Exhibit 10.19


SHORT FORM OFFICE LEASE


BY
AND BETWEEN





AND





FOR
THAT PROPERTY LOCATED AT


11545
W. Bernardo
Court,
San
Diego, California


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T able of C ontents


1.
    
    BASIC LEASE PROVISIONS
    
    
    12.
    
    PROJECT
    
    
    23.
    
    TERM
    
    
    44.
    
    RENT
    
    
    55.
    
    USE & OCCUPANCY
    
    
    86.
    
    SERVICES & UTILITIES
    
    
    97.
    
    REPAIRS
    
    
    118.
    
    ALTERATIONS
    
    
    119.
    
    INSURANCE
    
    
    1210.
    
    DAMAGE OR DESTRUCTION
    
    
    1311.
    
    INDEMNITY
    
    
    1412.
    
    CONDEMNATION
    
    
    1513.
    
    TENANT TRANSFERS
    
    
    1614.
    
    LANDLORD TRANSFERS
    
    
    1715.
    
    DEFAULT AND REMEDIES
    
    
    1816.
    
    SECURITY
    
    
    1917.
    
    MISCELLANEOUS
    
    
    2018.
    
    OPTION TO EXTEND
    
    
    20Exhibits:EXHIBIT A  RULES & REGULATIONS
    
    
    A-1EXHIBIT B  PARKING
    
    
    B-1EXHIBIT C NOTICE OF LEASE TERM
    
    
    C-1EXHIBIT D  WORK LETTER
    
    
    D-1EXHIBIT E  TENANT ESTOPPEL CERTIFICATE
    
    
    ED-1


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I ndex of D efined T erms
 Additional Insured
    

12

    Mechanical Systems
    
    
    2Additional Rent
    

5

    Month
    
    
    4Affiliates
    

15

    NLT
    
    
    4Alterations
    

11

    Notice Addresses
    
    
    1Amortization Rate
    

6

    Option Rent
    
    
    21Approved Working Drawings
    
    Exhibit
D

    Option/Rent/Notice
    
    
    21Architect
    
    Exhibit
D

    Option Rent
    
    
    21Base Building
    

2

    Options
    
    
    21Base Rent
    

5

    Original Tenant
    
    
    21Billing Address
    

2

    Outside Agreement Date
    
    
    22Brokers
    

2

    Over-Allowance Amount
    
    Exhibit
    DBuilding
    

1

    Parking Allotment
    
    
    2Building Standard
    

3

    Parking Facilities

    C-1Building Structure
    

2

    Patron
    
    C-1Business Hours
    

2

    Permitted Transferee
    
    
    16Claims
    

14

    Plans
    
    Exhibit
    DCommencement Date
    

4

    Premises
    
    
    1Common Areas
    

2

    Project
    
    
    2Construction Allowance
    

2

    Quality Expenses
    
    
    6Contractor
    
    Exhibit
D

    Rent Exhibit D
    
    
    8Cost-Saving Expenses
    

6

    Repair Estimate
    
    
    13Date
    

1

    Replacement Premises
    
    
    20Default
    

18

    RSF
    
    
    3Default Rate
    

19

    Scheduled Commencement Date
    
    
    1Design Problem
    

11

    Scheduled Term
    
    
    1Encumbrance
    

17

    Security Deposit
    
    
    1Estimated Additional Rent
    

7

    Standard Services
    
    
    9Expenses
    

5

    Substantial Completion
    
    Exhibit
    DExpiration Date
    

4

    Successor Landlord
    
    
    17Force Majeure
    

19

    Taking
    
    
    15Hazardous Materials
    

9

    Taxes
    
    
    5Holdover
    

4

    Telecommunication Services
    
    
    10Holidays
    

2

    Tenant
    
    
    1HVAC
    

9

    Tenant Delays
    
    Exhibit
    DInterest Notice
    

21

    Tenants Personal Property
    
    
    3Interruption Estimate
    

13

    Tenants Share
    
    
    1Land
    

2

    Tenants Wiring
    
    
    10Landlord
    

1

    Tenants Acceptance
    
    
    21Late Charge
    

8

    Term
    
    
    4Lease
    

1

    Transfer
    
    
    16Leasehold Improvements
    

3

    Untenantable
    
    
    13Liability Limit
    

2

    Use
    
    
    1Mandated Expenses
    

6

    Vehicles
    
    
    C-1Market Rent
    

21

    Working Drawings
    
    Exhibit
    DYear
    
    
    4
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##### 



Lease
 
 1.
    
    BASIC LEASE PROVISIONS
 1.1
    
    Basic Lease Definitions.
    
    In this Lease, the following defined terms have the meanings indicated.(a)
    
    Date:
    
    May 5, 2008.(b)
    
    Landlord:
    
    BERNARDO REGENCY, LLC, a Delaware limited liability company.(c)
    
    Tenant:
    
    LIFEVANTAGE CORPORATION, a Colorado corporation.(d)
    
    Building:
    
    11545 W. Bernardo Court, San Diego, California, deemed to contain 48,055 RSF(e)
    
    Premises:
    
    Suites 301 and 302 deemed to contain 3,204 RSF (2,818 USF).(f)
    
    Use:
    
    General administrative
non-governmental office use consistent with that of a first-class office building.(g)
    
    Scheduled Term:
    
    Five (5) years and Three (3) months.(h)
    
    Scheduled
Commencement Date:
    
    July 1, 2008.(i)
    
    Base Rent:
    
    The following amounts, payable in accordance with Article 4:
 Period
    
    Monthly Rate
    
    Annual Base Rent
    
    Monthly Base RentYear 1
    
    $
    2.45
    
    
    $
    94,197.60
    
    
    $
    7,849.80
    *Year 2
    
    $
    2.54
    
    
    $
    97,494.52
    
    
    $
    8,124.54Year 3
    
    $
    2.63
    
    
    $
    100,906.79
    
    
    $
    8,408.90Year 4
    
    $
    2.72
    
    
    $
    104,438.54
    
    
    $
    8,703.21Year 5
    
    $
    2.81
    
    
    $
    108,093.87
    
    
    $
    9,007.82
 
 *
    
    subject to abatement as set forth in Section 4.1, below. (j)
    
    Base Year;
    
    The calendar year 2008.Tenants Share:
    
    6.67%(k)
    
    Security Deposit:
    
    $7,849.80(l)
    
    Notice Address:
    
    For each party, the following addresses:
 To Landlord
    
    To TenantBernardo Regency, LLC
    
    Before the Commencement Date:c/o CABI Developers
    
    Life Vantage Corporation9911 W. Pico Boulevard, Suite 1200
    
    6400 S. Fiddlers Green Circle, Suite 1970Los Angeles, California 90035
    
    Greenwood Village, CO 80111Attn: V.P./Legal
    
    Attn: David Brown(858) 442-4924After the Commencement Date:Life Vantage CorporationAttn: 11545 W. Bernardo Court, Suite 301San Diego, California 92127
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##### 



(m)
    
