acunetx_10k-ex1005.htm


    
      
        

      

    

    EXHIBIT
10.5

     

    INDUSTRIAL
LEASE

     

    TORRANCE
COMMERCE CENTER

     

    Dated:
January 22, 2010

     

    1.   BASIC
LEASE TERMS. For purposes of this Lease, the following terms have the
following definitions and meanings:

     

    (a)   Landlord:
KOLL/PER TORRANCE COMMERCE CENTER, LLC, a Delaware limited liability
company

     

    Landlord's
Address (For Notices):

     

    KOLL/PER
TORRANCE COMMERCE CENTER, LLC

    c/o The
Koll Company

    17755 Sky
Park East, Suite 100

    Irvine,
California 92614

    Attention:
Cynthia Wityak, Senior Manager

     

    With a
copy to:

     

    The Koll
Company

    4343 Von
Karman Avenue, Suite 150

    Newport
Beach, California 92660

    Attn:
Regional Asset Manager - Torrance.

     

    Landlord's Address (For Payment
of.
Rent):

     

    Koll/PER
TORRANCE COMMERCE CENTER, LLC

    Dept.
2619-78

    Los
Angeles, CA 90084-2619

     

    (b)   Tenant:
ACUNETX, INC., a Nevada corporation

     

    Tenant's Trade Name:
AcuNetx

     

    Tenant's
Address for Notices (Premises):

     

    2301 W.
205t1
Street, Suite 102

    Torrance,
CA 90501-1449

     

    (c)   Premises:
Suite 102 of Building 2301 (the "Building")
of TORRANCE COMMERCE CENTER (the "Project"),
located at 2301 W. 205th
Street in the City of Torrance ("City").
County of Los Angeles ("County"),
State of California ("State")
as shown on Exhibit
"A-I". The Premises contain approximately 1,620 Rentable Square Feet
(subject to adjustment as provided in this Lease).

      


    (e)   Term:
Twelve (12) calendar months

     

    (f)   Commencement Date:
February 1,
2010

     

    (g)   Expiration Date:
January 31,
2011

     

    (i)   Monthly
Base Rent :

    
    

       

    
      	

              PERIOD
      COVERED:

            	

              MONTHLY
      BASE RENT:

            
	

              02/01/10
      — 01/31/11

            	

              $1,888.00

            


    

       

    (I)    Monthly
Operating Expense Charge:

       

    
      	

              PERIOD
      COVERED:

            	

              

                MONTHLY
      OPERATING EXPENSE CHARGE:

              

            
	

              

                02/01/10
      — 01/31/11

              

            	

              

                $162.00

              

            


    

       

    
      to
adjustment as provided in this Lease).

       

      (d)   Tenant's
Share of Operating Expenses: 1.45% based on 111,981 Rentable Square Feet
in the Project
and 1,620 Rentable Square Feet in the Premises

       

      (j)   Security
Deposit: $2,190.00 (see Paragraph #7)

    

     

    (k)   Non-Refundable
Cleaning Fee Portion of Security Deposit: Waived

     

    (l)   Permitted
Use: General office and warehouse for a medical diagnostics equipment
company and no other use
without the express written consent of Landlord, which consent Landlord may
withhold in its sole and absolute discretion.

     

    (m)   Broker(s):
Grubb & Ellis representing Landlord and Tenant.

     

    (n)   Guarantor(s):
None.

     

    (o)   Interest
Rate: The greater of ten percent (10%) per annum or two percent (2%) in
excess of the prime lending
or reference rate of Wells Fargo Bank N.A., or any successor bank in effect on
the twenty-fifth (25th) day of the calendar month immediately prior to the event
giving rise to the Interest Rate imposition; provided, however, the Interest
Rate will in no event exceed the maximum interest rate permitted to be charged
by applicable law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (p)   Exhibits:
Exhibit
"A-1" and Exhibit "C" through
Exhibit "G",
inclusive, which Exhibits are attached to this
Lease and incorporated herein by this reference.

     

    This
Paragraph 1
represents a summary of the basic terms and definitions of this Lease. In the
event of any inconsistency between the terms contained in this Paragraph 1 and
any specific provision of this Lease, the terms of the more specific provision
shall prevail.

    


    2.    PREMISES AND COMMON
AREAS.

     

    (a)   Premises.
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
the Premises upon and
subject to the terms, covenants and conditions contained in this Lease to be
performed by each party.

     

    (b)   Tenant's
Use of Common Areas. During the Term of this Lease, Tenant shall have the
nonexclusive right to
use in common with all other occupants of the Project, the following common
areas of the Project (collectively, the "Common Areas"): the
parking facilities of the Project which serve the Building, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways, landscaped areas, and similar areas and facilities situated within
the Project and appurtenant to the Building which are not reserved for the
exclusive use of any Project occupants.

     

    (c)   Landlord's
Reservation of Rights. Provided that Landlord uses commercially
reasonable efforts to not
materially and adversely interfere with Tenant's use of the Premises, Landlord
reserves for itself and for all other owner(s) and operator(s) of the Common
Areas and the balance of the Project, the right from time to time to: (i)
install, use, maintain, repair, replace and relocate pipes, ducts, conduits,
wires and appurtenant meters and equipment above the ceiling surfaces, below the
floor surfaces and within the walls of the Building; (ii) make changes to the
design and layout of the Project, including, without limitation, changes to
buildings, driveways, entrances, loading and unloading areas, direction of
traffic, landscaped areas and walkways, parking spaces and parking areas; and
(iii) use or close temporarily the Common Areas, and/or other portions of the
Project while engaged in making improvements, repairs or alterations to the
Building, the Project, or any portion thereof.

    


    3.   TERM.
The term of this Lease ("Term") will be for
the period designated in Subparagraph 1(e),
commencing on the
Commencement Date, and ending on the Expiration Date. Each consecutive twelve
(12) month period of the Term of this Lease, commencing on the Commencement
Date, will be referred to herein as a "Lease
Year".

     

    4.    POSSESSION.

     

    (a)   Existing
Tenancy. Tenant currently occupies the Premises pursuant to that certain
Standard Industrial/Commercial
Multi-Tenant Lease — Gross dated January 9, 2003 which was amended by the First
Amendment to Lease dated July 27, 2005 and the Second Amendment to Lease dated
December 19, 2007 (as amended, the "Prior Lease") originally entered into by AMB
Property, L.P. a Delaware limited partnership ("Original Lessor") as Lessor, and
Tenant, as Lessee. Landlord has succeeded to the interest of Original Lessor
under the Lease. The term of the Prior Lease expires on January 31, 2010.
Landlord and Tenant agree that this Lease supersedes the Prior Lease and the
Prior Lease is hereby deemed terminated as of the Commencement Date; provided
however, notwithstanding the expiration of the Prior Lease, Tenant shall remain
liable for, and shall indemnify and hold Landlord and the Landlord Indemnified
Parties harmless from and against, any and all Indemnified Claims [as defined in
Paragraph 18(b)] which may have accrued, arisen or occurred during the term of
the Prior Lease.

     

    (b)   Condition
of Premises. Landlord shall have no obligation whatsoever to improve or
otherwise fund any
improvements to the Premises in conjunction with this Lease. By taking
possession of the Premises, Tenant will be deemed to have accepted the Premises
in its "as-is" condition on the date of delivery of possession. Tenant
acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty with respect to the Premises, the Building, the
Project or any portions thereof or with respect to the suitability of same for
the conduct of Tenant's business and Tenant further acknowledges that Landlord
will have no obligation to construct or complete any additional buildings or
improvements within the Project.

     

    (c)    Lease
Confirmation. Concurrently with the delivery of the Premises by Landlord,
Landlord shall deliver
to Tenant and Tenant shall execute a written statement in the form attached
hereto as Exhibit
"G", attached hereto (the "Tenant Commencement
Certificate") confirming the Commencement Date of the Lease and the
Expiration Date of the Lease. If Tenant fails to sign and return the Tenant
Commencement Certificate to Landlord upon the delivery of the Premises by
Landlord, the Tenant Commencement Certificate as sent by Landlord shall be
deemed to have correctly set forth the Commencement Date and the other matters
addressed in the Certificate. The form of certificate shown in Exhibit "G" may also
be used in conjunction with amendments to this Lease, if any, and Tenant shall
execute the same within ten (10) days after receipt of a request therefor from
Landlord.

     

    5.    RENT

     

    (a)   Monthly
Base Rent. Tenant agrees to pay Landlord the Monthly Base Rent for the
Premises (subject to
adjustment as hereinafter provided) in advance on the first day of each calendar
month during the Term without prior notice or demand, except that Tenant agrees
to pay the Monthly Base Rent for the first month of the Term directly to
Landlord concurrently with Tenant's delivery of the executed Lease to Landlord.
The obligation of Tenant to pay Monthly Base Rent and other sums to Landlord and
the obligations of Landlord under this Lease are independent obligations. All
rent must be paid to Landlord, without any deduction or offset, in lawful money
of the United States of America, at the address designated by Landlord or to
such other person or at such other place as Landlord may from time to time
designate in writing. Monthly Base Rent will be adjusted during the Term of this
Lease as provided in Subparagraph 1(h)  of
this Lease.

     

    (b)   Additional
Rent. All amounts and charges to be paid by Tenant hereunder, including,
without limitation,
payments for Operating Expenses, insurance and repairs, will be considered
additional rent for purposes of this Lease, and the word "rent" as used in this
Lease will include all such additional rent unless the context specifically or
clearly implies that only Monthly Base Rent is intended.

     

    (c)   Late
Payments. Late payments of Monthly Base Rent and/or any item of
additional rent will be subject
to interest and a late charge as provided in Subparagraph 22(f)
below.

     

    
      
        
        

      

      
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    6.    OPERATING
EXPENSES.

     

    (a)   Operating
Expenses. Throughout the Term of this Lease, commencing on the
Commencement Date, Tenant
agrees to pay Landlord as additional rent in accordance with the terms of this
Paragraph 6,
Tenant's Share of Operating Expenses for the taxes and insurance for the Project
and all costs and expenses for the operation, maintenance, repair, and
replacement of the Project including, without limitation: (i) any form of real
property tax assessment, license fee, license tax, business license fee,
commercial rental tax, levy, charge, improvement bond or similar imposition of
any kind or nature imposed by any authority having the direct power to tax,
including any city, county, state or federal government, or any school,
agricultural, lighting, drainage or other improvement or special assessment
district thereof, including, without limitation, any new taxes which are in
substitution for or in addition to any current taxes payable hereunder; (ii) any
and all assessments under any covenants, conditions and restrictions affecting
the Project; (iii) water, sewer and other utility charges; (iv) costs of
insurance obtained by Landlord pursuant to Paragraph 19 of the
Lease; (v) waste disposal and janitorial services; (vi) security; (vii) labor;
(viii) management costs including, without limitation: (A) wages and salaries
(and payroll taxes and similar charges ) of property management employees, and
(B) management office rental, supplies, equipment and related operating expenses
and management fees; (ix) supplies, materials, equipment and tools including
rental of personal property; (x) repair and maintenance of the structural
portions of the buildings with the Project, including the plumbing, heating,
ventilating, air-conditioning and electrical systems installed or furnished by
Landlord; (xi) maintenance, costs and upkeep of all parking and other Common
Areas; (xii) depreciation on a straight line basis and rental of personal
property used in maintenance: (xiii) amortization on a straight line basis over
the useful life [together with interest at the Interest Rate on the unamortized
balance) of all capitalized expenditures which are: (A) reasonably intended to
produce a reduction in operating charges or energy consumption; or (B) required
under any governmental law or regulation that was not applicable to the Project
at the time it was originally constructed; or (C) for replacement of any Project
equipment needed to operate the Project at the same quality levels as prior to
the replacement; (xiv) gardening and landscaping; (xv) maintenance of signs
(other than signs of tenants of the Project); (xvi) personal property taxes
levied on or attributable to personal property used in connection with the
Common Areas; (xvii) reasonable accounting, audit, verification, legal and other
consulting fees; and (xviii) costs and expenses of repairs, resurfacing,
repairing, maintenance, painting, lighting, cleaning, refuse removal, security
and similar items, including appropriate reserves.

     

    (b)   Determination of
Tenant's Monthly Operating Expense Charge. Tenant's Monthly Operating
Expense
Charge shall be determined as provided in Subparagraph 1(i) of
this Lease. If Tenant's Monthly Operating Expense Charge is scheduled for each
year of the Lease Term, as shown in Subparagraph 1(i),
then Subparagraph
6(c), Subparagraph 6(d) and
Subparagraph
6(e) below will not apply.

