Document:

SUBLEASE
        AGREEMENT

       

      MERIX
        CORPORATION

      an
        Oregon corporation

       

      (“Sublandlord”)

       

      -
        AND -

       

      XSUNX,
        INC.

      a
        Colorado corporation

       

      (“Subtenant”)
        

       

      April 1,
        2008

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Table
        Of Contents

       

      

        
          	
                  Paragraph

                	 	
                  Page

                
	 	 	 
	
                  1.

                	Sublease.	
                  1

                
	 	 	 
	
                  2.

                	Term.	
                  1

                
	 	 	 
	
                  3.

                	Rent.	
                  3

                
	 	 	 
	 	
                  3.1

                	
                  Additional
                    Rent and Direct Pay Obligations.

                	
                  3

                
	 	 	 	 
	 	
                  3.2

                	
                  Rent
                    Defined.

                	
                  3

                
	 	 	 	 
	 	
                  3.3

                	
                  Sublease
                    Performance Security.

                	
                  3

                
	 	 	 	 
	 	
                  3.4

                	
                  Escrow
                    For Property Insurance, Taxes And Assessments.

                	
                  5

                
	 	 	 	 
	
                  4.

                	Use
                  of Demised Premises.	
                  6

                
	 	 	 
	
                  5.

                	Signs.	
                  6

                
	 	 	 
	
                  6.

                	Master
                  Lease.	
                  6

                
	 	 	 
	 	
                  6.1

                	
                  Incorporation
                    By Reference.

                	
                  6

                
	 	 	 	 
	 	
                  6.2

                	
                  Certain
                    Modifications.

                	
                  6

                
	 	 	 	 
	 	
                  6.3

                	
                  Subtenant
                    Acknowledgements and Attornment.

                	
                  8

                
	 	 	 	 
	
                  7.

                	Master
                  Landlord’s Performance under Master Lease.	
                  8

                
	 	 	 
	 	
                  7.1

                	
                  Performance
                    by Master Landlord.

                	
                  8

                
	 	 	 	 
	 	
                  7.2

                	
                  Sublandlord’s
                    Efforts.

                	
                  9

                
	 	 	 	 
	
                  8.

                	Condition
                  of Demised Premises and Alterations Thereto.	
                  10

                
	 	 	 
	 	
                  8.1

                	
                  Condition
                    of Demised Premises.

                	
                  10

                
	 	 	 	 
	 	
                  8.2

                	
                  Subtenant
                    Alterations.

                	
                  10

                
	 	 	 	 
	 	
                  8.3

                	
                  Removal,
                    Holdover And Additional Security.

                	
                  11

                
	 	 	 	 
	 	
                  8.4

                	
                  Purchase
                    of Equipment.

                	
                  13

                
	 	 	 	 
	
                  9.

                	Subletting
                  and Assignment.	
                  14

                
	 	 	 
	
                  10.

                	Late
                  Charges.	
                  14

                
	 	 	 
	
                  11.

                	Insurance.	
                  14

                
	 	 	 
	
                  12.

                	Indemnity
                  and Release.	
                  15

                
	 	 	 
	 	
                  12.1

                	
                  Subtenant
                    Indemnity.

                	
                  15

                
	 	 	 	 
	 	
                  12.2

                	
                  Sublandlord
                    Indemnity.

                	
                  15

                
	 	 	 	 
	
                  13.

                	Events
                  of Default and Remedies.	
                  16

                
	 	 	 
	 	
                  13.1

                	
                  Events
                    of Default.

                	
                  16

                
	 	 	 	 
	 	
                  13.2

                	
                  Remedies
                    Upon Default.

                	
                  16

                
	 	 	 	 
	 	
                  13.3

                	
                  Sublandlord’s
                    Right to Cure.

                	
                  17

                
	 	 	 	 
	 	
                  13.4

                	
                  Subtenant’s
                    Reimbursement.

                	
                  17

                

        

      

      

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

      
        Table
          Of Contents

         

        
          	
                  Paragraph

                	 	
                  Page

                
	 	 	 	 
	
                  14.

                	Miscellaneous.	
                  18

                
	 	 	 
	 	
                  14.1

                	
                  Notices.

                	
                  18

                
	 	 	 	 
	 	
                  14.2

                	
                  Brokers.

                	
                  19

                
	 	 	 	 
	 	
                  14.3

                	
                  Captions.

                	
                  19

                
	 	 	 	 
	 	
                  14.4

                	
                  Successors and Assigns.

                	
                  19

                
	 	 	 	 
	 	
                  14.5

                	
                  Attorneys’
                    Fees.

                	
                  19

                
	 	 	 	 
	 	
                  14.6

                	
                  Gender and Number.

                	
                  19

                
	 	 	 	 
	 	
                  14.7

                	
                  Separability.

                	
                  19

                
	 	 	 	 
	 	
                  14.8

                	
                  Conditions
                    Precedent.

                	
                  19

                
	 	 	 	 
	 	
                  14.9

                	
                  Amendment
                    of Master Lease.

                	
                  21

                
	 	 	 	 
	 	
                  14.10

                	
                  Quiet
                    Enjoyment.

                	
                  21

                
	 	 	 	 
	 	
                  14.11

                	
                  Amendment;
                    Entire Agreement.

                	
                  21

                
	 	 	 	 
	 	
                  14.12

                	
                  No
                    Waiver.

                	
                  21

                
	 	 	 	 
	 	
                  14.13

                	
                  Time
                    of Essence.

                	
                  21

                
	 	 	 	 
	 	
                  14.14

                	
                  Governing
                    Law.

                	
                  21

                
	 	 	 	 
	 	
                  14.15

                	
                  Memorandum
                    of Sublease

                	
                  21

                

        

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

      Sublease
        Agreement

       

      This
        Sublease Agreement
        (this
“Sublease”)
        is
        entered into as of this 1st day of April 2008 (“Effective Date”),
        by
        and between Merix
        Corporation,
        an
        Oregon corporation (“Sublandlord”),
        and
XsunX,
        Inc.,
        a
Colorado
        corporation
        (“Subtenant”).

       

       

      Recitals

       

      A.  Sublandlord
        and Opus Northwest, L.L.C. (“Original Landlord”)
        entered into that certain Net Lease Agreement, dated August 21, 2000 (the
“Master Lease”),
        relating to the Demised Premises (as described in the Master Lease), located
        in
        the City of Wood Village, County of Multnomah, State of Oregon, as more
        particularly described in the Master Lease. The Demised Premises was
        subsequently sold to, and concurrently therewith the Master Lease was
        subsequently assigned to, Pro-Active Properties LLC, an Oregon limited liability
        company (the “Master Landlord”).
        Capitalized terms used but not defined herein shall have the meanings ascribed
        to them in the Master Lease. A copy of the Master Lease is attached hereto
        as
Exhibit
        A.

       

      B.  Sublandlord
        desires to sublease to Subtenant and Subtenant desires to sublease from
        Sublandlord the Demised Premises subject to the terms, conditions and covenants
        set forth below. 

       

      Agreement

       

      Now,
        therefore,
        for
        good and valuable consideration, the receipt and sufficiency of which are
        hereby
        acknowledged, the parties hereto agree as follows:

       

       

      1.  Sublease. Sublandlord
        hereby subleases to Subtenant and Subtenant hereby hires and takes from
        Sublandlord the Demised Premises, subject to the terms, covenants and conditions
        contained in this Sublease. Sublandlord represents and warrants to Subtenant
        that (i) a true, accurate and complete copy of the Master Lease is attached
        hereto as Exhibit
        A;
        (ii) as of the Effective Date, the Master Lease is in full force and
        effect; (iii) as of the Effective Date, neither Sublandlord, nor to
        Sublandlord’s actual knowledge, the Master Landlord, is in default of its
        respective obligations under the Master Lease nor has any currently effective
        notice of default been delivered by either Master Landlord or Sublandlord;
        and
        (iv) Basic Rent, Additional Rent and all other sums due under the Master
        Lease have been paid through the Effective Date.

       

      2.  Term. The
        term
        of this Sublease (the “Term”)
        shall
        commence on the later of (i) satisfaction of the conditions precedent to
        the effectiveness of this Sublease set forth in Paragraph 14.8
        below,
        and (ii) the date of Substantial Completion (as defined in Paragraph 8.1
        below)
        of the Sublandlord Removal Work (as defined in Paragraph 8.1
        below)
        (such date herein, the “Commencement Date”)
        and
        will expire at 5:00 p.m. Oregon time on the July 31, 2011
        (the “Expiration Date”)
        unless
        earlier terminated pursuant to the terms of this Sublease. For purposes of
        this
        Sublease, the term “Sublease Year”
shall
        mean each consecutive twelve (12) month period during the Term.

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      Notwithstanding
        anything to the contrary herein, so long as neither Subtenant nor Subtenant’s
        agents or contractors interfere with or delay completion of the Sublandlord
        Removal Work, prior to the Commencement Date, Sublandlord shall permit Subtenant
        and Subtenant’s agents and contractors to enter portions of the Demised Premises
        where Sublandlord has designated in writing to Subtenant that the Sublandlord
        Removal Work has been completed solely for the purpose of installing Subtenant’s
        cabling, telephone systems, furniture and other business equipment; provided,
        however,
        that
        such access shall (i) be granted only after reasonable prior notice (but in
        no event less than twenty four (24) hours prior notice) to Sublandlord of
        the
        time and date of such access, (ii) be subject to all of the terms and
        conditions of this Sublease (including, without limitation, the obligation
        to
        comply with the provisions Paragraph 11
        below),
        with the exception of the obligation to pay Basic Rent and Additional Rent
        hereunder, (iii) Subtenant shall indemnify, defend (with legal counsel
        reasonably satisfactory to Sublandlord), protect and hold Sublandlord and
        its
        officers, employees, agents, successors and assigns harmless from and against
        all claims, losses, liabilities, judgments, damages, costs and expenses
        (including attorneys’ fees) incurred in connection with, arising from or related
        to any such access to the Demised Premises by Subtenant or Subtenant’s agents
        and contractors and/or the activities of Subtenant and/or Subtenant’s agents and
        contractors in, on or about the Demised Premises prior to the Commencement
        Date
        (including, without limitation, any claim brought against Sublandlord by
        Subtenant or Subtenant’s agents and/or contractors with respect to any damage to
        personal property or injury to persons, the risk of which has been assumed
        by
        Subtenant pursuant to clause (II) below), (iv) Subtenant shall coordinate
        such access with Sublandlord and Sublandlord’s contractors performing the
        Sublandlord Removal Work to ensure that such access shall not interfere with
        or
        delay completion of the Sublandlord Removal Work, any such delay or interference
        constituting a default by Subtenant hereunder, and (v) Subtenant shall not
        be permitted to conduct business from the Demised Premises until after the
        Commencement Date has occurred; provided,
        further however,
        that
        Sublandlord may, in the exercise of Sublandlord’s sole and absolute discretion,
        permit Subtenant to commence business operations from portions of the Demised
        Premises prior to the Commencement Date, provided that, any such use of portions
        of the Demised Premises shall be subject to Subtenant’s payment of Additional
        Rent and a proportional share of Basic Rent. Notwithstanding the foregoing
        or
        anything to the contrary herein, in the event (I) Sublandlord determines
        that any such access by Subtenant is causing interference or delay in the
        completion of the Sublandlord Removal Work, or that any such access or continued
        access is reasonably anticipated to cause such interference or delay, then
        Sublandlord may deny access to the Demised Premises by Subtenant, Subtenant’s
        agents Subtenant’s contractors, or any of them and no such denial shall
        constitute nor be deemed to constitute grounds for (x) an abatement of any
        amounts payable to Sublandlord under the terms of this Sublease, or (y) a
        waiver
        of any obligations imposed upon Subtenant pursuant to the terms of this
        Sublease, and (II) Subtenant hereby acknowledges and agrees that Subtenant
        assumes all risk of damage to personal property or injury to persons in,
        upon or
        about the Demised Premises, the Building and/or the Land from any cause
        whatsoever (including, but not limited to, any personal injuries resulting
        from
        a slip and fall in, upon or about the Demised Premises, the Building and/or
        the
        Land) and waives the right to recover from and forever releases and discharges
        Sublandlord and Sublandlord’s partners, subpartners and their respective
        officers and employees, from liability with respect to damage to personal
        property or injury to persons in, upon or about the Demised Premises, the
        Building and/or the Land from any cause whatsoever, irrespective of whether
        any
        such damage or injury was direct or indirect, known or unknown, foreseen
        or
        unforeseen, and irrespective of the negligence of Sublandlord and/or
        Sublandlord’s employees, agents or contractors.

       

       

      3.  Rent.
        Commencing
        on the Commencement Date, and continuing throughout the Term, Subtenant shall
        pay to Sublandlord as monthly base rent (the “Basic Rent”)
        for
        the Demised Premises in the respective amounts set forth in the table below
        for
        the respective months falling within the time periods set forth
        below:

       

      
        
          
            	
                    Each
                      Month During The Time Period:

                  	 	
                    Monthly
                      Basic Rent Payable With Respect To 

                    Each
                      Month During The Subject Time Period:

                  
	 	 	 
	
                    Commencement
                      Date to July 31, 2009

                  	 	
                    $53,000.00

                  
	 	 	 
	
                    August 1,
                      2009 to July 31, 2010

                  	 	
                    $54,060.00

                  
	 	 	 
	
                    August 1,
                      2010 to July 31, 2011

                  	 	
                    $55,141.20

                  

          

        

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      Basic
        Rent shall be paid in advance on the first day of each calendar month of
        the
        Term and shall be payable without notice or demand, and without any deduction,
        offset or abatement, in lawful money of the United States of America, to
        Sublandlord at the address stated herein, or to such other persons or at
        such
        other places as Sublandlord may designate in writing. Sublandlord shall pay
        when
        due the Basic Rent owed to Master Landlord pursuant to Section
        3.1
        of the
        Master Lease, as well as any replenishment of the Security Deposit set forth
        in
Sections
        3.6
        and
3.7
        of the
        Master Lease required by Master Landlord pursuant to the Master Lease, and
        the
        Sharing of Excess Rent, if any, with respect to the Rent payable by Subtenant
        under this Sublease as and when set forth in Section
        15.4
        of the
        Master Lease.

       

      3.1   Additional
        Rent and Direct Pay Obligations. Subtenant
        shall pay all amounts of Additional Rent (as defined in Section 3.3
        of the
        Master Lease) at the times required pursuant to the Master Lease. This
        obligation shall include, without limitation, payment of all amounts specified
        within Sections 3.3
        and
        5.1 of
        the
        Master Lease and in Article XI
        of
        the
        Master Lease. With the exception of rental amounts set forth in Section
        3.1
        of the
        Master Lease, the security amounts set forth in Sections
        3.6
        and
3.7
        of the
        Master Lease and the Sharing of Excess Rent with respect to the Rent payable
        by
        Subtenant under this Sublease as set forth in Section
        15.4
        of the
        Master Lease (but without limiting any such obligation with respect to any
        “rent” or “other consideration” payable to Subtenant pursuant to any future
        assignment of this Sublease or sub-sublease of any portion of the Demised
        Premises, if any), Subtenant shall also be responsible, at Subtenant’s sole cost
        and expense, to pay all amounts imposed upon Tenant pursuant to the Master
        Lease, including, without limitation, the payment and performance obligations
        set forth in Sections 5.3,
        15.4 (but
        only
        with respect to any “rent” or “other consideration” payable to Subtenant
        pursuant to any future assignment of this Sublease or sub-sublease of any
        portion of the Demised Premises) and
        20.18 of
        the
        Master Lease and in Articles VII,
        VIII
        and
        IX of
        the
        Master Lease. Subtenant hereby acknowledges and agrees that the obligations
        set
        forth in the preceding sentence are in addition to Subtenant’s obligations for
        payment of the Basic Rent and Additional Rent set forth in this
        Sublease.

       

      3.2   Rent
        Defined. Basic
        Rent, Additional Rent and all other sums payable by Subtenant pursuant to
        this
        Sublease (other than the Equipment Purchase Price (as defined in Paragraph 8.4
        below))
        shall be deemed to be “Rent.”
The
        Rent for any partial month during which the term of this Sublease commences
        or
        terminates shall be equitably prorated.

       

      3.3   Sublease
        Performance Security. Upon
        the
        earlier to occur of (i) satisfaction of the conditions precedent to the
        effectiveness of this Sublease set forth in Paragraph 14.8
        below,
        and (ii) the date which is ten (10) business days prior to the date
        Subtenant commences any work in connection with any changes, alterations,
        modifications and/or improvements to the Demised Premises, Subtenant shall,
        at
        Subtenant’s sole cost and expense, deliver to Sublandlord the Letter of Credit
        (as defined below) in a face amount equal to One Hundred Six Thousand Dollars
        ($106,000.00) (the “L/C Face
        Amount”).
        Notwithstanding the foregoing, neither the Letter of Credit nor any Draw
        Proceeds (as defined below) shall be deemed an advance rent deposit or an
        advance payment of any other kind, or a measure of Sublandlord’s damages upon
        Subtenant’s default. 

       

      3.3.1  Definitions.
         For
        purposes of this Sublease, the following terms shall have the following
        definitions:

       

      “Draw
        Event”
means
        each of the following events:

       

      (a)  the
        occurrence of any one or more of the following: (i) Subtenant's filing of
        a
        petition under any chapter of the Bankruptcy Code, or under any federal,
        state
        or foreign bankruptcy or insolvency statute now existing or hereafter enacted,
        or Subtenant's making a general assignment or general arrangement for the
        benefit of creditors, (ii) the filing of an involuntary petition under any
        chapter of the Bankruptcy Code, or under any federal, state or foreign
        bankruptcy or insolvency statute now existing or hereafter enacted, or the
        filing of a petition for adjudication of bankruptcy or for reorganization
        or
        rearrangement, by or against Subtenant and such filing not being dismissed
        within 60 days, (iii) the entry of an order for relief under any chapter
        of the
        Bankruptcy Code, or under any federal, state or foreign bankruptcy or insolvency
        statute now existing or hereafter enacted, (iv) the appointment of a
        "custodian," as such term is defined in the Bankruptcy Code (or of an equivalent
        thereto under any federal, state or foreign bankruptcy or insolvency statute
        now
        existing or hereafter enacted), for Subtenant, or the appointment of a trustee
        or receiver to take possession of substantially all of Subtenant's assets
        located at the Demised Premises or of Subtenant's interest in this Sublease
        and
        possession not being restored to Subtenant within 60 days, or (v) the subjection
        of all or substantially all of Subtenant's assets located at the Demised
        Premises or of Subtenant's interest in this Sublease to attachment, execution
        or
        other judicial seizure and such subjection not being discharged within 60
        days;
        or

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      (b)  the
        failure of Subtenant to make any payment of Basic Rent, of any monthly
        installment of any Additional Rent, of any monthly escrow installment with
        respect to taxes, assessments and/or property insurance premiums or any other
        monetary obligation within the time periods required by this Sublease;
        or

       

      (c)  the
        occurrence of any other event of default under this Sublease.

       

      “Draw
        Proceeds”
means
        the proceeds of any draw or draws made by Sublandlord under the Letter of
        Credit, together with any and all interest accruing thereon.

       

      “L/C
        Bank”
means
        US Bank, or another United States bank which is acceptable to Sublandlord,
        in
        Sublandlord’s sole and absolute discretion, which has a branch office located in
        Portland, Oregon.

       

      “Letter
        of Credit”
means
        that certain irrevocable letter of credit, having an expiration date of not
        sooner than September 15, 2011, in the L/C Face Amount, issued by the L/C
        Bank, as extended, renewed, replaced or modified from time to time in accordance
        with this Sublease; provided,
        however,
        that in
        any event the Letter of Credit shall provide: (i) that Sublandlord may make
        partial and multiple draws thereunder, in an amount not to exceed the principal
        amount thereof; (ii) that Sublandlord may draw upon the Letter of Credit in
        an amount not to exceed the principal amount thereof and the L/C Bank will
        pay
        to Sublandlord the amount of such draw upon receipt by the L/C Bank of only
        a
        sight draft signed by Sublandlord, it being acknowledged and agreed that
        no
        certification shall be required from the Sublandlord, including, without
        limitation, any certification of any current conditions under this Sublease;
        (iii) that draws may be presented by facsimile; (iv) that draws will
        be honored on the same business day as presented if presented prior to 11:00
        a.m. Pacific time or the next business day if presented thereafter; and
        (v) all fees payable with respect to the Letter of Credit shall be paid
        promptly by Subtenant without reduction to the amount of the Letter of
        Credit.

       

      3.3.2  Letter
        of Credit Draw Events; Payment and Holding of Draw
        Proceeds. Immediately
        upon, and at any time or from time to time after, the occurrence of any one
        or
        more Draw Events, Sublandlord will have the unconditional right to draw on
        the
        Letter of Credit, in the full amount thereof or in any lesser amount or amounts
        as Sublandlord may determine, in its sole and absolute discretion. Upon the
        payment to Sublandlord of the Draw Proceeds, Sublandlord will hold the Draw
        Proceeds in its own name and for its own account, without liability for
        interest, and as security for the performance by Subtenant of Subtenant’s
        covenants and obligations (theretofore or thereafter arising) under this
        Sublease (including, without limitation, any indemnification obligations
        of
        Subtenant set forth herein or in the Master Lease), and will be entitled
        to use
        and apply any and all of the Draw Proceeds from time to time solely to
        compensate Sublandlord hereunder. Among other things, it is expressly understood
        that the Draw Proceeds will not be considered an advance payment of Basic
        Rent
        or Additional Rent or a measure of Sublandlord’s damages resulting from any
        event of default hereunder (past, present or future). Further, immediately
        upon
        the occurrence of any one or more Draw Events, Sublandlord may, from time
        to
        time and without prejudice to any other remedy, use the Draw Proceeds (whether
        from a contemporaneous or prior draw on the Letter of Credit) to the extent
        necessary to make good any arrearages of Basic Rent or Additional Rent, to
        repair damage to the Demised Premises caused by Subtenant, to clean and repair
        the Demised Premises upon termination of this Sublease, to pay to Sublandlord
        any and all amounts to which Sublandlord is entitled in connection with the
        pursuit of any one or more of its remedies hereunder, and to compensate
        Sublandlord for any and all other damage, injury, expense or liability caused
        to
        Sublandlord by any and all such events of default, including, without
        limitation, reimbursement to Sublandlord for the payment of any amount which
        Sublandlord may spend or be required to spend by reason of Subtenant’s default,
        it being expressly acknowledged and agreed by Subtenant that any use of the
        Draw
        Proceeds shall not constitute a bar or defense to any of Sublandlord’s remedies
        set forth in Paragraph 13
        below.
        Any
        delays in Landlord's draw on the Letter of Credit or in Landlord's use of
        the
        Draw Proceeds as provided in this Paragraph 3.3
        will not
        constitute a waiver by Landlord of any of its rights hereunder with respect
        to
        the Letter of Credit or the Draw Proceeds. Following any such application
        of the
        Draw Proceeds, and upon written notice from Sublandlord to Subtenant specifying
        the amount of the Draw Proceeds so utilized by Sublandlord, Subtenant shall
        immediately deliver to Sublandlord an amendment to the Letter of Credit or
        a
        replacement Letter of Credit in an amount equal to the full L/C Face Amount.
        Subtenant’s failure to deliver such replacement Letter of Credit to Sublandlord
        within ten (10) days of Sublandlord’s notice shall constitute an additional
        event of default hereunder. Under no circumstances will Sublandlord be liable
        for any indirect, consequential, special or punitive damages incurred by
        Subtenant in connection with any draw by Sublandlord of any Draw Proceeds,
        Sublandlord's liability being limited to the reimbursement of costs and expenses
        as and to the extent expressly provided in this Paragraph 3.3.
        Nothing
        in this Sublease or in the Letter of Credit will confer upon Subtenant any
        property rights or interests in any Draw Proceeds.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      3.3.3  Restrictions
        on Subtenant Actions; Waiver of Rights. Notwithstanding
        any contrary term or provision of this Sublease, Subtenant will not take
        any
        action, or cause or permit any person or entity to take any action, and
        Subtenant hereby irrevocably waives any and all rights which it may otherwise
        have at law or in equity, to enjoin, interfere with, restrict or limit, in
        any
        way whatsoever, any demand or draw by Sublandlord or any payment to Sublandlord
        under the Letter of Credit. If Subtenant, or any person or entity on Subtenant’s
        behalf or at Subtenant’s discretion, brings any proceeding or action to enjoin,
        interfere with, restrict or limit, in any way whatsoever, any one or more
        draws,
        demands or payments under the Letter of Credit, Subtenant will be liable
        for any
        and all direct, indirect, consequential, special and punitive damages resulting
        therefrom or arising in connection therewith, including, without limitation,
        attorneys’ fees and costs; provided,
        however,
        that
        nothing herein shall affect the right of Subtenant to bring any action, suit
        or
        proceeding against Sublandlord for any misapplication of any such Draw Proceeds
        after Sublandlord has exercised its right to make such a draw and actually
        received such Draw Proceeds.

