Document:

<PAGE>

                                                                    EXHIBIT 10.6

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR TELENETICS CORPORATION SHALL HAVE RECEIVED
AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS
NOT REQUIRED.

                               WARRANT TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                             TELENETICS CORPORATION

                           Expires September 29, 2009

No.: W-___                                       Number of Shares: _____________
Date of Issuance: September 30, 2004

         FOR VALUE RECEIVED, subject to the provisions hereinafter set forth,
the undersigned, Telenetics Corporation, a California corporation (together with
its successors and assigns, the "ISSUER"), hereby certifies that
_____________________ or its registered assigns is entitled to subscribe for and
purchase, during the period specified in this Warrant, up to
____________________________________ (__________) shares (subject to adjustment
as hereinafter provided) of the duly authorized, validly issued, fully paid and
non-assessable Common Stock of the Issuer, at an exercise price per share equal
to the Warrant Price then in effect, subject, however, to the provisions and
upon the terms and conditions hereinafter set forth. This Warrant is one of the
"Warrants" issued pursuant to the Letter Agreement (as defined in SECTION 9
hereof). Capitalized terms used in this Warrant and not otherwise defined herein
shall have the respective meanings specified in SECTION 9 hereof.

1. TERM.

         The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on the date of issuance of this Warrant and
shall expire at 5:00 p.m., eastern time, on September 29, 2009 (such period
being the "TERM").

2. METHOD OF EXERCISE PAYMENT; ISSUANCE OF NEW WARRANT; TRANSFER AND EXCHANGE.

         (a) TIME OF EXERCISE. The purchase rights represented by this Warrant
may be exercised in whole or in part at any time and from time to time during
the Term.

                                      -1-

<PAGE>

         (b) METHOD OF EXERCISE. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, together
with the payment to the Issuer of an amount of consideration therefor equal to
the Warrant Price in effect on the date of such exercise multiplied by the
number of shares of Warrant Stock with respect to which this Warrant is then
being exercised, payable at such Holder's election (i) by certified or official
bank check or by wire transfer to an account designated by the Issuer, (ii) by
"CASHLESS EXERCISE" by surrender to the Issuer for cancellation of a portion of
this Warrant representing that number of unissued shares of Warrant Stock which
is equal to the quotient obtained by dividing (A) the product obtained by
multiplying the Warrant Price by the number of shares of Warrant Stock being
purchased upon such exercise by (B) the Per Share Market Value as of the date of
such exercise, or (iii) by a combination of the foregoing methods of payment
selected by the Holder of this Warrant; provided, however, that the "cashless
exercise" method shall not be available before September 30, 2006. In any case
where the consideration payable upon such exercise is being paid in whole or in
part pursuant to the provisions of clause (ii) of this subsection (b), such
exercise shall be accompanied by written notice from the Holder of this Warrant
specifying the manner of payment thereof and containing a calculation showing
the number of shares of Warrant Stock with respect to which rights are being
surrendered thereunder and the net number of shares to be issued after giving
effect to such surrender.

         (c) ISSUANCE OF STOCK CERTIFICATES. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise (if the deliveries required
to be made by the Holder pursuant to SECTION 2(b) are received by the Issuer
prior to 5:00 p.m. eastern time on the exercise date) and delivered to the
Holder hereof within a reasonable time, not exceeding three (3) Trading Days
after such exercise, and the Holder hereof shall be deemed for all purposes to
be the Holder of the shares of Warrant Stock so purchased as of the date of such
exercise, and (ii) unless this Warrant has expired, a new Warrant representing
the number of shares of Warrant Stock, if any, with respect to which this
Warrant shall not then have been exercised (less any amount thereof which shall
have been canceled in payment or partial payment of the Warrant Price as
hereinabove provided) shall also be issued to the Holder hereof at the Issuer's
expense within such time or as soon as practicable thereafter.

         (d) TRANSFERABILITY OF WARRANT. Subject to SECTION 2(e), this Warrant
may be transferred by a Holder without the consent of the Issuer. If transferred
pursuant to this paragraph and subject to the provisions of subsection (e) of
this SECTION 2, this Warrant may be transferred on the books of the Issuer by
the Holder hereof in person or by duly authorized attorney, upon surrender of
this Warrant at the principal office of the Issuer, properly endorsed (by the
Holder executing an assignment in the form attached hereto) and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants for the purchase of the same aggregate number of shares of Warrant
Stock, each new Warrant to represent the right to purchase such number of shares
of Warrant Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant hereto.

                                      -2-

<PAGE>

         (e) COMPLIANCE WITH SECURITIES LAWS.

                  (i) The Holder of this Warrant, by acceptance hereof,
         acknowledges that this Warrant or the shares of Warrant Stock to be
         issued upon exercise hereof are being acquired solely for the Holder's
         own account and not as a nominee for any other party, and for
         investment, and that the Holder will not offer, sell or otherwise
         dispose of this Warrant or any shares of Warrant Stock to be issued
         upon exercise hereof except pursuant to an effective registration
         statement, or an exemption from registration, under the Securities Act
         and any applicable state securities laws.

                  (ii) Except as provided in paragraph (iii) below, this Warrant
         and all certificates representing shares of Warrant Stock issued upon
         exercise hereof shall be stamped or imprinted with a legend in
         substantially the following form:

                           THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE
                           UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER
                           THE SECURITIES ACT OF 1933, AS AMENDED (THE
                           "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND
                           MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
                           UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
                           APPLICABLE STATE SECURITIES LAWS OR TELENETICS
                           CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS
                           COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER
                           THE SECURITIES ACT AND UNDER THE PROVISIONS OF
                           APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

                  (iii) The restrictions imposed by this subsection (e) upon the
         transfer of this Warrant or the shares of Warrant Stock to be purchased
         upon exercise hereof shall terminate (A) when such securities shall
         have been resold pursuant to an effective registration statement under
         the Securities Act, (B) upon the Issuer's receipt of an opinion of
         counsel, in form and substance reasonably satisfactory to the Issuer,
         addressed to the Issuer to the effect that such restrictions are no
         longer required to ensure compliance with the Securities Act and state
         securities laws, or (C) upon the Issuer's receipt of other evidence
         reasonably satisfactory to the Issuer that such registration and
         qualification under the Securities Act and state securities laws are
         not required. Whenever such restrictions shall cease and terminate as
         to any such securities, the Holder thereof shall be entitled to receive
         from the Issuer (or its transfer agent and registrar), without expense
         (other than applicable transfer taxes, if any), new Warrants (or, in
         the case of shares of Warrant Stock, new stock certificates) of like
         tenor not bearing the applicable legend required by paragraph (ii)
         above relating to the Securities Act and state securities laws.

                                      -3-

<PAGE>

         (f) CONTINUING RIGHTS OF HOLDER. The Issuer will, at the time of or at
any time after each exercise of this Warrant, upon the request of the Holder
hereof, acknowledge in writing the extent, if any, of its continuing obligation
to afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such Holder shall fail to make any such request, the
failure shall not affect the continuing obligation of the Issuer to afford such
rights to such Holder.

3. STOCK FULLY PAID; RESERVATION AND LISTING OF SHARES; COVENANTS.

         (a) STOCK FULLY PAID. The Issuer represents, warrants, covenants and
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this Warrant or otherwise hereunder will, upon issuance, be duly authorized,
validly issued, fully paid and non-assessable and free from all taxes, liens and
charges created by or through Issuer. The Issuer further covenants and agrees
that during the period within which this Warrant may be exercised, the Issuer
will at all times have authorized and reserved for the purpose of the issue upon
exercise of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.

         (b) RESERVATION. If any shares of Common Stock required to be reserved
for issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing, of,
all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under
the applicable securities exchange rules, all unissued shares of Warrant Stock
which are at any time issuable hereunder, so long as any shares of Common Stock
shall be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any and for so long as securities of the same class shall be
listed on such securities exchange or market by the Issuer.

         (c) COVENANTS. The Issuer shall not by any action including, without
limitation, amending the Articles of Incorporation or the by-laws of the Issuer,
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such actions as may be necessary or appropriate to protect
the rights of the Holder hereof against dilution (to the extent specifically
provided herein) or impairment. Without limiting the generality of the
foregoing, the Issuer will (i) not permit the par value, if any, of its Common
Stock to exceed the then effective Warrant Price, (ii) take all such action as
may be reasonably necessary in order that the Issuer may validly and legally
issue fully paid and nonassessable shares of Common Stock, free and clear of any
liens, claims, encumbrances and restrictions (other than as provided herein)
upon the exercise of this Warrant, and (iii) use its best efforts to obtain all
such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be reasonably necessary to enable the Issuer
to perform its obligations under this Warrant.

                                      -4-

<PAGE>

         (d) LOSS, THEFT, DESTRUCTION OF WARRANTS. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.

         (e) REGISTRATION RIGHTS. The Warrant Stock is entitled to the benefits
of and subject to the obligations relating to those certain registration rights
expressly set forth in the Letter Agreement.

4. ADJUSTMENT OF WARRANT PRICE AND WARRANT SHARE NUMBER.

         The Warrant Price shall be adjusted as set forth in this SECTION 4.
Upon each adjustment to the Warrant Price, the Holder shall thereafter be
entitled to receive upon exercise of this Warrant, at the Warrant Price
resulting from such adjustment, the number of shares of Common Stock obtained by
(i) multiplying the Warrant Price in effect immediately prior to such adjustment
by the number of shares of Common Stock purchasable hereunder immediately prior
to such adjustment, and (ii) dividing the product thereof by the Warrant Price
resulting from such adjustment. The Issuer shall give the Holder notice of any
event described below which requires an adjustment pursuant to this SECTION 4 in
accordance with SECTION 5.

