Document:

Unassociated Document

    Exhibit
      10.5

     

    LEASE
      AGREEMENT

     

     

    between

     

     

    Westlake
      Plaza Business Park, LLC

    a
      California Limited Liability Company

    as
      “Landlord”

     

    and

     

    BioElectronic
      Corporation

    A
      Maryland Corporation

    As
      “Tenant”

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    BASIC
      LEASE INFORMATION

     

    
      	
              Lease
                Date:

            	
              For
                identification purposes only, the date of this Lease is January 31,
                2005.

            
	 	 
	
              Landlord:

            	
              Westlake
                Plaza Business Park, LLC 

              a
                California Limited Liability Company

            
	 	 
	
              Tenant:

            	
              BioElectronic
                Corporation

              A
                Maryland Corporation

            
	 	 
	
              Project:

            	
              Westlake
                Plaza Business Park

            
	 	 
	
              Building
                Address:

            	
              31255
                Cedar Valley Drive

              Westlake
                Village, CA 91361

            
	 	 
	
              Rentable
                Area of Building:

            	
              Approximately
                68,587 rentable square feet

            
	 	 
	
              Premises:

            	
              Suite
                202, consisting of approximately 1,906 Rentable Square
                Feet

            
	 	 
	
              Tenant’s
                Share:

            	
              2.78%

            
	 	 
	
              Term:

            	
              Two
                (2) years

            
	 	 
	
              Scheduled
                Commencement Date:

            	
              March
                15, 2005

            
	 	 
	
              Expiration
                Date:

            	
              March
                14, 2007

            
	 	 
	
              Base
                Rent:

            	
              $3,430.80

            
	 	 
	
              Annual
                Rent Escalations:

            	
              Three
                Percent (3%) per annum

            
	 	 
	
              Base
                Year:

            	
              The
                calendar year 2005.

            
	 	 
	
              Security
                Deposit:

            	
              $6,861.60
                (Equal to two (2) months of Base Rent).

            
	 	 
	
              Business
                Hours:

            	
              8:00
                a.m. to 6:00 p.m. Monday-Friday

              (except
                major holidays)

              9:00
                a.m. to 1:00 p.m. Saturday

              (except
                major holidays)

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
      	 	 
	
              Landlord’s
                Address

              For
                Payment of Rent:

            	
               

              Westlake
                Plaza Business Park, LLC

              c/o
                Silagi Development and Management

              101
                Hodencamp Road, Suite 200

              Thousand
                Oaks, CA 91360

            
	 	 
	
              Tenant’s
                Address for

              Billing
                and Notices:

            	
               

              BioElectronics
                Corporation

              31255
                Cedar Valley Dr., Suite 202

              Westlake
                Village, CA 91362

            
	 	 
	
              Brokers:

            	
              Westoaks
                Commercial Group-Lessor

              Capital
                NAI-Leassee

            
	 	 
	
              Additional
                Provisions:

            	 
	
              Premises
                Possession:

            	
              March
                1, 2005

            
	 	 
	
              Rental
                Abatement:

            	
              March
                two (2) of the initial lease term.

            
	 	 
	
              Relocation
                Option:

            	
              In
                the event Lessee requires space larger by thirty (30%) percent or
                more
                during the initial Lease Term, Lessor shall re-locate Lessee to available
                space within the Project or other project in the Conejo Valley owned
                by
                Lessor. Upon mutual agreement of a new lease by Lessor and Lessee,
                the
                remaining Lease Term for the Premises shall be mutually terminated
                by the
                parties. 

            

    

    

    

    
      
         

      

      
        3

        
          

          Tenant Landlord

          _____ _______

        

      

      
         

      

    

     

    THIS
      LEASE is made as of the Lease Date set forth in the Basic Lease Information,
      by
      and between the Landlord Identified in the Basic Lease Information (“Landlord”),
      and
      the Tenant identified in the Basic Lease Information (“Tenant”).
      Landlord and Tenant hereby agree as follows:

     

    1. PREMISES.
      Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, upon
      the terms and subject to the conditions of this Lease, the office space
      identified in the Basic Lease Information as the Premises (the “Premises”),
      in the
      Building located at the address specified in the Basic Lease Information (the
      “Building”).
      The
      approximate configuration and location of the Premises is shown on Exhibit
      A.
      Landlord and Tenant agree that the Rentable area of the Premises for all
      purposes under this Lease shall be the Rentable Area specified in the Basic
      Lease Information. The Building, together with the parking facilities serving
      the Building (the “Parking
      Facility”),
      and
      the parcel(s) of land on. which the Building and the panting Facility are
      situated (collectively, the “Property”),
      is
      part of the Project identified in the Basic Lease Information (the “Project”).

     

    2. TERM;
      POSSESSION. The term of this Lease (the “Term”)
      shall
      commence on the Commencement Date as described below and, unless sooner
      terminated, shall expire on the Expiration Date set forth in the Basic Lease
      Information (the “Expiration
      Date”).
      The
“Commencement
      Date”
      shall be
      the earlier of (a) the date on which Landlord tenders possession of the Premises
      to Tenant, with all of Landlord’s construction obligations, if any, “Substantially
      Completed”
      as
      provided in the Construction Rider attached as Exhibit B (the “Construction
      Rider”)
      or, in
      the event of any “Tenant
      Delay,”
      as
      defined in the Construction Rider, the date on which Landlord could have done
      so
      had there been no such Tenant Delay; or (b) the date upon which Tenant, with
      Landlord’s written permission, actually occupies and conducts business in any
      portion of the Premises. The parties anticipate that the Commencement Date
      will
      occur on or about the Scheduled Commencement Date set forth in the Basic Lease
      Information (the “Scheduled
      Commencement Date”).
      Landlord shall pay Tenant’s hold-over charges if the Premises are not
      Substantially Completed within seventy-five (75) days after Lease execution,
      provided, however, that Landlord shall not be liable for any other claims,
      damages or liabilities if the Premises are not ready for occupancy by the
      Scheduled Commencement Date. When the Commencement Date has been established,
      Landlord and Tenant shall at the request of either party confirm the
      Commencement Date and Expiration Date in writing.

     

    3. RENT3.1 Base
      Rent.
      Tenant
      agrees to pay to Landlord the Base Rent set forth in the Basic Lease
      Information, without prior nonce or demand, on the first day of each and every
      calendar month during the Term, except that Base Rent for the first full
      calendar month in which Base Rent is payable shall be paid upon Tenant’s
      execution of this Lease and Base Rent for any partial month at the beginning
      of
      the Term shall be paid on the Commencement Date. Base Rent for any partial
      mouth
      at the beginning or end of the Term shall be prorated based on the actual number
      of days in the month.

     

    If
      the
      Basic Lease Information provides for any change in Base Rent by reference to
      years or months (without specifying particular dates); the change will take
      effect on the applicable annual or monthly anniversary
      of
      the Commencement Date (which won’t necessarily be die first day of a calendar
      month).

    
      

      
        
           

        

        
          4

          
            

            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    3.2 Additional
      Rent: Increases in Operating Costs and Taxes.

     

    (1) “Base
      Operating Costs”
means
      Operating Costs for the calendar year specified as the Base Year in the Basic
      Lease Information (excluding therefrom, however, utilities, janitorial services
      and maintenance, and any Operating Costs of a nature that would not ordinarily
      be incurred on an annual, recurring basis).

     

    (2) “Base
      Taxes”
means
      Taxes for the calendar year specified as the Base Year the Basic Lease
      Information.

     

    (3) “Operating
      Costs”
means
      all costs of managing, operating, maintaining and repairing the Property,
      including all costs, expenditures, fees and charges for; (A) operation,
      maintenance and repair of the Property (including maintenance, repair and
      replacement of glass, the roof covering or membrane, and landscaping); (B)
      utilities and services (including telecommunications facilities and equipment,
      recycling programs and trash removal), and associated supplies and materials;
      (C) compensation (including employment taxes and fringe benefits) for persons
      who perform duties in connection with the operation, management, maintenance
      and
      repair of the Building, such compensation to be appropriately allocated for
      persons who also perform duties unrelated to the Building; (D) property
      insurance (including coverage for earthquake and hood if carried by Landlord),
      liability, rental income and other insurance relating to the Property, and
      expenditures for deductible amounts paid under such insurance; (E) licenses,
      permits and inspections; (F) complying with the requirements of any law,
      statute, ordinance or governmental rule or regulation or any orders pursuant
      thereto (collectively “Laws”);
      (G)
      amortization of capital improvements required to comply with Laws, or which
      are
      intended to reduce Operating Costs or improve the utility, efficiency or
      capacity of any Building System, with interest on the unamortized balance at
      the
      rate paid by Landlord en funds borrowed to finance such capital improvements
      (or, if Landlord finances such improvements out of Landlord’s funds without
      borrowing, the rate that Landlord would have pad to borrow such funds, as
      reasonably determined by Landlord), over such useful life as Landlord shall
      reasonably determine; (H) an office in the Project for the management of the
      Property, including expenses of furnishing and equipping such office and the
      rental value of any space occupied for such purposes; (I) property management
      fees; (J) accounting, legal and other professional services incurred in
      connection with the operation of the Property and the calculation of Operating
      Costs and Taxes; (K) a reasonable allowance for depreciation on machinery and
      equipment used to maintain the Property and on other personal property owned
      by
      Landlord in the Property (including window coverings and carpeting in common
      areas); (L) contesting the validity or applicability of any Laws that may affect
      the Property; (M) the Building’s share of any shared or common area, maintenance
      fees and expenses (including costs and expenses of operating, managing, owning
      and maintaining the Parking Facility and the common areas of the Project and
      any
      fitness center or conference center in the Project); and (N) any other cost,
      expenditure, fee or charge, whether or not hereinabove described, which in
      accordance with generally accepted property management practices would be
      considered an expense of managing, operating, maintaining and repairing the
      Property. Operating Costs for any calendar year during which average occupancy
      of the Building is less than ninety-five percent (95%) shall be calculated
      based
      upon the Operating Costs that would have been incurred if the Building had
      an
      average occupancy of ninety-five percent (95%) during the entire calendar
      year.

    
      

      
        
           

        

        
          5

          
            

            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    In
      no
      event shall cost for any item of utilities included in Operating Costs for
      any
      year subsequent to the Base Year be less than the amount included in Operating
      Costs for the base year for such utility item. Notwithstanding anything to
      the
      contrary set forth in this Lease, when calculating Operating Costs for the
      Base
      Year, Operating Costs shall exclude (a) market-wide labor rate increases due
      to
      extraordinary circumstances including, but not limited to, boycotts and strikes,
      (b) utility rate increases due to extraordinary circumstances including; but
      not
      limited to, conservation surcharges, boycotts, embargoes, or other shortages,
      and (c) amortization or any capital items including, but not limited to, capital
      improvements, capital repairs, and capital replacements (including such
      amortized costs where the actual improvement, repair, or replacement was made
      in
      prior years).

     

    Operating
      Costs shall not include (i) capital improvements (except as otherwise provided
      above); (ii) costs of special services rendered to individual tenants (including
      Tenant) for which a special charge is made; (iii) interest and principal
      payments on loans or indebtedness secured by the Building; (iv) costs of
      improvements for Tenant or other tenants of the Building; (v) costs of services
      or other benefits of a type which are not available to Tenant but which are
      available to other tenants or occupants, and cost; for which Landlord is
      reimbursed by other tenants of the Building other than through payment of
      Tenants’ shares of increases in Operating Costs and Taxes; (vi) leasing
      commissions, attorneys’ fees and other expenses incurred in connection with
      leasing space in the Building or enforcing such leases; (vii) depreciation
      or
      amortization, other than as specifically enumerated in the definition or
      Operating Costs above; and (viii) costs, fines or penalties incurred due to
      Landlord’s violation of any Law..

     

    (4) “Taxes”
      means:
      all real property taxes and general, special or district assessments or other
      governmental impositions, of whatever kind, nature or origin, imposed on or
      by
      reason of the ownership or use of the Property; governmental charges, fees
      or
      assessments for transit or traffic mitigation (including area-wide Traffic
      improvement assessments and transportation system management fees), housing,
      police, fire or other governmental service or purported benefits to the
      Property; personal property taxes assessed on the personal property of Landlord
      used in the operation of the Property; service payments in lieu of taxes and
      taxes and assessments of every kind and nature whatsoever levied or assessed
      in
      addition to, in lieu of or in substitution for existing or additional real
      or
      personal property taxes on the Property or the personal property described
      above; any increases in the foregoing caused by changes in assessed valuation,
      tax rate or other factors or circumstances; and the reasonable cost of
      contesting by appropriate proceedings the amount or validity of any taxes,
      assessments or charges described above. To the extent paid by Tenant or ether
      tenants as “Tenant’s
      Taxes”
      (as
      defined in Section 8 - Tenant’s
      Taxes),.
      “Tenant’s
      Taxes”
      shall be
      excluded from Taxes.

     

    (5) ‘Tenant’s
      Share”
      means
      the Rentable Area of the Premises divided by the total Rentable Area of the
      Building, as set forth in the Basic Lease Information. lithe Rentable Area
      of
      the Building is changed or the Rentable Area of the Premises is changed by
      Tenant’s leasing of additional space hereunder or for any other reason, Tenant’s
      Share shall be adjusted accordingly.

     

    (b) Additional
      Rent.

     

    (1) Tenant
      shall pay Landlord as “Additional
      Rent”
      for each
      calendar year or portion thereof during the Term Tenant’s Share of the sum of
      (x) the amount (if any) by which Operating Costs for such period exceed Base
      Operating Costs, and (y) the amount (if any) by which Taxes for such period
      exceed Base Taxes.

    
      

      
        
           

        

        
          6

          
            

            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    (2) Prior
      to
      the end of the Base Year and each calendar year thereafter, Landlord shall
      notify Tenant of Landlord’s estimate of Operating Costs, Taxes and Tenant’s
      Additional Rent for the following calendar year. Commencing on the first day
      of
      January of each calendar year and continuing on the first day of every month
      thereafter in such year, Tenant shall pay to Landlord one-twelfth
      (1/12th)
      of the
      estimated Additional Rent. If Landlord thereafter estimates that Operating
      Costs
      or Taxes for such year will vary from Landlord’s prior estimate, Landlord may,
      by notice to Tenant, revise the estimate for such year (and Additional Rent
      shall thereafter be payable based on the revised estimate).

     

    (3) As
      soon
      as reasonably practicable after the end of the Base Year and each calendar
      year
      thereafter, Landlord shall furnish Tenant a statement with respect to such
      year,
      showing Operating Costs, Taxes and Additional Rent for the year, and the total
      payments made by Tenant with respect thereto. Unless Tenant raises any
      objections to Landlord’s statement within thirty (30) days after receipt of the
      same, such statement shall conclusively he deemed correct and Tenant shall
      have
      no right thereafer to dispute such statement or any item therein or the
      computation of Additional Rent based hereon. If Tenant does object to such
      statement, then Landlord shall provide Tenant with reasonable verification
      of
      the figures shown on the statement and the parties shall negotiate in good
      faith
      to resolve any disputes. Any objection of Tenant to Landlord’s statement and
      resolution of any dispute shall not postpone the time for payment of any amounts
      due Tenant or Landlord based on Landlord’s statement, nor shall any failure of
      Landlord to deliver Landlord’s statement in a timely manner relieve Tenant of
      Tenant’s obligation to pay any amounts due Landlord based on Landlord’s
      statement.

     

    (4) If
      Tenant’s Additional Rent as finally determined for any calendar year exceeds the
      total payments made by Tenant on account thereof, Tenant shall pay Landlord
      the
      deficiency within fourteen (14) days of Tenant’s receipt of Landlord’s
      statement. If the total payments made by Tenant on account thereof exceed
      Tenant’s Additional Rent as finally determined for such year, Tenant’s excess
      payment shall be credited toward the rent next due from Tenant under this Lease.
      For any partial calendar year at the beginning or end of the Term, Additional
      Rent shall be prorated on the basis of a 365-day year by computing Tenant’s
      Share of the increases in Operating Costs and Taxes for the entire Year and
      then
      prorating such amount for the number of days during such year included in the
      Term. Notwithstanding the termination of this Lease, Landlord shall pay to
      Tenant or Tenant shall pay to Landlord, as the case may be, within fourteen
      (14)
      days after Tenant’s receipt of Landlord’s final statement for the calendar year
      in which this Lease terminates, the difference between Tenant’s Additional Rent
      for that year, as finally determined by Landlord, and the total amount
      previously paid by Tenant on account thereof:

     

    If
      for
      any reason Base Taxes or Taxes for any year during the Term are reduced,
      refunded or otherwise changed, Tenant’s Additional Rent shall be adjusted
      accordingly. If Taxes are temporarily reduced as a result of space in the
      Building being leased to a tenant that is entitled to an exemption from property
      taxes or other taxes, then for purposes of determining Additional Rent for
      each
      year in which Taxes are reduced by any such exemption, ‘faxes for such year
      shall be calculated on the basis of the amount the Taxes for the year would
      have
      been in the absence of the exemption. The obligations of Landlord to refund
      any
      overpayment of Additional Rent and of Tenant to pay any Additional Rent not
      previously paid shall survive the expiration of the Term. Notwithstanding
      anything to the contrary in this Lease, if there is at any time a decrease
      in
      Taxes below the amount of the Taxes for the Base Year, then for purposes of
      calculating Additional Rent for the year in which such decrease occurs and
      all
      subsequent periods, Base Taxes shell be reduced to equal the Taxes for the
      year
      in which the decrease occurs.

    
      

      
        
           

        

        
          7

          
            

            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    3.3 Payment
      of Rent.
      All
      amounts payable or reimbursable by Tenant under this Lease, including late
      charges and interest (collectively, “Rent”),
      shall
      constitute rent and shall be payable and recoverable as rent in the manner
      provided in this Lease. All sums payable to landlord on demand under the terms
      of this Lease shall be payable on the first day of the month and no later than
      the fifth day of the month. All rent shall be paid without offset, recoupment,
      or deduction in lawful money of the United States of America to Landlord at
      Landlord’s Address for Payment of Rent as set forth in the Basic Lease
      Information, or to such other person or at such other place as Landlord may
      from
      time to time designate.

