STANDARD
MULTI-TENANT OFFICE LEASE - GROSS


AIR
COMMERCIAL REAL ESTATE ASSOCIATION




1.
            Basic Provisions ("Basic
      Provisions").




1.1  
 Parties: This
Lease ("Lease"), dated
for reference purposes onlyAugust 26, 2008 , is made by and
between Dolphinshire,
L.P., a California limited partnership("Lessor")and Cellynx
Group, Inc., a Nevada corporation("Lessee"),(collectively the "Parties", or individually a
"Party").




1.2(a) Premises: That certain portion
of the Project (as defined below), known as Suite Numbers(s) 370 , Third floor(s),
consisting of approximately 2,120
rentable square feet and approximately 1,868
useable square feet ("Premises").  The
Premises are located at: 25910
Acero , in the City of Mission
Viejo , County of Orange ,
State of California
, with zip code 92691.  
In addition to Lessee's rights to use and occupy thePremises as hereinafter
specified, Lessee shall have non-exclusive rights to the Common Areas (as
defined in Paragraph 2.7 below) as hereinafterspecified, but shall not
have any rights to the roof, the exterior walls, the area above the dropped
ceilings, or the utility raceways of the buildingcontaining the Premises
("Building") or to any
other buildings in the Project. The Premises, the Building, the Common Areas,
the land upon whichthey are located, along
with all other buildings and improvements thereon, are herein collectively
referred to as the “Project." The Project consists ofapproximately 97,529
rentable square feet. (See also Paragraph 2)




1.2(b) Parking: eight
(8) unreserved and zero
(0) reserved vehicle parking spaces at a monthly
cost of  $ 0.00 per
unreserved space and $ 0.00 per reserved space. (See Paragraph
2.6)




1.3      Term: one
(1) years and six
(6) months ("Original Term")
commencing October
1, 2008  ("Commencement Date") and
ending March
31, 2010  ("Expiration Date"). (See also
Paragraph 3)




1.4      Early Possession: (See
Addendum, Paragraph 52) ("Early Possession Date"). (See
also Paragraphs 3.2 and 3.3)





1.5     
Base Rent: $ 4,
664.00 per month ("Base Rent)", payable on
the First
(1st) day of each month
commencing October
1, 2008 . (See also Paragraph
4)




þIf this box is checked,
there are provisions in this Lease for the Base Rent to be adjusted. (See
Addendum, Paragraph 50)





1.6     
Lessee's Share of Operating
Expense Increase: two
& 17/100ths percent ( 2.17%) ("Lessee's
Share"). Lessee's Share has been calculated by dividing the approximate
rentable square footage of the Premises by the total approximatesquare footage of the
rentable space contained in the Project and shall not be subject to revision
except in connection with an actual change in the sizeof the Premises or a change
in the space available for lease in the Project.




1.7     
Base Rent and Other Monies Paid
Upon Execution:





(a)  Base Rent: $ 4,664.00 for
the period of
October, 2008 .


(b)  Security Deposit: $ 9,328.00
("Security Deposit").
(See also Paragraph 5 and Addendum, Paragraph 56 )


(c)  Parking: $ N/A
for the period N/A.


(d)  Other: $ 4,664.00
for Prepaid
Rent for the month of March,
2010 .


(e)  Total Due Upon Execution of this
Lease: $ 13,992.00
($4,664.00 due on Nov. 1,
2008) .




1.8     
Agreed Use: General
Office . (See also Paragraph 6)




1.9     
Base Year; Insuring
Party. The Base Year is 2008 . 
Lessor is the "Insuring
Party". (See also Paragraphs 4.2 and 8)




1.10   
Real Estate Brokers:
(See also Paragraph 15)





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





þ  Grubb
& Ellis represents
Lessor exclusively ("Lessor's
Broker");


þ  Colliers
International represents Lessee exclusively ("Lessee's Broker");
or


þ  N/A represents
both Lessor and Lessee ("Dual
Agency").




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(b)  Payment to Brokers: Upon
execution and delivery of this Lease by both Parties, Lessor shall pay to the
Brokers the brokeragefee agreed to in a separate
written agreement (or if there is no such agreement, the sum of N/A or N/A
% of the total Base Rent for the brokerage services rendered by the
Brokers).




1.11     
Guarantor. The
obligations of the Lessee under this Lease shall be guaranteed by None
("Guarantor"). (See also
Paragraph 37)




1.12     
Business Hours for the
Building:8:00 a.m.
to 6:00 p.m.,
Mondays through Fridays (except Building Holidays) and 9:00a.m.
to 1:00
p.m. on Saturdays (except Building Holidays). "Building Holidays" shall mean
the dates of observation of New Year's Day, President's Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day,
and .




1.13     
Lessor Supplied
Services. Notwithstanding the provisions of Paragraph 11.1, Lessor is NOT
obligated to provide the following:





oJanitorial
services


o Electricity


oOther
(specify):




1.14     
Attachments. Attached
hereto are the following, all of which constitute a part of this
Lease:





þan Addendum to Standard
Office Lease consisting of Paragraphs 50
through 59 ;


þa plot plan depicting
the Premises; Exhibit "A"


þa current set of the
Rules and Regulations; Exhibit "B"a Work Letter;


oa janitorial
schedule;


oother
(specify):




2.
            Premises.




2.1     
Letting. Lessor hereby
leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the
term, at the rental, and upon all of the terms, covenants and conditions set
forth in this Lease. Unless otherwise provided herein, any statement of size set
forth in this Lease,or that may have been used
in calculating Rent, is an approximation which the Parties agree is reasonable
and any payments based thereon are notsubject to revision whether
or not the actual size is more or less. Note: Lessee is advised to verify the
actual size prior to executing this Lease.




2.2     
Condition. Lessor shall
deliver the Premises to Lessee in a clean condition on the Commencement Date or
the Early PossessionDate, whichever first
occurs ("Start Date"),
and warrants that the existing electrical, plumbing, fire sprinkler, lighting,
heating, ventilating and airconditioning systems
("HVAC"), and all other
items which the Lessor is obligated to construct pursuant to the Work Letter
attached hereto, if any, otherthan those constructed by
Lessee, shall be in good operating condition on said date, that the structural
elements of the roof, bearing walls andfoundation of the Unit
shall be free of material defects, and that the Premises do not contain
hazardous levels of any mold or fungi defined as toxicunder applicable state or
federal law.




2.3     
Compliance. Lessor
warrants to the best of its actual knowledge that the improvements comprising
the Premises and the Common Areas comply with the building codes that were in
effect at the time that each such improvement, or portion thereof, was
constructed, and alsowith all applicable laws,
covenants or restrictions of record, regulations, and ordinances ("Applicable Requirements") in
effect on the Start Date. Saidwarranty does not apply to
the use to which Lessee will put the Premises, modifications which may be
required by the Americans with Disabilities Act orany similar laws as a
result of Lessee's use (see Paragraph 50), or to any Alterations or Utility
Installations (as defined in Paragraph 7.3(a)) made or tobe made by Lessee. NOTE: Lessee is responsible for
determining whether or not the zoning and other Applicable Requirements
areappropriate for Lessee's intended
use, and acknowledges that past uses of the Premises may no longer be
allowed. If the Premises do notcomply with said warranty,
Lessor shall, except as otherwise provided, promptly after receipt of written
notice from Lessee setting forth with specificitythe nature and extent of
such non-compliance, rectify the same. If the Applicable Requirements are
hereafter changed so as to require during the termof this Lease the
construction of an addition to or an alteration of the Premises, the remediation
of any Hazardous Substance, or the reinforcement orother physical modification
of the Premises ("Capital
Expenditure"), Lessor and Lessee shall allocate the cost of such work as
follows:




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(a) 
Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as
a result of the specific and unique use of thePremises by Lessee as
compared with uses by tenants in general, Lessee shall be fully responsible for
the cost thereof, provided, however that if suchCapital Expenditure is
required during the last 2 years of this Lease and the cost thereof exceeds 6
months' Base Rent, Lessee may instead terminatethis Lease unless Lessor
notifies Lessee, in writing, within 10 days after receipt of Lessee's
termination notice that Lessor has elected to pay thedifference between the
actual cost thereof and the amount equal to 6 months' Base Rent. If Lessee
elects termination, Lessee shall immediately ceasethe use of the Premises
which requires such Capital Expenditure and deliver to Lessor written notice
specifying a termination date at least 90 daysthereafter. Such
termination date shall, however, in no event be earlier than the last day that
Lessee could legally utilize the Premises withoutcommencing such Capital
Expenditure.





(b)  If
such Capital Expenditure is not the result of the specific and unique use of the
Premises by Lessee (such as, governmentallymandated seismic
modifications), then Lessor and Lessee shall allocate the cost of such Capital
Expenditure as follows: Lessor shall advance thefunds necessary for such
Capital Expenditure but Lessee shall be obligated to pay, each month during the
remainder of the term of this Lease, on thedate on which Base Rent is
due, an amount equal to the product of multiplying Lessee's share of the cost of
such Capital Expenditure (the percentagespecified in Paragraph 1.6
by a fraction, the numerator of which is one, and the denominator of which is
144 (i.e. 1/144th of the cost per month). Lesseeshall pay interest on the
unamortized balance of Lessee's share at a rate that is commercially reasonable
in the judgment of Lessor's accountants. Lessee may, however, prepay its
obligation at any time. Provided, however, that if such Capital Expenditure is
required during the last 2 years of thisLease or if Lessor
reasonably determines that it is not economically feasible to pay its share
thereof, Lessor shall have the option to terminate thisLease upon 90 days prior
written notice to Lessee unless Lessee notifies Lessor, in writing, within 10
days after receipt of Lessor's termination noticethat Lessee will pay for
such Capital Expenditure. If Lessor does not elect to terminate, and fails to
tender its share of any such Capital Expenditure,Lessee may advance such
funds and deduct same, with Interest, from Rent until Lessor's share of such
costs have been fully paid. If Lessee is unableto finance Lessor's share,
or if the balance of the Rent due and payable for the remainder of this Lease is
not sufficient to fully reimburse Lessee on anoffset basis, Lessee shall
have the right to terminate this Lease upon 30 days written notice to
Lessor.





(c)  Notwithstanding
the above, the provisions concerning Capital Expenditures are intended to apply
only to nonvoluntary,unexpected, and new
Applicable Requirements. If the Capital Expenditures are instead triggered by
Lessee as a result of an actual or proposedchange in use, change in
intensity of use, or modification to the Premises then, and in that event,
Lessee shall either: (i) immediately cease suchchanged use or intensity of
use and/or take such other steps as may be necessary to eliminate the
requirement for such Capital Expenditure, or (ii)complete such Capital
Expenditure at its own expense. Lessee shall not have any right to terminate
this Lease.




2.4     
Acknowledgements. Lessee
acknowledges that: (a) Lessee has been advised by Lessor and/or Brokers to
satisfy itself with respect to the condition of the Premises (including but not
limited to the electrical, HVAC and fire sprinkler systems, security,
environmental aspects,and compliance with
Applicable Requirements), and their suitability for Lessee's intended use, (b)
Lessee has made such investigation as it deemsnecessary with reference to
such matters and assumes all responsibility therefor as the same relate to its
occupancy of the Premises, and (c) neitherLessor, Lessor's agents,
nor Brokers have made any oral or written representations or warranties with
respect to said matters other than as set forth inthis Lease. In addition,
Lessor acknowledges that: (i) Brokers have made no representations, promises or
warranties concerning Lessee's ability tohonor the Lease or
suitability to occupy the Premises, and (ii) it is Lessor's sole responsibility
to investigate the financial capability and/or suitability ofall proposed
tenants.




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




2.6     
Vehicle Parking. So long as Lessee is not
in default, and subject Subject to the Rules and Regulations
attached hereto, and as established by Lessor from time to time, Lessee shall be
entitled to rent
and use the number of parking spaces specified in Paragraph 1.2(b)
at the rental
rate applicable from time to time for monthly parking as set by Lessor
and/or its licensee.





(a)  If
Lessee commits, permits or allows any of the prohibited activities described in
the Lease or the rules then in effect, thenLessor shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove or tow away the vehicle involvedand charge the cost to
Lessee, which cost shall be immediately payable upon demand by
Lessor.