       

      3.4   Escrow
        For Property Insurance, Taxes And Assessments. 

       

      3.4.1   Taxes
        And Assessments. Notwithstanding
        anything to the contrary herein or in the Master Lease, Subtenant shall pay
        to
        Sublandlord the known or estimated yearly real estate taxes and assessments
        payable with respect to the Demised Premises in monthly payments equal to
        one-twelfth of the known or estimated yearly real estate taxes and assessments
        next payable with respect to the Demised Premises. From time to time Sublandlord
        may re-estimate the amount of real estate taxes and assessments, and in such
        event Sublandlord shall notify Subtenant, in writing, of such re-estimate
        and
        fix future monthly installments for the remaining period prior to the next
        tax
        and assessment due date in an amount sufficient to pay the re-estimated amount
        over the balance of such period after giving credit for payments made by
        Subtenant on the previous estimate. If the total monthly payments made by
        Subtenant pursuant to this Paragraph 3.4.1
        shall
        exceed the amount of payments necessary for said taxes and assessments during
        the applicable period, such excess shall be credited on subsequent monthly
        payments of the same nature; but if the total of such monthly payments so
        made
        under this Paragraph 3.4.1
        shall be
        insufficient to pay such taxes and assessments when due, then Subtenant shall
        pay to Sublandlord such amount as may be necessary to make up the deficiency.
        Payment by Subtenant of real estate taxes and assessments under this
Paragraph 3.4.1
        shall be
        considered as performance of such obligation under the provisions of
Section
        5.1
        of the
        Master Lease.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      3.4.2   Property
        Insurance. Notwithstanding
        anything to the contrary herein or in the Master Lease, Subtenant shall pay
        to
        Sublandlord the known or estimated yearly property insurance premiums payable
        with respect to the insurance to be maintained by Subtenant pursuant to
Section 6.1
        of the
        Master Lease in monthly payments equal to one-twelfth of the known or estimated
        amount of such yearly premiums. From time to time Sublandlord may re-estimate
        the amount of the premiums for the property insurance to be maintained by
        Subtenant pursuant to Section 6.1
        of the
        Master Lease, and in such event Sublandlord shall notify Subtenant, in writing,
        of such re-estimate and fix future monthly installments for the remaining
        period
        prior to the date the next premium payment becomes due date in an amount
        sufficient to pay the re-estimated amount over the balance of such period
        after
        giving credit for payments made by Subtenant on the previous estimate. If
        the
        total monthly payments made by Subtenant pursuant to this Paragraph 3.4.2
        shall
        exceed the amount of payments necessary for said insurance premium payments
        during the applicable period, such excess shall be credited on subsequent
        monthly payments of the same nature; but if the total of such monthly payments
        so made under this Paragraph 3.4.2
        shall be
        insufficient to pay such insurance premiums when due, then Subtenant shall
        pay
        to Sublandlord such amount as may be necessary to make up the deficiency.
        Payment by Subtenant of insurance premium installments under this Paragraph 3.4.2
        shall be
        considered as performance of such obligation under the provisions of
Section
        6.1
        of the
        Master Lease.

       

      4.  Use
        of Demised Premises. Subtenant
        shall use and occupy the Demised Premises in accordance with the use specified
        in the Master Lease and for no other use.

       

       

      5.  Signs. Subtenant
        shall comply with the signage criteria specified in Article XVII
        of the
        Master Lease.

       

      6.  Master
        Lease. 

       

      6.1   Incorporation
        By Reference. Subtenant
        and this Sublease shall be subject in all respects to the provisions, terms,
        covenants and conditions of the Master Lease, including, without limitation,
        the
        rights of Master Landlord thereunder. Except as otherwise expressly provided
        in
        this Paragraph 6,
        all of
        the provisions, terms, covenants and conditions of the Master Lease insofar
        as
        they are not inconsistent with the terms of this Sublease are made a part
        of and
        incorporated by reference into this Sublease as if recited herein in full.
        Subtenant and Sublandlord each covenant not to take any action or do or perform
        any act or fail to take any action or do or perform any act which would result
        in the failure or breach of any of the covenants, terms, provisions or
        conditions of the Master Lease on the part of the Tenant thereunder.
        Notwithstanding the foregoing, (1) in addition to any express modifications
        to the terms of the Master Lease set forth in Paragraph 6.2
        below,
        the following sections, articles and Exhibit are incorporated into and made
        a
        part of this Sublease as modified by the terms of this Sublease: Articles XV
        (expressly excluding Section 15.6
        thereof), XII
        and
XIX
        and
Sections 3.4,
        12.1
        and
        12.5
        and
Exhibit F,
        and
        (2) the following sections, articles and exhibits are not incorporated into
        or made a part of this Sublease: Articles I,
        II
        and
XXI,
        Sections 3.1,
        3.6, 3.7, 5.5, 6.7, 9.6, 13.5, 15.6, 20.4, 20.9, 20.19 and
        20.24
        and
Exhibits C,
        D, E
        and
G.
        As
        applied to this Sublease, the words “Landlord”
and
        “Tenant”
as
        used
        in the Master Lease shall be deemed to refer to Sublandlord and Subtenant
        under
        this Sublease, respectively. The rights and obligations of Landlord and the
        Tenant under the Master Lease shall be deemed the rights and obligations
        of
        Sublandlord and Subtenant, respectively, under this Sublease and shall be
        binding upon and inure to the benefit of Sublandlord and Subtenant,
        respectively. As between the parties to this Sublease only, in the event
        of
        conflict between the terms of the Master Lease and the terms of this Sublease,
        the terms of this Sublease shall control.

       

      6.2   Certain
        Modifications. Sublandlord
        and Subtenant hereby acknowledge and agree, that as between Sublandlord and
        Subtenant, the following modifications shall be made to the terms of the
        Master
        Lease in defining each parties respective obligations thereunder:

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      6.2.1  As
        a
        condition to exercising any right to contest the application of any Impositions,
        as provided in
        Section 5.2
        of the
        Master Lease, Subtenant shall first provide Sublandlord with good and sufficient
        surety bond or other security deemed appropriate by Sublandlord in the amount
        of
        any such Impositions plus estimated penalties which may be imposed, payment
        or
        performance of which is legally being delayed pending such contest.

       

      6.2.2  Section 7.2
        of the
        Master Lease shall be amended by deleting the last sentence of said Section
        consisting of the following in its entirety:

       

      “Nothing
        contained in this Section 7.2 shall be construed to relieve Landlord of the
        obligation to finish Landlord’s Improvements described in Exhibit
        C.”

       

      6.2.3  Section 8.1
        of the
        Master Lease shall be amended by deleting the introductory phrase of the
        first
        sentence of said Section consisting of the following in its
        entirety:

       

      “Save
        and except for the one-year guaranty against defective materials and workmanship
        or other guaranties provided for in Section 2.4 hereof, and the completion
        of
        incomplete items provided for in Section 2.5 hereof,”

       

      6.2.4  Section 8.3
        of the
        Master Lease shall be amended by deleting the introductory phrase of the
        first
        sentence of said Section consisting of the following:

       

      “Except
        as expressly set forth in Section 8.1 and Section 21.2 of this
        Lease,”

       

      Said
        Section 8.3
        of the
        Master Lease shall be further amended by deleting the final phrase of the
        last
        sentence of said Section consisting of the following:

       

      “except
        as expressly provided in Section 16.2”

       

      6.2.5  Section 9.1
        of the
        Master Lease shall be amended by deleting the introductory phrase of the
        first
        sentence of said Section consisting of the words “Landlord’s
        Improvements and Tenant’s Improvements (collectively, the “Initial
        Improvements”)”
        and
        replacing such phrase with the phrase “Any
        alterations, improvements, replacements or repairs constructed by
        Tenant”.
        In
        connection with the foregoing, Subtenant hereby acknowledges and agrees that
        the
        obligations with respect to Landlord’s replacements set forth in Sections 8.1
        and
9.1
        are
        obligations of Master Landlord only, and as such, Sublandlord’s obligations with
        respect thereto shall be limited as provided in Paragraph 7
        below

       

      6.2.6  As
        a
        condition to exercising any right to contest the application of any laws
        or
        ordinances, as provided in
        Section 9.4
        of the
        Master Lease, Subtenant shall first provide Sublandlord with good and sufficient
        surety bond or other security deemed appropriate by Sublandlord in the amount
        of
        any lien, charge or other obligation plus estimated penalties which may be
        imposed, payment or performance of which is legally being delayed pending
        such
        contest.

       

      6.2.7  Section 9.7
        of the
        Master Lease shall be amended by deleting the final phrase of the last sentence
        of said Section consisting of the following:

       

      “,
        including but not limited to the covenants contained in Section
        9.6”

       

      6.2.8  Section 19.1(b)
        of the
        Master Lease shall be amended by deleting the words “involving
        in the aggregate an estimated cost of more than Ten Thousand and no/100 Dollars
        ($10,000.00) or which in Landlord’s reasonable judgment would materially alter
        the mechanical, structural, or electrical systems of the
        Improvements”
        from the
        first sentence of said Section. Said Section 19.1(b)
        shall
        be
        further amended by deleting the final sentence of said Section consisting
        of the
        following in its entirety:

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      “Notwithstanding
        the foregoing, Tenant may make alterations which do not affect the Building’s
        structure or the Building’s systems or equipment, provided the expenditures
        therefor do not exceed $50,000.00, without Landlord’s prior written consent so
        long as Tenant gives Landlord a written description of the proposed alterations
        at least 15 days prior to commencement of the alterations so that Landlord
        may
        post a notice of nonresponsibility.”

       

      6.2.9  Section 19.1(g)
        of
        the
        Master Lease shall be amended by deleting the final sentence of said Section
        consisting of the following in its entirety:

       

      “All
        improvements, additions or installations installed by Tenant which did not
        require Landlord’s prior approval shall be removed by Tenant as provided for in
        this Section 19.1(g), unless Tenant has obtained a written waiver of such
        condition from Landlord.”

       

      In
        connection with the foregoing, Subtenant hereby acknowledges and agrees that
        Subtenant’s obligations with respect to removal of improvements and restoration
        of the Demised Premises as set forth in Sections 19.1(g)
        and
20.18
        of the
        Master Lease shall be secured as provided in Paragraph 8.3
        below.

       

      6.2.1  Section 20.6
        of the
        Master Lease shall be amended by deleting the final sentence of said Section
        consisting of the following in its entirety:

       

      “Nothing
        herein contained shall be construed as relieving Landlord of its obligations
        under Article II or Section 21.2 of this Lease, or releasing Landlord from
        any
        obligation to complete the cure of any breach by Landlord during the period
        of
        its ownership of the Demised Premises.”

       

      	6.3 
                 	
              Subtenant
                Acknowledgements and Attornment. 

            

       

      As
        provided in Article XV
        of the
        Master Lease, Subtenant hereby acknowledges and agrees that (i) this
        Sublease is only for actual use and occupancy of the Demised Premises by
        Subtenant; (ii) this Sublease is subject and subordinate to all of the
        terms, covenants and conditions of the Master Lease and to all of the rights
        of
        Master Landlord thereunder; and (iii) in the event the Master Lease shall
        terminate before the expiration of this Sublease, Subtenant will, at Master
        Landlord’s option, attorn to Master Landlord and waive any rights that Subtenant
        may have to terminate this Sublease or to surrender possession of the Demised
        Premises hereunder, as a result of the termination of the Master
        Lease.

       

      7.  Master
        Landlord’s Performance under Master Lease.

       

      	7.1
                	
              Performance
                by Master Landlord.

            

       

      7.1.1  Subtenant
        recognizes that, except for payments of the Basic Rent owed to Master Landlord
        pursuant to Section
        3.1
        of the
        Master Lease, as well as any replenishment of the Security Deposit set forth
        in
Sections
        3.6 and
        3.7
        of the
        Master Lease required by Master Landlord pursuant to the Master Lease, and
        the
        Sharing of Excess Rent, if any, with respect to the Rent payable by Subtenant
        under this Sublease as and when set forth in Section
        15.4
        of the
        Master Lease (which payments shall be made by Sublandlord), Sublandlord is
        not
        in a position to render any of the services or to perform any of the obligations
        required of Sublandlord by the terms of this Sublease which are corresponding
        obligations of the Master Landlord under the Master Lease. Therefore,
        notwithstanding anything to the contrary contained in this Sublease, the
        performance by Sublandlord of its obligations hereunder are conditional upon
        the
        due performance by Master Landlord of its corresponding obligations under
        the
        Master Lease and Sublandlord shall not be liable to Subtenant for any
        non-performance, default or breach by Master Landlord under the Master Lease.
        Subtenant shall not have any claim against Sublandlord nor shall Sublandlord
        be
        liable to Subtenant by reason of Master Landlord’s failure or refusal to comply
        with any of the provisions of the Master Lease. This Sublease shall remain
        in
        full force and effect notwithstanding Master Landlord’s failure or refusal to
        comply with any such provisions of the Master Lease and Subtenant shall pay
        Basic Rent, Additional Rent and all other payments or charges provided for
        in
        this Sublease without any abatement, deduction or setoff
        whatsoever.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      7.1.2  With
        respect to the non-performance, default or breach by Master Landlord of its
        obligations under the Master Lease, Sublandlord shall reasonably cooperate
        with
        Subtenant to obtain Master Landlord’s performance or Master Landlord’s cure of
        such breach or default, including, but not limited to, Master Landlord’s
        obligations, if any, to make repairs and replacements to Structural Items,
        as
        set forth in Section 8.1
        of the
        Master Lease and to reimburse Subtenant for costs incurred by Subtenant in
        response to a Special Landlord Default, if any, as and if such reimbursement
        is
        required pursuant to Section 16.2
        of
        the
        Master Lease; provided,
        however,
        Sublandlord’s sole obligation with respect thereto shall be to (a) request
        such performance or cure from the Master Landlord following a request in
        writing
        by Subtenant, and (b) use commercially reasonable efforts to obtain such
        performance or cure of such breach or default from the Master Landlord. In
        this
        regard, Sublandlord may, in its sole and absolute discretion, but shall have
        no
        obligation to, expend funds or institute legal action or other proceedings
        against Master Landlord to cause performance or remedy a breach by Master
        Landlord. If, after receipt of a written request to do so from Subtenant,
        Sublandlord for any reason refuses to institute legal action or other
        proceedings for the enforcement of Sublandlord’s rights against, or to remedy a
        breach by, the Master Landlord with respect to the Demised Premises (an
“Action”)
        (which
        refusal shall be set forth in a written notice from Sublandlord to Subtenant),
        then following Subtenant’s receipt of such written notice Subtenant shall have
        the right to take such Action in its own name, and for that purpose and only
        to
        such extent, all rights of Sublandlord as Tenant under the Master Lease are
        hereby conferred upon and assigned to Subtenant and Subtenant shall be
        subrogated to such rights. If Subtenant institutes an Action against Master
        Landlord, Subtenant shall indemnify, defend (with legal counsel reasonably
        satisfactory to Sublandlord), protect and hold Sublandlord and its officers,
        employees, agents, successors and assigns harmless from and against all claims,
        losses, liabilities, judgments, damages, costs and expenses (including
        attorneys’ fees) in any manner arising out of or related to such
        Action.

       

      7.2   Sublandlord’s
        Efforts. Whenever
        the consent of Master Landlord shall be required by the Master Lease during
        the
        term of this Sublease, Sublandlord shall use commercially reasonable efforts
        to
        obtain, at Subtenant’s sole cost and expense, such consent on behalf of
        Subtenant. Whenever this Sublease requires the consent of Sublandlord not
        to be
        unreasonably withheld, conditioned or delayed, it shall be reasonable for
        Sublandlord to withhold such consent at any time Master Landlord withholds
        its
        consent to Sublandlord under the Master Lease. If Subtenant believes Master
        Landlord is not within its rights to withhold such consent to such matter,
        Sublandlord’s sole obligation to Subtenant shall be to use commercially
        reasonable efforts, at no cost to Sublandlord, to obtain the consent of Master
        Landlord. Nothing herein is to be construed as prohibiting Subtenant from
        seeking Master Landlord’s consent independent of Sublandlord’s efforts;
provided,
        however,
        that
        Subtenant shall (i) provide Sublandlord with notice in accordance with
Paragraph
        14.1
        of this
        Sublease specifying in reasonable detail its intended action prior to seeking
        consent from Sublandlord, and (ii) afford Sublandlord an opportunity to
        have a representative present during any meetings, negotiations or other
        form of
        discussion with Master Landlord (whether taking place by telephone, video
        conference or in-person) arising from or otherwise related to such
        action.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      	8.  	
              Condition
                of Demised Premises and Alterations
                Thereto.

            

       

      8.1   Condition
        of Demised Premises. Following
        the Effective Date, Sublandlord shall perform certain removal and restoration
        work in and around the Demised Premises. In connection therewith, Sublandlord
        and Subtenant shall, in the exercise of each party’s respective sole and
        absolute discretion, mutually agree upon the scope of the removal and
        restoration work to be performed by Sublandlord, which removal and restoration
        work shall be described in an Exhibit to be attached hereto as Exhibit
        B
        (the
        removal and restoration work so identified shall be referred to herein as
        the
“Sublandlord
        Removal Work”).
        Upon
        Substantial Completion (as defined below) of the Sublandlord Removal Work,
        Sublandlord shall deliver the Demised Premises to Subtenant in a “broom clean”
condition. Subject to completion of any punch-list items in connection with
        Sublandlord’s completion of the Sublandlord Removal Work, Subtenant shall accept
        the Demised Premises in its “as
        is”,
        “where
        is”
        condition “with
        all faults”
on
        the
        Commencement Date, without any warranty or representation by Sublandlord
        of any
        kind or nature regarding the condition or suitability of the Demised Premises
        for any purpose, whether expressed or implied, except as expressly provided
        below. Subtenant acknowledges that, except as expressly provided below,
        Sublandlord has made no representation or warranty of any kind or nature
        regarding the condition or suitability of the Demised Premises, the Building
        or
        any systems of the Building supplied to the Demised Premises for any particular
        purpose or use.

       

      8.1.1  Condition
        of Demised Premises. To
        the
        best of Sublandlord’s actual knowledge, as of the Effective Date, (i) the
        mechanical, electrical and plumbing systems (to the extent such systems shall
        remain after the Sublandlord Removal Work) and all roll-up doors are in good
        working order, and (ii) there are no water leaks in the roof membrane.

       

      8.1.2  Pending
        Litigation. To
        the
        best of Sublandlord's actual knowledge, there are no pending actions, suits
        or
        proceedings before any court or administrative agency against Sublandlord
        which
        could, in the aggregate, materially and adversely affect the Demised Premises
        or
        Sublandlord’s ability to perform its obligations under this
        Sublease.

       

      8.1.3  Pending
        Condemnation. To
        the
        best of Sublandlord’s actual knowledge, Sublandlord has not received any written
        notice of any pending or threatened condemnation or similar proceeding affecting
        the Demised Premises or any portion thereof.

       

      8.1.4  No
        Representation Regarding Suitability. Subtenant
        acknowledges that Sublandlord has made no representation or warranty of any
        kind
        or nature regarding the condition or suitability of the Demised Premises,
        the
        Building or any systems of the Building supplied to the Demised Premises
        for any
        particular purpose or use.

       

      As
        used
        herein, the term “Substantial
        Completion”
shall
        mean the Sublandlord Removal Work has occurred and, to the extent required
        by
        law, Sublandlord has received electrical, plumbing, mechanical and fire
        protection final approval of the Sublandlord Removal Work; provided,
        however,
        that
        Substantial Completion shall be deemed to have occurred notwithstanding a
        requirement to complete “punchlist” or similar corrective work. As used
        herein, the phrases “to
        the best of Sublandlord's actual knowledge,”
        “to
        the best of Sublandlord's knowledge,”“to
        Sublandlord's knowledge,”
        “to
        Sublandlord's actual knowledge,”
or
        words of similar import, shall mean the actual knowledge of John Johnston,
        as of
        the Effective Date of this Sublease, without duty of inquiry or
        investigation.

       

      8.2   Subtenant
        Alterations. 
        Subtenant shall not make any changes, alterations,
        modifications or improvements to the Demised Premises and/or the Building,
        except as expressly provided in Article XIX
        of the
        Master Lease, as the same has been modified by this Sublease; provided,
        however,
        that
        Sublandlord shall not unreasonably withhold, condition or delay its consent
        to
        any such request. Without limiting the foregoing, Subtenant hereby acknowledges
        and agrees that, (i) at the expiration or earlier termination of this
        Sublease, Subtenant shall have the obligation to complete the removal and
        restoration work with respect to the Demised Premises which is described
        within
Sections 19.1(g)
        and
20.18
        of the
        Master Lease (such removal and restoration work is herein referred to as
        the
“Removal
        Work”),
        and
        (ii) as security for Subtenant’s performance of the Removal Work, no later
        than ten (10) business days following Sublandlord’s approval of Subtenant’s
        proposed changes, alterations, modifications and/or improvements, but in
        any
        event prior to the commencement of any work in connection therewith, Subtenant
        shall, at Subtenant's sole cost and expense, deliver the Removal Work Letter
        of
        Credit (as defined in Paragraph 8.3
        below)
        to Sublandlord in the Removal Work L/C Face Amount (as defined in Paragraph 8.3
        below).
        The Removal Work shall include, without limitation, the removal of any
        alterations to the Demised Premises performed by Subtenant. Any such Removal
        Work shall be commenced, in any event, on or before June 1, 2011 or such
        other date as may be mutually and reasonably agreed upon by Subtenant and
        Sublandlord at the time of Sublandlord’s grant of consent to any such changes,
        alterations, modifications or improvements which give rise to the requirement
        for such Removal Work (such date, as adjusted pursuant to the following
        paragraph, is herein referred to as the “Removal
        Work Commencement Date”)
        and
        completed on or before the Expiration Date. The Removal Work shall be completed
        on or before the Expiration Date; provided,
        however,
        that in
        the event that (x) Master Landlord notifies Sublandlord in writing that
        (I) certain changes, alterations, modifications or improvements may remain
        on the Demised Premises past the Expiration Date (any such changes, alterations,
        modifications or improvements identified by Master Landlord within such notice
        shall be referred to herein collectively as the “Excluded
        Alterations”),
        (II) Master Landlord releases Sublandlord from the obligation to perform
        Removal Work or any restoration work whatsoever with respect to the Excluded
        Alterations, and (III) Master Landlord agrees to hold Sublandlord harmless
        for any obligation with respect to removal, restoration, modification, repair
        or
        replacement of such Excluded Alterations, (y) Subtenant performs all other
        obligations of Subtenant under this Sublease, and (z) this Sublease has not
        been terminated prior to the Expiration Date, then Subtenant shall not be
        required to remove the Excluded Alterations prior to the Expiration
        Date.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      Notwithstanding
        anything to the contrary herein or in the Master Lease, in addition to the
        requirements set forth in Section 19.1
        of
        the
        Master Lease, including, without limitation, the requirement for issuance
        of the
        performance bond set forth in item (v)
        of
Section 19.1(b)
        of the
        Master Lease, as a condition to approval of any change, alteration, modification
        or improvement to the Demised Premises and/or the Building, Sublandlord may
        require (x) that the Removal Work L/C Face Amount (as defined in
Paragraph 8.3
        below)
        with respect to the Removal Work Letter of Credit be increased to an amount
        which reasonably approximates one hundred twenty-five percent (125%) of the
        then
        estimated cost to complete any additional Removal Work corresponding to the
        change, alteration, modification or improvement for which Subtenant is then
        requesting approval from Sublandlord, and/or (y) that the Removal Work
        Commencement Date be adjusted to accommodate completion of removal of such
        alterations, modifications or improvements on or before the Expiration Date.
        Without limiting the obligation of Subtenant to obtain the consent of Master
        Landlord and Sublandlord in connection therewith, any increase to the Removal
        Work L/C Face Amount required pursuant to the preceding sentence shall be
        delivered to Sublandlord prior to Subtenant commencing any change, alteration,
        modification or improvement to the Demised Premises and/or the Building.
        

       

      8.3   Removal,
        Holdover And Additional Security. 
        As provided in Paragraph 8.2
        above,
        Subtenant shall complete the Removal Work on or before the Expiration Date.
        Should Subtenant fail to complete the Removal Work on or before the Expiration
        Date, Subtenant shall be deemed to be in holdover of the Demised Premises
        and in
        default of this Sublease and, in addition to any other rights or remedies
        available to Sublandlord with respect to such default, Subtenant shall be
        obligated to pay Basic Rent to Sublandlord during the continuation of such
        hold
        over, at a rate equal to two hundred percent (200%) of the Basic Rent in
        effect
        immediately prior to the Expiration Date.

       

      8.3.1  Definitions.
         For
        purposes of this Sublease, the following terms shall have the following
        definitions:

       

      “Removal
        Work Draw Event”
means
        each of the following events:

       

      (a)  the
        occurrence of any one or more of the following: (i) Subtenant’s filing of a
        petition under any chapter of the Bankruptcy Code, or under any federal,
        state
        or foreign bankruptcy or insolvency statute now existing or hereafter enacted,
        or Subtenant’s making a general assignment or general arrangement for the
        benefit of creditors, (ii) the filing of an involuntary petition under any
        chapter of the Bankruptcy Code, or under any federal, state or foreign
        bankruptcy or insolvency statute now existing or hereafter enacted, or the
        filing of a petition for adjudication of bankruptcy or for reorganization
        or
        rearrangement, by or against Subtenant and such filing not being dismissed
        within 60 days, (iii) the entry of an order for relief under any chapter
        of the
        Bankruptcy Code, or under any federal, state or foreign bankruptcy or insolvency
        statute now existing or hereafter enacted, (iv) the appointment of a
“custodian,” as such term is defined in the Bankruptcy Code (or of an equivalent
        thereto under any federal, state or foreign bankruptcy or insolvency statute
        now
        existing or hereafter enacted), for Subtenant, or the appointment of a trustee
        or receiver to take possession of substantially all of Subtenant’s assets
        located at the Premises or of Subtenant’s interest in this Sublease and
        possession not being restored to Subtenant within 60 days, or (v) the subjection
        of all or substantially all of Subtenant’s assets located at the Premises or of
        Subtenant’s interest in this Sublease to attachment, execution or other judicial
        seizure and such subjection not being discharged within 60 days; or

       

      
        
          
          

        

        
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      (b)  the
        failure of Subtenant to commence and diligently prosecute completion of the
        Removal Work at the times and in the time periods required under this Sublease;
        or

       

      (c)  the
        effective date of any termination of this Sublease, if the Removal Work has
        not
        been completed in accordance with this Sublease upon such date.