         (a) The Warrant Price shall be further adjusted as follows:

                  (i) In the case of any amendment to the Issuer's Articles of

         Incorporation to change the designation of the Common Stock or the
         rights, privileges, restrictions or conditions with respect to the
         Common Stock or division of the Common Stock, this Warrant shall be
         adjusted so as to provide that upon exercise thereof, the Holder shall
         receive, in lieu of each share of Common Stock theretofore issuable
         upon such exercise, the kind and amount of shares, other securities,
         money and property receivable upon such designation, change or division
         by the Holder issuable upon such exercise had the exercise occurred
         immediately prior to such designation, change or division. This Warrant
         shall be deemed thereafter to provide for adjustments that shall be as
         nearly equivalent as may be practicable to the adjustments provided for
         in this SECTION 4. The provisions of this SUBSECTION 4(a)(i) shall
         apply in the same manner to successive reclassifications, changes,
         consolidations and mergers.

                  (ii) If the Issuer shall at any time subdivide its outstanding
         shares of Common Stock into a greater number of shares of Common Stock,
         or declare a dividend or make any other distribution upon the Common
         Stock payable in shares of Common Stock, the Warrant Price in effect
         immediately prior to such subdivision or dividend or other distribution
         shall be proportionately reduced, and conversely, in case the
         outstanding shares of Common Stock shall be combined into a smaller
         number of shares of Common Stock, the Warrant Price in effect
         immediately prior to such combination shall be proportionately
         increased.

                                      -5-

<PAGE>

                  (iii) If any capital reorganization or reclassification of the
         capital stock of the Issuer, or any consolidation or merger of the
         Issuer with or into another corporation or other entity, or the sale of
         all or substantially all of the Issuer's assets to another corporation
         or other entity shall be effected in such a way that holders of shares
         of Common Stock shall be entitled to receive stock, securities, other
         evidence of equity ownership or assets with respect to or in exchange
         for shares of Common Stock, then, as a condition of such
         reorganization, reclassification, consolidation, merger or sale (except
         as otherwise provided below in this SECTION 4), lawful and adequate
         provisions shall be made whereby the Holder shall thereafter have the
         right to receive upon the exercise hereof upon the basis and upon the
         terms and conditions specified herein, such shares of stock,
         securities, other evidence of equity ownership or assets as may be
         issued or payable with respect to or in exchange for a number of
         outstanding shares of such Common Stock equal to the number of shares
         of Common Stock immediately theretofore purchasable and receivable upon
         the exercise of this Warrant under this SECTION 4 had such
         reorganization, reclassification, consolidation, merger or sale not
         taken place, and in any such case appropriate provisions shall be made
         with respect to the rights and interests of the Holder to the end that
         the provisions hereof (including, without limitation, provisions for
         adjustments of the Warrant Price and of the number of shares of Common
         Stock receivable upon the exercise of this Warrant) shall thereafter be
         applicable, as nearly as may be practicable, in relation to any shares
         of stock, securities, other evidence of equity ownership or assets
         thereafter deliverable upon the exercise hereof. Subject to the terms
         of this Warrant, in the event of a merger or consolidation of the
         Company with or into another corporation or other entity as a result of
         which the number of shares of common stock of the surviving corporation
         or other entity issuable to holders of Common Stock, is greater or
         lesser than the number of shares of Common Stock outstanding
         immediately prior to such merger or consolidation, then the Warrant
         Price in effect immediately prior to such merger or consolidation shall
         be adjusted in the same manner as though there were a subdivision or
         combination of the outstanding shares of Common Stock.

                  (iv) In case the Issuer shall, at any time prior to exercise
         of this Warrant, consolidate or merge with any other corporation or
         other entity (where the Issuer is not the surviving entity) or transfer
         all or substantially all of its assets to any other corporation or
         other entity, then the Issuer shall, as a condition precedent to such
         transaction, cause effective provision to be made so that the Holder of
         this Warrant upon the exercise of this Warrant after the effective date
         of such transaction shall be entitled to receive the kind and amount of
         shares, evidences of indebtedness and/or other securities or property
         receivable on such transaction by a holder of the number of shares of
         Common Stock as to which this Warrant was exercisable immediately prior
         to such transaction (without giving effect to any restriction upon such
         exercise); and, in any such case, appropriate provision shall be made
         with respect to the rights and interest of the Holder of this Warrant
         to the end that the provisions of this Warrant shall thereafter be
         applicable (as nearly as may be practicable) with respect to any
         shares, evidences of indebtedness or other securities or assets
         thereafter deliverable upon exercise of this Warrant.

                                      -6-

<PAGE>

                  (v) No fractional shares of Common Stock shall be issued in
         connection with any exercise of this Warrant, but in lieu of such
         fractional shares, the Issuer shall make a cash payment therefor equal
         in amount to the product of the applicable fraction multiplied by the
         Warrant Price then in effect.

         (b) OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION. The
following provisions shall be applicable to the making of adjustments of the
number of shares of Common Stock for which this Warrant is exercisable and the
Warrant Price then in effect provided for in this SECTION 4:

                  (i) WHEN ADJUSTMENTS TO BE MADE. The adjustments required by
         this SECTION 4 shall be made whenever and as often as any specified
         event requiring an adjustment shall occur, except that any adjustment
         of the number of shares of Common Stock for which this Warrant is
         exercisable that would otherwise be required may be postponed (except
         in the case of a subdivision or combination of shares of the Common
         Stock, as provided for in SECTION 4(a)(ii)) up to, but not beyond the
         date of exercise if such adjustment either by itself or with other
         adjustments not previously made adds or subtracts less than one percent
         (1%) of the shares of Common Stock for which this Warrant is
         exercisable immediately prior to the making of such adjustment. Any
         adjustment representing a change of less than such minimum amount
         (except as aforesaid) which is postponed shall be carried forward and
         made as soon as such adjustment, together with other adjustments
         required by this SECTION 4 and not previously made, would result in a
         minimum adjustment or on the date of exercise. For the purpose of any
         adjustment, any specified event shall be deemed to have occurred at the
         close of business on the date of its occurrence.

                  (ii) FRACTIONAL INTERESTS. In computing adjustments under this
         SECTION 4, fractional interests in Common Stock shall be taken into
         account to the nearest one one-hundredth (1/100th) of a share.

                  (iii) WHEN ADJUSTMENT NOT REQUIRED. If the Issuer shall take a
         record of the holders of its Common Stock for the purpose of entitling
         them to receive a dividend or distribution or subscription or purchase
         rights and shall, thereafter and before the distribution to
         stockholders thereof, legally abandon its plan to pay or deliver such
         dividend, distribution, subscription or purchase rights, then
         thereafter no adjustment shall be required by reason of the taking of
         such record and any such adjustment previously made in respect thereof
         shall be rescinded and annulled.

         (c) FORM OF WARRANT AFTER ADJUSTMENTS. The form of this Warrant need
not be changed because of any adjustments in the Warrant Price or the number and
kind of Securities purchasable upon the exercise of this Warrant.

5. NOTICE OF ADJUSTMENTS.

         Whenever the Warrant Price or Warrant Share Number shall be adjusted
pursuant to SECTION 4 hereof (for purposes of this SECTION 5, each an
"ADJUSTMENT"), the Issuer shall cause its Chief Financial Officer to prepare and
execute a certificate setting forth, in reasonable detail, the event requiring
the adjustment, the amount of the adjustment, the method by which such

                                      -7-

<PAGE>

adjustment was calculated (including a description of the basis on which the
Board made any determination hereunder), and the Warrant Price and Warrant Share
Number after giving effect to such adjustment, and shall cause copies of such
certificate to be delivered to the Holder of this Warrant after each adjustment.

6. FRACTIONAL SHARES.

         No fractional shares of Warrant Stock will be issued in connection with
an exercise hereof, but in lieu of such fractional shares, the Issuer shall make
a cash payment therefor equal in amount to the product of the applicable
fraction multiplied by the Per Share Market Value then in effect.

7. OWNERSHIP CAP AND CERTAIN EXERCISE RESTRICTIONS.

         (a) Notwithstanding anything to the contrary set forth in this Warrant,
at no time may a holder of this Warrant exercise this Warrant if the number of
shares of Common Stock to be issued pursuant to such exercise would exceed, when
aggregated with all other shares of Common Stock beneficially owned by such
holder at such time, the number of shares of Common Stock which would result in
such holder beneficially owning more than 4.999% of all of the Common Stock
outstanding at such time; provided, however, that upon a holder of this Warrant
providing the Issuer with sixty (60) days notice (pursuant to SECTION 13 hereof)
(the "WAIVER NOTICE") that such holder would like to waive this SECTION 7(a)
with regard to any or all shares of Common Stock issuable upon exercise of this
Warrant, this SECTION 7(a) will be of no force or effect with regard to all or a
portion of the Warrant referenced in the Waiver Notice.

         (b) The Holder may not exercise the Warrant hereunder to the extent
such exercise would result in the Holder beneficially owning (as determined in
accordance with SECTION 13(D) of the Exchange Act and the rules thereunder) in
excess of 9.999% of the then issued and outstanding shares of Common Stock,
including shares issuable upon exercise of the Warrant held by the Holder after
application of this Section.

8. INTENTIONALLY OMITTED.

9. DEFINITIONS.

         For the purposes of this Warrant, the following terms have the
following meanings:

         "ARTICLES OF INCORPORATION" means the Articles of Incorporation of the
Issuer as in effect on the Original Issue Date, and as hereafter from time to
time amended, modified, supplemented or restated in accordance with the terms
hereof and thereof and pursuant to applicable law.