    Billing Address:
    
    For each party, the following address:
 For Landlord
    
    For TenantBernardo Regency, LLC
    
    LifeVantage Corporationc/o CABI Developers
    
    Attn: 11545 W. Bernardo Court, Suite 3019911 W. Pico Boulevard, Suite 1200
    
    San Diego, California 92127Los Angeles, California 90035Attn: V.P./Legal
 (n)
    
    Brokers:
    
    CB Richard Ellis, Inc. (for Landlord); and
Corporate Real Estate Consultants (for
Tenant). Brokers will be paid by Landlord in
accordance with a separate agreement with
Landlord.(o)
    
    Parking Allotment:
    
    Twelve (12) unreserved parking passes, for
the use and access to the Buildings Parking
Facility subject to the terms set forth in
Exhibit C to this Lease.(p)
    
    Liability Limit:
    
    $3 million for any one accident or occurrence.(q)
    
    Construction Allowance:
    
    None; Landlord shall construct the
Improvements on a turn key basis in
accordance with the Work Letter attached to
this Lease as Exhibit E.(r)
    
    Business Hours:
    
    From 8:00 a.m. to 6:00 p.m., Monday through
Friday, and from 9:00 a.m. to 1:00 p.m. on
Saturdays, except for the days observed for: excepting New Years Day, Martin Luther King
Day, Presidents Day, Memorial Day,
Independence Day, Labor Day, Veterans Day,
Thanksgiving and the day after Thanksgiving
and Christmas, and in Landlords reasonable
discretion, any other holidays recognized by
landlords of comparable projects to the
Building (Holidays).
 2.
    
    PROJECT
 2.1 Project.
 2.2 Land.
 2.3 Base Building.
 (a)
    
    Building Structure. Building Structure means the structural
components in the Building, including foundations, floor and ceiling slabs, roofs,
exterior walls, exterior glass and mullions, columns, beams, shafts, and emergency
stairwells. The Building Structure excludes the Leasehold Improvements (and similar
improvements to other premises) and the Mechanical Systems.(b)
    
    Mechanical Systems. Mechanical Systems means the mechanical,
electronic, physical or informational systems generally serving the Building or Common
Areas, including the sprinkler, plumbing, heating, ventilating, air conditioning,
lighting, communications, security, drainage, sewage, waste disposal, vertical
transportation, and fire/life safety systems.
 2.4 Common Areas.
 2.5 Premises.
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##### 



(a)
    
    Leasehold Improvements. Leasehold Improvements means all
non-structural improvements in the Premises or exclusively serving the Premises, and
any structural improvements to the Building made to accommodate Tenants particular use
of the Premises. The Leasehold Improvements may exist in the Premises as of the Date,
or be installed by Landlord or Tenant under this Lease at the cost of either party. The
Leasehold Improvements include: (1) interior walls and partitions (including those
surrounding structural columns entirely or partly within the Premises); (2) the
interior one-half of walls that separate the Premises from adjacent areas designated
for leasing; (3) the interior drywall on exterior structural walls, and walls that
separate the Premises from the Common Areas; (4) stairways and stairwells connecting
parts of the Premises on different floors, except those required for emergency exiting;
(5) the frames, casements, doors, windows and openings installed in or on the
improvements described in the foregoing clauses (1) through (4), or that provide
entry/exit to/from the Premises; (6) all hardware, fixtures, cabinetry, railings,
paneling, woodwork and finishes in the Premises or that are installed in or on the
improvements described in the foregoing clauses (1) through (5); (7) if any part of the
Premises is on the ground floor, the ground floor exterior windows (including mullions,
frames and glass); (8) integrated ceiling systems (including grid, panels and
lighting); (9) carpeting and other floor finishes; (10) kitchen, rest room, laboratory
or other similar facilities that exclusively serve the Premises (including plumbing
fixtures, toilets, sinks and built-in appliances); and (11) the sprinkler, plumbing,
heating, ventilating, air conditioning, electrical, metering, lighting, communications,
security, drainage, sewage, waste disposal, vertical transportation, fire/life safety,
and other mechanical, electronic, physical or informational systems that exclusively
serve the Premises, including the parts of each system that are connected to the
Mechanical Systems from the common point of distribution for each system to and
throughout the Premises (such items in this subsection (11) shall be referred to the
Systems).
 (b)
    
    Exclusions from the Premises. The Premises does not include: (1) any
areas above the finished ceiling or integrated ceiling systems, or below the finished
floor coverings that are not part of the Leasehold Improvements, (2) janitors closets, (3)
stairways and stairwells to be used for emergency exiting or as Common Areas, (4)
rooms for Mechanical Systems or connection of telecommunication equipment, (5) vertical
transportation shafts, (6) vertical or horizontal shafts, risers, chases, flues or
ducts, and (7) any easements or rights to natural light, air or view.
 2.6 Building Standard.
 2.7 Tenants Personal Property.
 2.8 Rentable Area.
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3. TERM
 3.1 Term .
 (a)
    
    Commencement Date. TheCommencement Date means the date that is the
earlier of:
 (1)
    
    The day that Tenant first conducts business in the Premises; or(2)
    
    The later of:
 (A)
    
    The Scheduled Commencement Date, or(B)
    
    The day that Landlord tenders the Premises to
Tenant with Landlords Work substantially complete or that date that
Landlord would have tendered possession of the Premises but for delay
caused by Tenant.
 (b)
    
    Expiration Date. Expiration Date means the date that is the Scheduled
Term (plus that many additional days required for the Expiration Date to be the last
day of a Month) after the later of:
 (1)
    
    The Scheduled Commencement Date, or(2)
    
    The Commencement Date.
 (c)
    
    Early Occupancy. Tenant may not enter the Premises for any purpose
until Landlord tenders the Premises to Tenant. If Tenant conducts business in any part
of the Premises before the Scheduled Commencement Date, Tenant will pay Base Rent for
that period at the rate for the first Month that Base Rent is due, without discount or
excuse. Notwithstanding anything to the contrary provided herein, and provided that
Tenant and its agents do not interfere with Landlords Contractors work in the
Building and the Premises, Landlord shall allow Tenant access to the Premises ten (10)
days prior to the Substantial Completion of the Premises for the purpose of Tenant
installing overstandard equipment or fixtures (including Tenants data and telephone
equipment) in the Premises. Prior to Tenants entry into the Premises as permitted by
the terms of this Section, Tenant shall submit a schedule to Landlord and Contractor,
for their approval, which schedule shall detail the timing and purpose of Tenants
entry. Tenant shall hold Landlord harmless from and indemnify, protect and defend
Landlord against any loss or damage to the Building or Premises and against injury to
any persons caused by Tenants actions pursuant to this Section.
 (d)
    
    Late Occupancy. If Landlord fails to tender possession of the Premises
to Tenant by the Scheduled Commencement Date due to delay caused by Tenant or Force
Majeure, Landlord will not be in default of this Lease.
 (e)
    