     

    4. SECURITY
      DEPOSIT. On execution of this Lease, Tenant shall deposit with Landlord the
      amount specified in the Basic Lease Information as the Security Deposit, if
      any
      (the “Security
      Deposit”),
      as
      security for the performance of Tenant’s obligations under this Lease. Landlord
      may (but shall have no obligation to) use the Security Deposit or any portion
      thereof to cure any Event of Default under this Lease or to compensate Landlord
      for any damage Landlord incurs as a result of Tenant’s failure to perform any of
      Tenant’s obligations hereunder. In such event Tenant shall pay to Landlord on
      demand an amount sufficient to replenish the Security Deposit. If Tenant is
      not
      in default at the expiration or termination of this Lease, Landlord shall return
      to Tenant the Security Deposit or the balance thereof then held by Landlord
      and
      not applied as provided above. Landlord may commingle the Security Deposit
      with
      Landlord’s general and other funds. Landlord shall not be required to pay
      interest on the Security Deposit to Tenant.

     

    5. USE
      AND
      COMPLIANCE WITH LAWS.

     

    5.1 Use.
      The
      Premises shall be used and occupied for general business office purposes and
      for
      no other use or purpose without Landlord’s prior consent. Tenant shall comply
      with all present and future Laws relating to Tenant’s use or occupancy of the
      Premises (and make any repairs, alterations or improvements as required to
      comply with all such Laws), and shall observe the “Building
      Rules”
      (as
      defined in Section 27 -- Rules and Regulations). Tenant shall not do, bring,
      keep or sell anything in or about the Premises that is prohibited by, or that
      will cause a cane Ration of or an increase in the existing premium for, any
      insurance policy covering the Property or any part thereof. Tenant shall not
      permit the Premises to be occupied or used in any manner that will constitute
      waste or a nuisance, or disturb the quiet enjoyment of or otherwise annoy other
      tenants in the Building. Without limiting the foregoing, the Premises shall
      not
      be used for educational activities to the public; practice of medicine or any
      of
      the healing arts, providing social services, for any governmental use (including
      embassy or consulate use), or for personnel agency, customer service office
      open
      to the public, studios for radio, television or other media. Tenant shall not,
      without the prior consent of Landlord, (i) bring into the Building or the
      Premises anything that may cause substantial noise, odor or vibration, overload
      the floors in the Premises or the Building or any of the heating, ventilating
      and air-conditioning (“EVAC”),
      mechanical, elevator, plumbing, electrical, fire protection, life safety,
      security or other systems in the Building (“Building
      Systems”),
      or
      jeopardize the structural integrity of the Building or any part thereof, (ii)
      connect to the utility systems of the Building any apparatus, machinery or
      other
      equipment other than typical office equipment; or (iii) connect to any
      electrical circuit in the Premises any equipment or other load with aggregate
      electrical power requirements in excess of 80% of the rated capacity of the
      circuit.

     

    5.2 Hazardous
      Materials.

     

    (a) Definitions.

     

    (1) “Hazardous
      Materials”
      shall
      mean any substances (A) that now or in the future is regulated or governed
      by,
      requires investigation or remediation under, or is defined as a hazardous waste,
      hazardous substance, pollutant or contaminant under any governmental statute,
      code, ordinance, regulation, rule or order, and any amendment thereto, including
      the Comprehensive Environmental Response Compensation and Liability Act, 42
      U.S.C. §9601 et
      seq.,
      and the
      Resource Conservation and Recovery Act, 42 U.S.C. §6901 et
      seq.,
      or (B)
      that is toxic, explosive; corrosive, flammable, radioactive, carcinogenic,
      dangerous or otherwise hazardous, including gasoline, diesel fuel, petroleum
      hydrocarbons; polychlorinated biphenyls (PCBs), asbestos, radon and urea
      formaldehyde foam insulation.

    
      

      
        
           

        

        
          8

          
            

            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    (2) “Environmental
      Requirements”
      shall
      mean all present and future Laws, orders, permits, licenses, approvals,
      authorizations and other requirements of any kind applicable to Hazardous
      Materials.

     

    (3) “Handled
      by Tenant”
      and
“Handling
      by Tenant”
      shall
      mean and refer to any installation, handling, generation, storage, use,
      disposal, discharge, release, abatement, removal, transportation, or any other
      activity of any type by Tenant or its agents, employees, contractors, licensees,
      assignees, sublessees, transferees or representatives (collectively,
“Representatives”)
      or its
      guests, customers, invitees, or visitors (collectively, “Visitors”),
      at or
      about the Premises in connection with or involving Hazardous
      Materials.

     

    (4) “Environmental
      Losses”
      shall
      mean all costs and expenses of any kind, damages, including foreseeable and
      unforeseeable consequential damages, fines and penalties incurred in connection
      with any violation of and compliance with Environmental Requirements and all
      losses of any kind attributable to the diminution of value, loss of use or
      adverse effects on marketability or use of any portion of the Promises or
      Property.

     

    (b) Tenant’s
      Covenants.
      No
      Hazardous Materials shall be Handled by Tenant at or about the Premises or
      Property without Landlord’s prior written consent, which consent may be granted,
      denied, or conditioned upon compliance with Landlord’s requirements, all in
      Landlord’s absolute discretion. Notwithstanding the foregoing, normal quantities
      and use of those Hazardous Materials customarily used in the conduct of general
      office activities, such as copier fluids and cleaning supplies (“Permitted
      Hazardous Materials”),
      may be
      used and stored at the Premises without Landlord’s prior written consent,
      provided that Tenant’s activities at or about the Premises and Property and the
      Handling by Tenant of all Hazardous Materials shall comply at all times with
      all
      Environmental Requirements. At the expiration or termination of the Lease,
      Tenant shall promptly remove from the Premises and Property all Hazardous
      Materials Handled by Tenant at the Premises or the Property. Tenant shall keep
      Landlord fully and promptly informed of all Handling by Tenant of Hazardous
      Materials other than Permitted Hazardous Materials. Tenant shall be responsible
      and liable for the compliance with all of the provisions of this Section by
      all
      of Tenant’s Representatives and Visitors, and all of Tenant’s obligations under
      this Section (including it’s indemnification obligations under paragraph
      (e) below) shall survive the expiration or termination of this
      Lease.

     

    (c) Compliance.
      Tenant
      shall at Tenant’s expense promptly take all actions required by any governmental
      agency or entity in connection with or as a result of the Handling by Tenant
      of
      Hazardous Materials at or about the Premises or Property, including inspection
      and testing, performing all cleanup, removal and remediation work required
      with
      respect to those Hazardous Materials, complying with all closure requirements
      and post-closure monitoring, and filing all required reports or plans. All
      of
      the foregoing work and all Handling by Tenant of all Hazardous Materials shall
      be performed in a good, safe and workmanlike manner by consultants qualified
      and
      licensed to undertake such work and in a manner that will not interfere with
      any
      other tenant’s quiet enjoyment of the Property or Landlord’s use, operation,
      leasing, and sale of the Property. Tenant shall deliver to Landlord prior to
      delivery to any governmental agency, or promptly after receipt from any such
      agency, copies of all permits, manifests, closure or remedial action plans,
      notices, and all other documents relating to the Handling by Tenant of Hazardous
      Materials at or about the Premises or Property. If any lien attaches to the
      Premises or the Property in connection with or as a result of the Handling
      by
      Tenant of Hazardous Materials, and Tenant does not cause the same to be
      released, by payment, bonding or otherwise, within ten (10) days after the
      attachment thereof, Landlord shall have the right but not the obligation to
      cause the same to be released and any sums expended by Landlord (plus Landlord’s
      administrative costs) in connection therewith shall be payable by Tenant on
      demand.

    
      

      
        
           

        

        
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            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    (d) Landlord’s
      Rights.
      Landlord shall have the right, but not the obligation, to enter the Premises
      at
      any reasonable time (i) to confirm Tenant’s compliance with the provisions of
      this Section 5.2, and (ii) to perform Tenant’s obligations muter this Section if
      Tenant has failed to do so after reasonable notice to Tenant. Landlord shall
      also have the right to engage qualified Hazardous Materials consultants to
      inspect the Premises and review the handling by Tenant of Hazardous Materials,
      including review of all permits, reports, plans, and other documents regarding
      same. Tenant shall pay to Landlord on demand the costs of Landlord’s
      consultants’ fees and all costs incurred by Landlord in performing Tenant’s
      obligations under this Section, Landlord shall use reasonable efforts to
      minimize any interference with Tenant’s business caused by Landlord’s entry into
      the Premises, but Landlord shall not be responsible for any interference caused
      thereby.

     

    (e) Tenant’s
      Indemnification.
      Tenant
      agrees to indemnify, defend, protect and hold harmless Landlord and its partners
      or members and its or their partners, members, directors officers, shareholders,
      employees and agents from all Environmental Losses and all other claims,
      actions, losses, damages, liabilities, costs and expenses of every kind,
      including reasonable attorneys’, experts’ and consultants’ fees and costs,
      incurred at any time and arising from or in connection with the Handling by
      Tenant of Hazardous Materials at or about the Property or Tenant’s failure to
      comply in full with all Environmental Requirements with respect to the
      Premises.

     

    6. TENANT
      IMPROVEMENTS & ALTERATIONS.

     

    6.1 Landlord
      and Tenant shall perform their respective obligations with respect to design
      and
      construction of any improvements to be constructed and installed in the Premises
      (the “Tenant
      Improvements”),
      as
      provided in the Construction Rider. Except for any Tenant Improvements to be
      menstruated by Tenant as provided in the Construction Rider or the Space Plan,
      Tenant shall not make any alterations, improvements or changes to the Premises,
      including installation of any telephone or data communication wiring
      (“Alterations”),
      without Landlord’s prior written consent. Notwithstanding the foregoing, Tenant
      may install a security system in the Premises, provided that the installation
      is
      otherwise done in accordance with the requirements of this Section 6 and this
      Lease, including obtaining Landlord’s prior written approval of the plans and
      specifications for such security system. Any such Alterations shall be completed
      by Tenant at Tenant’s sole cost and expense: (i) with due diligence, in a good
      and workmanlike manner, using new materials; (ii) in compliance with plans
      and
      specifications reasonably approved by Landlord; (iii) in compliance with the
      construction rules and regulations promulgated by Landlord from time to time;
      (iv) in accordance with all applicable Laws (including all work, whether
      structural or non-structural, inside or outside the Premises, required to comply
      fully with all applicable Laws and necessitated by Tenant’s work); and (v)
      subject to all conditions which Landlord may in Landlord’s reasonable discretion
      impose. Such conditions may include requirements for Tenant to: (i) provide
      payment or performance bonds or additional insurance (from Tenant or Tenant’s
      contractors, subcontractors or design professionals); (ii) use contractors
      or
      subcontractors reasonably approved by Landlord; and (iii) remove all or part
      of
      the Alterations prior to or upon expiration or termination of the Term, as
      designated by Landlord. If any work outside the Premises, or any work on or
      adjustment to any of the Building Systems, is required in connection with or
      as
      a result of Tenant’s work, such work shall be performed at Tenant’s expense by
      contractors reasonably approved by Landlord. Landlord’s right to review and
      approve (or withhold approval of) Tenant’s plans, drawings, specifications,
      contractor(s) and other aspects of construction work proposed by Tenant is
      intended solely to protect Landlord, the Property and Landlord’s interests. No
      approval or consent by Landlord shall be deemed or construed to be a
      representation or warranty by Landlord as to the adequacy, sufficiency, fitness
      or suitability thereof or compliance thereof with applicable Laws or other
      requirements.

    
      

      
        
           

        

        
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            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    6.2 Before
      making any Alterations, Tenant shall submit to Landlord for Landlord’s prior
      approval reasonably detailed final plans and specifications prepared by a
      licensed architect or engineer, a copy of the construction contract, including
      the name of the contractor and all subcontractors proposed by Tenant to make
      the
      Alterations and a copy of the contractor’s license. Tenant shall reimburse
      Landlord upon demand for any expenses incurred by Landlord in connection with
      any Alterations made by Tenant, including reasonable fees charged by Landlord’s
      contractors or consultants to review plans and specifications prepared by Tenant
      and to update the existing as-built plans and specifications of the Building
      to
      reflect the Alterations, Tenant shall obtain all applicable permits,
      authorizations and governmental approvals and deliver copies of the same to
      Landlord before commencement of any Alterations.

     

    6.3 Tenant
      shall keep the Premises and the Property free and clear of all liens arising
      out
      of any work performed, materials furnished or obligations incurred by Tenant
      if
      any such lien attaches to the Premises or the Property, and Tenant does not
      cause the same to be released by payment, bonding or otherwise within ten (10)
      days after the attachment thereof, Landlord shall have the right but not the
      obligation to cause the same to be released, and any sums expended by Landlord
      (plus Landlord’s administrative costs) in connection therewith shall be payable
      by Tenant on demand with interest thereon from the date of expenditure by
      Landlord at the Interest Rate (as defined in Section 162 Interest). Tenant
      shall
      give Landlord at least ten (10) days’ notice prior to the commencement of any
      Alterations and cooperate with Landlord in posting and maintaining notices
      of
      non-responsibility in connection therewith.

     

    6.4 Subject
      to the provisions of Section 5 -- Use
      and Compliance with Laws
      and the
      foregoing provisions of this Section, Tenant may install and maintain
      furnishings, equipment, movable partitions, business equipment and other trade
      fixtures (“Trade
      Fixtures”)
      in the
      Premises, provided that the Trade Fixtures do not become an integral part of
      the
      Premises or the Building. Tenant shall promptly repair any damage to the
      Premises or the Building caused by any installation or removal of such Trade
      Fixtures.

     

    7. MAINTENANCE
      AND REPAIRS.

     

    7.1 By
      taking
      possession of the Premises Tenant agrees that the Premises are then in a good
      and tenantable condition. During the Term, Tenant at Tenant’s expense but under
      the direction of Landlord, shall repair and maintain the Premises; including
      the
      interior walls, floor coverings, ceiling (ceiling tiles and grid), Tenant
      Improvements, Alterations, fire extinguishers, outlets and fixtures, and any
      appliances (including dishwashers, hot water heaters and garbage disposers)
      in
      the Premises, in a first class condition, and keep the Premises in a clean;
      safe
      and orderly condition.

     

    7.2 Landlord
      shall maintain or cause to be maintained in reasonably good order, condition
      and
      repair, the structural portions of the roof, foundations, floors and exterior
      walls of the Building, the Building Systems, and the public and common areas
      of
      the Property, such as elevators, stairs, lobby, corridors and restrooms, such
      that the Building is in a Class A condition as is consistent with similar office
      buildings in the vicinity of the Building; provided, however, that Tenant shall
      pay the cost of repairs for any damage occasioned by Tenant’s use of the
      Premises or the Property or any act or omission of Tenant or Tenant’s
      Representatives or Visitors, to the extent (if any) not covered by Landlord’s
      property insurance. Landlord shall be under no obligation to inspect the
      Premises. Tenant shall promptly report in writing to Landlord any defective
      condition known to Tenant which Landlord is required to repair. As a material
      part of the consideration for this Lease, Tenant hereby waives any benefits
      of
      any applicable existing or future Law, including the provisions of California
      Civil Code Sections 1932(1), 1941 and 1942, that allows a tenant to make repairs
      at its landlord’s expense.

     

    7.3 Landlord
      hereby reserves the right, at any time and from time to time, without liability
      to Tenant, and without constituting an eviction, constructive or otherwise,
      or
      entitling Tenant to any abatement of rent or to terminate this Lease or
      otherwise releasing Tenant from any of Tenant’s obligations under this
      Lease:

    
      

      
        
           

        

        
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            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    (a) To
      make
      alterations, additions, repairs, improvements to or in or to decrease the size
      of area of, all or any part of the Building, the fixtures and equipment therein,
      and the Building Systems;

     

    (b) To
      change
      the Building’s name or street address;

     

    (c) To
      install any and all signs on the exterior and interior of the
      Building;

     

    (d) To
      reduce, increase, enclose or otherwise change at any time and from time to
      time
      the size, number, location, lay-out and nature of the common areas (including
      the Parking Facility) and other tenancies and premises in the Property and
      to
      create additional rentable areas through use or enclosure of common areas;
      and

     

    (e) If
      any
      governmental authority promulgates or revises any Law or imposes mandatory
      or
      voluntary controls or guidelines on Landlord or the Property relating to the
      use
      or conservation of energy or utilities or the reduction of automobile or other
      emissions or reduction or management of traffic or parking on the Property
      (collectively “Controls”),
      to
      comply with such Controls, whether mandatory or voluntary, or snake any
      alterations to the Property related thereto.

     

    8. TENANT’S
      TAXES. “Tenant’s
      Taxes”
      shall
      mean (a) all taxes, assessments, license fees and other governmental charges
      or
      impositions levied or assessed against or with respect to Tenant’s personal
      property or Trade Fixtures in the Premises, whether any such imposition is
      levied directly against Tenant or levied against Landlord or the Property,
      (b)
      all rental, excise, sales or transaction privilege taxes arising out of this
      Lease (excluding, however, state and federal personal or corporate income taxes
      measured by the income of Landlord from all sources) imposed by any taxing
      authority upon Landlord or upon Landlord’s receipt of any rent payable by Tenant
      pursuant to the terms of this Lease (“Rental
      Tax”),
      and
      (c) any increase in Taxes attributable to inclusion of a value placed on
      Tenant’s personal property, Trade Fixtures or Alterations. Tenant shall pay any
      Rental Tax to Landlord in addition to and at the same time as Base Rent is
      payable under this Lease, and shall pay all other Tenant’s Taxes before
      delinquency (and, at Landlord’s request, shall furnish Landlord satisfactory
      evidence thereof). If Landlord pays Tenant’s Taxes or any portion thereof,
      Tenant shall reimburse Landlord upon demand for the amount of such payment,
      together with interest at the Interest Rate from the date of Landlord’s payment
      to the date of Tenant’s reimbursement.

     

    9. UTILITIES
      AND SERVICES.

     

    9.1 Description
      of Services.
      Landlord shall furnish to the Premises: reasonable amounts of heat, ventilation
      and air-conditioning during the Business Hours specified in the Basic Lease
      Information (“Business
      Hours”)
      on
      weekdays except public holidays (“Business
      Days”);
      reasonable amounts of electricity; and janitorial services five days a Week
      (except public holidays). Landlord shall also provide the Building with normal
      fluorescent tube replacement, exterior window washing, elevator service, and
      common area toilet room supplies: Landlord shall also provide Tenant, at
      Landlord’s sole cost and expense, with (1) Building standard directory strip on
      the Building directory in the lobby of the Building. Landlord shall also provide
      Tenant, at Landlord’s sole cost and expense, with one (1) building standard
      suite identification sign at the main entry door to the Premises. All additional
      signage shall be installed by Landlord, at Tenant’s sole cost and expense, and
      shall be subject to Landlord’s prior approval which shall not be unreasonably
      withheld, Any additional utilities or services that Landlord may agree to
      provide (including lamp or tube replacement for other than Building Standard
      lighting fixtures) shall be at Tenant’s sole expense:

    
      

      
        
           

        

        
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            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    9.2 Payment
      for Additional Utilities and Services.