(b) 
The monthly rent per parking space specified in Paragraph 1.2(b) is subject to
change upon 30 days prior written notice toLessee unless said rental
rate is $0.0 0, then the rate will remain unchanged throughout the initial term
of this Lease. The rent for the parking ispayable one month in
advance prior to the first day of each calendar month.




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2.7     
Common Areas -
Definition. The term "Common Areas" is defined as
all areas and facilities outside the Premises and within the exterior boundary
line of the Project and interior utility raceways and installations within the
Premises that are provided and designated by the Lessorfrom time to time for the
general nonexclusive use of Lessor, Lessee and other tenants of the Project and
their respective employees, suppliers,shippers, customers,
contractors and invitees, including, but not limited to, common entrances,
lobbies, corridors, stairwells, public restrooms,




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




2.9     
Common Areas - Rules and
Regulations. Lessor or such other person(s) as Lessor may appoint shall
have the exclusive control and management of the Common Areas and shall have the
right, from time to time, to adopt, modify, amend and enforce reasonable rules
andregulations
("Rules and
Regulations") for the management, safety, care, and cleanliness of the
grounds, the parking and unloading of vehicles and thepreservation of good order,
as well as for the convenience of other occupants or tenants of the Building and
the Project and their invitees. The Lesseeagrees to abide by and
conform to all such Rules and Regulations, and shall use its best efforts to
cause its employees, suppliers, shippers, customers,contractors and invitees to
so abide and conform. Lessor shall not be responsible to Lessee for the
noncompliance with said Rules and Regulations byother tenants of the
Project.




2.10     
Common Areas - Changes.
Lessor shall have the right, in Lessor's sole discretion, from time to
time:





(a)  To
make changes to the Common Areas, including, without limitation, changes in the
location, size, shape and number of the lobbies, windows, stairways, air shafts,
elevators, escalators, restrooms, driveways, entrances, parking spaces, parking
areas, loading andunloading areas, ingress,
egress, direction of traffic, landscaped areas, walkways and utility
raceways;





(b)  To
close temporarily any of the Common Areas for maintenance purposes so long as
reasonable access to the Premises remains available;





(c)  To
designate other land outside the boundaries of the Project to be a part of the
Common Areas;





(d) 
To add additional buildings and improvements to the Common Areas;





(e) 
To use the Common Areas while engaged in making additional improvements, repairs
or alterations to the Project, or any portion thereof; and





(f)  To
do and perform such other acts and make such other changes in, to or with
respect to the Common Areas and Project as Lessor may, in the exercise of sound
business judgment, deem to be appropriate.




3.
            Term.




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




3.2     
Early Possession. If
Lessee totally or partially occupies the Premises prior to the Commencement
Date, the obligation to pay Base Rent shall be abated for the period of such
early possession. All other terms of this Lease (including but not limited to
the obligations to payLessee's Share of the
Operating Expense Increase) shall be in effect during such period. Any such
early possession shall not affect the ExpirationDate.




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3.3     
Delay In Possession.
Lessor agrees to use its best commercially reasonable efforts to deliver
possession of the Premises to Lessee by the Commencement Date. If, despite said
efforts, Lessor is unable to deliver possession by such date, Lessor shall not
be subject to anyliability therefor, nor
shall such failure affect the validity of this Lease. Lessee shall not, however,
be obligated to pay Rent or perform its otherobligations until Lessor
delivers possession of the Premises and any period of rent abatement that Lessee
would otherwise have enjoyed shall run fromthe date of delivery of
possession and continue for a period equal to what Lessee would otherwise have
enjoyed under the terms hereof, but minus anydays of delay caused by the
acts or omissions of Lessee. If possession is not delivered within 60 days after
the Commencement Date, as the samemay be extended under the
terms of any Work Letter executed by Parties, Lessee may, at its option, by
notice in writing within 10 days after the end ofsuch 60 day period, cancel
this Lease, in which event the Parties shall be discharged from all obligations
hereunder. If such written notice is notreceived by Lessor within
said 10 day period, Lessee's right to cancel shall terminate. If possession of
the Premises is not delivered within 120 daysafter the Commencement
Date, this Lease shall terminate unless other agreements are reached between
Lessor and Lessee, in writing.




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




4.
            Rent.




4.1.     
Rent Defined. All
monetary obligations of Lessee to Lessor under the terms of this Lease (except
for the Security Deposit) are deemed to be rent ("Rent"). (See Addendum,
Paragraph 50)




4.2     
Operating Expense
Increase. Lessee shall pay to Lessor during the term hereof, in addition
to the Base Rent, Lessee's Share of the amount by which all Operating Expenses
for each Comparison Year exceeds the amount of all Operating Expenses for the
Base Year, such excessbeing hereinafter referred
to as the "Operating Expense
Increase", in accordance with the following provisions:





(a) 
"Base Year" is as
specified in Paragraph 1.9.





(b) 
"Comparison Year" is
defined as each calendar year during the term of this Lease subsequent to the
Base Year; provided, however, Lessee shall have no obligation to pay a share of
the Operating Expense Increase applicable to the first 12 months of the
LeaseTerm (other than
such as are mandated by a governmental authority, as to which government
mandated expenses Lessee shall pay Lessee's Share,notwithstanding they occur
during the first twelve (12) months). Lessee's Share of the Operating Expense
Increase for the first and last ComparisonYears of the Lease Term
shall be prorated according to that portion of such Comparison Year as to which
Lessee is responsible for a share of suchincrease.





(c) 
"Operating Expenses"
include all costs incurred by Lessor relating to the ownership and operation of
the Project, calculated as if the Project was at least 95% occupied, including,
but not limited to, the following:





(i) 
The operation, repair, and maintenance in neat, clean, safe, good order and
condition, but not the replacement (see subparagraph (g)), of the
following:





(aa) 
The Common Areas, including their surfaces, coverings, decorative items,
carpets, drapes and window coverings, and including parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, stairways,
parkways,driveways,
landscaped areas, striping, bumpers, irrigation systems, Common Area lighting
facilities, building exteriors and roofs, fences and gates;





(bb) 
All heating, air conditioning, plumbing, electrical systems, life safety
equipment, communicationsystems and other equipment
used in common by, or for the benefit of, lessees or occupants of the Project,
including elevators and escalators, tenantdirectories, fire detection
systems including sprinkler system maintenance and repair.





(ii)   
Trash disposal, janitorial and security services, pest control services, and the
costs of any environmental inspections;




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(iii)  
Any other service to be provided by Lessor that is elsewhere in this Lease
stated to be an "Operating Expense";





(iv)  The
cost of the premiums for the insurance policies maintained by Lessor pursuant to
paragraph 8 and any deductible portion of an insured loss concerning the
Building or the Common Areas;





(v)   The
amount of the Real Property Taxes payable by Lessor pursuant to paragraph
10;





(vi)  
The cost of water, sewer, gas, electricity, and other publicly mandated services
not separately metered;





(vii) 
Labor, salaries, and applicable fringe benefits and costs, materials, supplies
and tools, used in maintaining and/or cleaning the Project and accounting and
management fees attributable to the operation of the Project;





(viii) The
cost of any capital improvement to the Building or the Project not covered under
the provisions of Paragraph 2.3 provided; however, that Lessor shall allocate
the cost of any such capital improvement over a 12 year period and Lessee shall
not berequired to pay
more than Lessee's Share of 1/144th of the cost of such Capital Expenditure in
any given month;





(ix)   
Replacement of equipment or improvements that have a useful life for accounting
purposes of 5 years or less.


(d) 
Any item of Operating Expense that is specifically attributable to the Premises,
the Building or to any other building in theProject or to the
operation, repair and maintenance thereof, shall be allocated entirely to such
Premises, Building, or other building
Project. However,any
such item that is not specifically attributable to the Building or to any other
building or to the operation, repair and maintenance thereof, shall beequitably allocated by
Lessor to all buildings in the Project.





(e)  The
inclusion of the improvements, facilities and services set forth in Subparagraph
4.2(c) shall not be deemed to impose an obligation upon Lessor to either have
said improvements or facilities or to provide those services unless the Project
already has the same, Lessoralready provides the
services, or Lessor has agreed elsewhere in this Lease to provide the same or
some of them.





(f) Lessee's
Share of Operating Expense Increase is payable monthly on the same day as the
Base Rent is due hereunder.  The amount of such payments shall be based on
Lessor's estimate of the Operating Expense Expenses. Within 60 120 days
after each calendar year,written request
(but not more than once each year) Lessor shall
deliver to Lessee a reasonably detailed statement showing Lessee's Share of
theactual Common Area
Operating Expenses incurred during the preceding year.a reasonably detailed
statement showing Lessee's Share of the actualOperating Expense Increase
incurred during such year. If Lessee's payments during such Year exceed Lessee's
Share, Lessee shall credit the amountof such over-payment
against Lessee's future payments. If Lessee's payments during such Year were
less than Lessee's Share, Lessee shall pay toLessor the amount of the
deficiency within 10 days after delivery by Lessor to Lessee of said statement.
Lessor and Lessee shall forthwith adjustbetween them by cash
payment any balance determined to exist with respect to that portion of the last
Comparison Year for which Lessee isresponsible as to Operating
Expense Increases, notwithstanding that the Lease term may have terminated
before the end of such Comparison Year.





(g)  Operating
Expenses shall not include the costs of replacement for equipment or capital
components such as the roof, foundations, exterior walls or a Common Area
capital improvement, such as the parking lot paving, elevators, fences that have
a useful life foraccounting purposes of 5
years or more unless it is of the type described in paragraph 4.2(c) (viii), in
which case their cost shall be included as aboveprovided.





(h)  Operating
Expenses shall not include any expenses paid by any tenant directly to third
parties, or as to which Lessor is otherwise reimbursed by any third party, other
tenant, or by insurance proceeds.




4.3     
Payment. Lessee shall
cause payment of Rent to be received by Lessor in lawful money of the United
States on or before the day on which it is due, without offset or deduction
(except as specifically permitted in this Lease). All monetary amounts shall be
rounded to the nearestwhole dollar. In the event
that any invoice prepared by Lessor is inaccurate such inaccuracy shall not
constitute a waiver and Lessee shall be obligatedto pay the amount set forth
in this Lease. Rent for any period during the term hereof which is for less than
one full calendar month shall be proratedbased upon the actual
number of days of said month. Payment of Rent shall be made to Lessor at its
address stated herein or to such other persons orplace as Lessor may from
time to time designate in writing. Acceptance of a payment which is less than
the amount then due shall not be a waiver ofLessor's rights to the
balance of such Rent, regardless of Lessor's endorsement of any check so
stating. In the event that any check, draft, or otherinstrument of payment given
by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor
the sum of $25 in addition to any LateCharge and Lessor, at its
option, may require all future Rent be paid by cashier's check. Payments will be
applied first to accrued late charges andattorney's fees, second to
accrued interest, then to Base Rent and Common Area Operating Expenses, and any
remaining amount to any otheroutstanding charges or
costs.




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5.
            Security
      Deposit.




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




6.
            Use.




6.1     
Use. Lessee shall use
and occupy the Premises only for the Agreed Use, or any other legal use which is
reasonably comparable thereto, and for no other purpose. Lessee shall not use or
permit the use of the Premises in a manner that is unlawful, creates damage,
waste or anuisance,
or that disturbs occupants of or causes damage to neighboring premises or
properties. Other than guide, signal and seeing eye dogs, Lesseeshall not keep or allow in
the Premises any pets, animals, birds, fish, or reptiles. Lessor shall not
unreasonably withhold or delay its consent to anywritten request for a
modification of the Agreed Use, so long as the same will not impair the
structural integrity of the improvements of the Building, willnot adversely affect the
mechanical, electrical, HVAC, and other systems of the Building, and/or will not
affect the exterior appearance of the Building. If Lessor elects to withhold
consent, Lessor shall within 7 days after such request give written notification
of same, which notice shall include anexplanation of Lessor's
objections to the change in the Agreed Use.