    Confirmation of Term. If applicable, Landlord shall notify Tenant of
the Commencement Date using a Notice of Lease Term (NLT) in the form attached to this
Lease as Exhibit D. Tenant shall execute and deliver to Landlord the NLT within 10
business days after its receipt, but Tenants failure to do so will not reduce Tenants
obligations or Landlords rights under this Lease.
 3.2
Holdover.
 3.3 Condition on Expiration.
 (a)
    
    Return of the Premises. At the end of the Term, Tenant will return
possession of the Premises to Landlord vacant, free of Tenants Personal Property, in
broom-clean condition, and with all Leasehold Improvements in good working order and
repair (excepting ordinary wear and tear), except that Landlord may require
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##### 



Tenant, by notice at least 10 days before the expiration of the Term, to remove (and
restore the Premises damaged by removal):
 (1)
    
    All Tenants Wiring; and(2)
    
    Any item of Leasehold Improvements (not part of the original
Leasehold Improvements made by Landlord as outlined in the Work Letter or the
Systems) or Alterations (other than Tenants Wiring) if either:
 (A)
    
    When Landlord consented to the
installation of the improvement, Landlord reserved Landlords right
to have Tenant remove the improvement at the end of the Term; or(B)
    
    Tenant failed to obtain Landlords
written consent under § 8.1 (a) for an item of Alterations to
become part of the Premises.
 (b)
    
    Correction by Landlord. If Tenant fails to return possession of the
Premises to Landlord in the condition required under (a), then Tenant shall reimburse
Landlord for the costs incurred by Landlord to put the Premises in the condition
required under (a), plus Landlords standard administration fee.(c)
    
    Abandoned Property. Tenants Personal Property left behind in the
Premises after the end of the Term will be considered abandoned and Landlord may move,
store, retain or dispose of these items at Tenants cost, including Landlords standard
administration fee.
 4.
    
    RENT
 4.1 Base Rent. st nd rd th
 4.2 Additional Rent.
 (a)
    
    Taxes. For each full or partial Year Tenant shall pay as in the manner
described below the Tenants Share of the Taxes for such Year in
excess of the Taxes for
the Base Year. Taxes means the total costs incurred by Landlord for: (1) real and
personal property taxes and assessments (including ad valorem and special assessments)
levied on the Project and Landlords personal property used in connection with the
Project; (2) taxes on rents or other income derived from the Building; (3) capital and
place-of-business taxes; (4) taxes, assessments or fees in lieu of the taxes described
in the foregoing clauses (1) through (3); and (5) the reasonable costs incurred to
reduce the taxes described in the foregoing clauses (1) through (4). Taxes excludes net
income taxes and taxes paid under §4.3.(b)
    
    Expenses. For each full or partial Year, Tenant shall pay in the manner
described below the Tenants Share of the Expenses for such Year in excess of the
Expenses for the Base Year. Expenses means the total costs incurred by Landlord to
operate, manage, administer, equip, secure, protect, repair, replace, refurbish, clean,
maintain, decorate and inspect the Project, including a fee to manage the Project not
to exceed 5% of the gross revenue of the Project. Expenses that vary with occupancy will
be calculated as if the Building is 95% occupied and operating and all such services
are provided to all tenants.
 (1)
    
    Expenses include:
 (A)
    
    Standard Services provided under §6.1 (excluding
electrical service pursuant to Section 6.3);(B)
    
    Repairs and maintenance performed under §7.2;(C)
    
    Insurance maintained under §9.2 (including deductibles paid);(D)
    
    Wages, salaries and benefits of personnel to the extent they render
services to the Project;
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(E)
    
    Costs of operating the Project management office (including reasonable rent);(F)
    
    Amortization installments of costs required to be capitalized and incurred:
 (i)
    
    To comply with insurance requirements or laws (Mandated
Expenses);(ii)
    
    That are reasonably calculated to
reduce other Expenses or the rate of increase in other Expenses
(Cost-Saving Expenses); or(iii)
    
    That are reasonably calculated to improve or maintain the
safety, health or access of Project occupants, and otherwise maintain the
quality, appearance, or integrity of the Project (Quality Expenses).
 (2)
    
    Expenses exclude:
 (A)
    
    Taxes;(B)
    
    Mortgage payments (principal and interest), and ground lease rent;(C)
    
    Commissions, advertising costs, attorneys fees and costs of
improvements in connection with leasing space in the Building;(D)
    
    Costs reimbursed by insurance proceeds or tenants of the Building (other
than as Direct
Costs);(E)
    
    Depreciation;(F)
    
    Except for the costs identified in §4.2(b)(1)(F), costs
required to be capitalized according to sound real estate accounting and
management principles, consistently applied;(G)
    
    Collection costs and legal fees paid in disputes with tenants; and(H)
    
    Costs to maintain and operate the entity that is
Landlord (as opposed to operation and maintenance of the Project).(I)
    
    Costs incurred by Landlord due to the violation by
Landlord of the terms and conditions of any lease of space in the Project or
any law, code, regulation, ordinance or the like;(J)
    
    Landlords general corporate overhead and general and administrative
expenses; and(K)
    
    Costs incurred to (i) comply with laws relating to the
removal of any Hazardous Material, unless caused by Tenant or any Tenant
Parties, and (ii) to remove, remedy, contain, or treat any Hazardous Material,
which Hazardous Material is brought onto the Project after the date hereof by
Landlord or any other tenant of the Project or any other person.
 (c)
    
    Amortization and Accounting Principles.
 (1)
    
    Each item of Mandated Expenses and Quality Expenses will be fully amortized in
equal annual installments, with interest on the principal balance at Amortization Rate,
over the number of years, not to exceed 10, that Landlord projects the item of Expenses
will be productive for its intended use, without replacement, but properly repaired and
maintained.(2)
    
    Each item of Cost-Saving Expenses will be fully amortized in equal annual
installments, with interest on the principal balance at the Amortization Rate, over
the number of years that Landlord reasonably estimates for the present value of the
projected savings in Expenses (discounted at the Amortization Rate)to equal the cost.(3)
    
    Any item of Expenses of significant cost that is not required to be capitalized
but is unexpected or does not typically recur may, in Landlords discretion, be
amortized in equal annual installments, with interest on the principal balance at the
Amortization Rate, over a number of years determined by Landlord.(4)
    
    Amortization Rate means the prime rate of Citibank, N.A. (or a comparable
financial institution selected by Landlord), plus 3%.
 6




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##### 



(5)
    
    Landlord may allocate Direct Costs for the Project to various components of
the Project on an equitable basis.(6)
    
    Subject to the specific provisions of this Article 4, Landlord will usesound real estate accounting and management principles, consistently applied, to
determine Direct Costs.
 (d)
    