       

      “Removal
        Work L/C Draw Proceeds”
means
        the proceeds of any draw or draws made by Sublandlord under the Removal Work
        Letter of Credit, together with any and all interest accruing
        thereon.

       

      “Removal
        Work L/C Face Amount”
shall
        mean an amount which reasonably approximates one hundred twenty-five percent
        (125%) of the reasonably estimated costs and expenses to complete the Removal
        Work, as such amount may be increased from time to time pursuant to Paragraph 8.2
        above in
        connection with any changes, alterations, modifications or improvements to
        the
        Demised Premises requested by Subtenant.

       

      “Removal
        Work Letter of Credit”
means
        that certain irrevocable letter of credit, having an expiration date of not
        sooner than September 15, 2011, in the Removal Work L/C Face Amount, issued
        by the L/C Bank, as extended, renewed, replaced or modified from time to
        time in
        accordance with this Sublease; provided,
        however,
        that in
        any event the Removal Work Letter of Credit shall provide: (i) that
        Sublandlord may make partial and multiple draws thereunder, in an amount
        not to
        exceed the principal amount thereof; (ii) that Sublandlord may draw upon
        the Removal Work Letter of Credit in an amount not to exceed the principal
        amount thereof and the L/C Bank will pay to Sublandlord the amount of such
        draw
        upon receipt by the L/C Bank of only a sight draft signed by Sublandlord,
        it
        being acknowledged and agreed that no certification shall be required from
        the
        Sublandlord, including, without limitation, any certification of any current
        conditions under this Sublease; (iii) that draws may be presented by
        facsimile; (iv) that draws will be honored on the same business day as
        presented if presented prior to 11:00 a.m. Pacific time or the next business
        day
        if presented thereafter; and (v) all fees payable with respect to the
        Removal Work Letter of Credit shall be paid promptly by Subtenant without
        reduction to the amount of the Removal Work Letter of Credit.

       

      8.3.2  Removal
        Work Letter of Credit Draw Events; Payment and Holding of Draw
        Proceeds. Immediately
        upon, and at any time or from time to time after, the occurrence of any one
        or
        more Removal Work Draw Events, Sublandlord will have the unconditional right
        to
        draw on the Removal Work Letter of Credit, in the full amount thereof or
        in any
        lesser amount or amounts as Sublandlord may determine, in its sole and absolute
        discretion. Upon the payment to Sublandlord of the Removal Work L/C Draw
        Proceeds, Sublandlord will hold the Removal Work L/C Draw Proceeds in its
        own
        name and for its own account, without liability for interest, and as security
        for the performance by Subtenant of Subtenant’s covenants and obligations
        (theretofore or thereafter arising) under this Sublease, and will be entitled
        to
        use and apply any and all of the Removal Work L/C Draw Proceeds from time
        to
        time solely to compensate Sublandlord hereunder. Among other things, it is
        expressly understood that the Removal Work L/C Draw Proceeds will not be
        considered an advance payment of Basic Rent or Additional Rent or a measure
        of
        Sublandlord’s damages resulting from any event of default hereunder (past,
        present or future). Further, immediately upon the occurrence of any one or
        more
        Removal Work L/C Draw Events, Sublandlord may, from time to time and without
        prejudice to any other remedy, use the Removal Work L/C Draw Proceeds (whether
        from a contemporaneous or prior draw on the Removal Work Letter of Credit)
        to
        the extent necessary to pay to Sublandlord any and all amounts to which
        Sublandlord is entitled in connection with completion of the Removal Work,
        and
        to compensate Sublandlord for any and all other damage, injury, expense or
        liability caused to Sublandlord by Subtenant’s failure to timely complete the
        Removal Work, including, without limitation, payment of any Basic Rent and/or
        Additional Rent during any applicable period of holdover. Any delays in
        Sublandlord’s draw on the Removal Work Letter of Credit or in Sublandlord’s use
        of the Removal Work L/C Draw Proceeds will not constitute a waiver by
        Sublandlord of any of its rights hereunder with respect to the Removal Work
        Letter of Credit or the Removal Work L/C Draw Proceeds. Following any such
        application of the Removal Work L/C Draw Proceeds, and upon written notice
        from
        Sublandlord to Subtenant specifying the amount of the Removal Work L/C Draw
        Proceeds so utilized by Sublandlord, Subtenant shall immediately deliver
        to
        Sublandlord an amendment to the Removal Work Letter of Credit or a replacement
        Letter of Credit in an amount equal to the full Removal Work L/C Face Amount.
        Subtenant’s failure to deliver such replacement Removal Work Letter of Credit to
        Sublandlord within ten (10) days of Sublandlord’s notice shall constitute an
        additional event of default hereunder. Under no circumstances will Sublandlord
        be liable for any indirect, consequential, special or punitive damages incurred
        by Subtenant in connection with any draw by Sublandlord of any Removal Work
        L/C
        Draw Proceeds. Nothing in this Sublease or in the Removal Work Letter of
        Credit
        will confer upon Subtenant any property rights or interests in any Removal
        Work
        L/C Draw Proceeds.

       

      
        
          
          

        

        
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      8.3.3  Restrictions
        on Subtenant Actions; Waiver of Rights. Notwithstanding
        any contrary term or provision of this Sublease, Subtenant will not take
        any
        action, or cause or permit any person or entity to take any action, and
        Subtenant hereby irrevocably waives any and all rights which it may otherwise
        have at law or in equity, to enjoin, interfere with, restrict or limit, in
        any
        way whatsoever, any demand or draw by Sublandlord or any payment to Sublandlord
        under the Removal Work Letter of Credit. If Subtenant, or any person or entity
        on Subtenant’s behalf or at Subtenant’s discretion, brings any proceeding or
        action to enjoin, interfere with, restrict or limit, in any way whatsoever,
        any
        one or more draws, demands or payments under the Removal Work Letter of Credit,
        Subtenant will be liable for any and all direct, indirect, consequential,
        special and punitive damages resulting therefrom or arising in connection
        therewith, including, without limitation, attorneys’ fees and
        costs.

       

      8.4   Purchase
        of Equipment. Concurrent
        with entering into this Sublease, Sublandlord intends to sell to Subtenant
        and
        Subtenant intends to purchase from Sublandlord, all of Sublandlord’s right,
        title and interest in and to certain equipment which is presently located
        within
        the Demised Premises. In connection therewith, Sublandlord and Subtenant
        shall,
        in the exercise of each party’s respective sole and absolute discretion,
        (x) identify the equipment to be so purchased by Subtenant, which equipment
        shall be identified on an Exhibit to be attached hereto as Exhibit C
        (the
        equipment so identified shall be referred to herein as the “Equipment”),
        and
        (y) the purchase price Subtenant shall pay to Sublandlord for the Equipment
        (the "Equipment
        Purchase Price").
        Subtenant acknowledges and agrees that: (i) the Equipment is being sold
“As-Is,
        Where-Is and With All Faults”;
        (ii) Sublandlord has made no agreement to alter, repair, replace or improve
        all or any portion of the Equipment; (iii) Sublandlord makes no warranty or
        representation, express or implied, or arising by operation of law, including,
        but in no way limited to, any warranty of condition, habitability,
        merchantability or fitness for a particular purpose of the Equipment;
        (iv) Sublandlord is not, nor shall it be deemed to be, liable or bound in
        any manner by any oral or written statements, representations or information
        pertaining to the Equipment, or the operation thereof, furnished by any real
        estate broker, agent, employee, servant or other person; and (v) Subtenant
        is a sophisticated and experienced buyer of property such as the Equipment
        and
        has been duly represented by counsel in connection with the negotiation of
        this
        Sublease. On the later to occur of (a) satisfaction of the condition
        precedent to the effectiveness of this Sublease set forth in Paragraph 14.8.1
        below,
        and (b) two (2) business days following Sublandlord and Subtenant’s mutual
        agreement upon the Equipment and the Equipment Purchase Price, Subtenant
        shall
        pay to Sublandlord, in addition to any other amounts to be delivered to
        Sublandlord pursuant to this Sublease or paid by Subtenant pursuant to this
        Sublease, the Equipment Purchase Price representing the full purchase price
        for
        the Equipment. The Equipment Purchase Price is payment for the value of the
        Equipment, does not constitute Rent payable under this Sublease and/or the
        Master Lease and the obligation of Subtenant with respect to payment of the
        Equipment Purchase Price is separate and distinct from Subtenant's obligations
        under this Sublease. Without limiting the foregoing, the obligation of payment
        of the Equipment Purchase Price may be enforced by a separate action or actions
        brought against Subtenant, irrespective of whether or not any action is brought
        against Subtenant with respect to Rent or any other obligations of Subtenant
        under this Sublease.

       

      
        
          
          

        

        
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      9.  Subletting
        and Assignment. Except
        in
        accordance with Article XV
        of the
        Master Lease (as the same has been modified by this Sublease), Subtenant
        shall
        not sell, assign, encumber or otherwise transfer by operation of law or
        otherwise this Sublease or any interest herein, sub-sublet the Demised Premises
        or suffer any other person to occupy or use the Demised Premises or any portion
        thereof.

       

      10.  Late
        Charges. If
        any
        installment of Rent or any other sum due from Subtenant shall not be received
        by
        Sublandlord or Sublandlord’s designee (i) within five (5) days after
        said amount is due, or (ii) upon the date said amount is due if any
        installment of Rent or other sum due from Subtenant has not been received
        by
        Sublandlord or Sublandlord’s designee within five (5) days after the date
        due on two (2) or more occasions during any given Sublease Year, then
        Subtenant shall pay to Sublandlord a late charge equal to five percent (5%)
        of
        the overdue amount plus any attorneys’ fees incurred by Sublandlord by reason of
        Subtenant’s failure to pay Rent and/or other charges when due hereunder. The
        late charge shall be deemed additional Rent and the right to require it shall
        be
        in addition to all of Sublandlord’s other rights and remedies hereunder or at
        law and shall not be construed as liquidated damages or as limiting
        Sublandlord’s remedies in any manner. In addition to the late charge described
        above, any Rent or other amounts owing hereunder which are not paid
        (i) within five (5) days after the date they are due, or
        (ii) upon the date they are due if any Rent or other amounts owing
        hereunder have not been received by Sublandlord or Sublandlord’s designee within
        five (5) days after the date due on two (2) or more occasions during
        any given Sublease Year, shall bear interest from the date when due until
        paid
        at a rate per annum equal to the lesser of (i) the annual “Bank Prime Loan”
rate cited in the Federal reserve Statistical Release
        Publication G.13(415), published on the first Tuesday of each calendar
        month (or such other comparable index as Sublandlord and Subtenant shall
        reasonably agree upon if such rate ceases to be published) plus two
        (2) percentage points, and (ii) the highest rate permitted by
        applicable law.

       

      11.  Insurance. During
        the Term hereof, Subtenant shall at its expense maintain in full force and
        effect the insurance required to be held and maintained by Tenant pursuant
        to
Article VI
        of the
        Master Lease, in the forms required pursuant to said Article VI
        of the
        Master Lease and naming both Sublandlord and Master Landlord as additional
        insureds/loss payees, as applicable, with respect to each policy where Tenant
        is
        required to name Landlord as an additional insured/loss payee, as applicable,
        pursuant to the Master Lease. Without limiting the foregoing and notwithstanding
        anything to the contrary herein, Subtenant hereby acknowledges that Sublandlord
        is not maintaining any insurance with respect to the Building and/or any
        other
        Improvements on or about the Demised Premises and that Subtenant shall be
        obligated to maintain such insurance pursuant to the provisions of Section 6.1
        of the
        Master Lease; provided,
        however,
        that
        Sublandlord shall make the amounts deposited with Sublandlord pursuant to
        Paragraph 3.2
        above
        available for payment of premiums for such property insurance.

       

      Without
        limiting Subtenant’s obligation to restore any Improvements located upon the
        Demised Premises, as provided in Article XIII
        of the
        Master Lease, Sublandlord and Subtenant intend that their respective property
        loss risks shall be borne by reasonable insurance carriers to the extent
        above
        provided, and Sublandlord and Subtenant hereby agree to look solely to, and
        seek
        recovery only from, their respective insurance carriers in the event of a
        property loss to the extent that such coverage is agreed to be provided
        hereunder. The parties each hereby waive all rights and claims against each
        other for such losses, and waive all rights of subrogation of their respective
        insurers. Subtenant hereby further waives all rights and claims against Master
        Landlord for such losses, and waives all rights of subrogation of Subtenant’s
        respective insurers with respect to Master Landlord. The parties agree that
        their respective insurance policies are now, or shall be, endorsed such that
        the
        waiver of subrogation shall not affect the right of the insured to recover
        thereunder.

       

      
        
          
          

        

        
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      12.  Indemnity
        and Release. 

       

      12.1   Subtenant
        Indemnity. On
        the
        Commencement Date and thereafter, Subtenant hereby assumes all risk of damage
        to
        property or injury to persons in, upon or about the Demised Premises, the
        Building and/or the Land from any cause whatsoever (including, but not limited
        to, any personal injuries resulting from a slip and fall in, upon or about
        the
        Demised Premises, the Building and/or the Land) and agrees that Master Landlord,
        its partners, subpartners and their respective officers, agents, servants,
        employees, and independent contractors (collectively, “Master
        Landlord Parties”)
        and
        Sublandlord, its partners, subpartners and their respective officers, agents,
        servants, employees, and independent contractors (collectively, “Sublandlord
        Parties”),
        shall
        not be liable for, and are hereby released from any responsibility for, any
        damage either to person or property or resulting from the loss of use thereof,
        which damage is sustained by any person in, upon or about the Demised Premises,
        the Building and/or the Land or by Subtenant or by other persons claiming
        through Subtenant in, upon or about Demised Premises, the Building and/or
        the
        Land. Without limiting the foregoing, Subtenant promptly upon notice shall
        indemnify, defend, protect, and hold harmless the Master Landlord Parties
        and
        the Sublandlord Parties from any and all loss, cost, damage, expense and
        liability (including without limitation court costs and reasonable attorneys’
fees) incurred in connection with or arising from (i) any cause in, on or
        about the Demised Premises, the Building and/or the Land (including, but
        not
        limited to, a slip and fall) from and after the Commencement Date, (ii) any
        acts, omissions or negligence of Subtenant or of any person claiming by,
        through
        or under Subtenant, or of the contractors, agents, servants, employees,
        invitees, guests or licensees of Subtenant or any such other person claiming
        by,
        through or under Subtenant, in, on or about the Demised Premises, the Building
        and/or the Land, or (iii) any breach of the terms of this Sublease either
        prior to, during, or after (to the extent Subtenant continues to occupy the
        Demised Premises) the expiration of the Term; provided,
        however,
        that
        the terms of the foregoing indemnity shall not apply to the gross negligence
        or
        willful misconduct of Master Landlord and/or Sublandlord. Should Master Landlord
        or Sublandlord be named as a defendant in any suit brought against Subtenant
        in
        connection with or arising out of Subtenant’s occupancy of the Demised Premises,
        Subtenant shall pay to Master Landlord and Sublandlord their costs and expenses
        incurred in such suit, including without limitation, their actual professional
        fees such as reasonable appraisers’, accounts’ and attorneys’ fees. The
        provision of this Paragraph 12
        shall
        survive the expiration or sooner termination of this Sublease with respect
        to
        any claims or liability arising in connection with any event occurring prior
        to
        such expiration or termination.

       

      12.2   Sublandlord
        Indemnity. 
        Sublandlord
        shall indemnify and hold Subtenant harmless of and from all liability,
        judgments, costs, penalties and expenses, damages, claims, or demands, including
        reasonable attorney's fees, to the extent the same are caused by or arise
        in
        connection with (i) the gross negligence or willful misconduct of
        Sublandlord or its employees, agents or contractors occurring on or about
        the
        Demised Premises after the Commencement Date;(ii) the failure by
        Sublandlord to comply with or perform its obligations under the Master Lease
        (as
        the same have been modified by this Sublease) and/or this Sublease; and
        (iii) Sublandlord’s breach of its representations and warranties
        hereunder. 

       

      
        
          
          

        

        
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      	13.  	
              Events
                of Default and Remedies. 

            

       

      13.1   Events
        of Default. The
        occurrence of any of the following shall constitute a default of this Sublease
        by Subtenant:

       

      13.1.1  Any
        failure by Subtenant to pay any Rent or any other charge required to be paid
        under this Sublease, or any part thereof, when due; provided,
        however,
        notwithstanding anything to the contrary set forth in this Paragraph 13.1.1,
        Subtenant’s failure to pay any Rent or any other charge required to be paid
        under this Sublease, or any part thereof, when due shall constitute a default
        of
        this Sublease by Subtenant only if such failure is not cured within five
        (5) days after said amount is due; provided,
        however,
        that
        Subtenant shall not previously have so failed to pay any Rent or any other
        charge within five (5) days after said amount is due on two
        (2) occasions during any given Sublease Year, in which event Subtenant
        thereafter shall not be entitled to such five (5) day period;
        or

       

      13.1.2  Subtenant’s
        failure to commence the Removal Work on or before the Removal Work Commencement
        Date and to diligently prosecute completion of such Removal Work on a timetable
        reasonably anticipated to permit completion of such Removal Work no later
        than
        the Expiration Date;

       

      13.1.3  Except
        where a specific time period is otherwise set forth for Subtenant’s performance
        in this Sublease, in which event the failure to perform by Subtenant within
        such
        time period shall be a default by Subtenant under this Paragraph 13.1.2,
        any
        failure by Subtenant to observe or perform any other provision, covenant
        or
        condition of this Sublease to be observed or performed by Subtenant where
        such
        failure continues for twenty (20) days after written notice thereof from
        Sublandlord to Subtenant; provided,
        however,
        that if
        the nature of such default is such that the same cannot reasonably be cured
        within a twenty (20) day period, Subtenant shall not be deemed to be in
        default if it diligently commences such cure within such period and thereafter
        diligently proceeds to rectify and cure such default; or

       

      13.1.4  The
        failure by Subtenant to observe or perform according to the provisions of
        Paragraph 4
        (Use)
        or
Paragraph
        11
        (Insurance) above and Article IV
        and
        Article VI
        of the
        Master Lease or the failure by Subtenant to observe or perform any other
        provision, covenant or condition of this Sublease which failure, because
        of the
        character of such provision, covenant or condition, would immediately,
        materially and adversely jeopardize Sublandlord’s interest in this Sublease or
        the Demised Premises, where such failure continues for more than one
        (1) business day after notice from Sublandlord.

       

      The
        notice periods provided in this Paragraph 13.1
        are in
        lieu of, and not in addition to, any notice periods provided in Article XII
        of the
        Master Lease and/or by law.

       

      13.2   Remedies
        Upon Default. Upon
        the
        occurrence of any event of default by Subtenant, Sublandlord shall have,
        in
        addition to any other remedies available to Sublandlord at law or in equity
        (all
        of which remedies shall be distinct, separate and cumulative), the option
        to
        pursue any one or more of the following remedies, each and all of which shall
        be
        cumulative and nonexclusive, without any notice or demand
        whatsoever.

       

      13.2.1  
        Terminate this Sublease, in which event Subtenant shall immediately commence
        completion of the Removal Work required pursuant to Paragraph 8.3
        above,
        and shall diligently prosecute such Removal Work to completion, and upon
        such
        completion shall surrender the Demised Premises to Sublandlord. During the
        performance of any such Removal Work, Subtenant shall be deemed to continue
        to
        occupy the Demised Premises and shall have all obligations hereunder, including,
        without limitation, the obligation to make all payments of Basic Rent and
        Additional Rent. If Subtenant fails to so commence and diligently prosecute
        such
        Removal Work and/or fails to surrender the Demised Premises, then Sublandlord
        may, without prejudice to any other remedy which it may have for possession
        or
        arrearages in Rent, enter upon and take possession of the Demised Premises
        and
        expel or remove Subtenant and any other person who may be occupying the Demised
        Premises or any part thereof, without it being liable for prosecution or
        any
        claim or damages therefor. Upon any termination of this Sublease pursuant
        to
        this Paragraph 13.2.1,
        Sublandlord may recover from Subtenant the following:

       

      
        
          
          

        

        
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      (a) The
        worth
        at the time of any unpaid Rent which has been earned at the time of such
        termination; plus

       

      (b) The
        worth
        at the time of award of the amount by which the unpaid Rent which would have
        been earned after termination until the time of award exceeds the amount
        of such
        rental loss that Subtenant proves could have been unreasonably avoided;
        plus

       

      (c) The
        worth
        at the time of award of the amount by which the unpaid Rent for the balance
        of
        the Term after the time of award exceeds the amount of such rental loss that
        Subtenant proves could have been reasonably avoided; plus

       

      (d) Any
        other
        amount necessary to compensate Sublandlord for all the detriment proximately
        caused by Subtenant’s failure to perform its obligations under this Sublease or
        which in the ordinary course of things would be likely to result therefrom,
        including, without limitation, any amounts necessary to complete Subtenant’s
        required Removal Work; and

       

      (e) At
        Sublandlord’s election, such other amounts in addition to or in lieu of the
        foregoing as may be permitted from time to time by applicable law.

       

      As
        used
        in Paragraphs 13.2.1(a)
        and
13.2.1(b),
        above,
        the “worth at the time of award” shall be computed by allowing interest at the
        rate set forth in Paragraph 10
        above,
        but in no case greater than the maximum amount of such interest permitted
        by
        law. As used in Paragraph
        13.2.1(c)
        above,
        the “worth at the time of award” shall be computed by discounting such amount at
        the discount rate of the Federal Reserve Bank of San Francisco at the time
        of award plus one percent (1%).

       

      13.2.2  
        Sublandlord shall at all times have the rights and remedies (which shall
        be
        cumulative with each other and cumulative and in addition to those rights
        and
        remedies available under Paragraph 13.2.1
        above,
        and Paragraphs 13.3
        and
        13.4
        below,
        or any law or other provision of this Sublease), without prior demand or
        notice
        except as required by applicable law, to seek any declaratory, injunctive
        or
        other equitable relief, and specifically enforce this Sublease, or restrain
        or
        enjoin a violation or breach of any provision hereof. 

       

      13.3   Sublandlord’s
        Right to Cure. All
        covenants and agreements to be kept or performed by Subtenant under this
        Sublease shall be performed by Subtenant at Subtenant’s sole cost and expense
        and without any reduction of Rent. If Subtenant shall fail to perform any
        obligation under this Sublease, Sublandlord may, but shall not be obligated
        to,
        make any such payment or perform any such act on Subtenant’s part without
        waiving its rights based upon any default of Subtenant and without releasing
        Subtenant from any obligations hereunder. Without limiting the foregoing,
        if
        Subtenant shall either fail to commence the Removal Work on or before the
        Removal Work Commencement Date and/or fail to diligently prosecute such Removal
        Work thereafter on a timetable reasonably anticipated to permit completion
        of
        such Removal Work no later than the Expiration Date, then Sublandlord shall
        have
        the right to perform such Removal Work on Subtenant’s behalf, at Subtenant’s
        sole cost and expense and without releasing Subtenant from any obligations
        under
        this Sublease, including, without limitation, Subtenant’s obligation to pay
        Basic Rent, Additional Rent, or any other amounts hereunder during Sublandlord’s
        performance of such Removal Work. 

       

      13.4   Subtenant’s
        Reimbursement. Except
        as
        may be specifically provided to the contrary in this Sublease, upon delivery
        by
        Sublandlord to Subtenant of statements therefor, Subtenant shall pay to
        Sublandlord the following sums (which sums, shall bear interest from the
        date
        accrued by Sublandlord until paid by Subtenant at a rate per annum equal
        to
        interest at the rate set forth in Paragraph 10
        above,
        but in no case greater than the maximum amount of such interest permitted
        by
        law): (i) sums equal to expenditures reasonably made and obligations
        incurred by Sublandlord pursuant to the provisions of Paragraph 13.3,
        (ii) sums equal to the amount of all losses, costs, liabilities, damages
        and expenses for which Subtenant has agreed to indemnify Sublandlord pursuant
        to
Paragraph 12
        above,
        (iii) sums equal to all expenditures made and obligations incurred by
        Sublandlord in collecting or attempting to collect the Rent or in enforcing
        or
        attempting to enforce any rights of Sublandlord under this Sublease or pursuant
        to law, including, without limitation, all legal fees and other amounts so
        expended; provided,
        however,
        that
        Sublandlord shall not be entitled to reimbursement of the sums set forth
        in this
        item (iii) where Subtenant is the prevailing party as determined in
        accordance with Paragraph 14.5
        below.
        Subtenant’s obligations under this Paragraph 13.4
        shall
        survive the expiration or sooner termination of this Sublease.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      14.  Miscellaneous.

       

      14.1   Notices. All
        notices, demands, statements, designations, approvals or other communications
        (collectively, “Notices”)
        given
        or required to be given by either party to the other hereunder or by law
        shall
        be in writing, shall be (A)  sent by United States certified or
        registered mail, postage prepaid, return receipt requested (“Mail”),
        (B) transmitted by telecopy, if such telecopy is promptly followed by a
        Notice sent by Mail, (C) delivered by a nationally recognized overnight
        courier, or (D) delivered personally. Any Notice shall be sent,
        transmitted, or delivered, as the case may be, to Sublandlord and Subtenant,
        in
        each case addressed as followed (or addressed and sent to such other place
        as
        either party may from time to time designate in a Notice to the
        other):

       

      
        	
                Subtenant:

              	
                XsunX,
                  Inc.

                65
                  Enterprise 

                Aliso
                  Viejo CA 92656

                Attention:
                  Joe Grimes

                 

                with
                  a copy to: 

                Coni
                  Rathbone, Esq.