6.2     
Hazardous
Substances.





(a)Reportable Uses Require
Consent. The term "Hazardous Substance" as used
in this Lease shall mean any product,substance, or waste whose
presence, use, manufacture, disposal, transportation, or release, either by
itself or in combination with other materialsexpected to be on the
Premises, is either: (i) potentially injurious to the public health, safety or
welfare, the environment or the Premises, (ii) regulatedor monitored by any
governmental authority, or (iii) a basis for potential liability of Lessor to
any governmental agency or third party under any applicablestatute or common law
theory. Hazardous Substances shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, and/or crude oil or anyproducts, byproducts or
fractions thereof. Lessee shall not engage in any activity in or on the Premises
which constitutes a Reportable Use ofHazardous Substances
without the express prior written consent of Lessor and timely compliance (at
Lessee's expense) with all ApplicableRequirements. "Reportable Use" shall mean (i)
the installation or use of any above or below ground storage tank, (ii) the
generation, possession,storage, use,
transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice, registration orbusiness plan is required
to be filed with, any governmental authority, and/or (iii) the presence at the
Premises of a Hazardous Substance with respectto which any Applicable
Requirements requires that a notice be given to persons entering or occupying
the Premises or neighboring properties. Notwithstanding the foregoing, Lessee
may use any ordinary and customary materials reasonably required to be used in
the normal course of theAgreed Use such as ordinary
office supplies (copier toner, liquid paper, glue, etc.) and common household
cleaning materials, so long as such use is incompliance with all
Applicable Requirements, is not a Reportable Use, and does not expose the
Premises or neighboring property to any meaningfulrisk of contamination or
damage or expose Lessor to any liability therefor. In addition, Lessor may
condition its consent to any Reportable Use uponreceiving such additional
assurances as Lessor reasonably deems necessary to protect itself, the public,
the Premises and/or the environment againstdamage, contamination,
injury and/or liability, including, but not limited to, the installation (and
removal on or before Lease expiration or termination) ofprotective modifications
(such as concrete encasements) and/or increasing the Security
Deposit.






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(b)  Duty to Inform Lessor. If
Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has
come to belocated in,
on, under or about the Premises, other than as previously consented to by
Lessor, Lessee shall immediately give written notice of such factto Lessor, and provide
Lessor with a copy of any report, notice, claim or other documentation which it
has concerning the presence of such HazardousSubstance.





(c)  Lessee Remediation. Lessee
shall not cause or permit any Hazardous Substance to be spilled or released in,
on, under, orabout
the Premises (including through the plumbing or sanitary sewer system) and shall
promptly, at Lessee's expense, comply with all ApplicableRequirements and take all
investigatory and/or remedial action reasonably recommended, whether or not
formally ordered or required, for the cleanupof any contamination of,
and for the maintenance, security and/or monitoring of the Premises or
neighboring properties, that was caused or materiallycontributed to by Lessee,
or pertaining to or involving any Hazardous Substance brought onto the Premises
during the term of this Lease, by or forLessee, or any third
party.





(d)  Lessee Indemnification. Lessee
shall indemnify, defend and hold Lessor, its agents, employees, lenders and
ground lessor,if any,
harmless from and against any and all loss of rents and/or damages, liabilities,
judgments, claims, expenses, penalties, and attorneys' andconsultants' fees arising
out of or involving any Hazardous Substance brought onto the Premises by or for
Lessee, or any third party (provided,however, that Lessee shall
have no liability under this Lease with respect to underground migration of any
Hazardous Substance under the Premisesfrom areas outside of the
Project not caused or contributed to by Lessee). Lessee's obligations shall
include, but not be limited to, the effects of anycontamination or injury to
person, property or the environment created or suffered by Lessee, and the cost
of investigation, removal, remediation,restoration and/or
abatement, and shall survive the expiration or termination of this Lease. No
termination, cancellation or release agreement enteredinto by Lessor and Lessee
shall release Lessee from its obligations under this Lease with respect to
Hazardous Substances, unless specifically soagreed by Lessor in writing
at the time of such agreement.





(e)  Lessor Indemnification. Lessor
and its successors and assigns shall indemnify, defend, reimburse and hold
Lessee, itsemployees
and lenders, harmless from and against any and all environmental damages,
including the cost of remediation, which result from HazardousSubstances which existed on
the Premises prior to Lessee's occupancy or which are caused by the gross
negligence or willful misconduct of Lessor, itsagents or employees.
Lessor's obligations, as and when required by the Applicable Requirements, shall
include, but not be limited to, the cost ofinvestigation, removal,
remediation, restoration and/or abatement, and shall survive the expiration or
termination of this Lease.





(f)  Investigations and
Remediations. Lessor shall retain the responsibility and pay for any
investigations or remediationmeasures required by
governmental entities having jurisdiction with respect to the existence of
Hazardous Substances on the Premises prior toLessee's occupancy, unless
such remediation measure is required as a result of Lessee's use (including
"Alterations", as defined in paragraph 7.3(a)below) of the Premises, in
which event Lessee shall be responsible for such payment. Lessee shall cooperate
fully in any such activities at the requestof Lessor, including
allowing Lessor and Lessor's agents to have reasonable access to the Premises at
reasonable times in order to carry out Lessor'sinvestigative and remedial
responsibilities.





(g)  Lessor Termination Option. If
a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of
this Lease,unless
Lessee is legally responsible therefor (in which case Lessee shall make the
investigation and remediation thereof required by the ApplicableRequirements and this Lease
shall continue in full force and effect, but subject to Lessor's rights under
Paragraph 6.2(d) and Paragraph 13), Lessormay, at Lessor's option,
either (i) investigate and remediate such Hazardous Substance Condition, if
required, as soon as reasonably possible atLessor's expense, in which
event this Lease shall continue in full force and effect, or (ii) if the
estimated cost to remediate such condition exceeds 12times the then monthly Base
Rent or $100,000, whichever is greater, give written notice to Lessee, within 30
days after receipt by Lessor of knowledgeof the occurrence of such
Hazardous Substance Condition, of Lessor's desire to terminate this Lease as of
the date 60 days following the date of suchnotice. In the event Lessor
elects to give a termination notice, Lessee may, within 10 days thereafter, give
written notice to Lessor of Lessee'scommitment to pay the
amount by which the cost of the remediation of such Hazardous Substance
Condition exceeds an amount equal to 12 times thethen monthly Base Rent or
$100,000, whichever is greater. Lessee shall provide Lessor with said funds or
satisfactory assurance thereof within 30days following such
commitment. In such event, this Lease shall continue in full force and effect,
and Lessor shall proceed to make such remediationas soon as reasonably
possible after the required funds are available. If Lessee does not give such
notice and provide the required funds or assurancethereof within the time
provided, this Lease shall terminate as of the date specified in Lessor's notice
of termination.




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6.3     
Lessee's Compliance with
Applicable Requirements . Except as otherwise provided in this Lease,
Lessee shall, at Lessee's sole expense, fully, diligently and in a timely
manner, materially comply with all Applicable Requirements, the requirements of
any applicable fireinsurance underwriter or
rating bureau, and the recommendations of Lessor's engineers and/or consultants
which relate in any manner to the Premises,without regard to whether
said requirements are now in effect or become effective after the Start Date.
Lessee shall, within 10 days after receipt ofLessor's written request,
provide Lessor with copies of all permits and other documents, and other
information evidencing Lessee's compliance with anyApplicable Requirements
specified by Lessor, and shall immediately upon receipt, notify Lessor in
writing (with copies of any documents involved) ofany threatened or actual
claim, notice, citation, warning, complaint or report pertaining to or involving
the failure of Lessee or the Premises to complywith any Applicable
Requirements. Likewise, Lessee shall immediately give written notice to Lessor
of: (i) any water damage to the Premises and anysuspected seepage, pooling,
dampness or other condition conducive to the production of mold; or (ii) any
mustiness or other odors that might indicatethe presence of mold in the
Premises.




6.4     
Inspection; Compliance.
Lessor and Lessor's "Lender" (as defined in
Paragraph 30) and consultants shall have the right to enter into Premises at any
time, in the case of an emergency, and otherwise at reasonable times, after
reasonable notice, for the purpose of inspecting thecondition of the Premises
and for verifying compliance by Lessee with this Lease. The cost of any such
inspections shall be paid by Lessor, unless aviolation of Applicable
Requirements, or a Hazardous Substance Condition (see paragraph 9.1e) is found
to exist or be imminent, or the inspection isrequested or ordered by a
governmental authority. In such case, Lessee shall upon request reimburse Lessor
for the cost of such inspection, so longas such inspection is
reasonably related to the violation or contamination. In addition, Lessee shall
provide copies of all relevant material safety datasheets (MSDS) to Lessor within 10 days
of the receipt of written request therefor.




7.
            Maintenance;
      Repairs; Utility Installations; Trade Fixtures and Alterations
      .




7.1     
Lessee's Obligations.
Notwithstanding Lessor's obligation to keep the Premises in good condition and
repair, Lessee shall be responsible for payment of the cost thereof to Lessor as
additional rent to be included as a part of Operating Expense Increase
charges for that portionof the cost of any
maintenance and repair of the Premises, or any equipment (wherever located) that
serves only Lessee or the Premises, to the extentsuch cost is attributable
to causes beyond normal wear and tear. Lessee shall be responsible for the cost
of painting, repairing or replacing wall coverings, and to repair or replace any
improvements within the Premises. Lessor may, at its option, upon reasonable
notice, elect to have Lesseeperform any particular such
maintenance or repairs the cost of which is otherwise Lessee's responsibility
hereunder.




7.2     
Lessor's Obligations.
Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 4.2
(Operating Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9 (Damage or
Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursuant to
Paragraph 4.2,shall
keep in good order, condition and repair the foundations, exterior walls,
structural condition of interior bearing walls, exterior roof, fire
sprinklersystem, fire
alarm and/or smoke detection systems, fire hydrants, and the Common Areas.
Lessee expressly waives the benefit of any statute now orhereafter in effect to the
extent it is inconsistent with the terms of this Lease.




7.3     
Utility Installations; Trade
Fixtures; Alterations .





(a)Definitions. The term
"Utility Installations"
refers to all floor and window coverings, air lines, vacuum lines, power
panels,electrical
distribution, security and fire protection systems, communication cabling,
lighting fixtures, HVAC equipment, and plumbing in or on thePremises. The term "Trade Fixtures" shall mean
Lessee's machinery and equipment that can be removed without doing material
damage to thePremises. The term "Alterations" shall mean any
modification of the improvements, other than Utility Installations or Trade
Fixtures, whether byaddition or deletion.
"Lessee Owned Alterations
and/or Utility Installations " are defined as Alterations and/or Utility
Installations made by Lesseethat are not yet owned by
Lessor pursuant to Paragraph 7.4(a).






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(b)  Consent. Lessee shall not make
any Alterations or Utility Installations to the Premises without Lessor's prior
written consent. Lessee may, however, make non-structural Utility Installations
to the interior of the Premises (excluding the roof) without such consent but
upon noticeto Lessor,
as long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof, ceilings, floors or any existingwalls, will not affect the
electrical, plumbing, HVAC, and/or life safety systems, and the cumulative cost
thereof during this Lease as extended does notexceed $2000.
Notwithstanding the foregoing, Lessee shall not make or permit any roof
penetrations and/or install anything on the roof without theprior written approval of
Lessor. Lessor may, as a precondition to granting such approval, require Lessee
to utilize a contractor chosen and/or approvedby Lessor. Any Alterations
or Utility Installations that Lessee shall desire to make and which require the
consent of the Lessor shall be presented toLessor in written form with
detailed plans. Consent shall be deemed conditioned upon Lessee's: (i) acquiring
all applicable governmental permits, (ii)furnishing Lessor with
copies of both the permits and the plans and specifications prior to
commencement of the work, and (iii) compliance with allconditions of said permits
and other Applicable Requirements in a prompt and expeditious manner. Any
Alterations or Utility Installations shall beperformed in a workmanlike
manner with good and sufficient materials. Lessee shall promptly upon completion
furnish Lessor with as built plans andspecifications. For work
which costs an amount in excess of one month's Base Rent, Lessor may condition
its consent upon Lessee providing a lienand completion bond in an
amount equal to 150% of the estimated cost of such Alteration or Utility
Installation and/or upon Lessee's posting anadditional Security Deposit
with Lessor.