         "BOARD" shall mean the Board of Directors of the Issuer.

                                      -8-

<PAGE>

         "CAPITAL STOCK" means and includes (i) any and all shares, interests,
participations or other equivalents of or interests in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or limited) in
any Person which is a partnership, (iii) all membership interests or limited
liability company interests in any limited liability company, and (iv) all
equity or ownership interests in any Person of any other type.

         "COMMON STOCK" means the Common Stock, no par value per share, of the
Issuer and any other Capital Stock into which such stock may hereafter be
changed.

         "GOVERNMENTAL AUTHORITY" means any governmental, regulatory or
self-regulatory entity, department, body, official, authority, commission,
board, agency or instrumentality, whether federal, state or local, and whether
domestic or foreign.

         "HOLDERS" mean the Persons who shall from time to time own any Warrant.
The term "HOLDER" means one of the Holders.

         "INDEPENDENT APPRAISER" means a nationally recognized or major regional
investment banking firm or firm of independent certified public accountants of
recognized standing (which may be the firm that regularly examines the financial
statements of the Issuer) that is regularly engaged in the business of
appraising the Capital Stock or assets of corporations or other entities as
going concerns, and which is not affiliated with either the Issuer or the Holder
of any Warrant.

         "LETTER AGREEMENT" means the letter agreements regarding the proposed
offering of unsecured promissory notes, common stock and warrants executed by
the Issuer and the investors signatory thereto dated September 30, 2004.

         "MAJORITY HOLDERS" means at any time the Holders of Warrants
exercisable for a majority of the shares of Warrant Stock issuable under the
Warrants at the time outstanding.

         "NASDAQ" means The Nasdaq SmallCap Market or The Nasdaq National
Market.

         "ORIGINAL ISSUE DATE" means September 30, 2004.

         "OTC BULLETIN BOARD" means the over-the-counter electronic bulletin
board.

         "PERSON" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.

         "PER SHARE MARKET VALUE" means on any particular date (a) the closing
price per share of the Common Stock on such date on the OTC Bulletin Board or
another registered national stock exchange on which the Common Stock is then
listed, or if there is no such price on such date, then the closing price on
such exchange or quotation system on the date nearest preceding such date, or
(b) if the Common Stock is not then reported by the OTC Bulletin Board or the
Pink Sheets LLC (or similar organization or agency succeeding to its functions
of reporting prices), then the average of the "PINK SHEET" quotes for the
relevant conversion period, as determined in good faith by the holder, or (c) if
the Common Stock is not then publicly traded the fair market value of a share of
Common Stock as determined by an Independent Appraiser selected in good faith by

                                      -9-

<PAGE>

the Majority Holders; provided, however, that the Issuer, after receipt of the
determination by such Independent Appraiser, shall have the right to select an
additional Independent Appraiser, in which case, the fair market value shall be
equal to the average of the determinations by each such Independent Appraiser;
and provided, further that all determinations of the Per Share Market Value
shall be appropriately adjusted for any stock dividends, stock splits or other
similar transactions during such period. The determination of fair market value
by an Independent Appraiser shall be based upon the fair market value of the
Issuer determined on a going concern basis as between a willing buyer and a
willing seller and taking into account all relevant factors determinative of
value, and shall be final and binding on all parties. In determining the fair
market value of any shares of Common Stock, no consideration shall be given to
any restrictions on transfer of the Common Stock imposed by agreement or by
federal or state securities laws, or to the existence or absence of, or any
limitations on, voting rights.

         "SECURITIES" means any debt or equity securities of the Issuer, whether
now or hereafter authorized, any instrument convertible into or exchangeable for
Securities or a Security, and any option, warrant or other right to purchase or
acquire any Security. "SECURITY" means one of the Securities.

         "SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar federal statute then in effect.

         "SUBSIDIARY" means any corporation at least 50% of whose outstanding
Voting Stock shall at the time be owned directly or indirectly by the Issuer or
by one or more of its Subsidiaries, or by the Issuer and one or more of its
Subsidiaries.

         "TERM" has the meaning specified in SECTION 1 hereof.

         "TRADING DAY" means (a) a day on which the Common Stock is traded on
the OTC Bulletin Board, or (b) if the Common Stock is not listed on the OTC
Bulletin Board, a day on which the Common Stock is traded on Nasdaq or any
registered national stock exchange, or (c) if the Common Stock is not traded on
the OTC Bulletin Board, Nasdaq or any registered national stock exchange, a day
on which the Common Stock is quoted in the over-the-counter market as reported
by the Pink Sheets LLC (or any similar organization or agency succeeding its
functions of reporting prices); provided, however, that in the event that the
Common Stock is not listed or quoted as set forth in (a), (b) and (c) hereof,
then Trading Day shall mean any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government action to close.

         "VOTING STOCK" means, as applied to the Capital Stock of any
corporation, Capital Stock of any class or classes (however designated) having
ordinary voting power for the election of a majority of the members of the Board
of Directors (or other governing body) of such corporation, other than Capital
Stock having such power only by reason of the happening of a contingency.

         "WARRANTS" means the Warrants issued and sold pursuant to the Letter
Agreement, including, without limitation, this Warrant, and any other warrants
of like tenor issued in substitution or exchange for any thereof pursuant to the
provisions of SECTION 2(c), 2(d) or 2(e) hereof or of any of such other
Warrants.

                                      -10-

<PAGE>

         "WARRANT PRICE" means U.S. $[150% of the VWAP of the Company's Common
Stock during the ten business days immediately preceding September 30, 2004], as
such price may be adjusted from time to time as shall result from the
adjustments specified in this Warrant, including SECTION 4 hereof.

         "WARRANT SHARE NUMBER" means at any time the aggregate number of shares
of Warrant Stock which may at such time be purchased upon exercise of this
Warrant, after giving effect to all prior adjustments and increases to such
number made or required to be made under the terms hereof.

         "WARRANT STOCK" means Common Stock issuable upon exercise of any
Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants.
10. OTHER NOTICES.

         In case at any time:

         (a) the Issuer shall make any distributions to the holders of Common
Stock; or

         (b) the Issuer shall authorize the granting to all holders of its
Common Stock of rights to subscribe for or purchase any shares of Capital Stock
of any class; or

         (c) there shall be any reclassification of the Capital Stock of the
Issuer; or

         (d) there shall be any capital reorganization by the Issuer; or

         (e) there shall be any (i) consolidation or merger involving the Issuer
or (ii) sale, transfer or other disposition of all or substantially all of the
Issuer's property, assets or business (except a merger or other reorganization
in which the Issuer shall be the surviving corporation and its shares of Capital
Stock shall continue to be outstanding and unchanged and except a consolidation,
merger, sale, transfer or other disposition involving a wholly-owned
Subsidiary); or

         (f) there shall be a voluntary or involuntary dissolution, liquidation
or winding-up of the Issuer or any partial liquidation of the Issuer or
distribution to holders of Common Stock;

then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least ten (10)
days prior to the action in question and not less than ten (10) days prior to
the record date or the date on which the Issuer's transfer books are closed in
respect thereto. The Issuer shall give to the Holder notice of all meetings and

                                      -11-

<PAGE>

actions by written consent of its stockholders, at the same time in the same
manner as notice of any meetings of stockholders is required to be given to
stockholders who do not waive such notice (or, if such requires no notice, then
two (2) Trading Days written notice thereof describing the matters upon which
action is to be taken). The Holder shall have the right to send two (2)
representatives selected by it to each meeting, who shall be permitted to
attend, but not vote at, such meeting and any adjournments thereof. This Warrant
entitles the Holder to receive copies of all financial and other information
distributed or required to be distributed to the holders of the Common Stock.

11. AMENDMENT AND WAIVER.

         Any term, covenant, agreement or condition in this Warrant may be
amended, or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), by a written
instrument or written instruments executed by the Issuer and the Majority
Holders; provided, however, that no such amendment or waiver shall reduce the
Warrant Share Number, increase the Warrant Price, shorten the period during
which this Warrant may be exercised or modify any provision of this SECTION 11

without the consent of the Holder of this Warrant.

12. GOVERNING LAW.

         THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS
OF LAW.

13. NOTICES.

         Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given
and effective on the earlier of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified for notice prior to 5:00 p.m., eastern time, on a Trading Day, (ii)
the Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified for
notice later than 5:00 p.m., eastern time, on any date and earlier than 11:59
p.m., eastern time, on such date, (iii) the Trading Day following the date of
mailing, if sent by nationally recognized overnight courier service or (iv)
actual receipt by the party to whom such notice is required to be given. The
addresses for such communications shall be with respect to the Holder of this
Warrant or of Warrant Stock issued pursuant hereto, addressed to such Holder at
its last known address or facsimile number appearing on the books of the Issuer
maintained for such purposes, or with respect to the Issuer, addressed to:

         Telenetics Corporation
         39 Parker
         Irvine, California 92618
         Attention: President
         Attention: Chief Financial Officer
         Telecopier: (949) 455-9324
         Telephone: (949) 455-4000

                                      -12-

<PAGE>

with copies (which copies shall not constitute notice to the Company) to:

         Rutan & Tucker, LLP
         611 Anton Boulevard, Suite 1400
         Costa Mesa, California 92626
         Attention: Larry A. Cerutti, Esq.
         Telecopier: (714) 546-9035
         Telephone: (714) 641-5100

Any party hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.