     

    (c)   Estimate
Statement. Prior to the Commencement Date and on or about March 1st of
each subsequent
calendar year during the Term of this Lease, Landlord will endeavor to deliver
to Tenant a statement ("Estimate
Statement") wherein Landlord will estimate both the Operating Expenses
and Tenant's Monthly Operating Expense Charge for the then current calendar
year. Tenant agrees to pay Landlord, as additional rent, Tenant's estimated
Monthly Operating Expense Charge each month thereafter, beginning with the next
installment of rent due, until such time as Landlord issues a revised Estimate
Statement or the Estimate Statement for the succeeding calendar year; except
that, concurrently with the regular monthly rent payment next due following the
receipt of each such Estimate Statement, Tenant agrees to pay Landlord an amount
equal to one monthly installment of Tenant's estimated Monthly Operating Expense
Charge (less any applicable Operating Expenses already paid) multiplied by the
number of months from January, in the current calendar year, to the month of
such rent payment next due, all months inclusive. If at any time during the Term
of this Lease, but not more often than quarterly, Landlord reasonably determines
that Tenant's Share of Operating Expenses for the current calendar year will be
greater than the amount set forth in the then current Estimate Statement,
Landlord may issue a revised Estimate Statement and Tenant agrees to pay
Landlord, within ten (10) days of receipt of the revised Estimate Statement, the
difference between the amount owed by Tenant under such revised Estimate
Statement and the amount owed by Tenant under the original Estimate Statement
for the portion of the then current calendar year which has expired. Thereafter
Tenant agrees to pay Tenant's Monthly Operating Expense Charge based on such
revised Estimate Statement until Tenant receives the next calendar year's
Estimate Statement or a new revised Estimate Statement for the current calendar
year.

     

    (d)   Actual
Statement. By March 1st of each calendar year during the Term of this
Lease, Landlord will also
endeavor to deliver to Tenant a statement ("Actual Statement")
which states Tenant's Share of the actual Operating Expenses for the preceding
calendar year. If the Actual Statement reveals that Tenant's Share of the actual
Operating Expenses is more than the total Additional Rent paid by Tenant for
Operating Expenses on account of the preceding calendar year, Tenant agrees to
pay Landlord the difference in a lump sum within ten (10) days of receipt of the
Actual Statement. If the Actual Statement reveals that Tenant's Share of the
actual Operating Expenses is less than the Additional Rent paid by Tenant for
Operating Expenses on account of the preceding calendar year, Landlord will
credit any overpayment toward the next monthly installment(s) of Tenant's Share
of the Operating Expenses due under this Lease.

     

    (e)   Miscellaneous.
Any delay or failure by Landlord in delivering any Estimate Statement or
Actual Statement
pursuant to this Paragraph 6 will not
constitute a waiver of its right to require an increase in rent nor will it
relieve Tenant of its obligations pursuant to this Paragraph 6, except
that Tenant will not be obligated to make any payments based on such Estimate
Statement or Actual Statement until ten (10) days after receipt of such Estimate
Statement or Actual Statement. If Tenant does not object to any Estimate
Statement or Actual Statement within thirty (30) days after Tenant receives any
such statement, such statement will be deemed final and binding on Tenant. Even
though the Term has expired and Tenant has vacated the Premises, when the final
determination is made of Tenant's Share of the actual Operating Expenses for the
year in which this Lease terminates, Tenant agrees to promptly pay any increase
due over the estimated expenses paid and, conversely, any overpayment made in
the event said expenses decrease shall promptly be rebated by Landlord to
Tenant. Such obligation will be a continuing one which will survive the
expiration or termination of this Lease. Prior to the expiration or sooner
termination of the Lease Term and Landlord's acceptance of Tenant's surrender of
the Premises, Landlord will have the right to estimate the actual Operating
Expenses for the then current Lease Year and to collect from Tenant prior to
Tenant's surrender of the Premises, Tenant's Share of any excess of such actual
Operating Expenses over the estimated Operating Expenses paid by Tenant in such
Lease Year.

     

    
      
        
        

      

      
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    7.    SECURITY
DEPOSIT AND CLEANING FEE. Landlord is currently holding $2,190.00 as
security deposit under the Prior
Lease (the "Prior Lease Deposit"). Tenant hereby consents to the transfer of the
Prior Lease Deposit to Tenant's account as part of the Security Deposit
hereunder. The Security Deposit will be held by Landlord as security for the
full and faithful performance by Tenant of all of the terms, covenants, and
conditions of this Lease to be kept and performed
by Tenant during the Term hereof. The Security Deposit is not, and may not be
construed by Tenant to constitute, rent for the last month or any portion
thereof. If Tenant defaults with respect to any provisions of this Lease
including, but not limited to, the provisions relating to the payment of rent or
additional rent, Landlord may (but will not be required to) use, apply or retain
all or any part of the Security Deposit for the payment of any rent or any other
sum in default, or for the payment of any other amount which Landlord may spend
by reason of Tenant's default or to compensate Landlord for any loss or damage
which Landlord may suffer by reason of Tenant's default. If any portion of the
Security Deposit is so used or applied, Tenant agrees, within ten (10) days
after Landlord's written demand therefor, to deposit cash with Landlord in an
amount sufficient to restore the Security Deposit to its original amount and
Tenant's failure to do so shall constitute a default under this Lease. Landlord
is not required to keep Tenant's Security Deposit separate from its general
funds, and Tenant is not entitled to interest 'on such Security Deposit. If
Tenant is not in default at the expiration or termination of this Lease,
Landlord will return the Security Deposit to Tenant, less the non-refundable
Cleaning Fee portion designated in Subparagraph 1(k).
Landlord's obligations with respect to the Security Deposit are those of a
debtor and not of a trustee. Tenant hereby waives the provisions of Section
1950.7 of the California Civil Code and agrees that the provisions of this
Section 7 shall govern the treatment of Tenant's Security Deposit in all
respects for this Lease.

     

    8.    USE.

     

    (a)   Tenant's
Use of the Premises. The Premises may be used for the use or uses set
forth in Subparagraph 1(I)
only, and Tenant will not use or permit the Premises to be used for any other
purpose without the prior written consent of Landlord, which consent Landlord
may withhold in its sole and absolute discretion. Nothing in this Lease will be
deemed to give Tenant any exclusive right to such use in the
Project.

     

    (b)   Compliance.
At Tenant's sole cost and expense, Tenant agrees to procure, maintain and
hold available
for Landlord's inspection, all governmental licenses and permits required for
the proper and lawful conduct of Tenant's business from the Premises, if any.
Tenant agrees not to use, alter or occupy the Premises or allow the Premises to
be used, altered and occupied in violation of, and Tenant, at its sole cost and
expense, agrees to use and occupy the Premises, and cause the Premises to be
used and occupied, in compliance with: (i) any and all laws, statutes, zoning
restrictions, ordinances, rules, regulations, orders and rulings now or
hereafter in force and any requirements of any insurer, insurance authority or
duly constituted public authority having jurisdiction over the Premises, the
Building or the Project now or hereafter in force, (ii) the requirements of the
Board of Fire Underwriters and any other similar body, (iii) the Certificate of
Occupancy issued for the Building, and (iv) any recorded covenants, conditions
and restrictions and similar regulatory agreements, if any, which affect the
use, occupation or alteration of the Premises, the Building and/or the Project.
Tenant agrees to comply with the Rules and Regulations referenced in Paragraph 28 below.
Tenant agrees not to do or permit anything to be done in or about the Premises
which will in any manner obstruct or interfere with the rights of other tenants
or occupants of the Project, or injure or unreasonably annoy them, or use or
allow the Premises to be used for any unlawful or unreasonably objectionable
purpose. Tenant agrees not to place or store any articles or materials outside
of the Premises or to cause, maintain or permit any nuisance or waste in, on,
under or about the Premises or elsewhere within the Project. Tenant shall not
use or allow the Premises to be used for lodging, bathing or the washing of
clothes.

     

    (c)   Hazardous
Materials. Except for ordinary and general office supplies, such as
copier toner, liquid paper,
glue, ink and common household cleaning materials (some or all of which may
constitute "Hazardous
Materials" as defined in this Lease), Tenant agrees not to cause or
permit any Hazardous Materials to be brought upon, stored, used, handled,
generated, released or disposed of on, in, under or about the Premises, the
Building, the Common Areas or any other portion of the Project by Tenant, its
agents, employees, subtenants, assignees, licensees, contractors or invitees
(collectively, "Tenant's Parties"),
without the prior written consent of Landlord, which consent Landlord may
withhold in its sole and absolute discretion. Concurrently with the execution of
this Lease and annually thereafter, within ten (10) days of written request from
Landlord, Tenant agrees to complete and deliver to Landlord an Environmental
Questionnaire in the form of Exhibit "F" attached
hereto. Upon the expiration or earlier termination of this Lease, Tenant agrees
to promptly remove from the Premises, the Building and the Project, at its sole
cost and expense, any and all Hazardous Materials, including any equipment or
systems containing Hazardous Materials which are installed, brought upon,
stored, used, generated or released upon, in, under or about the Premises, the
Building and/or the Project or any portion thereof by Tenant or any of Tenant's
Parties. To the fullest extent permitted by law, Tenant agrees to promptly
indemnify, protect, defend and hold harmless Landlord and Landlord's partners,
officers, directors, employees, agents, successors and assigns (collectively,
"Landlord Indemnified
Parties") from and against any and all claims, damages, judgments, suits,
causes of action, losses, liabilities, penalties, fines, expenses and costs
(including, without limitation, clean-up, removal, remediation and restoration
costs, sums paid in settlement of claims, attorneys' fees, consultant fees and
expert fees and court costs) which arise or result from the presence of
Hazardous Materials on, in,
under or about the Premises, the Building or any other portion of the
Project and which are caused or permitted by Tenant or any of Tenant's Parties.
Tenant agrees to promptly notify Landlord of any release of Hazardous Materials
in the Premises, the Building or any other portion of the Project which Tenant
becomes aware of during the Term of this Lease, whether caused by Tenant or any
other persons or entities. In the event of any release of Hazardous Materials
caused or permitted by Tenant or any of Tenant's Parties, Landlord shall have
the right, but not the obligation, to cause Tenant to immediately take all steps
Landlord deems necessary or appropriate to remediate such release and prevent
any similar future release to the satisfaction of Landlord and Landlord's
mortgagee(s). At all times during the Term of this Lease, Landlord will have the
right, but not the obligation, to enter upon the Premises to inspect,
investigate, sample and/or monitor the Premises to determine if Tenant is in
compliance with the terms of this Lease regarding Hazardous Materials. As used
in this Lease, the term "Hazardous Materials"
shall mean and include any hazardous or toxic materials, substances or wastes as
now or hereafter designated under any law, statute, ordinance, rule, regulation,
order or ruling of any agency of the State, the United States Government or any
local governmental authority, including, without limitation, asbestos,
petroleum, petroleum hydrocarbons and petroleum based products, urea
formaldehyde foam insulation, polychlorinated biphenyls ("PCBs"), and freon
and other chlorofluorocarbons. The provisions of this Subparagraph 8(c)
will survive the expiration or earlier termination of this Lease.

     

    (d)   Refuse
and Sewage. Tenant agrees not to keep any trash, garbage, waste or other
refuse on the Premises
except in sanitary containers and agrees to regularly and frequently remove same
from the Premises. Tenant shall keep all containers or other equipment used for
storage of such materials in a clean and sanitary condition. Tenant shall
properly dispose of all sanitary sewage and shall not use the sewage disposal
system for the disposal of anything except sanitary sewage. Tenant shall keep
the sewage disposal system free of all obstructions and in good operating
condition. If the volume of Tenant's trash becomes excessive in Landlord's
judgment, Landlord shall have the right to charge Tenant for additional trash
disposal services and/or to require that Tenant contract directly for additional
trash disposal services at Tenant's sole cost and expense.


    
      
         


      

      
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      9.   NOTICES. Any notice required
or permitted to be given hereunder must be in writing and may be given by
personal
delivery (including delivery by overnight courier or an express mailing service)
or by mail, if sent by registered or certified mail. Notices to Tenant shall be
sufficient if delivered to Tenant at the Premises and notices to Landlord shall
be sufficient if delivered to Landlord at the address designated in Subparagraph 1(a).
Either party may specify a different address for notice purposes by written
notice to the other, except that the Landlord may in any event use the Premises
as Tenant's address for notice purposes.

    

     

    10.   BROKERS. The parties
acknowledge that the broker(s) who negotiated this Lease are stated in
Subparagraph 1(m).
Landlord and Tenant each agree to promptly indemnify, protect, defend and hold
harmless the other from and against any and all claims, damages, judgments,
suits, causes of action, losses, liabilities, penalties, fines, expenses and
costs (including attorneys' fees and court costs) resulting from any breach by
the indemnifying party of the foregoing representation, including, without
limitation, any claims that may be asserted by any broker, agent or finder
undisclosed by the indemnifying party. The foregoing mutual indemnity shall
survive the expiration or earlier termination of this Lease. Tenant agrees that
Landlord will not recognize or compensate any third party broker with regards to
any renewals and/or expansions.

     

    11.    SURRENDER;
HOLDING OVER.

     

    (a)   Surrender. The voluntary or
other surrender of this Lease by Tenant, or a mutual cancellation thereof,
shall not
constitute a merger, and shall, at the option of Landlord, operate as an
assignment to Landlord of any or all subleases or subtenancies. Upon the
expiration or earlier termination of this Lease, Tenant agrees to timely and
peaceably surrender the Premises to Landlord broom clean and in a state of good
order, repair and condition, ordinary wear and tear and casualty damage
excepted, with all of Tenant's personal property and alterations removed from
the Premises to the extent required under Paragraph 13 and all
damage caused by such removal repaired as required by Paragraph 13. The
delivery of keys to any employee of Landlord or to Landlord's agent or any
employee thereof alone will not be sufficient to constitute a termination of
this Lease or a surrender of the Premises.