(c)  Liens; Bonds. Lessee shall
pay, when due, all claims for labor or materials furnished or alleged to have
been furnished to orfor Lessee at or for use on
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or anyinterest therein. Lessee
shall give Lessor not less than 10 days notice prior to the commencement of any
work in, on or about the Premises, andLessor shall have the right
to post notices of non-responsibility. If Lessee shall contest the validity of
any such lien, claim or demand, then Lesseeshall, at its sole expense
defend and protect itself, Lessor and the Premises against the same and shall
pay and satisfy any such adverse judgment thatmay be rendered thereon
before the enforcement thereof. If Lessor shall require, Lessee shall furnish a
surety bond in an amount equal to 150% of theamount of such contested
lien, claim or demand, indemnifying Lessor against liability for the same. If
Lessor elects to participate in any such action,Lessee shall pay Lessor's
attorneys' fees and costs.




7.4     
Ownership; Removal; Surrender;
and Restoration.





(a) 
Ownership. Subject to
Lessor's right to require removal or elect ownership as hereinafter provided,
all Alterations and UtilityInstallations made by
Lessee shall be the property of Lessee, but considered a part of the Premises.
Lessor may, at any time, elect in writing to be theowner of all or any
specified part of the Lessee Owned Alterations and Utility Installations. Unless
otherwise instructed per paragraph 7.4(b) hereof, allLessee Owned Alterations
and Utility Installations shall, at the expiration or termination of this Lease,
become the property of Lessor and besurrendered by Lessee with
the Premises.





(b)  Removal. By delivery to Lessee
of written notice from Lessor not earlier than 90 and not later than 30 days
prior to the end ofthe term of this Lease,
Lessor may require that any or all Lessee Owned Alterations or Utility
Installations be removed by the expiration or termination ofthis Lease. Lessor may
require the removal at any time of all or any part of any Lessee Owned
Alterations or Utility Installations made without therequired
consent.





(c)  Surrender; Restoration. Lessee
shall surrender the Premises by the Expiration Date or any earlier termination
date, with all ofthe
improvements, parts and surfaces thereof clean and free of debris, and in good
operating order, condition and state of repair, ordinary wear and tearexcepted. "Ordinary wear
and tear" shall not include any damage or deterioration that would have been
prevented by good maintenance practice. Notwithstanding the foregoing, if this
Lease is for 12 months or less, then Lessee shall surrender the Premises in the
same condition as delivered toLessee on the Start Date
with NO allowance for ordinary wear and tear. Lessee shall repair any damage
occasioned by the installation, maintenance orremoval of Trade Fixtures,
Lessee owned Alterations and/or Utility Installations, furnishings, and
equipment as well as the removal of any storage tankinstalled by or for Lessee.
Lessee shall also completely remove from the Premises any and all Hazardous
Substances brought onto the Premises by or for Lessee, or any third party
(except Hazardous Substances which were deposited via underground migration from
areas outside of the Premises)even if such removal would
require Lessee to perform or pay for work that exceeds statutory requirements.
Trade Fixtures shall remain the property ofLessee and shall be removed
by Lessee. Any personal property of Lessee not removed on or before the
Expiration Date or any earlier termination dateshall be deemed to have
been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor
may desire. The failure by Lessee totimely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of Lessor
shall constitute a holdover under theprovisions of Paragraph 26
below.




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8.
            Insurance;
      Indemnity.




8.1     
Insurance Premiums. The
cost of the premiums for the insurance policies maintained by Lessor pursuant to
paragraph 8 are included as Operating Expenses (see paragraph 4.2 (c)(iv)). Said
costs shall include increases in the premiums resulting from additional
coveragerelated to
requirements of the holder of a mortgage or deed of trust covering the Premises,
Building and/or Project, increased valuation of the Premises,Building and/or Project,
and/or a general premium rate increase. Said costs shall not, however, include
any premium increases resulting from thenature of the occupancy of
any other tenant of the Building. If the Project was not insured for the
entirety of the Base Year, then the base premiumshall be the lowest annual
premium reasonably obtainable for the required insurance as of the Start Date,
assuming the most nominal use possible ofthe Building and/or
Project. In no event, however, shall Lessee be responsible for any portion of
the premium cost attributable to liability insurancecoverage in excess of
$2,000,000 procured under Paragraph 8.2(b).




8.2     
Liability
Insurance.





(a)  Carried by Lessee. Lessee
shall obtain and keep in force a Commercial General Liability policy of
insurance protecting Lesseeand Lessor as an additional
insured against claims for bodily injury, personal injury and property damage
based upon or arising out of the ownership,use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing singlelimit coverage in an amount
not less than $1,000,000 per occurrence with an annual aggregate of not less
than $2,000,000. Lessee shall add Lessor asan additional insured by
means of an endorsement at least as broad as the Insurance Service
Organization's "Additional Insured-Managers or Lessorsof Premises" Endorsement
and coverage shall also be extended to include damage caused by heat, smoke or
fumes from a hostile fire. The policyshall not contain any
intra-insured exclusions as between insured persons or organizations, but shall
include coverage for liability assumed under thisLease as an "insured contract" for the
performance of Lessee's indemnity obligations under this Lease. The limits of
said insurance shall not,however, limit the
liability of Lessee nor relieve Lessee of any obligation hereunder. Lessee shall
provide an endorsement on its liability policy(ies)which provides that its
insurance shall be primary to and not contributory with any similar insurance
carried by Lessor, whose insurance shall beconsidered excess insurance
only.





(b)  Carried by Lessor. Lessor
shall maintain liability insurance as described in Paragraph 8.2(a), in addition
to, and not in lieu of,the insurance required to
be maintained by Lessee. Lessee shall not be named as an additional insured
therein.




8.3     
Property Insurance - Building,
Improvements and Rental Value .





(a)  Building and Improvements.
Lessor shall obtain and keep in force a policy or policies of insurance in the
name of Lessor,with
loss payable to Lessor, any ground-lessor, and to any Lender insuring loss or
damage to the Building and/or Project. The amount of suchinsurance shall be equal to
the full insurable replacement cost of the Building and/or Project, as the same
shall exist from time to time, or the amountrequired by any Lender, but
in no event more than the commercially reasonable and available insurable value
thereof. Lessee Owned Alterations andUtility Installations,
Trade Fixtures, and Lessee's personal property shall be insured by Lessee under
Paragraph 8.4. If the coverage is available andcommercially appropriate,
such policy or policies shall insure against all risks of direct physical loss
or damage (except the perils of flood and/orearthquake unless required
by a Lender), including coverage for debris removal and the enforcement of any
Applicable Requirements requiring theupgrading, demolition,
reconstruction or replacement of any portion of the Premises as the result of a
covered loss. Said policy or policies shall alsocontain an agreed valuation
provision in lieu of any coinsurance clause, waiver of subrogation, and
inflation guard protection causing an increase in theannual property insurance
coverage amount by a factor of not less than the adjusted U.S. Department of
Labor Consumer Price Index for All UrbanConsumers for the city
nearest to where the Premises are located. If such insurance coverage has a
deductible clause, the deductible amount shall notexceed $1,000 per
occurrence.





(b)  Rental Value. Lessor shall
also obtain and keep in force a policy or policies in the name of Lessor with
loss payable to Lessorand any Lender, insuring
the loss of the full Rent for one year with an extended period of indemnity for
an additional 180 days ("Rental
Valueinsurance"). Said insurance
shall contain an agreed valuation provision in lieu of any coinsurance clause,
and the amount of coverage shall beadjusted annually to
reflect the projected Rent otherwise payable by Lessee, for the next 12 month
period.





(c)  Adjacent Premises. Lessee
shall pay for any increase in the premiums for the property insurance of the
Building and for theCommon Areas or other
buildings in the Project if said increase is caused by Lessee's acts, omissions,
use or occupancy of the Premises.





(d)  Lessee's Improvements. Since
Lessor is the Insuring Party, Lessor shall not be required to insure Lessee
Owned Alterationsand
Utility Installations unless the item in question has become the property of
Lessor under the terms of this Lease.




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8.4     
Lessee's Property; Business
Interruption Insurance .





(a)  Property Damage. Lessee shall
obtain and maintain insurance coverage on all of Lessee's personal property,
Trade Fixtures,and
Lessee Owned Alterations and Utility Installations. Such insurance shall be full
replacement cost coverage with a deductible of not to exceed$1,000 per occurrence. The
proceeds from any such insurance shall be used by Lessee for the replacement of
personal property, Trade Fixtures andLessee Owned Alterations
and Utility Installations. Lessee shall provide Lessor with written evidence
that such insurance is in force.





(b)  Business Interruption. Lessee
shall obtain and maintain loss of income and extra expense insurance in amounts
as willreimburse
Lessee for direct or indirect loss of earnings attributable to all perils
commonly insured against by prudent lessees in the business of Lesseeor attributable to
prevention of access to the Premises as a result of such perils.





(c)  No Representation of Adequate
Coverage. Lessor makes no representation that the limits or forms of
coverage of insurancespecified herein are
adequate to cover Lessee's property, business operations or obligations under
this Lease.




8.5     
Insurance Policies.
Insurance required herein shall be by companies duly licensed or admitted to
transact business in the state where the Premises are located, and maintaining
during the policy term a "General Policyholders Rating" of at least A-, VI, as
set forth in the mostcurrent issue of "Best's
Insurance Guide", or such other rating as may be reasonably acceptable to
Lessor.  required by
a Lender.  Lessee shall not door permit to be done
anything which invalidates the required insurance policies. Lessee shall, prior
to the Start Date, deliver to Lessor certified
copiesof policies of such
insurance or certificates evidencing the existence and amounts of
the required insurance. No such policy shall be cancelable orsubject to modification
except after 10 days prior written notice to Lessor. Lessee shall, at least 30
days prior to the expiration of such policies, furnish Lessor with evidence of
renewals or "insurance binders" evidencing renewal thereof, or Lessor may order
such insurance and charge the cost thereof toLessee, which amount shall
be payable by Lessee to Lessor upon demand. Such policies shall be for a term of
at least one year, or the length of theremaining term of this
Lease, whichever is less. If either Party shall fail to procure and maintain the
insurance required to be carried by it, the otherParty may, but shall not
be required to, procure and maintain the same.




8.6     
Waiver of Subrogation.
Without affecting any other rights or remedies, Lessee and Lessor each hereby
release and relieve the other, and waive their entire right to recover damages
against the other, for loss of or damage to its property arising out of or
incident to the perilsrequired to be insured
against herein. The effect of such releases and waivers is not limited by the
amount of insurance carried or required, or by anydeductibles applicable
hereto. The Parties agree to have their respective property damage insurance
carriers waive any right to subrogation that suchcompanies may have against
Lessor or Lessee, as the case may be, so long as the insurance is not
invalidated thereby.




8.7     
Indemnity. Except for
Lessor's gross negligence or willful misconduct, Lessee shall indemnify,
protect, defend and hold harmless the Premises, Lessor and its agents, Lessor's
master or ground lessor, partners and Lenders, from and against any and all
claims, loss of rents and/ordamages, liens, judgments,
penalties, attorneys' and consultants' fees, expenses and/or liabilities arising
out of, involving, or in connection with, the useand/or occupancy of the
Premises by Lessee. If any action or proceeding is brought against Lessor by
reason of any of the foregoing matters, Lesseeshall upon notice defend
the same at Lessee's expense by counsel reasonably satisfactory to Lessor and
Lessor shall cooperate with Lessee in suchdefense. Lessor need not
have first paid any such claim in order to be defended or
indemnified.




8.8     
Exemption of Lessor and its
Agents from Liability. Notwithstanding the negligence or breach of this
Lease by Lessor or its agents, neither Lessor nor its agents shall be liable
under any circumstances for: (i) injury or damage to the person or goods, wares,
merchandise orother
property of Lessee, Lessee's employees, contractors, invitees, customers, or any
other person in or about the Premises, whether such damage orinjury is caused by or
results from fire, steam, electricity, gas, water or rain, indoor air quality,
the presence of mold or from the breakage, leakage,obstruction or other
defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting
fixtures, or from any other cause, whether the saidinjury or damage results
from conditions arising upon the Premises or upon other portions of the
Building, or from other sources or places, (ii) anydamages arising from any
act or neglect of any other tenant of Lessor or from the failure of Lessor or
its agents to enforce the provisions of any otherlease in the Project, or
(iii) injury to Lessee's business or for any loss of income or profit therefrom.
Instead, it is intended that Lessee's sole recourse inthe event of such damages
or injury be to file a claim on the insurance policy(ies) that Lessee is
required to maintain pursuant to the provisions ofparagraph 8.




