, are appropriate for
Tenant's intended use, and acknowledges that past uses of the Premises may no
longer be allowed. If the Premises do not comply with said warranty, Landlord
shall, except as otherwise provided, promptly after receipt of written notice
from Tenant setting forth with specificity the nature and extent of such
non-compliance, rectify the same at Landlord's expense. If Tenant does not give
Landlord written notice of a non-compliance with this warranty within 6 months
following the Start Date, correction of that non-compliance shall be the
obligation of Tenant at Tenant's sole cost and expense. If the Applicable
Requirements are hereafter changed so as to require during the term of this
Lease the construction of an addition to or an alteration of the Unit, Premises
and/or Building, the remediation of any Hazardous Substance, or the
reinforcement or other physical modification of the Unit, Premises and/or
Building ("Capital Expenditure"), Landlord and Tenant shall allocate the cost of
such work as follows:
(a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required
as a result of the specific and unique use of the Premises by Tenant as compared
with uses by tenants in general, Tenant shall be fully responsible for the cost
thereof, provided, however that if such Capital Expenditure is required during
the last 2 years of this Lease and the cost thereof exceeds 6 months' Base Rent,
Tenant may instead terminate this Lease unless Landlord notifies Tenant, in
writing, within 10 days after receipt of Tenant's termination notice that
Landlord has elected to pay the difference between the actual cost thereof and
the amount equal to 6 months' Base Rent. If Tenant elects termination, Tenant
shall immediately cease the use of the Premises which requires such Capital
Expenditure and deliver to Landlord written notice specifying a termination date
at least 90 days thereafter. Such termination date shall, however, in no event
be earlier than the last day that Tenant could legally utilize the Premises
without commencing such Capital Expenditure.
(b) If such Capital Expenditure is not the result of the specific and unique use
of the Premises by Tenant (such as, governmentally mandated seismic
modifications), then Landlord and Tenant shall allocate the obligation to pay
for the portion of such costs reasonably attributable to the Premises pursuant
to the formula set out in Paragraph 7.1(d); provided, however, that if such
Capital Expenditure is required during the last 2 years of this Lease or if
Landlord reasonably determines that it is not economically feasible to pay its
share thereof, Landlord shall have the option to terminate this Lease upon 90
days prior written notice to Tenant unless Tenant notifies Landlord, in writing,
within 10 days after receipt of Landlord's termination notice that Tenant will
pay for such Capital Expenditure. If Landlord does not elect to terminate, and
fails to tender its share of any such Capital Expenditure, Tenant may advance
such funds and deduct same, with Interest, from Rent until Landlord's share of
such costs have been fully paid. If Tenant is unable to finance Landlord's
share, or if the balance of the Rent due and payable for the remainder of this
Lease is not sufficient to fully reimburse Tenant on an offset basis, Tenant
shall have the right to terminate this Lease upon 30 days written notice to
Landlord.
(c) Notwithstanding the above, the provisions concerning Capital Expenditures
are intended to apply only to non-voluntary, unexpected, and new Applicable
Requirements. If the Capital Expenditures are instead triggered by Tenant as a
result of an actual or proposed change in use, change in intensity of use, or
modification to the Premises then, and in that event, Tenant shall be fully
responsible for the cost thereof, and Tenant shall not have any right to
terminate this Lease.

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

2.5 Tenant as Prior Owner/Occupant. The warranties made by Landlord in Paragraph
2 shall be of no force or effect if immediately prior to the Start Date Tenant
was the owner or occupant of the Premises. In such event, Tenant shall be
responsible for any necessary corrective work.

2.6 Vehicle Parking. Tenant shall be entitled to use the number of Unreserved
Parking Spaces and Reserved Parking Spaces specified in Paragraph 1.2(b) on
those portions of the Common Areas designated from time to time by Landlord for
parking. Tenant shall not use more parking spaces than said number. Said parking
spaces shall be used for parking by vehicles no larger than full-size passenger
automobiles or pick-up trucks, herein called "Permitted Size Vehicles." Landlord
may regulate the loading and unloading of vehicles by adopting Rules and
Regulations as provided in Paragraph 2.9. No vehicles other than Permitted Size
Vehicles may be parked in the Common Area without the prior written permission
of Landlord.
(a) Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, suppliers, shippers, customers,
contractors or invitees to be loaded, unloaded, or parked in areas other than
those designated by Landlord for such activities.
(b) Tenant shall not service or store any vehicles in the Common Areas.
(c) If Tenant permits or allows any of the prohibited activities described in
this Paragraph 2.6, then Landlord shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove or tow
away the vehicle involved and charge the cost to Tenant, which cost shall be
immediately payable upon demand by Landlord.

2.7 Common Areas - Definition. The term "Common Areas" is defined as all areas
and facilities outside the Premises and within the exterior boundary line of the
Project and interior utility raceways and installations within the Unit that are
provided and designated by the Landlord from time to time for the general
non-exclusive use of Landlord, Tenant and other tenants of the Project and their
respective employees, suppliers, shippers, customers, contractors and invitees,
including parking areas, loading and unloading areas, trash areas, roadways,
walkways, driveways and landscaped areas.

2.8 Common Areas - Tenant's Rights. Landlord grants to Tenant, for the benefit
of Tenant and its employees, suppliers, shippers, contractors, customers and
invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Landlord
under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Project. Under no circumstances shall the
right herein granted to use the Common Areas be deemed to include the right to
store any property, temporarily or permanently, in the Common Areas. Any such
storage shall be permitted only by the prior written consent of Landlord or
Landlord's designated agent, which consent may be revoked at any time. In the
event that any unauthorized storage shall occur then Landlord shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove the property and charge the cost to Tenant, which cost shall be
immediately payable upon demand by Landlord.

2.9 Common Areas - Rules and Regulations. Landlord or such other person(s) as
Landlord may appoint shall have the exclusive control and management of the
Common Areas and shall have the right, from time to time, to establish, modify,
amend and enforce the Rules and Regulations as contained in Exhibit “C”,
attached hereto and made a part hereof by this reference, ("Rules and
Regulations") for the management, safety, care, and cleanliness of the grounds,
the parking and unloading of vehicles and the preservation of good order, as
well as for the convenience of other occupants or tenants of the Building and
the Project and their invitees. Tenant agrees to abide by and conform to all
such Rules and Regulations, and to cause its employees, suppliers, shippers,
customers, contractors and invitees to so abide and conform. Landlord shall not
be responsible to Tenant for the non-compliance with said Rules and Regulations
by other tenants of the Project.

2.10 Common Areas - Changes. Landlord shall have the right, in Landlord's sole
discretion, from time to time:
(a) To make changes to the Common Areas, including, without limitation, changes
in the location, size, shape and number of driveways, entrances, parking spaces,
parking areas, loading and unloading areas, ingress, egress, direction of
traffic, landscaped areas, walkways and utility raceways;
(b) To close temporarily any of the Common Areas for maintenance purposes so
long as reasonable access to the Premises
remains available;
(c) To designate other land outside the boundaries of the Project to be a part
of the Common Areas;
(d) To add additional buildings and improvements to the Common Areas;
(e) To use the Common Areas while engaged in making additional improvements,
repairs or alterations to the Project, or any portion thereof; and
(f) To do and perform such other acts and make such other changes in, to or with
respect to the Common Areas and Project as Landlord may, in the exercise of
sound business judgment, deem to be appropriate.

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

3.2 Early Possession. If Tenant totally or partially occupies the Premises prior
to the Commencement Date, the obligation to pay Base Rent shall be abated for
the period of such early possession. All other terms of this Lease (including
but not limited to the obligations to pay Tenant's Share of Common Area
Operating Expenses, Real Property Taxes and insurance premiums and to maintain
the Premises) shall, however, be in effect during such period. Any such early
possession shall not affect the Expiration Date.

3.3 Delay In Possession. Landlord agrees to use its best commercially reasonable
efforts to deliver possession of the Premises to Tenant by the Commencement
Date. If, despite said efforts, Landlord is unable to deliver possession as
agreed, Landlord shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease. Tenant shall not, however, be
obligated to pay Rent or perform its other obligations until it receives
possession of the Premises. If possession is not delivered within 60 days after
the Commencement Date, Tenant may, at its option, by notice in writing within 10
days after the end of such 60 day period, cancel this Lease, in which event the
Parties shall be discharged from all obligations hereunder. If such written
notice is not received by Landlord within said 10 day period, Tenant's right to
cancel shall terminate. Except as otherwise provided, if possession is not
tendered to Tenant by the Start Date and Tenant does not terminate this Lease,
as aforesaid, any period of rent abatement that Tenant would otherwise have
enjoyed shall run from the date of delivery of possession and continue for a
period equal to what Tenant would otherwise have enjoyed under the terms hereof,
but minus any days of delay caused by the acts or omissions of Tenant. If
possession of the Premises is not delivered within 4 months after the
Commencement Date, this Lease shall terminate unless other agreements are
reached between Landlord and Tenant, in writing.

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

4. Rent.
4.1 Rent Defined. All monetary obligations of Tenant to Landlord under the terms
of this Lease (except for the Security Deposit) are deemed to be rent ("Rent").

4.2 Common Area Operating Expenses. Tenant shall pay to Landlord during the term
hereof, in addition to the Base Rent, Tenant's Share (as specified in Paragraph
1.6) of all Common Area Operating Expenses, as hereinafter defined, during each
calendar year of the term of this Lease, in accordance with the following
provisions:
(a) "Common Area Operating Expenses" are defined, for purposes of this Lease, as
all costs incurred by Landlord relating to the ownership and operation of the
Project, including, but not limited to, the following:
(i) The operation, repair and maintenance, in neat, clean, good order and
condition of the following:
 
(aa) The Common Areas and Common Area improvements, including parking areas,
loading and unloading areas, trash areas, roadways, parkways, walkways,
driveways, landscaped areas, bumpers, irrigation systems, Common Area lighting
facilities, fences and gates, elevators, roofs, and roof drainage systems.

(bb) Exterior signs and any tenant directories.
(cc) Any fire detection and/or sprinkler systems.
(ii) The cost of water, gas, electricity and telephone to service the Common
Areas and any utilities not separately metered.
(iii) Trash disposal, pest control services, property management security
services, and the costs of any environmental inspections.
(iv) Reserves set aside for maintenance and repair of Common Areas.
(v) Real Property Taxes (as defined in Paragraph 10).
(vi) The cost of the premiums for the insurance maintained by Landlord pursuant
to Paragraph 8.
(vii) Any deductible portion of an insured loss concerning the Building or the
Common Areas.
 
(viii) The cost of any Capital Expenditure to the Building or the Project not
covered under the provisions of Paragraph 2.3 provided; however, that Landlord
shall allocate the cost of any such Capital Expenditure over a 12 year period
and Tenant shall not be required to pay more than Tenant's Share of 1/144th of
the cost of such Capital Expenditure in any given month.

(ix) Any other services to be provided by Landlord that are stated elsewhere in
this Lease to be a Common Area Operating Expense.
(b) Any Common Area Operating Expenses and Real Property Taxes that are
specifically attributable to the Unit, the Building or to any other building in
the Project or to the operation, repair and maintenance thereof, shall be
allocated entirely to such Unit, Building, or other building.  However, any
Common Area Operating Expenses and Real Property Taxes that are not specifically
attributable to the Building or to any other building or to the operation,
repair and maintenance thereof, shall be equitably allocated by Landlord to all
buildings in the Project.
(c) The inclusion of the improvements, facilities and services set forth in
Subparagraph 4.2(a) shall not be deemed to impose an obligation upon Landlord to
either have said improvements or facilities or to provide those services unless
the Project already has the same, Landlord already provides the services, or
Landlord has agreed elsewhere in this Lease to provide the same or some of them.
(d) Tenant's Share of Common Area Operating Expenses shall be payable by Tenant
within 10 days after a reasonably detailed statement of actual expenses is
presented to Tenant. At Landlord's option, however, an amount may be estimated
by Landlord from time to time of Tenant's Share of annual Common Area Operating
Expenses and the same shall be payable monthly or quarterly, as Landlord shall
designate, during each 12 month period of the Lease term, on the same day as the
Base Rent is due hereunder. Landlord shall deliver to Tenant within 60 days
after the expiration of each calendar year a reasonably detailed statement
showing Tenant's Share of the actual Common Area Operating Expenses incurred
during the preceding year. If Tenant's payments under this Paragraph 4.2(d)
during the preceding year exceed Tenant's Share as indicated on such statement,
Landlord shall credit the amount of such over-payment against Tenant's Share of
Common Area Operating Expenses next becoming due. If Tenant's payments under
this Paragraph 4.2(d) during the preceding year were less than Tenant's Share as
indicated on such statement, Tenant shall pay to Landlord the amount of the
deficiency within 10 days after delivery by Landlord to Tenant of the statement.