     

    (b)   Holding Over. If Tenant holds
over after the expiration or earlier termination of the Term, Landlord
may, at
its option, treat Tenant as a tenant at sufferance only, and evict Tenant
immediately, or consent in writing to the continued occupancy by Tenant which
shall be subject to all of the terms, covenants and conditions of this Lease, so
far as applicable, including the payment of Operating Expenses, except that the
Monthly Base Rent for any month or partial month during which Tenant holds over
shall be equal to two hundred percent (200%) of the Monthly Base Rent in effect
under this Lease immediately prior to such holdover. Acceptance by Landlord of
rent after such expiration or earlier termination will not result in a renewal
of this Lease. If Tenant fails to surrender the Premises upon the expiration of
this Lease in accordance with the terms of this Paragraph 11 despite
demand to do so by Landlord, Tenant agrees to promptly indemnify, protect,
defend and hold Landlord harmless from all claims, damages, judgments, suits,
causes of action, losses, liabilities, penalties, fines, expenses and costs
(including attorneys' fees and costs), including, without limitation, costs and
expenses incurred by Landlord in returning the Premises to the condition in
which Tenant was to surrender it and claims made by any succeeding tenant
founded on or resulting from Tenant's failure to timely surrender the Premises
in accordance with the terms of this Lease. The provisions of this Subparagraph 11(b)
will survive the expiration or earlier termination of this Lease.

     

    12.    TAXES ON TENANT'S
PROPERTY. Tenant agrees to pay before delinquency, all taxes and
assessments (real and
personal) levied against Tenant's business operations or any personal property,
improvements, alterations, trade fixtures or merchandise placed by Tenant in or
about the Premises.

     

    13.   ALTERATIONS. Tenant shall not
make any alterations to the Premises or any other aspect of the Project,
without
Landlord's prior written consent, which consent Landlord may withhold in its
reasonable but subjective discretion. Notwithstanding the foregoing to the
contrary, Tenant shall not make (i) any structural alterations, improvements or
additions to the Premises, or (ii) any alterations, improvements or additions to
the Premises which (a) will adversely impact the Building's mechanical,
electrical or heating, ventilation or air conditioning systems, or (b) will
adversely impact the structure of the Building, or (c) are visible from the
exterior of the Premises, or (d) which will result in the penetration or
puncturing of the roof or floor, without, in each case, first obtaining
Landlord's prior written consent or approval to such Alterations (which consent
or approval shall be in the Landlord's sole and absolute discretion). All
permitted alterations must be performed in compliance with Landlord's standard
rules and regulations regarding alterations. All alterations will become the
property of Landlord and will remain upon and be surrendered with the Premises
at the end of the Term of this Lease; provided, however, Landlord may require
Tenant to remove any or all alterations at the end of the Term of this Lease. If
Tenant fails to remove by the expiration or earlier termination of this Lease
all of its personal property, or any alterations identified by Landlord for
removal, Landlord may, at its option, treat such failure as a hold-over pursuant
to Subparagraph
11(b) above, and/or Landlord may (without liability to Tenant for loss
thereof) treat such personal property and/or alterations as abandoned and, at
Tenant's sole cost and expense and in addition to Landlord's other rights and
remedies under this Lease, at law or in equity: (a) remove and store such items;
and/or (b) upon ten (10) days' prior notice to Tenant, sell, discard or
otherwise dispose of all or any such items at private or public sale for such
price as Landlord may obtain or by other commercially reasonable means. Tenant
shall be liable for all costs of disposition of Tenant's abandoned property and
Landlord shall have no liability to Tenant with respect to any such abandoned
property. Landlord agrees to apply the proceeds of any sale of any such property
to any amounts due to Landlord under this Lease from Tenant (including
Landlord's attorneys' fees and other costs incurred in the removal, storage
and/or sale of such items), with any remainder to be paid to
Tenant.

       

    14.   REPAIRS.

     

    (a)    Landlord
agrees to repair and maintain the structural portions of the Building, including
the foundations, bearing
and exterior walls (excluding glass), subflooring and roof (excluding
skylights), and the unexposed electrical, plumbing and sewer systems, including
those portions of such systems which are outside the Premises, gutters and
downspouts on the Building and the heating, ventilating and air conditioning
systems (HVAC) which serve the Premises, unless such maintenance and repairs are
caused in part or in whole by the act, neglect or omission of any duty by
Tenant, its agents, servants, employees or invitees, in which case Tenant will
pay to Landlord, as additional rent, the reasonable cost of such maintenance and
repairs. The costs of maintenance, repairs or replacement of HVAC unit performed
by Landlord will be included in Operating Expenses. Except as provided in this
Subparagraph
14(a), Landlord has no obligation to alter, remodel, improve, repair,
decorate or paint the Premises or any part thereof. Landlord will not be liable
for any failure to make any such repairs or to perform any maintenance unless
such failure shall persist for an unreasonable time after written notice of the
need of such repairs or maintenance is given to Landlord by Tenant. Tenant will
not be entitled to any abatement of rent and Landlord will not have any
liability by reason of any injury to or interference
with Tenant's business arising from the making of any repairs, alterations or
improvements in or to any portion of the Building or the Premises or in or to
fixtures, appurtenances and equipment therein. Tenant waives the right to make
repairs at Landlord's expense under any law, statute, ordinance, rule,
regulation, order or ruling (including, without limitation, to the extent the
Premises are located in California, the provisions of California Civil Code
Sections 1941 and 1942 and any successor statutes or laws of a similar
nature).

     

    
      
        
        

      

      
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    (b)   Tenant's Obligations. Tenant
agrees to keep, maintain and preserve the Premises in a state of condition
and repair consistent with the Building and, when and if needed, at Tenant's
sole cost and expense, to make all repairs to the Premises and every part
thereof including, without limitation, all walls, storefronts, floors, ceilings,
interior and exterior doors and windows and fixtures interior plumbing.
Regarding HVAC (heating ventilation, and air conditioning) systems and
equipment, Tenant will be responsible for up to $200.00 cost and expense of any
HVAC repairs or service calls and Landlord will be responsible for the costs and
expenses exceeding $200.00. Any such maintenance and repairs will be performed
by Landlord's contractor, or at Landlord's option, by such contractor or
contractors as Tenant may choose from an approved list to be submitted by
Landlord. Tenant agrees to pay all costs and expenses incurred in such
maintenance and repair within seven (7) days after billing by such contractor or
contractors. If Tenant refuses or neglects to repair and maintain the Premises
properly as required hereunder to the reasonable satisfaction of Landlord,
Landlord, at any time following ten (10) days from the date on which Landlord
makes a written demand on Tenant to effect such repair and maintenance, may
enter upon the Premises and make such repairs and/or maintenance, and upon
completion thereof, Tenant agrees to pay to Landlord as additional rent,
Landlord's costs for making such repairs plus an amount not to exceed ten
percent (10%) of such costs for overhead, within ten (10) days of receipt from
Landlord of a written itemized bill therefor. Any amounts not reimbursed by
Tenant within such ten (10) day period will bear interest at the Interest Rate
until paid by Tenant.

     

    15.   LIENS. Tenant agrees not to
permit any mechanic's, materialmen's or other liens to be filed against all or
any part of
the Project, the Building or the Premises, nor against Tenant's leasehold
interest in the Premises, by reason of or in connection with any repairs,
alterations, improvements or other work contracted for or undertaken by Tenant
or any other act or omission of Tenant or Tenant's agents, employees,
contractors, licensees or invitees. At Landlord's request, Tenant agrees to
provide Landlord with enforceable, conditional and final lien releases (or other
evidence reasonably requested by Landlord to demonstrate protection from liens)
from all persons furnishing labor and/or materials at the Premises. Landlord
will have the right at all reasonable times to post on the Premises and record
any notices of non- responsibility which it deems necessary for protection from
such liens. If any such liens are filed, Tenant will, at its sole cost and
expense, promptly cause such liens to be released of record or bonded so that it
no longer affects title to the Project, the Building or the Premises. If Tenant
fails to cause any such liens to be so released or bonded within ten (10) days
after filing thereof, such failure will be deemed a material breach by Tenant
under this Lease without the benefit of any additional notice or cure period
described in Paragraph
22 below, and Landlord may, without waiving its rights and remedies based
on such breach, and without releasing Tenant from any of its obligations, cause
such liens to be released by any means it shall deem proper, including payment
in satisfaction of the claims giving rise to such liens. Tenant agrees to pay to
Landlord within ten (10) days after receipt of invoice from Landlord, any sum
paid by Landlord to remove such liens, together with interest at the Interest
Rate from the date of such payment by Landlord. Tenant shall also indemnify each
and all of the Landlord Indemnified Parties against any damages, losses or costs
arising out of any such mechanic's, materialmen's or other liens filed against
all or any part of the Project, Building or the Premises by reason of or in
connection with any repairs, alterations, improvements or other work contracted
for or undertaken by Tenant or any other act or omission of Tenant or Tenant's
agents, employees, contractors, licensees or invitees.

     

    16.   ENTRY BY LANDLORD. Landlord
and its employees and agents will at all reasonable times have the right to
enter the
Premises to inspect the same, to show the Premises to prospective purchasers or
tenants, to post notices of non-responsibility, and/or to repair the Premises as
permitted or required by this Lease. In exercising such entry rights, Landlord
will endeavor to minimize, as reasonably practicable, the interference with
Tenant's business, and will provide Tenant with reasonable advance notice of any
such entry (except in emergency situations). Landlord will at all times have and
retain a key with which to unlock all doors in the Premises, excluding Tenant's
vaults and safes. Tenant shall not alter any lock or install any new or
additional locks or bolts on any door of the Premises without Landlord's prior
written consent and without providing Landlord with a key to all such locks.
Except in the case of the gross negligence or willful misconduct of Landlord,
any entry to the Premises obtained by Landlord will not be construed or deemed
to be a forcible or unlawful entry into the Premises, or an eviction of Tenant
from the Premises and Landlord will not be liable to Tenant for any damages or
losses resulting from any such entry.

     

    17.    UTILITIES AND
SERVICES.

     

    (a)   Throughout
the Term of this Lease, Tenant shall pay directly to the utility company
providing such service
all costs for gas, heat, light, power, electricity, telephone and other services
metered, chargeable or provided to the Premises. Landlord will not be liable to
Tenant for any failure to furnish any of the foregoing utilities and services if
such failure is caused by all or any of the following: (i) accident, breakage or
repairs; (ii) strikes, lockouts or other labor disturbance or labor dispute of
any character; (iii) governmental regulation, moratorium or other governmental
action or inaction; (iv) inability despite the exercise of reasonable diligence
to obtain electricity, water or fuel; or (v) any other cause beyond Landlord's
reasonable control. In addition, in the event of any stoppage or interruption of
services or utilities, Tenant shall not be entitled to any abatement or
reduction of rent (except as expressly provided in Subparagraph 20(f) or
Subparagraph
21(b) if such failure results from a damage or taking described therein),
no eviction of Tenant will result from such failure and Tenant will not be
relieved from the performance of any covenant or agreement in this Lease because
of such failure. In the event of any failure; stoppage or interruption thereof,
Landlord agrees to diligently attempt to resume service promptly.

     

    (b)   The
electricity for the Premises is currently in Landlord's name. Tenant agrees to
contact Southern California
Edison within ten (10) days from the date. Tenant takes possession of the
Premises and have the bill for electricity put into Tenant's name. Tenant shall
reimburse Landlord for any interim charges actually billed to Landlord for
electricity from the date Tenant takes possession of the Premises until the date
the bill is put into Tenant's name. In the event Tenant fails to put the bill
for electricity in Tenant's name within ten (10) days from the date Tenant takes
possession of the Premises, Landlord shall have the right to contact Southern
California Edison on the eleventh (11th) day after Tenant takes possession of
the Premises and have the electricity for the Premises turned off. Tenant hereby
acknowledges that Tenant has the absolute responsibility to contact Southern
California Edison and have electrical service put into Tenant's name. In the
event Tenant fails to put the bill for electrical service into Tenant's name as
required hereinabove and Landlord has electrical service turned off, Tenant
understands that there will be no electrical service to the Premises. In such
event, Tenant releases and holds Landlord harmless from any claims, demands,
liabilities, damages, expenses, actions and causes of action based on, arising
out of, or related thereto. Tenant waives the right
to additional notice of any kind from Landlord and/or Southern California Edison
and specifically waives any rights or remedies provided by Civil Code Section
789.3.

     

    
      
        
        

      

      
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18.    ASSUMPTION OF
RISK AND INDEMNIFICATION.

     

    (a)   Assumption
of Risk. Tenant, as a material part of the consideration to Landlord,
agrees that neither Landlord
nor any Landlord Indemnified Parties (as defined in Subparagraph 8(c)
above) will be liable to Tenant for, and Tenant expressly assumes the risk of
and waives any and all claims it may have against Landlord or any Landlord
Indemnified Parties with respect to, (i) any and all damage to property or
injury to persons in, upon or about the Premises, the Building or the Project
resulting from the act or omission (except for the grossly negligent or
intentionally wrongful act or omission) of Landlord, (ii) any such damage caused
by other tenants or persons in or about the Building or the Project, or caused
by quasi-public work, (iii) any damage to property entrusted to employees of the
Building, (iv) any loss of or damage to property by theft or otherwise, or (v)
any injury or damage to persons or property resulting from any casualty,
explosion, falling plaster or other masonry or glass, steam, gas, electricity,
water or rain which may leak from any part of the Building or any other portion
of the Project or from the pipes, appliances or plumbing works therein or from
the roof, street or subsurface or from any other place, or resulting from
dampness. Neither Landlord nor any Landlord Indemnified Parties will be liable
for consequential damages arising out of any loss of the use of the Premises or
any equipment, property or facilities therein by Tenant or any Tenant Parties
(as defined in Subparagraph 8(c)
above) or for interference with light. Tenant agrees to give prompt notice to
Landlord in case of fire or accidents in the Premises or the Building, or of
defects therein or in the fixtures or equipment.