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8.9     
Failure to Provide
Insurance. Lessee acknowledges that any failure on its part to obtain or
maintain the insurance required herein will expose Lessor to risks and
potentially cause Lessor to incur costs not contemplated by this Lease, the
extent of which will be extremely difficult to ascertain. Accordingly, for any
month or portion thereof that Lessee does not maintain the required insurance
and/or does not provide Lessorwith the required binders
or certificates evidencing the existence of the required insurance, the Base
Rent shall be automatically increased, without anyrequirement for notice to
Lessee, by an amount equal to 10% of the then existing Base Rent or $100,
whichever is greater. The parties agree that suchincrease in Base Rent
represents fair and reasonable compensation for the additional risk/costs that
Lessor will incur by reason of Lessee's failure tomaintain the required
insurance. Such increase in Base Rent shall in no event constitute a waiver of
Lessee's Default or Breach with respect to thefailure to maintain such
insurance, prevent the exercise of any of the other rights and remedies granted
hereunder, nor relieve Lessee of its obligation tomaintain the insurance
specified in this Lease.




9.
            Damage
      or Destruction.




9.1     
Definitions.





(a) 
"Premises Partial
Damage" shall mean damage or destruction to the improvements on the
Premises, other than LesseeOwned Alterations and
Utility Installations, which can reasonably be repaired in 3 months or less from
the date of the damage or destruction, and thecost thereof does not
exceed a sum equal to 6 month's Base Rent. Lessor shall notify Lessee in writing
within 30 days from the date of the damage ordestruction as to whether
or not the damage is Partial or Total.





(b)  "Premises Total Destruction"
shall mean damage or destruction to the improvements on the Premises, other than
LesseeOwned
Alterations and Utility Installations and Trade Fixtures, which cannot
reasonably be repaired in 3 months or less from the date of the damage ordestruction and/or the cost
thereof exceeds a sum equal to 6 12 month's Base Rent. Lessor shall notify
Lessee in writing within 30 days from the dateof the damage or
destruction as to whether or not the damage is Partial or Total.





(c)  "Insured Loss" shall mean
damage or destruction to improvements on the Premises, other than Lessee Owned
Alterations andUtility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a),irrespective of any
deductible amounts or coverage limits involved.





(d)  "Replacement Cost" shall mean
the cost to repair or rebuild the improvements owned by Lessor at the time of
the occurrenceto
their condition existing immediately prior thereto, including demolition, debris
removal and upgrading required by the operation of ApplicableRequirements, and without
deduction for depreciation.





(e)  "Hazardous Substance Condition"
shall mean the occurrence or discovery of a condition involving the presence of,
or acontamination by,
a Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises which requires repair, remediation, orrestoration.




9.2     
Partial Damage - Insured
Loss. If a Premises Partial Damage that is an Insured Loss occurs, then
Lessor shall, at Lessor's expense, repair such damage (but not Lessee's Trade
Fixtures or Lessee Owned Alterations and Utility Installations) as soon as
reasonably possibleand this Lease shall
continue in full force and effect; provided, however, that Lessee shall, at
Lessor's election, make the repair of any damage ordestruction the total cost
to repair of which is $5,000 or less, and, in such event, Lessor shall make any
applicable insurance proceeds available toLessee on a reasonable
basis for that purpose. Notwithstanding the foregoing, if the required insurance
was not in force or the insurance proceeds arenot sufficient to effect
such repair, the Insuring Party shall promptly contribute the shortage in
proceeds as and when required to complete said repairs. In the event, however,
such shortage was due to the fact that, by reason of the unique nature of the
improvements, full replacement cost insurancecoverage was not
commercially reasonable and available, Lessor shall have no obligation to pay
for the shortage in insurance proceeds or to fullyrestore the unique aspects
of the Premises unless Lessee provides Lessor with the funds to cover same, or
adequate assurance thereof, within 10 daysfollowing receipt of
written notice of such shortage and request therefor. If Lessor receives said
funds or adequate assurance thereof within said 10 dayperiod, the party
responsible for making the repairs shall complete them as soon as reasonably
possible and this Lease shall remain in full force andeffect. If such funds or
assurance are not received, Lessor may nevertheless elect by written notice to
Lessee within 10 days thereafter to: (i) makesuch restoration and repair
as is commercially reasonable with Lessor paying any shortage in proceeds, in
which case this Lease shall remain in fullforce and effect, or (ii)
have this Lease terminate 30 days thereafter. Lessee shall not be entitled to
reimbursement of any funds contributed by Lesseeto repair any such damage
or destruction. Premises Partial Damage due to flood or earthquake shall be
subject to Paragraph 9.3, notwithstanding thatthere may be some insurance
coverage, but the net proceeds of any such insurance shall be made available for
the repairs if made by either Party.




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9.3     
Partial Damage - Uninsured
Loss. If a Premises Partial Damage that is not an Insured Loss occurs,
unless caused by anegligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense),
Lessor may either: (i) repair such damage assoon as reasonably possible
at Lessor's expense, in which event this Lease shall continue in full force and
effect, or (ii) terminate this Lease by givingwritten notice to Lessee
within 30 days after receipt by Lessor of knowledge of the occurrence of such
damage. Such termination shall be effective 60days following the date of
such notice. In the event Lessor elects to terminate this Lease, Lessee shall
have the right within 10 days after receipt of thetermination notice to give
written notice to Lessor of Lessee's commitment to pay for the repair of such
damage without reimbursement from Lessor. Lessee shall provide Lessor with said
funds or satisfactory assurance thereof within 30 days after making such
commitment. In such event this Leaseshall continue in full
force and effect, and Lessor shall proceed to make such repairs as soon as
reasonably possible after the required funds areavailable. If Lessee does
not make the required commitment, this Lease shall terminate as of the date
specified in the termination notice.




9.4     
Total Destruction.
Notwithstanding any other provision hereof, if a Premises Total Destruction
occurs, this Lease shall terminate60 days following such
Destruction. If the damage or destruction was caused by the gross negligence or
willful misconduct of Lessee, Lessor shallhave the right to recover
Lessor's damages from Lessee, except as provided in Paragraph 8.6.




9.5     
Damage Near End of Term.
If at any time during the last 6 months of this Lease there is damage for which
the cost to repair


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




9.6     
Abatement of Rent; Lessee's
Remedies.





(a)  Abatement. In the event of
Premises Partial Damage or Premises Total Destruction or a Hazardous Substance
Condition forwhich
Lessee is not responsible under this Lease, the Rent payable by Lessee for the
period required for the repair, remediation or restoration of suchdamage shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired, but
not to exceed the proceeds received fromthe Rental Value insurance.
All other obligations of Lessee hereunder shall be performed by Lessee, and
Lessor shall have no liability for any suchdamage, destruction,
remediation, repair or restoration except as provided herein.





(b)  Remedies. If Lessor shall be
obligated to repair or restore the Premises and does not commence, in a
substantial andmeaningful way, such repair
or restoration within 90 days after such obligation shall accrue, Lessee may, at
any time prior to the commencement ofsuch repair or restoration,
give written notice to Lessor and to any Lenders of which Lessee has actual
notice, of Lessee's election to terminate thisLease on a date not less
than 60 days following the giving of such notice. If Lessee gives such notice
and such repair or restoration is not commencedwithin 30 days thereafter,
this Lease shall terminate as of the date specified in said notice. If the
repair or restoration is commenced within such 30days, this Lease shall
continue in full force and effect. "Commence" shall mean either the
unconditional authorization of the preparation of the requiredplans, or the beginning of
the actual work on the Premises, whichever first occurs.




9.7     
Termination; Advance
Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or
Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent
and any other advance payments made by Lessee to Lessor. Lessor shall, in
addition, returnto
Lessee so much of Lessee's Security Deposit as has not been, or is not then
required to be, used by Lessor.




9.8     
Waive Statutes. Lessor
and Lessee agree that the terms of this Lease shall govern the effect of any
damage to or destruction of the Premises with respect to the termination of this
Lease and hereby waive the provisions of any present or future statute to the
extent inconsistentherewith.




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10.
            Real
      Property Taxes.




10.1     
Definitions. As used
herein, the term "Real Property
Taxes" shall include any form of assessment; real estate, general,
special, ordinary or extraordinary, or rental levy or tax (other than
inheritance, personal income or estate taxes); improvement bond; and/or license
fee imposedupon or
levied against any legal or equitable interest of Lessor in the Project,
Lessor's right to other income therefrom, and/or Lessor's business ofleasing, by any authority
having the direct or indirect power to tax and where the funds are generated
with reference to the Project address and wherethe proceeds so generated
are to be applied by the city, county or other local taxing authority of a
jurisdiction within which the Project is located. "RealProperty Taxes" shall also
include any tax, fee, levy, assessment or charge, or any increase therein: (i)
imposed by reason of events occurring duringthe term of this Lease,
including but not limited to, a change in the ownership of the Project, (ii) a
change in the improvements thereon, and/or (iii) leviedor assessed on machinery or
equipment provided by Lessor to Lessee pursuant to this Lease.




10.2     
Payment of Taxes. Except
as otherwise provided in Paragraph 10.3, Lessor shall pay the Real Property
Taxes applicable to the Project, and said payments shall be included in the
calculation of Operating Expenses in accordance with the provisions of Paragraph
4.2.




10.3     
Additional Improvements.
Operating Expenses shall not include Real Property Taxes specified in the tax
assessor's records andwork sheets as being caused
by additional improvements placed upon the Project by other lessees or by Lessor
for the exclusive enjoyment of suchother lessees.
Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at
the time Operating Expenses are payable underParagraph 4.2, the entirety
of any increase in Real Property Taxes if assessed solely by reason of
Alterations, Trade Fixtures or Utility Installationsplaced upon the Premises by
Lessee or at Lessee's request or by reason of any alterations or improvements to
the Premises made by Lessorsubsequent to the execution
of this Lease by the Parties.




10.4     
Joint Assessment. If the
Building is not separately assessed, Real Property Taxes allocated to the
Building shall be an equitable proportion of the Real Property Taxes for all of
the land and improvements included within the tax parcel assessed, such
proportion to be determined byLessor from the respective
valuations assigned in the assessor's work sheets or such other information as
may be reasonably available. Lessor'sreasonable determination
thereof, in good faith, shall be conclusive.




10.5     
Personal Property Taxes.
Lessee shall pay prior to delinquency all taxes assessed against and levied upon
Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings,
equipment and all personal property of Lessee contained in the Premises.
Whenpossible, Lessee
shall cause its Lessee Owned Alterations and Utility Installations, Trade
Fixtures, furnishings, equipment and all other personalproperty to be assessed and
billed separately from the real property of Lessor. If any of Lessee's said
property shall be assessed with Lessor's realproperty, Lessee shall pay
Lessor the taxes attributable to Lessee's property within 10 days after receipt
of a written statement setting forth the taxesapplicable to Lessee's
property.




11.
            Utilities
      and Services.




11.1     
Services Provided by
Lessor. Lessor shall provide heating, ventilation, air conditioning,
reasonable amounts of electricity for normal lighting and office machines, water
for reasonable and normal drinking and lavatory use in connection with an
office, (as may be located in the common areas of the Project), and replacement
light bulbs and/or fluorescent tubes and ballasts for standard overhead
fixtures. Lessor shall alsoprovide janitorial services
to the Premises and Common Areas 5 times per week, excluding Building Holidays,
or pursuant to the attached janitorialschedule, if any. Lessor
shall not, however, be required to provide janitorial services to kitchens or
storage areas included within the Premises.Janitorial Services in the
kitchen will not include washing dishes but will include dusting counter tops,
trash removal and floor cleaning/waxing onceper month.




11.2     
Services Exclusive to
Lessee. Lessee shall pay for all water, gas, heat, light, power,
telephone and other utilities and servicesspecially or exclusively
supplied and/or metered exclusively to the Premises or to Lessee, together with
any taxes thereon. If a service is deleted byParagraph 1.13 and such
service is not separately metered to the Premises, Lessee shall pay at Lessor's
option, either Lessee's Share or a reasonableproportion to be determined
by Lessor of all charges for such jointly metered service.