14. WARRANT AGENT.

         The Issuer may, by written notice to each Holder of this Warrant,
appoint an agent having an office in New York, New York for the purpose of
issuing shares of Warrant Stock on the exercise of this Warrant pursuant to
subsection (b) of SECTION 2 hereof, exchanging this Warrant pursuant to
subsection (d) of SECTION 2 hereof or replacing this Warrant pursuant to
subsection (d) of SECTION 3 hereof, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such agent.

15. REMEDIES.

         The Issuer stipulates that the remedies at law of the Holder of this
Warrant in the event of any default or threatened default by the Issuer in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise.

16. SUCCESSORS AND ASSIGNS.

         This Warrant and the rights evidenced hereby shall inure to the benefit
of and be binding upon the successors and assigns of the Issuer, the Holder
hereof and (to the extent provided herein) the Holders of Warrant Stock issued
pursuant hereto, and shall be enforceable by any such Holder or Holder of
Warrant Stock.

17. MODIFICATION AND SEVERABILITY.

         If, in any action before any court or agency legally empowered to
enforce any provision contained herein, any provision hereof is found to be
unenforceable, then such provision shall be deemed modified to the extent
necessary to make it enforceable by such court or agency. If any such provision
is not enforceable as set forth in the preceding sentence, the unenforceability
of such provision shall not affect the other provisions of this Warrant, but
this Warrant shall be construed as if such unenforceable provision had never
been contained herein.

                                      -13-

<PAGE>

18. HEADINGS.

         The headings of the Sections of this Warrant are for convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.

         IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day
and year first above written.

                                         TELENETICS CORPORATION

                                         By:
                                            ------------------------------------
                                              Name:  David L. Stone
                                              Title: President

                                      -14-

<PAGE>

                                  EXERCISE FORM

                             TELENETICS CORPORATION

The undersigned _______________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _____ shares of common stock of Telenetics
Corporation covered by the within Warrant.

Dated: _________________             Signature ________________________________

                                     Address __________________________________
                                             __________________________________

                                   ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.

Dated: _________________             Signature ________________________________

                                     Address __________________________________
                                             __________________________________

                               PARTIAL ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named corporation.

Dated: _________________             Signature ________________________________

                                     Address __________________________________
                                             __________________________________

                           FOR USE BY THE ISSUER ONLY:

This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of ___________, _____, shares of the Company's common stock issued therefor in
the name of _______________, Warrant No. W-_____ issued for ____ shares of the
Company's common stock in the name of _______________.

                                      -15-October 4 2004 8K Exhibit 10.1

                                                                                              Exhibit 10.1

SUBLEASE

THIS SUBLEASE is made and entered
into this 29th day of
September, 2004, by and between SAFENET, INC., a Delaware corporation
("Landlord") and 8X8, INC., a Delaware corporation ("Tenant").

1.BASIC LEASE PROVISIONS.

A.Property Address: 3151 Jay Street, Santa Clara,
California

B.Tenant's Address until the Commencement

Date: 2445 Mission College Boulevard, Santa Clara,
California 95054-1214; thereafter, the Premises

C.Landlord's Address (for notices): SafeNet, Inc.,
4690 Millennium Drive, Belcamp, Maryland 21017, Attention: Kevin Hicks, Director
of Legal Affairs

D.Prime Landlord: Orchard Jay Investors, LLC, a
California limited liability company and David J. Brown

E.Prime Landlord's Address (for notices): Orchard
Jay Investors, LLC and David J. Brown, c/o Orchard Properties, 2290 North First
Street, Suite 300, San Jose, CA 95131

FIdentification of Prime Lease and all amendments
thereto:

Lease dated May 10, 1999, as amended by First Addendum
to Lease dated for reference purposes as May 10, 1999 and further amended by
Second Amendment to Lease and Partial Termination Agreement dated as of October
30, 2002

G.Sublease Term: Fifty-Seven (57) months from the
Commencement Date

H.Delivery Date: Defined in Section 5 hereof

I.Expiration Date: August 25, 2009

J.Rent: $40,183 per month (which is Eighty-Six
Cents ($.86) per square foot per month multiplied by the number of square feet
listed in Section 1(N) hereof), beginning on the Rent Commencement Date (as
defined in Section 7), escalating to Eighty-Eight Cents ($.88) per square foot
per month beginning on the thirty-third month of the Term.

K.Payee of Rent: SAFENET, INC.

L.Address of Payment of Rent: 4690
Millennium Drive, Belcamp, Maryland 21017, Attention: Accounts Payable

M. [Intentionally Deleted]

N.Description of Premises: Approximately 46,724
rentable square feet which constitutes the entire Building

O.Security Deposit: $ 250,000.00, subject to the
reductions, if any, set forth in Section 24 below.

P.Tenant's Use: General office, marketing,
research, assembly, manufacturing, storage/warehousing of goods and products,
testing and other legal related uses, subject to the Prime Landlord's prior
written consent. 

Q.Brokers: Landlord's Broker-Newmark & Company
Real Estate Inc.

 Tenant's Broker-The Staubach Company

2. PRIME LEASE. Landlord is
the tenant under a Prime Lease (the "Prime Lease") with the Prime Landlord
identified in Section l(D), bearing the date specified in Section
1(F). Landlord represents and warrants to Tenant that (a) Landlord has
delivered to Tenant a full and complete copy of the Prime Lease and all other
agreements between Prime Landlord and Landlord governing the use and occupancy
of the Premises (defined below), (b) the Prime Lease is, as of the date hereof,
in full force and effect, and (c) no event of default has occurred under the
Prime Lease and, to Landlord's knowledge, no event has occurred and is
continuing which would constitute an event of default but for the requirement of
the giving of notice and/or the expiration of the period of time to cure.

3.SUBLEASE. Landlord, for and in
consideration of the rents herein reserved and of the covenants and agreements
herein contained on the part of the Tenant to be performed, hereby subleases to
the Tenant, and the Tenant accepts from the Landlord the space described in
Section 1(N) (the "Premises") which constitutes the entire building located at
3151 Jay Street, Santa Clara, California (the "Building"), situated on and a
part of the property (the "Project") shown on the site plan
attached hereto and made a part hereof as Exhibit A.

4.TERM. The term of this Lease
(hereinafter "Term") shall commence on the date (hereinafter "Commencement
Date") which is the latest to occur of:

A.The date which is sixty
(60) days after the Delivery Date (as defined in Section 5 herein); or

B.December 1, 2004; or 

C.Receipt of Written
Consent from Prime Landlord.

The Term shall expire on the date
("Expiration Date") specified in Section 1(I), unless sooner terminated as
otherwise provided elsewhere in the Sublease.

5.POSSESSION. Landlord agrees
to perform the repairs (the "Repairs") described in Exhibit B attached hereto
and made a part hereof. Except for the Repairs, and except as otherwise provided
in this Section 5, the Premises are to be delivered by Landlord to Tenant AS IS.
On the Delivery Date, the roof, all structural components of the Building, HVAC,
electrical and plumbing systems, the parking lot and site lighting shall be in
good operating condition and shall conform to applicable code requirements.
Landlord shall notify Tenant as soon as the Repairs and made a part hereof are
completed. The date on which Landlord delivers possession of the Premises to the
Tenant with the Repairs completed shall be the "Delivery Date". Taking of
possession by Tenant shall be deemed conclusively to establish that the Repairs
have been completed in accordance with Exhibit B. If the Delivery Date fails to
occur by October 1, 2004 this Sublease shall remain in effect, Landlord shall
have no liability to Tenant as a result of any delay in occupancy, but unless
the delay is occasioned by any act or omission of Tenant, the Tenant shall
receive one day of free rent for each day of delay in the Delivery Date beyond
October 1, 2004. If the Delivery Date fails to occur by November 1, 2004 and
such failure is not occasioned by any act or omission of Tenant, then Tenant
shall have the right to terminate this Sublease; provided, however, that
Landlord shall have no liability to Tenant as a result of such failure of the
Delivery Date to occur.

6.TENANT'S USE. The Premises shall
be used and occupied only for the Tenant's Use set forth in Section 1(P).

7.RENT. Beginning on the first
day of the seventh (7th) month after the Commencement Date (the "Rent
Commencement Date"), Tenant agrees to pay the Rent set forth in Section 1(J)
to the Payee specified in Section l(K), at the address specified in
Section l(L), or to such other payee or at such other address as may be
designated by notice in writing from Landlord to Tenant, without prior demand
therefor and without any deduction whatsoever. Rent shall be paid in advance on
the first day of each month of the Term beginning on the Rent Commencement Date,
except that the first monthly installment of Rent shall be paid by Tenant to
Landlord upon execution of this Sublease by Tenant. Rent shall be pro-rated for
partial months at the beginning and end of the Term. Tenant's covenant to pay
Rent shall be independent of every other covenant in this Lease. If Rent is not
paid when due, Tenant shall pay, relative to the delinquent payment, an amount
equal to the sum which would be payable by Landlord to Prime Landlord for an
equivalent default under the Prime Lease.

8.FURNITURE/EQUIPMENT. Landlord
shall leave the furniture, fixtures and equipment identified on Schedule
1 (collectively, the "FF&E"), at no cost to Tenant, for Tenant's use in
the Premises during the Term. To the extent permitted by the terms and
provisions of the Prime Lease, and as mutually agreed between Tenant and
Landlord, Landlord shall remove, at its sole cost and expense, any furniture and
equipment in the Premises not identified on Schedule 1. All FF&E
shall remain the property of the Landlord during the Term. To the extent
permitted by the terms and provisions of the Prime Lease, Tenant shall have the
option, at the end of the Term, to purchase the FF&E for ten and 00/100
dollars ($10.00). All FF&E not purchased by Tenant at the end of the Term,
shall be returned at the end of the Term, normal wear and tear and damage by
casualty excepted. In no event shall Tenant be responsible for any FF&E
charges or fees incurred by Landlord under contracts entered into or on behalf
of Landlord.