    Estimates. Landlord will provide to Tenant a reasonably detailed itemization of
estimated Direct Costs for each Year. During the Term, if for any Year, Tenants Share exceeds
Tenant Share for the Base Year, Tenant will pay an amount equal to the excess (Excess), in
equal Monthly installments, on the first day of each Month. If Landlord has not provided
Tenant with Landlords estimate of Direct Costs for a Year, then Tenant will pay the estimated
Excess until the estimate is revised by Landlord. Landlord may reasonably revise its estimate
of Direct Costs for a Year and after receipt of the revised estimate,
Tenant will pay the
monthly installments of Excess based on the revised estimate for the remainder of the Year or
until the estimate is later revised by Landlord. The aggregate estimates of Direct Costs paid
by Tenant in a Year is the Estimated Direct Costs.(e)
    
    Settlement. As soon as practicable after the end of each Year, Landlord will give
Tenant a statement of the actual Direct Costs for the Year, and which shall indicate the
amount, if any, of the Excess. Direct Costs for any partial Year will be prorated based on a
365-day calendar year. The statement of Direct Costs is conclusive, binds Tenant, and Tenant
waives all rights to contest the statement, except for items of Direct Costs to which Tenant
objects by notice to Landlord given within 90 days after receipt of Landlords statement;
however, Tenants objection will not relieve Tenant from its obligation to pay Direct Costs
pending resolution of any objection. If the Direct Costs exceed the Estimated Direct Costs for
the Year, then Tenant shall pay any underpayment in Excess to Landlord in a lump sum as Rent
within 30 days after receipt of Landlords statement of Direct Costs. If the Estimated Direct
Costs exceeds the Direct Costs for the Year, then Landlord shall credit any overpayment in
Excess against Rent next due. However, if the Term ends during a Year, then Landlord may, in
Landlords sole discretion, elect either of the following:
(1) to forego the settlement of Excess Direct Costs for the Year that is otherwise required
and accept the payments of estimated Excess for the final Year in satisfaction of Tenants
obligations to pay Excess for the final Year, or (2) to have Landlords and Tenants
obligations under this §4.2(e) survive the end of the Term.(f)
    
    Audit. Tenant shall have the right to review and/or audit Landlords books and
records regarding Tenants Share of Operating Costs at Landlords offices during normal
business hours on ten (10) business days prior notice (Review Notice) for a period of
ninety (90) days following Tenants receipt of the Annual Statement (the Review Period).
Within a reasonable time after receipt of Tenants review/audit notice, Landlord shall make
all pertinent records available for inspection that are reasonably necessary for Tenant to
conduct its review. If any records are maintained at a location other than the office of the
Project, Tenant may either inspect the records at such other location or pay for the
reasonable cost of copying and shipping the records. Any audit shall
be conducted by a
reputable firm of certified public accountants (Tenants
CPA) which, along with Tenant,
agrees to be bound by a confidentiality agreement, on a noncontingent fee basis. Tenant shall
have no right to contest, review or audit such statement if a Default has occurred and is
continuing, or if Tenant fails to give such written notice during the Review Period. Within
ninety (90) days after the records are made available to Tenant, Tenant shall have the right
to give Landlord written notice (an Objection Notice) stating in reasonable detail any
objection to the books and records that Tenant has reviewed. If Tenant fails to give Landlord
an Objection Notice within the 90-day period or fails to provide Landlord with a Review Notice
within the 90-day period described above, Tenant shall be deemed to have approved Landlords
statement of Operating Costs for such year and shall be barred from raising any claims
regarding the Operating Costs for that year. Landlord may elect to contest the conclusion of
Tenants auditor in the Objection Notice by giving a written contest notice (the Contest
Notice) to Tenant within sixty (60) days after receipt of the Objection Notice, such Contest
Notice containing the name of a firm of certified public accountants appointed by Landlord
(Landlords CPA). Landlords CPA and Tenants CPA shall meet and confer within forty-five
(45) days after the Contest Notice is given in an attempt to agree on any disputed items. If
Landlords CPA and Tenants CPA are unable to agree on all disputed items within forty-five
(45) days after the Contest Notice, then each of Landlords CPA and Tenants CPA shall propose
and deliver to each other in writing an amount to be paid by Tenant to Landlord or Landlord to
Tenant relating to the Operating Costs being audited. Tenants CPA and Landlords CPA shall
agree on a third CPA experienced in real estate accounting
unaffiliated with
 7




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##### 



Landlord, Tenant and their respective CPAs and who has not worked for Landlord,
Tenant or their respective CPAs in the last ten (10) years. Such third CPA (the
Deciding CPA) shall meet for one day or less with Landlords CPA and Tenants CAP
within fifteen (15) business days after the appointment of such Deciding CPA, and at
the end of such meeting the Deciding CPA shall choose in writing either Tenants
CPAs proposal or Landlords CPAs proposal, and such decision shall be final,
binding and nonappealable. If Landlord and Tenant determine that Operating Costs for
the calendar year are less than reported, Landlord shall provide Tenant with a credit
against the next installment of Rental in the amount of the overpayment by Tenant.
Likewise, if Landlord and Tenant determine that Operating Costs for
the calendar year
are greater than reported, Tenant shall pay Landlord the amount of any underpayment
within thirty (30) days. Landlord shall pay for Landlords CPA, Tenant shall pay for
Tenants CPA and the cost of the Deciding CPA shall be divided equally among the
parties. No books and records may be removed from Landlords office. Notwithstanding
the foregoing, if it is determined that Operating Costs reflected in the Annual
Statement have been overstated by five percent (5%) or more, than Landlord shall pay
for the reasonable cost of Tenants CPA and the Deciding
CPA.
 4.3 Other Taxes.
 4.4 Terms of Payment.
 4.5 Late Payment.
 5. USE & OCCUPANCY
 5.1 Use.
 5.2 Compliance with Laws and Directives.
 (a)
    
    Tenants Compliance. Subject to the remaining terms of this
Lease, Tenant shall comply at Tenants expense with all laws and directives of
Landlords insurers concerning:
 (1)
    
    The Leasehold Improvements and Alterations,(2)
    
    Tenants use or occupancy of the Premises,(3)
    
    Tenants employer/employee obligations,(4)
    
    A condition created by Tenant, its Affiliates or their contractors or invitees,(5)
    
    Tenants failure to comply with this Lease,(6)
    
    The negligence of Tenant or its Affiliates or contractors, or(7)
    
    Any chemical wastes, contaminants, pollutants or substances
that are hazardous, toxic, infectious, flammable or dangerous, or regulated by any
local, state or federal statute, rule, regulation or
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Notwithstanding the foregoing, nothing in this Paragraph 5.2(a) shall require Tenant
to bear any expenses for any structural changes, modifications or Alterations to the
Premises or the Project or any changes to the Systems unless such changes are
necessitated by Tenants particular use of, or improvement to, the Premises or the
Project.(b)
    
    Landlords Compliance. The cost of Landlords compliance with laws
or directives of Landlords insurers concerning the Project, other than those that
are Tenants obligation under subsection (a), will be included in Expenses to the
extent allowed under §4.2.
 5.3 Occupancy.
 5.4 OFAC Certification.
 6.
    