     

    (a) Upon
      request by Tenant in accordance with the procedures established by Landlord
      from
      time to time for furnishing HVAC service at tunes other than Business Hours
      on
      Business Days, Landlord shall furnish such service to Tenant and Tenant chat)
      pay for such service on an hourly basis at the then prevailing rate established
      for the Building by Landlord, currently $45.00 per hour, which rate shall
      reflect Landlord’s actual costs and expenses of furnishing such additional
      service to Tenant.

     

    (b) If
      the
      temperature otherwise maintained in any portion of the Premises by the HVAC
      systems of the Building is affected as a result of (i) any light’s, machines or
      equipment used by Tenant in the Premises, or (ii) the occupancy of the Premises
      by more than one person per 5 square feet of rentable area, then Landlord shall
      have the right to install any machinery or equipment reasonably necessary to
      restore the temperature, including modifications to the standard
      air-conditioning equipment. The cost of any such equipment and modifications,
      including the cost of installation and any additional cost of operation and
      maintenance of the seine, shall be paid by Tenant to Landlord upon
      demand.

     

    (c) If
      Tenant’s usage of electricity, water or any other utility service exceeds the
      use of such utility Landlord determines to be typical, normal and customary
      for
      the Building, Landlord may determine the amount of such excess use by any
      reasonable means (including the installation at Landlord’s request but at
      Tenant’s expense of a separate meter or other measuring device) and charge
      Tenant for the cost of such excess usage. In addition, Landlord may impose
      a
      reasonable charge for the use of any additional or unusual janitorial services
      required by Tenant because of any unusual Tenant Improvements or Alterations,
      the carelessness of Tenant, or the nature of Tenant’s business (including, but
      not limited to, hours of operation).

     

    9.3 Interruption
      of Services.
      In the
      event of an interruption in or failure or inability to provide any services
      or
      utilities to the Premises or Building for any reason, (a “Service
      Failure”),
      such
      Service Failure shall not, regardless of its duration, impose upon Landlord
      any
      liability whatsoever, constitute an eviction of Tenant, constructive or
      otherwise, entitle Tenant to an abatement of rent or to terminate this Lease
      or
      otherwise release Tenant from any of Tenant’s obligations under this Lease.
      Tenant hereby waives any benefits of any applicable existing or future Law,
      including the provisions of California Civil Code Section 1932(1), permitting
      the termination of this Lease due to such interruption, failure or
      inability.

     

    10. EXCULPATION
      AND INDEMNIFICATION.

     

    10.1 Landlord’s
      Indemnification of Tenant.
      Landlord shall indemnify, protect, defend and hold Tenant harmless front and
      against any claims, actions, liabilities, damages, costs or expenses, including
      reasonable attorneys’ fees and costs incurred in defending against the seine
      (“Claims”)
      asserted by any third party against Tenant for loss, injury or damage, to the
      extent such loss, injury or damage is caused by the willful misconduct or
      negligent acts or omissions of Landlord or its authorized
      representatives.

     

    10.2 Tenant’s
      Indemnification of Landlord.
      Tenant
      shall indemnify, protect, defend and hold Landlord and Landlord’s authorized
      representatives harmless from and against Claims arising from (a) the acts
      or
      omissions of Tenant or Tenant’s Representatives or Visitors in or about the
      Property, or (b) any construction or other work undertaken by Tenant on the
      Premises (including any design defects), or (c) any breach or default under
      this
      Lease by Tenant, or (d) any loss, injury or damage, howsoever and by whomsoever
      caused, to any person or property, occurring in or about the Premises during
      the
      Term, including Claims described in this clause (e) to the extent they are
      caused by the willful misconduct or negligent acts or omissions of Landlord
      or
      its authorized representatives.

     

    10.3 Damage
      to Tenant and Tenant’s Property.
      Landlord shall not be liable to Tenant for any loss, injury or other damage
      to
      Tenant or to Tenant’s property in or about the Premises or the Property from any
      cause (including defects in the Property or in any equipment in the Property;
      fire, explosion or other casualty; bursting, rupture, leakage or overflow of
      any
      plumbing or other pipes or lines, sprinklers, tanks, drains, drinking fountains
      or washstands in, above, or about the Premises or the Property; or acts of
      other
      tenants in the Property): Tenant hereby waives all claims against Landlord
      for
      any such loss, injury or damage and the cast and expense of defending against
      claims relating thereto, including any loss, injury or damage caused by
      Landlord’s negligence (active or passive) of willful misconduct. Notwithstanding
      any other provision of this Lease to the contrary, in no event shall Landlord
      be
      liable to Tenant for any punitive or consequential damages or damages for loss
      of business by Tenant.

    
      

      
        
           

        

        
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            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    10.4 Survival.
      The
      obligations of the parties under this Section 10 shall survive the expiration
      or
      termination of this Lease.

     

    11. INSURANCE

     

    11.1 Tenant’s
      Insurance.

     

    (a) Liability
      Insurance.
      Tenant
      shall maintain in full force throughout the Term, commercial general liability
      insurance providing coverage on an occurrence form basis with limits of not
      less
      than Two Million Dollars each occurrence for bodily injury and property damage
      combined, Two Million Dollars annual general aggregate, and Two Million Dollars
      products and completed operations annual aggregate. Tenant’s liability insurance
      policy or policies shall: (i) include premises and operations liability
      coverage, products and completed operations liability coverage, broad form
      property damage coverage including completed operations, blanket contractual
      liability coverage including, to the maximum extent possible, coverage for
      the
      indemnification obligations of Tenant under this Lease, and personal and
      advertising injury coverage; (ii) provide that the insurance company has the
      duty to defend all insureds under the policy; (iii) provide that defense costs
      are paid in addition to and do not deplete any of the policy limits; (iv) cover
      liabilities arising out of or incurred in connection with Tenant’s use or
      occupancy of the Premises or the Property; (v) extend coverage to cover
      liability for the actions of Tenant’s Representatives and Visitors; and (vi)
      designate separate limits for the Property. Each policy of liability insurance
      required by this Section shall: (1) contain a cross liability endorsement or
      separation of insureds clause; (2) provide that any waiver of subrogation rights
      or release prior to a loss does not void coverage; (3) provide that it is
      primary to and not contributing with, any policy of insurance carried by
      Landlord covering the same loss; (4) provide that any failure to comply with
      the
      reporting provisions by Tenant shall not affect coverage provided to Landlord,
      its partners, property managers and Mortgagees; and (5) name Landlord, its
      partners, the Property Manager identified in the Basic Lease Information (the
      “Property
      Manager”),
      and
      such other parties in interest as Landlord may from time to time reasonably
      designate to Tenant in writing, as additional insureds. Such additional insureds
      shall be provided at least the same extent of coverage as is provided to Tenant
      under such policies with respect to liability arising out of the ownership,
      maintenance or use of the Premises. All endorsements effecting such additional
      Insured status shall be at least as broad as additional insured endorsement
      form
      number CG 20 11 11 85 or CG 20 11 11 01 96 promulgated by the Insurance Services
      Office.

     

    (b) Property
      Insurance.
      Tenant
      shall at all times maintain in effect with respect to any Alterations and
      Tenant’s Trade Fixtures and personal property, commercial property insurance
      providing coverage, on an “all risk” or “special form” basis, in an amount equal
      to at least 90% of the full replacement cost of the covered property. Tenant
      may
      carry such insurance under blanket policy, provided that such policy provides
      coverage is equivalent to a separate policy. During the Term, the proceeds
      from
      any such policies of insurance shall be used for the repair: or replacement
      of
      the Alterations, Trade Fixtures and personal property so insured. Landlord
      shall
      be provided coverage under such insurance to the extent of its insurable
      interest and, if requested by Landlord, both Landlord and Tenant shall sign
      all
      documents reasonably necessary or proper in connection with the settlement
      of
      any claim or loss under such insurance. Landlord will have no obligation to
      carry insurance on any Alterations or on Tenant’s Trade Fixtures or personal
      property.

     

    (c) Requirements
      For All Policies.
      Each
      policy of insurance required under this Section 11.1 shall: (i) be in a fond,
      and written by an insurer, reasonably acceptable to Landlord, (ii) be maintained
      at ‘tenant’s sole cost and expense, and (iii) require at least thirty (30) days’
written notice to Landlord prior to any cancellation, nonrenewal or modification
      of insurance coverage. Insurance companies issuing such policies shall have
      rating classifications of “A” or better and financial size category ratings of
      II” or better according to the latest edition of the A.M. Best Key Rating Guide.
      All insurance companies issuing such policies shall be admitted carriers
      licensed to do business in the state where the Property is located. Any
      deductible amount under such insurance shall not exceed Five Thousand Dollars
      ($5,000). Tenant shall provide to Landlord, upon request, evidence that the
      insurance required to be carted by Tenant pursuant to this Section, including
      any endorsement effecting the additional insured status, is in fall force and
      effect and that premiums therefor have been paid.

    
      

      
        
           

        

        
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            Tenant Landlord

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    (d) Certificates
      of Insurance.
      Prior
      to occupancy of the Premises by Tenant, and not less than thirty (30) days
      prior
      to expiration of any policy thereafter, Tenant shall famish to Landlord a
      certificate of insurance reflecting that the insurance required by this Section
      is in force, accompanied by an endorsement showing the required additional
      insureds satisfactory to Landlord in substance and form. Notwithstanding the
      requirements of this paragraph, Tenant shall at Landlord’s request provide to
      Landlord a certified copy of each insurance policy required to be in force
      at
      any time pursuant to the requirements of this Lease or its
      Exhibits.

     

    11.2 Landlord’s
      Insurance.
      During
      the Term, to the extent such cm cadges are available at a commercially
      reasonable cost; Landlord shall maintain in effect insurance: on the Building
      with responsible insurers, on an “all risk” or “special form” basis, insuring
      the Building and the Tenant Improvements in an amount equal to at least 90%
      of
      the replacement cost thereof, excluding land, foundations, footings and
      underground installations. Landlord may, but shall not be obligated to, carry
      insurance against additional perils and/or in greater amounts.

     

    11.3 Mutual
      Waiver of Right of Recovery & Waiver of Subrogation.
      Landlord and Tenant each hereby waive any right of recovery against each other
      and the partners, managers, members, shareholders, officers, directors and
      authorized representatives of each other for any loss or damage that is covered
      by any policy of property insurance maintained by either party (or required
      by
      this Lease to be maintained) with respect to the Premises or the Property or
      operation therein; regardless of cause, including negligence (active or passive)
      of the party benefiting from the waiver. If any such policy of insurance
      relating to this Lease or to the Premises or the Property does not permit the
      foregoing waiver or if the coverage under any such policy would be invalidated
      as a result of such waiver, the party maintaining such policy shall obtain
      from
      the insurer under such policy a waiver mien right of recovery by way of
      subrogation against either party in connection with any claim, loss or damage
      covered by such policy.

     

    12. DAMAGE
      OR
      DESTRUCTION. 

     

    12.1 Landlord’s
      Duty to Repair.

     

    (a) If
      all or
      a substantial part of the Premises are rendered untenantable or inaccessible
      by
      damage to all or any part of the Property from fire or other casualty then,
      unless either party is entitled to and elects to terminate this Lease pursuant
      to Sections 12.2 -- Landlord’s
      Right to Terminate
      and 12.3
      -- Tenant’s
      Right to Terminate,
      Landlord shall, at its expense, use reasonable efforts to repair and restore
      the
      Premises and/or the Property, as the case may be, to substantially their former
      condition; provided, however, that in no event shall Landlord have any
      obligation for repair or restoration beyond the extent of insurance proceeds
      received by Landlord for such repair or restoration, or for any of Tenant’s
      personal property, Trade Fixtures or Alterations.

     

    (b) If
      Landlord is required or elects to repair damage to the Premises and/or the
      Property, this Lease shall continue in effect, but Tenant’s Base Rent and
      Additional Rent shall be abated with regard to any portion of the Premises
      that
      Tenant is prevented from using by reason of such damage or it’s repair from the
      date of the casualty until substantial completion of Landlord’s repair of the
      affected portion of the Premises as required under this Lease. In no event
      shall
      Landlord be liable to Tenant by reason of any injury to or interference with
      Tenant’s business or property arising from fire or other casualty or by reason
      of any repairs to any part of the Property necessitated by such
      casualty.

    
      

      
        
           

        

        
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            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    12.2 Landlord’s
      Right to Terminate.
      Landlord may elect to terminate this Lease following damage by fire or other
      casualty under the following circumstances:

     

    (a) If,
      in
      the reasonable judgment of Landlord, the Premises and the Property cannot be
      substantially repaired and restored under applicable Laws within one (1) year
      from the date of the casualty;

     

    (b) If,
      in
      the reasonable judgment of Landlord, adequate proceeds are not, for any reason,
      made available to Landlord from Landlord’s insurance policies (and/or from
      Landlord’s funds made available for such purpose, at Landlord’s sole option) to
      make the required repairs;

     

    (c) If
      the
      Building is damaged or destroyed to the extent that, in the reasonable judgment
      of Landlord, the cost to repair and restore the Building would exceed
      twenty-five percent (25%) of the full replacement cost of the Building, whether
      or not the Premises are at all damaged or destroyed; or

     

    (d) If
      the
      fire or other casualty occurs during the last nine (9) months of the
      Term.

     

    If
      any of
      the circumstances described in subparagraphs (a), (b), (c) or (d) of this
      Section 12.2 occur or anise, Landlord shall give Tenant notice within one
      hundred and twenty (120) days after the date of the casualty, specifying whether
      Landlord elects to terminate this Lease as provided above and, if not,
      Landlord’s estimate of the time required to complete Landlord’s repair
      obligations under this Lease.

     

    12.3 Tenant’s
      Right to Terminate:
      If all
      or a substantial part of the Premises are rendered untenantable or inaccessible
      by damage to all or any part of the Property from fire or other casualty and
      Landlord does not elect to terminate as provided above, then Tenant may elect
      to
      terminate this Lease if Landlord’s estimate of the time required to complete
      Landlord’s repair obligations under this Lease is greater than one (1) year, in
      which event Tenant may elect to terminate this Lease by giving Landlord notice
      of such election to terminate within thirty (30) days after Landlord’s notice to
      Tenant pursuant to Section 12.2 -- Landlord’s
      Right to Terminate.

     

    12.4 Waiver.
      Landlord and Tenant each hereby waive the provisions of California Civil Code
      Sections 1932(2), 1933(4) and any other applicable existing or future Law
      permitting the termination of a lease agreement in the event of damage or
      destruction under any circumstances other than as provided in Sections
      12.2 — Landlord’s Right to Terminate and 12.3 -- Tenant’s
      Right to Terminate.

     

    13. CONDEMNATION.
      

     

    13.1 Definitions.

     

    (a) “Award”
      shall
      mean all compensation, sums, or anything of value awarded, paid or received
      on a
      total or partial Condemnation.

     

    (b) “Condemnation”
      shall
      mean (i) a permanent taking (or a temporary taking for a period extending beyond
      the end of the Term) pursuant to the exercise of the power of condemnation
      or
      eminent domain by any public or quasi-public authority, private corporation
      or
      individual having such power (“Condemnor”),
      whether by legal proceedings or otherwise, or (ii) voluntary sale or transfer
      by
      Landlord to any such authority, either under threat of condemnation or while
      legal proceedings for condemnation are pending.

    
      

      
        
           

        

        
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            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    (c) “Date
      of Condemnation”
      shall
      mean the earlier of the date that title to the property taken is vested in
      the
      Condemnor or the date the Condemnor has the right to possession o the property
      being condemned.

     

    13.2 Effect
      on Lease.

     

    (a) If
      the
      Premises are totally taken by Condemnation, this Lease shall terminate us of
      the
      Date of Condemnation. If a portion but not all of the Premises is taken by
      Condemnation, this Lease shall remain in effect; provided, however, that if
      the
      portion of the Premises remaining after the Condemnation will be unsuitable
      for
      Tenant’s continued use, then upon notice to Landlord within thirty (30) days
      after Landlord notifies Tenant of the Condemnation, Tenant may terminate this
      Lease effective as of the Date of Condemnation.

     

    (b) If
      twenty-five percent (25%) or more of the Project or of the parcels) of land
      on
      which the Building is situated or of the Parting Facility or of the floor area
      in the Building is taken by Condemnation, or if as a result of any Condemnation
      the Building is no longer reasonably suitable for use as an office building,
      whether or not any portion of the Premises is taken, Landlord may elect to
      terminate this Lease, effective as of the Date of Condemnation, by notice to
      Tenant within thirty (30) days after the Date of Condemnation.

     

    (c) If
      all or
      a portion of the Premises is temporarily taken by a Condenmor for a period
      not
      extending beyond the end of the Term, this Lease shall remain in full force
      and
      effect.

     

    13.3 Restoration.
      If this
      Lease is not terminated as provided in Section 13.2 -- Effect
      on Lease,
      Landlord, at its expense, shall diligently proceed to repair and restore the
      Promises to substantially its former condition (to the extent permitted by
      then
      applicable Laws) and/or repair and restore the Building to an architecturally
      complete office building; provided, however, that Landlord’s obligations to so
      repair and restore shall be limited to the amount of any Award received by
      Landlord and not required to be paid to any Mortgagee (as defined in Section
      20.2 below). In no event shall Landlord have any obligation to repair or replace
      any improvements in the Premises beyond the amount of any Award received by
      Landlord for such repair or to repair or replace any of Tenant’s personal
      property, Trade Fixtures, or Alterations.

     

    13.4 Abatement
      and Reduction of Rent.
      If any
      portion of the Premises is taken in a Condemnation or is rendered permanently
      untenantable by repairs necessitated by the Condemnation, and this Lease is
      not
      terminated, the Base Rent and Additional Rent payable under this Lease shall
      be
      proportionally reduced as of the Date of Condemnation based upon the percentage
      of rentable square feet in the Premises so taken or rendered permanently
      untenantable. In addition, if this lease remains in effect following a
      Condemnation and Landlord proceeds to repair and restore the Premises, the
      Base
      Rent and Additional Rent payable under this Lease shall be abated during the
      period of such repair or restoration to the extent such repairs prevent Tenant’s
      use of the Premises.