9.TENANT'S OBLIGATIONS. Tenant
shall be responsible for, and shall pay the following:

A.All janitorial costs and
utility consumption costs, including without limitation, electric and other
charges incurred in connection with lighting, and providing electrical power to
the Premises. Tenant shall hold Landlord harmless from all costs or expenses
Landlord may incur from Tenant's failure to pay utility bills or to perform any
of its obligations with respect to the purchase of utilities.

B.All maintenance, repairs
and replacements as to the Premises and its equipment, to the extent Landlord is
obligated to perform the same under Section 6.1 of the Prime Lease.

10.QUIET ENJOYMENT. Landlord
represents that it has full power and authority to enter into this Sublease,
subject to the consent of the Prime Landlord. So long as Tenant is not in
default in the performance of its covenants and agreements in this Sublease,
Tenant's quiet and peaceable enjoyment of the Premises shall not be disturbed or
interfered with by Landlord, or by any person claiming by, through, or under
Landlord.

11.TENANT'S INSURANCE. Tenant shall
procure and maintain, at its own cost and expense, such liability insurance as
is required to be carried by Landlord under the Prime Lease, naming Landlord, as
well as Prime Landlord, in the manner required therein and such property
insurance as is required to be carried by Landlord under the Prime Lease to the
extent such property insurance pertains to the Premises. Tenant shall furnish to
Landlord a certificate of Tenant's insurance required hereunder not later than
ten (10) days prior to Tenant's taking possession of the Premises. Each party
hereby waives claims against the other for property damage provided such waiver
shall not invalidate the waiving party's property insurance and, provided
further, that each party obtains from its insurance carrier a waiver of its
right of subrogation. Tenant hereby waives claims against Prime Landlord and
Landlord for property damage to the Premises or its contents if and to the
extent that Landlord waives such claims against Prime Landlord under the Prime
Lease. Tenant agrees to obtain, for the benefit of Prime Landlord and Landlord,
such waivers of subrogation rights from its insurer as are required of Landlord
under the Prime Lease. Landlord shall also maintain in full force and effect at
Landlord's sole cost and expense, during the Term all of the insurance required
to be carried by the "Tenant" under the Prime Lease with respect to the
Premises. 

12.ASSIGNMENT OR SUBLETTING.

A.Tenant shall not (i)
assign, convey or mortgage this Sublease or any interest under it; (ii) allow
any transfer thereof or any lien upon Tenant's interest by operation of law;
(iii) further sublet the Premises or any part thereof; or (iv) permit the
occupancy of the Premises or any part thereof by anyone other than Tenant.
Landlord's consent to an assignment of this Sublease or a further sublease of
the Premises shall not be unreasonably withheld, and if Landlord consents
thereto, Landlord shall use reasonable efforts to obtain the consent of Prime
Landlord provided that Landlord shall have no liability to Tenant for the
failure to obtain such consent under any circumstances and Landlord shall not be
obligated to expend any funds in order to obtain such consent. Any cost of
obtaining Prime Landlord's consent shall be borne by Tenant. Any permitted
sublease or assignment shall be subject to all of the terms and provisions of
Section 14.1 of the Prime Lease; provided however, that Landlord shall not have
any termination rights under Section 14.1(C) of the Prime Lease. Subject to the
terms and provisions of Section 14.1(D) of the Prime Lease, if Tenant sublets
any part of the Premises, then with respect to the space so subleased, Tenant
shall pay to Landlord fifty percent (50%) of the positive difference, if any,
between (i) all Subrent (as defined in the Prime Lease) paid by the subtenant to
Tenant, less (ii) the sum of all Rent and additional rent allocable to the space
sublet and all Permitted Transfer Costs (as defined in the Prime Lease) related
to such sublease. Such amount shall be paid to Landlord on the same basis,
whether periodic or in lump sum, that such Subrent is paid to Tenant by its
subtenant. In calculating Landlord's share of any periodic payments, all
Permitted Transfer Costs shall be first recovered by Tenant. 

B.No permitted assignment
shall be effective and no permitted sublease shall commence unless and until any
default by Tenant hereunder shall have been cured. No permitted assignment or
subletting shall relieve Tenant from Tenant's obligations and agreements
hereunder and Tenant shall continue to be liable as a principal and not as a
guarantor or surety to the same extent as though no assignment or subletting had
been made.

C.Tenant may enter into a Permitted
Transfer (as defined in Section 14.1(F) of the Prime Lease) without Landlord's
prior written consent in accordance with the terms and provisions of Section
14.1(F) of the Prime Lease.

13.RULES. Tenant agrees to comply
with all rules and regulations that Prime Landlord has made or may hereafter
from time to time make for the Building. 

14.REPAIRS AND COMPLIANCE. Tenant
shall promptly pay for the repairs set forth in Section 9(B) hereof and
Tenant shall, at Tenant's own expense, comply with all laws and ordinances, and
all orders, rules and regulations of all governmental authorities and of all
insurance bodies and their fire prevention engineers at any time in force,
applicable to the Premises or to Tenant's particular use or manner of use
thereof, except that Tenant shall not hereby be under any obligation to comply
with any law, ordinance, rule or regulation requiring any structural alteration
of or in connection with the Premises, unless such alteration is required by
reason of Tenant's particular use or manner of use of the Premises, or a
condition which has been created by or at the sufferance of Tenant, or is
required by reason of a breach of any of Tenant's covenants and agreements
hereunder. As used herein "structure" or "structural" shall have the definition
ascribed to it in the Prime Lease or if no specific definition is given therein
`structure" or `structural" shall mean that portion of the Building which is
integral to the integrity of the Building as an existing enclosed unit and
shall, in any event, include footings, foundation, outside walls, skeleton,
bearing columns and interior bearing walls, floor slabs; roof and roofing
system.

15.ALTERATIONS. Tenant shall not
make any alterations in or additions to the Premises ("Alterations") if to do so
would constitute a default under the Prime Lease. If Tenant's proposed
Alterations would not constitute a default under the Prime Lease, Landlord's
consent thereto shall nonetheless be required, but Landlord's consent to such
Alterations shall not be unreasonably withheld, and if Landlord consents
thereto, Landlord shall use reasonable efforts to obtain the consent of Prime
Landlord if consent is required under the Prime Lease; provided that Landlord
shall have no liability to Tenant for the failure to obtain such consent under
any circumstances and Tenant shall pay all costs and expenses of Landlord and
Prime Landlord to obtain such consent. If Alterations by Tenant are permitted or
consented to as aforesaid, Tenant shall comply with all of the covenants of
Landlord contained in the Prime Lease pertaining to the performance of such
Alterations and, in such event, Landlord will notify Tenant in writing at the
time of providing consent whether or not it will require Tenant to remove such
Alterations at the expiration of the Term. In addition, Tenant shall indemnify,
defend and hold harmless Landlord against liability, loss, cost, damage, liens
and expense imposed on Landlord arising out of the performance of Alterations by
Tenant.

16.SURRENDER. Upon the
expiration of this Sublease, or upon the termination of the Sublease or of the
Tenant's right to possession of the Premises, Tenant will at once surrender and
deliver up the Premises, together with all improvements thereon, to Landlord in
good condition and repair, reasonable wear and tear excepted; conditions
existing because of Tenant's failure to perform maintenance, repairs or
replacements as required of Tenant under this Sublease shall not be deemed
"reasonable wear and tear". Said improvements shall include all plumbing,
lighting, electrical, heating, cooling and ventilating fixtures and equipment
and other articles of personal property used in the operation of the Premises
(as distinguished from operations incident to the business of Tenant). Tenant
shall surrender to Landlord all keys to the Premises and make known to Landlord
the explanation of all combination locks which Tenant is permitted to leave on
the Premises. All Alterations in or upon the Premises made by Tenant shall
become a part of and shall remain upon the Premises upon such termination
without compensation, allowance or credit to Tenant provided, however, that
Landlord shall have the right to require Tenant to remove any Alterations made
by Tenant, or portion thereof. Said right shall be exercisable by Landlord
giving written notice thereof to Tenant on or before thirty (30) days prior to
such expiration. Tenant shall also remove any Alterations made by Tenant, or
portion thereof, which Prime Landlord may require Landlord to remove, pursuant
to the terms of the Prime Lease. In any such event, Tenant shall restore the
Premises to the condition the Premises was in prior to the making of such
Alteration, and shall repair any damage occasioned by such removal or
restoration. If Landlord or Prime Landlord requires removal of any Alteration
made by Tenant, or a portion thereof, and Tenant does not make such removal in
accordance with this Section, Landlord may remove the same (and repair any
damage occasioned thereby), and dispose thereof, or at its election, deliver the
same to any other place of business of Tenant, or warehouse the same. Tenant
shall pay the costs of such removal, repair, delivery and warehousing on demand.
As between Landlord and Tenant, Tenant shall not be required to remove any
Alterations performed by Landlord prior to the Commencement Date or to restore
the Premises to their condition prior to the making of such Alterations. If,
however, the term of the Sublease expires at or about the date of the expiration
of the Prime Lease, and if Landlord is required under or pursuant to the terms
of the Prime Lease to remove any Alterations performed prior to the Commencement
Date, Tenant shall permit Landlord to enter the Premises for a reasonable period
of time prior to the expiration of the Sublease for the purpose of removing its
Alterations and restoring the Premises as required.