11.3     
Hours of
Service. Said services and utilities shall be provided during times
set forth in Paragraph 1.12. Utilities and services requiredat other times shall be
subject to advance request and reimbursement by Lessee to Lessor of the cost
thereof.




11.4     
Excess Usage by
Lessee. Lessee shall not make connection to the utilities except by
or through existing outlets and shall not install oruse machinery or equipment
in or about the Premises that uses excess water, lighting or power, or suffer or
permit any act that causes extra burdenupon the utilities or
services, including but not limited to security and trash services, over
standard office usage for the Project. Lessor shall requireLessee to reimburse Lessor
for any excess expenses or costs that may arise out of a breach of this
subparagraph by Lessee. Lessor may, in its solediscretion, install at
Lessee's expense supplemental equipment and/or separate metering applicable to
Lessee's excess usage or loading.




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11.5     
Interruptions.There
shall be no abatement of rent and Lessor shall not be liable in any respect
whatsoever for the inadequacy,stoppage, interruption or
discontinuance of any utility or service due to riot, strike, labor dispute,
breakdown, accident, repair or other cause beyondLessor's reasonable control
or in cooperation with governmental request or directions.




12.
            Assignment
      and Subletting.




12.1     
Lessor's Consent
Required.





(a)  Lessee
shall not voluntarily or by operation of law assign, transfer, mortgage or
encumber (collectively, "assign
orassignment") or sublet all or
any part of Lessee's interest in this Lease or in the Premises without Lessor's
prior written consent which consent shall not be unreasonably withheld,
conditioned or delayed.





(b)  Unless
Lessee is a corporation and its stock is publicly traded on a national stock
exchange, a change in the control of Lesseeshall constitute an
assignment requiring consent. The transfer, on a cumulative basis, of 25% or
more of the voting control of Lessee shall constitute achange in control for this
purpose.





(c)  The
involvement of Lessee or its assets in any transaction, or series of
transactions (by way of merger, sale, acquisition,financing, transfer,
leveraged buyout or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Lessee's assets occurs, whichresults or will result in a
reduction of the Net Worth of Lessee by an amount greater than 25% of such Net
Worth as it was represented at the time ofthe execution of this Lease
or at the time of the most recent assignment to which Lessor has consented, or
as it exists immediately prior to saidtransaction or transactions
constituting such reduction, whichever was or is greater, shall be considered an
assignment of this Lease to which Lessormay withhold its consent.
"Net Worth of Lessee"
shall mean the net worth of Lessee (excluding any guarantors) established under
generally acceptedaccounting
principles.





(d)  An
assignment or subletting without consent shall, at Lessor's option, be a Default
curable after notice per Paragraph 13.1(c), ora noncurable Breach without
the necessity of any notice and grace period. If Lessor elects to treat such
unapproved assignment or subletting as anoncurable Breach, Lessor
may either: (i) terminate this Lease, or (ii) upon 30 days written notice,
increase the monthly Base Rent to 110% of the BaseRent then in effect.
Further, in the event of such Breach and rental adjustment, (i) the purchase
price of any option to purchase the Premises held byLessee shall be subject to
similar adjustment to 110% of the price previously in effect, and (ii) all fixed
and non-fixed rental adjustments scheduledduring the remainder of the
Lease term shall be increased to 110% of the scheduled adjusted
rent.





(e)  Lessee's
remedy for any breach of Paragraph 12.1 by Lessor shall be limited to
compensatory damages and/or injunctive relief.





(f)  Lessor
may reasonably withhold consent to a proposed assignment or subletting if Lessee
is in Default at the time consent isrequested.





(g)  Notwithstanding
the foregoing, allowing a diminimus portion of the Premises, i e. 20 square feet
or less, to be used by a thirdparty vendor in connection
with the installation of a vending machine or payphone shall not constitute a
subletting.




12.2     
Terms and Conditions Applicable
to Assignment and Subletting .





(a)  Regardless
of Lessor's consent, no assignment or subletting shall: (i) be effective without
the express written assumption bysuch assignee or sublessee
of the obligations of Lessee under this Lease, (ii) release Lessee of any
obligations hereunder, or (iii) alter the primaryliability of Lessee for the
payment of Rent or for the performance of any other obligations to be performed
by Lessee.





(b)  Lessor
may accept Rent or performance of Lessee's obligations from any person other
than Lessee pending approval ordisapproval of an
assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of Rent or performance shallconstitute a waiver or
estoppel of Lessor's right to exercise its remedies for Lessee's Default or
Breach.





(c)  Lessor's
consent to any assignment or subletting shall not constitute a consent to any
subsequent assignment or subletting.





(d)  In
the event of any Default or Breach by Lessee, Lessor may proceed directly
against Lessee, any Guarantors or anyone elseresponsible for the
performance of Lessee's obligations under this Lease, including any assignee or
sublessee, without first exhausting Lessor'sremedies against any other
person or entity responsible therefore to Lessor, or any security held by
Lessor.




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(e)  Each
request for consent to an assignment or subletting shall be in writing,
accompanied by information relevant to Lessor'sdetermination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited tothe intended use and/or
required modification of the Premises, if any, together with a fee of $500 $300 as
consideration for Lessor's considering andprocessing said request.
Lessee agrees to provide Lessor with such other or additional information and/or
documentation as may be reasonablyrequested. (See also
Paragraph 36) At all times throughout the initial term of the Lease and any
renewal or option periods, Lessee shall be solelyresponsible for the
insurance requirements outlined in the Lease (See Paragraph 8) and shall
indemnify, defend and hold Lessor harmless from anyand all claims, acts,
injuries, damage or negligence caused by or in connection with Lessee's
sublessee.





(f)  Any
assignee of, or sublessee under, this Lease shall, by reason of accepting such
assignment, entering into such sublease, orentering into possession of
the Premises or any portion thereof, be deemed to have assumed and agreed to
conform and comply with each and everyterm, covenant, condition
and obligation herein to be observed or performed by Lessee during the term of
said assignment or sublease, other than suchobligations as are contrary
to or inconsistent with provisions of an assignment or sublease to which Lessor
has specifically consented to in writing.





(g)  Lessor's
consent to any assignment or subletting shall not transfer to the assignee or
sublessee any Option granted to theoriginal Lessee by this
Lease unless such transfer is specifically consented to by Lessor in writing.
(See Paragraph 39.2)




12.3     
Additional Terms and Conditions
Applicable to Subletting . The following terms and conditions shall apply
to any subletting by Lessee of all or any part of the Premises and shall be
deemed included in all subleases under this Lease whether or not expressly
incorporated therein:





(a)  Lessee
hereby assigns and transfers to Lessor all of Lessee's interest in all Rent
payable on any sublease, and Lessor maycollect such Rent and apply
same toward Lessee's obligations under this Lease; provided, however, that until
a Breach shall occur in the performanceof Lessee's obligations,
Lessee may collect said Rent. In the event that the amount collected by Lessor
exceeds Lessee's then outstanding obligationsany such excess shall be
refunded to Lessee. Lessor shall not, by reason of the foregoing or any
assignment of such sublease, nor by reason of thecollection of Rent, be
deemed liable to the sublessee for any failure of Lessee to perform and comply
with any of Lessee's obligations to suchsublessee. Lessee hereby
irrevocably authorizes and directs any such sublessee, upon receipt of a written
notice from Lessor stating that a Breachexists in the performance
of Lessee's obligations under this Lease, to pay to Lessor all Rent due and to
become due under the sublease. Sublesseeshall rely upon any such
notice from Lessor and shall pay all Rents to Lessor without any obligation or
right to inquire as to whether such Breach exists,notwithstanding any claim
from Lessee to the contrary. In the event Lessee subleases all or a portion of
the Premises and the total Base Rentpayable by Sublessee
exceeds the total Base Rent payable under the Lease ("Bonus Value") Lessee may
first deduct its reasonable, direct, out ofpocket expenses for lease
commissions, tenant improvements and free rent (if any) from the Bonus Value
which net Bonus Value will then be split with Lessor on a 50/50
basis





(b)  In
the event of a Breach by Lessee, Lessor may, at its option, require sublessee to
attorn to Lessor, in which event Lessor shallundertake the obligations
of the sublessor under such sublease from the time of the exercise of said
option to the expiration of such sublease; provided,however, Lessor shall not
be liable for any prepaid rents or security deposit paid by such sublessee to
such sublessor or for any prior Defaults orBreaches of such
sublessor.





(c)  Any
matter requiring the consent of the sublessor under a sublease shall also
require the consent of Lessor.





(d)  No
sublessee shall further assign or sublet all or any part of the Premises without
Lessor's prior written consent.





(e)  Lessor
shall deliver a copy of any notice of Default or Breach by Lessee to the
sublessee, who shall have the right to cure theDefault of Lessee within
the grace period, if any, specified in such notice. The sublessee shall have a
right of reimbursement and offset from andagainst Lessee for any such
Defaults cured by the sublessee.




13.
            Default;
      Breach; Remedies.




13.1     
Default; Breach. A
"Default" is defined as
a failure by the Lessee to comply with or perform any of the terms, covenants,
conditions, or Rules
and Regulations or Lessee is in monetary default under this Lease. A
"Breach" is defined as
the occurrence of one or more of thefollowing Defaults, and the
failure of Lessee to cure such Default within any applicable grace
period:





(a)  The
abandonment of the Premises; or the vacating of the Premises without providing a
commercially reasonable level ofsecurity, or where the
coverage of the property insurance described in Paragraph 8.3 is jeopardized as
a result thereof, or without providing reasonableassurances to minimize
potential vandalism.




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(b)  The
failure of Lessee to make any payment of Rent or any Security Deposit required
to be made by Lessee hereunder, whetherto Lessor or to a third
party, when due, to provide reasonable evidence of insurance or surety bond, or
to fulfill any obligation under this Lease whichendangers or threatens life
or property, where such failure continues for a period of 3 business days
following written notice to Lessee.





(c)  The
commission of waste, act or acts constituting public or private nuisance, and/or
an illegal activity on the Premises byLessee, where such actions
continue for a period of 3 business days following written notice to
Lessee.





(d)  The
failure by Lessee to provide (i) reasonable written evidence of compliance with
Applicable Requirements, (ii) the servicecontracts, (iii)
the rescission of an unauthorized assignment or subletting, (iv) an Estoppel
Certificate, (v) a requested subordination, non-disturbanceand attornment
agreement, (vi) evidence
concerning any guaranty and/or Guarantor, (vii) any document requested under
Paragraph 41, (viii) materialdata safety sheets (MSDS),
or (ix) any other documentation or information which Lessor may reasonably
require of Lessee under the terms of thisLease, where any such
failure continues for a period of 10 days following written notice to
Lessee.





(e)  A
Default by Lessee as to the terms, covenants, conditions or provisions of this
Lease, or of the rules adopted under Paragraph2.9 hereof, other than
those described in subparagraphs 13.1(a), (b) or (c), above, where such Default
continues for a period of 30 days after writtennotice; provided, however,
that if the nature of Lessee's Default is such that more than 30 days are
reasonably required for its cure, then it shall not bedeemed to be a Breach if
Lessee commences such cure within said 30 day period and thereafter diligently
prosecutes such cure to completion.





(f)  The
occurrence of any of the following events: (i) the making of any general
arrangement or assignment for the benefit ofcreditors; (ii) becoming a
"debtor" as defined in
11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a
petition filed against Lessee,the same is dismissed
within 60 days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of Lessee's assets located atthe Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within 30
days; or (iv) the attachment, execution or otherjudicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not dischargedwithin 30 days; provided,
however, in the event that any provision of this subparagraph is contrary to any
applicable law, such provision shall be of noforce or effect, and not
affect the validity of the remaining provisions.





(g)  The
discovery that any financial statement of Lessee or of any Guarantor given to
Lessor was materially false.