                Davis
                  Wright Tremaine LLP

                1300
                  SW Fifth Avenue, Suite 2300

                Portland,
                  OR 97201

                Fax:
                  (503) 778-5299 

              
	
                 

                Sublandlord:

              	
                 

                Merix
                  Corporation

                15725
                  SW Greystone Ct., Suite 200

                Beaverton,
                  OR 97006

                Attention:
                  J. Johnstone

                Fax:
                  (503) 357-1504

                 

                with
                  a copy to:

                 

                Merix
                  Corporation

                15725
                  SW Greystone Ct., Suite 200

                Beaverton,
                  OR 97006

                Attention:
                  Linda Moore

                Fax:
                  (503)

              

      

       

      Any
        Notice will be deemed given (i) three (3) days after the date it is
        posted if sent by Mail, (ii) the date the telecopy is transmitted, if
        transmitted prior to 5:00 p.m. Oregon Time on a business day, otherwise on
        the
        next business day thereafter, (iii) the date the overnight courier delivery
        is made, or (iv) the date personal delivery is made. Any Notice given by an
        attorney on behalf of Sublandlord or by Sublandlord’s managing agent shall be
        considered as given by Sublandlord and shall be fully effective. Any notice
        required to be given by Sublandlord to Subtenant pursuant to the terms of
        this
        Sublease which is dependent upon Sublandlord’s receipt of notice from Master
        Landlord shall be given by Sublandlord to Subtenant within two (2) business
        days after Sublandlord’s receipt of such notice from Master
        Landlord. 

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      14.2   Brokers. Subtenant
        and Sublandlord hereby represent to each other that, except for
        (i) Colliers International (“Colliers”),
        and
        (ii) Meridian Pacific and Norris Beggs & Simpson (collectively,
“Subtenant’s
        Brokers”),
        neither party has engaged any broker or finder in connection with the procuring,
        execution, or delivery of this Sublease, and each party hereto agrees to
        defend,
        indemnify and hold the other harmless against any claims by any broker or
        finder
        for services rendered to the indemnifying party in connection with this
        Sublease. Colliers shall be paid for services rendered in connection with
        this
        Sublease in accordance with a separate agreement between Colliers and
        Sublandlord. Subtenant’s Brokers shall be paid for services rendered in
        connection with this Sublease in accordance with a separate agreement between
        Colliers and Subtenant’s Brokers. The provisions of this Paragraph 14.2
        shall
        survive any termination of this Sublease.

       

      14.3   Captions. The
        captions of the paragraphs of this Sublease are not a part of this Sublease
        and
        shall have no effect upon the construction or interpretation of any part
        hereof.

       

      14.4   Successors and Assigns. The
        covenants and conditions herein contained, subject to Paragraph 9,
        apply
        to and bind the successors and assigns of the parties hereto.

       

      14.5   Attorneys’
        Fees. If
        any action or proceeding is brought by either party against the other under
        or
        in connection with this Sublease, the prevailing party shall be entitled
        to
        recover all its costs and expenses, including, without limitation, the fees
        of
        its attorneys in such action or proceeding in such amount as the court may
        adjudge reasonable as attorneys’ fees, and the right of the prevailing party
        hereunder to recover its attorneys’ fees from the other party shall be separate
        from and shall not merge into any judgment.

       

      14.6   Gender and Number. Wherever
        the context so requires, each gender shall include any other gender, and
        the
        singular number shall include the plural and vice-versa.

       

      
        14.7   Separability. Any
          provision of this Sublease which shall prove to be invalid, void or illegal
          shall in no way affect, impair or invalidate any other provision hereof
          and all
          such other provisions shall remain in full force and effect.

      

       

      14.8   Conditions
        Precedent. The
        effectiveness of this Sublease is hereby conditioned, upon the
        following:

       

      14.8.1  Master
        Landlord’s Consent. Master
        Landlord’s written consent to this Sublease. The parties agree to cooperate and
        to each use commercially reasonable efforts to obtain the consent of Master
        Landlord to this Sublease. Should Master Landlord not consent to this Sublease,
        each party shall be released from all obligations with respect hereto and
        neither party shall have any further rights in law or in equity with respect
        to
        this Sublease.

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      14.8.2  Environmental
        Report. Following
        the mutual execution and delivery of this Sublease, Sublandlord shall, at
        Sublandlord’s sole cost and expense, obtain a so called “Phase I” or “level
        one” environmental site assessment of the Demised Premises (herein, a
“Phase I”)
        to be
        performed by an environmental professional reasonably acceptable to Subtenant;
        provided,
        however,
        that
        Sublandlord will use commercially reasonable efforts to have such Phase I
        completed on or before May 15, 2008. The Phase I shall be provided to
        Subtenant for review; provided,
        however,
        that
        Sublandlord makes no representation or warranty with respect to the truth,
        accuracy or completeness of any information set forth within the Phase I
        and Sublandlord shall have no liability or obligation to Subtenant with respect
        to the information set forth within such Phase I. If the Phase I
        reveals the potential existence of any Hazardous Materials in, on or about
        the
        Demised Premises at levels that would warrant further testing, in the
        professional judgment of the environmental profession performing the
        Phase I, then Sublandlord shall, at Sublandlord’s sole cost and expense,
        obtain a so called “Phase II” or “level two” environmental site assessment
        of the Demised Premises (herein, a “Phase II”)
        to be
        performed by an environmental professional reasonably acceptable to Subtenant;
        provided,
        however,
        that
        Sublandlord will use commercially reasonable efforts to have such Phase II
        completed on or before July 15, 2008. The Phase II, if obtained, shall
        be provided to Subtenant for review; provided,
        however,
        that
        Sublandlord makes no representation or warranty with respect to the truth,
        accuracy or completeness of any information set forth within the Phase II
        and Sublandlord shall have no liability or obligation to Subtenant with respect
        to the information set forth within such Phase II. The effectiveness of
        this Sublease is hereby conditioned upon Subtenant’s review and approval, in the
        exercise of its reasonable discretion of the Phase I and, if obtained, the
        Phase II. Should Subtenant reasonably disapprove of any Hazardous Materials
        disclosed within either the Phase I or, if obtained, the Phase II,
        then Subtenant shall provide written notice of such disapproval to Sublandlord
        and shall promptly thereafter complete the Removal Work with respect to any
        changes, alterations, modifications or improvements to the Demised Premises
        and/or the Building made by Subtenant prior to the date of such notice of
        termination. Following Subtenant’s completion of the subject Removal Work, this
        Sublease shall terminate.
        If
        Subtenant does not elect to terminate this Sublease, as provided in this
        Paragraph 14.8,
        then
        the Sublease shall continue; provided,
        however,
        that
        following the completion of the Removal Work to be commenced and completed
        prior
        to the Expiration Date pursuant to Paragraph 8.2,
        Subtenant shall, at Subtenant’s sole cost and expense, obtain a so called
“Phase I” or “level one” environmental site assessment of the Demised
        Premises (herein, the “Expiration
        Phase I”)
        to be
        performed by an environmental professional reasonably acceptable to Sublandlord.
        The Expiration Phase I shall be provided to Sublandlord for review;
provided,
        however,
        that
        Subtenant makes no representation or warranty with respect to the truth,
        accuracy or completeness of any information set forth within the Expiration
        Phase I and Subtenant shall have no liability or obligation to Sublandlord
        with respect to the truth, accuracy or completeness of the information set
        forth
        within such Expiration Phase I. If the Expiration Phase I reveals the
        potential existence of any Hazardous Materials in, on or about the Demised
        Premises, then Subtenant shall promptly thereafter, at Subtenant’s sole cost and
        expense, obtain a so called “Phase II” or “level two” environmental site
        assessment of the Demised Premises (herein, the “Expiration
        Phase II”)
        to be
        performed by an environmental professional reasonably acceptable to Sublandlord.
        The Expiration Phase II shall be provided to Sublandlord for review;
provided,
        however,
        that
        Subtenant makes no representation or warranty with respect to the truth,
        accuracy or completeness of any information set forth within the Expiration
        Phase II and Subtenant shall have no liability or obligation to Sublandlord
        with respect to the truth, accuracy or completeness of the information set
        forth
        within such Expiration Phase II. Notwithstanding anything to the contrary
        herein, if the Phase I and or the Phase II, if obtained, are not
        approved by Subtenant on or before July 31, 2008, then either Subtenant or
        Sublandlord may elect to terminate this Sublease upon written notice to the
        other and following delivery or receipt, as applicable, of such notice by
        Subtenant, Subtenant shall promptly thereafter complete the Removal Work
        with
        respect to any changes, alterations, modifications or improvements to the
        Demised Premises and/or the Building made by Subtenant prior to the date
        of such
        notice of termination. Following Subtenant’s completion of the subject Removal
        Work, this Sublease shall terminate.

       

      14.8.3  Scope
        of Sublandlord’s Removal Work, Designation of Equipment and Determination of
        Equipment Purchase Price. Following
        the mutual execution and delivery of this Sublease, Sublandlord and Subtenant
        shall seek to reach agreement upon (i) the scope of the Sublandlord’s
        Removal Work and Exhibit B
        related
        thereto, (ii) the Equipment and Exhibit C
        related
        thereto, and (iii) the Equipment Purchase Price (the “Exhibit
        Items”).
        Notwithstanding
        anything to the contrary herein, if Sublandlord and Subtenant do not reach
        agreement upon the Exhibit Items, in the exercise of each party’s respective
        sole and absolute discretion, on or before April 25, 2008, then either Subtenant
        or Sublandlord may elect to terminate this Sublease upon written notice to
        the
        other, whereupon neither party shall have any further obligation
        hereunder.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      14.9   Amendment
        of Master Lease. Sublandlord
        may amend the Master Lease without notice to or the consent of Subtenant,
        provided that such amendment affects only Sublandlord’s rights and/or
        obligations under the Master Lease and does not adversely affect Subtenant’s
        rights or increase Subtenant’s obligations under this Sublease as to the Demised
        Premises.

       

      14.10   Quiet
        Enjoyment. Subtenant,
        upon the paying of all Rent hereunder and performing each of the covenants,
        agreements and conditions of this Sublease required to be performed by
        Subtenant, shall lawfully and quietly hold, occupy and enjoy the Demised
        Premises during the Term hereof, subject, however, to the provisions set
        forth
        in this Sublease, and provided that if Sublandlord is unable to perform any
        of
        its obligations under this Sublease as a direct or indirect result of any
        failure by Master Landlord to perform or comply with the terms of the Master
        Lease, then Sublandlord’s sole obligation to Subtenant shall be to use
        commercially reasonable efforts, at no cost to Sublandlord, to obtain
        performance by Master Landlord.

       

      14.11   Amendment;
        Entire Agreement. This
        Sublease may be altered, amended, modified or revoked only by an instrument
        in
        writing signed by both Sublandlord and Subtenant; provided that no such
        amendment shall in any manner modify or amend the provisions of the Master
        Lease
        or otherwise bind or affect the rights of Master Landlord unless Master Landlord
        consents to such amendment in writing. This Sublease, together with the Master
        Lease and any exhibits hereto or referred to herein, constitutes the entire
        and
        exclusive agreement between Sublandlord and Subtenant with respect to the
        Demised Premises. Sublandlord and Subtenant hereby agree that all prior or
        contemporaneous oral or written understandings, agreements or negotiations
        between them relating to the Demised Premises are merged into and revoked
        by
        this instrument.

       

      14.12   No
        Waiver. The
        waiver by Sublandlord of any breach of any term, provision, covenant or
        condition contained in this Sublease, or the failure of such party to insist
        on
        the strict performance by the other party, shall not be deemed to be a waiver
        of
        such term, provision, covenant or condition as to any subsequent breach thereof
        or of any other term, covenant or condition contained in this Sublease. The
        acceptance of Rent hereunder by Sublandlord or the payment of Rent hereunder
        by
        Subtenant shall not be deemed to be a waiver of any breach or default by
        Subtenant, respectively, or any term, provision, covenant or condition herein,
        regardless of Sublandlord’s knowledge of such breach or default at the time of
        such acceptance or payment of Rent.

       

      14.13   Time
        of Essence. Time
        is of the essence of each and every provision of this Sublease.

       

      14.14   Governing
        Law. This
        Sublease shall be
        construed and enforced in accordance with the laws of the State of Oregon,
        without giving effect to any choice of law rule that would cause the application
        of the laws of any jurisdiction other than the State of Oregon.

       

      14.15
          Counterpart
        Originals. This
        Sublease may be executed in two or more counterparts, which when taken together
        shall constitute one and the same instrument. The parties contemplate that
        they
        may be executing counterparts of this Sublease transmitted by facsimile and
        agree and intend that a signature by facsimile machine shall bind the party
        so
        signing with the same effect as though the signature were an original
        signature.

       

      14.16
          Memorandum
        of Sublease.
        With
        Master Landlord’s consent, exercisable in Master Landlord’s sole and absolute
        discretion, Master Landlord, Sublandlord and Subtenant shall execute and
        acknowledge a memorandum or short form Sublease setting forth the respective
        parties, description of the Demised Premises, the Term of the Sublease and
        any
        other provision hereof, the inclusion of which may be mutually agreed upon
        by
        the parties, which memorandum or short form Sublease shall be recorded after
        the
        Commencement Date.

       

      [Execution
        Page Follows]

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      In
        Witness Whereof,
        the
        parties have executed this Sublease as of the date first written
        above.

       

      
        	
                Sublandlord

                 

              	
                Merix
                  Corporation, 

                an
                  Oregon corporation

              
	 	 
	 	
                By:

              	  

	 	
                Name:

              	  

	 	
                Title:

              	  

	 	 	 
	
                Subtenant

              	
                XsunX,
                  Inc., 

                a
                  Colorado corporation

              
	 	 
	 	
                By:

              	  

	 	
                Name:

              	  

	 	
                Title:

              	  

      

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      Exhibit
        “A” To Sublease

       

      Master
        Lease

      

       

      NET
        LEASE AGREEMENT

       

      OPUS
        NORTHWEST, L.L.C. - Landlord

       

      MERIX
        CORPORATION - Tenant

       

      Dated:
        August 21, 2000

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

       

      TABLE
        OF CONTENTS

       

      
        	 	 	 	
                Page

              
	 	 	 	 
	
                ARTICLE
                  I

              	
                TERM
                  OF LEASE

              	 	
                1

              
	 	 	 	 
	
                Section
                  1.1

              	
                Term
                  of Lease

              	 	
                1

              
	 	 	 	 
	
                ARTICLE
                  II

              	
                CONSTRUCTION
                  OF IMPROVEMENTS

              	 	
                1

              
	 	 	 	 
	
                Section
                  2.1

              	
                Landlord's
                  Improvements

              	 	
                1

              
	 	 	 	 
	
                Section
                  2.2

              	
                Excused
                  Delays

              	 	
                1

              
	 	 	 	 
	
                Section
                  2.3

              	
                Possession
                  of Demised Premises

              	 	
                2

              
	 	 	 	 
	
                Section
                  2.4

              	
                Repair
                  and Maintenance

              	 	
                2

              
	 	 	 	 
	
                ARTICLE
                  III

              	
                BASIC
                  RENT

              	 	
                2

              
	 	
                 

              	 	 
	
                Section
                  3.1

              	
                Basic
                  Rent

              	 	
                2

              
	 	 	 	 
	
                Section
                  3.2

              	
                Basic
                  Rent Adjustment

              	 	
                3

              
	 	 	 	 
	
                Section
                  3.3

              	
                Additional
                  Rent

              	 	
                3

              
	 	 	 	 
	
                Section
                  3.4

              	
                Delinquent
                  Payments

              	 	
                3

              
	 	 	 	 
	
                Section
                  3.5

              	
                Independent
                  Obligations

              	 	
                4

              
	 	 	 	 
	
                Section
                  3.6

              	
                Security
                  Deposit

              	 	
                4

              
	 	 	 	 
	
                Section
                  3.7

              	
                Letter
                  of Credit

              	 	
                4

              
	 	 	 	 
	
                ARTICLE
                  IV

              	
                USE
                  OF DEMISED PREMISES

              	 	
                6

              
	 	 	 	 
	
                Section
                  4.1

              	
                Permitted
                  Use

              	 	
                6

              
	 	 	 	 
	
                Section
                  4.2

              	
                Preservation
                  of Demised Premises

              	 	
                6

              
	 	
                 

              	 	 
	
                Section
                  4.3

              	
                Acceptance
                  of Demised Premises

              	 	
                7

              
	 	 	 	 
	
                ARTICLE
                  V

              	
                PAYMENT
                  OF TAXES, ASSESSMENTS, ETC.

              	 	
                7

              
	 	 	 	 
	
                Section
                  5.1

              	
                Payment
                  of Impositions

              	 	
                7

              
	 	 	 	 
	
                Section
                  5.2

              	
                Tenant's
                  Right to Contest Impositions

              	 	
                7

              
	 	 	 	 
	
                Section
                  5.3

              	
                Levies
                  and Other Taxes

              	 	
                8

              
	 	 	 	 
	
                Section
                  5.4

              	
                Evidence
                  of Payment

              	 	
                8

              
	 	 	 	 
	
                Section
                  5.5

              	
                Escrow
                  for Taxes and Assessments

              	 	
                8

              
	 	 	 	 
	
                Section
                  5.6

              	
                Landlord's
                  Right to Contest Impositions

              	 	
                8

              
	 	 	 	 
	
                ARTICLE
                  VI

              	
                INSURANCE

              	 	
                9

              
	 	 	 	 
	
                Section
                  6.1

              	
                Tenant's
                  Insurance Obligations

              	 	
                9

              
	 	 	 	 
	
                Section
                  6.2

              	
                Insurance
                  Coverage

              	 	
                9

              
	 	 	 	 
	
                Section
                  6.3

              	
                Insurance
                  Provisions

              	 	
                9

              
	 	 	 	 
	
                Section
                  6.4

              	
                Waiver
                  of Subrogation

              	 	
                10

              
	 	 	 	 
	
                Section
                  6.5

              	
                Tenant's
                  Personal Property

              	 	
                10

              

      

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	
                Section
                  6.6

              	
                Unearned
                  Premiums

              	 	
                10

              
	 	 	 	 
	
                Section
                  6.7

              	
                Blanket
                  Insurance Coverage

              	 	
                10

              
	 	 	 	 
	
                ARTICLE
                  VII

              	
                UTILITIES

              	 	
                11

              
	 	 	 	 
	
                Section
                  7.1

              	
                Payment
                  of Utilities

              	 	
                11

              
	 	 	 	 
	
                Section
                  7.2

              	
                Additional
                  Charges

              	 	
                11

              
	 	 	 	 
	
                ARTICLE
                  VIII

              	
                REPAIRS

              	 	
                11

              
	 	 	 	 
	
                Section
                  8.1

              	
                Tenant's
                  Repairs

              	 	
                11

              
	 	 	 	 
	
                Section
                  8.2

              	
                Maintenance

              	 	
                11

              
	 	 	 	 
	
                Section
                  8.3

              	
                Tenant's
                  Waiver of Claims Against Landlord

              	 	
                12

              
	 	 	 	 
	
                Section
                  8.4

              	
                Prohibition
                  Against Waste

              	 	
                12

              
	 	 	 	 
	
                Section
                  8.5

              	
                Landlord's
                  Right to Effect Repairs

              	 	
                12

              
	 	 	 	 
	
                Section
                  8.6

              	
                Misuse
                  or Neglect

              	 	
                12

              
	 	 	 	 
	
                ARTICLE
                  IX

              	
                COMPLIANCE
                  WITH LAWS AND ORDINANCES

              	 	
                12

              
	 	 	 	 
	
                Section
                  9.1

              	
                Compliance
                  with Laws and Ordinances

              	 	
                12

              
	 	 	 	 
	
                Section
                  9.2

              	
                Compliance
                  with Permitted Encumbrances

              	 	
                12

              
	 	 	 	 
	
                Section
                  9.3

              	
                Tenant's
                  Obligations

              	 	
                12

              
	 	 	 	 
	
                Section
                  9.4

              	
                Tenant's
                  Right to Contest Laws and Ordinances

              	 	
                13

              
	 	 	 	 
	
                Section
                  9.5

              	
                Compliance
                  with Hazardous Materials Laws

              	 	
                13

              
	 	
                 

              	 	 
	
                Section
                  9.6

              	
                Hazardous
                  Materials Representation by Landlord

              	 	
                14

              
	 	
                 

              	 	 
	
                Section
                  9.7

              	
                Cost
                  of Compliance with Hazardous Materials Laws

              	 	
                14

              
	 	
                 

              	 	 
	
                Section
                  9.8

              	
                Discovery
                  of Hazardous Materials

              	 	
                14

              
	 	 	 	 
	
                Section
                  9.9

              	
                Indemnification

              	 	
                14

              
	 	 	 	 
	
                Section
                  9.10

              	
                Environmental
                  Audits

              	 	
                15

              
	 	 	 	 
	
                Section
                  9.11

              	
                Acts
                  or Omissions Regarding Hazardous Materials

              	 	
                15

              
	 	 	 	 
	
                Section
                  9.12

              	
                Survival

              	 	
                15

              
	 	 	 	 
	
                ARTICLE
                  X

              	
                MECHANIC'S
                  LIENS AND OTHER LIENS

              	 	
                15

              
	 	 	 	 
	
                Section
                  10.1

              	
                Freedom
                  from Liens

              	 	
                15

              
	 	 	 	 
	
                Section
                  10.2

              	
                Landlord's
                  Indemnification

              	 	
                15

              
	 	 	 	 
	
                Section
                  10.3

              	
                Removal
                  of Liens

              	 	
                16

              
	 	 	 	 
	
                ARTICLE
                  XI

              	
                INTENT
                  OF PARTIES

              	 	
                16

              
	 	 	 	 
	
                Section
                  11.1

              	
                Net
                  Lease

              	 	
                16

              
	 	 	 	 
	
                Section
                  11.2

              	
                Payment
                  by Landlord

              	 	
                17

              
	 	
                 

              	 	 
	
                Section
                  11.3

              	
                Interest
                  on Unpaid Amounts

              	 	
                17

              
	 	 	 	 
	
                ARTICLE
                  XII

              	
                DEFAULTS
                  OF TENANT

              	 	
                17

              
	 	 	 	 
	
                Section
                  12.1

              	
                Event
                  of Default

              	 	
                17

              
	 	 	 	 
	
                Section
                  12.2

              	
                Surrender
                  of Demised Premises

              	 	
                18

              

      

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	
                Section
                  12.3

              	
                Reletting
                  by Landlord

              	
                 

              	
                18

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  12.4

              	
                Survival
                  of Tenant's Obligations

              	
                 

              	
                18

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  12.5

              	
                Damages

              	
                 

              	
                19

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  12.6

              	
                No
                  Waiver

              	
                 

              	
                19

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  12.7

              	
                Landlord's
                  Remedies

              	
                 

              	
                19

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  12.8

              	
                Bankruptcy

              	
                 

              	
                20

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  12.9

              	
                Waiver
                  by Tenant

              	
                 

              	
                20

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                ARTICLE
                  XIII

              	
                DESTRUCTION
                  AND RESTORATION

              	
                 

              	
                20

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  13.1

              	
                Destruction
                  and Restoration

              	
                 

              	
                20

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  13.2

              	
                Application
                  of Insurance Proceeds

              	
                 

              	
                20

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  13.3

              	
                Continuance
                  of Tenant's Obligations

              	
                 

              	
                21

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  13.4

              	
                Availability
                  of Insurance Proceeds

              	
                 

              	
                21

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  13.5

              	
                Completion
                  of Restoration

              	
                 

              	
                21

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  13.6

              	
                Termination
                  of Lease

              	
                 

              	
                21

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                ARTICLE
                  XIV

              	
                CONDEMNATION

              	
                 

              	
                22

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  14.1

              	
                Condemnation
                  of Entire Demised Premises

              	
                 

              	
                22

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  14.2

              	
                Partial
                  Condemnation/Termination of Lease

              	
                 

              	
                22

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  14.3

              	
                Partial
                  Condemnation/Continuation of Lease

              	
                 

              	
                23

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  14.4

              	
                Continuance
                  of Obligations

              	
                 

              	
                24

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  14.5

              	
                Adjustment
                  of Rent

              	
                 

              	
                24

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                ARTICLE
                  XV

              	
                ASSIGNMENT,
                  SUBLETTING, ETC.