     

    13.5 Awards.
      Any
      Award made shall be paid to Landlord, and Tenant hereby assigns to Landlord,
      and
      waives all interest in or claim to any such Award, including any claim for
      the
      value of the unexpired Term; provided, however, that Tenant shall be entitled
      to
      receive, or to prosecute separate claim for, an Award for a temporary taking
      of
      the Premises or a portion thereof by a Condemnor where this Lease is not
      terminated (to the extent such Award relates to the unexpired Term), or an
      Award
      or portion thereof separately designated for relocation expenses or the
      interruption of or damage to Tenant’s business or as compensation for Tenant’s
      personal property, Trade fixtures or Alterations.

    
      

      
        
           

        

        
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            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    13.6 Waiver.
      Landlord and Tenant each hereby waive the provisions of California Code of
      Civil
      Procedure Section 1265.130 and any other applicable existing or future Law
      allowing either party to petition for a termination of this Least upon a partial
      taking of the Premises and/or the Properly.

     

    14. ASSIGNMENT
      AND SUBLETTING:.

     

    14.1 Landlord’s
      Consent Required.
      Tenant
      shall not assign this Lease or any interest therein, or sublet or license or
      permit the use or occupancy of the Premises or any part thereof for the benefit
      of anyone other than Tenant, or in any other manner transfer all or any part
      of
      Tenant’s interest under this Lease (each and all a “Transfer”),
      without the prior written consent of Landlord, which consent (subject to the
      other provisions of this Section 14) shall not be unreasonably withheld. If
      Tenant is a business entity, any direct or indirect transfer of fifty percent
      (50%) or more of the ownership interest of the entity (whether in a single
      transaction or in the aggregate through more than one transaction) shall be
      deemed a Transfer. Not withstanding any provision in this Lease to the contrary,
      Tenant shall not mortgage, pledge, hypothecate or otherwise encumber this Lease
      or all or arty part of Tenant’s interest under this Lease.

     

    14.2 Reasonable
      Consent.

     

    (a) Prior
      to
      any proposed Transfer, Tenant shall submit in writing to Landlord (i) the name
      and legal composition of the proposed assignee, subtenant, user or other
      Transferee (each a “Proposed Transferee”); (ii) the nature of the business
      proposed to be canted on in the Premises; (iii) a current balance sheet, income
      statements for the last two years and such other reasonable financial and other
      information concerning the Proposed Transferee as Landlord may request; and
      (iv)
      a copy of the proposed assignment, sublease or other agreement governing the
      proposed Transfer. Within fifteen (15) Business Days after Landlord receives
      all
      such information it shall notify Tenant whether it approves or disapproves
      such
      Transfer or if it elects to proceed under Section 14.7 -- Landlord’s
      Right to Space.

     

    (b) Tenant
      acknowledges and agrees that, among other circumstances for which Landlord
      could
      reasonably withhold consent to a proposed Transfer, it shall be reasonable
      for
      Landlord to withhold consent where (i) the Proposed Transferee does not intend
      itself to occupy the entire Portion of the Premises assigned or sublet, (ii)
      Landlord reasonably disapproves of the Proposed Transferee’s business operating
      ability or history, reputation or creditworthiness or the character of the
      business conducted by the Proposed Transferee, (iii) the Proposed Transferee
      is
      a governmental agency or unit or an existing tenant in the Project, (iv) the
      proposed Transfer would violate any “exclusive” rights of any tenants in the
      Project, (v) Landlord or Landlords agent has shown space in the Building to
      the
      Proposed Transferee or responded to any inquiries from the Proposed.
      Transferee’s agent concerning availability of space in the Building at any time
      within the preceding nine months, or (vi) Landlord otherwise determines that
      the
      proposed Transfer would have die effect of decreasing the value of the Building
      or increasing the expenses associated with operating, maintaining and repairing
      the Property. In no event may Tenant publicly offer or advertise all or any
      portion of the Premises for assignment or sublease at a rental less than that
      than sought by Landlord for a direct lease (non-sublease) of comparable epee
      in
      the Project.

     

    14.3 Excess
      Consideration.
      If
      Landlord consents to the Transfer, Tenant shall be permitted to retain one
      half
      (1/2) of any consideration paid by any transferee (the “Transferee”)
      for the
      Transfer, including, in the case of a sublease, the excess of the rent and
      other
      consideration payable by the subtenant over the amount of Base Rent and
      Additional Rent payable hereunder applicable to the subleased
      space.

     

    14.4 No
      Release Of Tenant.
      No
      consent by Landlord to any Transfer shall relieve Tenant of any obligation
      to be
      performed by Tenant under this Lease, whether occurring before or after such
      consent, assignment, subletting or other Transfer. Each Transferee shall be
      jointly and severally liable with Tenant (and Tenant shall be jointly and
      severally liable with each Transferee) for the payment of rent (or, in the
      ease
      of a sublease, rent in the amount set forth in the sublease) and for the
      performance of all other terms and provisions of this Lease. The consent by
      Landlord to any Transfer shall not relieve Tenant or any such Transferee from
      the obligation to obtain Landlord’s express prior written consent to any
      subsequent Transfer by Tenant or any Transferee. The acceptance of rent by
      Landlord from any other person (whether or not such person is an occupant of
      the
      Premises) shall not be deemed to be a waiver by Landlord of any provision of
      this Lease or to be a consent to any Transfer.

    
      

      
        
           

        

        
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            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    14.5 Expenses
      and Attorneys’ Fees.
      Tenant
      shall pay to Landlord all reasonable costs and expenses (including reasonable
      attorneys’ fees) incurred by Landlord in connection with reviewing or consenting
      to any proposed Transfer (including any request for consent to, or any waiver
      of
      Landlord’s rights in connection with, any security interest in any of Tenant’s
      property at the Premises). Tenant’s payment to Landlord for such costs and
      expenses incurred by Landlord as a result of reviewing or consenting to any
      proposed Transfer shall not exceed two thousand dollars
      ($2,000.00).

     

    14.6 Effectiveness
      of Transfer.
      Prior
      to the date on which any permitted Transfer (whether or not requiring Landlord’s
      consent) becomes effective, Tenant shall deliver to Landlord a counterpart
      of
      the fully executed Transfer document arid Landlord’s standard form of Consent to
      Assignment or Consent to Sublease executed by Tenant and the Transferee in
      which
      each of Tenant and the Transferee confirms its obligations pursuant to this
      Lease. Failure or refusal of a Transferee to execute any such instrument shall
      not release or discharge the Transferee from liability as provided herein.
      The
      voluntary, involuntary or other surrender of this Lease by Tenant, or a mutual
      cancellation by Landlord and Tenant, shall not work a merger, and any such
      surrender or cancellation shall, at the option of the Landlord, either terminate
      all or any existing subleases or operate as an assignment to Landlord of any
      or
      all of such subleases.

     

    14.7 Landlord’s
      Right to Space.
      Notwithstanding any of the above provisions of this Section to the contrary,
      if
      Tenant notifies Landlord that it desires to enter into a Transfer, Landlord,
      in
      lieu of consenting to such Transfer, may elect (x) in the case of an assignment
      or a sublease of the entire Premises, to terminate this Lease, or (y) in the
      ease of a sublease of less than the entire Premises, to terminate this Lease
      as
      it relates to the space proposed to be subleased by Tenant. In such event,
      this
      Lease will terminate (or the space proposed to be subleased will be removed
      from
      the Premises subject to this Lease and the Base Rent and Tenant’s Share under
      this Lease shall be proportionately reduced) on the date the Transfer was
      proposed to be effective, and Landlord may lease such space to any party,
      including the prospective Transferee identified by Tenant.

     

    14.8 Assignment
      of Sublease Rents.
      Tenant
      hereby absolutely and irrevocably assigns to Landlord any and all rights to
      receive rent and other consideration from any sublease and agrees that Landlord,
      as assignee or as attorney-in-fact for Tenant for purposes hereof, or a receiver
      for Tenant appointed on Landlord’s application may (but shall not be obligated
      to) collect such rents and other consideration and apply the same toward
      Tenant’s obligations to Landlord under this Lease; provided, however, that
      Landlord grants to Tenant at all times prior to occurrence of any breach or
      default by Tenant a revocable license to collect such rents (which license
      shall
      automatically and without notice be and be deemed to have been revoked and
      terminated immediately upon any Event of Default).

     

    15. DEFAULT
      AND REMEDIES.

     

    15.1 Events
      of Default.
      The
      occurrence of any of the following shall constitute an “Event of Default” by
      Tenant:

     

    (a) Tenant
      fails to make any payment of rent within five (5) days following the date that
      such payment is clue, or any amount required to replenish the security deposit
      as provided in Section 4 above, if payment in full is not received by Landlord
      within three (3) business days after written notice that it is due.

     

    (b) Tenant
      abandons the Premises without payment of rent.

    
      

      
        
           

        

        
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            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    (c) Tenant
      fails timely to deliver any subordination document, estoppel certificate or
      financial statement requested by Landlord within the applicable time period
      specified in Sections 20 -- Encumbrances
      -- and
      21 -- Estoppel
      Certificates and Financial Statements
      -
      below.

     

    (d) Tenant
      violates the restrictions on Transfer set forth in Section 14 -Assignment
      and Subletting.

     

    (e) Tenant
      ceases doing business as a going concern; makes an assignment for the benefit
      of
      creditors; is adjudicated an insolvent, files a petition (or files an answer
      admitting the material allegations of a petition) seeking relief under any
      state
      or federal bankruptcy or other statute, law or regulation affecting creditors’
rights; all or substantially all of Tenant’s assets are subject to judicial
      seizure or attachment and are not released within thirty (30) days, or Tenant
      consents to or acquiesces in the appointment of a trustee, receiver or
      liquidator for Tenant or for all or any substantial part of Tenant’s
      assets.

     

    (f) Tenant
      fails, within ninety (90) days after the commencement of any proceedings against
      Tenant seeking relief under any state or federal bankruptcy or other statute;
      law or regulation affecting creditors’ rights, to have such proceedings
      dismissed, or Tenant fails, within ninety (90) days after an appointment,
      without Tenant’s consent or acquiescence, of any trustee, receiver or liquidator
      for Tenant or for all or any substantial part of Tenant’s assets, to have such
      appointment vacated.

     

    (g) Tenant
      fails to perform or comply with any provision of this Lease other than those
      described in (a) through (f) above, and does not fatly cure such failure within
      fifteen (15) days after notice to Tenant or, if such failure cannot be cured
      within such fifteen (15) day period, Tenant fails within such fifteen (1a)-day
      period to commence, and thereafter diligently proceed with, all actions
      necessary to care such failure as soon as reasonably possible but in all events
      within ninety (90) days of such notice; provided, however, that if Landlord
      in
      Landlord’s reasonable judgment determines that such failure cannot or will not
      be cured by Tenant within such ninety (90) days, then such failure shall
      constitute an Event of Default immediately upon such notice to
      Tenant.

     

    15.2 Remedies.
      Upon
      the occurrence of an Event of Default, Landlord shall have the following
      remedies, which shall not be exclusive but shall be cumulative and shall be
      in
      addition to any other remedies now or hereafter allowed by law:

     

    (a) Landlord
      may terminate Tenant’s right to possession of the Premises at any time by
      written notice to Tenant. Tenant expressly acknowledges that in the absence
      of
      such written notice from Landlord, no other act of Landlord, including re-entry
      into the Premises, efforts to relet the Premises, reletting of the Premises
      for
      Tenant’s account, storage of Tenant’s personal property and Trade Fixtures,
      acceptance of keys to the Premises from Tenant or exercise of any other rights
      and remedies under this Section, shall constitute an acceptance of Tenant’s
      surrender of the Premises or constitute a termination of this Lease or of
      Tenant’s right to possession of the Premises. Upon such termination in writing
      of Tenant’s right to possession of the Premises, as herein provided, this Lease
      shall terminate and Landlord shall be entitled to recover damages from Tenant
      as
      provided in California Civil Code Section 1951.2 and any other applicable
      existing or future Law providing for recovery of damages for such breach,
      including the worth at the time of award of the amount by which the rent which
      would be payable by Tenant hereunder for the remainder of the Term after the
      date of the award of damages, including Additional Rent as reasonably estimated
      by Landlord, exceeds the amount of such rental loss as Tenant proves could
      have
      been reasonably avoided, discounted at the discount rate published by the
      Federal Reserve Bank of San Francisco for member banks at the time of the award
      plus one percent (1%).

    
      

      
        
           

        

        
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            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    (b) Landlord
      shall have the remedy described in California Civil Code Section 1951.4
      (Landlord may continue this Lease in effect after Tenant’s breach and
      abandonment and recover rent as it becomes due, if Tenant has the right to
      sublet or assign, subject only to reasonable limitations).

     

    (c) Landlord
      may cure the Event of Default at Tenant’s expense. If Landlord pays any sum or
      incurs any expense in curing the Event of Default, Tenant shall reimburse
      Landlord upon demand for the amount of such payment or expense with interest
      at
      the Interest Rate from the date the sum is paid or the expense is incurred
      until
      Landlord is reimbursed by Tenant.

     

    (d) Landlord
      may remove all Tenant’s property from the Premises, and such property may he
      stored by Landlord in a public warehouse or elsewhere at the sole cost and
      for
      the account of Tenant. If Landlord does not elect to store any or all of
      Tenant’s property left in the Premises, Landlord may consider such property to
      be abandoned by Tenant, and Landlord may thereupon dispose of such property
      in
      any manner deemed appropriate by Landlord. Any proceeds realized by Landlord
      on
      the disposal of any such property shall be applied first to offset all expenses
      of storage and sale, then credited against Tenant’s outstanding obligations to
      Landlord under this Lease, and any balance remaining after satisfaction of
      all
      obligations of Tenant under this Lease shall be delivered to
      Tenant.

     

    16. LATE
      CHARGE AND INTEREST.

     

    16.1 Late
      Charge.
      If any
      payment of rent is not received by Landlord when due, Tenant shall pay to
      Landlord on demand as a fate charge an additional amount equal to five percent
      (5%) of the overdue payment. A late charge shall not be imposed more than once
      on any particular installment not paid when due, but imposition of a late charge
      on any payment not made when due does not eliminate or supersede late charges
      imposed on other (prior) payments not made when due or preclude imposition
      of a
      late charge on other installments or payments not made when due.

     

    16.2 Interest.
      In
      addition to the late charges referred to above, which are intended to defray
      Landlord’s costs resulting from late payments, any payment front Tenant to
      Landlord not paid when due shall at Landlord’s option bear interest from the
      date due until paid to Landlord by Tenant at the late of fifteen percent (15%)
      per annum or the maximum lawful rate that Landlord may charge to Tenant under
      applicable laws, whichever is less (the “Interest Rate”). Acceptance of any late
      charge and/or interest shall not constitute a waiver of Tenants default with
      respect to the overdue sum or prevent Landlord from exercising any of its other
      rights and remedies under this Lease.

     

    17. WAIVER.
      No provisions of this Lease shall be deemed waived by Landlord unless such
      waiver is in a writing signed by Landlord. The waiver by Landlord of any breach
      of any provision of this Lease shall not be deemed a waiver of such provision
      or
      of any subsequent breach of the same or any other provision of this Lease.
      No
      delay or omission in the exercise of any right or remedy of Landlord upon any
      default by Tenant shall impair such right or remedy or be construed as a waiver.
      Landlords acceptance of any payments of rent due under this Lease shall not
      be
      deemed a waiver of airy default by Tenant under this Lease (including Tenant’s
      recurrent failure to timely pay rent) other than Tenant’s nonpayment of the
      accepted sums; and no endorsement or statement on any check or payment or in
      any
      letter or document accompanying any check or payment shall be deemed an accord
      and satisfaction. Landlord’s consent to or approval of any act by Tenant
      requiring Landlord’s consent or approval shall not be deemed to waive or render
      unnecessary Landlord’s consent to or approval of any subsequent act by
      Tenant.

     

    18. ENTRY,
      INSPECTION AND CLOSURE. Upon reasonable oral or written notice to Tenant (and
      without notice in emergencies), Landlord and its authorized representatives
      may
      enter the Premises at all reasonable times to: (a) determine whether the
      Premises are in good condition, (b) determine whether Tenant is complying with
      its obligations under this Lease, (c) perform any maintenance or repair of
      the
      Premises or the Building that Landlord has the right or obligation to perform,
      (d) install or repair improvements for other tenants where access to the
      Premises is required for such installation or repair, (e) serve, post of keep
      posted any notices required or allowed under the provisions of this Lease,
      (f)
      show the Premises to prospective brokers, agents, buyers, transferees,
      Mortgagees or tenants, or (g) do any other act or thing necessary for the safety
      or preservation of the Premises or the Building. When reasonably necessary
      Landlord may temporarily close entrances, doors, corridors, elevators or other
      facilities in the Building without liability to Tenant by reason of such
      closure. Landlord shall conduct its activities under this Section in a manner
      that will minimize inconvenience to Tenant without incurring additional expense
      to Landlord. In no event shall Tenant be entitled to an abatement of rent on
      account of any entry by Landlord, and Landlord shall not be liable in any manner
      for any inconvenience, loss of business or other damage to Tenant or other
      persons arising out of Landlord’s entry on the Premises in accordance with this
      Section. No action by Landlord pursuant to this paragraph shall constitute
      an
      eviction of Tenant, constructive or otherwise, entitle Tenant to an abatement
      of
      rent or to terminate this Lease or otherwise release Tenant from any of Tenant’s
      obligations under this Lease.

    
      

      
        
           

        

        
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            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    19. SURRENDER
      AND HOLDING OVER.

     

    19.1 Surrender.
      Upon
      the expiration or termination of this Lease, Tenant shall surrender the Premises
      and all Tenant Improvements and Alterations to Landlord broom-clean and in
      their
      original condition, except for reasonable wear and tear, damage from casualty
      or
      condemnation and any changes resulting from approved Alterations; provided,
      however, that prior to the expiration or termination of this Lease Tenant shall
      remove all telephone and other cabling installed in the Building by Tenant
      and
      remove from the Premises all Tenant’s personal property and any Trade Fixtures
      and all Alterations that Landlord has elected to require Tenant to remove as
      provided in Section 6.1 - Tenant
      Improvements & Alterations,
      and
      repair any damage caused by such removal. If such removal is not completed
      before the expiration or termination of the Term, Landlord shall have the right
      (but no obligation) to remove the same, and Tenant shall pay Landlord on demand
      for all costs of removal and storage thereof and for the rental value of the
      Premises for the period from the end of the Tern through the end of the time
      reasonably required for such removal. Landlord shall also have the right to
      retain or dispose of all or any portion of such property if Tenant does not
      pay
      all such costs and retrieve the property within ten (10) days after notice
      from
      Landlord (in which event title to all such property described in Landlords
      notice shall be transferred to and vest in Landlord). Tenant waives all Claims
      against Landlord for any derange or loss to Tenant resulting from Landlord’s
      removal, storage, retention, or disposition of any such property. Upon
      expiration or termination of this Lease or of Tenant’s possession, whichever is
      earliest, Tenant shall surrender all keys to the Premises or any other part
      of
      the Building and shall deliver to Landlord all keys for or make known to
      Landlord the combination of locks on all safes, cabinets and vaults that may
      be
      located in the Premises. Tenant’s obligations under this Section shall survive
      the expiration or termination of this Lease.