4.3 Payment. Tenant shall cause payment of Rent to be received by Landlord in
lawful money of the United States, without offset or deduction (except as
specifically permitted in this Lease), on or before the day on which it is due.
Rent for any period during the term hereof which is for less than one full
calendar month shall be prorated based upon the actual number of days of said
month. Payment of Rent shall be made to Landlord at its address stated herein or
to such other persons or place as Landlord may from time to time designate in
writing. Acceptance of a payment which is less than the amount then due shall
not be a waiver of Landlord's rights to the balance of such Rent, regardless of
Landlord's endorsement of any check so stating. In the event that any check,
draft, or other instrument of payment given by Tenant to Landlord is dishonored
for any reason, Tenant agrees to pay to Landlord the sum of $25 in addition to
any late charges which may be due.

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

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

6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous Substance" as used in
this Lease shall mean any product, substance, or waste whose presence, use,
manufacture, disposal, transportation, or release, either by itself or in
combination with other materials expected to be on the Premises, is either: (i)
potentially injurious to the public health, safety or welfare, the environment
or the Premises, (ii) regulated or monitored by any
governmental authority, or (iii) a basis for potential liability of Landlord to
any governmental agency or third party under any applicable statute or common
law theory. Hazardous Substances shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products
or fractions thereof. Tenant shall not engage in any activity in or on the
Premises which constitutes a Reportable Use of Hazardous Substances without the
express prior written consent of Landlord and timely compliance (at Tenant's
expense) with all Applicable Requirements. "Reportable Use" shall mean (i) the
installation or use of any above or below ground storage tank, (ii) the
generation, possession, storage, use, transportation, or disposal of a Hazardous
Substance that requires a permit from, or with respect to which a report,
notice, registration or business plan is required to be filed with, any
governmental authority, and/or (iii) the presence at the Premises of a Hazardous
Substance with respect to which any Applicable Requirements requires that a
notice be given to persons entering or occupying the Premises or neighboring
properties. Notwithstanding the foregoing, Tenant may use any ordinary and
customary materials reasonably required to be used in the normal course of the
Agreed Use, so long as such use is in compliance with all Applicable
Requirements, is not a Reportable Use, and does not expose the Premises or
neighboring property to any meaningful risk of contamination or damage or expose
Landlord to any liability therefor. In addition, Landlord may condition its
consent to any Reportable Use upon receiving such additional assurances as
Landlord reasonably deems necessary to protect itself, the public, the Premises
and/or the environment against damage, contamination, injury and/or liability,
including, but not limited to, the installation (and removal on or before Lease
expiration or termination) of protective modifications (such as concrete
encasements) and/or increasing the Security Deposit.
(b) Duty to Inform Landlord. If Tenant knows, or has reasonable cause to
believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises, other than as previously consented to by Landlord, Tenant
shall immediately give written notice of such fact to Landlord, and provide
Landlord with a copy of any report, notice, claim or other documentation which
it has concerning the presence of such Hazardous
Substance.
(c) Tenant Remediation. Tenant shall not cause or permit any Hazardous Substance
to be spilled or released in, on, under, or about the Premises (including
through the plumbing or sanitary sewer system) and shall promptly, at Tenant's
expense, take all investigatory and/or remedial action reasonably recommended,
whether or not formally ordered or required, for the cleanup of any
contamination of, and for the maintenance, security and/or monitoring of the
Premises or neighboring properties, that was caused or materially contributed to
by Tenant, or pertaining to or involving any Hazardous Substance brought onto
the Premises during the term of this Lease, by or for Tenant, or any third
party.
(d) Tenant Indemnification. Tenant shall indemnify, defend and hold Landlord,
its agents, employees, lenders and ground Landlord, if any, harmless from and
against any and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and attorneys' and consultants' fees arising out of
or involving any Hazardous Substance brought onto the Premises by or for Tenant,
or any third party (provided, however, that Tenant shall have no liability under
this Lease with respect to underground migration of any Hazardous Substance
under the Premises from areas outside of the Project).  Tenant's obligations
shall include, but not be limited to, the effects of any contamination or injury
to person, property or the environment created or suffered by Tenant, and the
cost of investigation, removal, remediation, restoration and/or abatement, and
shall survive the expiration or termination of this Lease. No termination,
cancellation or release agreement entered into by Landlord and Tenant shall
release Tenant from its obligations under this Lease with respect to Hazardous
Substances, unless specifically so agreed by Landlord in writing at the time of
such agreement.
(e) Landlord Indemnification. Landlord and its successors and assigns shall
indemnify, defend, reimburse and hold Tenant, its employees and lenders,
harmless from and against any and all environmental damages, including the cost
of remediation, which existed as a result of Hazardous Substances on the
Premises prior to the Start Date or which are caused by the gross negligence or
willful misconduct of Landlord, its agents or employees. Landlord's obligations,
as and when required by the Applicable Requirements, shall include, but not be
limited to, the cost of investigation, removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of this Lease.
(f) Investigations and Remediations. Landlord shall retain the responsibility
and pay for any investigations or remediation measures required by governmental
entities having jurisdiction with respect to the existence of Hazardous
Substances on the Premises prior to the Start Date, unless such remediation
measure is required as a result of Tenant's use (including "Alterations", as
defined in paragraph 7.3(a) below) of the Premises, in which event Tenant shall
be responsible for such payment. Tenant shall cooperate fully in any such
activities at the request of Landlord, including allowing Landlord and
Landlord's agents to have reasonable access to the Premises at reasonable times
in order to carry out Landlord's investigative and remedial responsibilities.
(g) Landlord Termination Option. If a Hazardous Substance Condition (see
Paragraph 9.1(e)) occurs during the term of this Lease, unless Tenant is legally
responsible therefor (in which case Tenant shall make the investigation and
remediation thereof required by the Applicable Requirements and this Lease shall
continue in full force and effect, but subject to Landlord's rights under
Paragraph 6.2(d) and Paragraph 13), Landlord may, at Landlord's option, either
(i) investigate and remediate such Hazardous Substance Condition, if required,
as soon as reasonably possible at Landlord's expense, in which event this Lease
shall continue in full force and effect, or (ii) if the estimated cost to
remediate such condition exceeds 12 times the then monthly Base Rent or
$100,000, whichever is greater, give written notice to Tenant, within 30 days
after receipt by Landlord of knowledge of the occurrence of such Hazardous
Substance Condition, of Landlord's desire to terminate this Lease as of the date
60 days following the date of such notice. In the event Landlord elects to give
a termination notice, Tenant may, within 10 days thereafter, give written notice
to Landlord of Tenant's commitment to pay the amount by which the cost of the
remediation of such Hazardous Substance Condition exceeds an amount equal to 12
times the then monthly Base Rent or $100,000, whichever is greater. Tenant shall
provide Landlord with said funds or satisfactory assurance thereof within 30
days following such commitment. In such event, this Lease shall continue in full
force and effect, and Landlord shall proceed to make such remediation as soon as
reasonably possible after the required funds are available. If Tenant does not
give such notice and provide the required funds or assurance thereof within the
time provided, this Lease shall terminate as of the date specified in Landlord's
notice of termination.

6. 3 Tenant's Compliance with Applicable Requirements. Except as otherwise
provided in this Lease, Tenant shall, at Tenant's sole expense, fully,
diligently and in a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable fire insurance underwriter or
rating bureau, and the recommendations of Landlord's engineers and/or
consultants which relate in any manner to the Premises, without regard to
whether said requirements are now in effect or become effective after the Start
Date. Tenant shall, within 10 days after receipt of Landlord's written request,
provide Landlord with copies of all permits and other documents, and other
information evidencing Tenant's compliance with any Applicable Requirements
specified by Landlord, and shall immediately upon receipt, notify Landlord in
writing (with copies of any documents involved) of any threatened or actual
claim, notice, citation, warning, complaint or report pertaining to or involving
the failure of Tenant or the Premises to comply with any Applicable
Requirements.

6. 4 Inspection; Compliance. Landlord and Landlord's "Lender" (as defined in
Paragraph 30) and consultants shall have the right to enter into Premises at any
time, in the case of an emergency, and otherwise at reasonable times, for the
purpose of inspecting the condition of the Premises and for verifying compliance
by Tenant with this Lease. The cost of any such inspections shall be paid by
Landlord, unless a violation of Applicable Requirements, or a contamination is
found to exist or be imminent, or the inspection is requested or ordered by a
governmental authority. In such case, Tenant shall upon request reimburse
Landlord for the cost of such inspection, so long as such inspection is
reasonably related to the violation or contamination.

7. Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations.
7. 1 Tenant's Obligations.
(a) In General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3
(Compliance), 6.3 (Tenant's Compliance with Applicable Requirements), 7.2
(Landlord's Obligations), 9 (Damage or Destruction), and 14 (Condemnation),
Tenant shall, at Tenant's sole expense, keep the Premises, Utility Installations
(intended for Tenant's exclusive use, no matter where located), and Alterations
in good order, condition and repair (whether or not the portion of the Premises
requiring repairs, or the means of repairing the same, are reasonably or readily
accessible to Tenant, and whether or not the need for such repairs occurs as a
result of Tenant's use, any prior use, the elements or the age of such portion
of the Premises), including, but not limited to, all equipment or facilities,
such as plumbing, HVAC equipment, electrical, lighting facilities, boilers,
pressure vessels, fixtures, interior walls, interior surfaces of exterior walls,
ceilings, floors, windows, doors, plate glass, and skylights but excluding any
items which are the responsibility of Landlord pursuant to Paragraph 7.2.
Tenant, in keeping the Premises in good order, condition and repair, shall
exercise and perform good maintenance practices, specifically including the
procurement and maintenance of the service contracts required by Paragraph
7.1(b) below. Tenant's obligations shall include restorations , replacements or
renewals when necessary to keep the Premises and all improvements thereon or a
part thereof in good order, condition and state of repair.
(b) Service Contracts. Tenant shall, at Tenant's sole expense, procure and
maintain contracts, with copies to Landlord, in customary form and substance
for, and with contractors specializing and experienced in the maintenance of the
following equipment and improvements, if any, if and when installed on the
Premises: (i) HVAC equipment, (ii) boiler and pressure vessels, (iii)
clarifiers, and (iv) any other equipment, if reasonably required by Landlord.
However, Landlord reserves the right, upon notice to Tenant, to procure and
maintain any or all of such service contracts, and if Landlord so elects, Tenant
shall reimburse Landlord, upon demand, for the cost thereof.
(c ) Failure to Perform. If Tenant fails to perform Tenant's obligations under
this Paragraph 7.1, Landlord may enter upon the Premises after 10 days' prior
written notice to Tenant (except in the case of an emergency, in which case no
notice shall be required), perform such obligations on Tenant's behalf, and put
the Premises in good order, condition and repair, and Tenant shall promptly
reimburse Landlord for the cost thereof.
(d) Replacement. Subject to Tenant's indemnification of Landlord as set forth in
Paragraph 8.7 below, and without relieving Tenant of liability resulting from
Tenant's failure to exercise and perform good maintenance practices, if an item
described in Paragraph 7.1(b) cannot be repaired other than at a cost which is
in excess of 50% of the cost of replacing such item, then such item shall be
replaced by Landlord, and the cost thereof shall be prorated between the Parties
and Tenant shall only be obligated to pay, each month during the remainder of
the term of this Lease, on the date on which Base Rent is due, an amount equal
to the product of multiplying the cost of such replacement by a fraction, the
numerator of which is one, and the denominator of which is 144 (ie. 1/144th of
the cost per month). Tenant shall pay interest on the unamortized balance at a
rate that is commercially reasonable in the judgment of Landlord's accountants.
Tenant may, however, prepay its obligation at any time.

7. 2 Landlord's Obligations. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 4.2 (Common Area Operating Expenses), 6 (Use),
7.1 (Tenant's Obligations), 9 (Damage or Destruction) and 14 (Condemnation),
Landlord, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good
order, condition and repair the foundations, exterior walls, structural
condition of interior bearing walls, exterior roof, fire sprinkler system,
Common Area fire alarm and/or smoke detection systems, fire hydrants, parking
lots, walkways, parkways, driveways, landscaping, fences, signs and utility
systems serving the Common Areas and all parts thereof, as well as providing the
services for which there is a Common Area Operating Expense pursuant to
Paragraph 4.2. Landlord shall not be obligated to paint the exterior or interior
surfaces of exterior walls nor shall Landlord be obligated to maintain, repair
or replace windows, doors or plate glass of the Premises. Tenant expressly
waives the benefit of any statute now or hereafter in effect to the extent it is
inconsistent with the terms of this Lease.