    SERVICES & UTILITIES
 6.1
    
    Standard Services.(a)
    
    Standard Services Defined. Standard Services means:
 (1)
    
    Heating, ventilation and air-conditioning (HVAC) during
Business Hours as reasonably required to comfortably use and occupy the Premises
and interior Common Areas;(2)
    
    Tempered water from the public utility for use in Common Areas
rest rooms, and water from the public utility for use in customary kitchen
facilities located in the Premises;(3)
    
    Janitorial services to the Premises and interior Common Areas 5
days a week, except Holidays, and pest control services in the Common Areas as
needed to keep the Common Areas free from infestation;(4)
    
    Access to the Premises (by at least 1 passenger elevator if not on the ground
floor);(5)
    
    Labor to replace fluorescent tubes and ballasts in Building Standard light
fixtures in the Premises;(6)
    
    Access control services; and(7)
    
    Electricity from Landlords selected provider(s) for Common Areas lighting;
 (b)
    
    Standard Services Provided. During the Term, Landlord shall provide the
Standard Services to Tenant. The cost of the Standard Services is included in Expenses.
Landlord is not responsible for any inability to provide Standard Services due to
either the concentration of personnel or equipment in the Premises; or Tenants use of
equipment in the Premises that is not customary office equipment or has special cooling
requirements.
 6.2 Additional Services.
 (a)
    
    HVAC. If Tenant requests HVAC service to the Premises during non-Business
Hours, Tenant will pay as Rent Landlords scheduled rate for this service.(b)
    
    Lighting. Landlord will furnish Building Standard lamps, bulbs, ballasts
and starters that are part of the Leasehold Improvements at no cost to Tenant (but shall
be included in Direct Costs), and non Building standard lamps, bulbs, ballasts and
starters that are part of the Leasehold Improvements for purchase by
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Tenant at Landlords cost, plus Landlords standard administration fee. Landlord
will install non-Building Standard items at Landlords scheduled rate for this
service.(c)
    
    Other Utilities and Services. Tenant will pay as Rent the actual cost
of utilities or services (other than HVAC and lighting addressed in (a) and (b), and
subject to Section 6.3 below) either used by Tenant or provided at Tenants request in
excess of that provided as part of the Standard Services, plus Landlords standard
administration fee. Tenants excess consumption may be estimated by Landlord unless
either Landlord requires or Tenant elects to install Building Standard meters to
measure Tenants consumption.(d)
    
    Additional Systems and Metering. Landlord may require Tenant, at
Tenants expense, to upgrade or modify existing Mechanical Systems serving the
Premises or the Leasehold Improvements to the extent necessary to meet Tenants excess
requirements (including installation of Building Standard meters to measure the same).
 6.3 Separate Metering and Electrical Billing.
 6.4 Telecommunication Services.
 (a)
    
    Providers. Each Telecommunication Services provider that does not
already provide service to the Building shall be subject to Landlords approval, which
Landlord may withhold in Landlords sole discretion. Without
liability to Tenant, the
license of any Telecommunication Services provider servicing the Building may be
terminated under the terms of the license, or not renewed upon the expiration of the
license.(b)
    
    Tenants Wiring. Landlord may, in its sole discretion, designate the
location of all wires, cables, fibers, equipment, and connections
(Tenants Wiring)
for Tenants Telecommunication Services, restrict and control access to telephone
cabinets and rooms. Tenant may not use or access the Base Building, Common Areas or
roof for Tenants Wiring without Landlords prior written consent, which Landlord may
withhold in Landlords sole discretion. Tenants Wiring will be subject to removal in
accordance with §3.3.(c)
    
    No Beneficiaries. This §6.4 is solely for
Tenants benefit, and no one
else shall be considered a beneficiary of these provisions.
 6.5 Special Circumstances.
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7. REPAIRS
 7.1 Tenants Repairs.
 7.2 Landlords Repairs.
 8. ALTERATIONS
 8.1 Alterations by Tenant.
 (a)
    
    Consent Required. All Alterations to excess of $1,500 require Landlords prior
written consent. If a Design Problem exists, Landlord may withhold its consent in Landlords
sole discretion; otherwise, Landlord will not unreasonably withhold
its consent. Unless Tenant
obtains Landlords prior written consent to the Alterations becoming part of the Premises to
be tendered to Landlord on termination of the Lease, Landlord may require Tenant to remove
Alterations and restore the Premises under §3.3 upon termination of this Lease.(b)
    
    Design Problem Defined. Design Problem means a condition
that results, or will result, from work proposed, being performed or
that has been completed that either:
 (1)
    
    Does not comply with laws;(2)
    
    Does not meet or exceed the Building Standard;(3)
    
    Exceeds the capacity, adversely affects, is incompatible with,
or impairs Landlords ability to maintain, operate, alter, modify or improve
the Base Building;(4)
    
    Affects the exterior appearance of the Building or Common Areas;(5)
    
    Violates any agreement affecting the Project;(6)
    
    Costs more to demolish than Building Standard improvements;(7)
    
    Violates any insurance regulations or standards for a fire-resistive office
building;
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(8)
    
    Locates any equipment, Tenants Wiring or Tenants Personal Property on the
roof of the Building, in Common Areas or in telecommunication or electrical
closets, except for connections of Tenants Wiring to service provided by
Telecommunications Services providers; or(9)
    
    Cases a work of visual art (as defined in the Visual
Artists Rights Act of 1990) to be incorporated into or made a part of
the Building.
 (c)
    
    Performance of Alterations. Alterations shall be performed by Tenant
in a good and workman-like manner according to plans and specifications approved by
Landlord. All Alterations shall comply with law and insurance requirements. Landlords
designated contractors must perform Alterations affecting the Base Building or
Mechanical Systems; and, all other work will be performed by qualified contractors that
meet Landlords insurance requirements and are otherwise approved by Landlord. Promptly
after completing Alterations, Tenant will deliver to Landlord as-built CADD plans,
proof of payment, a copy of the recorded notice of completion, and all unconditional
lien releases.(d)
    
    Bonding. If requested by Landlord, before commencing Alterations Tenant
shall at Tenants cost obtain bonds, or deposit with Landlord other security acceptable
to Landlord for the payment and completion of the Alterations. These bonds or other
security shall be in form and amount acceptable to Landlord.(e)
    
    Alterations Fee. Tenant shall pay Landlord as Rent 5% of
the total construction costs of the Alterations to cover review of Tenants plans and
construction coordination by Landlords employees. In addition, Tenant shall reimburse
Landlord for the actual cost that Landlord reasonably incurs to have engineers,
architects or other professional consultants review Tenants plans and work in
progress, or inspect the completed Alterations.
 8.2 Alterations by Landlord
 8.3 Liens and Disputes.
 9. INSURANCE
 9.1 Tenants Insurance.
 (a)
    
    Tenants Coverage. Before taking possession of
the Premises for any purpose (including construction of
Tenant improvements, if any) and during the Term, Tenant will provide and keep in
force the following coverage:
 (1)
    