     

    19.2 Holding
      Over.
      If
      Tenant (directly or through any Transferee or other successor-in-interest of
      Tenant) remains in possession of the Premises after the expiration or
      termination of this Lease, Tenant’s continued possession shall be on the basis
      of a tenancy at the sufferance of Landlord: No act or omission by Landlord,
      other than its specific written consent, shall constitute permission for Tenant
      to continue in possession of the Premises, and if such consent is given or
      declared to have been given by a court judgment, Landlord may terminate Tenants
      holdover tenancy at any time upon seven CI) days written notice. In such event,
      Tenant shall continue to comply with or perform all the terns and obligations
      of
      Tenant under this Lease, except that the monthly Base Rent during Tenant’s
      holding over shall be one hundred twenty-five percent (125%) of the Base rent
      payable in the last full month prior to the termination hereof Acceptance by
      Landlord of rent after such termination shall not constitute a renewal or
      extension of this Lease; and nothing contained in this provision shall be deemed
      to waive Landlord’s right of re-entry or any other right hereunder or at law.
      Tennant shall indemnify, defend and hold Landlord harmless from and against
      all
      Claims arising or resulting directly or indirectly from Tenant’s failure to
      timely surrender the Premises, including (i) any rent payable by or any loss,
      cost, or damages claimed by any prospective tenant of the Premises, and (ii)
      Landlord’s damages as a result of such prospective tenant rescinding or refusing
      to enter into the prospective lease of the Premises by reason of such failure
      to
      timely surrender the Premises.

    
      

      
        
           

        

        
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            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    20. ENCUMBRANCES.

     

    20.1 Subordination.
      This
      Lease is expressly made subject and subordinate to any mortgage, deed of trust,
      ground lease, underlying lease or like encumbrance affecting any part of the
      Property tic any interest of Landlord therein which is now misting or hereafter
      executed or recorded (“Encumbrance”); provided, however, that such subordination
      shall only be effective, as to future Encumbrances, if the holder of the
      Encumbrance agrees that this Lease shall Survive the termination of the
      Encumbrance by lapse of time, foreclosure or otherwise so long as Tenant is
      not
      in default under this Lease. Provided the conditions of the preceding sentence
      are satisfied; Tenant shall execute and deliver to Landlord, within ten (10)
      days after written request therefor by Landlord and in a form reasonably
      requested by Landlord, any additional documents evidencing the subordination
      of
      this Lease -with respect to any such Encumbrance and the nondisturbance
      agreement of the holder of any such Encumbrance. If the interest of Landlord
      in
      the Property is transferred pursuant to or in lieu of proceedings for
      enforcement of any Encumbrance, Tenant shall immediately and automatically
      attorn to the new owner, and this Lease shall continue in full force and effect
      as a direct lease between the transferee and Tenant on the terms and conditions
      set forth in this Lease.

     

    20.2 Mortgagee
      Protection.
      Tenant
      agrees to give any holder of any Encumbrance covering any part of the Property
      (“Mortgagee”),
      by
      registered mail, a copy of any notice of default served upon Landlord, provided
      that prior to such notice Tenant has been notified in writing (by way of notice
      of assignment of rents and leases, or otherwise) of the address of such
      Mortgagee. If Landlord shall have failed to cure such default within thirty
      (30)
      days from the effective date of such notice of default, then the Mortgagee
      shall
      have an additional thirty (30) days within which to cure such default or if
      such
      default cannot be cured within that time, then such additional time as may
      be
      necessary to cure such default (including the time necessary to foreclose or
      otherwise terminate its Encumbrance, if necessary to effect such cure), and
      this
      Lease shall not be terminated so long as such remedies are being diligently
      pursued.

     

    21. ESTOPPEL
      CERTIFICATES AND FINANCIAL STATEMENTS.

     

    21.1 Estoppel
      Certificates.
      Within
      five (5) days after written request therefor, Tenant shall execute and deliver
      to Landlord, in a form provided by or satisfactory to Landlord, a certificate
      stating that this Lease is in full force and effect, describing any amendments
      or modifications hereto, acknowledging that this Lease is subordinate or prior,
      as the case may be, to any Encumbrance and stating any other information
      Landlord may reasonably request, including the Term, the monthly Base Rent,
      the
      date to which Rent has been paid, the amount of any security deposit or prepaid
      rent, whether either party hereto is in default under the terms of the Lease,
      and whether Landlord has completed its construction obligations hereunder (if
      any). Tenant irrevocably constitutes, appoints and authorizes Landlord as
      Tenant’s special attorney-in-fact for such purpose to complete, execute and
      deliver such certificate if Tenant fails timely to execute and deliver such
      certificate as provided above. Any person or entity purchasing, acquiring an
      interest in or extending financing with respect to the Property shall be
      entitled to rely upon any such certificate. If Tenant fails to deliver such
      certificate within five (5) days after Landlord’s second written request
      therefor, Tenant shall be liable to Landlord for any damages incurred by
      Landlord including any profits or other benefits from any financing of the
      Property or any interest to timely execute or deliver such estoppel
      certificate.

     

    21.2 Financial
      Statements.
      Within
      ten (10) days after written request therefor, but not more than once a year,
      Tenant shall deliver to Landlord a copy of the financial statements (including
      at least a year end balance sheet and a statement of profit and loss) of Tenant
      (and of each guarantor of Tenant’s obligations wider this Lease) for each of the
      three most recently completed years, prepared in accordance with generally
      accepted accounting principles (and, if such is Tenant’s normal practice,
      audited by an independent certified public accountant), all then available
      subsequent interim statements, and such other financial information as may
      reasonably be requested by Landlord or required by any Mortgagee.

    
      

      
        
           

        

        
          23

          
            

            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    22. NOTICES.
      Any notice, demand, request, consent or approval that either party desires
      or is
      required to give to the other party under this Lease shall be in writing and
      shall be served personally, delivered by messenger or courier service, or sent
      by U.S. certified mail, return receipt requested, posage prepaid, addressed
      to
      the other party at the party’s address for notices set forth in the Basic Lease
      Information. Any notice required pursuant to any Laws may be incorporated into,
      given concurrently with or given separately from any notice required under
      this
      Lease. Notices shall be deemed to have been given and be effective on the
      earlier of (a) receipt (or refusal of delivery or receipt); or (b) one (1)
      day
      after acceptance by the independent service for delivery, if sent by Independent
      messenger or courier service; or three (3) days after mailing if sent by mail
      in
      accordance with this Section. Either party may change its address for notices
      hereunder, effective fifteen (15) days after notice to the other party complying
      with this Section. If Tenant sublets the Premises, notices tram Landlord shall
      be effective on the subtenant when given to Tenant pursuant to this
      Section.

     

    23. ATTORNEYS’
      FEES. In the event of any dispute between Landlord and Tenant in any way related
      to this Lease, and whether involving contract and/or tort claims, the
      non-prevailing party shall pay to the prevailing party all reasonable attorneys
      fees and costs and expenses of any type, without restriction by statute, court
      rule or otherwise, incurred by the prevailing party in connection with any
      action or proceeding (including any appeal and the enforcement of any judgment
      or award), whether or not the dispute is litigated or prosecuted to final
      judgment (collectively, “Fees”).
      The
“prevailing party” shall be determined based upon an assessment of which party’s
      major arguments or positions taken in the action or proceeding could fairly
      be
      said to have prevailed (whether by compromise; settlement, abandonment by the
      other party of its claim or defense, final decision, after any appeals, or
      otherwise) over the other party’s major arguments or positions on major disputed
      issues. Any Fees incurred in enforcing a judgment shall be recoverable
      separately from any other amount included in the judgment and shall survive
      and
      not be merged in the judgment. The Fees shall be deemed an “actual pecuniary
      loss” within the meaning of Bankruptcy Code Section 365(b)(l)(B), and
      notwithstanding the foregoing, all Fees incurred by either party in any
      bankruptcy case filed by or against the other party; front and after the order
      for relief until this Lease is rejected or assumed in such bankruptcy case,
      will
      be “obligations of the debtor” as that phrase is used in Bankruptcy Code Section
      365(d)(3).

     

    24. QUIET
      POSSESSION. Subject to Tenant’s full and timely performance of all of Tenant’s
      obligations under this Lease and subject to the terms of this Lease, including
      Section 20 - Encumbrances,
      Tenant
      shall have the quiet possession of the Premises throughout the Term as against
      any persons or entities lawfully claiming by, through or under
      Landlord.

     

    25. SECURITY
      MEASURES. Landlord may, but shall be under no obligation to, implement security
      measures for the Property, such as the registration of all persons entering
      or
      leaving the Building, requiring identification for access to the Building,
      evacuation of the Building for cause, suspected cause, or for drill purposes,
      the issuance of magnetic pass cards or keys for Building or elevator access
      and
      other actions that Landlord deems necessary or appropriate to prevent any threat
      of property loss or damage, bodily injury or business interruption; provided,
      however, that such measures shall be implemented in a way as not to
      inconvenience tenants of the Building unreasonably. If Landlord uses an access
      card system, Landlord may require Tenant to pay Landlord a deposit for each
      after-hours Building access card issued to Tenant, in the amount specified
      in
      the Basic Lease Information. Tenant shall be responsible for any loss, theft
      or
      breakage of any such cards, which must be retuned by Tenant to Landlord upon
      expiration or earlier termination of the Lease. Landlord may retain the deposit
      for any card not so returned. Landlord shall at all times have the right to
      change, alter or reduce any such security services or measures. Tenant shall
      cooperate and comply with, and cause Tenant’s Representatives and Visitors to
      cooperate and comply with, such security measures. Landlord, its agents and
      employees shall have no liability to Tenant or its Representatives or Visitors
      for the implementation or exercise of, or the failure to implement or exercise,
      any such security measures or for any resulting disturbance of Tenant’s use or
      enjoyment of the Premises.

     

    26. FORCE
      MAJEURE. If Landlord is delayed interrupted or prevented from performing any
      of
      its obligations under this Lease, including its obligations under the
      Construction Rider (if any), and such delay, interruption or prevention is
      due
      to fire, act of God, governmental act or failure to net, labor dispute,
      unavailability of materials or any cause outside the reasonable control of
      Landlord, then the time for performance of the affected obligations of Landlord
      shall be extended for a period equivalent to the period of such delay,
      interruption or prevention.

    
      

      
        
           

        

        
          24

          
            

            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    27. RULES
      AND
      REGULATIONS. Tenant shall be bound by and shall comply with the rules and
      regulations attached to and made a part of this Lease as Exhibit C to the extent
      those rules and regulations adopted by Landlord for all tenants of the Building,
      upon notice to Tenant thereof (collectively, the “Building
      Rules”).
      Landlord shall not be responsible to Tenant or to any other person for any
      violation of, or failure to observe, the Building Rules by any other tenant
      or
      other person.

     

    28. LANDLORD’S
      LIABILITY. The term “Landlord,” as used in this Lease, shall mean only the owner
      or owners of the Building at the time in question. In the event of any
      conveyance of title to the Building, them from and after the date of such
      conveyance, the transferor Landlord shall be relieved of all liability with
      respect to Landlord’s obligations to be performed under this Lease after the
      date of such conveyance. Notwithstanding any other term or provision of this
      Lease, the liability of Landlord for its obligations under this Lease is limited
      solely to Landlord’s interest in the Building as the same may from time to time
      be encumbered, and no personal liability shall at any time be asserted or
      enforceable against any other assets of Landlord or against Landlord’s partners
      or members or its or their respective partners, shareholders, members,
      directors, officers or managers on account of any of Landlord’s obligations or
      any actions under this Lease.

     

    29. CONSENTS
      AND APPROVALS.

     

    29.1 Determination
      in Good Faith.
      Wherever the consent, approval, judgment or determination of Landlord is
      required or permitted under this Lease, Landlord may exercise its good faith
      business judgment in granting or withholding such consent or approval or in
      making such judgment o: determination without reference to any extrinsic
      standard of reasonableness, unless the specific provision contained in this
      Lease providing for such consent, approval judgment or determination specifies
      that Landlord’s consent or approval is not to be unreasonably withheld, or that
      such judgment or determination is to be reasonable, or otherwise specifies
      the
      standards under which Landlord may withhold its consent. If it is determined
      that Landlord failed to give its consent where it was required to do so under
      this Lease, Tenant shall be entitled to injunctive relief but shall not to
      be
      entitled to monetary damages or to terminate this Lease for such
      failure.

     

    29.2 No
      Liability Imposed on Landlord.
      The
      review and/or approval by Landlord of any item or matter to be reviewed or
      approved by Landlord under the terms of this Lease or any Exhibits or Addenda
      hereto shall not impose upon Landlord any liability for the accuracy or
      sufficiency of any such item or matter or time quality or suitability of such
      item for its intended use. Any such review or approval is for the sole purpose
      of protecting Landlord’s interest in the Property, and no third parties,
      including Tenant or the Representatives and Visitors of Tenant or any person
      or
      entity claiming by, through or under Tenant, shall have any rights as a
      consequence thereof.

     

    30. WAIVER
      OF
      RIGHT TO JURY TRIAL. Landlord and Tenant waive their respective rights to trial
      by jury of any contract or tort claim, counterclaim, cross-complaint, or cause
      of action in any action, proceeding, or hearing brought by either party against
      the other on any matter arising out of or in any way connected with this Lease,
      the relationship of Landlord and Tenant, or Tenant’s use or occupancy of the
      Premises, including any claim of injury or damage or the enforcement of any
      remedy under any current or future law, statute, regulation, code, or
      ordinance.

     

    31. BROKERS.
      Landlord shall pay the fee or commission of the broker or brokers identified
      in
      the Basic Lease Information (the “Broker”)
      in
      accordance with Landlord’s separate written agreement with the Broker, if any.
      Tenant warrants and represents to Landlord that in the negotiating or making
      of
      this Lease neither Tenant nor anyone acting on Tenant’s behalf has dealt with
      any broker or finder who might be entitled to a fee or commission for this
      Lease
      other than the Broker. Tenant shall indemnify and hold Landlord harmless from
      any claim or claims, including costs, expenses and attorney’s fees incurred by
      Landlord asserted by any other broker or finder for a fee or commission based
      upon any dealings with or statements made by Tenant or Tenant’s
      Representatives.

     

    32. RELOCATION
      OF PREMISES. For the purpose of maintaining an economical and proper
      distribution of tenants acceptable to Landlord throughout the Project, Landlord
      shall have the right from time to time during the Term to relocate the Premises
      within the Project, provided that (a) the rentable and usable area of the new
      Premises is of equivalent size to the existing Premises, subject to a variation
      of up to ten percent (10%”), (b) Landlord shall pay the cost of providing tenant
      improvements In the new Premises, which shall be substantially comparable in
      layout to those in the existing Premises, and (c) Landlord shall pay reasonable
      costs (to the extent such costs are submitted in writing to Landlord and
      approved in writing by Landlord prior to such move) of moving Tenant’s Trade
      Fixtures and personal property to the new Premises. Landlord shall deliver
      to
      Tenant written notice of Landlord’s election to relocate the Premises,
      specifying the new location at least sixty (60) days prior to the date the
      relocation is to be effective.

    
      

      
        
           

        

        
          25

          
            

            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    33. ENTIRE
      AGREEMENT. This Lease, including the Exhibits and any Addenda attached hereto,
      and the documents referred to herein, jitney, constitute the entire agreement
      between Landlord and Tenant with respect to the leasing of space by Tenant
      in
      the Building, and supersede all prior or contemporaneous agreements,
      understandings, proposals and other representations by or between Landlord
      and
      Tenant, whether written or oral, all of which are merged herein. Neither
      Landlord nor Landlord’s agents have made any representations or warranties with
      respect to the Premises, the Building, die Project or this Lease except as
      expressly set forth herein, and no rights, easements or licenses shall be
      acquired by Tenant by implication or otherwise unless expressly set forth
      herein. The submission of this Lease for examination does not constitute an
      option for the Premises and this Lease shall become effective as a binding
      agreement only upon execution and delivery thereof by Landlord to
      Tenant.

     

    34. MISCELLANEOUS.
      This Lease may not be amended or modified except by a writing slimed by Landlord
      and Tenant. Subject to Section 14 -.Assignment
      and Subletting
      and
      Section 28 - Landlord’s
      Liability,
      this
      Lease shall be binding on and shall inure to the benefit of the parties and
      their respective successors, assigns and legal representatives: The
      determination that any provisions hereof may be void; invalid, illegal or
      unenforceable shall not impair any other provisions hereof and all such other
      provisions of this Lease shall remain in full force and effect.

     

    The
      unenforceability, invalidity or illegality of any provision of this Lease under
      particular circumstances shall not render unenforceable, invalid or illegal
      other provisions of this Lease; or the same provisions under other
      circumstances. This Lease shall be construed and interpreted in accordance
      with
      the laws (excluding conflict of laws principles) of the State in which the
      Building is located. The provisions of this lease shall be construed in
      accordance with the fair meaning of the language used and shall not be strictly
      construed against either party, even if such parry drafted the provision in
      question; When required by the context of this Lease; the singular includes
      the
      plural. ‘Wherever the term “including” is used in this Lease, it shall be
      interpreted as meaning “including, but not limited to” the matter or matters
      thereafter enumerated. The captions contained in this Lease are for purposes
      of
      convenience only and are not to be used to interpret or construe this Lease.
      If
      more than one person or entity is identified as Tenant hereunder, the
      obligations of each and all of them under this Lease shall be joint and several.
      Time is of the essence with respect to this Lease, except as to the conditions
      relating to the delivery of possession of the Premises to Tenant_ Neither
      Landlord nor Tenant shall record this Lease.

     

    35. AUTHORITY.
      If Tenant is a corporation., partnership, limited liability company or other
      form of business entity, each of the persons executing this Lease on behalf
      of
      Tenant warrants and represents that Tenant is a duly organized and validly
      existing entity, that Tenant has full right and authority to enter into this
      Lease and that the persons signing on behalf of Tenant are authorized to do
      so
      and have the power to bind Tenant to this Lease. Tenant shall provide Landlord
      upon request with evidence reasonably satisfactory to Landlord confirming the
      foregoing representations.