7. 3 Utility Installations; Trade Fixtures; Alterations.
(a) Definitions. The term "Utility Installations" refers to all floor and window
coverings, air lines, power panels, electrical distribution, security and fire
protection systems, communication systems, lighting fixtures, HVAC equipment,
plumbing, and fencing in or on the Premises.  The term "Trade Fixtures" shall
mean Tenant's machinery and equipment that can be removed without doing material
damage to the Premises. The term "Alterations" shall mean any modification of
the improvements, other than Utility Installations or Trade Fixtures, whether by
addition or deletion. "Tenant Owned Alterations and/or Utility Installations"
are defined as Alterations and/or Utility Installations made by Tenant that are
not yet owned by Landlord pursuant to Paragraph 7.4(a).
(b) Consent. Tenant shall not make any Alterations or Utility Installations to
the Premises without Landlord's prior written consent. Tenant may, however, make
non-structural Utility Installations to the interior of the Premises (excluding
the roof) without such consent but upon notice to Landlord, as long as they are
not visible from the outside, do not involve puncturing, relocating or removing
the roof or any existing walls, and the cumulative cost thereof during this
Lease as extended does not exceed a sum equal to 3 month's Base Rent in the
aggregate or a sum equal to one month's Base Rent in any one year.
Notwithstanding the foregoing, Tenant shall not make or permit any roof
penetrations and/or install anything on the roof without the prior written
approval of Landlord. Landlord may, as a precondition to granting such approval,
require Tenant to utilize a contractor chosen and/or approved by Landlord.  Any
Alterations or Utility Installations that Tenant shall desire to make and which
require the consent of the Landlord shall be presented to Landlord in written
form with detailed plans. Consent shall be deemed conditioned upon Tenant's: (i)
acquiring all applicable governmental permits, (ii) furnishing Landlord with
copies of both the permits and the plans and specifications prior to
commencement of the work, and (iii) compliance with all conditions of said
permits and other Applicable Requirements in a prompt and expeditious manner.
Any Alterations or Utility Installations shall be performed in a workmanlike
manner with good and sufficient materials. Tenant shall promptly upon completion
furnish Landlord with as-built plans and specifications. For work which costs an
amount in excess of one month's Base Rent, Landlord may condition its consent
upon Tenant providing a lien and completion bond in an amount equal to 150% of
the estimated cost of such Alteration or Utility Installation and/or upon
Tenant's posting an additional Security Deposit with Landlord.
(c) Indemnification. Tenant shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Tenant at or for
use on the Premises, which claims are or may be secured by any mechanic's or
materialman's lien against the Premises or any interest therein. Tenant shall
give Landlord not less than 10 days notice prior to the commencement of any work
in, on or about the Premises, and Landlord shall have the right to post notices
of non-responsibility. If Tenant shall contest the validity of any such lien,
claim or demand, then Tenant shall, at its sole expense defend and protect
itself, Landlord and the Premises against the same and shall pay and satisfy any
such adverse judgment that may be rendered thereon before the enforcement
thereof. If Landlord shall require, Tenant shall furnish a surety bond in an
amount equal to 150% of the amount of such contested lien, claim or demand,
indemnifying Landlord against liability for the same. If Landlord elects to
participate in any such action, Tenant shall pay Landlord's attorneys' fees and
costs.

7.4 Ownership; Removal; Surrender; and Restoration.
(a) Ownership. Subject to Landlord's right to require removal or elect ownership
as hereinafter provided, all Alterations and Utility Installations made by
Tenant shall be the property of Tenant, but considered a part of the Premises.
Landlord may, at any time, elect in writing to be the owner of all or any
specified part of the Tenant Owned Alterations and Utility Installations. Unless
otherwise instructed per paragraph 7.4(b) hereof, all Tenant Owned Alterations
and Utility Installations shall, at the expiration or termination of this Lease,
become the property of Landlord and be surrendered by Tenant with the Premises.
(b) Removal. By delivery to Tenant of written notice from Landlord not earlier
than 90 and not later than 30 days prior to the end of the term of this Lease,
Landlord may require that any or all Tenant Owned Alterations or Utility
Installations be removed by the expiration or termination of this Lease.
Landlord may require the removal at any time of all or any part of any Tenant
Owned Alterations or Utility Installations made without the required consent.
(c) Surrender; Restoration. Tenant shall surrender the Premises by the
Expiration Date or any earlier termination date, with all of the improvements,
parts and surfaces thereof broom clean and free of debris, and in good operating
order, condition and state of repair, ordinary wear and tear excepted. "Ordinary
wear and tear" shall not include any damage or deterioration that would have
been prevented by good maintenance practice. Notwithstanding the foregoing, if
this Lease is for 12 months or less, then Tenant shall surrender the Premises in
the same condition as delivered to Tenant on the Start Date with NO allowance
for ordinary wear and tear. Tenant shall repair any damage occasioned by the
installation, maintenance or removal of Trade Fixtures, Tenant owned Alterations
and/or Utility Installations, furnishings, and equipment as well as the removal
of any storage tank installed by or for Tenant. Tenant shall also completely
remove from the Premises any and all Hazardous Substances brought onto the
Premises by or for Tenant, or any third party (except Hazardous Substances which
were deposited via underground migration from areas outside of the Project) even
if such removal would require Tenant to perform or pay for work that exceeds
statutory requirements. Trade Fixtures shall remain the property of Tenant and
shall be removed by Tenant. The failure by Tenant to timely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of
Landlord shall constitute a holdover under the provisions of Paragraph 26 below.

8. Insurance; Indemnity.
8.1       Liability Insurance-Tenant. Without limiting the insurance
requirements  contained in Exhibit “D” attached hereto, Tenant shall, at all
Tenant’s expense, obtain and keep in force during the term of this Lease a
policy of Comprehensive General Liability insurance utilizing an Insurance
Services Office Standard Form with Broad Form General Liability Endorsement, in
an amount of not less than $1,000,000 per occurrence of bodily injury and
property damage combined or in a greater amount as reasonably determined by
Landlord and shall insure Tenant with Landlord and Landlord’s asset management
and property management companies as an additional insureds against liability
arising out of the use, occupancy or maintenance of the Premises.  Compliance
with the above requirement shall not limit the liability of Tenant hereunder.

8.2       Property Insurance-Tenant.   Without limiting the insurance
requirements contained in Exhibit “D” attached hereto, Tenant shall, at Tenant’s
expense, obtain and keep in force during the term of this Lease, replacement
cost fire and extended coverage insurance, with vandalism and malicious
mischief, sprinkler leakage and earthquake sprinkler leakage endorsements, in an
amount sufficient to cover not less than 100% of the full replacement cost, as
the same may exist from time to time, of all of Tenant’s personal property,
fixtures, equipment and tenant improvements.

8.3       Insurance Policies. Without limiting the insurance requirements
contained in Exhibit “D” attached hereto, Tenant shall deliver to Landlord
copies of liability insurance policies required under Paragraph 8.1 or
certificates evidencing the existence and amounts of such insurance prior to
Tenant’s possession of the Premises.  Additionally, Tenant shall deliver to
Landlord the certificates showing the additional insureds set forth  in
Paragraph 5 of Exhibit “D.”  No such policy shall be cancelable or subject to
reduction of coverage or other modification except after thirty (30) days prior
written notice to Landlord.  Tenant shall, at least thirty (30) days prior to
the expiration of such policies, furnish Landlord with renewals thereof.

8.4       Waiver of Subrogation. Tenant hereby releases and relieves Landlord,
and waives Tenant’s entire right of recovery against Landlord, for direct or
consequential loss or damage arising out of or incident to the perils covered by
property insurance carried by Tenant, whether due to the negligence of Landlord
or their agents, employees, contractors and/or invitees.  If necessary, all
property insurance policies required under this Lease shall be endorsed to so
provide.

8.5       Assumption of Risk and Indemnification.
(a) Assumption of Risk. Tenant, as a material part of the consideration to
Landlord, agrees that neither Landlord nor Landlord partners, members, officers,
directors, employees, agents, attorneys, lenders, successors and assigns
(collectively, "Landlord Indemnified Parties") shall 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 or the Industrial 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 Industrial Project, or caused by quasi-public work, (iii) any damage to
property entrusted to employees of the Industrial Project, (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 Industrial Project or any other portion of the Common Areas 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 or
facilities therein by Tenant or Tenant’s agents, employees, subtenants,
assignees, licensees, contractors or invitees (collectively, "Tenant's Parties")
or for interference with light. Tenant agrees to give prompt notice to Landlord
in case of fire or accidents in the Premises or the Office  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 (defined in
8.5(a) above), 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, Common Areas, or the Industrial Project
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 Industrial Project or elsewhere; 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 claim, 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 8.5(b) will survive the expiration or earlier termination of this
Lease. Tenant's covenants, agreements and indemnification obligations arising
pursuant to Subparagraphs 8.5 (a) and 8.5 (b) above, are not intended to and
shall not relieve any insurance carrier of its obligations under policies
required to be carried by Tenant pursuant to the provisions of this Lease.

8.6       No Representation of Adequate Coverage. Landlord makes no
representation that the limits or forms of coverage of insurance specified in
this Paragraph 8 are adequate to cover Tenant’s property or obligations under
this Lease.

8.7       Failure to Maintain Insurance.  For any period or periods in which
Tenant fails to maintain any insurance required by this Lease, or, if after ten
(10) days following the Commencement Date, Tenant has not provided Landlord with
the Additional Insured-Manager’s or Landlord’s, or other required additional
Insured Endorsements required to be submitted pursuant to this Lease, without
further notice, Base Rent shall be automatically increased by Two Hundred and
Fifty Dollars ($250.00) per month, until such time as Tenant complies with the
insurance provisions of this Lease.  Notwithstanding anything contained herein
to the contrary, the foregoing shall not be construed, interpreted, or deemed
(i) a waiver of any default created by reason of Tenant’s failure to provide the
insurance certificates and endorsements called for in this Lease; (ii) limit any
other right or remedy of Landlord; (iii) relieve Tenant of its obligations
regarding maintenance of insurance as provided by the Lease; or (iv) be
considered a policy of insurance in favor of Tenant.  Landlord and Tenant agree
the additional monthly charge described herein represents a fair and reasonable
estimate of the additional administrative costs Landlord will incur by reason of
any failure by Tenant to provide the required insurance documentation to
Landlord.
 
9. Damage or Destruction.
9. 1 Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction to the
improvements on the Premises, other than Tenant Owned Alterations and Utility
Installations, which can reasonably be repaired in 3 months or less from the
date of the damage or destruction, and the cost thereof does not exceed a sum
equal to 6 month's Base Rent. Landlord shall notify Tenant in writing within 30
days from the date of the damage or destruction as to whether or not the damage
is Partial or Total.
(b) "Premises Total Destruction" shall mean damage or destruction to the
improvements on the Premises, other than Tenant Owned Alterations and Utility
Installations and Trade Fixtures, which cannot reasonably be repaired in 3
months or less from the date of the damage or destruction and/or the cost
thereof exceeds a sum equal to 6 month's Base Rent. Landlord shall notify Tenant
in writing within 30 days from the date of the damage or destruction as to
whether or not the damage is Partial or Total.
(c) "Insured Loss" shall mean damage or destruction to improvements on the
Premises, other than Tenant Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible amounts
or coverage limits involved.
(d) "Replacement Cost" shall mean the cost to repair or rebuild the improvements
owned by Landlord at the time of the occurrence to their condition existing
immediately prior thereto, including demolition, debris removal and upgrading
required by the operation of Applicable Requirements, and without deduction for
depreciation.
(e) "Hazardous Substance Condition" shall mean the occurrence or discovery of a
condition involving the presence of, or a contamination by, a Hazardous
Substance as defined in Paragraph 6.2(a), in, on, or under the Premises.
9.2 Partial Damage - Insured Loss. If a Premises Partial Damage that is an
Insured Loss occurs, then Landlord shall, at Landlord's expense, repair such
damage (but not Tenant's Trade Fixtures or Tenant Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Tenant shall, at Landlord's
election, make the repair of any damage or destruction the total cost to repair
of which is $5,000 or less, and, in such event, Landlord shall make any
applicable insurance proceeds available to Tenant on a reasonable basis for that
purpose. Notwithstanding the foregoing, if the required insurance was not in
force or the insurance proceeds are not sufficient to effect such repair, the
Insuring Party shall promptly contribute the shortage in proceeds as and when
required to complete said repairs. In the event, however, such shortage was due
to the fact that, by reason of the unique nature of the improvements, full
replacement cost insurance coverage was not commercially reasonable and
available, Landlord shall have no obligation to pay for the shortage in
insurance proceeds or to fully restore the unique aspects of the Premises unless
Tenant provides Landlord with the funds to cover same, or adequate assurance
thereof, within 10 days following receipt of written notice of such shortage and
request therefor. If Landlord receives said funds or adequate assurance thereof
within said 10 day period, the party responsible for making the repairs shall
complete them as soon as reasonably possible and this Lease shall remain in full
force and effect. If such funds or assurance are not received, Landlord may
nevertheless elect by written notice to Tenant within 10 days thereafter to: (i)
make such restoration and repair as is commercially reasonable with Landlord
paying any shortage in proceeds, in which case this Lease shall remain in full
force and effect, or (ii) have this Lease terminate 30 days thereafter. Tenant
shall not be entitled to reimbursement of any funds contributed by Tenant to
repair any such damage or destruction. Premises Partial Damage due to flood or
earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be
some insurance coverage, but the net proceeds of any such insurance shall be
made available for the repairs if made by either Party.