    Commercial general liability insurance insuring Tenants use
and occupancy of the Premises and use of the Common Areas, and covering personal
and bodily injury, death, and damage to others property of not less than the
Liability Limit. Each of these policies shall include cross liability and
severability of interests clauses, and be written on an occurrence, and not
claims-made, basis. Each of these policies shall name Landlord, the Building
property manager, each secured lender, and any other party reasonably designated
by Landlord as an additional insured (Additional Insured).(2)
    
    All risk insurance (including standard extended coverage
endorsement perils, leakage from fire protective devices and other water damage)
covering the full replacement cost of the Leasehold Improvements and Tenants
Personal Property. Each of these policies shall name Landlord and each Additional
Insured an additional insured to the extent of their interest in the Leasehold
Improvements. Each of these policies shall include a provision or endorsement in
which the insurer waives its right of subrogation against Landlord and each
Additional Insured.(3)
    
    Insurance covering the perils described in (2) for Tenants loss of
income or insurable gross profits with a limit not less than Tenants annual Rent.
Each of these policies shall include a provision or
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endorsement in which the insurer waives its right of subrogation against
Landlord and each Additional Insured.(4)
    
    If any boiler or machinery is operated in the Premises, boiler and machinery insurance.(5)
    
    Insurance required by law, including workers compensation insurance.(6)
    
    Employers liability insurance with limits not less than $1 million.(7)
    
    Commercial automobile liability insurance covering all owned,
hired, and non-owned vehicles
with a combined single limit of not less than $1 million for each accident
or person.(8)
    
    Insurance covering the Leasehold Improvements and Tenants
Personal Property against loss or
damage; provided, however, that Tenant may elect to self-insure this
coverage. If Tenant does not
elect to self-insure this coverage, then each of these policies shall name
Landlord and each
Additional Insured an additional insured to the extent of their interest in
the Leasehold
Improvements.
 (b)
    
    Insurers and Terms. Each policy required under (a) shall be written
with insurance companies that are
licensed to do business in the state in which the Building is located and have a
rating of not less than A and
a Financial Size Class of at least VIII by A.M. Best Company. The proceeds
of policies providing
coverage under subsection (a)(2) of this §9.1 will be payable to Landlord, Tenant and
each Encumbrance
holder as their interests may appear. Tenant will cooperate with Landlord in
collecting any insurance
proceeds that may be due in the event of loss, and Tenant will execute and deliver to
Landlord proofs of
loss and any other instruments that Landlord may require to recover such insurance
proceeds.(c)
    
    Proof of Insurance. At least 10 days prior to the Commencement Date,
and throughout the Term, Tenant
will provide Landlord with certificates of insurance establishing that the coverage
required under
subsection (a) is in effect. Tenant will provide replacement certificates at least 30
days before any policy
expires that the expiring policy has been renewed or replaced.9.2
    
    Landlords Insurance.(a)
    
    Landlords Coverage. During the Term, Landlord
will provide and keep in force
the following coverage:
 (1)
    
    Commercial general liability insurance.(2)
    
    All risk insurance (including standard extended coverage
endorsement perils, leakage from fire
protective devices and other water damage) covering the Project improvements
(excepting the
Leasehold Improvements to be insured by Tenant). Each of these policies shall
include a
provision or endorsement in which the insurer waives its right of subrogation
against Tenant.(3)
    
    Insurance covering the perils described in (2) for Landlords
loss of rental income or insurable
gross profits. Each of these policies shall include a provision or endorsement
in which the insurer
waives its right of subrogation against Tenant.(4)
    
    Boiler and machinery insurance.(5)
    
    Other insurance that Landlord elects to maintain.
 (b)
    
    Terms. Each of the policies required under (a) will have those
limits, deductibles, retentions and other
terms that Landlord prudently determines.
 10. DAMAGE OR DESTRUCTION
 10.1 Damage and Repair.
 (a)
    
    Landlords Estimates. Landlord will assess the damage to the Project
(but not the Leasehold
Improvements) and notify Tenant of Landlords reasonable estimate of the time required to
substantially
complete repairs and restoration of the Project (Repair Estimate) within 30 days after the
date of the
casualty. Landlord will also estimate the time that all or a portion of the Premises will be
Untenantable
(Interruption Estimate). Untenantable means that the Premises are not reasonably
accessible or are unfit for the Use. Within 30 days after the later of the casualty,
issuance of the Repair Estimate, issuance of
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the Interruption Estimate, or receipt of any denial of coverage or reservation of
rights from Landlords insurer, each party may terminate the Lease by written notice
to the other on the following conditions:
 (1)
    
    Landlord may elect to terminate this Lease if either:
 (A)
    
    The Repair Estimate exceeds 180 days, or(B)
    
    The damage or destruction occurs in the last 12 Months of the Term; or(C)
    
    The repair and restoration is not fully covered
by insurance maintained or required to be
maintained by Landlord (subject only to those deductibles or retentions Landlord elected
to maintain) or Landlords insurer denies coverage or reserves its
rights on coverage.
 (2)
    
    Tenant may elect to terminate this Lease if the Interruption Estimate exceeds
180 days.
 (b)
    
    Repairs. If neither party terminates the Lease under (a), then
the Lease shall remain in full force and effect and the parties will proceed as
follows:
 (1)
    
    Landlord will repair and restore the Project (but not Leasehold
Improvements) to the condition
existing prior to such damage, except for modifications required by law.
Landlord will perform
such work reasonably promptly, subject to delay for loss adjustment, delay
caused by Tenant and
Force Majeure.(2)
    
    Tenant will repair and restore the Leasehold Improvements
reasonably promptly to the condition
existing prior to such damage, but not less than then current Building
Standards, except for
modifications required by law.(3)
    
    Tenant may not terminate this Lease if the actual time to
perform the repairs and restoration
exceeds the Repair Estimate, or the actual interruption exceeds the
Interruption Estimate.
 10.2
Rent Abatement. th
 11. INDEMNITY
 11.1 Claims.
 11.2 Landlords Waivers and Tenants Indemnity.
 (a)
    
    Landlords Waivers. Landlord waives any Claims against Tenant and its
Affiliates for perils insured or
required to be insured by Landlord under subsections (2) and
(3) of §9.2(a), except
to the extent caused by
the gross negligence or willful misconduct of Tenant or its Affiliates.(b)
    
    Tenants Indemnity. Unless waived by Landlord under (a), Tenant will
indemnify and defend Landlord
and its Affiliates and hold each of them harmless from and against Claims arising
from:
 (1)
    
    Any accident or occurrence on or about the Premises, except to the extent caused by
Landlords or
its Affiliates gross negligence or willful misconduct;(2)
    
    Tenants or its Affiliates negligence or willful misconduct; or
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(3)
    
    Any claim for commission or other compensation by
any person other than the Brokers for services rendered to Tenant in
procuring this Lease.
 11.3
    
    Tenants Waivers and Landlords Indemnity.(a)
    