     

    (b)   Indemnification.
Tenant will be liable for, and agrees, to the maximum extent permissible
under applicable
law, to promptly indemnify, protect, defend and hold harmless Landlord and all
Landlord Indemnified Parties, from and against, any and all claims, damages,
judgments, suits, causes of action, losses, liabilities, penalties, fines,
expenses and costs, including attorneys' fees and court costs (collectively,
"Indemnified
Claims"). arising or resulting from (i) any act or omission of Tenant or
any Tenant Parties; (ii) the use of the Premises and Common Areas and conduct of
Tenant's business by Tenant or any Tenant Parties, or any other activity, work
or thing done, permitted or suffered by Tenant or any Tenant Parties, in or
about the Premises, the Building or elsewhere within the Project; and/or (iii)
any default by Tenant of any obligations on Tenant's part to be performed under
the terms of this Lease. In case any action or proceeding is brought against
Landlord or any Landlord Indemnified Parties by reason of any such Indemnified
Claims, Tenant, upon notice from Landlord, agrees to promptly defend the same at
Tenant's sole cost and expense by counsel approved in writing by Landlord, which
approval Landlord will not unreasonably withhold.

     

    (c)   Survival;
No Release of Insurers. Tenant's indemnification obligations under Subparagraph 18(b)
will
survive the expiration or earlier termination of this Lease. Tenant's covenants,
agreements and indemnification obligation in Subparagraph 18(a)
and Subparagraph
18(b) above, are not intended to and will not relieve any insurance
carrier of its obligations under policies required to be carried by Tenant
pursuant to the provisions of this Lease.

    


    19.    INSURANCE.

     

    (a)   Tenant's
Insurance. Commencing on the date of final mutual execution and delivery
of this Lease and
continuing throughout the entire Term hereof and any other period of occupancy,
Tenant agrees to keep in full force and effect, at its sole cost and expense,
the insurance specified on Exhibit "E" attached
hereto. Landlord reserves the right to require any other form or forms of
insurance as Tenant or Landlord or any mortgagees of Landlord may reasonably
require from time to time in form, in amounts, and for insurance risks against
which, a prudent tenant would protect itself, but only to the extent coverage
for such risks and amounts are available in the insurance market at commercially
acceptable rates. Landlord makes no representation that the limits of liability
required to be carried by Tenant under the terms of this Lease are adequate to
protect Tenant's interests and Tenant should obtain such additional insurance or
increased liability limits as Tenant deems appropriate.

     

    (b)   Supplemental Tenant
Insurance Requirements. All policies must be in a
form reasonably satisfactory
to Landlord and issued by an insurer admitted to do business in the State. All
policies must be issued by insurers with a policyholder rating of "A" and a
financial rating of "X" in the most recent version of Best's Key Rating Guide.
All policies must contain a requirement to notify Landlord (and Landlord's
property manager and any mortgagees or ground lessors of Landlord who are named
as additional insureds, if any) in writing not less than thirty (30) days prior
to any material change, reduction in coverage, cancellation or other termination
thereof. Tenant agrees to deliver to Landlord, as soon as practicable after
placing the required insurance, but in any event within the time frame specified
in Subparagraph
19(a) above, certificate(s) of insurance and/or if required by Landlord,
certified copies of each policy evidencing the existence of such insurance and
Tenant's compliance with the provisions of this Paragraph 19. Tenant
agrees to cause replacement policies or certificates to be delivered to Landlord
not less than thirty (30) days prior to the expiration of any such policy or
policies. If any such initial or replacement policies or certificates are not
furnished within the time(s) specified herein, Landlord will have the right, but
not the obligation, to obtain such insurance as Landlord deems necessary to
protect Landlord's interests at Tenant's expense. Tenant's insurance under Subparagraph
19(a)(iii)  and Subparagraph
19(a)(iv) must name Landlord and Landlord's property manager (and at
Landlord's request, Landlord's mortgagees and ground lessors of which Tenant has
been informed in writing) as additional insureds and must also contain a
provision that the insurance afforded by such policy is primary insurance and
any insurance carried by Landlord and Landlord's property manager or Landlord's
mortgagees or ground lessors, if any, will be excess over and non-contributing
with Tenant's insurance

     

    (c)   Waiver
of Right of Recovery. Tenant and Landlord each assumes all risk with
respect to damage to or theft
of its respective property located at the Premises and with respect to Tenant,
interruption of its business and agrees to look solely to its own insurance in
the case of any damage to its property or and with respect to Tenant,
interruption to its business. Landlord, Tenant, each waive any right of recovery
against the other and their respective agents, employees, contractors and
managers for any loss or damage with respect to its property, or the Premises or
the Building. Failure of a party to insure shall not void this waiver. Any fire,
extended coverage or property insurance policy maintained by Tenant or Landlord
shall contain a waiver of subrogation provision. The waivers of right or
recovery contained in this provision shall apply EVEN IF THE LOSS OR DAMAGE TO
WHICH THIS PROVISION APPLIES IS CAUSED SOLELY OR IN PART BY THE NEGLIGENCE OF
LANDLORD OR TENANT.

     

    (d)   Business
Interruption.
Landlord shall not be responsible for, and Tenant releases and discharges
Landlord
from, and Tenant further waives any right of recovery from Landlord and its
agents, employees, contractors and managers for, any loss for or from business
interruption or loss of use of the Premises or Property suffered by Tenant
in  connection
with Tenant's use or occupancy of the Premises, EVEN IF SUCH LOSS IS CAUSED
SOLELY OR IN PART BY THE NEGLIGENCE OF LANDLORD.

     

    
      
        
        

      

      
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20.    DAMAGE OR
DESTRUCTION.

     

    (a)   Partial
Destruction. If the Premises or the Building are damaged by fire or other
casualty to an extent not
exceeding twenty-five percent (25%) of the full replacement cost thereof, and
Landlord's contractor reasonably estimates in a writing delivered to Landlord
and Tenant that the damage thereto may be repaired, reconstructed or restored to
substantially its condition immediately prior to such damage within one hundred
eighty (180) days from the date of such casualty, and Landlord will receive
insurance proceeds sufficient to cover the costs of such repairs, reconstruction
and restoration (including proceeds from Tenant and/or Tenant's insurance which
Tenant is required to deliver to Landlord pursuant to Subparagraph 20(d)
below to cover Tenant's obligation for the costs of repair, reconstruction and
restoration of any portion of the tenant improvements and any alterations for
which Tenant is responsible under this Lease), then Landlord agrees to commence
and proceed diligently with the work of repair, reconstruction and restoration
and this Lease will continue in full force and effect.

     

    (b)   Substantial
Destruction. Any damage or destruction to the Premises or the Building
which Landlord is not
obligated to repair pursuant to Subparagraph 20(a)
above will be deemed a substantial destruction. In the event of a substantial
destruction, Landlord may elect to either: (i) repair, reconstruct and restore
the portion of the Building or the Premises damaged by such casualty, in which
case this Lease will continue in full force and effect, subject to Tenant's
termination right contained in Subparagraph 20(c)
below; or (ii) terminate this Lease effective as of the date which is thirty
(30) days after Tenant's receipt of Landlord's election to so
terminate.

     

    (c)   Termination
Rights. If Landlord elects to repair, reconstruct and restore pursuant to
Subparagraph 20(b)(i)
hereinabove, and if Landlord's contractor estimates that as a result of such
damage, Tenant cannot be given reasonable use of and access to the Premises
within two hundred forty (240) days after the date of such damage, then either
Landlord or Tenant may terminate this Lease effective upon delivery of written
notice to the other within ten (10) days after Landlord delivers notice to
Tenant of its election to so repair, reconstruct or restore; provided, however,
Tenant shall have no right to terminate this Lease if Landlord can relocate
Tenant to other comparable Premises in the Building or the Project within one
hundred eighty (180) days after the date of such damage.

     

    (d)   Tenant's
Costs and Insurance Proceeds. In the event of any damage or destruction
of all or any part of
the Premises, Tenant agrees to immediately (i) notify Landlord thereof, and (ii)
deliver to Landlord all property insurance proceeds received by Tenant with
respect to any tenant improvements installed by or at the cost of Tenant and any
alterations, but excluding proceeds for Tenant's furniture, fixtures, equipment
and other personal property, whether or not this Lease is terminated as
permitted in this Paragraph 20, and
Tenant hereby assigns to Landlord all rights to receive such insurance proceeds.
If for any reason (including Tenant's failure to obtain required insurance),
Tenant fails to receive insurance proceeds covering the full replacement cost of
any tenant improvements and any alterations which are damaged, Tenant will be
deemed to have self-insured the replacement cost of such items, and upon any
damage or destruction thereto, Tenant agrees to immediately pay to Landlord the
full replacement cost of such items, less any insurance proceeds actually
received by Landlord from Landlord's or Tenant's insurance with respect to such
items.

     

    (e)   Abatement
of Rent. In the event of any damage, repair, reconstruction and/or
restoration described in this
Paragraph 20,
rent will be abated or reduced, as the case may be, from the date of such
casualty in proportion to the degree to which Tenant's use of the Premises is
impaired during such period of repair until such use is restored. Except for
abatement of rent as provided hereinabove, Tenant will not be entitled to any
compensation or damages for loss of, or interference with, Tenant's business or
use or access of all or any part of the Premises or for lost profits or any
other consequential damages of any kind or nature, which result from any such
damage, repair, reconstruction or restoration.

     

    (f)    Damage Near
End of Term. Landlord and Tenant shall each have the right to terminate
this Lease if any damage to the Premises or the Building occurs during the last
twelve (12) months of the Term of this Lease where Landlord's contractor
estimates in a writing delivered to Landlord and Tenant that the repair,
reconstruction or restoration of such damage cannot be completed within sixty
(60) days after the date of such casualty. If either party desires to terminate
this Lease under this Subparagraph (f) it
shall provide written notice to the other party of such election within ten (10)
days after receipt of Landlord's contractor's repair estimates.

     

    (g)    Waiver of
Termination Right. Landlord and Tenant agree that the foregoing
provisions of this Paragraph 20 are to
govern their respective rights and obligations in the event of any damage or
destruction and supersede and are in lieu of the provisions of any applicable
law, statute, ordinance, rule, regulation, order or ruling now or hereafter in
force which provide remedies for damage or destruction of leased premises
(including, without limitation, to the extent the Premises are located in
California, the provisions of California Civil Code Section 1932, Subsection 2,
and Section 1933, Subsection 4 and any successor statute or laws of a similar
nature).

    


    21.    EMINENT
DOMAIN.

     

    (a)   Substantial
Taking. If the whole of the Premises, or such part thereof as shall
substantially interfere with
Tenant's use and occupancy of the Premises, as contemplated by this Lease, is
taken for any public or quasi-public purpose by any lawful power or authority by
exercise of the right of appropriation, condemnation or eminent domain, or sold
to prevent such taking, either party will have the right to terminate this Lease
effective as of the date possession is required to be surrendered to such
authority.

     

    (b)   Partial
Taking; Abatement of Rent. In the event of a taking of a portion of the
Premises which does not
substantially interfere with Tenant's use and occupancy of the Premises
including any temporary taking of ninety (90) days or less, then, neither party
will have the right to terminate this Lease and Landlord will thereafter proceed
to make a functional unit of the remaining portion of the Premises (but only to
the extent Landlord receives proceeds therefor from the condemning authority),
and rent will be abated with respect to the part of the Premises which Tenant is
deprived of on account of such taking. Notwithstanding the immediately preceding
sentence to the contrary, if any part of the Building or the Project is taken
(whether or not such taking substantially interferes with Tenant's use of the
Premises), Landlord may terminate this Lease upon thirty (30) days' prior
written notice to Tenant if Landlord also terminates the leases of the other
tenants of the Building which are leasing comparably sized space for comparable
lease terms.

     

    
      
        
        

      

      
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    (c)   Condemnation
Award. In connection with any taking of the Premises or the Building,
Landlord will be entitled
to receive the entire amount of any award which may be made or given in such
taking or condemnation, without deduction or apportionment for any estate or
interest of Tenant, it being expressly understood and agreed by Tenant that no
portion of any such award will be allowed or paid to Tenant for any so-called
bonus or excess value of this Lease, and such bonus or excess value will be the
sole property of Landlord. Tenant agrees not to assert any claim against
Landlord or the taking authority for any compensation because of such taking
(including any claim for bonus or excess value of this Lease); provided,
however, if any portion of the Premises is taken, Tenant will have the right to
recover from the condemning authority (but not from Landlord) any compensation
as may be separately awarded or recoverable by Tenant for the taking of Tenant's
furniture, fixtures, equipment and other personal property within the Premises,
for Tenant's relocation expenses, and for any loss of goodwill or other damage
to Tenant's business by reason of such taking.

     

    22.    DEFAULTS AND
REMEDIES.

     

    (a)   Defaults.
The occurrence of any one or more of the following events will be deemed
a default by Tenant:

     

    (I)    The
abandonment or vacation of the Premises by Tenant.