9. 3 Partial Damage - Uninsured Loss. If a Premises Partial Damage that is not
an Insured Loss occurs, unless caused by a negligent or willful act of Tenant
(in which event Tenant shall make the repairs at Tenant's expense), Landlord may
either: (i) repair such damage as soon as reasonably possible at Landlord's
expense, in which event this Lease shall continue in full force and effect, or
(ii) terminate this Lease by giving written notice to Tenant within 30 days
after receipt by Landlord of knowledge of the occurrence of such damage. Such
termination shall be effective 60 days following the date of such notice. In the
event Landlord elects to terminate this Lease, Tenant shall have the right
within 10 days after receipt of the termination notice to give written notice to
Landlord of Tenant's commitment to pay for the repair of such damage without
reimbursement from Landlord. Tenant shall provide Landlord with said funds or
satisfactory assurance thereof within 30 days after making such commitment. In
such event this Lease shall continue in full force and effect, and Landlord
shall proceed to make such repairs as soon as reasonably possible after the
required funds are available. If Tenant does not make the required commitment,
this Lease shall terminate as of the date specified in the termination notice.

9. 4 Total Destruction. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall terminate 60 days following
such Destruction. If the damage or destruction was caused by the gross
negligence or willful misconduct of Tenant, Landlord shall have the right to
recover Landlord's damages from Tenant, except as provided in Paragraph 8.6.

9. 5 Damage Near End of Term. If at any time during the last 6 months of this
Lease there is damage for which the cost to repair exceeds one month's Base
Rent, whether or not an Insured Loss, Landlord may terminate this Lease
effective 60 days following the date of occurrence of such damage by giving a
written termination notice to Tenant within 30 days after the date of occurrence
of such damage. Notwithstanding the foregoing, if Tenant at that time has an
exercisable option to extend this Lease or to purchase the Premises, then Tenant
may preserve this Lease by, (a) exercising such option and (b) providing
Landlord with any shortage in insurance proceeds (or adequate assurance thereof)
needed to make the repairs on or before the earlier of (i) the date which is 10
days after Tenant's receipt of Landlord's written notice purporting to terminate
this Lease, or (ii) the day prior to the date upon which such option expires. If
Tenant duly exercises such option during such period and provides Landlord with
funds (or adequate assurance thereof) to cover any shortage in insurance
proceeds, Landlord shall, at Landlord's commercially reasonable expense, repair
such damage as soon as reasonably possible and this Lease shall continue in full
force and effect. If Tenant fails to exercise such option and provide such funds
or assurance during such period, then this Lease shall terminate on the date
specified in the termination notice and Tenant's option shall be extinguished.

9.6 Abatement of Rent; Tenant's Remedies.
(a) Abatement. In the event of Premises Partial Damage or Premises Total
Destruction or a Hazardous Substance Condition for
which Tenant is not responsible under this Lease, the Rent payable by Tenant for
the period required for the repair, remediation or restoration of such
damage shall be abated in proportion to the degree to which Tenant's use of the
Premises is impaired, but not to exceed the proceeds received from the
Rental Value insurance. All other obligations of Tenant hereunder shall be
performed by Tenant, and Landlord shall have no liability for any such damage,
destruction, remediation, repair or restoration except as provided herein.
(b) Remedies. If Landlord shall be obligated to repair or restore the Premises
and does not commence, in a substantial and
meaningful way, such repair or restoration within 90 days after such obligation
shall accrue, Tenant may, at any time prior to the commencement of such
repair or restoration, give written notice to Landlord and to any Lenders of
which Tenant has actual notice, of Tenant's election to terminate this Lease on
a date not less than 60 days following the giving of such notice. If Tenant
gives such notice and such repair or restoration is not commenced within 30 days
thereafter, this Lease shall terminate as of the date specified in said notice.
If the repair or restoration is commenced within such 30 days, this Lease shall
continue in full force and effect. "Commence" shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs.

9. 7 Termination; Advance Payments. Upon termination of this Lease pursuant to
Paragraph 6.2(g) or Paragraph 9, an equitable
adjustment shall be made concerning advance Base Rent and any other advance
payments made by Tenant to Landlord. Landlord shall, in addition, return to
Tenant so much of Tenant's Security Deposit as has not been, or is not then
required to be, used by Landlord.

9. 8 Waive Statutes. Landlord and Tenant agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the
Premises with respect to the termination of this Lease and hereby waive the
provisions of any present or future statute to the extent inconsistent herewith.

10. Real Property Taxes.
10. 1 Definition. As used herein, the term "Real Property Taxes" shall include
any form of assessment; real estate, general, special, ordinary or major
structural defects pre-existing Tenant's occupancy, or extraordinary, or rental
levy or tax (other than inheritance, personal income or estate taxes);
improvement bond; and/or license fee imposed upon or levied against any legal or
equitable interest of Landlord in the Project, Landlord's right to other income
therefrom, and/or Landlord's business of leasing, by any authority having the
direct or indirect power to tax and where the funds are generated with reference
to the Project address and where the proceeds so generated are to be applied by
the city, county or other local taxing authority of a jurisdiction within which
the Project is located. The term "Real Property Taxes" shall also include any
tax, fee, levy, assessment or charge, or any increase therein, imposed by reason
of events occurring during the term of this Lease, including but not limited to,
a change in the ownership of the Project or any portion thereof or a change in
the improvements thereon. In calculating Real Property Taxes for any calendar
year, the Real Property Taxes for any real estate tax year shall be included in
the calculation of Real Property Taxes for such calendar year based upon the
number of days which such calendar year and tax year have in common.

10.2 Payment of Taxes. Landlord shall pay the Real Property Taxes applicable to
the Project, and except as otherwise provided in Paragraph 10.3, any such
amounts shall be included in the calculation of Common Area Operating Expenses
in accordance with the provisions of Paragraph 4.2.

10. 3 Additional Improvements. Common Area Operating Expenses shall not include
Real Property Taxes specified in the tax assessor's records and work sheets as
being caused by additional improvements placed upon the Project by other Tenants
or by Landlord for the exclusive enjoyment of such other Tenants.
Notwithstanding Paragraph 10.2 hereof, Tenant shall, however, pay to Landlord at
the time Common Area Operating Expenses are payable under Paragraph 4.2, the
entirety of any increase in Real Property Taxes if assessed solely by reason of
Alterations, Trade Fixtures or Utility Installations placed upon the Premises by
Tenant or at Tenant's request.

10. 4 Joint Assessment. If the Building is not separately assessed, Real
Property Taxes allocated to the Building shall be an equitable proportion of the
Real Property Taxes for all of the land and improvements included within the tax
parcel assessed, such proportion to be determined by Landlord from the
respective valuations assigned in the assessor's work sheets or such other
information as may be reasonably available. Landlord's reasonable determination
thereof, in good faith, shall be conclusive.

10. 5 Personal Property Taxes. Tenant shall pay prior to delinquency all taxes
assessed against and levied upon Tenant Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Tenant contained in the Premises. When possible, Tenant shall cause its
Tenant Owned Alterations and Utility Installations, Trade Fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately
from the real property of Landlord. If any of Tenant's said property shall be
assessed with Landlord's real property, Tenant shall pay Landlord the taxes
attributable to Tenant's property within 10 days after receipt of a written
statement setting forth the taxes applicable to Tenant's property.

11. Utilities. Tenant shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. Notwithstanding the provisions of
Paragraph 4.2, if at any time in Landlord's sole judgment, Landlord determines
that Tenant is using a disproportionate amount of water, electricity or other
commonly metered utilities, or that Tenant is generating such a large volume of
trash as to require an increase in the size of the dumpster and/or an increase
in the number of times per month that the dumpster is emptied, then Landlord may
increase Tenant's Base Rent by an amount equal to such increased costs.

12. Assignment and Subletting.
12. 1 Landlord's Consent Required.
(a) Tenant shall not voluntarily or by operation of law assign, transfer,
mortgage or encumber (collectively, "assign or assignment") or sublet all or any
part of Tenant's interest in this Lease or in the Premises without Landlord's
prior written consent.
(b) A change in the control of Tenant shall constitute an assignment requiring
consent. The transfer, on a cumulative basis, of 25% or more of the voting
control of Tenant shall constitute a change in control for this purpose.
(c) The involvement of Tenant or its assets in any transaction, or series of
transactions (by way of merger, sale, acquisition, financing, transfer,
leveraged buy-out or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Tenant's assets occurs, which results or will
result in a reduction of the Net Worth of Tenant by an amount greater than 25%
of such Net Worth as it was represented at the time of the execution of this
Lease or at the time of the most recent assignment to which Landlord has
consented, or as it exists immediately prior to said transaction or transactions
constituting such reduction, whichever was or is greater, shall be considered an
assignment of this Lease to which Landlord may withhold its consent. "Net Worth
of Tenant" shall mean the net worth of Tenant (excluding any guarantors)
established under generally accepted accounting principles.
(d) An assignment or subletting without consent shall, at Landlord's option, be
a Default curable after notice per Paragraph 13.1(c), or a noncurable Breach
without the necessity of any notice and grace period. If Landlord elects to
treat such unapproved assignment or subletting as a noncurable Breach, Landlord
may either: (i) terminate this Lease, or (ii) upon 30 days written notice,
increase the monthly Base Rent to 110% of the Base Rent then in effect. Further,
in the event of such Breach and rental adjustment, (i) the purchase price of any
option to purchase the Premises held by Tenant shall be subject to similar
adjustment to 110% of the price previously in effect, and (ii) all fixed and
non-fixed rental adjustments scheduled during the remainder of the Lease term
shall be increased to 110% of the scheduled adjusted rent.
(e) Tenant's remedy for any breach of Paragraph 12.1 by Landlord shall be
limited to compensatory damages and/or injunctive relief.

12. 2 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Landlord's consent, no assignment or subletting shall: (i) be
effective without the express written assumption by such assignee or subTenant
of the obligations of Tenant under this Lease, (ii) release Tenant of any
obligations hereunder, or (iii) alter the primary liability of Tenant for the
payment of Rent or for the performance of any other obligations to be performed
by Tenant.
(b) Landlord may accept Rent or performance of Tenant's obligations from any
person other than Tenant pending approval or disapproval of an assignment.
Neither a delay in the approval or disapproval of such assignment nor the
acceptance of Rent or performance shall constitute
a waiver or estoppel of Landlord's right to exercise its remedies for Tenant's
Default or Breach.
(c) Landlord's consent to any assignment or subletting shall not constitute a
consent to any subsequent assignment or subletting.
(d) In the event of any Default or Breach by Tenant, Landlord may proceed
directly against Tenant, any Guarantors or anyone else responsible for the
performance of Tenant's obligations under this Lease, including any assignee or
subTenant, without first exhausting Landlord's remedies against any other person
or entity responsible therefore to Landlord, or any security held by Landlord.
(e) Each request for consent to an assignment or subletting shall be in writing,
accompanied by information relevant to Landlord's determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or subTenant, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a fee of $1,000 or
10% of the current monthly Base Rent applicable to the portion of the Premises
which is the subject of the proposed assignment or sublease, whichever is
greater, as consideration for Landlord's considering and processing said
request. Tenant agrees to provide Landlord with such other or additional
information and/or documentation as may be reasonably requested.
(f) Any assignee of, or subTenant under, this Lease shall, by reason of
accepting such assignment or entering into such sublease, be deemed to have
assumed and agreed to conform and comply with each and every term, covenant,
condition and obligation herein to be observed or performed by Tenant during the
term of said assignment or sublease, other than such obligations as are contrary
to or inconsistent with provisions of an assignment or sublease to which
Landlord has specifically consented to in writing.
(g) Landlord's consent to any assignment or subletting shall not transfer to the
assignee or subTenant any Option granted to the original Tenant by this Lease
unless such transfer is specifically consented to by Landlord in writing. (See
Paragraph 39.2)

12. 3 Additional Terms and Conditions Applicable to Subletting. The following
terms and conditions shall apply to any subletting by Tenant of all or any part
of the Premises and shall be deemed included in all subleases under this Lease
whether or not expressly incorporated therein:
(a) Tenant hereby assigns and transfers to Landlord all of Tenant's interest in
all Rent payable on any sublease, and Landlord may collect such Rent and apply
same toward Tenant's obligations under this Lease; provided, however, that until
a Breach shall occur in the performance of Tenant's obligations, Tenant may
collect said Rent. Landlord shall not, by reason of the foregoing or any
assignment of such sublease, nor by reason of the collection of Rent, be deemed
liable to the subTenant for any failure of Tenant to perform and comply with any
of Tenant's obligations to such subTenant. Tenant hereby irrevocably authorizes
and directs any such subTenant, upon receipt of a written notice from Landlord
stating that a Breach exists in the performance of Tenant's obligations under
this Lease, to pay to Landlord all Rent due and to become due under the
sublease. SubTenant shall rely upon any such notice from Landlord and shall pay
all Rents to Landlord without any obligation or right to inquire as to whether
such Breach exists, notwithstanding any claim from Tenant to the contrary.
(b) In the event of a Breach by Tenant, Landlord may, at its option, require
subTenant to attorn to Landlord, in which event Landlord shall undertake the
obligations of the subLandlord under such sublease from the time of the exercise
of said option to the expiration of such sublease; provided, however, Landlord
shall not be liable for any prepaid rents or security deposit paid by such
subTenant to such subLandlord or for any prior Defaults or Breaches of such
subLandlord.
(c) Any matter requiring the consent of the subLandlord under a sublease shall
also require the consent of Landlord.
(d) No subTenant shall further assign or sublet all or any part of the Premises
without Landlord's prior written consent.
(e) Landlord shall deliver a copy of any notice of Default or Breach by Tenant
to the subTenant, who shall have the right to cure the Default of Tenant within
the grace period, if any, specified in such notice. The subTenant shall have a
right of reimbursement and offset from and against Tenant for any such Defaults
cured by the subTenant.