              	
                 

              	
                24

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  15.1

              	
                Restriction
                  on Transfer

              	
                 

              	
                24

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  15.2

              	
                Restriction
                  From Further Assignment

              	
                 

              	
                25

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  15.3

              	
                Tenant's
                  Failure to Comply

              	
                 

              	
                25

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  15.4

              	
                Sharing
                  of Excess Rent

              	
                 

              	
                25

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  15.5

              	
                Assignment
                  to Affiliates

              	
                 

              	
                25

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  15.6

              	
                Permitted
                  Subleases

              	
                 

              	
                26

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                ARTICLE
                  XVI

              	
                SUBORDINATION,
                  NONDISTURBANCE, NOTICE TO MORTGAGEE AND ATTORNMENT

              	
                 

              	
                26

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  16.1

              	
                Subordination
                  by Tenant

              	
                 

              	
                26

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  16.2

              	
                Landlord's
                  Default

              	
                 

              	
                26

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  16.3

              	
                Attornment

              	
                 

              	
                27

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                ARTICLE
                  XVII

              	
                SIGNS

              	
                 

              	
                27

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  17.1

              	
                Tenant's
                  Signs

              	
                 

              	
                27

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                ARTICLE
                  XVIII

              	
                REPORTS
                  BY TENANT

              	
                 

              	
                27

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  18.1

              	
                Annual
                  Statements

              	
                 

              	
                27

              

      

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
                  XIX

              	
                CHANGES
                  AND ALTERATIONS

              	
                 

              	
                27

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  19.1

              	
                Tenant's
                  Changes and Alterations

              	
                 

              	
                27

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                ARTICLE
                  XX

              	
                MISCELLANEOUS
                  PROVISIONS

              	
                 

              	
                29

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.1

              	
                Entry
                  by Landlord

              	
                 

              	
                29

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.2

              	
                Exhibition
                  of Demised Premises

              	
                 

              	
                29

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.3

              	
                Indemnification
                  by Tenant

              	
                 

              	
                29

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.4

              	
                Notices

              	
                 

              	
                30

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.5

              	
                Quiet
                  Enjoyment

              	
                 

              	
                31

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.6

              	
                Landlord's
                  Continuing Obligations

              	
                 

              	
                31

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.7

              	
                Estoppel

              	
                 

              	
                31

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.8

              	
                Authority

              	
                 

              	
                32

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.9

              	
                Memorandum
                  of Lease

              	
                 

              	
                32

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.10

              	
                Severability

              	
                 

              	
                32

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.11

              	
                Successors
                  and Assigns

              	
                 

              	
                32

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.12

              	
                Captions

              	
                 

              	
                32

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.13

              	
                Relationship
                  of Parties

              	
                 

              	
                33

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.14

              	
                Entire
                  Agreement

              	
                 

              	
                33

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.15

              	
                No
                  Merger

              	
                 

              	
                33

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.16

              	
                Possession
                  and Use

              	
                 

              	
                33

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section 20.17 No

              	
                Surrender
                  During Lease Term

              	
                 

              	
                33

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.18

              	
                Surrender
                  of Demised Premises

              	
                 

              	
                33

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.19

              	
                Holding
                  Over

              	
                 

              	
                34

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.20

              	
                Landlord
                  Approvals

              	
                 

              	
                34

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.21

              	
                Survival

              	
                 

              	
                34

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.22

              	
                Attorneys'
                  Fees

              	
                 

              	
                34

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.23

              	
                Landlord's
                  Limited Liability

              	
                 

              	
                34

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.24

              	
                Broker

              	
                 

              	
                34

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.25

              	
                Governing
                  Law

              	
                 

              	
                34

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.26

              	
                Joint
                  and Several Liability

              	
                 

              	
                34

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  20.27

              	
                Time
                  is of the Essence

              	
                 

              	
                34

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                ARTICLE
                  XXI

              	
                ADDITIONAL
                  PROVISIONS

              	
                 

              	
                35

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  21.1

              	
                Options
                  to Extend

              	
                 

              	
                35

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  21.2

              	
                Initial
                  Improvements

              	
                 

              	
                36

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  21.3

              	
                Right
                  of First Opportunity to Make Offer

              	
                 

              	
                40

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                Section
                  21.4

              	
                Conditions
                  Subsequent

              	
                 

              	
                41

              

      

      
        
          
          

        

        
          iv

          
            

          

        

        
          
          

        

      

    

    EXHIBITS

     

    
       

      
        	
                Exhibit "A"

              	
                Legal
                  Description and Permitted Encumbrances

              
	 	 
	
                Exhibit
                  "B"

              	
                Permitted
                  Encumbrances

              
	 	 
	
                Exhibit "C"

              	
                Outline
                  Plans

              
	 	 
	
                Exhibit
                  "D"

              	
                Form
                  of Letter of Credit

              
	 	 
	
                Exhibit "E"

              	
                Design
                  and Construction Schedule

              
	 	 
	
                Exhibit
                  "F"

              	
                Tenant's
                  Questionnaire

              
	 	 
	
                Exhibit
                  "G"

              	
                Preliminary
                  Budget

              

      

    

     

    
      
        
        

      

      
        v

        
          

        

      

      
        
        

      

    

     

    NET
      LEASE AGREEMENT

     

    THIS
      NET LEASE AGREEMENT ("Lease"),
      is made as of this 21st day of August, 2000, by and between Opus Northwest,
      L.L.C., a Delaware limited liability company ("Landlord") and Merix Corporation,
      an Oregon corporation ("Tenant").

     

    WITNESSETH:

     

    Landlord,
      for and in consideration of the rents, covenants and agreements hereinafter
      reserved, mentioned and contained on the part of Tenant, its successors and
      assigns, to be paid, kept, observed and performed, has leased, rented, let
      and
      demised, and by these presents does lease, rent, let and demise unto Tenant,
      and
      Tenant does hereby take and hire, upon and subject to the conditions and
      limitations hereinafter expressed, all that parcel of land situated in the
      City
      of Wood Village, County of Multnomah and State of Oregon described in
      Exhibit "A" attached hereto and made a part hereof, together with any
      appurtenant easements described in said Exhibit "A" (the "Land"), together
      with all improvements located on and to be constructed thereon (the
      "Improvements"). The Land and the Improvements are hereinafter referred to
      as
      the "Demised Premises." The Demised Premises are subject to the matters listed
      on the attached Exhibit "B" (the "Permitted Encumbrances") and all applicable
      laws, rules, ordinances, statutes, regulations, and other governmental
      requirements (collectively, "Laws"). The structures located upon and being
      a
      part of the Demised Premises which are constructed for human occupancy or for
      storage of goods, merchandise, equipment, or other personal property are
      collectively called the "Building."

     

    15.

    TERM
      OF LEASE

     

    15.1
        Term
      of Lease.
      The
      initial term of this Lease shall commence on 120 days after the date on which
      Landlord's Improvements (defined in Section 21.2(a)) are Substantially
      Completed, as defined in Section 21.2 (l), but no earlier than July 9, 2001,
      and
      shall end ten (10) years thereafter (the "Commencement Date"). The initial
      term
      of the Lease, as set forth above, is sometimes hereinafter referred to as the
      "Initial Term." Any reference to the term of this Lease or similar reference
      shall be a reference to the Initial Term together with any renewal terms (if
      any) of this Lease or any extensions to or modifications of the Initial Term.
      Tenant shall not be liable to Landlord for the payment of Basic Rent (as
      hereinafter defined), Additional Rent (as hereinafter defined), or the payment
      of any other obligation to be paid by Tenant (except as set forth in Section
      21.2) until the Rent Commencement Date as defined in Section 2.3.

     

    16.

    CONSTRUCTION
      OF IMPROVEMENTS 

     

    16.1
        Landlord's
      Improvements.
      Landlord
      agrees to construct Landlord's
      Improvements described on the Outline Plans which are attached hereto and made
      a
      part hereof as Exhibit "C" ("Landlord's Improvements") and as provided in
      Section 21.2. The cost of Landlord's Improvements shall be paid for as provided
      in Section 21.2. Landlord's Improvements shall be constructed in a good and
      workmanlike manner in accordance with the Outline Plans and Landlord agrees
      to
      complete the construction thereof in accordance with the applicable building
      code and all other applicable laws, codes, rules, and regulations as they are
      interpreted and enforced by the governmental bodies having jurisdiction thereof
      as of the date of Landlord's building permit for Landlord's
      Improvements.

     

    16.2
        Excused
      Delays.
      Landlord
      shall diligently proceed with the construction of the Landlord's Improvements
      and Substantially Complete the same on or before March 9, 2001 (the "Target
      Date"); provided,
      however,
      if
      delay is caused or contributed to by any Tenant Delay or by Force Majeure (as
      defined in Section 21.2(l)), then the time of completion of said construction
      and the Target Date shall be extended for the additional time caused by such
      delay. Such delays are each hereinafter referred to as an "Excused
      Delay."
      If
      Landlord's Improvements are not Substantially Completed by the Target Date
      and
      if any delay in Substantial Completion of Landlord's Improvements is caused
      in
      whole or in part by any Tenant Delay (as defined below), the Commencement Date
      and the Rent Commencement Date shall be one day earlier for each day, or partial
      day, of delay in Substantial Completion of Landlord's Improvements caused by
      any
      Tenant Delay. If Landlord's Improvements are not Substantially Completed by
      the
      Target Date as such date is extended by Excused Delays (the "Actual Target
      Date"), then the Rent Commencement Date shall be extended by the number of
      days
      as follows: (a) the same number of days as there are between the Actual Target
      Date and the date on which Landlord's Improvements are Substantially Completed,
      up to and including the 30th
      day
      following the Actual Target date; plus (b) twice number of days as there are
      between the 31st
      day
      following the Actual Target Date and the date on which Landlord's Improvements
      are Substantially Completed, up to and including the 60th
      day
      following the Actual Target Date; plus (c) three times the number of days as
      there are between the 61st
      day
      following the Actual Target Date and the date on which Landlord's Improvements
      are Substantially Completed.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    16.3
        Possession
      of Demised Premises Tenant
      shall be responsible for Landlord's increased cost of labor and materials if
      any, and loss of rent as provided in Section 2.2, arising out of delay in
      the completion of the Demised Premises caused by any Tenant Delay. Tenant shall
      not have any right to possession or use of the Demised Premises until the date
      upon which the Demised Premises are Substantially Completed and ready for
      occupancy by Tenant.
      If
      Tenant occupies any portion of the Demised Premises prior to Substantial
      Completion of the Landlord's Improvements, the terms of this Lease shall apply
      to such occupancy or use of the Demised Premises by Tenant. Basic Rent,
      Additional Rent, and the payment of other obligations to be paid by Tenant
      shall
      commence on the Commencement Date (the "Rent Commencement Date"). Tenant shall
      be allowed to install its machinery, equipment, fixtures and other personal
      property on the Demised Premises (which are not part of the Tenant's
      Improvements) during the final stages of completion of construction and as
      permitted by Landlord from time to time after Substantial Completion of
      Landlord's Improvements provided that Tenant does not thereby interfere with
      the
      completion of construction or occasion any labor dispute as a result of such
      installations and provided further that Tenant does hereby agree to assume
      all
      risk of loss or damage to such machinery, equipment, fixtures and other personal
      property, and to indemnify, defend and hold harmless Landlord from any loss
      or
      damage to such machinery, equipment, fixtures and personal property, and all
      liability, loss or damage arising from any injury to the property of Landlord,
      or its contractors, subcontractors or materialmen, and any death or personal
      injury to any person or persons to the extent arising out of such installations,
      except for liability, loss or damage caused by Landlord's negligence or willful
      misconduct or that of its contractors, employees, and agents. Delay in putting
      Tenant in possession of the Demised Premises shall not serve to extend the
      Initial Term of this Lease or to make Landlord liable for any damages arising
      therefrom, except as expressly provided in Section 2.2.
      Landlord
      agrees to use reasonable efforts to coordinate Landlord's work with Tenant's
      installations so long as Tenant's installations do not interfere with or delay
      construction of Landlord's Improvements or Tenant's Improvements.

        

    Landlord
      shall be obligated to deliver possession of the Demised Premises to Tenant
      in
      accordance with the provisions of Section 2.2 and Section 21.2 if Tenant has
      executed and delivered this Lease in a form acceptable to Landlord on or before
      August 25, 2000, and there is no Tenant Delay. Each day between
      August 25, 2000, and the date on which Tenant executes and delivers this
      Lease to Landlord shall be a day of Tenant Delay.

     

    16.4
        Repair
      and Maintenance.
      Save
      and
      except for the one year guaranty against defective items occasioned by poor
      workmanship and/or materials referred to in Section 21.2 below, and Landlord's
      obligations described in Section 8.1, below, Tenant upon commencement of the
      term shall have and hold the Demised Premises as the same shall then be without
      any liability or obligation on the part of Landlord for making any alterations,
      improvements or repairs of any kind in or about the Demised Premises for the
      term of this Lease, or any extension or renewal thereof, and Tenant agrees
      to
      maintain the Demised Premises and all parts thereof in a good and sufficient
      state of repair as required by the provisions of this Lease.

     

    17.

    BASIC
      RENT

     

    17.1
        Basic
      Rent.
      In
      consideration of the leasing of the Demised Premises and the construction of
      the
      Landlord's Improvements referred to in Article II hereof, Tenant covenants
      to
      pay Landlord, without previous demand therefor and without any right of setoff
      or deduction whatsoever, except as expressly provided in this Lease, at the
      office of Landlord at:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Opus
      Northwest Management, L.L.C.

    Agent
      for
      Opus Northwest, L.L.C.

    10350
      Bren Road West

    Minnetonka,
      MN 55343

     

    or
      at
      such other place as Landlord may from time to time designate in writing, rent,
      payable monthly, in advance, commencing on the Rent Commencement Date and
      continuing on the first day of each calendar month thereafter for the succeeding
      months during the balance of the Initial Term in accordance with the following
      schedule:

     

    
      	
              Time
                Period

            	 	
              Monthly
                Rent

            	 
	
              Rent
                Commencement Date through 36th
                Month

            	 	
              $

            	
              41,850.00

            	 
	 	 	 	 	 
	
              37th
                Month through 60th
                Month

            	 	
              $

            	
              45.616.00

            	 
	 	 	 	 	 
	
              61st
                Month through 96th
                Month

            	 	
              $

            	
              48,353.49

            	 
	 	 	 	 	 
	
              97th
                Month through 120th
                Month

            	 	
              $

            	
              52,705.30

            	 

    

     

    The
      rent
      provided for in this Section 3.1 is hereinafter called the "Basic
      Rent."

     

    17.2
        Basic
      Rent Adjustment.
      If
      the
      Initial Term of this Lease does not commence on the first day of a calendar
      month or end on the last day of a calendar month, the installment of Basic
      Rent
      for the partial calendar month at the commencement or the termination of the
      term shall be prorated on the basis of the number of days within such calendar
      month.

     

    17.3
        Additional
      Rent.
      The
      Basic
      Rent shall be absolutely net to Landlord so that this Lease shall yield, net
      to
      Landlord, the Basic Rent specified in Section 3.1 in each year of the term
      of
      this Lease and that all impositions, insurance premiums, utility charges,
      maintenance, repair and replacement expenses, all expenses relating to
      compliance with laws, and all other costs, fees, charges, expenses,
      reimbursements and obligations of every kind and nature whatsoever relating
      to
      the Demised Premises (excepting only Landlord's portion of the proration of
      real
      estate taxes and special assessments for the first and last years of the term
      of
      this Lease referred to in Section 5.1, certain taxes of Landlord referred to
      in
      the last sentence of Section 5.3 of this Lease, Landlord's obligations set
      forth
      in Section 8.1, and Landlord's costs to comply with its obligations under the
      Lease and the Construction Warranty described in Section 21.2) which may arise
      or become due during the term or by reason of events occurring during the term
      of this Lease shall be paid or discharged by Tenant when and as due. In the
      event Tenant fails to pay or discharge any imposition, insurance premium,
      utility charge, maintenance repair or replacement expense which it is obligated
      to pay or discharge, Landlord may, but shall not be obligated to pay the same,
      after giving Tenant ten business days' prior written notice and an opportunity
      to cure, and in that event Tenant shall reimburse Landlord therefor within
      30
      days of invoice and pay the same as additional rent (all such items being
      sometimes hereinafter collectively referred to as "Additional Rent"), and Tenant
      hereby agrees to indemnify, defend and save Landlord harmless from and against
      such impositions, insurance premiums, utility charges, maintenance, repair
      and
      replacement expenses, all expenses relating to compliance with Laws, and all
      other costs, fees, charges, expenses, reimbursements and obligations above
      referred to.

     

    17.4
        Delinquent
      Payments.
      Except
      as expressly set forth in this Lease, all payments of Basic Rent and Additional
      Rent shall be payable without previous demand therefor and without any right
      of
      setoff or deduction whatsoever, and in case of nonpayment of any item of
      Additional Rent by Tenant when the same is due, Landlord shall have, in addition
      to all its other rights and remedies, all of the rights and remedies available
      to Landlord under the provisions of this Lease or by law in the case of
      nonpayment of Basic Rent. The performance and observance by Tenant of all the
      terms, covenants, conditions and agreements to be performed or observed by
      Tenant hereunder shall be performed and observed by Tenant at Tenant's sole
      cost
      and expense. Any installment of Basic Rent or Additional Rent or any other
      charges payable by Tenant under the provisions hereof which shall not be paid
      when due or within ten days thereafter shall bear interest at an annual rate
      equal to two percentage points per annum in excess of the published "prime
      rate"
      or "base rate" of interest charged by Norwest Bank Minneapolis, N.A. (or similar
      institution if said Bank shall cease to exist or to publish such a prime rate)
      from the date when the same is due hereunder until the same shall be paid,
      but
      in no event in excess of the maximum lawful rate permitted to be charged by
      Landlord against Tenant. Said rate of interest is sometimes hereinafter referred
      to as the "Maximum Rate of Interest."

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    In
      addition, any installment of Basic Rent or Additional Rent or any other charges
      payable by Tenant under the provisions hereof which shall not be paid when
      due
      and which remain unpaid ten days thereafter shall be subject to a late payment
      fee of five (5%) of the unpaid amount.

     

    17.5
        Independent
      Obligations.
      Except
      as expressly set forth in this Lease, the covenants and obligations of Tenant
      to
      pay Basic Rent and Additional Rent hereunder shall be independent from any
      obligations, warranties or representations, express or implied, if any, of
      Landlord herein contained.

     

    17.6
        Security
      Deposit.
      Contemporaneously
      with the execution hereof, Tenant shall pay to Landlord the sum of ninety-four
      thousand five hundred fifty-five and No/100 Dollars ($94,555.00) (the "Security
      Deposit"). The Security Deposit shall be held by Landlord without liability
      for
      interest and as security for the performance by Tenant of Tenant's covenants
      and
      obligations under this Lease, it being expressly understood that such deposit
      shall not be considered an advance payment of Basic Rent or Additional Rent
      or a
      measure of Landlord's damages in case of default by Tenant. Upon the occurrence
      of any event of default by Tenant, Landlord may, from time to time, without
      prejudice to any other remedy, use the Security Deposit to make good any
      arrearages of Basic Rent, Additional Rent and any other damage, injury, expense
      or liability caused to Landlord by such event of default. Following any such
      application of the Security Deposit, Tenant shall pay to Landlord on demand
      the
      amount so applied in order to restore the Security Deposit to its original
      amount. So long as no Event of Default occurs, Landlord shall return one-half
      of
      the Security Deposit to Tenant after the end of the fifth year of the Term.
      Provided there exists no Event of Default hereunder, any remaining balance
      of
      the Security Deposit shall be returned by Landlord to Tenant upon expiration
      or
      earlier termination of this Lease. If Landlord transfers its interest in the
      Demised Premises during the term of this Lease, Landlord may assign the Security
      Deposit to the transferee and thereafter shall have no further liability for
      the
      return of the Security Deposit.

     

    17.7
        Letter
      of Credit.
      As an
      alternative to providing the Security Deposit described in Section 3.6, Tenant
      may provide a Letter of Credit if the Letter of Credit is provided in strict
      accordance with the provisions of this Section 3.7.

     

    3.7.1 Definitions.
      For
      purposes of this Section 3.7, the following terms shall have the following
      definitions:

     

    3.7.1.1
      "Draw Event"
      means
      each of the following events:

     

    17.7.1  the
      occurrence of any one or more of the following: (i) Tenant's filing of a
      petition under any chapter of the Bankruptcy Code, or under any federal, state
      or foreign bankruptcy or insolvency statute now existing or hereafter enacted,
      or Tenant's making a general assignment or general arrangement for the benefit
      of creditors, (ii) the filing of an involuntary petition under any chapter
      of
      the Bankruptcy Code, or under any federal, state or foreign bankruptcy or
      insolvency statute now existing or hereafter enacted, or the filing of a
      petition for adjudication of bankruptcy or for reorganization or rearrangement,
      by or against Tenant and such filing not being dismissed within 60 days, (iii)
      the entry of an order for relief under any chapter of the Bankruptcy Code,
      or
      under any federal, state or foreign bankruptcy or insolvency statute now
      existing or hereafter enacted, (iv) the appointment of a "custodian," as such
      term is defined in the Bankruptcy Code (or of an equivalent thereto under any
      federal, state or foreign bankruptcy or insolvency statute now existing or
      hereafter enacted), for Tenant, or the appointment of a trustee or receiver
      to
      take possession of substantially all of Tenant's assets located at the Premises
      or of Tenant's interest in this Lease and possession not being restored to
      Tenant within 60 days, or (v) the subjection of all or substantially all of
      Tenant's assets located at the Premises or of Tenant's interest in this Lease
      to
      attachment, execution or other judicial seizure and such subjection not being
      discharged within 60 days; or

     

    
      
        
        

      

      
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    17.7.2  the
      failure of Tenant, not less than 60 days prior to the stated expiration date
      of
      the Letter of Credit then in effect, to cause an extension, renewal or
      replacement issuance of the Letter of Credit, at the reduced amount, if any,
      applicable under Section 3.7.2, to be effected, which extension, renewal or
      replacement issuance will be made by the L/C Bank, and, except as expressly
      provided in Section 3.7.2, will otherwise meet all of the requirements of the
      initial Letter of Credit under this Section 3.7, which failure will be an Event
      of Default under this Lease; or

     

    17.7.3  the
      failure of Tenant to make any payment of Basic Rent, of any monthly installment
      of Tenant's Share of Expenses or of any other Additional Rent monetary
      obligation within the time periods required by this Lease; or

     

    17.7.4  the
      occurrence of any other Event of Default under this Lease.

     

    3.7.1.2
      "Draw Proceeds"
      means
      the proceeds of any draw or draws made by Landlord under the Letter of Credit,
      together with any and all interest accruing thereon.

     

    3.7.1.3
      "L/C Bank"
      means US
      Bank, or another United States bank which is acceptable to Landlord, in
      Landlord's sole and absolute discretion, which has a branch office located
      in
      Portland, Oregon.

     

    3.7.1.4
      "Letter of Credit"
      means
      that certain one-year irrevocable letter of credit, in the amount of $94,555.00,
      issued by the L/C Bank, as required under Section 3.7.2 and, as extended,
      renewed, replaced or modified from time to time in accordance with this Lease,
      which letter of credit will be in substantially the same form as attached
EXHIBIT "D."

     

    3.7.2 Amount
      of Letter of Credit; Permitted Reductions.
      If
      Tenant does not deliver the Security Deposit, then upon execution of this Lease,
      Tenant shall cause the Letter of Credit, in the amount of $94,955.00, to be
      issued by the L/C Bank in favor of Landlord, and its successors, assigns and
      transferees. Tenant shall cause the Letter of Credit to remain in full force
      and
      effect during the entire Term, in accordance with this Section 3.7. The specific
      requirements for the Letter of Credit and the rights of Landlord to make draws
      thereon will be as set forth in this Section 3.7. Subject to this Section 3.7,
      but anything else in this Lease to the contrary notwithstanding, all of Tenant's
      rights and all of Landlord's obligations under this Lease are strictly
      contingent on Tenant's causing the Letter of Credit to remain in full force
      and
      effect during the entire Term; provided, however, that so long as there has
      not
      occurred any Event of Default or Draw Event, the amount of the Letter of Credit
      may be reduced after the end of the fifth year of the Term of this Lease, by
      an
      amount equal to $47,277.50.

     

    3.7.3
      Letter of Credit Draw Events; Payment and Holding of Draw
      Proceeds.
      Immediately upon, and at any time or from time to time after, the occurrence
      of
      any one or more Draw Events, Landlord will have the unconditional right to
      draw
      on the Letter of Credit, in the full amount thereof or in any lesser amount
      or
      amounts as Landlord may determine, in its sole and absolute discretion, in
      accordance with this Section 3.7. Upon the payment to Landlord of the Draw
      Proceeds, Landlord will hold the Draw Proceeds in its own name and for its
      own
      account, without liability for interest, and as security for the performance
      by
      Tenant of Tenant's covenants and obligations (theretofore or thereafter arising)
      under this Lease, and will be entitled to use and apply any and all of the
      Draw
      Proceeds from time to time solely to compensate Landlord hereunder. Among other
      things, it is expressly understood that the Draw Proceeds will not be considered
      an advance payment of Basic Rent or Additional Rent or a measure of Landlord's
      damages resulting from any Event of Default hereunder (past, present or future).
      Further, immediately upon the occurrence of any one or more Draw Events,
      Landlord may, from time to time and without prejudice to any other remedy,
      use
      the Draw Proceeds (whether from a contemporaneous or prior draw on the Letter
      of
      Credit) to the extent necessary to make good any arrearages of Basic Rent or
      Additional Rent, to pay to Landlord any and all amounts to which Landlord is
      entitled in connection with the pursuit of any one or more of its remedies
      hereunder, and to compensate Landlord for any and all other damage, injury,
      expense or liability caused to Landlord by any and all such Events of Default.
      Any delays in Landlord's draw on the Letter of Credit or in Landlord's use
      of
      the Draw Proceeds as provided in this Section 3.7 will not constitute a waiver
      by Landlord of any of its rights hereunder with respect to the Letter of Credit
      or the Draw Proceeds. Following any such application of the Draw Proceeds,
      Tenant will pay to Landlord on demand the cash amount so applied in order to
      restore the Draw Proceeds to the full amount thereof immediately prior to such
      application. Under no circumstances will Landlord be liable for any indirect,
      consequential, special or punitive damages incurred by Tenant in connection
      with
      any draw by Landlord of any Draw Proceeds, Landlord's liability being limited
      to
      the reimbursement of costs and expenses as and to the extent expressly provided
      in this Section 3.7. Nothing in this Lease or in the Letter of Credit will
      confer upon Tenant any property rights or interests in any Draw Proceeds;
      provided, however, that upon the expiration or earlier termination of this
      Lease, and so long as there then exist no Draw Events or Events of Default
      hereunder, Tenant will then be entitled to the return of any remaining unapplied
      balance of the Draw Proceeds then held by Landlord, and the Letter of Credit
      itself (if and to the extent not previously drawn in full).