     

    (ii)   The
failure by Tenant to make any payment of rent or additional rent or any other
payment required
to be made by Tenant hereunder, as and when due, where such failure continues
for a period of three (3) days after written notice thereof from Landlord to
Tenant; provided, however, that any such notice will be in lieu of, and not in
addition to, any notice required under applicable law (including, without
limitation, to the extent the Premises are located in California, the provisions
of California Code of Civil Procedure Section 1161 regarding unlawful detainer
actions or any successor statute or law of a similar nature).

     

    (iii)   The
failure by Tenant to observe or perform any of the express or implied covenants
or provisions
of this Lease to be observed or performed by Tenant, other than as specified in
Subparagraph
22(a)(i) or Subparagraph
22(a)(ii) above, where such failure continues for a period of five (5)
days after written notice thereof from Landlord to Tenant. The provisions of any
such notice will be in lieu of, and not in addition to, any notice required
under applicable law (including, without limitation, to the extent the Premises
are located in California, California Code of Civil Procedure Section 1161
regarding unlawful detainer actions and any successor statute or similar law).
If the nature of Tenant's default is such that more than five (5) days are
reasonably required for its cure, then Tenant will not be deemed to be in
default if Tenant, with Landlord's concurrence, commences such cure within such
five (5) day period and thereafter diligently prosecutes such cure to
completion.

     

    (iv)   (A)The making by
Tenant of any general assignment for the benefit of creditors; (B) the
filing by
or against Tenant of a petition to have Tenant adjudged a bankrupt or a petition
for reorganization or arrangement under any law relating to bankruptcy (unless,
in the case of a petition filed against Tenant, the same is dismissed within
sixty (60) days); (C) the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where possession is not restored to Tenant
within thirty (30) days; or (D) the attachment, execution or other judicial
seizure of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease where such seizure is not discharged within
thirty (30) days.

     

    (b)   Landlord's
Remedies; Termination. In the event of any default by Tenant, in addition
to any other remedies
available to Landlord at law or in equity under applicable law (including,
without limitation, to the extent the Premises are located in California, the
remedies of Civil Code Section 1951.4 and any successor statute or similar law),
Landlord will have the immediate right and option to terminate this Lease and
all rights of Tenant hereunder. If Landlord elects to terminate this Lease then,
to the extent permitted under applicable law, Landlord may recover from Tenant:
(i) the worth at the time of award of any unpaid rent which had been earned at
the time of such termination; plus (ii) the worth at the time of award of the
amount by which the unpaid rent which would have been earned after termination
until the time of award exceeds the amount of such rent loss that Tenant proves
could have been reasonably avoided; plus (iii) the worth at the time of award of
the amount by which the unpaid rent for the balance of the Term after the time
of award exceeds the amount of such rent loss that Tenant proves could be
reasonably avoided; plus (iv) any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which, in the ordinary course of things, results
therefrom including, but not limited to: attorneys' fees and costs; brokers'
commissions; the costs of refurbishment, alterations, renovation and repair of
the Premises, and removal (including the repair of any damage caused by such
removal) and storage (or disposal) of Tenant's personal property, equipment,
fixtures, alterations, the tenant improvements and any other items which Tenant
is required under this Lease to remove but does not remove, as well as the
unamortized value of any free rent, reduced rent, free parking, reduced rate
parking and any tenant improvement allowance or other costs or economic
concessions provided, paid, granted or incurred by Landlord pursuant to this
Lease. As used in Subparagraphs
22(b)(i) and Subparagraphs
22(b)(ii)  above, the "worth at the time of award" is computed
by allowing interest at the Interest Rate. As used in Subparagraph
22(b)(iii) above, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).

     

    (c)   Landlord's
Remedies; Re-Entry Rights. In the event of any default by Tenant, in
addition to any other
remedies available to Landlord under this Lease, at law or in equity, Landlord
will also have the right, with or without terminating this Lease, to re-enter
the Premises and remove all persons and property from the Premises; such
property may be removed and stored in a public warehouse or elsewhere and/or
disposed of at the sole cost and expense of and for the account of Tenant in
accordance with the provisions of Paragraph 13 of this
Lease or any other procedures permitted by applicable law. No re-entry or taking
possession of the Premises by Landlord pursuant to this Subparagraph 22(c)
will be construed as an election to terminate this Lease unless a written notice
of such intention is given to Tenant or unless the termination thereof is
decreed by a court of competent jurisdiction.

     

    
      
        
        

      

      
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    (d)   Landlord's
Remedies; Re-Letting. If Landlord does not elect to terminate this Lease,
Landlord may from time
to time, without terminating this Lease, either recover all rent as it becomes
due or relet the Premises or any part thereof on terms and conditions as
Landlord in its sole and absolute discretion may deem advisable with the right
to make
alterations and repairs to the Premises in connection with such reletting. If
Landlord elects to relet the Premises, then rents received by Landlord from such
reletting will be applied: first, to the payment of any indebtedness other than
rent due hereunder from Tenant to Landlord; second, to the payment of any cost
of such reletting; third, to the payment of the cost of any alterations and
repairs to the Premises incurred in connection with such reletting; fourth, to
the payment of rent due and unpaid hereunder and the residue, if any, will be
held by Landlord and applied to payment of future rent as the same may become
due and payable hereunder. Should that portion of such rents received from such
reletting during any month, which is applied to the payment of rent hereunder,
be less than the rent payable during that month by Tenant hereunder, then Tenant
agrees to pay such deficiency to Landlord immediately upon demand therefor by
Landlord. Such deficiency will be calculated and paid monthly.

     

    (e)   Landlord's
Remedies; Performance for Tenant. All covenants and agreements to be
performed by Tenant
under any of the terms of this Lease are to be performed by Tenant at Tenant's
sole cost and expense and without any abatement of rent. If Tenant fails to pay
any sum of money owed to any party other than Landlord, for which it is liable
under this Lease, or if Tenant fails to perform any other act on its part to be
performed hereunder, and such failure continues for ten (10) days after notice
thereof by Landlord, Landlord may, without waiving or releasing Tenant from its
obligations, but shall not be obligated to, make any such payment or perform any
such other act to be made or performed by Tenant. Tenant agrees to reimburse
Landlord upon demand for all sums so paid by Landlord and all necessary
incidental costs, together with interest thereon at the Interest Rate, from the
date of such payment by Landlord until reimbursed by Tenant. This remedy shall
be in addition to any other right or remedy of Landlord set forth in this Paragraph
22.

     

    (f)   Late
Payment. If Tenant fails to pay any installment of rent when due or if
Tenant fails to make any other
payment for which Tenant is obligated under this Lease when due, such late
amount will accrue interest at the Interest Rate until such amount is paid by
Tenant to Landlord. In addition, Tenant agrees to pay to Landlord concurrently
with such late payment amount, as additional rent, a late charge equal to ten
percent (10%) of the amount due to compensate Landlord for the extra costs
Landlord will incur as a result of such late payment. Landlord and Tenant agree
that such late charge represents a fair and reasonable estimate of the costs
that Landlord will incur by reason of any such late payment. Acceptance of any
such interest and late charge will not constitute a waiver of the Tenant's
default with respect to the overdue amount, or prevent Landlord from exercising
any of the other rights and remedies available to Landlord. If Tenant incurs a
late charge more than three (3) times in any period of twelve (12) months during
the Lease Term, then,-notwithstanding
that Tenant cures the late payments for which such late charges are imposed,
Landlord will have the right to require Tenant thereafter to pay all
installments of Monthly Base Rent quarterly in advance in the form of a
cashier's check throughout the remainder of the Lease Term. Any payments of any
kind returned for insufficient funds will be subject to an additional handling
charge of $40.00, and
thereafter, Landlord may require Tenant to pay all future payments of rent or
other sums due by money order or cashier's check.

     

    (g)   Rights
and Remedies Cumulative. All rights, options and remedies of Landlord
contained in this Lease
will be construed and held to be cumulative, and no one of them will be
exclusive of the other, and Landlord shall have the right to pursue any one or
all of such remedies or any other remedy or relief which may be provided by law
or in equity, whether or not stated in this Lease. Nothing in this Paragraph 22 will be
deemed to limit or otherwise affect Tenant's indemnification of Landlord
pursuant to any provision of this Lease.

     

    23.   LANDLORD'S
DEFAULT. Landlord will not be in default in the performance of any
obligation required to be performed
by Landlord under this Lease unless Landlord fails to perform such obligation
within thirty (30) days after the receipt of written notice from Tenant
specifying in detail Landlord's failure to perform; provided however, that if
the nature of Landlord's obligation is such that more than thirty (30) days are
required for performance, then Landlord will not be deemed in default if it
commences such performance within such thirty (30) day period and thereafter
diligently pursues the same to completion. Upon any default by Landlord, Tenant
may exercise any of its rights provided at law or in equity, subject to the
limitations on liability set forth in Paragraph 35 of this
Lease.

     

    24.   ASSIGNMENT
AND SUBLETTING.

     

    (a)   Restriction
on Transfer. Except as otherwise expressly provided in this Paragraph 24,
Tenant will not,
either voluntarily or by operation of law, assign or encumber this Lease or any
interest herein or sublet the Premises or any part thereof, or permit the use or
occupancy of the Premises by any party other than Tenant (any such assignment,
encumbrance, sublease or the like will sometimes be referred to as a "Transfer") without
the prior written consent of Landlord, which consent Landlord will not
unreasonably withhold. For purposes of this Paragraph 24, if
Tenant is a corporation, partnership or other entity, any transfer, assignment,
encumbrance or hypothecation of fifty percent (50%) or more (individually or in
the aggregate) of any stock or other ownership interest in such entity, and/or
any transfer, assignment, hypothecation or encumbrance of any controlling
ownership or voting interest in such entity, will be deemed a Transfer and will
be subject to all of the restrictions and provisions contained in this Paragraph 24;
provided, however, this provision will not apply to public corporations,
the stock of which is traded through a public stock exchange or over the counter
system.

     

    (b)   Transfer
Notice. If Tenant desires to effect a Transfer, then at least thirty (30)
days prior to the date when
Tenant desires the Transfer to be effective (the "Transfer Date"),
Tenant agrees to give Landlord a notice (the "Transfer Notice"),
stating the name, address and business of the proposed assignee, sublessee or
other transferee (sometimes referred to hereinafter as "Transferee"),
reasonable information (including references) concerning the character,
ownership, and financial condition of the proposed Transferee, the Transfer
Date, any ownership or commercial relationship between Tenant and the proposed
Transferee, and the consideration and all other material terms and conditions of
the proposed Transfer, all in such detail as Landlord may reasonably
require.

     

    (c)   Landlord's
Options. Within fifteen (15) days of Landlord's receipt of any Transfer
Notice, and any additional
information requested by Landlord concerning the proposed Transferee's financial
responsibility, Landlord will notify Tenant of its election to do one of the
following: (i) consent to the proposed Transfer subject to such reasonable
conditions as Landlord may impose in providing such consent; (ii) refuse such
consent, which refusal shall be on reasonable grounds; or (iii) terminate this
Lease as to all or such portion of the Premises which is proposed to be sublet
or assigned and recapture all or such portion of the Premises for reletting by
Landlord.

     

    (d)   Additional
Conditions. A condition to Landlord's consent to any Transfer of this
Lease will be the delivery
to Landlord of a true copy of the fully executed instrument of assignment,
sublease, transfer or hypothecation, in form and substance reasonably
satisfactory to Landlord. Tenant agrees to pay to Landlord, as additional rent,
all sums and other consideration payable to and for the benefit of Tenant by the
assignee or sublessee in excess of the rent payable
under this Lease for the same period and portion of the Premises. In calculating
excess rent or other consideration which may be payable to Landlord under this
paragraph, Tenant will be entitled to deduct commercially reasonable third party
brokerage commissions and attorneys' fees and other amounts reasonably and
actually expended by Tenant in connection with such assignment or subletting if
acceptable written evidence of such expenditures is provided to Landlord.
Notwithstanding anything herein to the contrary, no Transfer will release Tenant
of Tenant's obligations under this Lease or alter the primary liability of
Tenant to pay the rent and to perform all other obligations to be performed by
Tenant hereunder. Landlord may require that any Transferee remit directly to
Landlord on a monthly basis, all monies due Tenant by said Transferee. Consent
by Landlord to one Transfer will not be deemed consent to any subsequent
Transfer. In the event of default by any Transferee of Tenant or any successor
of Tenant in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
such Transferee or successor. If Tenant effects a Transfer or requests the
consent of Landlord to any Transfer (whether or not such Transfer is
consummated), then, upon demand, Tenant agrees to pay Landlord a non-refundable
administrative fee of not less than One Hundred Dollars ($100.00) and not more
than Five Hundred Dollars ($500.00), plus Landlord's reasonable attorneys'
fees.