13. Default; Breach; Remedies.
13. 1 Default; Breach. A "Default" is defined as a failure by the Tenant to
comply with or perform any of the terms, covenants, conditions or Rules and
Regulations under this Lease. A "Breach" is defined as the occurrence of one or
more of the following Defaults, and the failure of Tenant to cure such Default
within any applicable grace period:
(a) The abandonment of the Premises; or the vacating of the Premises without
providing a commercially reasonable level of
security, or where the coverage of the property insurance described in Paragraph
8.3 is jeopardized as a result thereof, or without providing reasonable
assurances to minimize potential vandalism.
(b) The failure of Tenant to make any payment of Rent or any Security Deposit
required to be made by Tenant hereunder, whether to Landlord or to a third
party, when due, to provide reasonable evidence of insurance or surety bond, or
to fulfill any obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of 3 business days following
written notice to Tenant.
(c) The failure by Tenant to provide (i) reasonable written evidence of
compliance with Applicable Requirements, (ii) the service contracts, (iii) the
rescission of an unauthorized assignment or subletting, (iv) an Estoppel
Certificate, (v) a requested subordination, (vi) evidence concerning any
guaranty and/or Guarantor, (vii) any document requested under Paragraph 41
(easements), or (viii) any other documentation or information which Landlord may
reasonably require of Tenant under the terms of this Lease, where any such
failure continues for a period of 10 days following written notice to Tenant.
(d) A Default by Tenant as to the terms, covenants, conditions or provisions of
this Lease, or of the rules adopted under Paragraph 2.9 hereof, other than those
described in subparagraphs 13.1(a), (b) or (c), above, where such Default
continues for a period of 30 days after written notice; provided, however, that
if the nature of Tenant's Default is such that more than 30 days are reasonably
required for its cure, then it shall not be deemed to be a Breach if Tenant
commences such cure within said 30 day period and thereafter diligently
prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) the making of any general
arrangement or assignment for the benefit of creditors; (ii) becoming a "debtor"
as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the
case of a petition filed against Tenant, the same is dismissed within 60 days);
(iii) 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 30
days; or (iv) 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 30 days;
provided, however, in the event that any provision of this subparagraph (e) is
contrary to any applicable law, such provision shall be of no force or effect,
and not affect the validity of the remaining provisions.
(f) The discovery that any financial statement of Tenant or of any Guarantor
given to Landlord was materially false.
(g) If the performance of Tenant's obligations under this Lease is guaranteed:
(i) the death of a Guarantor, (ii) the termination of a Guarantor's liability
with respect to this Lease other than in accordance with the terms of such
guaranty, (iii) a Guarantor's becoming insolvent or the subject of a bankruptcy
filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's
breach of its guaranty obligation on an anticipatory basis, and Tenant's
failure, within 60 days following written notice of any such event, to provide
written alternative assurance or security, which, when coupled with the then
existing resources of Tenant, equals or exceeds the combined financial resources
of Tenant and the Guarantors that existed at the time of execution of this
Lease.

13.2 Remedies. If Tenant fails to perform any of its affirmative duties or
obligations, within 10 days after written notice (or in case of an emergency,
without notice), Landlord may, at its option, perform such duty or obligation on
Tenant's behalf, including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. The costs and expenses of any such performance by Landlord shall be
due and payable by Tenant upon receipt of invoice therefor. If any check given
to Landlord by Tenant shall not be honored by the bank upon which it is drawn,
Landlord, at its option, may require all future payments to be made by Tenant to
be by cashier's check. In the event of a Breach, Landlord may, with or without
further notice or demand, and without limiting Landlord in the exercise of any
right or remedy which Landlord may have by reason of such Breach:
(a) Terminate Tenant's right to possession of the Premises by any lawful means,
in which case this Lease shall terminate and Tenant shall immediately surrender
possession to Landlord. In such event Landlord shall be entitled to recover from
Tenant: (i) the unpaid Rent which had been earned at the time of termination;
(ii) the worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that the Tenant proves could have been reasonably
avoided; (iii) the worth at the time of award of the amount by which the unpaid
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that the Tenant proves could be reasonably avoided; and (iv)
any other amount necessary to compensate Landlord for all the detriment
proximately caused by the Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, including but not limited to the cost of recovering possession of the
Premises, expenses of reletting, including necessary renovation and alteration
of the Premises, reasonable attorneys' fees, and that portion of any leasing
commission paid by Landlord in connection with this Lease applicable to the
unexpired term of this Lease. The worth at the time of award of the amount
referred to in provision (iii) of the immediately preceding sentence shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of the District within which the Premises are located at the time of award
plus one percent. Efforts by Landlord to mitigate damages caused by Tenant's
Breach of this Lease shall not waive Landlord's right to recover damages under
Paragraph 12. If termination of this Lease is obtained through the provisional
remedy of unlawful detainer, Landlord shall have the right to recover in such
proceeding any unpaid Rent and damages as are recoverable therein, or Landlord
may reserve the right to recover all or any part thereof in a separate suit. If
a notice and grace period required under Paragraph 13.1 was not previously
given, a notice to pay rent or quit, or to perform or quit given to Tenant under
the unlawful detainer statute shall also constitute the notice required by
Paragraph 13.1. In such case, the applicable grace period required by Paragraph
13.1 and the unlawful detainer statute shall run concurrently, and the failure
of Tenant to cure the Default within the greater of the two such grace periods
shall constitute both an unlawful detainer and a Breach of this Lease entitling
Landlord to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Tenant's right to possession and recover the Rent as
it becomes due, in which event Tenant may sublet or assign, subject only to
reasonable limitations. Acts of maintenance, efforts to relet, and/or the
appointment of a receiver to protect the Landlord's interests, shall not
constitute a termination of the Tenant's right to possession.
(c) Pursue any other remedy now or hereafter available under the laws or
judicial decisions of the state wherein the Premises are located. The expiration
or termination of this Lease and/or the termination of Tenant's right to
possession shall not relieve Tenant from liability under any indemnity
provisions of this Lease as to matters occurring or accruing during the term
hereof or by reason of Tenant's occupancy of the Premises.

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

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

13.5 Interest. Any monetary payment due Landlord hereunder, other than late
charges, not received by Landlord, when due as to scheduled payments (such as
Base Rent) or within 30 days following the date on which it was due for
non-scheduled payment, shall bear interest from the date when due, as to
scheduled payments, or the 31st day after it was due as to non-scheduled
payments. The interest ("Interest") charged shall be equal to the prime rate
reported in the Wall Street Journal as published closest prior to the date when
due plus 4%, but shall not exceed the maximum rate allowed by law. Interest is
payable in addition to the potential late charge provided for in Paragraph 13.4.

13.6 Breach by Landlord.
(a) Notice of Breach. Landlord shall not be deemed in breach of this Lease
unless Landlord fails within a reasonable time to perform an obligation required
to be performed by Landlord. For purposes of this Paragraph, a reasonable time
shall in no event be less than 30 days after receipt by Landlord, and any Lender
whose name and address shall have been furnished Tenant in writing for such
purpose, of written notice specifying wherein such obligation of Landlord has
not been performed; provided, however, that if the nature of Landlord's
obligation is such that more than 30 days are reasonably required for its
performance, then Landlord shall not be in breach if performance is commenced
within such 30 day period and thereafter diligently pursued to completion.
(b) Performance by Tenant on Behalf of Landlord. In the event that neither
Landlord nor Lender cures said breach within 30 days after receipt of said
notice, or if having commenced said cure they do not diligently pursue it to
completion, then Tenant may elect to cure said breach at Tenant's expense and
offset from Rent an amount equal to the greater of one month's Base Rent or the
Security Deposit, and to pay an excess of such expense under protest, reserving
Tenant's right to reimbursement from Landlord. Tenant shall document the cost of
said cure and supply said documentation to Landlord.

14. Condemnation. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(collectively "Condemnation"), this Lease shall terminate as to the part taken
as of the date the condemning authority takes title or possession, whichever
first occurs. If more than 10% of the floor area of the Unit, or more than 25%
of Tenant's Reserved Parking Spaces, is taken by Condemnation, Tenant may, at
Tenant's option, to be exercised in writing within 10 days after Landlord shall
have given Tenant written notice of such taking (or in the absence of such
notice, within 10 days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning authority takes
such possession. If Tenant does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in proportion
to the reduction in utility of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of Landlord, whether
such award shall be made as compensation for diminution in value of the
leasehold, the value of the part taken, or for severance damages; provided,
however, that Tenant shall be entitled to any compensation for Tenant's
relocation expenses, loss of business goodwill and/or Trade Fixtures, without
regard to whether or not this Lease is terminated pursuant to the provisions of
this Paragraph. All Alterations and Utility Installations made to the Premises
by Tenant, for purposes of Condemnation only, shall be considered the property
of the Tenant and Tenant shall be entitled to any and all compensation which is
payable therefor. In the event that this Lease is not terminated by reason of
the Condemnation, Landlord shall repair any damage to the Premises caused by
such Condemnation.

15. Brokerage Fees.
15.1 Additional Commission. In addition to the payments owed pursuant to
Paragraph 1.10 above, and unless Landlord and the Brokers otherwise agree in
writing, Landlord agrees that: (a) if Tenant exercises any Option, (b) if Tenant
acquires from Landlord any rights to the Premises or other premises owned by
Landlord and located within the Project, (c) if Tenant remains in possession of
the Premises, with the consent of Landlord, after the expiration of this Lease,
or (d) if Base Rent is increased, whether by agreement or operation of an
escalation clause herein, then, Landlord shall pay Brokers a fee in accordance
with the schedule of the Brokers in effect at the time of the execution of this
Lease.

15.2 Assumption of Obligations. Any buyer or transferee of Landlord's interest
in this Lease shall be deemed to have assumed Landlord's obligation hereunder.
Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.10,
15, 22 and 31. If Landlord fails to pay to Brokers any amounts due as and for
brokerage fees pertaining to this Lease when due, then such amounts shall accrue
Interest. In addition, if Landlord fails to pay any amounts to Tenant's Broker
when due, Tenant's Broker may send written notice to Landlord and Tenant of such
failure and if Landlord fails to pay such amounts within 10 days after said
notice, Tenant shall pay said monies to its Broker and offset such amounts
against Rent. In addition, Tenant's Broker shall be deemed to be a third party
beneficiary of any commission agreement entered into by and/or between Landlord
and Landlord's Broker for the limited purpose of collecting any brokerage fee
owed.

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

16. Estoppel Certificates.
(a) Each Party (as "Responding Party") shall within 10 days after written notice
from the other Party (the "Requesting Party") execute, acknowledge and deliver
to the Requesting Party a statement in writing in form similar to the then most
current "Estoppel Certificate" form published by the American Industrial Real
Estate Association, plus such additional information, confirmation and/or
statements as may be reasonably requested by the Requesting Party.
(b) If the Responding Party shall fail to execute or deliver the Estoppel
Certificate within such 10 day period, the Requesting Party may execute an
Estoppel Certificate stating that: (i) the Lease is in full force and effect
without modification except as may be represented by the Requesting Party, (ii)
there are no uncured defaults in the Requesting Party's performance, and (iii)
if Landlord is the Requesting Party, not more than one month's rent has been
paid in advance. Prospective purchasers and encumbrances may rely upon the
Requesting Party's Estoppel Certificate, and the Responding Party shall be
estopped from denying the truth of the facts contained in said Certificate.
(c) If Landlord desires to finance, refinance, or sell the Premises, or any part
thereof, Tenant and all Guarantors shall deliver to any potential lender or
purchaser designated by Landlord such financial statements as may be reasonably
required by such lender or purchaser, including but not limited to Tenant's
financial statements for the past 3 years. All such financial statements shall
be received by Landlord and such lender or purchaser in confidence and shall be
used only for the purposes herein set forth.

17. 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 Tenants 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 Industrial 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.

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

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

20. Limitation on Landlord Liability. Notwithstanding anything in this Lease to
the contrary, and in consideration of the benefits accruing hereunder to Tenant,
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, claim,
damage, cause of action or obligation 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 a partnership or limited liability company, no partner,
investor, trustee, director, officer, employee, agent, shareholder, advisor,
manager, or member of Landlord (collectively referred to as “Landlord Party”)
shall be sued or named as a party in any suit or action and no service of
process shall be made against any Landlord Party; (c) no Landlord Party shall be
required to answer or otherwise plead to any service of process; (d) no judgment
will be taken against any Landlord Party and any judgment taken against any
Landlord Party  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 Landlord Party; (f)
the obligations under this Lease do not constitute personal obligations of the
individual Landlord Party, and Tenant shall not seek recourse against the
individual Landlord Party 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  Landlord Party.