    Tenants Waivers. Tenant waives any Claims against Landlord and its
Affiliates for:
 (1)
    
    Any peril insured or required to be insured by Tenant under
subsections (2), (3) and (8) of §9.1(a),
except to the extent caused by the gross negligence or willful misconduct of
Landlord or its
Affiliates, but in no case will Landlord be liable for any special or
consequential damages
(including interruption of business, loss of income, or loss of opportunity);
or(2)
    
    Damage caused by any public utility, public work, other tenants
or occupants of the Project, or
persons other than Landlord; or(3)
    
    Damages in excess of the insurance Landlord maintains under §9.1.
 (b)
    
    Landlords Indemnity. Unless waived by Tenant under (a),
Landlord will indemnify and defend Tenant and its Affiliates and hold each of them
harmless from and against Claims arising from:
 (1)
    
    Landlords or its Affiliates gross negligence or willful misconduct; or(2)
    
    Any claim for commission or other compensation by any
person other than the Brokers for
services rendered to Landlord in procuring this Lease.
 11.4 Affiliates Defined.
 11.5 Survival of Waivers and Indemnities.
 12.
    
    CONDEMNATION
 12.1
Taking.
 (a)
    
    Total Taking. If because of a Taking substantially all of the Premises
is untenantable for substantially all of the remaining Term, then the Lease
terminates on the date of the Taking.(b)
    
    Partial Taking. If a Taking does not cause the Lease to be terminated under
(a), then Landlord will restore
(and alter, as necessary) the Premises to be tenantable, unless the Lease is
terminated by either Landlord or Tenant under the following circumstances:
 (1)
    
    Landlord may terminate the Lease upon 60 days prior written
notice to Tenant if Landlord
reasonably determines that it is uneconomical to restore or alter the
Premises to be tenantable.(2)
    
    Tenant may terminate the Lease upon 60 days prior written notice
to Landlord if the Taking causes
more than 20% of the Premises to be Untenantable for the remainder of the Term
and Tenant cannot reasonably operate Tenant business for the Use in the remaining
Premises.
 (c)
    
    If the Lease is not terminated under (a) or (b), the Rent payable by Tenant
will be reduced for the term of
the Taking based upon the RSF Premises rendered Untenantable by the Taking and that
Tenant does not actually use.
 12.2 Awards.
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13. TENANT TRANSFERS
 13.1 Terms Defined.
 Transfer Defined.
 (1)
    
    Sublease of all or part of the premises, or assignment,
mortgage, hypothecation or other conveyance of an interest in this
Lease;(2)
    
    Use of the Premises by anyone other than Tenant with Tenants consent;(3)
    
    Change in Tenants form of organization (e.g., a change from a
partnership to limited liability company);(4)
    
    Transfer of 51% or more of Tenants assets, shares (excepting
shares transferred in the normal course of public trading), membership interests,
partnership interests or other ownership interests; or(5)
    
    Transfer of effective control of Tenant.
 13.2 Prohibited Transfers.
 13.3 Consent Not Required.
 (a)
    
    Either (1) controls, is controlled by, or is under common control with Tenant
(for purposes hereof, control shall mean ownership of not less than 50% of all of the
voting stock or legal and equitable interest in the entity in question), (2) results
from the merger or consolidation of Tenant, or (3) acquires all or substantially all of
the stock and/or assets of Tenant as a going concern;(b)
    
    Has a tangible net worth and liquid assets immediately following the Transfer
not less than the greater of (1) Tenants tangible net worth and liquid assets
preceding the Transfer, or (2) Tenants tangible net worth and liquid assets as of the
execution of this Lease;(c)
    
    Will not, by occupying the Premises, cause Landlord to breach any other lease
or other agreement affecting the Project; and(d)
    
    Is not named or listed as a Blocked Person.
 13.4 Consent Required.
 (a)
    
    Tenants Notice. Tenant shall notify Landlord at least 30 days prior to
the proposed Transfer of the name and address of the proposed transferee and the
proposed use of the Premises, and include in the notice the Transfer documents and
copies of the proposed transferees balance sheet and income statement for the most
recent complete fiscal year.(b)
    
    Landlords Rights. Within 30 days after receipt of Tenants complete notice,
Landlord may either:
 (1)
    
    If the proposed Transfer is either an assignment of this Lease or
sublease of substantially all of the Premises, terminate this Lease as of the
proposed Transfer date;(2)
    
    If the proposed Transfer is a sublease of all of the Premises or
any part of the Premises that will be separately demised and have its own
entrance from the Common Areas, exercise a right of first refusal to sublease
such portion of the Premises at the lesser of (A) the Rent (prorated for
subletting part of the Premises), or (B) the rent payable in the proposed
Transfer; or(3)
    
    Consent or deny consent to the proposed Transfer, consent not to be
unreasonably withheld if:
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(A)
    
    The proposed transferee, in Landlords reasonable
opinion, has the financial capacity to meet its obligations under the
proposed Transfer;(B)
    
    The proposed use is
consistent with the Use and will not cause
Landlord to be in breach of any lease or other
agreement affecting the Project;(C)
    
    The proposed transferee is typical of tenants that directly lease
premises in first-class office buildings;(D)
    
    The proposed transferee is not an existing tenant
or an Affiliate of an existing tenant, or a party with which Landlord is
actively negotiating to lease space in the Building (or has, in the last
6 months, been actively negotiating to lease space in the Building);(E)
    
    The proposed transferee is not an agency of any
government, medical facility or entity having sovereign immunity;(F)
    
    Tenant is not in Default under this Lease; and(G)
    
    The proposed transferee is not named or listed as a Blocked Person.
 (c)
    
    Compelling Consent. If Landlord does not consent to a Transfer,
Tenants sole remedy against Landlord will be an action for specific performance or
declaratory relief, and Tenant may not terminate this Lease or seek monetary damages.
 13.5 Payments to Landlord.
 13.6 Effect of Transfers.
 14. LANDLORD TRANSFERS
 14.1 Landlords Transfer.
 14.2 Subordination.
 14.3 Attornment. (a
Successor Landlord).
 (a)
    
    Liable for any obligation of Landlord under this Lease, or be subject
to any counterclaim, defense or offset accruing before Successor Landlord succeeds to
Landlords interest;
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(b)
    
    Bound by any modification or amendment of this Lease made without Successor
Landlords consent,(c)
    
    Bound by any prepayment of more than one months Rent;(d)
    
    Obligated to return any Security Deposit not paid over to Successor Landlord, or(e)
    
    Obligated to perform any improvements to the Premises (or provide an allowance therefor). Upon
Successor Landlords request, Tenant will, without charge, promptly execute, acknowledge and
deliver to Successor Landlord any instrument reasonably necessary required to evidence such
attornment.
 14.4 Estoppel Certificate.
 (a)
    
    The Commencement Date and Expiration Date;(b)
    
    The documents that constitute the Lease, and that the Lease is unmodified and in full
force and effect;(c)
    
    The date through which Base Rent, Additional Rent, and other Rent has been paid;(d)
    