(h)  If
the performance of Lessee's obligations under this Lease is guaranteed: (i) the
death of a Guarantor, (ii) the termination of aGuarantor's liability with
respect to this Lease other than in accordance with the terms of such guaranty,
(iii) a Guarantor's becoming insolvent or thesubject of a bankruptcy
filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's
breach of its guaranty obligation on an anticipatorybasis, and Lessee's
failure, within 60 days following written notice of any such event, to provide
written alternative assurance or security, which, whencoupled with the then
existing resources of Lessee, equals or exceeds the combined financial resources
of Lessee and the Guarantors that existed atthe time of execution of
this Lease.




13.2     
Remedies. If Lessee
fails to perform any of its affirmative duties or obligations, within 10 days
after receipt of written notice (or in case of an emergency, without notice),
Lessor may, at its option, perform such duty or obligation on Lessee's behalf,
including but not limited to theobtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. Lessee shall pay to Lessor an amountequal to 115% of the costs
and expenses incurred by Lessor in such performance upon receipt of an invoice
therefor. In the event of a Breach, Lessormay, with or without
further notice or demand, and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by reason ofsuch Breach:





(a) 
Terminate Lessee's right to possession of the Premises by any lawful means, in
which case this Lease shall terminate andLessee shall immediately
surrender possession to Lessor. In such event Lessor shall be entitled to
recover from Lessee: (i) the unpaid Rent which hadbeen earned at the time of
termination; (ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned aftertermination until the time
of award exceeds the amount of such rental loss that the Lessee proves could
have been reasonably avoided; (iii) the worth atthe time of award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss thatthe Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused bythe Lessee's failure to
perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including butnot limited to the cost of
recovering possession of the Premises, expenses of reletting, including
necessary renovation and alteration of the Premises,reasonable attorneys' fees,
and that portion of any leasing commission paid by Lessor in connection with
this Lease applicable to the unexpired term ofthis Lease. The worth at
the time of award of the amount referred to in provision (iii) of the
immediately preceding sentence shall be computed bydiscounting such amount at
the discount rate of the Federal Reserve Bank of the District within which the
Premises are located at the time of awardplus one percent. Efforts
by Lessor to mitigate damages caused by Lessee's Breach of this Lease shall not
waive Lessor's right to recover damagesunder Paragraph 12. If
termination of this Lease is obtained through the provisional remedy of unlawful
detainer, Lessor shall have the right to recoverin such proceeding any
unpaid Rent and damages as are recoverable therein, or Lessor may reserve the
right to recover all or any part thereof in aseparate suit. If a notice
and grace period required under Paragraph 13.1 was not previously given, a
notice to pay rent or quit, or to perform or quitgiven to Lessee under the
unlawful detainer statute shall also constitute the notice required by Paragraph
13.1. In such case, the applicable graceperiod required by
Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the
failure of Lessee to cure the Default within thegreater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this
Lease entitling Lessor to the remedies provided forin this Lease and/or by
said statute.




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(b)  Continue
the Lease and Lessee's right to possession and recover the Rent as it becomes
due, in which event Lessee maysublet or assign, subject
only to reasonable limitations. Acts of maintenance, efforts to relet, and/or
the appointment of a receiver to protect theLessor's interests, shall
not constitute a termination of the Lessee's right to possession.





(c)  Pursue
any other remedy now or hereafter available under the laws or judicial decisions
of the state wherein the Premises arelocated. The expiration or
termination of this Lease and/or the termination of Lessee's right to possession
shall not relieve Lessee from liability underany indemnity provisions of
this Lease as to matters occurring or accruing during the term hereof or by
reason of Lessee's occupancy of the Premises.




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




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




13.5     
Interest. Any monetary
payment due Lessor hereunder, other than late charges, not received by Lessor,
when due as toscheduled payments (such as
Base Rent) or within 30 days following the date on which it was due for
nonscheduled payment, shall bear interest fromthe date when due, as to
scheduled payments, or the 31st day after it was due as to nonscheduled
payments. The interest ("Interest") charged shall becomputed at the rate of 10%
per annum but shall not exceed the maximum rate allowed by law. Interest is
payable in addition to the potential latecharge provided for in
Paragraph 13.4.




13.6     
Breach by
Lessor.





(a)  Notice of Breach. Lessor shall
not be deemed in breach of this Lease unless Lessor fails within a reasonable
time to performan
obligation required to be performed by Lessor. For purposes of this Paragraph, a
reasonable time shall in no event be less than 30 days afterreceipt by Lessor, and any
Lender whose name and address shall have been furnished Lessee in writing for
such purpose, of written notice specifyingwherein such obligation of
Lessor has not been performed; provided, however, that if the nature of Lessor's
obligation is such that more than 30 daysare reasonably required for
its performance, then Lessor shall not be in breach if performance is commenced
within such 30 day period and thereafterdiligently pursued to
completion.





(b)  Performance by Lessee on Behalf of
Lessor. In the event that neither Lessor nor Lender cures said breach
within 30 daysafter
receipt of said notice, or if having commenced said cure they do not diligently
pursue it to completion, then Lessee may elect to cure said breachat Lessee's expense and
offset from Rent the actual and reasonable cost to perform such cure, provided
however, that such offset shall not exceed anamount equal to the greater
of one month's Base Rent or the Security Deposit, reserving Lessee's right to
seek reimbursement from Lessor for anysuch expense in excess of
such offset. Lessee shall document the cost of said cure and supply said
documentation to Lessor.




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14.
            Condemnation.




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




15.
            Brokerage
      Fees.




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




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




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




16.
            Estoppel
      Certificates.




(a)  Each
Party (as "Responding
Party") shall within 10 days after written notice from the other Party
(the "Requesting
Party")execute, acknowledge and
deliver to the Requesting Party a statement in writing in form similar to the
then most current "Estoppel
Certificate" formpublished by the
AIRCommercial Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonablyrequested by the Requesting
Party.





(b)  If
the Responding Party shall fail to execute or deliver the Estoppel Certificate
within such 10 day period, the Requesting Partymay execute an Estoppel
Certificate stating that: (i) the Lease is in full force and effect without
modification except as may be represented by theRequesting Party, (ii)
there are no uncured defaults in the Requesting Party's performance, and (iii)
if Lessor is the Requesting Party, not more than onemonth's rent has been paid
in advance. Prospective purchasers and encumbrancers may rely upon the
Requesting Party's Estoppel Certificate, and theResponding Party shall be
estopped from denying the truth of the facts contained in said
Certificate.






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(c)  If
Lessor desires to finance, refinance, or sell the Premises, or any part thereof,
Lessee and all Guarantors shall deliver to anypotential lender or
purchaser designated by Lessor such financial statements as may be reasonably
required by such lender or purchaser, including butnot limited to Lessee's
financial statements for the past 3 years within ten (10) calendar days of
Lessor's oral or written request. All such financialstatements shall be
received by Lessor and such lender or purchaser in confidence and shall be used
only for the purposes herein set forth.




17.
            Definition
      of Lessor.




The term
"Lessor" as used herein
shall mean the owner or owners at the time in question of the fee title to
thePremises, or, if
this is a sublease, of the Lessee's interest in the prior lease. In the event of
a transfer of Lessor's title or interest in the Premises or thisLease, Lessor shall deliver
to the transferee or assignee (in cash or by credit) any unused Security Deposit
held by Lessor. Except as provided inParagraph 15, upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid, the
prior Lessor shall be relieved of all liability withrespect to the obligations
and/or covenants under this Lease thereafter to be performed by the Lessor.
Subject to the foregoing, the obligations and/orcovenants in this Lease to
be performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined.




18.
            Severability.




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




19.
            Days.




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




20.
            Limitation
      on Liability.




The
obligations of Lessor under this Lease shall not constitute personal obligations
of Lessor or its partners, members, directors, officers or shareholders, and
Lessee shall look to the Project, and to no other assets of Lessor, for the
satisfaction of any liability ofLessor with respect to this
Lease, and shall not seek recourse against Lessor's partners, members,
directors, officers or shareholders, or any of theirpersonal assets for such
satisfaction.




21.
            Time
      of Essence.




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




22.
            No
      Prior or Other Agreements; Broker
Disclaimer.




This
Lease and the attached Addendum to Lease contains all agreements between the
Parties with respect to any matter mentioned herein, and no other prior or
contemporaneous agreement or understanding shall be effective.  Lessor and Lessee each
represents and warrants to the Brokers that it has made, and is relying solely
upon, its own investigation as to the nature, quality, character and financial
responsibility of the other Party to this Lease and as to the use, nature,
quality and character of the Premises.  Brokers have no responsibility with
respect thereto or with respect to any default or breach hereof by either
Party.  The liability (including court costs and attorneys' fees) of any
Broker with respect to negotiation, execution, delivery or performance by either
Lessor or Lessee under this Lease or any amendment or modification hereto shall
be limited to an amount up to the fee received by such Broker pursuant to this
Lease; provided, however, that the foregoing limitation on each Broker's
liability shall not be applicable to any gross negligence or willful misconduct
of such Broker.




23.
            Notices.




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




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23.2     
Date of Notice. Any
notice sent by registered or certified mail, return receipt requested, shall be
deemed given on the date of deliveryshown on the receipt card,
or if no delivery date is shown, the postmark thereon. If sent by regular mail
the notice shall be deemed given 72 hours afterthe same is addressed as
required herein and mailed with postage prepaid. Notices delivered by United
States Express Mail or overnight courier thatguarantee next day delivery
shall be deemed given 24 hours after delivery of the same to the Postal Service
or courier. Notices transmitted by facsimiletransmission or similar
means shall be deemed delivered upon telephone confirmation of receipt
(confirmation report from fax machine is sufficient),provided a copy is also
delivered via delivery or mail. If notice is received on a Saturday, Sunday or
legal holiday, it shall be deemed received on thenext business
day.




24.
            Waivers.




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




25.
            Disclosures
      Regarding The Nature of a Real Estate Agency
  Relationship.




(a) 
When entering into a discussion with a real estate agent regarding a real estate
transaction, a Lessor or Lessee should from the outset understand what type of
agency relationship or representation it has with the agent or agents in the
transaction. Lessor and Lesseeacknowledge being advised
by the Brokers in this transaction, as follows:





(i)  Lessor's Agent. A
Lessor's agent under a listing agreement with the Lessor acts as the agent for
the Lessor only. A Lessor's agent or subagent has the following affirmative
obligations: To the
Lessor:  A fiduciary duty of utmost care, integrity, honesty,
andloyalty in
dealings with the Lessor. To the Lessee and the
Lessor:  a. Diligent exercise of reasonable skills and care in
performance of the agent'sduties. b. A duty of honest
and fair dealing and good faith. c. A duty to disclose all facts known to the
agent materially affecting the value or desirabilityof the property that are
not known to, or within the diligent attention and observation of, the Parties.
An agent is not obligated to reveal to either Partyany confidential
information obtained from the other Party which does not involve the affirmative
duties set forth above.





(ii)  Lessee's
Agent. An agent can agree to act as agent for the Lessee only. In
these situations, the agent is not the Lessor's agent, even if by agreement the
agent may receive compensation for services rendered, either in full or in part
from the Lessor. An agentacting only for a Lessee
has the following affirmative obligations. To the Lessee: A
fiduciary duty of utmost care, integrity, honesty, and loyalty indealings with the Lessee.
To the Lessee and the
Lessor: a. Diligent exercise of reasonable skills and care in performance
of the agent's duties. b. Aduty of honest and fair
dealing and good faith. c. A duty to disclose all facts known to the agent
materially affecting the value or desirability of theproperty that are not known
to, or within the diligent attention and observation of, the Parties. An agent
is not obligated to reveal to either Party anyconfidential information
obtained from the other Party which does not involve the affirmative duties set
forth above.





(iii)  Agent Representing Both
Lessor and Lessee. A real estate agent, either acting directly or
through one or more associate licenses, can legally be the agent of both the
Lessor and the Lessee in a transaction, but only with the knowledge and consent
of both theLessor and
the Lessee. In a dual agency situation, the agent has the following affirmative
obligations to both the Lessor and the Lessee: a. A fiduciaryduty of utmost care,
integrity, honesty and loyalty in the dealings with either Lesser or the Lessee.
b. Other duties to the Lessor and the Lessee asstated above in
subparagraphs (i) or (ii). In representing both Lessor and Lessee, the agent may
not without the express permission of the respectiveParty, disclose to the
other Party that the Lessor will accept rent in an amount less than that
indicated in the listing or that the Lessee is willing to pay ahigher rent than that
offered. The above duties of the agent in a real estate transaction do not
relieve a Lessor or Lessee from the responsibility toprotect their own
interests. Lessor and Lessee should carefully read all agreements to assure that
they adequately express their understanding of thetransaction. A real estate
agent is a person qualified to advise about real estate. If legal or tax advice
is desired, consult a competent professional.