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

22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
or contemporaneous agreement or understanding pertaining to any such matter
shall be effective.  This Lease may be modified in writing only signed by the
parties in interest at the time of the modification.  Except as otherwise stated
in this Lease, Tenant hereby acknowledges that neither the real estate broker
listed in Paragraph 1.10 hereof nor any cooperating broker on this transaction
nor the Landlord or any employee or agents of any of said person has made any
oral or written warranties or representations to Tenant relative to the
condition or use by Tenant of the Premises or the Industrial Project and Tenant
acknowledges that Tenant assumes all responsibility regarding the Occupational
Safety Health Act, the legal use and adaptability of the Premises and the
compliance thereof with all applicable laws and regulations in effect during the
term of this Lease.

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

23.2 Date of Notice. Any notice sent by registered or certified mail, return
receipt requested, shall be deemed given on the date of delivery shown on the
receipt card, or if no delivery date is shown, the postmark thereon. If sent by
regular mail the notice shall be deemed given 48 hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantee next day
delivery shall be deemed given 24 hours after delivery of the same to the Postal
Service or courier. Notices transmitted by facsimile transmission or similar
means shall be deemed delivered upon telephone confirmation of receipt
(confirmation report from fax machine is sufficient), provided a copy is also
delivered via delivery or mail. If notice is received on a Saturday, Sunday or
legal holiday, it shall be deemed received on the next business day.

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

25. Disclosures Regarding The Nature of a Real Estate Agency Relationship.
(a) When entering into a discussion with a real estate agent regarding a real
estate transaction, a Landlord or Tenant should from the outset understand what
type of agency relationship or representation it has with the agent or agents in
the transaction. Landlord and Tenant acknowledge being advised by the Brokers in
this transaction, as follows:
(i) Landlord's Agent. A Landlord's agent under a listing agreement with the
Landlord acts as the agent for the Landlord only. A Landlord's agent or subagent
has the following affirmative obligations: To the Landlord: A fiduciary duty of
utmost care, integrity, honesty, and loyalty in dealings with the Landlord. To
the Tenant and the Landlord: (a) Diligent exercise of reasonable skills and care
in performance of the agent's duties. (b) A duty of honest and fair dealing and
good faith. (c) A duty to disclose all facts known to the agent materially
affecting the value or desirability of the property that are not known to, or
within the diligent attention and observation of, the Parties. An agent is not
obligated to reveal to either Party any confidential information obtained from
the other Party which does not involve the affirmative duties set forth above.
(ii) Tenant's Agent. An agent can agree to act as agent for the Tenant only. In
these situations, the agent is not the Landlord's agent, even if by agreement
the agent may receive compensation for services rendered, either in full or in
part from the Landlord. An agent acting only for a Tenant has the following
affirmative obligations. To the Tenant: A fiduciary duty of utmost care,
integrity, honesty, and loyalty in dealings with the Tenant. To the Tenant and
the Landlord: (a) Diligent exercise of reasonable skills and care in performance
of the agent's duties. (b) A duty of honest and fair dealing and good faith. (c)
A duty to disclose all facts known to the agent materially affecting the value
or desirability of the property that are not known to, or within the diligent
attention and observation of, the Parties. An agent is not obligated to reveal
to either Party any confidential information obtained from the other Party which
does not involve the affirmative duties set forth above.
(iii) Agent Representing Both Landlord and Tenant. A real estate agent, either
acting directly or through one or more associate licenses, can legally be the
agent of both the Landlord and the Tenant in a transaction, but only with the
knowledge and consent of both the Landlord and the Tenant. In a dual agency
situation, the agent has the following affirmative obligations to both the
Landlord and the Tenant: (a) A fiduciary duty of utmost care, integrity, honesty
and loyalty in the dealings with either Landlord or the Tenant. (b) Other duties
to the Landlord and the Tenant as stated above in subparagraphs (i) or (ii). In
representing both Landlord and Tenant, the agent may not without the express
permission of the respective Party, disclose to the other Party that the
Landlord will accept rent in an amount less than that indicated in the listing
or that the Tenant is willing to pay a higher rent than that offered. The above
duties of the agent in a real estate transaction do not relieve a Landlord or
Tenant from the responsibility to protect their own interests. Landlord and
Tenant should carefully read all agreements to assure that they adequately
express their understanding of the transaction. A real estate agent is a person
qualified to advise about real estate. If legal or tax advice is desired,
consult a competent professional.
(b) Brokers have no responsibility with respect to any default or breach hereof
by either Party. The liability (including court costs and attorneys' fees), of
any Broker with respect to any breach of duty, error or omission relating to
this Lease shall not exceed the fee received by such Broker pursuant to this
Lease; provided, however, that the foregoing limitation on each Broker's
liability shall not be applicable to any gross negligence or willful misconduct
of such Broker.
(c) Buyer and Seller agree to identify to Brokers as "Confidential" any
communication or information given Brokers that is considered by such Party to
be confidential.

26. No Right To Holdover. Tenant has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Tenant holds over, then the Base Rent shall be increased to
150% of the Base Rent applicable immediately preceding the expiration or
termination. Nothing contained herein shall be construed as consent by Landlord
to any holding over by Tenant.

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

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

29. Binding Effect; Choice of Law. This Lease shall be binding upon the parties,
their personal representatives, successors and assigns and be governed by the
laws of the State in which the Premises are located. Any litigation between the
Parties hereto concerning this Lease shall be initiated in the county in which
the Premises are located.

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

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

30.3 Non-Disturbance. With respect to Security Devices entered into by Landlord
after the execution of this Lease, Tenant's subordination of this Lease shall be
subject to receiving a commercially reasonable non-disturbance agreement (a
"Non-Disturbance Agreement") from the Lender which Non-Disturbance Agreement
provides that Tenant's possession of the Premises, and this Lease, including any
options to extend the term hereof, will not be disturbed so long as Tenant is
not in Breach hereof and attorns to the record owner of the Premises. Further,
within 60 days after the execution of this Lease, Landlord shall use its
commercially reasonable efforts to obtain a Non-Disturbance Agreement from the
holder of any pre-existing Security Device which is secured by the Premises. In
the event that Landlord is unable to provide the Non-Disturbance Agreement
within said 60 days, then Tenant may, at Tenant's option, directly contact
Lender and attempt to negotiate for the execution and delivery of a
Non-Disturbance Agreement.

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

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

32. Landlord's Access; Showing Premises; Repairs. Landlord and Landlord's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of showing the same
to prospective purchasers, lenders, or tenants, and making such alterations,
repairs, improvements or additions to the Premises as Landlord may deem
necessary. All such activities shall be without abatement of rent or liability
to Tenant. Landlord may at any time place on the Premises any ordinary "For
Sale" signs and Landlord may during the last 6 months of the term hereof place
on the Premises any ordinary "For Lease" signs. Tenant may at any time place on
the Premises any ordinary "For Sublease" sign.

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

34. Signs. Except for ordinary "For Sublease" signs which may be placed only on
the Premises, Tenant shall not place any sign upon the Project without
Landlord's prior written consent. All signs must comply with all provisions as
contained in Exhibit “B” attached hereto and made a part hereof by this
reference.

35. Termination; Merger. Unless specifically stated otherwise in writing by
Landlord, the voluntary or other surrender of this Lease by Tenant, the mutual
termination or cancellation hereof, or a termination hereof by Landlord for
Breach by Tenant, shall automatically terminate any sublease or lesser estate in
the Premises; provided, however, that Landlord may elect to continue any one or
all existing subtenancies. Landlord's failure within 10 days following any such
event to elect to the contrary by written notice to the holder of any such
lesser interest, shall constitute Landlord's election to have such event
constitute the termination of such interest.

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

37. Guarantor.
37.1 Execution. The Guarantors, if any, shall each execute a guaranty in the
form most recently published by the American Industrial Real Estate Association,
and each such Guarantor shall have the same obligations as Tenant under this
Lease.

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

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

39. Options. If Tenant is granted an option, as defined below, then the
following provisions shall apply.
39. 1 Definition. "Option" shall mean: (a) the right to extend the term of or
renew this Lease or to extend or renew any lease that Tenant has on other
property of Landlord; (b) the right of first refusal or first offer to lease
either the Premises or other property of Landlord; (c) the right to purchase or
the right of first refusal to purchase the Premises or other property of
Landlord.
39. 2 Options Personal To Original Tenant. Any Option granted to Tenant in this
Lease is personal to the original Tenant, and cannot be assigned or exercised by
anyone other than said original Tenant and only while the original Tenant is in
full possession of the Premises and, if requested by Landlord, with Tenant
certifying that Tenant has no intention of thereafter assigning or subletting.
39.3 Multiple Options. In the event that Tenant has any multiple Options to
extend or renew this Lease, a later Option cannot be exercised unless the prior
Options have been validly exercised.
39. 4 Effect of Default on Options.
(a) Tenant shall have no right to exercise an Option: (i) during the period
commencing with the giving of any notice of Default and continuing until said
Default is cured, (ii) during the period of time any Rent is unpaid (without
regard to whether notice thereof is given Tenant), (iii) during the time Tenant
is in Breach of this Lease, or (iv) in the event that Tenant has been given 3 or
more notices of separate Default, whether or not the Defaults are cured, during
the 12 month period immediately preceding the exercise of the Option.
(b) The period of time within which an Option may be exercised shall not be
extended or enlarged by reason of Tenant's inability to
exercise an Option because of the provisions of Paragraph 39.4(a).
(c) An Option shall terminate and be of no further force or effect,
notwithstanding Tenant's due and timely exercise of the Option, if, after such
exercise and prior to the commencement of the extended term, (i) Tenant fails to
pay Rent for a period of 30 days after such Rent becomes due (without any
necessity of Landlord to give notice thereof), (ii) Landlord gives to Tenant 3
or more notices of separate Default during any 12 month period, whether or not
the Defaults are cured, or (iii) if Tenant commits a Breach of this Lease.

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

41. Reservations. Landlord reserves the right: (i) to grant, without the consent
or joinder of Tenant, such easements, rights and dedications that Landlord deems
necessary, (ii) to cause the recordation of parcel maps and restrictions, and
(iii) to create and/or install new utility raceways, so long as such easements,
rights, dedications, maps, restrictions, and utility raceways do not
unreasonably interfere with the use of the Premises by Tenant. Tenant agrees to
sign any documents reasonably requested by Landlord to effectuate such rights.

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

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

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

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

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

47. Multiple Parties. If more than one person or entity is named herein as
either Landlord or Tenant, such multiple Parties shall have joint and several
responsibility to comply with the terms of this Lease.

48. Waiver of Jury Trial. The Parties hereby waive their respective rights to
trial by jury in any action or proceeding involving the Property or arising out
of this Agreement.

49. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation
and/or the Arbitration of all disputes between the Parties and/or Brokers
arising out of this Lease is is not attached to this Lease.

50. No Oral Agreement.  This Lease covers in full each and every agreement of
every kind or nature whatsoever between the parties and their respective agents
and representatives hereto concerning this lease, and all preliminary
negotiations and agreements of whatsoever kind or nature are merged herein, and
there are no oral agreements or implied covenants.  Landlord specifically does
not warrant that any other occupancy, present or future, in the Industrial
Project of which the Premises are a part, shall remain an occupant during the
term of this lease.

51.   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, Tenant’s partners, managers, members, officers,
directors, employees, agents and attorneys agree they 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 Industrial 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.

52.       Americans with Disabilities Act.  Landlord agrees to be responsible
for and shall pay all remedial costs associated with, and shall use commercially
reasonable diligence in complying with, the Americans with Disabilities act
("ADA"), as it relates to the Common Areas of the Building only, based solely on
requirements existing and imposed on Landlord as of the Commencement Date.  Any
changes, modifications, rehabilitation or repair to the Common Area required by
any amendment to ADA or any regulations thereunder which are enacted or become
effective after the Commencement Date, shall be Landlord's responsibility, but
the cost thereof shall be an Operating Expense for purposes of this
Lease.  Notwithstanding anything contained herein to the contrary,  Landlord
shall have no duty, obligation or responsibility, nor shall Landlord be
obligated to expend any moneys over and above the work specified in the Work
Letter to make the Premises comply with any requirements of ADA or any other
similar laws, including life-fire safety codes, physical handicap codes and/or
earthquake safety codes.

53. Legal Advice; Neutral Interpretation; Headings. Each party has received
independent legal advice from their attorneys with respect to the advisability
of executing this Lease and the meaning of the provisions hereof. The provisions
of this Lease shall be construed as to their fair meaning, and not for or
against any party based upon any attribution to such party as the source of the
language in question. Headings used in this Lease are for convenience of
reference only and shall not be used in construing this
Lease.

54. Joint Drafting:  This Lease shall not be construed in favor of or against
either party, but shall be construed as if both parties prepared this
Lease.  Landlord and Tenant acknowledge that they have been represented, or have
had the opportunity to be represented, by counsel of their own choice.  Neither
Landlord and Tenant is relying upon any legal advice from the other party's
counsel regarding the subject matter hereof.  Both parties acknowledge that they
understand the terms and conditions of this Lease and the terms and conditions
of all other documents and agreements executed in connection herewith and that
they sign the same freely.  Neither Landlord nor Tenant shall deny the
enforceability of any provision of this Lease or any of the other documents or
agreements executed in connection herewith on the  basis that it did not have
legal counsel or that it did not understand any such term or condition.  This
Lease and any ambiguities or uncertainties contained in this Lease shall be
equally and fairly interpreted for the benefit of and against all parties to
this Lease and shall further be construed and interpreted without reference to
the identity of the party or parties preparing this document, it being expressly
understood and agreed that the parties hereto participated equally in the
negotiation and preparation of this Lease or have had equal opportunity to do
so.  Accordingly, the parties hereby waive the legal effect of of any successor
and/or amended statute which in part states that in cases of uncertainty, the
language of the contract should be interpreted most strongly against the party
who caused the uncertainty to exist.  The captions used herein are for
convenience only and are not a part of this Lease and do not in any way limit or
amplify the terms and provisions hereof.