    
      

      
        
           

        

        
          26

          
            

            Tenant Landlord

            _____ _______

          

        

        
           

      

    

    IN
      WITNESS WHEREOF, Landlord and Tenant have entered into this Lease as of the
      date
      first above written.

     

    
      	
              TENANT:

            	 	
              LANDLORD:

            
	 	 	 
	
              BIOELECTRONIC
                CORPORATION

              a
                Maryland Corporation

            	 	
              WESTLAKE
                PLAZA BUINESS PARK,.LLC

              a
                California Limited Liability Company

            
	 	 	 
	 	 	 
	 	 	 
	
              By:

            	
              /s/
                Thomas O’Connor

            	 	
              By:

            	
              /s/
                Moshe Silagi

            
	 	 	 	 
	
              Name:

            	
              Thomas
                O’Connor

            	 	
              Name:

            	
              Moshe
                Silagi

            
	 	 	 	 
	
              Title:

            	
              C.O.O.

            	 	
              Title:

            	
              Managing
                Member

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
              By:

            	 	 	 	 
	 	 	 	 	 
	
              Name:

            	 	 	 	 
	 	 	 	 	 
	
              Title:

            	 	 	 	 

    

    
      

      
        
           

        

        
          27

          
            

            Tenant Landlord

            _____ _______

          

        

        
           

      

    

     

    EXHIBITS:

     

    Exhibit
      A: The
      Premises

     

    Exhibit
      B: Construction
      Rider

     

    Exhibit
      C: Building
      Rules

     

    Exhibit
      D: Additional
      Provisions

     

    The
      Basic
      Lease Information set forth above is part of the Lease. In the event of any
      conflict between any provision in the Basic Lease Information and the Lease,
      the
      Lease shall control.

    
      

      
        
           

        

        
          28

          
            

            Tenant Landlord

            _____ _______

          

        

        
           

      

    

     

     

     

    

    
      
         

      

      
        29

        
          

          Tenant Landlord

          _____ _______

        

      

      
         

    

    

     

     

     

    

    
      
         

      

      
        30

        
          

          Tenant Landlord

          _____ _______

        

      

      
         

    

     

    EXHIBIT
      C

     

     

    ATTACHED
      TO AWD FORMING A PART OF

    LEASE
      AGREEMENT DATED AS OF JANUARY 31, 2005

    BETWEEN

    WESTLAKE
      PLAZA BUSINESS PARK, LLC, AS LANDLORD,

    AND

    BIOELECTRON1C
      CORPORATION, AS TENANT

    (“LEASE”)

     

     

    BUILDING
      RULES

     

    The
      following Building Rules are additional provisions of the foregoing Lease to
      which they are attached. The capitalized teems used herein have the same
      meanings as these terms are given in the Lease.

     

    1. Use
      of
      Common Areas.
      Tenant
      will not obstruct the ,sidewalks, halls, passages, exits, entrances, elevators
      or stairways of the Building (“Common Areas”), and Tenant will not use the
      Common Areas for any purpose other than ingress and ogress to and from the
      Premises. The Common Areas, except for the sidewalks, are not open to the
      general public and Landlord reserves the right to control and prevent access
      to
      the Common Areas of any person whose presence, in Landlord’s opinion, would be
      prejudicial to the safety, reputation and interests of the Building and its
      tenants.

     

    2. No
      Access to Roof.
      Tenant
      has no right of access to the roof of the Building and will not install, repair
      or replace any antenna, aerial, aerial wires, fan, air-conditioner or other
      device on the roof of the Building, without the prior written consent of
      Landlord. Any such device installed without such written consent is subject
      to
      removal at Tenant’s expense without notice at any time. In any event Tenant will
      be liable for any damages or repairs incurred or required as a result of its
      installation, use, repair, maintenance or removal of such devices on the roof
      and agrees to indemnify and hold harmless Landlord from any liability, loss;
      damage, cost or expense; including reasonable attorneys’ fees, arising from any
      activities of Tenant or of Tenant’s Representatives on the roof of the
      Building.

     

    3. Signage.
      No
      sign; placard, picture, name, advertisement or notice visible from the exterior
      of the Premises will be inscribed, painted, affixed or otherwise displayed
      by
      Tenant on or in any part of the Building without the prior written consent
      of
      Landlord: Landlord reserves the right to adopt and furnish Tenant with general
      guidelines relating to signs in or on the Building. All approved signage will
      be
      inscribed, painted or affixed at Tenant’s expense by a person approved by
      Landlord, which approval will not be unreasonably withheld:

     

     

    Exhibit
      C, Page 1

    
      
        
           

        

        
          31

          
            

            Tenant Landlord

            _____ _______

          

        

        
           

      

    

    4. Prohibited
      Uses.
      The
      Premises will not be used for manufacturing, for the storage of merchandise
      held
      for sale to the general public, for lodging, or for the sale of goods to the
      general public. Tenant will not permit any food preparation on the Premises
      except that Tenant may use Underwriters’ Laboratory approved equipment for
      brewing coffee, tea, hot chocolate and similar beverages so long as such use
      is
      in accordance with all applicable federal, state and city laws, codes,
      ordinances, rules and regulations.

     

    5. Janitorial
      Services.
      Tenant
      will not employ any person for the purpose of cleaning the Premises or permit
      any person to enter the Building for such purpose other than Landlord’s
      janitorial service, except with Landlord’s prior written consent. Tenant will
      not necessitate, and will be liable for the cost of, any undue amount of
      janitorial labor by reason of Tenant’s carelessness in or indifference to the
      preservation of good order and cleanliness in the Premises. Janitorial service
      will not be furnished to areas in the Premises on nights when such areas are
      occupied after 9:30 p.m., unless such service is extended by written agreement
      to a later hour in specifically designated areas of the Premises.

     

    6. Keys
      and Locks.
      Landlord will furnish Tenant, free of charge, two (2) keys to each door or
      lock
      in the Premises. Landlord may make a reasonable charge for any additional or
      replacement keys. Tenant will not duplicate any keys, alter any locks or install
      any new or additional lock or bolt on arty door of its Premises or on any other
      part of the Building without the prior written consent of Landlord and, in
      any
      event, Tenant will provide Landlord with a key for any such lock. On the
      termination of the Lease, Tenant will deliver to Landlord all keys to any locks
      or doors in the Building which have been obtained by Tenant.

     

    Term
      shall be upon all the terms and conditions set forth in this Lease and all
      Exhibits thereto, except that: (i) Tenant shall have no further option to extend
      the Term of the Lease, other than as specifically set forth herein; (ii)
      Landlord shall not be obligated to contribute funds toward the cost of any
      remodeling, renovation, alteration or improvement work in the Premises; and
      (iii) Base Rent for any such Extension Period shall be the then Fair Market
      Base
      Rental (as defined below) for the Premises for the space and tarn involved,
      which shall be determined as set forth below. ‘

     

    (a) “Fair
      Market Base Rental”
shall
      mean the “fair market” Base Rent at the time or times in question for the
      applicable space, based on the prevailing rentals then being charged to tenants
      in the Building and tenants in other office buildings in the general vicinity
      of
      the Building of comparable size, location, quality and age as the Building
      for
      leases with terms equal to the Extension Period, taking into account the
      creditworthiness and financial strength of the tenant, the financial guaranties
      provided by the tenant (if any), the value of market concessions (including
      the
      value of construction, renovation, moving and other allowances or rent credits),
      the desirability, location in the building, size and quality of the space,
      tenant finish allowance and/or tenant improvements, included services, operating
      expenses and tax and expense stops or other escalation clauses, and brokerage
      commissions, for the space in the Building for which Fair Market Base Rental
      is
      being determined and for comparable space in the buildings which are being
      used
      for comparison. Fair Market Base Rental shall also reflect the then prevailing
      rental structure for comparable office buildings in the general vicinity of
      the
      Property, so that if, for example, at the time Fair Market Base Rental is being
      determined the prevailing rental structure for comparable space and for
      comparable lease terms includes periodic rental adjustments or escalations,
      Fair
      Market Base Rental shall reflect such rental structure.

    
      

      
        
           

        

        
          32

          
            

            Tenant Landlord

            _____ _______

          

        

        
           

        

      

    

    (b) Landlord
      and Tenant shall endeavor to agree upon the Fair Market Base Rental. If they
      are
      unable to so agree within thirty (30) days after receipt by Landlord of Tenant’s
      notice of exercise of the Extension Option, Landlord and Tenant shah mutually
      select a licensed real estate broker who is active in the leasing of office
      space in the general vicinity of the Property. Landlord shall submit Landlord’s
      determination of Fair Market Base Rental and Tenant shall submit Tenant’s
      determination of Fair Market Base Rental to such broker, at such rune or times
      and in such manner as Landlord and Tenant shall agree (or as directed by the
      broker if Landlord and Tenant do not promptly agree). The broker shall select
      either Landlord’s or Tenant’s determination as the Fair Market Base Rental, and
      such determination shall be binding on Landlord and Tennant. If Tenant’s
      determination is selected as the Fair Market Base Rental, then Landlord shall
      bear all of the broker’s cost and fem. If Landlords determination is selected as
      the Fair Market Base Rental, then Tenant shall bear all (tithe broker’s cost and
      fees.

     

    (c) In
      the
      event the Fair Market Base Rental for any Extension Period has not been
      determined at such time as Tenant is obligated to pay Base Rent for such
      Extension Period, Tenant shall pay as Base Rent pending such determination,
      the
      Base Rent in effect for such space immediately prior to the Extension Period;
      provided, that upon the determination of the applicable Fair Market Base Rental,
      any shortage of Base Rent paid, together with interest at the rate specified
      in
      the Lease, shall be paid to Landlord by Tenant.

     

    (d) In
      no
      event shall the Base Rent during any Extension Period be less than the Base
      Rent
      in effect immediately prior to such Extension Period.

     

    (e) The
      term
      of this Lease, whether consisting of the Initial Term alone or the Initial
      Term
      as extended by any Extension Period (if any Extension Option is exercised),
      is
      referred to in this Lease as the “Term”.

     

    
      Exhibit
        D, Page 2

      
        
           

        

          33

          
            

            Tenant Landlord

            _____ _______Unassociated Document

    Exhibit
      10.6

    

    BIOELECTRONICS
      CORPORATION

    2004
      EQUITY INCENTIVE PLAN

    

    

    This
      BioElectronics Corporation 2004 Equity Incentive Plan (the “Plan”)
      is
      established by BioElectronics Corporation, a Maryland corporation (the
      "Company"),
      effective
      as of November 30, 2004 (the “Effective
      Date”),
      subject to the approval of the shareholders of the Company within twelve (12)
      months thereafter. Capitalized terms not otherwise defined shall have the
      meanings set forth in Section 25.

    

    1. Purpose.
      The
      Plan is intended to provide qualifying Employees (including officers and
      Directors), Independent Directors and Consultants with equity ownership in
      the
      Company, thereby strengthening their commitment to the success of the Company,
      promoting the identity of interests between the Company’s shareholders and such
      Employees, Independent Directors and Consultants and stimulating their efforts
      on behalf of the Company, and to assist the Company in attracting and retaining
      talented personnel.

    

    2. Scope
      of the Plan.
      Subject
      to adjustment in accordance with Section 20, the total number of Shares for
      which grants under the Plan shall be available is 10,000,000. If any Shares
      subject to any Award granted hereunder are forfeited or such Award otherwise
      terminates without the issuance of such Shares or for other consideration in
      lieu of such Shares, the Shares subject to such Award, to the extent of any
      such
      forfeiture or termination, shall again be available for grant under the Plan.
      Shares awarded under the Plan may be treasury shares or newly-issued
      shares.

    

    3. Administration.
      

    

    (a) The
      Plan
      shall be administered by a Committee which shall consist of at least two or
      more
      members of the Board, all of whom, commencing with the date on which the Company
      becomes a Public Company, shall qualify as “non-employee directors” under
      Section (b)(3)(i) of Rule 16b-3. The number of members of the Committee may
      from
      time to time be increased or decreased, and commencing with the date on which
      the Company becomes a Public Company, shall be subject to such conditions,
      as
      the Board deems appropriate to permit transactions in Shares pursuant to the
      Plan to satisfy such conditions of Rule 16b-3 as then in effect. In the event
      there is no Committee or the Committee is unable to act, the Board shall take
      any and all actions required or permitted to be taken by the Committee under
      the
      Plan and shall serve as the Committee.

    

    (b) Subject
      to the express provisions of the Plan, the Committee has full and final
      authority and discretion as follows:

    

    (i) to
      determine when and to whom Awards should be granted and the terms, conditions
      and restrictions applicable to each Award, including, without limitation, (A)
      the exercise price of the Award, (B) the method of payment for Shares purchased
      upon the exercise of the Award, (C) the method of satisfaction of any tax
      withholding obligation arising in connection with the Award, (D) the timing,
      terms and conditions of the exercisability of the Award or the vesting of any
      Shares acquired upon the exercise thereof, (E) the time of the expiration of
      the
      vesting of any Shares acquired upon the exercise thereof, (F) the effect of
      the
      Grantee’s termination of employment or service with the Company on any of the
      foregoing, (G) all other terms, conditions and restrictions applicable to the
      Award or such Shares not inconsistent with the terms of the Plan, (H) the
      benefit payable under any SAR or Performance Share, and (I) whether or not
      specific Awards shall be identified with other specific Awards, and if so
      whether they shall be exercisable cumulatively with, or alternatively to, such
      other specific Awards;

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii) to
      determine the amount, if any, that a Grantee shall pay for Restricted Shares,
      whether to permit or require the payment of cash dividends thereon to be
      deferred and the terms related thereto, when Restricted Shares (including
      Restricted Shares acquired upon the exercise of any Award) shall be forfeited
      and whether such Shares shall be held in escrow;

     

    (iii) to
      interpret the Plan and to make all determinations necessary or advisable for
      the
      administration of the Plan;

    

    (iv) to
      make,
      amend and rescind rules, guidelines and policies relating to the Plan, or to
      adopt supplements to, or alternative versions of, the Plan, including, without
      limitation, rules with respect to the exercisability and forfeitability of
      Awards upon the termination of employment or service of a Grantee;

    

    (v) to
      determine the terms, conditions and restrictions of all Award Agreements (which
      need not be identical) and, with the consent of the Grantee, to amend any such
      Award Agreement at any time, among other things, to permit transfers of such
      Awards to the extent permitted by the Plan, except that the consent of the
      Grantee shall not be required for any amendment which (A) does not adversely
      affect the rights of the Grantee or (B) is necessary or advisable (as determined
      by the Committee) to carry out the purpose of the Award as a result of any
      change in applicable law;

    

    (vi) to
      cancel, with the consent of the Grantee, outstanding Awards and to grant new
      Awards in substitution therefor;

    

    (vii) to
      accelerate the exercisability of, and to accelerate or waive any or all of
      the
      terms, conditions and restrictions applicable to, any Award or any group of
      Awards for any reason and at any time, including in connection with a
      termination of employment (other than for Cause);

    

    (viii) subject
      to Section 6(c), to extend the time during which any Award or group of Awards
      may be exercised;

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (ix) to
      make
      such adjustments or modifications to Awards to Grantees working outside the
      United States as are advisable to fulfill the purposes of the Plan;

    

    (x) to
      impose
      such additional terms, conditions and restrictions upon the grant, exercise
      or
      retention of Awards as the Committee may, before or concurrent with the grant
      thereof, deem appropriate; and

    

    (xi) to
      take
      any other action with respect to any matters relating to the Plan for which
      it
      is responsible.

     

    The
      determination of the Committee on all matters relating to the Plan or any Award
      Agreement shall be final. 

    

    4. Indemnification
      and Reimbursement.
      Service
      as a member of the Committee or any other duly appointed subcommittee shall
      constitute service as a Board member, and such members shall accordingly be
      entitled to full indemnification and reimbursement as Board members for their
      service as members of the Committee or any other duly appointed subcommittee.
      No
      Committee or other duly appointed subcommittee member shall be liable for any
      act or omission made in good faith with respect to the Plan or any Award granted
      under the Plan.

    

    5. Eligibility.
      The
      Committee may, in its discretion, grant Awards to any Eligible Person, whether
      or not he or she has previously received an Award, except in the case of an
      ISO,
      which can only be granted to an Employee of the Company or any
      Subsidiary.

    

    6. Conditions
      to Grants.

    

    (a) General
      Conditions.
      Awards
      shall be evidenced by written Award Agreements specifying the number of Shares
      covered thereby, in such form as the Committee shall from time to time
      establish. Award Agreements may incorporate all or any of the terms of the
      Plan
      by reference and shall comply with and be subject to the following terms and
      conditions:

    

    (i) The
      Grant
      Date of an Award shall be the date on which the Committee grants the Award
      or
      such later date as specified in advance by the Committee;

    

    (ii) In
      the
      case of an Award of options, the Option Term shall under no circumstances extend
      more than ten (10) years after the Grant Date and shall be subject to earlier
      termination as herein provided; and 

    

    (iii) Any
      terms
      and conditions of an Award not set forth in the Plan shall be set forth in
      the
      Award Agreement related to that Award.