(b) 
Brokers have no responsibility with respect to any default or breach hereof by
either Party. The Parties agree that nolawsuit or other legal
proceeding involving any breach of duty, error or omission relating to this
Lease may be brought against Broker more than oneyear after the Start Date
and that the liability (including court costs and attorneys' fees), of any
Broker with respect to any such lawsuit and/or legalproceeding shall not exceed
the fee received by such Broker pursuant to this Lease; provided, however, that
the foregoing limitation on each Broker'sliability shall not be
applicable to any gross negligence or willful misconduct of such
Broker.




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(c)  Buyer
and Seller agree to identify to Brokers as "Confidential" any communication or
information given Brokers that is considered by such Party to be
confidential.




26.
            No
      Right To Holdover.




Lessee
has no right to retain possession of the Premises or any part thereof beyond the
expiration or termination of this Lease. In the event that Lessee holds over,
then the Base Rent shall be increased to 150% 200% of
the Base Rent applicable immediatelypreceding the expiration or
termination. Nothing contained herein shall be construed as consent by Lessor to
any holding over by Lessee.




27.
            Cumulative
      Remedies.




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




28.
            Covenants
      and Conditions; Construction of
Agreement.




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




29.
            Binding
      Effect; Choice of Law.




This
Lease shall be binding upon the Parties, their personal representatives,
successors and assigns and be governed by the laws of the State in which the
Premises are located. Any litigation between the Parties hereto concerning this
Lease shall beinitiated in the county in
which the Premises are located.




30.
            Subordination;
      Attornment; Non-Disturbance.




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




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




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




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




31.
            Attorneys'
      Fees.




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




32.
            Lessor's
      Access; Showing Premises; Repairs .




Lessor
and Lessor's agents shall have the right to enter the Premises at any time, in
the case of an emergency, and otherwise at reasonable times after reasonable
prior notice for the purpose of showing the same to prospective purchasers,lenders, or tenants, and
making such alterations, repairs, improvements or additions to the Premises as
Lessor may deem necessary or desirable andthe erecting, using and
maintaining of utilities, services, pipes and conduits through the Premises
and/or other premises as long as there is no materialadverse effect on Lessee's
use of the Premises. All such activities shall be without abatement of rent or
liability to Lessee.




33.
            Auctions.




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




34.
            Signs.




Lessor
may place on the Premises ordinary "For Sale" signs at any time and ordinary
"For Lease" signs during the last 6 months of the term hereof.




35.
            Termination;
      Merger.




Unless
specifically stated otherwise in writing by Lessor, the voluntary or other
surrender of this Lease by Lessee, the mutual termination or cancellation
hereof, or a termination hereof by Lessor for Breach by Lessee, shall
automatically terminate any sublease or lesserestate in the Premises;
provided, however, that Lessor may elect to continue any one or all existing sub
tenancies. Lessor's failure within 10 daysfollowing any such event to
elect to the contrary by written notice to the holder of any such lesser
interest, shall constitute Lessor's election to havesuch event constitute the
termination of such interest.




36.
            Consents.




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




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37.
            Guarantor.




37.1     
Execution. The
Guarantors, if any, shall each execute a guaranty in the form most recently
published by the AIR Commercial Real Estate Association.




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




38.
            Quiet
      Possession.




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




39.
            Options.




If Lessee
is granted an Option, as defined below, then the following provisions shall
apply.




39.1     
Definition. "Option" shall mean: (a) the
right to extend the term of or renew this Lease or to extend or renew any lease
that Lessee has on other property of Lessor; (b) the right of first refusal or
first offer to lease either the Premises or other property of Lessor; (c) the
right topurchase or
the right of first refusal to purchase the Premises or other property of
Lessor.




39.2     
Options Personal To Original
Lessee. Any Option granted to Lessee in this Lease is personal to the
original Lessee, and cannot be assigned or exercised by anyone other than said
original Lessee and only while the original Lessee is in full possession of the
Premises and, ifrequested by Lessor, with
Lessee certifying that Lessee has no intention of thereafter assigning or
subletting.




39.3     
Multiple Options. In the
event that Lessee has any multiple Options to extend or renew this Lease, a
later Option cannot be exercised unless the prior Options have been validly
exercised.




39.4     
Effect of Default on
Options.





(a) 
Lessee shall have no right to exercise an Option: (i) during the period
commencing with the giving of any notice of Default andcontinuing until said
Default is cured, (ii) during the period of time any Rent is unpaid (without
regard to whether notice thereof is given Lessee), (iii)during the time Lessee is
in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or
more notices of separate Default, whether or notthe Defaults are cured,
during the 12 month period immediately preceding the exercise of the
Option.





(b) The
period of time within which an Option may be exercised shall not be extended or
enlarged by reason of Lessee's inability toexercise an Option because
of the provisions of Paragraph 39.4(a).





(c) An
Option shall terminate and be of no further force or effect, notwithstanding
Lessee's due and timely exercise of the Option, if,after such exercise and
prior to the commencement of the extended term or completion of the purchase,
(i) Lessee fails to pay Rent for a period of 30days after such Rent
becomes due (without any necessity of Lessor to give notice thereof), or (ii) if
Lessee commits a Breach of this Lease.




40.
            Security
      Measures.




Lessee
hereby acknowledges that the Rent payable to Lessor hereunder does not include
the cost of guard service orother security measures,
and that Lessor shall have no obligation whatsoever to provide same. Lessee
assumes all responsibility for the protection ofthe Premises, Lessee, its
agents and invitees and their property from the acts of third parties. In the
event, however, that Lessor should elect to providesecurity services, then the
cost thereof shall be an Operating Expense.




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41.
            Reservations.




(a)  Lessor
reserves the right: (i) to grant, without the consent or joinder of Lessee, such
easements, rights and dedications thatLessor deems necessary,
(ii) to cause the recordation of parcel maps and restrictions, (iii) to create
and/or install new utility raceways, so long as sucheasements, rights,
dedications, maps, restrictions, and utility raceways do not unreasonably
interfere with the use of the Premises by Lessee. Lessormay also: change the name,
address or title of the Building or Project upon at least 90 days prior written
notice; provide and install, at Lessee'sexpense, Building standard
graphics on the door of the Premises and such portions of the Common Areas as
Lessor shall reasonably deemappropriate; grant to any
lessee the exclusive right to conduct any business as long as such exclusive
right does not conflict with any rights expresslygiven herein; and to place
such signs, notices or displays as Lessor reasonably deems necessary or
advisable upon the roof, exterior of the Building orthe Project or on pole
signs in the Common Areas. Lessee agrees to sign any documents reasonably
requested by Lessor to effectuate such rights. The obstruction of Lessee's view,
air, or light by any structure erected in the vicinity of the Building, whether
by Lessor or third parties, shall in no wayaffect this Lease or impose
any liability upon Lessor.





(b)  Lessor
also reserves the right to move Lessee to other space of comparable size in the
Building or Project. Lessor mustprovide at least 45 days
prior written notice of such move, and the new space must contain improvements
of comparable quality to those containedwithin the Premises. Lessor
shall pay the reasonable out of pocket costs that Lessee incurs with regard to
such relocation, including the expenses ofmoving and necessary
stationary revision costs. In no event, however, shall Lessor be required to pay
an amount in excess of two months Base Rent. Lessee may not be relocated more
than once during the term of this Lease.





(c)  Lessee
shall not: (i) use a representation (photographic or otherwise) of the Building
or Project or their name(s) in connectionwith Lessee's business; or
(ii) suffer or permit anyone, except in emergency, to go upon the roof of the
Building.




42.
            Performance
      Under Protest.




If at any
time a dispute shall arise as to any amount or sum of money to be paid by one
Party to the other under the provisions hereof, the Party against whom the
obligation to pay the money is asserted shall have the right to make payment
"under protest"and
such payment shall not be regarded as a voluntary payment and there shall
survive the right on the part of said Party to institute suit for recovery
ofsuch sum. If it
shall be adjudged that there was no legal obligation on the part of said Party
to pay such sum or any part thereof, said Party shall beentitled to recover such
sum or so much thereof as it was not legally required to pay. A Party who does
not initiate suit for the recovery of sums paid"under protest" within 6
months shall be deemed to have waived its right to protest such
payment.




43.
            Authority;
      Multiple Parties; Execution.




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





(b)  If
this Lease is executed by more than one person or entity as "Lessee", each such
person or entity shall be jointly andseverally liable hereunder.
It is agreed that any one of the named Lessees shall be empowered to execute any
amendment to this Lease, or otherdocument ancillary thereto
and bind all of the named Lessees, and Lessor may rely on the same as if all of
the named Lessees had executed suchdocument.





(c)  This
Lease may be executed by the Parties in counterparts, each of which shall be
deemed an original and all of which togethershall constitute one and
the same instrument.




44.
            Conflict.




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




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45.
            Offer.




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




46.
            Amendments.




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




47.
            Waiver of Jury
      Trial.




THE PARTIES HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING
THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.




48.
            Mediation
      and Arbitration of Disputes.




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




49.
            Americans
      with Disabilities Act.




Since compliance with the
Americans with Disabilities Act (ADA) is dependent upon Lessee's specific use of
the Premises, Lessor makes no warranty or representation as to whether or not
the Premises comply with ADA or any similar legislation.  In the event that
Lessee's use of the Premises requires modifications or additions to the Premises
in order to be in ADA compliance, Lessee agrees to make any such necessary
modifications and/or additions at Lessee's expense.




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





ATTENTION:
NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE
ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR
TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE
PARTIES ARE URGED TO:





1.     
SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
LEASE.





2.     
RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING AND SIZE OF THE PREMISES, THE
STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS,
COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF
THE PREMISES FOR LESSEE'S INTENDED USE.




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WARNING:
IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS
OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN
WHICH THE PREMISES ARE LOCATED.





The
parties hereto have executed this Lease at the place and on the dates specified
above their respective signatures.






Executed
      at: Irvine, CA
      92612
            
            Executed
      at: Mission Viejo, CA
      92692On: ____________________________
            
            On: 
      ____________________________By
      LESSOR:
            
            By
      LESSEE:Dolphinshire,
      L.P.
            
            Cellynx
      Group, Inc.a
      California limited partnership
            
            a
      Nevada corporationBy:
      Dolphin Partners, Inc.
            
            By:
      ____________________________Name
      Printed: a California corporation
            
            Name
      Printed:  ___________________Title:
      its authorized agent
            
            Title: 
      __________________________By: ___________________________
            
            By: 
      _________________________Name
      Printed: Kevin S. Pitts
            
            Name
      Printed: Daniel AshTitle:
      President
            
            Title:
      CEOAddress:
      18818 Teller Ave., Suite 200
            
            Address: ____________________Irvine,
      CA 92614
            
            ___________________________Telephone:
      (949) 852-9230
            
            Telephone:
      (714) 478-1631Facsimile:
      (949) 852-8924
            
            Facsimile:
      (     )Federal
      ID No. ____________________
            
            Federal
      ID No.  _________________LESSOR'S
      BROKER
            
            LESSEE'S
      BROKER_______________________________
            
            ________________________Attn:  
      _____________________________
            
            Attn:  
      _____________________________Address: 
      __________________________
            
            Address: 
      __________________________Telephone:
      (     )  ______________________
            
            Telephone:
      (     )  _____________________Facsimile: (    
      )  _______________________
            
            Facsimile: (    
      )  ______________________




These
forms are often modified to meet changing requirements of law and needs of the
industry. Always write or call to make sure you areutilizing the most current
form: AIR Commercial Real Estate Association, 700 South Flower Street, Suite
600, Los Angeles, CA 90017.  (213) 687-8777.




©Copyright
1999-By AIR Commercial Real Estate Association.


All
rights reserved.


No
part of these works may be reproduced in any form without permission in
writing.




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©1999
- AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM OFG-2-5/05E