     

    
      
        
        

      

      
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    25.   SUBORDINATION.
Without the necessity of any additional document being executed by Tenant
for the purpose
of effecting a subordination, and at the election of Landlord or any mortgagee
or beneficiary with a deed of trust encumbering the Building and/or the Project,
or any lessor of a ground or underlying lease with respect to the Building, this
Lease will be subject and subordinate at all times to: (i) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Building; and (ii) the lien of any mortgage or deed of trust which may now exist
or hereafter be executed for which the Building, the Project or any leases
thereof, or Landlord's interest and estate in any of said items, is specified as
security. Notwithstanding the foregoing, Landlord reserves the right to
subordinate any such ground leases or underlying leases or any such liens to
this Lease. If any such ground lease or underlying lease terminates for any
reason or any such mortgage or deed of trust is foreclosed or a conveyance in
lieu of foreclosure is made for any reason, at the election of Landlord's
successor in interest, Tenant agrees to attorn to and become the tenant of such
successor in which event Tenant's right to possession of the Premises will not
be disturbed as long as Tenant is not in default under this Lease. Tenant hereby
waives its rights under any law which gives or purports to give Tenant any right
to terminate or otherwise adversely affect this Lease and the obligations of
Tenant hereunder in the event of any such foreclosure proceeding or sale. Tenant
covenants and agrees to execute and deliver, upon demand by Landlord and in the
form reasonably required by Landlord, any additional documents evidencing the
priority or subordination of this Lease and Tenant's attornment agreement with
respect to any such ground lease or underlying leases or the lien of any such
mortgage or deed of trust. If Tenant fails to sign and return any such documents
within ten (10) days of receipt, Tenant will be in default
hereunder.

     

    26.   ESTOPPEL
CERTIFICATE. Within ten (10) days following any written request which
Landlord may make from time to
time, Tenant agrees to execute and deliver to Landlord an estoppel certificate,
in Landlord's standard form or as may reasonably be required by Landlord's
lender. Landlord and Tenant intend that any statement delivered pursuant to this
Paragraph 26
may be relied upon by any mortgagee, beneficiary, purchaser or prospective
purchaser of the Building or any interest therein. Tenant's failure to deliver
such statement within such time will be conclusive upon Tenant (i) that this
Lease is in full force and effect, without modification except as may be
represented by Landlord, (ii) that there are no uncured defaults in Landlord's
performance, and (iii) that not more than one (1) month's rent has been paid in
advance. Without limiting the foregoing, if Tenant fails to deliver any such
statement within such ten (10) day period, Landlord may deliver to Tenant an
additional request for such statement and Tenant's failure to deliver such
statement to Landlord within ten (10) days after delivery of such additional
request will constitute a default under this Lease. Tenant agrees to indemnify
and protect Landlord from and against any and all claims, damages, losses,
liabilities and expenses (including attorneys' fees and costs) attributable to
any failure by Tenant to timely deliver any such estoppel certificate to
Landlord as required by this Paragraph
26.

     

    27.   BUILDING
PLANNING. If Landlord requires the Premises for use in conjunction with
another suite or for other reasons
connected with the planning program for the Building or the Project, Landlord
will have the right, upon thirty (30) days' prior written notice to Tenant, to
move Tenant to other space in the Building of substantially similar size as the
Premises, and with tenant improvements of substantially similar age, quality and
layout as then existing in the Premises. Any such relocation will be at
Landlord's cost and expense, including the cost of providing such substantially
similar tenant improvements (but not any furniture or personal property) and
Tenant's reasonable moving, telephone installation and stationary reprinting
costs. If Landlord so relocates Tenant, the terms and conditions of this Lease
will remain in full force and effect and apply to the new space, except that (a)
a revised Exhibit
"A" will become part of this Lease and will reflect the location of the
new space, (b) Paragraph 1 of this
Lease will be amended to include and state all correct data as to the new space,
(c) the new space will thereafter be deemed to be the "Premises", and (d) all
economic terms and conditions (e.g. rent, total Operating Expense Allowance,
etc.) will be adjusted on a per square foot basis based on the total number of
rentable square feet of area contained in the new space. Landlord and Tenant
agree to cooperate fully with one another in order to minimize the inconvenience
to Tenant resulting from any such relocation.

     

    28.   RULES
AND REGULATIONS. Tenant agrees to faithfully observe and comply with the
"Rules and Regulations,"
a copy of which is attached hereto and incorporated herein by this reference as
Exhibit "D,"
and all reasonable and nondiscriminatory modifications thereof and additions
thereto from time to time put into effect by Landlord. Landlord will not be
responsible to Tenant for the violation or non-performance by any other tenant
or occupant of the Building of any of the Rules and Regulations.

     

    29.   MODIFICATION AND
CURE RIGHTS OF LANDLORD'S MORTGAGEES AND LESSORS. Tenant, within
ten (10)
days after request therefor, agrees to execute any reasonable amendments to this
Lease which may be requested by any lender or ground lessor of the Project,
provided any such amendments do not increase the obligations of Tenant under
this Lease or adversely affect the leasehold estate created by this Lease. In
the event of any default on the part of Landlord, Tenant will give notice by
registered or certified mail to any beneficiary of a deed of trust or mortgage
covering the Premises or ground lessor of Landlord whose address has been
furnished to Tenant, and Tenant agrees to offer such beneficiary, mortgagee or
ground lessor a reasonable opportunity to cure the default (including with
respect to any such beneficiary or mortgagee, time to obtain possession of the
Premises, subject to this Lease and Tenant's rights hereunder, by power of sale
or a judicial foreclosure, if such should prove necessary to effect a
cure).

     

    30.   DEFINITION
OF LANDLORD. The term "Landlord," as used in this Lease, so far as
covenants or obligations on the
part of Landlord are concerned, means and includes only the owner or owners, at
the time in question, of the fee title of the Premises or the lessees under any
ground lease, if any. In the event of any transfer, assignment or other
conveyance or transfers of any such title (other than a transfer for security
purposes only), Landlord herein named (and in case of any subsequent transfers
or conveyances, the then grantor) will be automatically relieved from and after
the date of
such transfer, assignment or conveyance of all liability as respects the
performance of any covenants or obligations on the part of Landlord contained in
this Lease thereafter to be performed, so long as the transferee assumes in
writing all such covenants and obligations of Landlord arising after the date of
such transfer. Landlord and Landlord's transferees and assignees have the
absolute right to transfer all or any portion of their respective title and
interest in the Project, the Building, the Premises and/or this Lease without
the consent of Tenant, and such transfer or subsequent transfer will not be
deemed a violation on Landlord's part of any of the terms and conditions of this
Lease.

     

    
      
        
        

      

      
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    31.   WAIVER. The waiver by either
party of any breach of any term, covenant or condition herein contained will not
be deemed
to be a waiver of any subsequent breach of the same or any other term, covenant
or condition herein contained, nor will any custom or practice which may develop
between the parties in the administration of the terms hereof be deemed a waiver
of or in any way affect the right of either party to insist upon performance in
strict accordance with said terms. The subsequent acceptance of rent or any
other payment hereunder by Landlord will not be deemed to be a waiver of any
preceding breach by Tenant of any term, covenant or condition of this Lease,
other than the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent. No acceptance by Landlord of a lesser sum than the
basic rent and additional rent or other sum then due will be deemed to be other
than on account of the earliest installment of such rent or other amount due,
nor will any endorsement or statement on any check or any letter accompanying
any check be deemed an accord and satisfaction, and Landlord may accept such
check or payment without prejudice to Landlord's right to recover the balance of
such installment or other amount or pursue any other remedy provided in this
Lease. The consent or approval of Landlord to or of any act by Tenant requiring
Landlord's consent or approval will not be deemed to waive or render unnecessary
Landlord's consent or approval to or of any subsequent similar acts by
Tenant.

     

    32.   PARKING. So long as this Lease
is in effect and provided Tenant is not in default hereunder, Landlord grants
to
Tenant, Tenant's visitors and guests a non-exclusive license to use the parking
areas which serve the Building subject to the terms and conditions of this Paragraph 32 and the
Rules and Regulations regarding parking contained in Exhibit "D" attached
hereto. Tenant will not use or allow any of Tenant's employees or guests to use
any parking spaces which have been specifically assigned by Landlord to other
tenants or occupants or for other uses such as visitor parking or which have
been designated by any governmental entity as being restricted to certain uses.
Landlord may assign any unreserved and unassigned parking spaces and/or make all
or any portion of such spaces reserved, if Landlord reasonably determines that
it is necessary for orderly and efficient parking or for any other reasonable
reason. Tenant agrees to cause its employees, subtenants, assignees,
contractors, suppliers, customers and invitees to comply with the Rules and
Regulations. Landlord reserves the right from time to time to modify and/or
adopt such other reasonable and non-discriminatory rules and regulations for the
parking facilities as it deems reasonably necessary for the operation of the
parking facilities.

     

    33.   FORCE MAJEURE. If either
Landlord or Tenant is delayed, hindered in or prevented from the performance of
any act
required under this Lease by reason of strikes, lock-outs, labor troubles,
inability to procure standard materials, failure of power, restrictive
governmental laws, regulations or orders or governmental action or inaction
(including failure, refusal or delay in issuing permits, approvals and/or
authorizations which is not the result of the action or inaction of the party
claiming such delay), riots, civil unrest or insurrection, war, fire,
earthquake, flood or other natural disaster, unusual and unforeseeable delay
which results from an interruption of any public utilities (e.g., electricity,
gas, water, telephone) or other unusual and unforeseeable delay not within the
reasonable control of the party delayed in performing work or doing acts
required under the provisions of this Lease, then performance of such act will
be excused for the period of the delay and the period for the performance of any
such act will be extended for a period equivalent to the period of such delay.
Notwithstanding the foregoing, the provisions of this Paragraph 33 will not
operate to excuse Tenant from prompt payment of rent or any other payments
required under the provisions of this Lease.

     

    34.   SIGNS. Landlord will designate
the location on the Premises, if any, for one Tenant identification sign. Tenant
has no
right to install Tenant identification signs in any other location in, on or
about the Premises or the Project and will not display or erect any other signs,
displays or other advertising materials that are visible from the exterior of
the Building or from within the Building in any interior or exterior common
areas. The size, design, color and other physical aspects of any and all
permitted sign(s) will be subject to (i) Landlord's written approval prior to
installation, which approval may be withheld in Landlord's discretion, (ii) any
covenants, conditions or restrictions and sign criteria governing the Project,
and (iii) any applicable municipal or governmental permits and approvals. The
current sign criteria for the Project is shown on Exhibit C attached hereto.
Tenant will be solely responsible for all costs for installation, maintenance,
repair and removal of any Tenant identification sign(s). If Tenant fails to
remove Tenant's sign(s) upon termination of this Lease and repair any damage
caused by such removal, Landlord may do so at Tenant's sole cost and expense.
Tenant agrees to reimburse Landlord for all costs incurred by Landlord to effect
any installation, maintenance or removal on Tenant's account, which amount will
be deemed additional rent, and may include, without limitation, all sums
disbursed, incurred or deposited by Landlord including Landlord's costs,
expenses and actual attorneys' fees with interest thereon at the Interest Rate
from the date of Landlord's demand until paid by Tenant. Any sign rights granted
to Tenant under this Lease are personal to Tenant and may not be assigned,
transferred or otherwise conveyed to any assignee or subtenant of Tenant without
Landlord's prior written consent, which consent Landlord may withhold in its
sole and absolute discretion.

     

    35.    LIMITATION ON
LIABILITY. In consideration of the benefits accruing hereunder, Tenant on
behalf of itself and all
successors and assigns of Tenant covenants and agrees that, in the event of any
actual or alleged failure, breach or default hereunder by Landlord: (a) Tenant's
recourse against Landlord for monetary damages will be limited to Landlord's
interest in the Building including, subject to the prior rights of any
Mortgagee, Landlord's interest in the rents of the Building and any insurance
proceeds payable to Landlord; (b) except as may be necessary to secure
jurisdiction of the partnership, no partner of Landlord shall be sued or named
as a party in any suit or action and no service of process shall be made against
any partner, member, shareholder, officer or director of Landlord; (c) no
partner, member, shareholder, officer or director of Landlord shall be required
to answer or otherwise plead to any service of process; (d) no judgment will be
taken against any partner, member, shareholder, officer or director of Landlord
and any judgment taken against any partner, member, shareholder, officer or
director of Landlord may be vacated and set aside at any time after the fact;
(e) no writ of execution will be levied against the assets of any partner,
member, shareholder, officer or director of Landlord; (f) the obligations under
this Lease do not constitute personal obligations of the individual partners,
members, directors, officers or shareholders of Landlord, and Tenant shall not
seek recourse against the individual partners, members, directors, officers or
shareholders of Landlord or any of their personal assets for satisfaction of any
liability in respect to this Lease; and (g) these covenants and agreements are
enforceable both by Landlord and also by any partner, member, shareholder,
officer or director of Landlord.

     

    
      
        
        

      

      
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    36.   FINANCIAL
STATEMENTS. Prior to the execution of this Lease by Landlord and at any
time during the Term of this
Lease upon ten (10) days prior written notice from Landlord, Tenant agrees to
provide Landlord with a current financial statement for Tenant and any
guarantors of Tenant and financial statements for the two (2) years prior to the
current financial statement year for Tenant and any guarantors of Tenant. Such
statements are to be prepared in accordance with generally accepted accounting
principles and, if such is the normal practice of Tenant, audited by an
independent certified public accountant.\

     

    37.   QUIET
ENJOYMENT. Landlord covenants and agrees with Tenant that upon Tenant
paying the rent required under
this Lease and paying all other charges and performing all of the covenants and
provisions on Tenant's part to be observed and performed under this Lease,
Tenant may peaceably and quietly have, hold and enjoy the Premises in accordance
with this Lease.