     

    
      
        
        

      

      
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    3.7.4. Restrictions
      on Tenant Actions; Waiver of Rights.
      Notwithstanding any contrary term or provision of this Lease, Tenant will not
      take any action, or cause or permit any person or entity to take any action,
      and
      Tenant hereby irrevocably waives any and all rights which it may otherwise
      have
      at law or in equity, to enjoin, interfere with, restrict or limit, in any way
      whatsoever, any demand or draw by Landlord or any payment to Landlord under
      the
      Letter of Credit. If Tenant, or any person or entity on Tenant's behalf or
      at
      Tenant's discretion, brings any proceeding or action to enjoin, interfere with,
      restrict or limit, in any way whatsoever, any one or more draws, demands or
      payments under the Letter of Credit, Tenant will be liable for any and all
      direct, indirect, consequential, special and punitive damages resulting
      therefrom or arising in connection therewith, including, without limitation,
      attorneys' fees and costs.

     

    3.7.5. Transferability.
      If
      Landlord transfers its interest in the Demised Premises, or any portion thereof,
      during the Term, Landlord may assign or transfer the Letter of Credit and any
      and all Draw Proceeds then held by Landlord to the transferee and thereafter
      will have no further liability with respect to the Letter of Credit or the
      Draw
      Proceeds, including, without limitation, any liability for the return of the
      Letter of Credit. Tenant will be solely responsible for any and all fees or
      costs (whether payable to the L/C Bank or otherwise) in order to effect such
      assignment or transfer of the Letter of Credit, and any failure by Tenant to
      pay
      the same will not affect the transferability thereof.

     

    18.

    USE
      OF DEMISED PREMISES

     

    18.1
        Permitted
      Use.
      The
      Demised Premises including all buildings or other improvements hereafter erected
      upon the same shall be used for manufacturing, heavy industrial and related
      uses, office, storage, shipping, clean rooms, and for no other use except as
      first approved by Landlord in writing, which approval shall not be unreasonably
      withheld, conditioned, or delayed. Tenant shall not use or occupy the same,
      or
      knowingly permit them to be used or occupied, contrary to any statute, rule,
      order, ordinance, requirement or regulation or other Law applicable thereto,
      or
      in any manner which would violate any certificate of occupancy affecting the
      same, or which would make void or voidable any insurance then in force with
      respect thereto or which would make it impossible to obtain fire or other
      insurance thereon required to be furnished hereunder by Tenant, or which would
      cause structural injury to the improvements or cause the value of the Demised
      Premises, or any portion thereof, substantially to diminish (reasonable wear
      and
      tear excepted), or which would constitute a public or private nuisance or waste
      or would violate any Hazardous Materials Laws (as defined in Section 9.5),
      and
      Tenant agrees that it will promptly, upon discovery of any such use, take all
      necessary steps to compel the discontinuance of such use.

     

    18.2
        Preservation
      of Demised Premises.
      Tenant
      shall not use, suffer, or permit the Demised Premises, or any portion thereof,
      to be used by Tenant, any third party or the public in such manner as might
      impair Landlord's title to the Demised Premises, or any portion thereof, or
      in
      such manner as is likely to cause a claim or claims of adverse usage or adverse
      possession by the public, as such, or third persons, or of implied dedication
      of
      the Demised Premises, or any portion thereof. Nothing in this Lease contained
      and no action or inaction by Landlord shall be deemed or construed to mean
      that
      Landlord has granted
      to Tenant any right, power or permission to do any act or make any agreement
      that may create, or give rise to or be the foundation for any such right, title,
      interest, lien, charge or other encumbrance upon the estate of Landlord in
      the
      Demised Premises.

     

    
      
        
        

      

      
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    18.3
        Acceptance
      of Demised Premises.
      Except
      as provided in Section 21.2 of this Lease, Tenant acknowledges that neither
      Landlord nor any agent of Landlord has made any representation or warranty
      with
      respect to the Demised Premises or the Building or with respect to the
      suitability or fitness of either for the conduct of Tenant's business or for
      any
      other purpose and Tenant accepts the Demised Premises in an "as is" condition.
      Tenant shall comply with the Permitted Encumbrances and any other recorded
      covenants, easements, conditions, and restrictions affecting the Demised
      Premises and the Building which are recorded during the Lease Term and which
      are
      approved by Tenant, which approval shall not be unreasonably withheld or
      delayed.

     

    19.

    PAYMENT
      OF TAXES, ASSESSMENTS, ETC.

     

    19.1
        Payment
      of Impositions.
      Tenant
      covenants and agrees to pay during the term of this Lease, commencing on the
      Rent Commencement Date, as Additional Rent, before any fine, penalty, interest
      or cost may be added thereto for the nonpayment thereof, all real estate taxes,
      special assessments, water rates and charges, sewer rates and charges, including
      any sum or sums payable for present or future sewer or water capacity, charges
      for public utilities, street lighting, excise levies, licenses, permits,
      inspection fees, other governmental charges, and all other charges or burdens
      of
      whatsoever kind and nature (including costs, fees, and expenses of complying
      with any restrictive covenants or similar agreements to which the Demised
      Premises are subject) incurred in the use, occupancy, ownership, operation,
      leasing or possession of the Demised Premises, without particularizing by any
      known name or by whatever name hereafter called, and whether any of the
      foregoing be general or special, ordinary or extraordinary, foreseen or
      unforeseen (all of which are sometimes herein referred to as "Impositions"),
      which at any time during the term may have been or may be assessed, levied,
      confirmed, imposed upon, or become a lien on the Demised Premises, or any
      portion thereof, or any appurtenance thereto, rents or income therefrom, and
      such easements or rights as may now or hereafter be appurtenant or appertain
      to
      the use of the Demised Premises. Beginning on the Rent Commencement Date, Tenant
      shall pay all special (or similar) assessments for public improvements or
      benefits which, during the term of this Lease shall be laid, assessed, levied
      or
      imposed upon or become payable or become a lien upon the Demised Premises,
      or
      any portion thereof; provided, however, that if by law any special assessment
      is
      payable (without default) or, at the option of Tenant, may be paid (without
      default) in installments (whether or not interest shall accrue on the unpaid
      balance of such special assessment), Tenant may pay the same, together with
      any
      interest accrued on the unpaid balance of such special assessment in
      installments as the same respectively become payable and before any fine,
      penalty, interest or cost may be added thereto for the nonpayment of any such
      installment and the interest thereon. Tenant shall pay all special assessments
      or installments thereof (including interest accrued thereon), whether heretofore
      or hereafter laid, assessed, levied or imposed upon the Demised Premises, or
      any
      portion thereof, which are due and payable during the term of this Lease
      beginning on the Rent Commencement Date. Landlord shall pay all installments
      of
      special assessments (including interest accrued on the unpaid balance) which
      are
      payable prior to the Rent Commencement Date and after the termination date
      of
      the term of this Lease. Tenant shall pay all real estate taxes, whether
      heretofore or hereafter levied or assessed upon the Demised Premises, or any
      portion thereof, which are due and payable during the term of this Lease.
      Landlord shall pay all real estate taxes which are payable prior to the Rent
      Commencement Date. Provisions
      herein to the contrary notwithstanding, Landlord shall pay that portion of
      the
      real estate taxes and installments of special assessments due and payable in
      respect to the Demised Premises during the year the term commences and the
      year
      in which the term ends which the number of days in said year not within the
      term
      of this Lease bears to 365, and Tenant shall pay the balance of said real estate
      taxes and installments of special assessments during said years.

     

    19.2
        Tenant's
      Right to Contest Impositions.
      Tenant
      shall have the right at its own expense to contest the amount or validity,
      in
      whole or in part, of any Imposition by appropriate proceedings diligently
      conducted in good faith, but only after payment of such Imposition, unless
      such
      payment, or a payment thereof under protest, would operate as a bar to such
      contest or interfere materially with the prosecution thereof, in which event,
      notwithstanding the provisions of Section 5.l hereof, Tenant may postpone or
      defer payment of such Imposition if neither the Demised Premises nor any portion
      thereof would, by reason of such postponement or deferment, be in danger of
      being forfeited or lost. Upon the termination of any such proceedings, Tenant
      shall pay the amount of such Imposition or part thereof, if any, as finally
      determined in such proceedings, the payment of which may have been deferred
      during the prosecution of such proceedings, together with any costs, fees,
      including attorney's fees, interest, penalties, fines and other liability in
      connection therewith. Tenant shall be entitled to the refund of any Imposition,
      penalty, fine and interest thereon received by Landlord which have been paid
      by
      Tenant or which have been paid by Landlord but for which Landlord has been
      previously reimbursed in full by Tenant. Landlord shall not be required to
      join
      in any proceedings referred to in this Section 5.2 unless the provisions of
      any
      law, rule or regulation at the time in effect shall require that such
      proceedings be brought by or in the name of Landlord, in which event Landlord
      shall join in such proceedings or permit the same to be brought in Landlord's
      name upon compliance with such reasonable conditions as Landlord may reasonably
      require. Landlord shall not ultimately be subject to any liability for the
      payment of any fees, including attorney's fees, costs and expenses in connection
      with such proceedings. Tenant agrees to pay all such reasonable fees (including
      reasonable attorney's fees), costs and expenses within 30 days of invoice,
      to
      make reimbursement to Landlord for such payment.

     

    
      
        
        

      

      
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    19.3
        Levies
      and Other Taxes.
      If,
      at
      any time during the term of this Lease, any method of taxation shall be such
      that there shall be levied, assessed or imposed on Landlord, or on the Basic
      Rent or Additional Rent, or on the Demised Premises or on the value of the
      Demised Premises, or any portion thereof, a capital levy, sales or use tax,
      gross receipts tax or other tax on the rents received therefrom, or a franchise
      tax, or an assessment, levy or charge measured by or based in whole or in part
      upon such rents or value, Tenant covenants to pay and discharge the same, it
      being the intention of the parties hereto that the rent to be paid hereunder
      shall be paid to Landlord absolutely net without deduction or charge of any
      nature whatsoever foreseeable or unforeseeable, ordinary or extraordinary,
      or of
      any nature, kind or description, except as in this Lease otherwise expressly
      provided. Nothing in this Lease contained shall require Tenant to pay any
      municipal, state or federal net income or excess profits taxes assessed against
      Landlord, or any municipal, state or federal capital levy, estate, succession,
      inheritance or transfer taxes of Landlord, or corporation franchise taxes
      imposed upon any corporate owner of the fee of the Demised
      Premises.

     

    19.4
        Evidence
      of Payment.
      Upon
      Landlord's request, Tenant covenants to furnish Landlord, within 30 days after
      the date upon which any Imposition or other tax, assessment, levy or charge
      is
      payable by Tenant, official receipts of the appropriate taxing authority, or
      other appropriate proof satisfactory to Landlord, evidencing the payment of
      the
      same.

     

    19.5
        Escrow
      for Taxes and Assessments.
      At
      Landlord's written demand after any Event of Default and for as long as such
      Event of Default is uncured, Tenant shall pay to Landlord the known or estimated
      yearly real estate taxes and assessments payable with respect to the Demised
      Premises in monthly payments equal to one-twelfth of the known or estimated
      yearly real estate taxes and assessments next payable with respect to the
      Demised Premises. From time to time Landlord may re-estimate the amount of
      real
      estate taxes and assessments, and in such event Landlord shall notify Tenant,
      in
      writing, of such re-estimate and fix future monthly installments for the
      remaining period prior to the next tax and assessment due date in an amount
      sufficient to pay the re-estimated amount over the balance of such period after
      giving credit for payments made by Tenant on the previous estimate. If the
      total
      monthly payments made by Tenant pursuant to this Section 5.5 shall exceed the
      amount of payments necessary for said taxes and assessments, such excess shall
      be credited on subsequent monthly payments of the same nature; but if the total
      of such monthly payments so made under this paragraph shall be insufficient
      to
      pay such taxes and assessments when due, then Tenant shall pay to Landlord
      such
      amount as may be necessary to make up the deficiency. Payment by Tenant of
      real
      estate taxes and assessments under this section shall be considered as
      performance of such obligation under the provisions of Section 5.1
      hereof.

     

    19.6
        Landlord's
      Right to Contest Impositions.
      In
      addition to the right of Tenant under Section 5.2 to contest the amount or
      validity of Impositions, Landlord shall also have
      the
      right, but not the obligation, to contest the amount or validity, in whole
      or in
      part, of any Impositions not contested by Tenant, by appropriate proceedings
      conducted in the name of Landlord or in the name of Landlord and Tenant. If
      Landlord elects to contest the amount or validity, in whole or in part, of
      any
      Impositions, such contests by Landlord shall be at Landlord's expense, provided,
      however, that if the amounts payable by Tenant for Impositions are reduced
      (or
      if a proposed increase in such amounts is avoided or reduced) by reason of
      Landlord's contest of Impositions, Tenant shall reimburse Landlord for costs
      incurred by Landlord in contesting Impositions, but such reimbursements shall
      not be in excess of the amount saved by Tenant by reason of Landlord's actions
      in contesting such Impositions.

     

    
      
        
        

      

      
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    20.

    INSURANCE

     

    20.1
        Tenant's
      Insurance Obligations.
      Tenant,
      at its sole cost and expense, shall obtain and continuously maintain in full
      force and effect during the term of this Lease, commencing with the date that
      rental (full or partial) commences, policies of insurance covering the
      Improvements constructed, installed or located on the Demised Premises naming
      the Landlord, as an additional insured, against (a) loss or damage by fire;
      (b)
      loss or damage from such other risks or hazards now or hereafter embraced by
      an
      "Extended Coverage Endorsement," including, but not limited to, windstorm,
      hail,
      explosion, vandalism, riot and civil commotion, damage from vehicles, smoke
      damage, water damage and debris removal; (c) loss for flood if the Demised
      Premises are in a designated flood or flood insurance area; (d) loss for damage
      by earthquake if the Demised Premises are located in an earthquake-prone area;
      (e) loss from so-called explosion, collapse and underground hazards; and (f)
      loss or damage from such other risks or hazards of a similar or dissimilar
      nature which are now or may hereafter be customarily insured against with
      respect to improvements similar in construction, design, general location,
      use
      and occupancy to the Improvements. At all times, such insurance coverage shall
      be in an amount equal to l00% of the then "full replacement cost" of the
      Improvements. "Full Replacement Cost" shall be interpreted to mean the cost
      of
      replacing the improvements without deduction for depreciation or wear and tear,
      and it shall include a reasonable sum for architectural, engineering, legal,
      administrative and supervisory fees connected with the restoration or
      replacement of the Improvements in the event of damage thereto or destruction
      thereof. If a sprinkler system shall be located in the Improvements, sprinkler
      leakage insurance shall be procured and continuously maintained by Tenant at
      Tenant's sole cost and expense. For the period prior to the date when full
      or
      partial rental commences hereunder Landlord, at its sole cost and expense,
      shall
      maintain in full force and effect, on a completed value basis, insurance
      coverage on the Building on Builder's Risk or other comparable
      coverage.

     

    20.2
        Insurance
      Coverage.
      During
      the term of this Lease, Tenant, at its sole cost and expense, shall obtain
      and
      continuously maintain in full force and effect the following insurance
      coverage:

     

    20.2.1  Comprehensive
      general liability insurance against any loss, liability or damage on, about
      or
      relating to the Demised Premises, or any portion thereof, with limits of not
      less than Five Million Dollars ($5,000,000.00) combined single limit, per
      occurrence and aggregate, coverage on an occurrence basis. Any such insurance
      obtained and maintained by Tenant shall name Landlord as an additional insured
      therein and shall be obtained and maintained from and with a reputable and
      financially sound insurance company authorized to issue such insurance in the
      state in which the Demised Premises are located. Such insurance shall
      specifically insure (by contractual liability endorsement) Tenant's obligations
      under Section 20.3 of this Lease.

     

    20.2.2  Boiler
      and pressure vessel (including, but not limited to, pressure pipes, steam pipes
      and condensation return pipes) insurance, provided the Building contains a
      boiler or other pressure vessel or pressure pipes. Landlord shall be named
      as an
      additional insured in such policy or policies of insurance.

     

    20.2.3  Such
      other insurance and in such amounts as may from time to time be reasonably
      required by Landlord, against other insurable hazards which at the time are
      commonly insured against in the case of premises and/or buildings or
      improvements similar in construction, design, general location, use and
      occupancy to those on or appurtenant to the Demised Premises.

     

    The
      insurance set forth in this Section 6.2 shall be maintained by Tenant at not
      less than the limits set forth herein until reasonably required to be changed
      from time to time by Landlord, in writing, whereupon Tenant covenants to obtain
      and maintain thereafter such protection in the amount or amounts so required
      by
      Landlord. Landlord agrees not to change such limits more often than once every
      seven years and only if commercially reasonable.

     

    20.3
        Insurance
      Provisions.
      All
      policies of insurance required by Section 6.l shall provide that the proceeds
      thereof shall be payable to Landlord and if Landlord so requests shall also
      be
      payable to any contract purchaser of the Demised Premises and the holder of
      any
      mortgages now or hereafter becoming a lien on the fee of the Demised Premises,
      or any portion thereof, as the interest of such purchaser or holder appears
      pursuant to a standard named insured or mortgagee clause. Tenant shall not,
      on
      Tenant's own initiative or pursuant to request or requirement of any third
      party, take out separate insurance concurrent in form or contributing in the
      event of loss with that required in Section 6.1 hereof, unless Landlord is
      named
      therein as an additional insured with loss payable as in said Section 6.l
      provided. Tenant shall immediately notify Landlord whenever any such separate
      insurance is taken out and shall deliver to Landlord original certificates
      evidencing the same. 

     

    
      
        
        

      

      
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    Each
      policy required under this Article VI shall have attached thereto (a) an
      endorsement that such policy shall not be cancelled or materially changed
      without at least 15 days prior written notice to Landlord, and (b) an
      endorsement to the effect that the insurance as to the interest of Landlord
      shall not be invalidated by any act or neglect of Landlord or Tenant except
      for
      arson committed by Landlord. All policies of insurance shall be written in
      companies reasonably satisfactory to Landlord and licensed in the state in
      which
      the Demised Premises are located. Such certificates of insurance shall be in
      a
      form reasonably acceptable to Landlord, shall be delivered to Landlord upon
      commencement of the term and prior to expiration of such policy, new
      certificates of insurance, shall be delivered to Landlord not less than 20
      days
      prior to the expiration of the then current policy term.

     

    20.4
        Waiver
      of Subrogation.
      Tenant
      shall cause to be inserted in the policy or policies of insurance required
      by
      this Section 6.1 hereof a so-called "Waiver of Subrogation Clause" as to
      Landlord. Tenant hereby waives, releases and discharges Landlord, its agents
      and employees
      from all claims whatsoever arising out of loss, claim, expense or damage to
      or
      destruction covered or coverable by insurance required under this
      Section 6.1 or actually carried whether or not required by this Lease,
      notwithstanding that such loss, claim, expense or damage may have been caused
      by
      Landlord, its agents or employees, and Tenant agrees to look to the insurance
      coverage only in the event of such loss.
      Landlord
      hereby waives, releases and discharges Tenant, its agents and employees from
      all
      claims whatsoever arising out of loss, claim, expense or damage to or
      destruction actually paid for by insurance required under this Section 6.1
      or actually carried whether or not required by this Lease, notwithstanding that
      such loss, claim, expense or damage may have been caused by Tenant, its agents
      or employees, and Landlord agrees to look to the insurance coverage only in
      the
      event of such loss so long as Tenant fully insures all such losses, claims,
      expenses, damage, and destruction as required by this Lease. 

     

    20.5
        Tenant's
      Personal
      Property.Tenant
      shall bear the risk or maintain insurance coverage (including loss of use and
      business interruption coverage) upon Tenant's business and upon all personal
      property of Tenant or the personal property of others kept, stored or maintained
      on the Demised Premises against loss or damage by fire, windstorm or other
      casualties or causes for such amount as Tenant may desire, and Tenant agrees
      that such policies shall contain a waiver of subrogation clause as to
      Landlord.
      Landlord
      shall not be responsible for the loss of or damage to any such
      items.

     

    20.6
        Unearned
      Premiums.
      Upon
      expiration of the term of this Lease, the unearned premiums upon any insurance
      policies or certificates thereof lodged with Landlord by Tenant shall, subject
      to the provisions of Article XIII hereof, be payable to Tenant, provided that
      Tenant shall not then be in an Event of Default.

     

    20.7
        Blanket
      Insurance Coverage.
      Nothing
      in this Article shall prevent Tenant from taking out insurance of the kind
      and
      in the amount provided for under the preceding paragraphs of this Article under
      a blanket insurance policy or policies (certificates thereof reasonably
      satisfactory to Landlord shall be delivered to Landlord) which may cover other
      properties owned or operated by Tenant as well as the Demised Premises;
      provided, however, that any such policy of blanket insurance of the kind
      provided for shall (a) specify therein the amounts thereof exclusively allocated
      to the Demised Premises or Tenant shall furnish Landlord and the holder of
      any
      fee mortgage with a written statement from the insurers under such policies
      specifying the amounts of the total insurance exclusively allocated to the
      Demised Premises, and (b) not contain any clause which would result in the
      insured thereunder being required to carry any insurance with respect to the
      property covered thereby in an amount not less than any specific percentage
      of
      the Full Replacement Cost of such property in order to prevent the insured
      therein named from becoming a co-insurer of any loss with the insurer under
      such
      policy; and further provided, however, that such policies of blanket insurance
      shall, as respects the Demised Premises, contain the various provisions required
      of such an insurance policy by the foregoing provisions of this Article
      VI.

     

    
      
        
        

      

      
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    21.

    UTILITIES

     

    21.1
        Payment
      of Utilities.
      From and
      after the Rent Commencement Date, Tenant will pay, when due, all charges of
      every nature, kind or description for utilities furnished to the Demised
      Premises or chargeable against the Demised Premises, including all charges
      for
      water, sewage, heat, gas, light, garbage, electricity, telephone, steam, power,
      or other public or private utility services. Prior to the Rent Commencement
      Date, Tenant shall pay for all utilities or services at the Demised Premises
      used by it or its agents, employees or contractors as reasonably allocated
      by
      Landlord.

     

    21.2
        Additional
      Charges.
      In
      the
      event that any charge or fee is required after the Commencement Date by the
      state in which the Demised Premises are located, or by any agency, subdivision,
      or instrumentality thereof, or by any utility company furnishing services or
      utilities to the Demised Premises, as a condition precedent to furnishing or
      continuing to furnish utilities or services to the Demised Premises, such charge
      or fee shall be deemed to be a utility charge payable by Tenant. The provisions
      of this Section 7.2 shall include, but not be limited to, any charges or fees
      for present or future water or sewer capacity to serve the Demised Premises,
      any
      charges for the underground installation of gas or other utilities or services,
      and other charges relating to the extension of or change in the facilities
      necessary to provide the Demised Premises with adequate utility services. In
      the
      event that Landlord has paid any such charge or fee after the Commencement
      Date,
      Tenant shall reimburse Landlord for such utility charge within 30 days of
      invoice. Nothing contained in this Section 7.2 shall be construed to relieve
      Landlord of the obligation to finish Landlord's Improvements described in
      Exhibit "C."

     

    22.

    REPAIRS

     

    22.1
        Tenant's
      Repairs.
      Save
      and
      except for the one-year guaranty against defective materials and workmanship
      or
      other guaranties provided for in Section 2.4 hereof, and the completion of
      incomplete items provided for in Section 2.5 hereof, Tenant, at its sole cost
      and expense, throughout the term of this Lease, shall take good care of the
      Demised Premises (including any improvements hereafter erected or installed
      on
      the Land), and shall keep the same in good order, condition and repair, and
      irrespective of such guaranty shall make and perform all routine maintenance
      thereof and all necessary repairs thereto, interior and exterior, structural
      and
      nonstructural, ordinary and extraordinary, foreseen and unforeseen, of every
      nature, kind and description. When used in this Article VIII, "repairs" shall
      include all necessary replacements, renewals, alterations, additions and
      betterments; provided,
      however,
      if (a)
      Tenant properly, regularly, and continuously maintains the roof, Building,
      foundation, and load-bearing walls in good condition, (b) the roof structure
      or
      the structural elements of the foundation, exterior walls, or load-bearing
      walls
      (each a "Structural Item") fail, or otherwise require replacement, and (c)
      such
      failure or need is not due to Tenant's use, Tenant's alterations, or casualty,
      then Landlord agrees to replace the Structural Item as necessary. The costs,
      fees and expenses of any such replacement (each a "Replacement Cost") shall
      be
      amortized on a straight-line basis over the useful life of the replaced item,
      as
      reasonably determined by Landlord, using applicable guidelines provided by
      GAAP,
      taking into account interest at the rate of 8% per annum. Tenant shall pay
      Landlord equal monthly payments of the monthly amortized amount of the
      Replacement Cost, with interest as provided in this Section, beginning 30 days
      after Landlord's invoice and continuing on the first day of each calendar month
      thereafter throughout the Term of the Lease, as it may be extended. All repairs
      made by Tenant shall be at least equal in quality to the original work and
      shall
      be made by Tenant in accordance with all laws, ordinances and regulations
      whether heretofore or hereafter enacted. The necessity for or adequacy of
      maintenance and repairs shall be measured by the standards which are appropriate
      for improvements of similar construction and class, provided that Tenant shall
      in any event make all repairs necessary to avoid any structural damage or other
      damage or injury to the Improvements.

     

    22.2
        Maintenance.
      Tenant,
      at its sole cost and expense, shall take good care of, repair and maintain
      all
      driveways, pathways, roadways, sidewalks, curbs, spur tracks, parking areas,
      loading areas, landscaped areas, entrances and passageways in good order and
      repair and shall promptly remove all accumulated snow, ice and debris from
      any
      and all driveways, pathways, roadways, sidewalks, curbs, parking areas, loading
      areas, entrances and passageways, and keep all portions of the Demised Premises,
      including areas appurtenant thereto, in a clean and orderly condition free
      of
      snow, ice, dirt, rubbish, debris and unlawful obstructions.