17.REMOVAL OF TENANT'S PROPERTY.
Upon the expiration of this Sublease, Tenant shall remove Tenant's articles of
personal property incident to Tenant's business ("Trade Fixtures"); provided,
however, that Tenant shall repair any injury or damage to the Premises which may
result from such removal, and shall restore the Premises to the same condition
as prior to the installation thereof. If Tenant does not remove Tenant's Trade
Fixtures from the Premises prior to the expiration or earlier termination of the
Term, Landlord may, at its option, remove the same (and repair any damage
occasioned thereby and restore the Premises as aforesaid) and dispose thereof or
deliver the same to any other place of business of Tenant, or warehouse the
same, and Tenant shall pay the cost of such removal, repair, restoration,
delivery or warehousing to Landlord on demand, or, alternatively, Landlord may
treat said Trade Fixtures as having been conveyed to Landlord with this Lease as
a Bill of Sale, without further payment or credit by Landlord to Tenant.

18.HOLDING OVER. Tenant shall
have no right to occupy the Premises or any portion thereof after the expiration
of this Sublease or after termination of this Sublease or of Tenant's right to
possession in consequence of an Event of Default hereunder. In the event Tenant
or any party claiming by, through or under Tenant holds over, Landlord may
exercise any and all remedies available to it at law or in equity to recover
possession of the Premises, and to recover damages, including without
limitation, damages payable by Landlord to Prime Landlord by reason of such
holdover. For each and every month or partial month that Tenant or any party
claiming by, through or under Tenant remains in occupancy of all or any portion
of the Premises after the expiration of this Sublease or after termination of
this Sublease or Tenant's right to possession, unless Tenant has received prior
written consent from Landlord and Prime Landlord, Tenant shall pay, as minimum
damages and not as a penalty, monthly rental at a rate equal to the greater of
(a) 150% the rate of Rent payable by Tenant hereunder immediately prior to the
expiration or other termination of this Sublease or of Tenant's right to
possession and (b) Landlord's hold over rent obligation to Prime Landlord. The
acceptance by Landlord of any lesser sum shall be construed as payment on
account and not in satisfaction of damages for such holding over. Tenant shall
indemnify, defend, protect and hold Landlord harmless from and against any and
all claims, demands, actions, losses, damages, obligations, costs and expenses,
including, without limitation, attorneys' fees incurred or suffered by Landlord
by reason of Tenant's failure to surrender the Premises on the expiration or
earlier termination of this Lease in accordance with the provisions of this
Lease.

19.ENCUMBERING TITLE. Tenant shall
not do any act which shall in any way encumber the title of Prime Landlord in
and to the Building or the Project, nor shall the interest or estate of Prime
Landlord or Landlord be in any way subject to any claim by way of lien or
encumbrance, whether by operation of law by virtue of any express or implied
contract by Tenant, or by reason of any other act or omission of Tenant. Any
claim to, or lien upon, the Premises, the Building or the Project arising from
any act or omission of Tenant shall accrue only against the subleasehold estate
of Tenant and shall be subject and subordinate to the paramount title and rights
of Prime Landlord in and to the Building and the Project and the interest of
Landlord in the premises leased pursuant to the Prime Lease. Without limiting
the generality of the foregoing, Tenant shall not permit the Premises, the
Building or the Project to become subject to any mechanics', laborers' or
materialmen's lien on account of labor or material furnished to Tenant or
claimed to have been furnished to Tenant in connection with work of any
character performed or claimed to have been performed on the Premises by, or at
the direction or sufferance of, Tenant, provided, however, that if so permitted
under the Prime Lease, Tenant shall have the right to contest in good faith and
with reasonable diligence, the validity of any such lien or claimed lien if
Tenant shall give to Prime Landlord and Landlord such security as set forth in
Section 5.5 of the Prime Lease, provided further, however, that on final
determination of the lien or claim of lien, Tenant shall immediately pay any
judgment rendered, with all proper costs and charges, and shall have the lien
released and any judgment satisfied.

20.INDEMNITY. Except to the extent
caused by the negligence or willful misconduct of Landlord, Prime Landlord or
their respective employees, agents and contractors (and, in any event, subject
to Landlord's and Prime Landlord's waivers of subrogation regarding property
damage in favor of Tenant, to the extent they exist), Tenant agrees to indemnify
Landlord and hold Landlord harmless from all losses, damages, liabilities and
expenses which Landlord may incur, or for which Landlord may be liable to Prime
Landlord, arising from the acts or omissions of Tenant which are the subject
matter of any indemnity or hold harmless of Landlord to Prime Landlord under the
Prime Lease. The provisions of this Section 20 shall survive the expiration or
sooner termination of this Sublease.

21.LANDLORD'S RESERVED RIGHTS.
Landlord reserves the right, on reasonable prior notice, to inspect the
Premises, or to exhibit the Premises to persons having a legitimate interest at
any time during the Term.

22.DEFAULTS. Tenant further agrees
that any one or more of the following events shall be considered Events of
Default as said term is used herein, that is to say, if:

A.Tenant shall be adjudged
an involuntary bankrupt, or a decree or order approving, as properly filed, a
petition or answer filed against Tenant asking reorganization of Tenant under
the Federal bankruptcy laws as now or hereafter amended, or under the laws of
any State, shall be entered, and any such decree or judgment or order shall not
have been vacated or stayed or set aside within sixty (60) days from the date of
the entry or granting thereof; or

B.Tenant shall file, or
admit the jurisdiction of the court and the material allegations contained in,
any petition in bankruptcy, or any petition pursuant or purporting to be
pursuant to the Federal bankruptcy laws now or hereafter amended, or Tenant
shall institute any proceedings for relief of Tenant under any bankruptcy or
insolvency laws or any laws relating to the relief of debtors, readjustment of
indebtedness, reorganization, arrangements, composition or extension; or

C.Tenant shall make any
assignment for the benefit of creditors or shall apply for or consent to the
appointment of a receiver for Tenant or any of the property of Tenant; or

D.Tenant shall admit in
writing its inability to pay its debts as they become due; or

E.A decree or order
appointing a receiver of the property of Tenant shall be made and such decree or
order shall not have been vacated, stayed or set aside within sixty (60) days
from the date of entry or granting thereof; or

F.Tenant shall have
abandoned the Premises or left the Premises substantially vacant; or

G.Tenant shall default in
any payment of Rent required to be made by Tenant hereunder when due as herein
provided and such default shall continue for five (5) days after notice thereof
in writing to Tenant; provided, however, that Tenant shall be entitled to only
one (1) such notice during each twelve (12) month period of the Term; or

H.Tenant shall default in
securing insurance or in providing evidence of insurance as set forth in Section
11 of this Sublease or shall default with respect to lien claims as set forth in
Section 20 of this Sublease and either such default shall continue for
five (5) days after notice thereof in writing to Tenant; or

I.Tenant shall, by its act
or omission to act, cause a default under the Prime Lease and such default shall
not be cured within the time, if any permitted for such cure under the Prime
Lease after receipt of the requisite written notice, if any; or

J.Tenant shall default in
any of the other covenants and agreements herein contained to be kept, observed
and performed by Tenant, and such default shall continue for thirty (30) days
after notice thereof in writing to Tenant or if such breach cannot be reasonably
cured within said thirty (30) day period, Tenant shall have failed to commence
such cure within said thirty (30) day period and thereafter continue with due
diligence to prosecute such cure to completion within such time period as is
reasonably needed.

23.REMEDIES. Upon the occurrence of
any one or more Events of Default, Landlord may exercise any remedy against
Tenant which Prime Landlord may exercise for default by Landlord under the Prime
Lease.

24.SECURITY DEPOSIT. 

A.To secure the faithful
performance by Tenant of all the covenants, conditions and agreements in this
Sublease set forth and contained on the part of Tenant to be fulfilled, kept,
observed and performed including, but not by way of limitation, such covenants
and agreements in this Sublease which become applicable upon the termination of
the same by re-entry or otherwise, Tenant has deposited with Landlord the
Security Deposit as specified in Section 1(O) on the understanding that:
(a) the Security Deposit or any portion thereof not previously applied, or from
time to time, such one or more portions thereof, may be applied to the curing of
any default that may then exist, without prejudice to any other remedy or
remedies which Landlord may have on account thereof, and upon such application
Tenant shall pay Landlord on demand the amount so applied which shall be added
to the Security Deposit so the same may be restored to its original amount; (b)
should the Prime Lease be assigned by Landlord, the Security Deposit or any
portion thereof not previously applied may be turned over to Landlord's assignee
and if the same be turned over as aforesaid, Tenant hereby releases Landlord
from any and all liability with respect to the Security Deposit and/or its
application or return; (c) if permitted by law, Landlord or its successor shall
not be obligated to hold the Security Deposit as a separate fund, but on the
contrary may commingle the same with its other funds; (d) if Tenant shall
faithfully fulfill, keep, perform and observe all of the covenants, conditions
and agreements in this Sublease set forth and contained on the part of Tenant to
be fulfilled, kept, performed and observed, the sum deposited or the portion
thereof not previously applied or reduced (as herein provided), shall be
returned to Tenant without interest no later than thirty (30) days after the
expiration of the Term of this Sublease or any renewal or extension thereof,
provided Tenant has vacated the Premises and surrendered possession thereof to
Landlord at the expiration of the Term or any extension or renewal thereof as
provided herein; (if in the event that Landlord terminates this Sublease or
Tenant's right to possession by reason of an Event of Default by Tenant,
Landlord may apply the Security Deposit against damages suffered to the date of
such termination and/or may retain the Security Deposit to apply against such
damages as may be suffered or shall accrue thereafter by reason of Tenant's
default; and (e) in the event any bankruptcy, insolvency, reorganization or
other creditor-debtor proceedings shall be instituted by or against Tenant, or
its successors or assigns, the Security Deposit shall be deemed to be applied
first to the payment of any Rent due Landlord for all periods prior to the
institution of such proceedings, and the balance, if any, of the Security
Deposit may be retained or paid to Landlord in partial liquidation of Landlord's
damages.