     

    38.    MISCELLANEOUS.

     

    (a)   Conflict
of Laws. This Lease shall be governed by and construed solely pursuant to
the laws of the State,
without giving effect to choice of law principles thereunder.

     

    (b)   Successors
and Assigns. Except as otherwise provided in this Lease, all of the
covenants, conditions
and provisions of this Lease shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.

     

    (c)   Professional
Fees and Costs. If either Landlord or Tenant should bring suit against
the other with respect
to this Lease, then all costs and expenses, including without limitation, actual
professional fees and costs such as appraisers', accountants' and attorneys'
fees and costs, incurred by the party which prevails in such action, whether by
final judgment or out of court settlement, shall be paid by the other party,
which obligation on the part of the other party shall be deemed to have accrued
on the date of the commencement of such action and shall be enforceable whether
or not the action is prosecuted to judgment. As used herein, attorneys' fees and
costs shall include, without limitation, attorneys' fees, costs and expenses
incurred in connection with any (i) post judgment motions; (ii) contempt
proceedings; (iii) garnishment, levy and debtor and third party examination;
(iv) discovery; and (v) bankruptcy litigation. Tenant agrees to pay all
collection agency fees and attorneys' fees charged to Landlord in connection
with any late payment or non-payment of rent or any other amounts due under this
Lease including, without limitation, a fee of $75.00 for the preparation of any
demand for delinquent rent or any notice to pay rent or quit.

     

    (d)   Terms
and Headings. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as
the singular. Words used in any gender include other genders. The paragraph
headings of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.

     

    (e)   Time.
Time is of the essence with respect to the performance of every provision
of this Lease in which time of
performance is a factor.

     

    (f)   Prior
Agreement; Amendments. This Lease constitutes and is intended by the
parties to be a final, complete
and exclusive statement of their entire agreement with respect to the subject
matter of this Lease. This Lease supersedes any and all prior and
contemporaneous agreements and understandings of any kind relating to the
subject matter of this Lease. There are no other agreements, understandings,
representations, warranties, or statements, either oral or in written form,
concerning the subject matter of this Lease. No alteration, modification,
amendment or interpretation of this Lease shall be binding on the parties unless
contained in a writing which is signed by both parties.

     

    (g)   Separability.
The provisions of this Lease shall be considered separable such that if
any provision or part of
this Lease is ever held to be invalid, void or illegal under any law or ruling,
all remaining provisions of this Lease shall remain in full force and effect to
the maximum extent permitted by law.

     

    (h)   Recording.
Neither Landlord nor Tenant shall record this Lease nor a short form
memorandum thereof
without the consent of the other.

     

    (i)   Counterparts.
This Lease may be executed in one or more counterparts, each of which
shall constitute
an original and all of which shall be one and the same agreement.

     

    Nondisclosure
of Lease Terms. Tenant acknowledges and agrees that the terms of this
Lease are confidential and constitute proprietary information of Landlord.
Disclosure of the terms could adversely affect the ability of Landlord to
negotiate other leases and impair Landlord's relationship with other tenants.
Accordingly, Tenant agrees that it, and its partners, officers, directors,
employees, agents and attorneys, shall not intentionally and voluntarily
disclose the terms and conditions of this Lease to any newspaper or other
publication or any other tenant or apparent prospective tenant of the Building
or other portion of the Project, or real estate agent, either directly or
indirectly, without the prior written consent of Landlord, provided, however,
that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease.

     

    (k)   Non-Discrimination.
Tenant acknowledges and agrees that there shall be no discrimination
against, or
segregation of, any person, group of persons, or entity on the basis of race,
color, creed, religion, age, sex, marital status, national origin, or ancestry
in
the leasing, subleasing, transferring, assignment, occupancy, tenure,
use, or enjoyment of the Premises, or any portion thereof.

     

    (I)   Joint
Product. This Lease is the result of arms-length negotiations between
Landlord and Tenant and their
respective attorneys. Accordingly, neither party shall be deemed to be the
author of this Lease and this Lease shall not be construed against either
party.

     

    39.    EXECUTION OF
LEASE.

     

    (a)   Joint
and Several Obligations.
If more than one person executes this Lease as Tenant, their execution
of this Lease will constitute their covenant and agreement that (i) each of them
is jointly and severally liable for the keeping, observing and performing of all
of the terms, covenants, conditions, provisions and agreements of this Lease to
be kept, observed and performed by Tenant, and (ii) the term "Tenant" as used in
this Lease means and includes each of them jointly and severally. The act of or
notice from, or notice or refund to, or the signature of any one or more
of them, with respect to the tenancy of this Lease, including, but not limited
to, any renewal, extension, expiration, termination or modification of this
Lease, will be binding upon each and all of the persons executing this Lease as
Tenant with the same force and effect as if each and all of them had so acted or
so given or received such notice or refund or so signed.

     

    
      
        
        

      

      
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    (b)   Tenant
as Corporation or Partnership. If Tenant executes this Lease as a
corporation or partnership,
then Tenant and the persons executing this Lease on behalf of Tenant represent
and warrant that such entity is duly qualified and in good standing to do
business in California and that the individuals executing this Lease on Tenant's
behalf are duly authorized to execute and deliver this Lease on its behalf, and
in the case of a corporation, in accordance with a duly adopted resolution of
the board of directors of Tenant, a copy of which is to be delivered to Landlord
on execution hereof, if requested by Landlord, and in accordance with
the by-laws of Tenant, and, in the case of a partnership, in accordance with the
partnership agreement and the most current amendments thereto, if any, copies of
which are to be delivered to Landlord on execution hereof, if requested by
Landlord, and that this Lease is binding upon Tenant in accordance with its
terms.

     

    (c)   Examination
of Lease. Submission of this instrument by Landlord to Tenant for
examination or signature
by Tenant does not constitute a reservation of or option for lease, and it is
not effective as a lease or otherwise until execution by and delivery to both
Landlord and Tenant.

     

    40.   TELECOMMUNICATIONS
LINES: Tenant shall be solely responsible for contacting the appropriate
telephone company
and contracting to have telephone and data lines brought to the Premises and
connected to Tenant's telecommunications equipment. Tenant must obtain prior
written approval for the installation of all such lines from the management
office. All work required in connection with the installation of such telephone
and data lines shall be done by licensed contractors that have been pre-approved
in writing by the management office. Tenant shall be solely responsible for any
and all costs connected with the installation, maintenance and repair of any
telephone and data lines. In addition, Tenant shall be solely responsible for
any monthly charge incurred relative to such telephone and data lines. Once
telephone and data lines have been installed and connected to the Premises, such
lines shall, at Landlord's election, become the property of Landlord. In the
event Tenant vacates the Premises or relocates or expands within the Project,
Tenant shall discontinue service to such lines but may NOT have the lines
removed, re-routed or redirected for Tenant's use without Landlord's prior
consent.

     

    41.   LEASE
GUARANTY. Intentionally omitted.

     

    42.    OFAC
COMPLIANCE.

     

    (a)   Certification.
Tenant certifies, represents, warrants and covenants that:

     

    (i)   It is not
acting and will not act, directly or indirectly, for or on behalf of any person,
group, entity,
or nation named by any Executive Order or the United States Treasury Department
as a terrorist, "Specially Designated National and Blocked Person", or other
banned or blocked person, entity, nation or transaction pursuant to any law,
order, rule, or regulation that is enforced or administered by the Office of
Foreign Assets Control; and

     

    (ii)   It is not
engaged in this transaction, directly or indirectly on behalf of, or instigating
or facilitating
this transaction, directly or indirectly on behalf of, any such person, group,
entity or nation.

     

    (b)   Indemnity.
Tenant hereby agrees to defend (with counsel reasonably acceptable to Landlord),
indemnify
and hold harmless Landlord and the Landlord Indemnified Parties from and against
any and all Indemnified Claims arising from or related to any such breach of the
foregoing certifications, representations, warranties and
covenants.

     

     

    [SIGNATURES
ON NEXT PAGE]

     

    
      
        
        

      

      
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    SIGNATURE
PAGE TO LEASE

    BY AND
BETWEEN KOLL/PER TORRANCE COMMERCE CENTER, LLC ("LANDLORD') AND

    ACUNETX,
INC., A NEVADA CORPORATION ("TENANT")

     

    IN
WITNESS WHEREOF, the parties have caused this Lease to be duly executed by their
duly authorized representatives.

     

    
    

     

    
      	

              TENANT:

               

              ACUNETX,
      INC.,

              a
      Nevada corporation

              


              By
      /s/ Robert
      Corrigan

                   
      Robert Corrigan, President

            	

              LANDLORD:

               

              KOLL/PER
      TORRANCE COMMERCE CENTER, LLC,

              a
      Delaware limited liability company

               

              By:
      Koll/PER LLC,

              a
      Delaware limited liability company, Managing Member

              By:  /s/ Diane
      Scott                          

            


    

     

    
      
        
        

      

      
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    EXHIBIT
"A-I"

     

    LOCATION OF
PREMISES

     

     

     

     

    
      
        
        

      

      
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    EXHIBIT
"B"

     

    INTENTIONALLY
OMITTED

     

     

    
 

    
      
        
        

      

      
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    EXHIBIT
"C"

     

    SIGN
CRITERIA

     

    1.   Recitals:

     

    Signs and
other graphics are an essential element of any community. As such, their
location, number, size and design consistency have a significant influence upon
a community's visual environment and a resultant effect upon a viewer's
perception of that community.

     

    In
communities where signs have not been property regulated, they have contributed
to visual clutter, unpleasant impressions and even confusion. In many of these
instances signs have
failed to achieve their original objective: Communication of their
intended message.

     

    Under
proper regulation, however, signs and other graphics may be designed and
displayed to effectively communicate their message and at the same time be
appropriate to their surroundings. Signs so designed and displayed can
contribute to community identity, and help create a community which is
efficiently organized and visually attractive. All new leases and renewals will
contain this exhibit and management will strictly enforce its
intent.

     

    2.    Criteria:

     

    Tenant
shall be allowed only one sign regardless of size of occupancy. No advertising placards,
merchandise, banners, pennants, names, insignia, trademarks, or other
descriptive material shall be affixed or maintained in a fashion to be displayed
to the exterior of the suite or on the glass panes of the building, landscaped
areas, streets or parking areas. No alarm company stickers larger than 3-1/2" x
2-1/2" will be allowed. Koll standard U.P.S. signs are available at the leasing
office for the asking. No other U.P.S. signage will be permissible.

     

    3.    Signage Layout Submitted to
Landlord for Approval:

     

    A layout
of each proposed sign showing copy/logo and color samples must be submitted to
the Landlord for approval prior to fabrication and installation.

     

    4.    Sign Specification/Method of
Building Attachment:

     

    The
subject premises have an 18" x 72" aluminum receptacle/frame provided by and at
the sole expense of the Landlord for insertion and placement of Tenant signage.
The Tenant's sign/insert shall be constructed at the sole expense of the Tenant,
constructed of white acrylic. If it is necessary to coat the exterior surface to
obtain the desired background color, the entire surface must be coated the same
color with no masking and the coating must have a five (5) to seven (7) year
exterior life expectancy without fading or peeling. All lettering, legends and
logos are to be computer-cut two (2) mil. high performance black vinyl. Hand
painting in not permitted.

     

    5.    Window
Lettering:

     

    No window
lettering is permitted except for the Tenant's business name
only which may be placed in the window immediately adjacent to the main
entry door. Tenants with little or no adjacent glass may place their name on the
door. Copy is to be computer cut two (2) mil. high performance white vinyl in 3"
helvetica medium lettering. Lettering is to be centered between the window
frames with a minimum 1-1/2" border on each side. Lettering is not to be
condensed more than 75%. Letter height may be reduced up to 1/2" to stay within
the other criteria. If the business name still cannot be accommodated on one
line then it may be placed on two (2) lines using a 2-1/2" letter height and
1-3/4" spacing between lines. The top edge of the top line is to be 69" above
the concrete slab. Any and all other attachments to the glass will be in
non-conformance. Subtenant names, business services or types, and all other
attachments to the glass or glazing, except as described above, shall be
considered non-conforming and subject to removal.

     

    6.    Window
Tinting:

     

    No
mirrored or colored tinting will be authorized. Before any tinting is applied to
the Tenant's windows, a sample must be submitted to the Landlord for written
approval prior to installation.

     

    7.    Landlord's Right to
Enforce:

     

    This
criteria establishes the uniform policies for all Tenant sign identification.
This criteria has been established for the purpose of maintaining the over all
appearance of the complex and to provide our tenants with a consistent quality
environment from which to conduct business. Any sign, graphics or other material
installed that does not conform to this criteria may be brought into conformity
by the Landlord without notice. Any cost incurred by the Landlord to remove
non­conforming signs or to correct defacement from mounting of
non-conforming signs shall be the responsibility of Tenant.

     

    
      
        
        

      

      
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    EXHIBIT
"D"

     

    RULES AND
REGULATIONS

     

    A.
General.
Rules and Regulations.
The following rules and regulations govern the use of the Building and
the
Common Areas. Tenant will be bound by such rules and regulations and agrees to
cause Tenant's Authorized Users, its employees, subtenants, assignees,
contractors, suppliers, customers and invitees to observe the same.