     

    
      
        
        

      

      
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    22.3
        Tenant's
      Waiver of Claims Against Landlord.
      Except
      as expressly set forth in Section 8.1 and Section 21.2 of this Lease, Landlord
      shall not be required to furnish any services or facilities or to make any
      repairs or alterations in, about or to the Demised Premises or any improvements
      hereafter erected thereon. Tenant hereby assumes the full and sole
      responsibility for the condition, operation, repair, replacement, maintenance
      and management of the Demised Premises and all improvements hereafter erected
      thereon, and Tenant
      hereby waives any rights created by any law now or hereafter in force to make
      repairs to the Demised Premises or improvements hereafter erected thereon at
      Landlord's expense
      except
      as expressly provided in Section 16.2.

     

    22.4
        Prohibition
      Against Waste.
      Tenant
      shall not do or suffer any waste or damage, disfigurement or injury to the
      Demised Premises, or any improvements hereafter erected thereon, or to the
      fixtures or equipment therein, or permit or suffer any overloading of the floors
      or other use of the Improvements that would place an undue stress on the same
      or
      any portion thereof beyond that for which the same was designed.

     

    22.5
        Landlord's
      Right to Effect Repairs.
      If
      Tenant
      should fail to perform any of its obligations under this Article VIII, then
      Landlord may, if it so elects, in addition to any other remedies provided
      herein, effect such repairs and maintenance after giving Tenant ten business
      days' prior written notice. Any sums expended by Landlord in effecting such
      repairs and maintenance shall be due and payable, on demand, together with
      interest thereon at the Maximum Rate of Interest from the date of each such
      expenditure by Landlord to the date of repayment by Tenant.

     

    22.6
        Misuse
      or Neglect.
      Tenant
      shall be responsible for all repairs to the Building which are made necessary
      by
      any misuse or neglect by: (i) Tenant or any of its officers, agents, employees,
      contractors, licensees, or subtenants; or (ii) any visitors, patrons, guests,
      or
      invitees of Tenant or its subtenant while in or upon the Demised
      Premises.

     

    23.

    COMPLIANCE
      WITH LAWS AND ORDINANCES

     

    23.1
        Compliance
      with Laws and Ordinances.
      Landlord's Improvements and Tenant's Improvements (collectively, the "Initial
      Improvements") and Landlord's replacements made pursuant to Section 8.1 shall
      be
      constructed in accordance with the applicable building code and all other
      applicable laws, codes, rules, and regulations, as they are interpreted and
      enforced by the governmental bodies having jurisdiction thereof as of the date
      of Landlord's building permit for Landlord's Improvements. Tenant shall,
      throughout the term of this Lease, and at Tenant's sole cost and expense,
      promptly comply or cause compliance with or remove or cure any violation of
      any
      and all present and future laws, ordinances, orders, rules, regulations and
      requirements of all federal, state, municipal and other governmental bodies
      having jurisdiction over the Demised Premises and the appropriate departments,
      commissions, boards and officers thereof, and the orders, rules and regulations
      of the Board of Fire Underwriters where the Demised Premises are situated,
      or
      any other body now or hereafter constituted exercising lawful or valid authority
      over the Demised Premises, or any portion thereof, or exercising authority
      with
      respect to the use or manner of use of the Demised Premises, and whether the
      compliance, curing or removal of any such violation and the costs and expenses
      necessitated thereby shall have been foreseen or unforeseen, ordinary or
      extraordinary, and whether or not the same shall be presently within the
      contemplation of Landlord or Tenant or shall involve any change of governmental
      policy, or require structural or extraordinary repairs, alterations or additions
      by Tenant and irrespective of the costs thereof.

     

    23.2
        Compliance
      with Permitted Encumbrances.
      Tenant,
      at its sole cost and expense, shall comply with the Permitted Encumbrances
      and
      all agreements, contracts, easements, restrictions, reservations or covenants,
      if any, hereafter created by Tenant or consented to, in writing, by Tenant
      or
      requested, in writing, by Tenant. Tenant shall also comply with, observe and
      perform all provisions and requirements of all policies of insurance at any
      time
      in force with respect to the Demised Premises and required to be obtained and
      maintained under the terms
      of
      Article VI hereof and shall comply with all development permits issued by
      governmental authorities issued in connection with development of the Demised
      Premises.

     

    23.3
        Tenant's
      Obligations.
      Notwithstanding
      that it may be usual and customary for Landlord to assume responsibility and
      performance of any or all of the obligations set forth in this Article IX,
      and
      notwithstanding any order, rule or regulation directed to Landlord to perform,
      Tenant hereby assumes such obligations because, by nature of this Lease, the
      rents and income derived from this Lease by Landlord are net rentals not to
      be
      diminished by any expense incident to the ownership, occupancy, use, leasing,
      or
      possession of the Demised Premises or any portion thereof.

     

    
      
        
        

      

      
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    23.4
        Tenant's
      Right to Contest Laws and Ordinances.
      After
      prior written notice to Landlord, Tenant, at its sole cost and expense and
      without cost or expense to Landlord, shall have the right to contest the
      validity or application of any law or ordinance referred to in this Article
      IX
      in the name of Tenant or Landlord, or both, by appropriate legal proceedings
      diligently conducted but only if compliance with the terms of any such law
      or
      ordinance pending the prosecution of any such proceeding may legally be delayed
      without the incurrence of any lien, charge or liability of any kind against
      the
      Demised Premises, or any portion thereof, and without subjecting Landlord or
      Tenant to any liability, civil or criminal, for failure so to comply therewith
      until the final determination of such proceeding; provided, however, if any
      lien, charge or civil liability would be incurred by reason of any such delay,
      Tenant nevertheless may contest as aforesaid and delay as aforesaid, provided
      that such delay would not subject Tenant or Landlord to criminal liability
      and
      Tenant (a) prosecutes the contest with due diligence and in good faith, and
      (b)
      agrees to indemnify, defend and hold harmless Landlord and the Demised Premises
      from any charge, liability or expense whatsoever.

     

    If
      necessary or proper to permit Tenant so to contest the validity or application
      of any such law or ordinance, Landlord shall, at Tenant's sole cost and expense,
      including reasonable attorney's fees incurred by Landlord, execute and deliver
      any appropriate papers or other documents; provided, Landlord shall not be
      required to execute any document or consent to any proceeding which would result
      in the imposition of any cost, charge, expense or penalty on Landlord or the
      Demised Premises unless Tenant pays such cost, charge, expense, or
      penalty.

     

    23.5
        Compliance
      with Hazardous Materials Laws.
      Tenant
      shall at all times and in all respects comply with all federal, state and local
      laws, ordinances and regulations ("Hazardous Materials Laws") relating to the
      industrial hygiene, environmental protection or the use, analysis, generation,
      manufacture, storage, presence, disposal or transportation of any oil, petroleum
      products, flammable explosives, asbestos, urea formaldehyde, polychlorinated
      biphenyls, radioactive materials or waste, or other hazardous, toxic,
      contaminated or polluting materials, substances or wastes, including without
      limitation any "hazardous substances," "hazardous
      wastes," "hazardous materials" or "toxic substances" under any such laws,
      ordinances or regulations (collectively, "Hazardous Materials").
      Upon
      execution and delivery of this Lease, Tenant shall execute and deliver to
      Landlord the questionnaire attached as Exhibit "F" to this Lease.

     

    Tenant
      shall at its own expense procure, maintain in effect and comply with all
      conditions of any and all permits, licenses and other governmental and
      regulatory approvals required for Tenant's use of the Demised Premises,
      including, without limitation, discharge of (appropriately treated) materials
      or
      waste into or through any sanitary sewer system serving the Demised Premises.
      Except as discharged into the sanitary sewer in strict accordance and conformity
      with all applicable Hazardous Materials Laws, Tenant shall cause any and all
      Hazardous Materials to be removed from the Demised Premises and transported
      solely by duly licensed haulers to duly licensed facilities for final disposal
      of such Hazardous Materials and wastes. Tenant shall in all respects, handle,
      treat, deal with and manage any and all Hazardous Materials in, on, under or
      about the Demised Premises in complete conformity with all applicable Hazardous
      Materials Laws and prudent industry practices regarding the management of such
      Hazardous Materials. All reporting obligations to the extent imposed upon Tenant
      by Hazardous Materials Laws are solely the responsibility of Tenant. Upon
      expiration or earlier termination of this Lease, Tenant shall cause all
      Hazardous Materials (to the extent such Hazardous Materials are generated,
      stored, released or disposed of during the term of this Lease by Tenant) to
      be
      removed from the Demised Premises and transported for use, storage or disposal
      in accordance and in compliance with all applicable Hazardous Materials Laws.
      Tenant shall not take any remedial action in response to the presence of any
      Hazardous Materials in, on, about or under the Demised Premises or in any
      Improvements situated on the Land, nor enter into any settlement agreement,
      consent, decree or other compromise in respect to any claims relating to any
      way
      connected with the Demised Premises or the Landlord's Improvements on the Land
      without first notifying Landlord of Tenant's intention to do so and affording
      Landlord reasonable opportunity to appear, intervene or otherwise appropriately
      assert and protect Landlord's interest with respect thereto. In addition, at
      Landlord's request, at the expiration of the term of this Lease, Tenant shall
      remove all tanks or fixtures which were placed on the Demised Premises during
      the term of this Lease and which contain, have contained or are contaminated
      with, Hazardous Materials.

     

    
      
        
        

      

      
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    Tenant
      shall immediately notify Landlord in writing of (a) any enforcement, clean-up,
      removal or other governmental or regulatory action instituted, completed or
      threatened pursuant to any Hazardous Materials Laws; (b) any claim made or
      threatened by any person against Landlord, or the Demised Premises, relating
      to
      damage, contribution, cost recovery, compensation, loss or injury resulting
      from
      or claimed to result from any Hazardous Materials; and (c) any reports made
      to
      any environmental agency arising out of or in connection with any Hazardous
      Materials in, on or about the Demised Premises or with respect to any Hazardous
      Materials removed from the Demised Premises, including, any complaints, notices,
      warnings, reports or asserted violations in connection therewith. Tenant shall
      also provide to Landlord, as promptly as possible, and in any event within
      five
      business days after Tenant first receives or sends the same, with copies of
      all
      claims, reports, complaints, notices, warnings or asserted violations relating
      in any way to the Demised Premises or Tenant's use thereof. Upon written request
      of Landlord (to enable Landlord to defend itself from any claim or charge
      related to any Hazardous Materials Law), Tenant shall promptly deliver to
      Landlord notices of hazardous waste manifests reflecting the legal and proper
      disposal of all such Hazardous Materials removed or to be removed from the
      Demised Premises. All such manifests shall list the Tenant or its agent as
      a
      responsible party and in no way shall attribute responsibility for any such
      Hazardous Materials to Landlord.

     

    23.6
        Hazardous
      Materials Representation by Landlord.
      To
      the
      best of Landlord's actual and present knowledge, no Hazardous Materials exist
      or
      are located on or in the Demised Premises, except as may be disclosed in that
      certain environmental site assessment prepared by Terra Associates, Inc., dated
      December 21, 1998 (the "Environmental Report"). Further, Landlord
      represents to Tenant that, to the best of its knowledge, Landlord has not caused
      the generation, storage or release of Hazardous Materials upon the Demised
      Premises, except in accordance with Hazardous Materials Laws.
      Landlord
      agrees to arrange for either the Environmental Report to be updated or another
      level one or level two environmental assessment of the Demised Premises to
      be
      performed between the date of execution of this Lease and the Commencement
      Date,
      at Landlord's sole cost and expense, and to provide a copy thereof to
      Tenant.

     

    23.7
        Cost
      of Compliance with Hazardous Materials Laws.
      Provisions of Sections 9.5 and 9.6 notwithstanding, Tenant shall be responsible
      only for that part of the cost of compliance with Hazardous Materials Laws
      which
      relates to a breach by Tenant of the covenants contained in this Lease to be
      kept and performed by Tenant, including but not limited to the covenants
      contained in Section 9.5. Landlord shall be responsible only for that part
      of
      the cost of compliance with Hazardous Materials Laws which relates to a breach
      by Landlord of the covenants contained in this Lease, including but not limited
      to the covenants contained in Section 9.6.

     

    23.8
        Discovery
      of Hazardous Materials.
      In
      the
      event (a) Hazardous Materials are discovered upon the Demised Premises, (b)
      Landlord has been given written notice of the discovery of such Hazardous
      Materials, and (c) pursuant to the provisions of Section 9.7, neither Landlord
      nor Tenant is obligated to pay the cost of compliance with Hazardous Materials
      Laws, then and in that event Landlord may voluntarily but shall not be obligated
      to agree with Tenant to take all action necessary to bring the Demised Premises
      into compliance with Hazardous Materials Laws at Landlord's sole cost. In the
      event Landlord fails to notify Tenant in writing within 30 days of the notice
      to
      Landlord of the discovery of such Hazardous Materials that Landlord intends
      to
      voluntarily take such action as is necessary to bring the Demised Premises
      into
      compliance with Hazardous Materials Laws, then Tenant may, (i) bring the Demised
      Premises into compliance with Hazardous Materials Laws at Tenant's sole cost
      or
      (ii) provided such Hazardous Materials endanger persons or property in, on,
      or
      about the Demised Premises or interfere with Tenant's use of the Demised
      Premises, terminate the Lease on a date not less than 90 days following written
      notice of such intent to terminate.

     

    23.9
        Indemnification.
      Tenant
      shall indemnify, defend (with counsel reasonably acceptable to Landlord),
      protect and hold Landlord and each of Landlord's officers, directors, partners,
      employees, agents, attorneys, successors and assigns free and harmless from
      and
      against any and all claims, liabilities, damages, costs, penalties, forfeitures,
      losses or expenses (including attorneys' fees) for death or injury to any person
      or damage to any property whatsoever (including water tables and atmosphere)
      arising or resulting in whole or in part, directly or indirectly, from the
      presence or discharge of Hazardous Materials, in, on, under, upon or from the
      Demised Premises or the Improvements located thereon or from the transportation
      or disposal of Hazardous Materials to or from the Demised Premises to the extent
      caused by Tenant whether knowingly or unknowingly, the standard herein being
      one
      of strict liability. Tenant's obligations hereunder shall include, without
      limitation, and whether foreseeable or unforeseeable, all costs of any required
      or necessary repairs, clean-up or detoxification or decontamination
      of the Demised Premises or the Improvements, and the presence and implementation
      of any closure, remedial action or other required plans in connection therewith,
      and shall survive the expiration of or early termination of the term of this
      Lease. For purposes of the indemnity provided herein, any acts or omissions
      of
      Tenant, or its employees, agents, customers, sub-lessees, assignees, contractors
      or sub-contractors of Tenant (whether or not they are negligent, intentional,
      willful or unlawful) shall be strictly attributable to Tenant.

     

    
      
        
        

      

      
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    23.10
        Environmental
      Audits.
      Upon
      request by Landlord during the term of this Lease, prior to the exercise of
      any
      renewal term and/or prior to vacating the Demised Premises, Tenant shall
      undertake and submit to Landlord an environmental audit from an environmental
      company reasonably acceptable to Landlord which audit shall evidence Tenant's
      compliance with this Article IX. 

     

    23.11
        Acts
      or Omissions Regarding Hazardous Materials.
      For
      purposes of the covenants and agreements contained in Sections 9.5 through
      9.10,
      inclusive, any acts or omissions of Tenant, its employees, agents, customers,
      sublessees, assignees, contractors or sub-contractors (except Opus Northwest,
      L.L.C., Landlord and their sub-contractors providing the Initial Improvements)
      shall be strictly attributable to Tenant; any acts or omissions of Landlord,
      its
      employees, agents, customers, assignees, contractors or sub-contractors shall
      be
      strictly attributable to Landlord. 

     

    23.12
        Survival.
      The
      respective rights and obligations of Landlord and Tenant under this Article
      IX
      shall survive the expiration or earlier termination of this Lease.

     

    24.

    MECHANIC'S
      LIENS AND OTHER LIENS

     

    24.1
        Freedom
      from Liens.
      Tenant
      shall not suffer or permit any mechanic's lien or other lien to be filed against
      the Demised Premises, or any portion thereof, by reason of work, labor, skill,
      services, equipment or materials supplied or claimed to have been supplied
      to
      the Demised Premises at the request of Tenant, or anyone holding the Demised
      Premises, or any portion thereof, through or under Tenant. If any such
      mechanic's lien or other lien shall at any time be filed against the Demised
      Premises, or any portion thereof, Tenant shall cause the same to be discharged
      of record or bonded off, as permitted by statute, on or before the later of
      (a) 30 days after the date of filing the same or (b) 15 days after
      Tenant's receipt of notice of the same. If Tenant shall fail to discharge or
      bond off such mechanic's lien or liens or other lien within such period, then,
      in addition to any other right or remedy of Landlord, after five days prior
      written notice to Tenant, Landlord may, but shall not be obligated to, discharge
      the same by paying to the claimant the amount claimed to be due or by procuring
      the discharge of such lien as to the Demised Premises by deposit in the court
      having jurisdiction of such lien, the foreclosure thereof or other proceedings
      with respect thereto, of a cash sum sufficient to secure the discharge of the
      same, or by the deposit of a bond or other security with such court sufficient
      in form, content and amount to procure the discharge of such lien, or in such
      other manner as is now or may in the future be provided by present or future
      law
      for the discharge of such lien as a lien against the Demised Premises. Any
      amount paid by Landlord, or the value of any deposit so made by Landlord,
      together with all costs, fees and expenses in connection therewith (including
      reasonable attorney's fees of Landlord), together with interest thereon at
      the
      Maximum Rate of Interest set forth in Section 3.4 hereof, shall be repaid by
      Tenant to Landlord on demand by Landlord and if unpaid may be treated as
      Additional Rent.
      Tenant shall indemnify and defend Landlord against and save Landlord and the
      Demised Premises, and any portion thereof, harmless from all losses, costs,
      damages, expenses, liabilities, suits, penalties, claims, demands and
      obligations, including, without limitation, reasonable attorney's fees resulting
      from the assertion, filing, foreclosure or other legal proceedings with respect
      to any such mechanic's lien or other lien.
      Tenant
      may obtain financing of its acquisition of its trade fixtures and equipment.
      Landlord agrees to subordinate its landlord's lien to the rights of the lender
      using a form reasonably acceptable to Landlord.

     

    
      
        
        

      

      
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    All
      materialmen, contractors, artisans, mechanics, laborers and any other person
      now
      or hereafter furnishing any labor, services, materials, supplies or equipment
      to
      Tenant with respect to the Demised Premises, or any portion thereof, are hereby
      charged with notice that they must look exclusively to Tenant to obtain payment
      for the same. Notice is hereby given that Landlord shall not be liable for
      any
      labor, services, materials, supplies, skill, machinery, fixtures or equipment
      furnished or to be furnished to Tenant upon credit, and that no mechanic's
      lien
      or other lien for any such labor, services, materials, supplies, machinery,
      fixtures or equipment shall attach to or affect the estate or interest of
      Landlord in and to the Demised Premises, or any portion thereof.

     

    24.2
        Landlord's
      Indemnification.
       The
      provisions of Section 10.1 above shall not apply to any mechanic's lien or
      other
      lien for labor, services, materials, supplies, machinery, fixtures or equipment
      furnished to the Demised Premises in the performance of Landlord's obligations
      to construct the Initial Improvements required by the provisions of Article
      II
      or Landlord's repair obligations in Section 8.1 and Section 21.2 hereof, and
      Landlord does hereby agree to indemnify and defend Tenant against and save
      Tenant and the Demised Premises, and any portion thereof, harmless from all
      losses, costs, damages, expenses, liabilities and obligations, including,
      without limitation, reasonable attorney's fees resulting from the assertion,
      filing, foreclosure or other legal proceedings with respect to any such
      mechanic's lien or other lien.

     

    24.3
        Removal
      of Liens.
       Except
      as
      otherwise provided for in this Article X, Tenant shall not create, permit or
      suffer, and shall promptly discharge and satisfy of record, any other lien,
      encumbrance, charge, security interest, or other right or interest which shall
      be or become a lien, encumbrance, charge or security interest upon the Demised
      Premises, or any portion thereof, or the income therefrom, or on the interest
      of
      Landlord or Tenant in the Demised Premises, or any portion thereof, save and
      except for those liens, encumbrances, charges, security interests, or other
      rights or interests consented to, in writing, by Landlord, or those mortgages,
      assignments of rents, assignments of leases and other mortgage documentation
      placed thereon by Landlord in financing or refinancing the Demised
      Premises.

     

    25.

    INTENT
      OF PARTIES

     

    25.1
        Net
      Lease.
       Landlord
      and Tenant do each state and represent that it is the intention of each of
      them
      that this Lease be interpreted and construed as an absolute net lease and all
      Basic Rent and Additional Rent shall be paid by Tenant to Landlord without
      abatement, deduction, diminution, deferment, suspension, reduction or setoff
      except as expressly set forth in this Lease, and the obligations of Tenant
      shall
      not be affected by reason of damage to or destruction of the Demised Premises
      from whatever cause (except as provided for in Section 9.8 and Section 13.6
      hereof); nor shall the obligations of Tenant be affected by reason of any
      condemnation, eminent domain or like proceedings (except as provided in Article
      XIV hereof); nor shall the obligations of Tenant be affected by reason
      of any
      other
      cause whether similar or dissimilar to the foregoing or by any laws or customs
      to the contrary. It is the further express intent of Landlord and Tenant that
      (a) the obligations of Landlord and Tenant hereunder shall be separate and
      independent covenants and agreements and that the Basic Rent and Additional
      Rent, and all other charges and sums payable by Tenant hereunder, shall commence
      at the times provided herein and shall continue to be payable in all events
      unless the obligations to pay the same shall be terminated pursuant to an
      express provision in this Lease; (b) all costs or expenses of whatsoever
      character or kind, general or special, ordinary or extraordinary, foreseen
      or
      unforeseen, and of every kind and nature whatsoever that may be necessary or
      required in and about the Demised Premises, or any portion thereof, and Tenant's
      possession or authorized use thereof during the term of this Lease, shall be
      paid by Tenant and all provisions of this Lease are to be interpreted and
      construed in light of the intention expressed in this Section 11.1; (c) the
      Basic Rent specified in Section 3.1 shall be absolutely net to Landlord so
      that
      this Lease shall yield net to Landlord the Basic Rent specified in Section
      3.1
      in each year during the term of this Lease (unless extended or renewed at a
      different Basic Rent); (d) all Impositions, insurance premiums, utility expense,
      repair and maintenance expense, and all other costs, fees, interest, charges,
      expenses, reimbursements and obligations of every kind and nature whatsoever
      relating to the Demised Premises, or any portion thereof, which may arise or
      become due during the term of this Lease, or any extension or renewal thereof,
      shall be paid or discharged by Tenant as Additional Rent; and (e) Tenant hereby
      agrees to indemnify, defend and save Landlord harmless from and against such
      costs, fees, charges, expenses, reimbursements and obligations, any interest
      thereon.

     

    
      
        
        

      

      
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    25.2
        Payment
      by Landlord.
       If
      Tenant
      shall at any time fail to pay any Imposition in accordance with the provisions
      of Article V, or to take out, pay for, maintain and deliver any of the insurance
      policies or certificates of insurance provided for in Article VI, or shall
      fail
      to make any other payment or perform any other act on its part to be made or
      performed, then Landlord, after ten business days' prior written notice (or
      without notice in case of emergency), and without waiving or releasing Tenant
      from any obligation of Tenant contained in this Lease, may, but shall be under
      no obligation to do so, (a) pay any Imposition payable by Tenant pursuant to
      the
      provisions of Article V; (b) take out, pay for and maintain any of the insurance
      policies provided for in this Lease; or (c) make any other payment or perform
      any other act on Tenant's part to be paid or performed as in this Lease
      provided, and Landlord may enter upon the Demised Premises for any such purpose
      and take all such action therein or thereon as may be necessary therefor.
      Nothing herein contained shall be deemed as a waiver or release of Tenant from
      any obligation of Tenant in this Lease contained.

     

    25.3
        Interest
      on Unpaid Amounts.
       If
      Tenant shall fail to perform any act required of it within ten business days
      after written notice to Tenant, Landlord may perform the same, but shall not
      be
      required to do so, in such manner and to such extent as Landlord may deem
      necessary or desirable, and in exercising any such right to employ counsel
      and
      to pay necessary and incidental costs and expenses, including reasonable
      attorney's fees. All sums so paid by Landlord and all necessary and incidental
      costs and expenses, including reasonable attorneys fees, in connection with
      the
      performance of any such act by Landlord, together with interest thereon at
      the
      Maximum Rate of interest provided for in Section 3.4 hereof from the date of
      making such expenditure by Landlord, shall be deemed Additional Rent hereunder
      and, except as is otherwise expressly provided herein, shall be payable to
      Landlord on demand or, at the option of Landlord, may be added to any monthly
      rental then due or thereafter becoming due under this Lease, and Tenant
      covenants to pay any such
      sum
      or sums, with interest as aforesaid, and Landlord shall have, in addition to
      any
      other right or remedy of Landlord, the same rights and remedies in the event
      of
      nonpayment thereof by Tenant as in the case of default by Tenant in the payment
      of monthly Basic Rent. Landlord shall not be limited in the proof of any damages
      which Landlord may claim against Tenant arising out of or by reason of Tenant's
      failure to provide and keep in force insurance as aforesaid, to the amount
      of
      the insurance premium or premiums not paid or not incurred by Tenant, and which
      would have been payable upon such insurance, but Landlord shall also be entitled
      to recover as damages for such breach the uninsured amount of any loss (to
      the
      extent of any deficiency between the dollar limits of insurance required by
      the
      provisions of this Lease and the dollar limits of the insurance actually carried
      by Tenant), damages, costs and expenses of suit, including reasonable attorney's
      fees, suffered or incurred by reason of damage to or destruction of the Demised
      Premises, or any portion thereof or other damage or loss which Tenant is
      required to insure against hereunder, occurring during any period when Tenant
      shall have failed or neglected to provide insurance as aforesaid. 