    

    (b) Grant
      of Options.
      No
      later than the Grant Date of any option, the Committee shall determine the
      Option Price of such option. Subject to Section 6(c), the Option Price of an
      option may be the Fair Market Value of a Share on the Grant Date or may be
      less
      than or more than that Fair Market Value. An option shall be exercisable for
      unrestricted Shares, unless the Award Agreement provides that it is exercisable
      for Restricted Shares.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (c) Grant
      of ISOs.
      At the
      time of the grant of any option, the Committee may, in its discretion, designate
      that such option shall be made subject to additional restrictions to permit
      the
      option to qualify as an "incentive stock option" under the requirements of
      Section 422 of the Code. Any option designated as an ISO:

     

    (i) shall
      have an Option Price that is not less than the Fair Market Value of a Share
      on
      the Grant Date and, if granted to a Ten Percent Owner, have an Option Price
      that
      is not less than 110% of the Fair Market Value of a Share on the Grant
      Date;

    

    (ii) shall
      be
      for a period of not more than ten (10) years and, if granted to a Ten Percent
      Owner, not more than five (5) years, from the Grant Date and shall be subject
      to
      earlier termination as provided herein or in the applicable Award
      Agreement;

    

    (iii) shall
      meet the limitations of this subparagraph 6(c)(iii). If the aggregate Fair
      Market Value of Shares with respect to which ISOs first become exercisable
      by a
      Grantee in any calendar year exceeds the limit determined in accordance with
      the
      provisions of Section 422 of the Code (the "Limit")
      taking
      into account Shares subject to all ISOs granted by the Company that are held
      by
      the Grantee, the excess will be treated as nonqualified options. To determine
      whether the Limit is exceeded, the Fair Market Value of Shares subject to
      options shall be determined as of the Grant Dates of the options. In reducing
      the number of options treated as ISOs to meet the Limit, the most recently
      granted options will be reduced first. If a reduction of simultaneously granted
      options is necessary to meet the Limit, the Committee may designate which Shares
      are to be treated as Shares acquired pursuant to an ISO;

    

    (iv) shall
      be
      granted within ten (10) years from the Effective Date;

    

    (v) shall
      require the Grantee to notify the Committee of any disposition of any Shares
      issued upon the exercise of the ISO under the circumstances described in Section
      421(b) of the Code (relating to certain disqualifying dispositions, a
      "Disqualifying
      Disposition"),
      within ten (10) business days after such Disqualifying Disposition;
      and

    

    (vi) unless
      otherwise permitted by the Code, shall by its terms not be assignable or
      transferable other than by will or the laws of descent and distribution and
      may
      be exercised, during the Grantee's lifetime, only by the Grantee, except that
      the Grantee may, in accordance with Section 7, designate in writing a
      beneficiary to exercise his or her ISOs after the Grantee's death.

    

    (d) Grant
      of SARs.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (i) When
      granted, SARs may, but need not, be identified with a specific option, specific
      Restricted Shares, or specific Performance Shares of the Grantee (including
      any
      option, Restricted Shares, or Performance Shares granted on or before the Grant
      Date of the SARs) in a number equal to or different from the number of SARs
      so
      granted. If SARs are identified with Shares subject to an option, with
      Restricted Shares, or with Performance Shares, then, unless otherwise provided
      in the applicable Award Agreement, the Grantee's associated SARs shall terminate
      upon (A) the expiration, termination, forfeiture, or cancellation of such
      option, Restricted Shares or Performance Shares, (B) the exercise of such option
      or Performance Shares, or (C) the date such Restricted Shares become
      nonforfeitable.

    

    (ii) The
      strike price (the "Strike
      Price")
      of any
      SAR shall equal, for any SAR that is identified with an option, the Option
      Price
      of such option, or for any other SAR, one hundred percent (100%) of the Fair
      Market Value of a Share on the Grant Date of such SAR, except that the Committee
      may (A) specify a higher Strike Price in the Award Agreement or (B) provide
      that
      the benefit payable upon exercise of any SAR shall not exceed such percentage
      of
      the Fair Market Value of a Share on such Grant Date as the Committee shall
      specify.

    

    (e) Grant
      of Performance Shares.

    

    
      
        (i)
          Before
          the grant of Performance Shares, the Committee shall:

      

    

    

    (A) determine
      objective performance goals, which may consist of any one or more of the
      following goals deemed appropriate by the Committee: earnings (either in the
      aggregate or on a per share basis), operating income, cash flow, EBITDA
      (earnings before interest, taxes, depreciation and amortization), return on
      equity, indices related to EVA (economic value added), per share rate of return
      on the Common Stock (including dividends), general indices relative to levels
      of
      general customer service satisfaction, as measured through various
      randomly-generated customer service surveys, market share (in one or more
      markets), customer retention rates, market penetration rates, revenues,
      reductions in expense levels, the attainment by the Common Stock of a specified
      market value for a specified period of time, and any other object performance
      goal deemed appropriate by the Committee, in each case where applicable to
      be
      determined either on a company-wide basis, individual basis or in respect of
      any
      one or more business units, and the amount of compensation under the goals
      applicable to such grant;

    

    (B) designate
      a period for the measurement of the extent to which performance goals are
      attained, which may begin simultaneously with, prior to or following the Grant
      Date (the "Performance
      Period");
      and

    

    (C) assign
      a
      performance percentage to each level of attainment of performance goals during
      the Performance Period, with the percentage applicable to minimum attainment
      being zero percent and the percentage applicable to maximum attainment to be
      determined by the Committee from time to time (the “Performance
      Percentage”).  

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (ii) If
      a
      Grantee is promoted, demoted, or transferred to a different business unit of
      the
      Company during a Performance Period, then, to the extent the Committee
      determines any one or more of the performance goals, Performance Period or
      Performance Percentage are no longer appropriate, the Committee may make any
      changes thereto as it deems appropriate in order to make them
      appropriate.

    

    (iii) When
      granted, Performance Shares may, but need not, be identified with Shares subject
      to a specific option, specific Restricted Shares or specific SARs of the Grantee
      granted under the Plan in a number equal to or different from the number of
      the
      Performance Shares so granted. If Performance Shares are so identified, then,
      unless otherwise provided in the applicable Award Agreement, the Grantee's
      associated Performance Shares shall terminate upon (A) the expiration,
      termination, forfeiture or cancellation of the option, Restricted Shares or
      SARs
      with which the Performance Shares are identified, (B) the exercise of such
      option or SARs, or (C) the date Restricted Shares become
      nonforfeitable.

    

    (f) Grant
      of Restricted Shares.

    

    (i) The
      Committee shall determine the amount, if any, that a Grantee shall pay for
      Restricted Shares, subject to the following sentence. The Committee shall
      require the Grantee to pay at least the Minimum Consideration for each
      Restricted Share. Such payment shall be made in full by the Grantee before
      the
      delivery of the shares and in any event no later than ten (10) business days
      after the Grant Date. In the discretion of the Committee and to the extent
      permitted by law, payment may also be made in accordance with Section 9.

    

    (ii) The
      Committee may, but need not, provide that all or any portion of a Grantee's
      Restricted Shares, or Restricted Shares acquired upon exercise of an option,
      shall be forfeited:

    

    (A) except
      as
      otherwise specified in the Plan or the Award Agreement, upon the Grantee's
      termination of employment within a specified time period after the Grant Date;
      or

    

    (B) if
      the
      Company or the Grantee does not achieve specified performance goals (if any)
      within a specified time period after the Grant Date and before the Grantee's
      termination of employment; or 

    

    (C) upon
      failure to satisfy such other conditions as the Committee may specify in the
      Award Agreement.

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    (iii) If
      Restricted Shares are forfeited and the Grantee was required to pay for such
      shares or acquired such Restricted Shares upon the exercise of an option, the
      Grantee shall be deemed to have resold such Restricted Shares to the Company
      at
      a price equal to the lesser of (A) the amount paid by the Grantee for such
      Restricted Shares or (B) the Fair Market Value of the Restricted Shares on
      the
      date of forfeiture, which shall be paid to the Grantee in cash as soon as
      administratively practicable. Such Restricted Shares shall cease to be
      outstanding and shall no longer confer on the Grantee thereof any rights as
      a
      shareholder of the Company, from and after the date of the event causing the
      forfeiture, whether or not the Grantee accepts the Company's tender of payment
      for such Restricted Shares.

    

    (iv) The
      Committee may provide that the certificates for any Restricted Shares (A) shall
      be held (together with a stock power executed in blank by the Grantee) in escrow
      by the Secretary of the Company until such Restricted Shares become
      nonforfeitable or are forfeited or (B) shall bear an appropriate legend
      restricting the transfer of such Restricted Shares. If any Restricted Shares
      become nonforfeitable, the Company shall cause certificates for such shares
      to
      be issued without such legend.

     

    (v)
      At
      the time of a grant of Restricted Shares, the Committee may require the payment
      of cash dividends thereon to be deferred and, if the Committee so determines,
      reinvested in additional Restricted Shares. Stock dividends or deferred cash
      dividends issued with respect to Restricted Shares shall be subject to the
      same
      restrictions and other terms as apply to the Restricted Shares with respect
      to
      which such dividends are issued. The Committee may in its discretion provide
      for
      payment of interest on deferred cash dividends.

    

    (g) Grant
      of Stock Bonuses.
      The
      Committee may grant Bonus Shares to any Eligible Employee. 

    

    7. Non-Transferability.
      An
      Award granted hereunder shall not be assignable or transferable other than
      by
      will or the laws of descent and distribution and may be exercised during the
      Grantee's lifetime only by the Grantee or his or her guardian or legal
      representative, except that, subject to Section 6(c) in respect of ISOs, a
      Grantee may, if permitted by the Committee, in its discretion, (a) designate
      in
      writing a beneficiary to exercise an Award after his or her death (if that
      designation has been received by the Company prior to the Grantee's death)
      and
      (b) transfer the Award to one or more members of the Grantee's Immediate Family
      or any other individuals or entities.

    

    8. Exercise.

    

    (a) Exercise
      of Options.

    

    (i) Subject
      to Section 6, each option shall become exercisable at such time or times as
      may
      be specified by the Committee from time to time in the applicable Award
      Agreement.

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (ii) An
      option
      shall be exercised by the delivery to the Company during the Option Term of
      (A)
      a written notice of intent to purchase a specific number of Shares subject
      to
      the option in accordance with the terms of the option by the person entitled
      to
      exercise the option and (B) payment in full of the Option Price of such specific
      number of Shares in accordance with Section 8(a)(iii).

    

    (iii) Payment
      of the Option Price may be made by any one or more of the following
      means:

    

    (A) cash,
      check, or wire transfer;

    

    (B) with
      the
      approval of the Committee, Mature Shares, valued at their Fair Market Value
      on
      the date of exercise;

    

    (C) with
      the
      approval of the Committee, Restricted Shares held by the Grantee for at least
      six (6) months prior to the exercise of the option, each such share valued
      at
      the Fair Market Value of a Share on the date of exercise;

    

    (D) following
      the date on which the Company becomes a Public Company, in accordance with
      procedures previously approved by the Company, through the sale of the Shares
      acquired on exercise of the option through a bank or broker-dealer to whom
      the
      Grantee has submitted an irrevocable notice of exercise and irrevocable
      instructions to deliver promptly to the Company the amount of sale or loan
      proceeds sufficient to pay for such Shares, together with, if requested by
      the
      Company, the amount of federal, state, local or foreign withholding taxes
      payable by Grantee by reason of such exercise; or

    

    (E) in
      the
      discretion of the Committee, payment may also be made in accordance with Section
      9.

    

    (F)
      with
      the approval of the Committee, in any combination of the foregoing or such
      other
      manner determined by the Committee.

     

    The
      Committee may in its discretion specify that, if any Restricted Shares are
      used
      to pay the Option Price ("Tendered
      Restricted Shares"),
      (A)
      all the Shares acquired on exercise of the option shall be subject to the same
      restrictions as the Tendered Restricted Shares, determined as of the date of
      exercise of the option or (B) a number of Shares acquired on exercise of the
      option equal to the number of Tendered Restricted Shares shall be subject to
      the
      same restrictions as the Tendered Restricted Shares, determined as of the date
      of exercise of the option.

    

    (b) Exercise
      of SARs.

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (i) Subject
      to Section 6(d), (A) each SAR not identified with any other Award shall become
      exercisable at such time or times as may be specified by the Committee from
      time
      to time in the applicable Award Agreement and (B) except as otherwise provided
      in the applicable Award Agreement, each SAR which is identified with any other
      Award shall become exercisable as and to the extent that the option or
      Restricted Shares with which such SAR is identified may be exercised or becomes
      nonforfeitable, as the case may be.

    

    (ii) 
      SARs
      shall be exercised by delivery to the Company of written notice of intent to
      exercise a specific number of SARs. Unless otherwise provided in the applicable
      Award Agreement, the exercise of SARs that are identified with Shares subject
      to
      an option or Restricted Shares shall result in the cancellation or forfeiture
      of
      such option or Restricted Shares, as the case may be, to the extent of such
      exercise.

    

    (iii) The
      benefit for each SAR exercised shall be equal to (A) the Fair Market Value
      of a
      Share on the date of such exercise, minus (B) the Strike Price specified in
      such
      SAR. Such benefit shall be payable in cash, except that the Committee may
      provide in the Award Agreement that benefits may be paid wholly or partly in
      Shares. 

    

    (c) Payment
      of Performance Shares.
      Unless
      otherwise provided in the Award Agreement with respect to an Award of
      Performance Shares, if the minimum performance goals applicable to such
      Performance Shares have been achieved during the applicable Performance Period,
      then the Company shall pay to the Grantee of such Award that number of Shares
      equal to the product of:

    

    (i) the
      sum
      of (A) number of Performance Shares specified in the applicable Award Agreement
      and (B) the number of additional Shares that would have been issuable if such
      Performance Shares had been Shares outstanding throughout the Performance Period
      and the stock dividends, cash dividends (except as otherwise provided in the
      Award Agreement), and other property paid in respect of such Shares had been
      reinvested in additional Shares as of each dividend payment date, multiplied
      by

    

    (ii) the
      Performance Percentage achieved during such Performance Period.

    

    The
      Committee may, in its discretion, determine that cash be paid in lieu of some
      or
      all of such Shares. The amount of cash payable in lieu of a Share shall be
      determined by valuing such Share at its Fair Market Value on the business day
      immediately preceding the date such cash is to be paid. Payments pursuant to
      this Section 8 shall be made as soon as administratively practical after the
      end
      of the applicable Performance Period. Any Performance Shares with respect to
      which the performance goals shall not have been achieved by the end of the
      applicable Performance Period shall expire.

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    9. Loans.
      The
      Committee may in its discretion allow a Grantee to defer payment to the Company
      of all or any portion of (a) the Option Price of an option, (b) the purchase
      price of Restricted Shares, or (c) any taxes associated with the exercise,
      nonforfeitability of, or payment of benefits in connection with, an Award.
      Any
      such payment deferral by the Company shall be on such terms and conditions
      as
      the Committee may determine, except that a Grantee shall not be entitled to
      defer the payment of such Option Price, purchase price, or any related taxes
      unless the Grantee (a) enters into a binding obligation to pay the deferred
      amount and (b) other than with respect to treasury shares, pays upon exercise
      of
      an option or grant of Restricted Shares, as applicable, an amount at least
      equal
      to the Minimum Consideration therefor. If the Committee has permitted a payment
      deferral in accordance with this Section 9, then the Committee may require
      the
      immediate payment of such deferred amount upon the Grantee's termination of
      employment or if the Grantee sells or otherwise transfers his or her Shares
      purchased pursuant to such deferral. The Committee may at any time in its
      discretion forgive the repayment of any or all of the principal of, or interest
      on, any such deferred payment obligation.

    

    10. Notification
      under Section 83(b).
      If the
      Grantee, in connection with the exercise of any option or the grant of
      Restricted Shares, makes the election permitted under Section 83(b) of the
      Code
      to include in such Grantee's gross income in the year of transfer the amounts
      specified in Section 83(b) of the Code, then such Grantee shall notify the
      Company, in writing, of such election within ten (10) days after filing the
      notice of the election with the Internal Revenue Service, in addition to any
      filing and notification required pursuant to regulations issued under Section
      83(b) of the Code. The Committee may, in connection with the grant of an Award
      or at any time thereafter, prohibit a Grantee from making the election described
      in this Section 10.

    

    11. Mandatory
      Tax Withholding.

    

    (a) Whenever
      under the Plan, Shares are to be delivered upon exercise or payment of an Award
      or upon Restricted Shares becoming nonforfeitable, or any other event with
      respect to rights and benefits hereunder, the Company shall be entitled to
      require (i) that the Grantee remit an amount in cash, or in the Company's
      discretion, Mature Shares or any other form of consideration, sufficient to
      satisfy all federal, state and local tax withholding requirements related
      thereto ("Required
      Withholding"),
      (ii)
      the withholding of such Required Withholding from compensation otherwise due
      to
      the Grantee or from any Shares due to the Grantee under the Plan, or (iii)
      any
      combination of the foregoing.

    

    (b) Any
      Grantee who makes a Disqualifying Disposition or an election under Section
      83(b)
      of the Code shall remit to the Company an amount sufficient to satisfy all
      resulting Required Withholding, except that in lieu of or in addition to the
      foregoing, the Company shall have the right to withhold such Required
      Withholding from compensation otherwise due to the Grantee or from any Shares
      or
      other payment due to the Grantee under the Plan.

    

    (c) Any
      surrender by a Section 16 Grantee of previously owned shares of Common Stock
      to
      satisfy tax withholding arising upon exercise of the Award must comply with
      the
      applicable provisions of Rule 16b-3(e) under the 1934 Act.

    

    12. Elective
      Share Withholding.
      At the
      Company's discretion, a Grantee may, with the prior consent of the Committee,
      elect the withholding by the Company of a portion of the Shares otherwise
      deliverable to such Grantee upon the exercise of an Award or upon Restricted
      Shares becoming nonforfeitable (each, a “Taxable
      Event”)
      having
      a Fair Market Value equal to the minimum amount necessary to satisfy the
      Required Withholding liability attributable to the Taxable Event.

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    13. Termination
      of Employment.

    

    (a) For
      Cause.
      Except
      as otherwise provided by the Committee in an Award Agreement, if a Grantee's
      employment is terminated for Cause, (i) the Grantee's Restricted Shares (and
      any
      SARs identified therewith) that are then forfeitable shall on the date of the
      Grantee's termination of employment be forfeited on such date, subject to the
      provisions of Section 6(f)(iii) regarding repayment of certain amounts to the
      Grantee; and (ii) any unexercised option, SAR or Performance Share shall
      terminate effective immediately upon such termination of
      employment.

    

    (b) On
      Account of Death.
      Except
      as otherwise provided by the Committee in the Award Agreement, if a Grantee's
      employment terminates on account of death, then:

    

    (i) the
      Grantee's Restricted Shares (and any SARs identified therewith) that are then
      forfeitable shall on the date of the Grantee's termination of employment be
      forfeited on such date;

    

    (ii) any
      unexercised option or SAR, to the extent exercisable on the date of such
      termination of employment, may be exercised, in whole or in part, within the
      first twelve (12) months after such termination of employment (but only during
      the Option Term) after the death of the Grantee by (A) his or her personal
      representative or by the person to whom the option or SAR, as applicable, is
      transferred by will or the applicable laws of descent and distribution, (B)
      the
      Grantee's designated beneficiary, or (C) a Permitted Transferee;
      and

    

    (iii) any
      unexercised Performance Shares may be exercised in whole or in part, at any
      time
      within six (6) months after such termination of employment on account of the
      death of the Grantee, by (A) his or her personal representative or by the person
      to whom the Performance Shares are transferred by will or the applicable laws
      of
      descent and distribution, (B) the Grantee's designated beneficiary, or (C)
      a
      Permitted Transferee, except that the benefit payable with respect to any
      Performance Shares for which the Performance Period has not ended as of the
      date
      of such termination of employment on account of death shall be equal to the
      product of Fair Market Value of such Performance Shares multiplied successively
      by each of the following:

    

    (A) a
      fraction, the numerator of which is the number of months (including as a whole
      month any partial month) that has elapsed since the beginning of such
      Performance Period until the date of such termination of employment and the
      denominator of which is the number of months (including as a whole month any
      partial month) in the Performance Period; and

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (B) a
      percentage determined in the discretion of the Committee that would be earned
      under the terms of the applicable Award Agreement assuming that the rate at
      which the performance goals have been achieved as of the date of such
      termination of employment would continue until the end of the Performance
      Period, or, if the Committee elects to compute the benefit after the end of
      the
      Performance Period, the Performance Percentage, as determined by the Committee,
      attained during the Performance Period for such Performance Shares.