     

    1.   Except as
specifically provided in the Lease to which these Rules and Regulations are
attached, no sign, placard,
picture, stickers, banners, advertisement, name or notice may be installed or
displayed on any part of the outside or inside of the Building without the prior
written consent of Landlord. Landlord will have the right to remove, at Tenant's
expense and without notice, any sign installed or displayed in violation of this
rule. All approved signs or lettering on doors and walls are to be printed,
painted, affixed or inscribed at the expense of Tenant and under the direction
of Landlord by a person or company designated or approved by
Landlord.

     

    2.   If
Landlord objects in writing to any curtains, blinds, shades, screens or hanging
plants or other similar objects attached
to or used in connection with any window or door of the Premises, or placed on
any windowsill, which is visible from the exterior of the Premises, Tenant will
immediately discontinue such use. Tenant agrees not to place anything against or
near glass partitions or doors or windows which may appear unsightly from
outside the Premises, including, without limitation, stickers, tinting
materials, foil shades, blinds or screens.

     

    3.   Tenant
will not obstruct any sidewalks, passages, exits or entrances of the Project.
The sidewalks, passages, exits and
entrances are not open to the general public, but are open, subject to
reasonable regulations, to Tenant's business invitees. Landlord will in all
cases retain the right to control and prevent access thereto of all persons
whose presence in the reasonable judgment of Landlord would be prejudicial to
the safety, character, reputation and interest of the Project and its tenants,
provided that nothing herein contained will be construed to prevent such access
to persons with whom any tenant normally deals in the ordinary course of its
business, unless such persons are engaged in illegal or unlawful activities. No
tenant and no employee or invitee of any tenant will go upon the roof of the
Building.

     

    4.   Landlord
expressly reserves the right to absolutely prohibit solicitation, canvassing,
distribution of handbills or any other
written material or goods, peddling, sales and displays of products, goods and
wares in all portions of the Project except for such activities as may be
expressly permitted under the Lease. Landlord reserves the right to restrict and
regulate the use of the Common Areas of the Project by invitees of tenants
providing services to tenants on a periodic or daily basis including food and
beverage vendors. Such restrictions may include limitations on time, place,
manner and duration of access to a tenant's premises for such
purposes.

     

    5.   Landlord
reserves the right to prevent access to the Project in case of invasion, mob,
riot, public excitement or other
commotion by closing the doors or by other appropriate action.

     

    6.   Landlord
reserves the right to approve companies providing cleaning and janitorial
services for the Premises. Tenant
will not cause any unnecessary labor by carelessness or indifference to the good
order and cleanliness of the Premises.

     

    7.   Landlord
will furnish Tenant, free of charge, with two keys to each exterior entry door
lock to the Premises. Landlord
may make a reasonable charge for any additional keys. Tenant shall not make or
have made additional keys, and Tenant shall not alter any lock or install any
new additional lock or bolt on any door of the Premises. Tenant, upon the
termination of its tenancy, will deliver to Landlord the keys to all doors which
have been furnished to Tenant.

     

    8.   If Tenant
requires telegraphic, telephonic, burglar alarm, satellite dishes, antennae or
similar services, it will first obtain
Landlord's approval, and comply with, Landlord's reasonable rules and
requirements applicable to such services, which may include separate licensing
by, and fees paid to, Landlord, as well as all federal, state, and local
regulations. Tenant will not transmit or receive any electromagnetic, microwave
or other radiation which may be harmful or hazardous to any person or property
in or about the Premises or elsewhere within the Project.

     

    9.   No
deliveries will be made which impede or interfere with other tenants or the
operation of the Building.

     

    10.   Tenant
will not use or keep in the Premises any kerosene, gasoline or inflammable or
combustible fluid or material
other than those limited quantities necessary for the operation or maintenance
of office equipment. Tenant will not sleep, cook or wash clothes in the Premises
or use or permit to be used in the Premises any foul or noxious gas or
substance, or permit or allow the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the Building by
reason of noise, odors or vibrations, intense glare, light or heat, nor will
Tenant bring into or keep in or about the Premises any birds or
animals.

     

    11.   Landlord
reserves the right, exercisable without notice and without liability to Tenant,
to change the name and street
address of the Building. Without the written consent of Landlord, Tenant will
not use the name of the Building or the Project in connection with or in
promoting or advertising the business of Tenant except as Tenant's
address.

     

    12.   The
toilet rooms, toilets, urinals, wash bowls and other apparatus will not be used
for any purpose other than that for
which they were constructed and no foreign substance of any kind whatsoever
shall be thrown therein. The expense of any breakage, stoppage or damage
resulting from any violation of this rule will be borne by the tenant who, or
whose employees or invitees, break this rule.

     

    13.    Tenant will
not sell, or permit the sale at retail of newspapers, magazines, periodicals,
theater tickets or any other
goods or merchandise to the general public in or on the Premises. Tenant will
not make any building-to-building solicitation of business from other tenants in
the Project. Tenant will not use the Premises for any business or activity other
than that specifically provided for in this Lease. Tenant will not conduct, nor
permit to be conducted, either voluntarily or involuntarily, any auction upon
the Premises without first having obtained Landlord's prior written consent,
which consent Landlord may withhold in its sole and absolute
discretion.

     

    
      
        
        

      

      
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    14.   Except
for the ordinary hanging of pictures and wall decorations, Tenant will not mark,
drive nails, screw or drill into the
partitions, woodwork or plaster or in any way deface the Pi-emises
or any part thereof, except in accordance with the provisions of the Lease
pertaining to alterations. Landlord reserves the right to direct electricians as
to where and how telephone and telegraph wires are to be introduced to the
Premises. Tenant will not cut or bore holes for wires. Tenant will not affix any
floor covering to the floor of the Premises in any manner except as approved by
Landlord. Tenant shall repair any damage resulting from noncompliance with this
rule.

     

    15.   Landlord
reserves the right to exclude or expel from the Project any person who, in
Landlord's judgment, is intoxicated
or under the influence of liquor or drugs or who is in violation of any of the
Rules and Regulations of the Building.

     

    16.   Tenant
will store all its trash and garbage within its Premises or in other facilities
provided by Landlord. Tenant will not
place in any trash box or receptacle any material which cannot be disposed of in
the ordinary and customary manner of trash and garbage disposal. All garbage and
refuse disposal is to be made in accordance with directions issued from time to
time by Landlord.

     

    17.   The
Premises will not be used for lodging nor shall the Premises be used for any
improper, immoral or objectionable
purpose.

     

    18.   Tenant
agrees to comply with all safety, fire protection and evacuation procedures and
regulations established by
Landlord or any governmental agency.

     

    19.   Tenant
assumes any and all responsibility for protecting its Premises from theft,
robbery and pilferage, which includes
keeping doors locked and other means of entry to the Premises closed. Tenant
will not leave or store any equipment, materials or items of any kind outside
the walls of the Premises.

     

    20.   Tenant
shall use at Tenant's cost such pest extermination and control contractor(s) as
Landlord may direct and at such
intervals as Landlord may reasonably require.

     

    21.   To the
extent Landlord reasonably deems it necessary to exercise exclusive control over
any portions of the Common
Areas for the mutual benefit of the tenants in the Project, Landlord may do so
subject to reasonable, non­discriminatory additional rules and
regulations.

     

    22.   Tenant's
requirements will be attended to only upon appropriate application to Landlord's
management office for the
Project by an authorized individual of Tenant. Employees of Landlord will not
perform any work or do anything outside of their regular duties unless under
special instructions from Landlord, and no employee of Landlord will admit any
person (Tenant or otherwise) to any office without specific instructions from
Landlord.

     

    23.   These
Rules and Regulations are in addition to, and will not be construed to in any
way modify or amend, in whole or
in part, the terms, covenants, agreements and conditions of the Lease. Landlord
may waive any one or more of these Rules and Regulations for the benefit of
Tenant or any other tenant, but no such waiver by Landlord will be construed as
a waiver of such Rules and Regulations in favor of Tenant or any other tenant,
nor prevent Landlord from thereafter enforcing any such Rules and Regulations
against any or all of the tenants of the Project.

     

    24.   Landlord
reserves the right to make such other and reasonable and non-discriminatory
Rules and Regulations as, in
its judgment, may from time to time be needed for safety and security, for care
and cleanliness of the Project and for the preservation of good order therein.
Tenant agrees to abide by all such Rules and Regulations herein above stated and
any additional reasonable and non-discriminatory rules and regulations which are
adopted. Tenant is responsible for the observance of all of the foregoing rules
by Tenant's employees, agents, clients, customers, invitees and
guests.

     

    25.   Tenant is
specifically prohibited from smoking (cigarettes, cigars, pipes or other types
of smoking) within the Premises.

     

    B.   Parking
Rules and Regulations.
The following rules and regulations govern the use of the parking
facilities
which serve the Building. Tenant will be bound by such rules and regulations and
agrees to cause its employees, subtenants, assignees, contractors, suppliers,
customers and invitees to observe the same:

     

    1.   Tenant
will not permit or allow any vehicles that belong to or are controlled by Tenant
or Tenant's employees,

    subtenants,
customers or invitees to be loaded, unloaded or parked in areas other than those
designated by Landlord for such activities. No vehicles are to be left in the
parking areas overnight and no vehicles are to be parked in the parking areas
other than normally sized passenger automobiles, motorcycles and pick-up trucks.
No extended term storage of vehicles is permitted.

     

    2.   Vehicles
must be parked entirely within painted stall lines of a single parking
stall.

     

    3.   All
directional signs and arrows must be observed.

     

    4.   The speed
limit within all parking areas shall be five (5) miles per hour.

     

    5.   Parking
is prohibited: (a) in areas not striped for parking; (b) in aisles or on ramps;
(c) where "no parking" signs are
posted; (d) in cross-hatched areas; and (e) in such other areas as may be
designated from time to time by Landlord or Landlord's parking
operator.

     

    6.   Landlord
reserves the right, without cost or liability to Landlord, to tow any vehicle if
such vehicle's audio theft alarm
system remains engaged for an unreasonable period of time.

     

    7.    Washing,
waxing, cleaning or servicing of any vehicle in any area not specifically
reserved for such purpose is prohibited.

     

    
      
        
        

      

      
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    8.   Landlord
may refuse to permit any person to park in the parking facilities who violates
these rules with unreasonable
frequency, and any violation of these rules shall subject the violator's car to
removal, at such car owner's expense. Tenant agrees to use its best efforts to
acquaint its employees, subtenants, assignees, contractors, suppliers, customers
and invitees with these parking provisions, rules and regulations.

     

    9.   Landlord
reserves the right, without cost or liability to Landlord,
to tow any vehicles which are used or parked in violation
of these rules and regulations.

     

    10.    Landlord
reserves the right from time to time to modify and/or adopt such other
reasonable and non-discriminatory
rules and regulations for the parking facilities as it deems reasonably
necessary for the operation of the parking facilities.

     

    
      
        
        

      

      
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EXHIBIT
"E"

     

    TENANT'S INSURANCE
REQUIREMENTS

     

    This
outlines the insurance requirements of your Lease. To assure compliance with
these terms, we suggest you send a copy of this Exhibit "E" to your
insurer or agent. Initial Certificates must be provided to Landlord prior to
occupancy of the Premises, renewals ten (10) days before
expiration.

     

    Commercial
General Liability Insurance:

     

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

     

    Bodily
Injury, Property Damage, Personal Injury and Advertising Injury; Blanket
Contractual Liability - Covering Indemnity Paragraph 18(b);
Products and Completed Operations Liability; Landlord as an Additional Insured;
Severability of Interest, permitting Cross liability among insureds; provision
stating that tenant's insurance is primary and non-contributing with any
insurance carried by Landlord.

     

    $1,000,000
Aggregate (minimum) this location $1,000,000 Products/Completed Operations
Aggregate $ 50,000 Fire Legal Liability Limit, per fire

     

    Tenant's
Property Insurance:

     

    All Risks
coverage of Property owned by Tenant or for which the Tenant is legally liable;
replacement cost basis, covering no less than ninety percent (90%) of all
values. "

     

    3.   Tenant's
Business Interruption Insurance:

     

    All Risks
coverage of operations at leased premises; covering one-years business
interruption due to insured peril. "

      


    4.   Tenant's
Workers' Compensation and Employer's Liability Insurance (if
requested):

     

    Statutory
Limits and terms required by state of leased premises; $1,000,000 Employer's
Liability Limit. 5.Tenant's
Automobile Insurance (if requested):

    $1,000,000
Combined Limit per accident; covering all owned, non-owned, hired autos (Symbol
1 - any auto).

    All
insurance is to be with licensed insurers having a Best's rating of "A 10" or
better, and must include the following:

     

    *Waiver
of Subrogation in favor of Landlord (property and business interruption) Thirty
(30) day pre-notice of cancellation/non renewal to Landlord

     

    PLEASE
INCLUDE THE PREMISES ADDRESS AS THE INSURED LOCATION.

    SEND
CERTIFICATE TO AND NAME THE FOLLOWING AS ADDITIONAL INSUREDS:

     

    KOLL/PER
TORRANCE COMMERCE CENTER, LLC

    KOLL/PER
LLC

    THE KOLL
COMPANY, LLC

    KOLL
INDUSTRIAL PROPERTIES, LLC

    17755 Sky
Park East, Suite 100

    Irvine,
CA 92614

    (949)
261-2499

    (949)
261-1186 FAX

     

    
      
        
        

      

      
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