B.In lieu of a cash
Security Deposit, Tenant shall deliver to Landlord an unconditional and
irrevocable letter of credit in favor of Landlord, in form reasonably
satisfactory to Landlord and Landlord's attorney, drawn upon such bank as
Landlord may approve, for the principal sum of the Security Deposit. Provided
that Tenant is not in default under any of the terms, provisions, and conditions
of this Lease on the expiration of the Term, Landlord shall return the letter of
credit to Tenant, and the same may be cancelled or permitted to expire. If the
term of any letter of credit held by Landlord will expire prior to the
expiration of the Term, and it is not extended or a new letter of credit for an
extended period of time is not substituted within thirty (30) days prior to the
expiration date of the letter of credit, then Landlord shall be entitled to make
demand for the principal amount of the letter of credit and, thereafter, to hold
such funds in accordance with this Section 25 until the Expiration Date of the
Term. At any time that Tenant is in default under the terms of this Lease,
Landlord shall be entitled to make demand for the principal amount of the letter
of credit (if Landlord does not already hold such funds), and Landlord shall
have the right, thereafter, to hold such funds for the balance of the Term in
accordance with this Section 25. If, as a result of any application of the
proceeds of a drawing against all or any part of the letter of credit, the
amount of cash then held by Landlord as the Security Deposit plus the remaining
available amount of the letter of credit shall be less than the total Security
Deposit which the Tenant is then obligated to maintain, Tenant shall forthwith
provide Landlord with additional letter(s) of credit in an amount equal to the
deficiency. Tenant shall not assign or encumber the letter of credit or any part
thereof, and neither Landlord nor its successors or assigns will be bound by any
such assignment, encumbrance, attempted assignment or attempted encumbrance.

C.Notwithstanding anything
contained herein to the contrary, if on (i) the first day of the nineteenth
(19th) month of the Term (the "First Reduction Date"), and
(ii) the first day of the thirty-first (31st) month of the Term (the
"Second Reduction Date"), this Sublease shall be in full force and effect
and no default by Tenant of its obligations hereunder has occurred and is
continuing, Tenant shall have the right to reduce the amount of the Security
Deposit, whether cash or letter of credit, to (1) One Hundred Fifty Thousand and
00/100 Dollars ($150,000.00) on the First Reduction Date, and (2) One Hundred
Thousand and 00/100 Dollars ($100,000.00) on the Second Reduction Date
provided that the Security Deposit shall have been previously reduced to
the amount set forth in the foregoing clause (1), and such reduced amount shall
be held by Landlord as security in accordance with the terms hereof. If the
security being held is cash and Tenant is entitled to a reduction of the
security so deposited as aforesaid, Landlord shall within ten (10) days after
Tenant's written request return to Tenant an amount of the security then being
held by Landlord so the amount of the principal of the Security Deposit being
held by Landlord shall be reduced as aforesaid, and if at the time of such
reduction, the security being held by Landlord is a letter of credit, Tenant
shall either deliver to Landlord an amendment to the existing letter of credit
or a new letter of credit, which amendment or new letter of credit shall comply
with the terms and conditions of this Section and shall reduce the amount of the
security as aforesaid.

25.NOTICES AND CONSENTS. All
notices, demands, requests, consents or approvals which may or are required to
be given by either party to the other shall be in writing and shall be deemed
given when received or refused if sent by United States registered or certified
mail, postage prepaid, return receipt requested or if sent by overnight
commercial courier service (a) if to Tenant, addressed to Tenant at the address
specified in Section l(B) or at such other place as Tenant may from time to time
designate by notice in writing to Landlord or (b) if for Landlord, addressed to
Landlord at the address specified in Section 1(C) or at such other place
as Landlord may from time to time designate by notice in writing to
Tenant. Each party agrees promptly to deliver a copy of each notice, demand,
request, consent or approval from such party to Prime Landlord and promptly to
deliver to the other party a copy of any notice, demand, request, consent or
approval received from Prime Landlord. Such copies shall be delivered by
overnight commercial courier or by United States registered or certified mail.
Tenant may rely upon any notice, consent or approval given in writing by
Landlord's agent or attorney.

26.PROVISIONS REGARDING SUBLEASE.
This Sublease and all the rights of parties hereunder are subject and
subordinate to the Prime Lease. Each party agrees that it will not, by its act
or omission to act, cause a default under the Prime Lease In furtherance of the
foregoing, the parties hereby confirm, each to the other, that it is not
practical in this Sublease agreement to enumerate all of the rights and
obligations of the various parties under the Prime Lease and specifically to
allocate those rights and obligations in this Sublease agreement. Accordingly,
in order to afford to Tenant the benefits of this Sublease and of those
provisions of the Prime Lease which by their nature are intended to benefit the
party in possession of the Premises, and in order to protect Landlord against a
default by Tenant which might cause a default or event of default by Landlord
under the Prime Lease:

A.Provided Tenant shall
timely pay all Rent when and as due under this Sublease, Landlord shall pay,
when and as due, all base rent, additional rent and other charges payable by
Landlord to Prime Landlord under the Prime Lease;

B.Landlord shall perform
its covenants and obligations under the Prime Lease which do not require for
their performance possession of the Premises and which are not otherwise to be
performed hereunder by Tenant on behalf of Landlord. Landlord shall make all
payments to Prime Landlord required under the Prime Lease to the extent Landlord
receives payments under this Sublease from Tenant (other than payments made
directly by Tenant to Prime Landlord, if any). Landlord shall commit no Event of
Tenant's Default (as defined in the Prime Lease) (other than an Event of
Tenant's Default resulting from Tenant's default under this Sublease). In the
event Landlord or Tenant commits an Event of Tenant's Default under the Prime
Lease, the non-defaulting party may (but shall not be obligated to) cure the
Event of Tenant's Default after giving the defaulting party not less than one
(1) business day's notice, but only to the extent that the defaulting party has
not commenced such cure. The non-defaulting party's taking such action shall not
be considered a cure of such Event of Tenant's Default by the defaulting party.
The non-defaulting party may take such action without releasing the defaulting
party from any obligations under this Sublease or the Prime Lease and without
waiving or releasing any right or remedy of the non-defaulting party under this
Sublease, the Prime Lease, at law or in equity with respect to the matter in
question. Not later than 30 days after written demand shall be made therefor by
the non-defaulting party, the defaulting party shall pay to the non-defaulting
party all costs incurred by the non-defaulting party in connection with the
remedying by the non-defaulting party of the Event of Tenant Default under the
Prime Lease and all other amounts paid and obligations incurred by the non-
defaulting party in connection therewith.

C.Tenant shall perform all
affirmative covenants as set forth in the Prime Lease and shall refrain from
performing any act which is prohibited by the negative covenants of the Prime
Lease, where the obligation to perform or refrain from performing is by its
nature imposed upon the party in possession of the Premises. If practicable and
commercially reasonable, Tenant shall perform affirmative covenants which are
also covenants of Landlord under the Prime Lease at least five (5) days prior to
the date when Landlord's performance is required under the Prime Lease. Landlord
shall have the right to enter the Premises to cure any default by Tenant under
this Section.

D.Landlord hereby grants to
Tenant the right to receive all of the services and benefits with respect to the
Premises which are to be provided by Prime Landlord under the Prime Lease.
Landlord shall have no duty to perform any obligations of Prime Landlord which
are, by their nature, the obligation of an owner or manager of real property.
For example, Landlord shall not be required to provide the services or repairs
which the Prime Landlord is required to provide under the Prime Lease. Landlord
shall have no responsibility for or be liable to Tenant for any default, failure
or delay on the part of Prime Landlord in the performance or observance by Prime
Landlord of any of its obligations under the Prime Lease, nor shall such default
by Prime Landlord affect this Sublease or waive or defer the performance of any
of Tenant's obligations hereunder except to the extent that such default by
Prime Landlord excuses performance by Landlord, under the Prime Lease. 

27.ADDITIONAL SERVICES. Landlord
shall cooperate with Tenant to cause Prime Landlord to provide services required
by Tenant in addition to those otherwise required to be provided by Prime
Landlord under the Prime Lease. Tenant shall pay Prime Landlord's charge for
such services promptly after having been billed therefor by Prime Landlord or by
Landlord. 

28.PRIME LANDLORD'S CONSENT. This
Sublease and the obligations of the parties hereunder are expressly conditioned
upon Landlord's obtaining prior written consent hereto by Prime Landlord. Tenant
shall promptly deliver to Landlord any information reasonably requested by Prime
Landlord (in connection with Prime Landlord's approval of this Sublease) with
respect to the nature and operation of Tenant's business and/or the financial
condition of Tenant. Landlord and Tenant hereby agree, for the benefit of Prime
Landlord, that this Sublease and Prime Landlord's consent hereto shall not (a)
create privity of contract between Prime Landlord and Tenant; (b) be deemed to
have amended the Prime Lease in any regard (unless Prime Landlord shall have
expressly agreed in writing to such amendment); or (c) be construed as a waiver
of Prime Landlord's right to consent to any assignment of the Prime Lease by
Landlord or any further subletting of premises leased pursuant to the Prime
Lease, or as a waiver of Prime Landlord's right to consent to any assignment by
Tenant of this Sublease or any sub-letting of the Premises or any part thereof.
If Prime Landlord fails to consent to this Sublease within thirty (30) days
after the execution and delivery of this Sublease, either party shall have the
right to terminate this Sublease by giving written notice thereof to the other
at any time thereafter, but before Prime Landlord grants such consent; provided,
however, that Tenant shall not have the right to terminate if Prime Landlord's
failure to consent is occasioned by any act or omission of Tenant, including
without limitation, the failure of Tenant to provide all information required by
Prime Landlord in connection with this Sublease and Prime Landlord's consent
thereto.