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

Dated:  ___________
 
LANDLORD:
 
FKC HIGHLAND, LLC,
a Delaware limited liability company
 
By:  FKC LLC,
a  California limited liability company,
its sole member
 
By:  Kraemer VI, Inc.,
a California corporation,
its manager
 
________________
Brett S. Albrecht
Managing Director
Dated:  ___________
 
TENANT:
 
FORTUNET, INC.
a Nevada corporation
 
By:_______________________
Print  Name
Its                                                       
 
By:_______________________
Print  Name
Its                                                       

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

  LEASE ADDENDUM
 
Parties: This Lease Addendum ("Lease Addendum"), which references that certain
Lease dated August 11th, 2008 , is made by and between  FKC HIGHLAND LLC, a
Delaware limited liability company  (“Landlord”)  and Fortunet, Inc., a Nevada
corporation (“Tenant"), (collectively the "Parties", or individually a "Party").
 
55. CONDITION OF PREMISES
The Premises shall be delivered to Tenant in its current “As-Is, “Where-is”,
with all Faults Accepted” condition.

56.       EARLY OCCUPANCY
Upon receipt of Tenant’s insurance as outlined per the Lease dated August 11,
2008, Landlord shall grant Tenant occupancy of the Premises free ofall monthly
rental and CAM charges for the period of September 1, 2008 through September 30,
2008 prior to the Commencement Date of theLease.  Tenant’s obligation to pay for
all separately metered utilities shall commence upon delivery of possession.

58.       REASONABLE DOCUMENTATION
Landlord shall provide reasonable documentation supporting any Operating Expense
pass-through calculation and/or year-end reconciliation throughout the term of
the Lease.
 

Dated:  ___________
 
LANDLORD:
 
FKC HIGHLAND, LLC,
a Delaware limited liability company
 
By:  FKC LLC,
a  California limited liability company,
its sole member
 
By:  Kraemer VI, Inc.,
a California corporation,
its manager
 
__________________________________
__________________________________
 
Dated:  ___________
 
TENANT:
 
FORTUNET, INC.
A Nevada corporation
 
By:_______________________
Print  Name
Its                                                      
 
By:_______________________
Print  Name
Its                                                      

 

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EXHIBIT A

PREMESIS

HIGHLAND INDUSTRIAL CENTER
 
[exh_1019.gif]

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 EXHIBIT B
SIGNAGE PROGRAM

TENANT SIGN CRITERIA

INTRODUCTION

The signage criteria contained in this Exhibit “B” (“Tenant Sign Criteria”)
provides design standards and specifications that assure consistency in quality,
color, size, placement, typestyle and configuration for Tenant signs throughout
the Industrial Building Project.  Tenant signs shall be carefully designed,
fabricated and installed to equal or exceed the standards normally associated
with commercial signage.  Landlord reserves the sole right to modify, change, or
eliminate all or part of the Tenant Sign Criteria at any time by written notice
to Tenant.

SUBMITTALS AND APPROVALS

1.  
Prior to sign fabrication and submittal for permit, Tenant shall submit for
Landlord’s approval three (3) complete sets of working drawings.  Such
submissions shall include:

a)  
Elevation of building and/or storefront showing design, location, size and
layout of sign, drawn to scale, indicating dimensions, attachment devices and
construction detail

b)  
Colored elevations showing colors and materials including building fascia,
letters faces, returns, and other details of construction as requested by
Landlord.  This section may be omitted if Tenant conforms with the supplemental
signage criteria, if any, provided by Landlord during the Term of the
Lease.  Section through letter and/or sign panel showing the dimensioned
projection of the face of the letter and/or sign panel and the illumination.

2.  
All Tenant sign submittals shall be reviewed by Landlord and/or its agent for
conformance with the provisions of these signage criteria.

3.  
If required during the permit process, Tenant shall also submit sign drawings
for approval to the appropriate association review committee and provide to the
City and Landlord a copy of the letter of approval.

4.  
Within ten (10) business days after receipt of Tenant’s working drawings,
Landlord shall either approve the submittal contingent upon any required
modifications or disapprove Tenant’s sign submittal, which approval or
disapproval shall remain the sole right and discretion of Landlord.  Tenant must
continue to resubmit rejected plans until approval is obtained.  A full set of
final plans must be approved and stamped by Landlord prior to permit application
and sign fabrication.

5.  
Following Landlord’s approval of proposed signage, Tenant or Tenant’s agent
shall submit to the appropriate governmental agency all sign plans signed by
Landlord and applications for all permits for fabrication and installation by
sign contractor.  Tenant shall furnish Landlord with a copy of said permits
prior to installation of Tenant’s sign(s).

6.  
Fabrication and installation of all signs shall be performed in accordance with
the standards and specifications outlined in these criteria, the final approved
plans and working drawings, and all applicable codes and regulations.

7.  
Tenant shall install the approved signage within 30 days after receipt of
permit.    If signage is not in place by that date, Landlord may order
fabrication and installation on Tenant’s behalf.  Tenant shall reimburse
Landlord for these costs.

 
TENANT’S RESPONSIBILITIES

Tenant shall be responsible for all expenses relating to signage for the
Premises including, but not limited to:
 
1.  
100% of costs for permit processing and application fees

2.  
100% of costs for sign fabrication and installation

3.  
All costs relating to signage removal, including repair of any damage to the
building

NON-CONFORMING SIGNS

Landlord may, at its sole discretion and at Tenant’s expense, correct, replace
or remove any sign that is installed without written approval and/or that is
deemed not to be in conformance with the plans as submitted and approved by
Landlord.
 
PROHIBITED SIGNS

Only those sign types provided for herein and specifically approved in writing
by the Landlord will be allowed.  The following signs are prohibited:

1.  
Temporary wall signs, pennants, flags, banners, inflatable displays or sandwich
boards.  (Except if approved in advance and in writing by the Landlord).

2.  
Window signs except where specifically approved by Landlord under the Lease.

3.  
Exposed junction boxes, transformers, lamps, tubing, conduits, raceways or neon
crossovers of any type.

4.  
Signs using “Trim Cap” retainers that do not match the color of letter and logo
returns.

5.  
Pre-manufactured signs, such as franchise signs, that have not been modified to
meet these criteria.

6.  
Paper, cardboard or styrofoam signs, stickers, or decals hung around, on or
behind Premises.

7.  
Simulated materials (i.e., wood grained plastic laminates, etc.) or wall
covering.

8.  
Animated lights or other “moving” sign components, except where specifically
provided by the approved sign plan.

9.  
Internally illuminated awning backgrounds.

10.  
Roof top signs, signs projecting above roof lines or parapets, signs on mansard
roofs or equipment screens.

11.  
Advertising or promotional signs affixed to parked vehicles and/or put on the
sidewalks or in the landscaped areas.

 

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EXHIBIT C
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 Tenants Parties 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 written 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 to 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 deposited 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, violate 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.

14. Except for the ordinary hanging of pictures and wall decorations, Tenant
will not mark, drive nails partitions, woodwork or plaster or in any way deface
the Premises or any part thereof, except as expressly permitted by this Lease.
Landlord reserves the right to direct electricians as to where and how telephone
and telegraph wires are to be installed into 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 in writing by Landlord. Tenant
shall, at Tenant’s sole cost and expense,  repair any damage resulting from
noncompliance with this or any other rule set forth herein.

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 for such purpose. 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 objectional 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 rules and
regulations.

22. Tenant's requirements will be attended to only upon appropriate written
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 Rules and
Regulations as, in its judgment, may from time to time be needed or
advantageous,  for safety and security, for care, and cleanliness,
attractiveness or benefit 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 rules and regulations which are adopted by
Landlord. Tenant is responsible for the observance of all of the foregoing rules
by Tenant's employees, agents, clients, customers, invitees and guests.

B. Parking Rules and Requlations. 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 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 audible 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 by Landlord for such purpose is prohibited.

8. Landlord may refuse to permit any person to park in the parking facilities
who violates these rules, and any violation of these rules shall subject the
vioiator'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 rules and regulations for the parking facilities as it deems
reasonably necessary or advantageous to the operation of the parking facilities.

RULES AND REGULATIONS FOR ALTERATIONS

ALTERATIONS. After installation of the initial Tenant Improvements for the
Premises as described on Exhibit "A-1" to the Lease, Tenant shall not make any
alterations, additions, improvements or decorations to the Premises
(collectively, "Alterations") without Landlord's prior written consent, which
consent Landlord may withhold in its reasonable but subjective discretion. All
permitted Alterations shall be subject to the following terms and conditions:

(a) Prohibited Alterations. Tenant may not make any Alterations which: (i)
affect any area outside the Premises; (ii) affect the Building's structure,
equipment, services or systems, or the proper functioning thereof, or Landlord's
access thereto; (iii) affect the outside appearance, character or use of the
Building or any Common Areas; (iv) in the reasonable opinion of Landlord, lessen
the value of the Building; or, (v) will violate, require a change or incur an
added cost in connection with any occupancy certificate, or insurance polity
applicable to the Premises.

(b) Landlord's Approval. In requesting Landlord's approval of any Alterations,
Tenant must deliver to Landlord written notice requesting Landlord's approval
and a copy of any plans, specifications and working drawings for any such
Alterations at least ten (10) days prior to commencement of the work thereof.
Landlord's approval of plans, specifications and/or working drawings for
Alterations will not create any responsibility or liability on the part of
Landlord for their completeness, design sufficiency, or compliance with
applicable permits, laws, rules and regulations of governmental agencies or
authorities. In approving any Alterations, Landlord reserves the right to
require Tenant to increase its security deposit to provide Landlord with
additional reasonable security for the removal of such Alterations by Tenant as
may be required by the Lease.

(c) Contractors. Alterations may be made or installed only by contractors and
subcontractors which have been approved in writing by Landlord, which approval
Landlord will not unreasonably withhold or delay; provided, however, Landlord
reserves the right to require that a contractor designated by Landlord as a
preferred contractor for the Building be given the first opportunity to bid for
any Alteration work. Before proceeding with any Alterations, Tenant agrees to
provide Landlord with ten (10) days prior written notice and Tenant's
contractors must obtain and maintain, on behalf of Tenant and at Tenant's sole
cost and expense: (i) all necessary governmental permits and approvals for the
commencement and completion of such Alterations; and (ii) if requested by
Landlord, a completion and lien indemnity bond, or other surety, reasonably
satisfactory to Landlord for such Alterations. Throughout the performance of any
Alterations, Tenant agrees to obtain, or cause its contractors to obtain,
workers compensation insurance and general liability insurance in compliance
with the provisions of Paragraph 19 of the Lease.

(d) Manner of Performance. All Alterations must be performed: (i) in accordance
with the approved plans, specifications and working drawings; (ii) in a
lien-free and first-class and workmanlike manner; (iii) in compliance with all
applicable permits, laws, statutes, ordinances, rules, regulations, orders and
rulings now or hereafter in effect and imposed by any governmental agencies and
authorities which assert jurisdiction; (iv) in such a manner so as not to
interfere with the occupancy of any other tenant in the Building, nor impose any
additional expense upon nor delay Landlord in the maintenance and operation of
the Building; and (v) at such times, in such manner, and subject to such rules
and regulations as Landlord may from time to time reasonably designate.

(e) Ownership. At Landlord's election, 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 the Lease, or, Landlord may, by written notice delivered to
Tenant, identify those Alterations which Landlord will require Tenant to remove
at the end of the Term of the Lease. Landlord may also require Tenant to remove
Alterations which Landlord did not have the opportunity to approve. If Landlord
requires Tenant to remove any Alterations, Tenant, at its sole cost and expense,
agrees to remove the identified Alterations on or before the expiration or
earlier termination of the Lease and repair any damage to the Premises caused by
such removal; or, at Landlord's option, Tenant agrees to pay to Landlord all of
Landlord's costs of such removal and repair.

(f) Personal Property. All articles of personal property owned by Tenant or
installed by Tenant at its expense in the Premises (including Tenant's business
and trade fixtures, furniture, movable partitions and equipment [such as
telephones, copy machines, computer terminals, refrigerators and facsimile
machines]) will be and remain the property of Tenant, and must be removed by
Tenant from the Premises, at Tenant's sole cost and expense, on or before the
expiration or earlier termination of the Lease. Tenant agrees to repair any
damage caused by such removal at its cost on or before the expiration or earlier
termination of the Lease.

(g) Removal of Alterations. If Tenant fails to remove by the expiration or
earlier termination of the 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-overpursuant to Paragraph 11(b) of the Lease,
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 the
Lease, at law or in equity: (a) remove and store such items; andlor (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 connection with the removal, storage and/or sale of such
items), with any remainder to be paid to Tenant.
 