    That neither Landlord nor Tenant is in Default;(e)
    
    That Landlord has satisfied all Lease obligations to improve the Premises (or
provide Tenant an allowance therefor) and Tenant has accepted the Premises;(f)
    
    That Tenant solely occupies the Premises; and(g)
    
    Such other matters concerning this Lease or Tenants occupancy that Landlord may
reasonably require.
 15. DEFAULT AND REMEDIES
 15.1
    
    Tenants Default and Remedies.
 (a)
    
    Tenant will be in Default of this Lease if Tenant either:
 (1)
    
    Fails to pay Rent when due, and the failure continues for 5 days
after Landlord notifies Tenant of
this failure under §17.2 (Tenant waiving any other notice that may be
required by law);(2)
    
    Fails to perform a non-monetary Lease obligation of Tenant and the
failure continues for 30 days
after Landlord notifies Tenant of this failure, but if it will reasonably take
more than 30 days to
perform this obligation, then Tenant will have a reasonable time to perform
this obligation, but
only if Tenant commences performing this obligation within 30 days after
Landlord notifies
Tenant of this failure;(3)
    
    Consummates a Transfer that violates Article 13;(4)
    
    Fails, within 15 days after it occurs, to discharge any attachment
or levy on Tenants interest in
this Lease;(5)
    
    Fails, within 60 days after it occurs, to have vacated or dismissed
any appointment of a receiver or
trustee of Tenants assets (or any Lease guarantors assets), or any voluntary
or involuntary
bankruptcy or assignment for the benefit of Tenants creditors (or any Lease
guarantors
creditors); or(6)
    
    Is listed or named as a Blocked Person, or Tenant acts directly or
indirectly for or on behalf of any
Blocked Person in connection with this Lease.
 (b)
    
    If Tenant is in Default, Landlord may, without prejudice to the exercise
of any other remedy, exercise any remedy available under law, including those described
below:
 (1)
    
    Landlord has the remedy described in California Civil Code
§1951.4. Landlord may continue this Lease in effect after Tenants breach and
abandonment (until Landlord terminates Tenants right
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to possess the Premises under (2), below) and recover Rent as it becomes due.
If Landlord elects this remedy, any Transfer Tenant proposes will be subject
only to reasonable limitations.
 (2)
    
    Landlord has the remedy described in California Civil
Code §1951.2. If Tenant does not abandon the Premises, Landlord may terminate
Tenants right to possess the Premises and recover from Tenant all of the
following:
 (A)
    
    The worth at the time of award (computed
by allowing interest at the rate in (3), below, on amounts due prior to
award, and discounting amounts due after award at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus 1%)
of:
 (i)
    
    The unpaid Rent earned as of termination;(ii)
    
    The amount that the unpaid
Rent earned after termination to the date of award exceeds the
rental loss that Tenant proves could have been reasonably
avoided; and(iii)
    
    The amount that the unpaid Rent
for the balance of the Term after the date of award exceeds
the rental loss that Tenant proves could have been reasonably
avoided; and
 (B)
    
    Any other amount necessary to compensate Landlord for damage caused
by Tenants
failure to observe this Lease (or which, in the ordinary course of
things would be likely to result therefrom, including costs of
obtaining mitigating rental income, such as excused
rent, brokerage commissions, improvements, parking concessions, lease
takeovers, cash payments, advertising, and moving costs).
 (3)
    
    For any amounts owed under (1) or (2), recover interest
at the greater of the interest rate permitted under law or 10% (Default Rate)
from the date each amount is due until paid by Tenant.
 15.2 Landlords Default and Remedies.
 (a)
    
    Landlord will be in Default of this Lease if Landlord fails to perform any
Lease obligation of Landlord
and this failure continues for 30 days after Tenant notifies Landlord of such
failure, or such longer period
of time as is reasonable if more than 30 days is reasonably required to
perform this obligation if
performance commences within this 30-day period and is diligently prosecuted to
completion.(b)
    
    If Landlord is in Default, then Tenant may exercise any remedy available under
law that is not waived or
limited under this Lease, subject to the following:
 (1)
    
    Tenant may not terminate this Lease due to any Landlord Default
until Tenant notifies each
Encumbrance holder and each Encumbrance holder is provided a reasonable
opportunity to gain
legal possession of the Project and, after gaining possession, cure the
Default.(2)
    
    Landlords liability under this Lease is limited to Landlords interest in the
Building.(3)
    
    No liability under this Lease is assumed by Landlords Affiliates.
 15.4 Enforcement Costs.
 15.5 Jury Trial.
 15.6 Force Majeure.
 16. SECURITY
 16.1 Security Deposit.
 19




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16.2 Refund.
 16.3 Financial Statements.
 17. MISCELLANEOUS
 17.1 Rules and Regulations.
 17.2 Notice.
 17.3 Intentionally Omitted.
 17.4 Building Name and Image.
 17.5 Entire Agreement.
 17.6
Successors.
 17.7 No Waiver.
 17.8 Independent Covenants.
 17.9 Captions.
 17.10 Authority.
 17.11 Applicable Law.
 20




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17.12 Confidentiality.
 17.13 Reasonableness.
 17.14 Time.
 17.15 Quiet Enjoyment.
 17.16
Landlords Entry.
 17.17 Exhibits.
 18. OPTION TO EXTEND
 18.1 Option Right Original Tenant Option Option Term
 18.2 Option Rent Option Rent Market Rent
 18.3 Exercise of Option Interest Notice Option Rent Notice Tenants
Acceptance
 21




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18.4 Determination of Market Rent
      rd
  Landlord
and Tenant execute this Lease as follows:
 LIFEVANTAGE CORPORATION
    
    
    
    BERNARDO REGENCY, LLCBy:
    
    /s/ David W. Brown
    
    
    
    By:Print:
    
    DAVID W. BROWN
    
    
    
    Print:Title:
    
    President/CEO
    
    
    
    Title:By:Print:Title:
 22




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EXHIBIT A  RULES & REGULATIONS
 1. Rules Applied.
 2. Right to Exclude.
 3. Obstructions ,
 4. Trash.
 5. Public Safety
 6. Keys, Access Cards and Locks
 7. Aesthetics
 (a)
    
    Attach any awnings, signs, displays or projections to either the outside
walls or windows of the Building, or to any part of the Premises visible from outside
the Premises;(b)
    
    Hang any non-Building Standard curtains, blinds, shades or screens in any window or
door of the Premises;(c)
    
    Coat or sunscreen the interior or exterior of any windows; or(d)
    
    Place any objects on windowsills.
 8. Directories
and Signs
 A-1




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9. HVAC
Operation
 10. Plumbing
 11. Equipment Location.
 12. Bicycles.
 13. Animals.
 14. Intentionally omitted.
 15. Elevators.
 16. Moving and Deliveries
 17. Solicitation.
 18. Food and Vending Machines.
 19. Pest Control.
 A-2




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20. Work Orders and Service Requests.
 21. Smoking.
 A-3