29.BROKERAGE. Each party warrants
to the other that it has had no dealings with any broker or agent in connection
with this Sublease other than the Brokers as specified in Section 1(Q), and
covenants to pay, hold harmless and indemnify the other party from and against
any and all costs (including reasonable attorneys' fees), expense or liability
for any compensation, commissions and charges claimed by any other broker or
other agent with respect to this Sublease or the negotiation thereof on behalf
of such party. Landlord shall pay Tenant's Broker a real estate brokerage
commission in accordance with Landlord's agreement with Tenant's Broker for the
subleasing of the Premises in an amount equal to One Hundred Seventy Five
Thousand and 00/100 Dollars ($175,000.00). One-half of Tenant's Broker's
commission shall be payable on the effective date of this Sublease and the other
one-half of such commission shall be payable on the Commencement Date. 

30.FORCE MAJEURE. Neither Landlord
nor Tenant shall be deemed in default with respect to any of the terms,
covenants and conditions of this Sublease on Landlord's or Tenant's (as
applicable) part to be performed (except, with respect to Tenant, the obligation
to pay Rent), if Landlord's or Tenant's (as applicable) failure to timely
perform same is due in whole or in part to any strike, lockout, labor trouble
(whether legal or illegal), civil disorder, failure of power, restrictive
governmental laws and regulations, riots, insurrections, war, shortages,
accidents, casualties, acts of God, delays caused directly by the other party or
its agents, employees and invitees, or any other cause beyond the reasonable
control of Landlord or Tenant (as applicable).

31.ADDITIONAL PROVISIONS. 

A.PARKING. Subject
to the terms and provisions of Section 4.5 of the Prime Lease. Tenant is
allocated and shall have the non-exclusive right to use not more than one
hundred seventy-seven (177) parking stalls contained within the Project for its
use and the use of Tenant's Agents (as defined in the Prime Lease), the location
of which may be designated from time to time by Prime Landlord. Tenant shall not
at any time use more parking spaces than the number so allocated to Tenant or
park its vehicles or the vehicles of others in any portion of the Project not
designated by Prime Landlord as a non-exclusive parking area. Tenant shall not
have the exclusive right to use any specific parking Space. If Prime Landlord
grants to any other tenant the exclusive right to use any particular parking
space(s), Tenant shall not use such spaces. Subject to the terms and provisions
of Paragraph 7 of the First Addendum to Lease, Tenant may designate not more
than five (5) non-exclusive "Visitor" parking spaces for the Building. 

B.ACCESS. Subject to
and in accordance with the Prime Lease and further subject to Landlord's access
rights and further subject to all actions or directives of any governmental
authority having jurisdiction with respect to the Building to the contrary, if
any, Tenant shall have access to, and the right to use, the Building at all
times during the Term, on a 24 hour a day basis. Notwithstanding the date of the
Commencement Date as set forth above, Tenant shall be allowed access to the
Premises after the execution of this Sublease in order to install its furniture,
trade fixtures, wiring, and equipment, and to perform certain related
activities. Any and all such installations and related activity shall be
coordinated with Landlord and, if required pursuant to the Prime Lease, with
Prime Landlord. All of the provisions of this Sublease shall apply during the
period commencing on the date hereof and continuing through the expiration or
earlier termination of the term of this Sublease, except that Subtenant shall
not be obligated to pay rent with respect to the period of time occurring prior
to the Rent Commencement Date. In addition to the foregoing, it is agreed that
Tenant may, upon receipt of the prior written consent of Landlord, conduct
business in the Premises prior to the Commencement Date.

C.SIGNAGE. Except as
otherwise set forth in this Section, Tenant shall not place on any portion of
the Premises any sign, placard, lettering in or on windows, banner, displays or
other advertising or communicative material which is visible from the exterior
of the Building without the prior written approval of Landlord and Prime
Landlord. Subject to and in accordance with that Prime Lease, Tenant shall have
the right to install building signage at its sole cost and expense. Subject to
and in accordance with the Prime Lease, Tenant shall also have the right to
install and maintain a tasteful sign on the side of the Building facing toward
Highway 101 which states solely Tenant's corporate name. Landlord shall
cooperate with Tenant to secure all approvals required under the Prime Lease.
Landlord shall, it its sole expense, remove its building signage. Tenant shall
maintain all such signs in good condition and repair at its sole cost and
expense. 

D.HAZARDOUS MATERIALS.

1.To the actual knowledge of Newmark Pacific, Inc., Landlord's
representative handling the Building, as of the Effective Date, without having
made any investigation (and without having been deemed to have investigated or
discovered any unknown facts which such investigation would have disclosed), and
subject to and qualified by all information and disclosure made to Landlord by
Prime Landlord and to Tenant by Landlord (including but not limited to those
disclosures made as described in Exhibits H and I to the Prime Lease and
Paragraph 6 of the First Addendum to Lease), (i) the soil, surface water or
groundwater on or under the Premises and the Project does not contain Hazardous
Materials (as defined in the Prime Lease) in amounts which violate any Hazardous
Materials Laws (as defined in the Prime Lease) to the extent that any
governmental entity could require any of Prime Landlord, Landlord or Tenant to
take any remedial action with respect to such Hazardous Materials; (ii) no
asbestos-containing building materials are present in the Building; and (iii) no
action, proceeding or claim is pending or threatened regarding the Building
concerning any Hazardous Materials. 

2.Tenant acknowledges Prime
Landlord's disclosure to Landlord in Exhibit I and under Paragraph 6 of the
First Addendum to Lease. 

3.Tenant shall indemnify,
defend upon demand with counsel reasonably acceptable to Landlord, and hold
harmless Landlord from and against any liabilities, losses, claims, damages,
lost profits, consequential damages, interest, penalties, fines, monetary
sanctions, attorneys' fees, experts' fees, court costs, remediation costs,
investigation costs, and other expenses which result from or arise in any manner
whatsoever out of the use, storage, treatment, transportation, release or
disposal of Hazardous Materials on or about the Project by Tenant or Tenant's
Agents (as defined in the Prime Lease) after the Commencement Date. 

4.Landlord shall indemnify,
defend upon demand with counsel reasonably acceptable to Tenant, and hold
harmless Tenant from and against any liabilities, losses, claims, damages, lost
profits, consequential damages, interest, penalties, fines, monetary sanctions,
attorneys' fees, experts' fees, court costs, remediation costs, investigation
costs, and other expenses which result from or arise in any manner whatsoever
out of the use, storage, treatment, transportation, release or disposal of
Hazardous Materials on or about the Project by Landlord or Landlord's Agents (as
defined in the Prime Lease) before or during the Term. 

E.LANDLORD'S RIGHT TO CURE
DEFAULT. In the event Tenant fails to timely perform or observe any of the
terms and conditions of this Sublease to be observed or performed by Tenant
beyond any applicable cure period, Landlord, after giving not less than 10 days'
notice thereof to Tenant (provided, however, that in the case of any emergency,
no such notice shall be applicable), may (but shall not be obligated to) make
the payment Tenant has failed to make or perform or otherwise cause compliance
with the provision that is the subject of Tenant's failure, but only to the
extent that Tenant has not commenced such performance or payment. Landlord's
taking such action shall not be considered a cure of such failure by Tenant.
Landlord may take such action without releasing Tenant from any obligations
under this Sublease and without waiving or releasing any right or remedy of
Landlord under this Sublease, at law or in equity with respect to the matter in
question. Not later than 30 days after written demand shall be made therefor by
Landlord of Tenant, Tenant shall pay to Landlord all costs incurred by Landlord
in connection with the remedying by Landlord of defaults by Tenant under this
Sublease and all other amounts paid and obligations incurred by Landlord in
connection therewith.

F.LANDLORD'S RIGHT TO TERMINATE
AFTER DAMAGE TO PREMISES. If Landlord has the right to terminate the Prime
Lease pursuant to Section 11.3 of the Prime Lease, then simultaneously with
Landlord's notice to Prime Landlord of the exercise of such termination right,
Landlord shall provide notice of such termination to Tenant in the manner
prescribed by Section 25 hereof. 

G.NEGOTIATIONS FOR EARLY
TERMINATION OF PRIME LEASE. So long as (i) this Sublease remains in full
force and effect, (ii) Tenant is not in default in the performance of its
covenants and agreements in this Sublease, and (iii) Tenant has not caused a
default under the Prime Lease, Landlord agrees that it will not enter into
negotiations with the Prime Landlord to effectuate an early termination of the
Prime Lease. 

H.OPTION TO EXTEND LEASE
TERM. Subject to the prior written consent of the Prime Landlord, and to the
extent permitted by the Prime Lease, Landlord hereby waives, releases and
forever relinquishes its option to extend the lease term of the Prime Lease
under Paragraph 2 of the First Addendum to Lease. 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

IN WITNESS WHEREOF, the parties have executed this
Sublease as of the date first set forth above.

LANDLORD:

SAFENET, INC., a Delaware corporation

By: ___________________________________

Name: ___________________________________

Title: _________________________________

TENANT:

8X8, INC., a Delaware corporation

By: ___________________________________

Name: ___________________________________

Title: _________________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}]]