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EXHIBIT D
TENANT'S INSURANCE REQUIREMENTS

This Exhibit “D” defines the insurance requirements of your Lease in addition to
all requirements included in Paragraph 8 of the Lease.

To assure compliance with these terms, we suggest you send a copy of this
Exhibit “D” to your insurer or agent.   Initial Certificates must be provided to
Landlord prior to occupancy of the Premises, renewals thirty (30) days before
expiration.

1.           Tenant’s Comprehensive or Commercial General Liability Insurance:

·  
$1,000,000 Combined Single Limit, each occurrence

·  
$2,000,000 Aggregate (minimum) this location

·  
$2,000,000 Products/Completed Operations Aggregate

·  
 Broad Form General Liability Endorsement coverages

·  
Full comprehensive liability coverage of operations at leased premises.

2.           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 100% of all
values;

·  
Vandalism and malicious mischief coverage to be included; and

·  
Sprinkler leakage and earthquake sprinkler leakage endorsements to be included.

·  
One-year business interruption due to insured peril.

 
3.
Tenant's Workers' Compensation Insurance:

·  
Statutory Limits and terms required by the State of Nevada, $1,000,000 Workers’
Compensation Limit

4.           Tenant's Automobile Insurance (if applicable):

·  
$1,000,000 Combined Limit per accident; covering all owned, non-owned, hired
autos

 
5.
All insurance is to be with licensed insurers having a Best's rating of "B+" or
better, and must include the following:

·  
Waiver of Subrogation in favor of Landlord;

·  
Thirty (30) day pre-notice of cancellation renewal to Landlord;

·  
Policy number and expiration date;

·  
Bodily Injury, Property Damage, Personal Injury and Advertising Injury;

·  
Blanket Contractual Liability - Covering Indemnity Paragraph 8.5;

·  
Products and Completed Operations Liability;

·  
Severability of Interest, permitting cross liability among insureds;

·  
Provision stating that Tenant's insurance is primary and non-contributory with
any insurance carried by Landlord; and

·  
The Certificate Holders and Additional Insured(s) shall be:

                                 “Landlord”    (as defined in Paragraph 1.1 of
the Lease) – Owner
                                                FKC LLC, a California limited
liability company.
 
·  
SEND ALL CERTIFICATES TO:

FKC HIGHLAND LLC
1050 E. Flamingo Rd., Suite S-100
Las Vegas, NV  89149
Tel.: 702-798-1700
 
 
6.
Without limiting the generality of the foregoing, Tenant shall obtain, pay and
keep in full force for the full term hereof, the following insurance issued by a
company or companies licensed to do business in Nevada and satisfactory to
Landlord:

 
(a)
Worker’s Compensation Insurance covering all employees with coverage of not less
than One Million Dollars ($1,000,000.00).

 
 
(b) 
 Commercial General Liability Insurance with a limit of  liability of not less
than One Million Dollars ($1,000,000.00) coverage for each occurrence, Two
Million Dollars ($2,000,000.00) coverage for products-completed operation
aggregate (CG2010) (11/85 ED.), and Two Million Dollars ($2,000,000.00) coverage
for general aggregate.  Such insurance shall be written on an “occurrence”
basis. If such Commercial General Liability Insurance contains a general
aggregate limit, it shall apply separately to the Premises.  Insurance shall be
written on ISO occurrence form CG 00 01 (or a substitute form providing
equivalent coverage) and shall cover liability arising from premises,
operations, independent contractors, products-completed operations, personal
injury and liability assumed under an insured contract.  Landlord and its
management company shall all be included as Additional Insureds under the
Commercial General Liability Insurance using the ISO additional insured
endorsement CG 20 10 (11/85 ED.) or a substitute providing equivalent coverage.
Tenant shall provide Landlord a Certificate of Insurance and an “Additional
Insured Endorsement”.  Tenant’s insurance shall be primary insurance with
respect to any claims covered thereunder; any other insurance maintained by
Landlord shall be excess and non-contributory with the insurance provided
hereunder.

 
(c)
Automobile Liability Insurance, including liability for all owned, hired and
non-owned vehicles, with not less than One Million Dollars ($1,000,000.00)
combined single limit bodily injury and property damage coverage;

 
 
Prior to the commencement of the Lease Tenant shall furnish to Landlord original
certificates or copies of policies showing that such insurance is in force and
that the premiums due thereunder have been paid and that Landlord and its
management company are named by separate endorsement as additional insured in
respect to any loss covered. Such certificates or policies shall provide that
the insurance may not be cancelled, terminated or modified without thirty (30)
days advance written notice thereof to each additional insured.  No policy shall
contain any provisions for exclusion from liability other than provisions for
exclusion forming a part of the standard basic unamended and unendorsed form of
policy, provided, however, in no event shall any exclusion be permitted which
conflicts with any coverage required by this Lease.  In the event of any failure
of Tenant to furnish and maintain insurance required  hereunder, any additional
insured, at its option, and without waiving the default of Tenant, shall have
the right to obtain such insurance for, and in the name of Tenant and the
additional insureds.  In such event Tenant shall pay the cost thereof upon
demand (as additional rent) and shall furnish all information required by the
insurance carrier.   Failure of Tenant to maintain the required insurance shall
be grounds, in the sole discretion of Landlord, to terminate the Lease. All
policies of insurance required hereunder must indicate that Tenant and its
insurer(s), waive all rights of subrogation against Landlord and its management
company as well as their respective agents, members, managers, directors,
officers, employees, attorneys, contractors and representatives for recovery of
damages to the extent these damages are covered by any policy of insurance
required hereunder.  The insurance company(ies) providing coverage hereunder
must be licensed to transact business in the State of Nevada and must carry an
A.M. Best Rating of B+ or better.

 

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EXHIBIT E
TENANT ENVIRONMENTAL QUESTIONNAIRE

The purpose of this form is to obtain information regarding the use or proposed
use of Hazardous Substances, as defined in Paragraph 50.2 of the Lease, at the
Premises. Prospective tenants should answer the questions in light of their
proposed operations at the Premises. Existing tenants should answer the
questions as they relate to ongoing operations at the Premises and should update
any information previously submitted. If additional space is needed to answer
the questions, you may attach separate sheets of paper to this form.   If
conditions arise subsequent to the completion of this form which would cause any
information previously provided by Tenant to be inaccurate, Tenant shall
forthwith advise Landlord in writing of all such changes.

Your cooperation in this matter is appreciated.

1.0           GENERAL INFORMATION

Name of Responding Company:  __________________________
Check the Applicable Status:       Prospective Tenant      Existing Tenant

Mailing Address: _____________________________
_____________________________
_____________________________

Contact Person and Title: ______________________, Telephone Number:
___/______________

Address of Leased Premises:  ______________________________________

Length of Lease Term:  ________ months

Describe the proposed operations to take place on the premises, including
principal products manufactured or services to be conducted. Existing tenants
should describe any proposed changes to ongoing operations.

_____________________________________________________________________________________.

2.0            STORAGE OF HAZARDOUS SUBSTANCES

2.1           Will any Hazardous Substances be used or stored on-site?

Wastes                      Yes [ ]                     No [ ]

Chemical Products  Yes [ ]                     No [ ]

Other                         Yes [ ]                     No [ ]

2.2           Attach a list of any Hazardous Substances to be used or stored,
the quantities that will be on-site at any given time, and the location and
method of storage.

3.0           STORAGE TANKS AND SUMPS

3.1           Is any above or below ground storage of gasoline, diesel or other
Hazardous Substances in tanks or sumps proposed or currently conducted at the
premises?

Yes [ ]                     No [ ]

If yes, describe the materials to be stored, and the type, size and construction
of the sump or tank. Attach copies of any permits obtained for the storage of
such substances.

3.2           Have any of the tanks or sumps been inspected or tested for
leakage?

Yes [ ]                     No [ ]

If yes, attach the results.

3.3           Have any spills or leaks occurred from such tanks or sumps?

Yes [ ]                     No [ ]

3.4           Were any regulatory agencies notified of the spill or leak?

Yes [ ]                     No [ ]

If yes, attach copies of any spill reports filed, any clearance letters or other
correspondence from regulatory agencies relating to the spill or leak.

 3.5           Have any underground storage tanks or sumps been taken out of
service or removed?

Yes [ ]                     No [ ]

If yes, attach copies of any closure permits and clearance obtained from
regulatory agencies relating to closure and removal of such tanks.

4.0           SPILLS

4.1           If an existing tenant, during the past year, have any spills
occurred at the Premises?

Yes [ ]                     No [ ]

If yes, please describe the location of the spill.

_______________________________________________________________________________

4.2           Were any agencies notified in connection with such spills?

Yes [ ]                     No [ ]

If yes, attach copies of any spill reports or other correspondence with
regulatory agencies.

 4.3           Were any clean-up actions undertaken in connection with the
spills?

Yes [ ]                     No [ ]

If yes, attach copies of any clearance letters obtained from any regulatory
agencies involved and the results of any final soil or groundwater sampling done
upon completion of the clean-up work.

5.0            WASTE MANAGEMENT

5.1           Has your company been issued an EPA Hazardous Waste Generator I.D.
Number?

Yes [ ]                     No [ ]

5.2           Has your company filed a biennial report as a hazardous waste
generator?

Yes [ ]                     No [ ]
 
If yes, attach a copy of the most recent report filed.

 5.3           Attach a list of the hazardous wastes, if any, generated or to be
generated at the Premises, its hazard class and the quantity generated on a
monthly basis.

5.4           Describe the method(s) of disposal for each waste. Indicate where
and how often disposal will take place.

On-site treatment or recovery: _________________
 
Discharged to sewer: _______________________
 
Transported & disposed of off-site:                              

Incinerator: ______________________________
 
5.5           Indicate the name of the person(s) responsible for maintaining
copies of hazardous waste manifests completed for off-site shipments of
hazardous waste.

_________________________________________

5.6           Is any treatment of processing of hazardous wastes currently
conducted or proposed to be conducted at the Premises:

Yes [ ]                     No [ ]
 
If yes, please describe any existing or proposed treatment methods.

_______________________________________________________________________________

5.7           Attach copies of any hazardous waste permits or licenses issued to
your company with respect to its operations at the Premises.

5.8           Please attach copies of any consents to your use or storage of
Hazardous Substances given by any prior owner of the Property.

6.0           WASTEWATER TREATMENT/DISCHARGE

6.1           Do you discharge wastewater to:

Storm drain:     Yes [ ]                     No [ ]   Sewer:                   
Yes [ ]                     No [ ]

Surface water: Yes [ ]                     No [ ]   Industrial disch.:  Yes [
]                     No [ ]

Is your wastewater treated before discharge?

Yes [ ]                     No [ ]

If yes, describe the type of treatment conducted.

______________________________________________________________________

6.3           Attach copies of any wastewater discharge permits issued to your
company with respect to its operations at the Premises.

7.0           AIR DISCHARGES

7.1           Do you have any filtration systems or stacks that discharge into
the air?

Yes [ ]                     No [ ]

 7.2           Do you operate any of the following types of equipment or any
other equipment requiring an air emissions permit?

  [ ] Spray booth                                       [ ] Incinerator
  [ ] Dip tank                                              [ ] Other (please
describe) ______________________
  [ ] Drying oven                                      [ ]  Other equipment
requiring air permits

 7.3           Are air emissions from your operations monitored?

Yes [ ]                     No [ ]

If yes, indicate the frequency of monitoring and a description of the monitoring
results.

________________________________________________________________________________

7.4           Attach copies of any air emissions permits pertaining to your
operations at the Premises.

8.0           HAZARDOUS SUBSTANCES DISCLOSURES

8.1           Does your company handle Hazardous Substances in a quantity equal
to or exceeding an aggregate of 500 pounds, 55 gallons, or 200 cubic feet per
month?

Yes [ ]                     No [ ]

 8.2           Has your company prepared a Hazardous Substances management plan
pursuant to any applicable requirements of a local fire department or
governmental agency?

Yes [ ]                     No [ ]

If yes, attach a copy of the business plan.

8.3           Has your company adopted any voluntary environmental, health or
safety program?

Yes [ ]                     No [ ]

If yes, attach a copy of the program.

9.0           ENFORCEMENT ACTIONS, COMPLAINTS

9.1           Has your company ever been subject to any agency enforcement
actions, administrative orders, or consent decrees?

Yes [ ]                     No [ ]

If yes, describe the actions and any continuing compliance obligations imposed
as a result of these actions.

__________________________________________________________________________________

9.2           Has your company ever received requests for information, notice or
demand letters, or any other inquiries regarding its operations?

Yes [ ]                     No [ ]

9.3           Have there ever been, or are there now pending, any lawsuits
against the company regarding any environmental or health and safety concerns?

Yes [ ]                     No [ ]

9.4           Has an environmental audit ever been conducted at your company's
current facility?

Yes [ ]                     No [ ]

If yes, identify who conducted the audit and when it was
conducted:  _________________________

10.0
Are you aware of any potential damage to persons or property that could be
caused by the use of any Hazardous Substance or any other substance in the
ordinary course its usage or your use.