    

    (c) On
      Account of Disability.
      Except
      as otherwise provided by the Committee in the Award Agreement, if a Grantee's
      employment terminates on account of Disability, then:

    

    (i) the
      Grantee's Restricted Shares (and any SARs identified therewith) that are then
      forfeitable shall on the date of the Grantee's termination of employment be
      forfeited on such date;

    

    (ii) any
      unexercised option or SAR, to the extent exercisable on the date of such
      termination of employment, may be exercised in whole or in part, within the
      first twelve (12) months after such termination of employment (but only during
      the Option Term) by the Grantee, or by (A) his or her personal representative
      or
      by the person to whom the option or SAR, as applicable, is transferred by will
      or the applicable laws of descent and distribution, (B) the Grantee's designated
      beneficiary, or (C) a Permitted Transferee; and

     

    (iii) any
      unexercised Performance Shares may be exercised in whole or in part, at any
      time
      within six (6) months after such termination of employment on account of
      Disability by the Grantee, or by (A) his personal representative or by the
      person to whom the Performance Shares are transferred by will or the applicable
      laws of descent and distribution, (B) the Grantee's designated beneficiary,
      or
      (C) a Permitted Transferee, except that the benefit payable with respect to
      any
      Performance Shares for which the Performance Period has not ended as of the
      date
      of such termination of employment on account of Disability shall be equal to
      the
      product of the Fair Market Value of the Performance Shares multiplied
      successively by each of the following:

     

    (A) a
      fraction, the numerator of which is the number of months (including as a whole
      month any partial month) that have elapsed since the beginning of such
      Performance Period until the date of such termination of employment and the
      denominator of which is the number of months (including as a whole month any
      partial month) in the Performance Period; and

     

    (B) 
      a
      percentage determined in the discretion of the Committee that would be earned
      under the terms of the applicable Award Agreement assuming that the rate at
      which the performance goals have been achieved as of the date of such
      termination of employment would continue until the end of the Performance
      Period, or, if the Committee elects to compute the benefit after the end of
      the
      Performance Period, the Performance Percentage, as determined by the Committee,
      attained during the Performance Period for such Performance Shares.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (d) Any
      Reason Other Than For Cause Or On Account of Death or Disability.
      Except
      as otherwise provided by the Committee in the Award Agreement, if a Grantee's
      employment terminates for any reason other than for Cause, or on account of
      death or Disability, then:

    (i) the
      Grantee's Restricted Shares (and any SARs identified therewith), that are then
      forfeitable shall on the date of the Grantee's termination of employment be
      forfeited on such date;

    

    (ii) any
      unexercised option or SAR (other than a SAR identified with a Restricted Share
      or Performance Share), to the extent exercisable immediately before the
      Grantee's termination of employment, may be exercised in whole or in part,
      not
      later than three (3) months after such termination of employment (but only
      during the Option Term); and

    

    (iii) the
      Grantee's Performance Shares (and any SARs identified therewith) shall terminate
      effective immediately upon such termination of employment.

     

    14. Substituted
      Awards.
      If the
      Committee cancels any Award (whether granted under the Plan or any plan of
      any
      entity acquired by the Company or a Subsidiary), the Committee may, in its
      discretion, substitute a new Award therefor upon such terms and conditions
      consistent with the Plan as the Committee may determine, except that (a) the
      Option Price of any new option, and the Strike Price of any new SAR, shall
      not
      be less than one hundred percent (100%) (one hundred ten percent (110%) in
      the
      case of an incentive stock option granted to a Ten Percent Owner) of the Fair
      Market Value of a Share on the date of the grant of the new Award; and (b)
      the
      Grant Date of the new Award shall be the date on which such new Award is
      granted.

     

    15 Securities
      Law Matters.
      

     

    (a) If
      the
      Committee deems necessary to comply with any applicable securities law, the
      Committee may require a written investment intent representation by the Grantee
      and may require that a restrictive legend be affixed to certificates for Shares.
      If, based upon the advice of counsel to the Company, the Committee determines
      that the exercise or nonforfeitability of, or delivery of benefits pursuant
      to,
      any Award would violate any applicable provision of (i) federal or state
      securities laws or (ii) the listing requirements of any national exchange or
      national market system on which are listed any of the Company's equity
      securities, then the Committee may postpone any such exercise, nonforfeitability
      or delivery, as applicable, but the Company shall use all reasonable efforts
      to
      cause such exercise, nonforfeitability or delivery to comply with all such
      provisions at the earliest practicable date.

     

    (b) Grants
      of
      options to Section 16 Grantees shall comply with Rule 16b-3 and shall contain
      such additional conditions or restrictions as may be required thereunder for
      such grants to qualify for exemption from liability under Section 16(b) of
      the
      1934 Act.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    16. No
      Employment Rights.
      Neither
      the establishment of the Plan nor the grant of any Award shall (a) give any
      Grantee the right to remain employed by the Company or any Subsidiary or to
      any
      benefits not specifically provided by the Plan or (b) modify the right of the
      Company or any Subsidiary to modify, amend, or terminate the Plan or any other
      employee benefit plan or employment agreement.

     

    17. No
      Rights as a Shareholder.
      A
      Grantee shall not have any rights as a shareholder of the Company with respect
      to the Shares (other than Restricted Shares) which may be deliverable upon
      exercise or payment of an Award until such Shares have been delivered to him
      or
      her. Restricted Shares, whether held by a Grantee or in escrow by the Company,
      shall confer on the Grantee all rights of a shareholder of the Company, except
      as otherwise provided in the Plan or applicable Award Agreement.

     

    18. Nature
      of Payments.
      Awards
      shall be special incentive payments to the Grantee and shall not be taken into
      account in computing the amount of salary or compensation of the Grantee for
      purposes of determining any pension, retirement, death or other benefit under
      (a) any pension, retirement, profit-sharing, bonus, insurance or other employee
      benefit plan of the Company or any Subsidiary or (b) any agreement between
      (i)
      the Company or any Subsidiary and (ii) the Grantee, except as such plan or
      agreement shall otherwise expressly provide.

     

    19. Non-uniform
      Determinations.
      The
      Committee's determinations under the Plan need not be uniform and may be made
      by
      the Committee selectively among persons who receive, or are eligible to receive,
      Awards, whether or not such persons are similarly situated. Without limiting
      the
      generality of the foregoing, the Committee shall be entitled to enter into
      non-uniform and selective Award Agreements as to (a) the identity of the
      Grantees, (b) the terms and provisions of Awards, including, without limitation,
      vesting and manner of payment of purchase price upon exercise, and (c) the
      treatment of terminations of employment.

     

    20. Adjustments.
      The
      Committee shall make equitable adjustment of:

     

    (a) the
      aggregate number of Shares available under the Plan for Awards and the aggregate
      number of Shares for which Awards may be granted to any individual Grantee
      in
      any calendar year pursuant to the second sentence of Section 2;

     

    (b) the
      number of Shares, SARs or Performance Shares covered by an Award;
      and

     

    (c) the
      Option Price of all outstanding options and the Strike Price of all outstanding
      SARs;

     

    to
      reflect a stock dividend, stock split, reverse stock split, share combination,
      recapitalization, merger, consolidation, spin-off, split-off, reorganization,
      rights offering, liquidation or similar event of or by the Company.

     

    21. Amendment
      of the Plan.
      The
      Committee may from time to time, in its discretion, amend the Plan without
      the
      approval of the Company's shareholders, except (a) as such shareholder approval
      may be required under the listing requirements of any securities exchange or
      national market system on which are listed the Company's equity securities
      and
      (b) that the Committee may not without the approval of the Company's
      shareholders amend the Plan to increase the total number of shares reserved
      for
      the purposes of the Plan (other than in accordance with Section
      20).

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    22. Termination
      of the Plan.
      The
      Plan shall continue in effect until the earlier of its termination by the
      Committee or the date on which all of the shares of Common Stock available
      for
      issuance under the Plan have been issued and all restrictions on such shares
      under the terms of the Plan and the agreements evidencing Awards granted under
      the Plan have lapsed. However, all Awards shall be granted, if at all, within
      ten (10) years from the earlier of the date the Plan is adopted by the Committee
      or the date the Plan is duly approved by the shareholders of the Company.
      Notwithstanding the foregoing, if the maximum number of shares of Common Stock
      issuable pursuant to the Plan has been increased at any time, all Awards shall
      be granted, if at all, no later than the last day preceding the ten (10) year
      anniversary of the earlier of (a) the date on which the latest such increase
      in
      the maximum number of shares of Common Stock issuable under the Plan was
      approved by the shareholders of the Company or (b) the date such amendment
      was
      adopted by the Committee. No termination shall affect any Award then outstanding
      under the Plan.

     

    23. No
      Illegal Transactions.
      The
      Plan and all Awards granted pursuant to it are subject to all applicable laws
      and regulations. Notwithstanding any provision of the Plan or any Award,
      Grantees shall not be entitled to exercise, or receive benefits under any Award,
      and the Company shall not be obligated to deliver any Shares or deliver benefits
      to a Grantee, if such exercise or delivery would constitute a violation by
      the
      Grantee or the Company of any applicable law or regulation.

     

    24. Constructive
      Sales.
      The
      Grantee shall not directly or indirectly, through related parties or otherwise,
      “short” or “short against the box” (as those terms are generally understood in
      the securities markets), or otherwise directly or indirectly (through derivative
      instruments or otherwise) dispose of or hedge, any securities of the Company
      issuable upon exercise of such Grantee’s Award(s). 

    

    25. Definitions.
      The
      terms set forth below have the indicated meanings which are applicable to both
      the singular and plural forms thereof:

    

    "Award"
      shall
      mean options, including ISOs, Restricted Shares, Bonus Shares, SARs or
      Performance Shares granted under the Plan.

    

    "Award
      Agreement"
      shall
      mean the written agreement by which an Award shall be evidenced.

    

    "Board"
      shall
      mean the Board of Directors of the Company.

    

    "Bonus
      Shares"
      shall
      mean Shares that are awarded to a Grantee without cost and without
      restrictions.

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    "Cause",
      with
      respect to any employee or consultant of the Company shall have the meaning
      set
      forth in such person’s employment or consulting agreement or, in the absence of
      such an agreement or if such term is not defined in such agreement, shall mean
      any one or more of the following, as determined by the Committee (in the case
      of
      a Section 16 Grantee) or the Chief Executive Officer or President of the Company
      (in the case of any other Grantee):

    

    (i) a
      Grantee's commission of a crime that is likely to result in injury to the
      Company or a Subsidiary;

    

    (ii) the
      material violation by the Grantee of written policies of the Company or a
      Subsidiary;

    

    (iii) the
      habitual neglect by the Grantee in the performance of his or her duties to
      the
      Company or a Subsidiary; or

    

    (iv) a
      Grantee’s willful misconduct or inaction in connection with his or her duties to
      the Company or a Subsidiary resulting in a material injury to the Company or
      a
      Subsidiary. 

    

    "Code"
      shall
      mean the Internal Revenue Code of 1986, as amended or superseded, and the
      regulations and rulings thereunder. Reference to a particular section of the
      Code shall include references to successor provisions.

    

    “Committee”
shall
      mean the committee of the Board appointed pursuant to Section 3(a), or if not
      so
      appointed or unable to act or with reference to Awards to Independent Directors,
      shall mean the entire Board.

    

    "Common
      Stock"
      shall
      mean the common stock, $0.001 par value per share, of the Company.

    

    “Consultant”
shall
      mean any person, including a Director, who is engaged by the Company or any
      Parent, Subsidiary or Affiliate thereof, to render services to or for the
      benefit of the Company and is compensated for such services.

    

    “Director”
shall
      mean a member of the Board.

    

    "Disability"
      shall
      mean a permanent and total disability, within the meaning of Section 22(e)(3)
      of
      the Code.

    

    "Effective
      Date"
      shall
      mean the date set forth in the first paragraph hereof.

    

    "Eligible
      Person"
      shall
      mean any Employee, Consultant or Director of the Company or any Subsidiary,
      including any prospective Employee or Employee on an approved leave of absence
      or layoff, if such leave or layoff does not qualify as a
      Disability.

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    “Employee”
shall
      mean any person treated as an employee (including officers and directors) in
      the
      records of the Company (or Subsidiary) and who is subject to the control and
      direction of the Company (or Subsidiary) with regard to both the work to be
      performed and the manner and method of performance. The payment of a director’s
      fee by the Company (or Subsidiary) to a Director shall not be sufficient to
      constitute “employment” of the Director by the Company (or
      Subsidiary).

    

    “Fair
      Market Value”
per
      share of Common Stock on any relevant date shall mean such value as determined
      in accordance with the following provisions:

    

    (i) If
      the
      Common Stock is at that time listed on a national securities exchange, then
      the
      Fair Market Value shall mean the closing selling price per share of Common
      Stock
      on the exchange on which such Common Stock is principally traded on the relevant
      date or, if there were no sales on that date, the closing selling price of
      such
      Common Stock on the last preceding date on which there were sales.

    

    (ii) If
      the
      Common Stock is at that time traded on the Nasdaq National Market®,
      Nasdaq
      Small Cap MarketSM
      or OTC
      Bulletin Board®,
      as the
      case may be, then the Fair Market Value shall mean the closing selling price
      per
      share of Common Stock on the relevant date, as the price is reported by the
      National Association of Securities Dealers on the Nasdaq National
      Market®,
      Nasdaq
      Small Cap MarketSM
      or OTC
      Bulletin Board®,
      as the
      case may be, or any successor system. If there is no closing selling price
      for
      the Common Stock on the relevant date, then the Fair Market Value shall mean
      the
      closing selling price on the last preceding date for which such quotation
      exists.

    (iii) If
      the
      Common Stock is neither listed on any national securities exchange nor traded
      on
      the Nasdaq National Market®,
      Nasdaq
      Small Cap MarketSM
      or OTC
      Bulletin Board®,
      then
      the Fair Market Value shall mean that value determined by the Committee after
      taking into account such factors as the Committee shall in good faith deem
      appropriate.

    

    “Grant
      Date”
shall
      have the meaning specified in Section 6(a).

    

    "Grantee"
      shall
      mean a person who has been granted an Award or any Permitted
      Transferee.

    

    “ISO”
shall
      mean an incentive stock option within the meaning of Section 422 of the
      Code.

    

    "Immediate
      Family"
      shall
      mean, with respect to a particular Grantee, the Grantee's spouse, children
      and
      grandchildren.

    

    "Independent
      Director"
      shall
      mean a member of the Board who in not an Employee of the Company.

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    "Mature
      Shares"
      shall
      mean Shares for which the holder thereof has good title, free and clear of
      all
      liens and encumbrances, and which such holder has held for at least six (6)
      months.

    

    "Minimum
      Consideration"
      shall
      mean par value per Share or such other amount that is from time to time
      considered to be minimum consideration under applicable law.

    

    "1934
      Act"
      shall
      mean the Securities Exchange Act of 1934, as amended. References to a particular
      section of the 1934 Act or rule thereunder, include references to successor
      provisions.

    

    "Option
      Price"
      shall
      mean the per share exercise price of an option.

    

    "Option
      Term"
      shall
      mean the period beginning on the Grant Date of an option and ending on the
      expiration date of such option, as specified in the Award Agreement for such
      option and as may, in the discretion of the Committee and consistent with the
      provisions of the Plan, be extended from time to time.

    

    "Performance
      Shares"
      shall
      mean an Award to a Grantee pursuant to Section 6(e).

    

    "Permitted
      Transferee"
      shall
      mean a person to whom an Award may be transferred or assigned in accordance
      with
      Section 7.

    

    “Public
      Company”
shall
      mean any entity issuing any class of equity securities that has been, or is
      required to be, registered under Section 12 of the 1934 Act.

    

    "Restricted
      Shares"
      shall
      mean Shares that are subject to forfeiture if the Grantee does not satisfy
      the
      conditions specified in the Award Agreement applicable to those
      Shares.

    

    "Rule
      16b-3"
      shall
      mean Rule 16b-3 of the SEC under the 1934 Act, as amended from time to time,
      together with any successor rule.

     

    "SAR"
      shall
      mean a stock appreciation right.

    

    "SEC"
      shall
      mean the Securities and Exchange Commission.

    

    "Section
      16 Grantee"
      shall
      mean a person who is subject to potential liability under Section 16(b) of
      the
      1934 Act with respect to transactions involving equity securities of the
      Company.

    

    "Share"
      shall
      mean a share of Common Stock.

    

    “Strike
      Price”
shall
      have the meaning specified in Section 6(d)(ii).

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    "Subsidiary"
      shall
      mean a subsidiary corporation, as defined in Section 424(f) of the Code (with
      the Company being treated as the employer corporation for purposes of this
      definition).

     

    "Ten
      Percent Owner"
      shall
      mean a person who owns capital stock (including stock treated as owned under
      Section 424(d) of the Code) possessing more than ten percent of the total
      combined Voting Power of all classes of capital stock of the Company or any
      Subsidiary.

    

    "Voting
      Power"
      shall
      mean the combined voting power of the then-outstanding securities of the Company
      entitled to vote generally in the election of directors.

     

    26. Controlling
      Law.
      The law
      of the State of New York, except its law with respect to choice of law, shall
      control all matters relating to the Plan.

     

    27. Severability.
      If any
      part of the Plan is declared by any court or governmental authority to be
      unlawful or invalid, such unlawfulness or invalidity shall not invalidate any
      other part of the Plan. Any Section or part of a Section so declared to be
      unlawful or invalid shall, if possible, be construed in a manner which will
      given effect to the terms of such Section to the fullest extent possible while
      remaining lawful and valid.

     

    
      
         

      

        19

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