     

    26.

    DEFAULTS
      OF TENANT

     

    26.1
        Event
      of Default.
       If
      any
      one or more of the following events (in this Article sometimes called "Events
      of
      Default") shall happen:

     

    26.1.1  If
      default shall be made by Tenant, by operation of law or otherwise, under the
      provisions of Article XV hereof relating to assignment, sublease, mortgage
      or
      other transfer of Tenant's interest in this Lease or in the Demised
      Premises;

     

    26.1.2  If
      default shall be made in the due and punctual payment of any Basic Rent or
      Additional Rent payable under this Lease or in the payment of any obligation
      to
      be paid by Tenant, when and as the same shall become due and payable, and such
      default shall continue for a period of ten days after written notice thereof
      given by Landlord to Tenant;

     

    26.1.3  If
      default shall be made by Tenant in keeping, observing or performing any of
      the
      terms contained in this Lease, other than those referred to in Subparagraphs
      (a)
      and (b) of this Section 12.1, which does not expose Landlord to criminal
      liability, and such default shall continue for a period of 30 days after written
      notice thereof given by Landlord to Tenant, or in the case of such a default
      or
      contingency which cannot with due diligence and in good faith be cured within
      30
      days, and Tenant fails to proceed promptly and with due diligence and in good
      faith to cure the same and thereafter to prosecute the curing of such default
      with due diligence and in good faith, it being intended that in connection
      with
      a default which does not expose Landlord to criminal liability, not susceptible
      of being cured with due diligence and in good faith within 30 days, that the
      time allowed Tenant within which to cure the same shall be extended for such
      period as may be necessary for the curing thereof promptly with due diligence
      and in good faith;

     

    
      
        
        

      

      
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    26.1.4  If
      default shall be made by Tenant in keeping, observing or performing any of
      the
      terms contained in this Lease, other than those referred to in Subparagraphs
      (a), (b) and (c) of this Section 12.1, and which exposes Landlord to criminal
      liability, and such default shall continue after written notice thereof given
      by
      Landlord to Tenant, and Tenant fails to proceed timely and promptly with all
      due
      diligence and in good faith to cure the same and thereafter to prosecute the
      curing of such default with all due diligence, it being intended that in
      connection with a default which exposes Landlord to criminal liability that
      Tenant shall proceed immediately to cure or correct such condition with
      continuity and with all due diligence and in good faith;

     

    then,
      and
      in any such event, Landlord, at any time thereafter during the continuance
      of
      any such Event of Default, may give written notice to Tenant specifying such
      Event of Default or Events of Default and stating that this Lease and the terms
      hereby demised shall terminate on the date specified in such notice, and upon
      the date specified in such notice this Lease and the terms hereby demised,
      and
      all rights of Tenant under this Lease, including all rights of renewal whether
      exercised or not, shall terminate, or in the alternative or in addition to
      the
      foregoing remedy, Landlord may assert and have the benefit of any other remedy
      allowed herein, at law, or in equity.

     

    26.2
        Surrender
      of Demised Premises.
       Upon
      any
      expiration or termination of this Lease, Tenant shall quit and peaceably
      surrender the Demised Premises, and all portions thereof, to Landlord, and
      Landlord, upon or at any time after any such expiration or termination, may,
      without further notice, enter upon and reenter the Demised Premises, and all
      portions thereof, and possess and repossess itself thereof, by force, summary
      proceeding, ejectment or otherwise, and may dispossess Tenant and remove Tenant
      and all other persons and property from the Demised Premises, and all portions
      thereof, and may have, hold and enjoy the Demised Premises and the right to
      receive all rental and other income of and from the same.

     

    26.3
        Reletting
      by Landlord.
       At
      any
      time, or from time to time after any such expiration or termination, Landlord
      may relet the Demised Premises, or any portion thereof, in the name of Landlord
      or otherwise, for such term or terms (which may be greater or less than the
      period which would otherwise have constituted the balance of the term of this
      Lease) and on such conditions (which may include concessions or free rent)
      as
      Landlord, in its uncontrolled discretion, may determine and may collect and
      receive the rents therefor. Landlord shall in no way be responsible or liable
      for any failure to relet the Demised Premises, or any part thereof, or for
      any
      failure to collect any rent due upon any such reletting; provided,
      however,
      that
      Landlord agrees to use commercially reasonable efforts to mitigate its damages
      as required by law.

     

    26.4
        Survival
      of Tenant's Obligations.
       No
      such
      termination of this Lease shall relieve Tenant of its liabilities and
      obligations under this Lease (as if this Lease had not been so terminated),
      and
      such liabilities and obligations shall survive any such termination. In the
      event of any such termination, whether or not the Demised Premises, or any
      portion thereof, shall have been relet, Tenant shall pay to Landlord a sum
      equal
      to the Basic Rent, and the Additional Rent and any other charges required to
      be
      paid by Tenant, up to the time of such termination of this Lease, and thereafter
      Tenant, until the end of what would have been the term of this Lease in the
      absence of such termination, shall be liable to Landlord for, and shall pay
      to
      Landlord, as and for liquidated and agreed current damages for Tenant's
      default:

     

    26.4.1  The
      equivalent of the amount of the Basic Rent and Additional Rent which would
      be
      payable under this Lease by Tenant if this Lease were still in effect,
      less

     

    26.4.2  The
      net proceeds of any reletting effected pursuant to the provisions of Section
      12.3 hereof after deducting all of Landlord's reasonable expenses in connection
      with such reletting, including, without limitation, all repossession costs,
      brokerage commissions, legal expenses, reasonable attorney's fees, alteration
      costs, and expenses of preparation of the Demised Premises, or any portion
      thereof, for such reletting.

     

    
      
        
        

      

      
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    Tenant
      shall pay such current damages in the amount determined in accordance with
      the
      terms of this Section 12.4, as set forth in a written statement thereof from
      Landlord to Tenant (hereinafter called the "Deficiency"), to Landlord in monthly
      installments on the days on which the Basic Rent would have been payable under
      this Lease if this Lease were still in effect, and Landlord shall be entitled
      to
      recover from Tenant each monthly installment of the Deficiency as the same
      shall
      arise.

     

    26.5
        Damages.
       At
      any
      time after an Event of Default and termination of this Lease, whether or not
      Landlord shall have collected any monthly Deficiency as set forth in Section
      12.4, Landlord shall be entitled to recover from Tenant, and Tenant shall pay
      to
      Landlord, on demand, as and for final damages for Tenant's default, an amount
      equal to the difference between the then present worth of the aggregate of
      the
      Basic Rent and Additional Rent and any other charges to be paid by Tenant
      hereunder for the unexpired portion of the term of this Lease (assuming this
      Lease had not been so terminated), and the then present worth of the then
      aggregate fair and reasonable fair market rent of the Demised Premises for
      the
      same period. In the computation of present worth, a discount at the rate of
      6%
      per annum shall be employed. If the Demised Premises, or any portion thereof,
      be
      relet by Landlord for the unexpired term of this Lease, or any part thereof,
      before presentation of proof of such damages to any court, commission or
      tribunal, the amount of rent reserved upon such reletting shall, prima facie,
      be
      the fair and reasonable fair market rent for the part or the whole of the
      Demised Premises so relet during the term of the reletting. Nothing herein
      contained or contained in Section 12.4 shall limit or prejudice the right of
      Landlord to prove for and obtain, as damages by reason of such expiration or
      termination, an amount equal to the maximum allowed by any statute or rule
      of
      law in effect at the time when, and governing the proceedings in which, such
      damages are to be proved, whether or not such amount be greater, equal to or
      less than the amount of the difference referred to above.

     

    26.6
        No
      Waiver.
       No
      failure by Landlord or by Tenant to insist upon the performance of any of the
      terms of this Lease or to exercise any right or remedy consequent upon a breach
      thereof, and no acceptance by Landlord of full or partial rent from Tenant
      or
      any third party during the continuance of any such breach, shall constitute
      a
      waiver of any such breach or of any of the terms of this Lease. None of the
      terms of this Lease to be kept, observed or performed by Landlord or by Tenant,
      and no breach thereof, shall be waived, altered or modified except by a written
      instrument executed by Landlord and/or by Tenant, as the case may be. No waiver
      of any breach shall affect or alter this Lease, but each of the terms of this
      Lease shall continue in full force and effect with respect to any other then
      existing or subsequent breach of this Lease. No waiver of any default of Tenant
      herein shall be implied from any omission by Landlord to take any action on
      account of such default, if such default persists or is repeated and no express
      waiver shall affect any default other than the default specified in the express
      waiver and that only for the time and to the extent therein stated. One or
      more
      waivers by Landlord shall
      not
      be construed as a waiver of a subsequent breach of the same covenant, term
      or
      condition.

     

    26.7
        Landlord's
      Remedies.
       In
      the
      event of any breach or threatened breach by Tenant of any of the terms contained
      in this Lease, Landlord shall be entitled to enjoin such breach or threatened
      breach and shall have the right to invoke any right or remedy allowed at law
      or
      in equity or by statute or otherwise as though entry, reentry, summary
      proceedings and other remedies were not provided for in this Lease. Each remedy
      or right of Landlord provided for in this Lease shall be cumulative and shall
      be
      in addition to every other right or remedy provided for in this Lease, or now
      or
      hereafter existing at law or in equity or by statute or otherwise, and the
      exercise or the beginning of the exercise by Landlord of any one or more of
      such
      rights or remedies shall not preclude the simultaneous or later exercise by
      Landlord of any or all other rights or remedies.

     

    
      
        
        

      

      
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    26.8
        Bankruptcy.
       If,
      during the term of this Lease, (a) Tenant shall make an assignment for the
      benefit of creditors, (b) a voluntary petition be filed by Tenant under any
      law
      having for its purpose the adjudication of Tenant a bankrupt, or Tenant be
      adjudged a bankrupt pursuant to an involuntary petition in bankruptcy, (c)
      a
      receiver be appointed for the property of Tenant, or (d) any department of
      the
      state or federal government, or any officer thereof duly authorized, shall
      take
      possession of the business or property of Tenant, the occurrence of any such
      contingency shall be deemed a breach of the Lease and this Lease shall, ipso
      facto upon the happening of any of said contingencies, be terminated and the
      same shall expire as fully and completely as if the day of the happening of
      such
      contingency were the date herein specifically fixed for the expiration of the
      term, and Tenant will then quit and surrender the Demised Premises, but Tenant
      shall remain liable as hereinafter provided. Notwithstanding other provisions
      of
      this Lease, or any present or future law, Landlord shall be entitled to recover
      from Tenant or Tenant's estate (in lieu of the equivalent of the amount of
      all
      rent and other charges unpaid at the date of such termination) as damages for
      loss of the bargain and not as a penalty, an aggregate sum which at the time
      of
      such termination represents the difference between the then present worth of
      the
      aggregate of the Basic Rent and Additional Rent and any other charges payable
      by
      Tenant hereunder that would have accrued for the balance of the term of this
      Lease (assuming this Lease had not been so terminated), over the then present
      worth of the aggregate fair market rent of the Demised Premises for the balance
      of such period, unless any statute or rule of law covering the proceedings
      in
      which such damages are to be proved shall limit the amount of such claim capable
      of being so proved, in which case Landlord shall be entitled to prove as and
      for
      damages by reason of such breach and termination of this Lease the maximum
      amount which may be allowed by or under any such statute or rule of law without
      prejudice to any rights of Landlord against any guarantor of Tenant's
      obligations herein. In the computation of present worth, a discount rate of
      6%
      per annum shall be employed. Nothing contained herein shall limit or prejudice
      Landlord's right to prove and obtain as damages arising out of such breach
      and
      termination the maximum amount allowed by any such statute or rule of law which
      may govern the proceedings in which such damages are to be proved, whether
      or
      not such amount be greater, equal to, or less than the amount of the excess
      of
      the present value of the rent and other charges required herein over the present
      value of the fair market rents referred to above. Specified remedies to which
      Landlord may resort under the terms of this Section l2.8 are cumulative and
      are
      not intended to be exclusive of any other remedies or means of redress to which
      Landlord may be lawfully entitled.

     

    26.9
        Waiver
      by Tenant.
       Tenant
      hereby expressly waives, so far as permitted by law, any and all right of
      redemption or reentry or repossession or to revive the validity and existence
      of
      this Lease in the event that Tenant shall be dispossessed by a judgment or
      by
      order of any court having jurisdiction over the Demised Premises or the
      interpretation of this Lease or in case of entry, reentry or repossession by
      Landlord or in case of any expiration or termination of this Lease.

     

    27.

    DESTRUCTION
      AND RESTORATION

     

    27.1
        Destruction
      and Restoration.
       Tenant
      covenants and agrees that in case of damage to or destruction of the
      Improvements after the Commencement Date of the term of this Lease, by fire
      or
      otherwise, Tenant, at its sole cost and expense, shall promptly restore, repair,
      replace and rebuild the same as nearly as possible to the condition that the
      same were in immediately prior to such damage or destruction with such changes
      or alterations (made in conformity with Article XIX hereof) as may be reasonably
      acceptable to Landlord or required by law. Tenant shall forthwith give Landlord
      written notice of such damage or destruction upon the occurrence thereof and
      specify in such notice, in reasonable detail, the extent thereof. Such
      restoration, repairs, replacements, rebuilding, changes and alterations,
      including the cost of temporary repairs for the protection of the Demised
      Premises, or any portion thereof, pending completion thereof are sometimes
      hereinafter referred to as the "Restoration." The Restoration shall be carried
      on and completed in accordance with the provisions and conditions of Section
      13.2 and Article XIX hereof. If the net amount of the insurance proceeds (after
      deduction of all costs, expenses and fees related to recovery of the insurance
      proceeds) recovered by Landlord and held by Landlord and Tenant as co-trustees
      is reasonably deemed insufficient by Landlord to complete the Restoration of
      such improvements (exclusive of Tenant's personal property and trade fixtures
      which shall be restored, repaired or rebuilt out of Tenant's separate funds),
      Tenant shall, upon request of Landlord, deposit with Landlord and Tenant, as
      co-trustees a cash deposit equal to the reasonable estimate of the amount
      necessary to complete the Restoration of such improvements less the amount
      of
      such insurance proceeds available.

     

    27.2
        Application
      of Insurance Proceeds.
       All
      insurance moneys recovered by Landlord and held by Landlord and Tenant as
      co-trustees on account of such damage or destruction, less the costs, if any,
      to
      Landlord to recover such funds, shall be applied to the payment of the costs
      of
      the Restoration and shall be paid out from time to time as the Restoration
      progresses upon the written request of Tenant, accompanied by a certificate
      of
      the architect or a qualified professional engineer in charge of the Restoration
      stating that as of the date of such certificate (a) the sum requested is justly
      due to the contractors, subcontractors, materialmen, laborers, engineers,
      architects, or persons, firms or corporations furnishing or supplying work,
      labor, services or materials for such Restoration, or is justly required to
      reimburse Tenant for any expenditures made by Tenant in connection with such
      Restoration, and when added to all sums previously paid out by Landlord does
      not
      exceed the value of the Restoration performed to the date of such certificate
      by
      all of said parties; (b) except for the amount, if any, stated in such
      certificates to be due for work, labor, services or materials, there is no
      outstanding indebtedness known to the person signing such certificate, after
      due
      inquiry, which is then due for work, labor, services or materials in connection
      with such Restoration, which, if unpaid, might become the basis of a mechanic's
      lien or similar lien with respect to the Restoration or a lien upon
      the Demised
      Premises, or any portion thereof; and (c) the costs, as estimated by the person
      signing such certificate, of the completion of the Restoration required to
      be
      done subsequent to the date of such certificate in order to complete the
      Restoration do not exceed the sum of the remaining insurance moneys, plus the
      amount deposited by Tenant, if any, remaining in the hands of Landlord after
      payment of the sum requested in such certificate.

     

    
      
        
        

      

      
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    Tenant
      shall furnish Landlord at the time of any such payment with evidence reasonably
      satisfactory to Landlord that there are no unpaid bills in respect to any work,
      labor, services or materials performed, furnished or supplied in connection
      with
      such Restoration. Landlord and Tenant as co-trustees shall not be required
      to
      pay out any insurance moneys where Tenant fails to supply satisfactory evidence
      of the payment of work, labor, services or materials performed, furnished or
      supplied, as aforesaid. If the insurance moneys in the hands of Landlord and
      Tenant as co-trustees, and such other sums, if any, deposited with Landlord
      and
      Tenant as co-trustees pursuant to Section 13.1 hereof, shall be insufficient
      to
      pay the entire costs of the Restoration, Tenant agrees to pay any deficiency
      within 30 days of demand. Upon completion of the Restoration and payment in
      full
      thereof by Tenant, Landlord shall, within a reasonable period of time
      thereafter, turn over to Tenant all insurance moneys or other moneys then
      remaining upon submission of proof reasonably satisfactory to Landlord that
      the
      Restoration has been paid for in full and the damaged or destroyed Building
      and
      other improvements repaired, restored or rebuilt as nearly as possible to the
      condition they were in immediately prior to such damage or destruction, or
      with
      such changes or alterations as may be made in conformity with Section 13.1
      and
      Article XIX hereof.

     

    27.3
        Continuance
      of Tenant's Obligations.
       Except
      as
      provided for in Section 13.6, no destruction of or damage to the Demised
      Premises, or any portion thereof, by fire, casualty or otherwise shall permit
      Tenant to surrender this Lease or shall relieve Tenant from its liability to
      pay
      to Landlord the Basic Rent and Additional Rent payable under this Lease or
      from
      any of its other obligations under this Lease, and Tenant waives any rights
      now
      or hereafter conferred upon Tenant by present or future law or otherwise to
      quit
      or surrender this Lease or the Demised Premises, or any portion thereof, to
      Landlord or to any suspension, diminution, abatement or reduction of rent on
      account of any such damage or destruction.

     

    27.4
        Availability
      of Insurance Proceeds.
       To
      the
      extent that any insurance moneys which would otherwise be payable to Landlord
      and used in the Restoration of the damaged or destroyed improvements are paid
      to
      any mortgagee of Landlord and applied in payment of or reduction of the sum
      or
      sums secured by any such mortgage or mortgages made by Landlord on the Demised
      Premises, Landlord may make available, for the purpose of Restoration of such
      improvements, an amount equal to the amount payable to its mortgagee out of
      such
      proceeds and in such event, such sum shall be applied in the manner provided
      in
      Section 13.2 hereof.

     

    27.5
        Completion
      of Restoration.
       The
      foregoing provisions of this Article XIII apply only to damage or destruction
      of
      the Improvements by fire, casualty or other cause occurring after the
      Commencement Date. Any such damage or destruction occurring prior to such time
      shall be restored, repaired, replaced and rebuilt by Landlord and during such
      period of construction Landlord shall obtain and maintain the builder's risk
      insurance coverage referred to in Section 6.1 hereof. All moneys received by
      Landlord under its builder's risk insurance coverage
      shall be applied by Landlord to complete the Restoration of such damage or
      destruction and if such insurance proceeds are insufficient Landlord shall
      provide all additional funds necessary to complete the Restoration of the
      Improvements.

     

    27.6
        Termination
      of Lease.
       If,
      within two years prior to the expiration of the term of this Lease, the
      Improvements shall be destroyed or damaged to such an extent that the
      Restoration thereof will cost an amount in excess of Five Hundred Thousand
      Dollars ($500,000.00) over and above the net proceeds of the insurance required
      to be and maintained by Tenant (to be collected by Landlord and Tenant as
      co-trustees), hereinafter referred to as the "Excess Funds," and Tenant shall
      be
      unable or unwilling to expend out of its own funds such Excess Funds for the
      purpose of Restoration of such damage or destruction for occupancy by Tenant,
      Tenant shall, with reasonable promptness, notify Landlord, in writing, of such
      fact, which notice shall be accompanied by a detailed statement of the nature
      and extent of such damage or destruction and detailed estimates of the total
      cost of Restoration. Within 30 days after the giving of such notice, Landlord
      shall notify Tenant either that (a) it will furnish, at its sole cost and
      expense, the Excess Funds which are necessarily required in connection with
      the
      Restoration (to be disbursed in conformity with the requirements of Section
      13.2
      and Article XIX hereof), or (b) it is unwilling to expend the Excess Funds
      for
      such purpose. Failure to give such notice within such 30-day period shall be
      deemed an election by Landlord not to make such expenditure. In the event that
      Landlord elects not to expend the Excess Funds, as aforesaid, then Tenant shall
      have the option, within 15 days after the expiration of said 30-day period,
      to
      terminate this Lease and surrender the Demised Premises to Landlord by a notice,
      in writing, addressed to Landlord, specifying such election accompanied by
      Tenant's payment of the balance of the Basic Rent and Additional Rent and other
      charges hereafter specified in this Section 13.6. Upon the giving of such notice
      and the payment of such amounts, the term of this Lease shall cease and come
      to
      an end on a day to be specified in Tenant's notice, which date shall not be
      more
      than 30 days after the date of delivery of such notice by Tenant to Landlord.
      Tenant shall accompany such notice with its payment of all Basic Rent and
      Additional Rent and other charges payable by Tenant hereunder, justly
      apportioned to the date of such termination. In such event Landlord shall be
      entitled to the proceeds of all insurance required to be carried by Tenant
      hereunder and Tenant shall execute all documents reasonably requested by
      Landlord to allow such proceeds to be paid to Landlord.

     

    
      
        
        

      

      
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    28.

    CONDEMNATION

     

    28.1
        Condemnation
      of Entire Demised Premises.
       If,
      during the term of this Lease, the entire Demised Premises shall be taken as
      the
      result of the exercise of the power of eminent domain (hereinafter referred
      to
      as the "Proceedings"), this Lease and all right, title and interest of Tenant
      hereunder shall cease and come to an end on the date of vesting of title
      pursuant to such Proceedings and Landlord shall be entitled to and shall receive
      the total award made in such Proceedings, Tenant hereby assigning any interest
      in such award, damages, consequential damages and compensation to Landlord
      and
      Tenant hereby waiving any right Tenant has now or may have under present or
      future law to receive any separate award of damages for its interest in the
      Demised Premises, or any portion thereof, or its interest in this
      Lease.
      Tenant
      may, however, make a separate claim not payable out of Landlord's award for
      Tenant's lost trade fixtures and its moving expenses, as permitted by
      law.

     

    In
      any
      taking of the Demised Premises, or any portion thereof, whether or not this
      Lease is terminated as in this Article provided, Tenant shall not be entitled
      to
      any portion of the award for the taking of the Demised Premises or damage to
      the
      Improvements, except as otherwise provided for in Section l4.3 with respect
      to
      the restoration of the Improvements, or for the estate or interest of Tenant
      therein, all such award, damages, consequential damages and compensation being
      hereby assigned to Landlord, and Tenant hereby waives any right it now has
      or
      may have under present or future law to receive any separate award of damages
      for its interest in the Demised Premises, or any portion thereof, or its
      interest in this Lease, except that Tenant shall have, nevertheless, the limited
      right to prove in the Proceedings and to receive any award which may be made
      for
      damages to or condemnation of Tenant's movable trade fixtures and equipment,
      and
      for Tenant's relocation costs in connection therewith.

     

    28.2
        Partial
      Condemnation/Termination of Lease.
       If,
      during the Initial Term of this Lease, or any extension or renewal thereof,
      less
      than the entire Demised Premises, but more than 15% of the floor area of the
      Building, or more than 25% of the land area of the Demised Premises, shall
      be
      taken in any such Proceedings, this Lease shall, upon vesting of title in the
      Proceedings, terminate as to the portion of the Demised Premises so taken,
      and
      Tenant may, at its option, terminate this Lease as to the remainder of the
      Demised Premises. Tenant shall not have the right to terminate this Lease
      pursuant to the preceding sentence unless (a) the business of Tenant conducted
      in the portion of the Demised Premises taken cannot reasonably be carried on
      with substantially the same utility and efficiency in the remainder of the
      Demised Premises (or any substitute space securable by Tenant pursuant to clause
      [b] hereof) and (b) Tenant cannot construct or secure substantially similar
      space to the space so taken, on the Demised Premises. Such termination as to
      the
      remainder of the Demised Premises shall be effected by notice in writing given
      not more than 60 days after the date of vesting of title in such Proceedings,
      and shall specify a date not more than 60 days after the giving of such notice
      as the date for such termination. Upon the date specified in such notice, the
      term of this Lease, and all right, title and interest of Tenant hereunder,
      shall
      cease and come to an end. If this Lease is terminated as in this Section 14.2
      provided, Landlord shall be entitled to and shall receive the total award made
      in such Proceedings, Tenant hereby assigning any interest in such award,
      damages, consequential damages and compensation to Landlord, and Tenant hereby
      waiving any right Tenant has now or may have under present or future law to
      receive any separate award of damages for its interest in the Demised Premises,
      or any portion thereof, or its interest in this Lease except as otherwise
      provided in Section 14.1. The right of Tenant to terminate this Lease, as in
      this Section 14.2 provided, shall be exercisable only upon condition that no
      Event of Default then exists. In the event that Tenant elects not to terminate
      this Lease as to the remainder of the Demised Premises, the rights and
      obligations of Landlord and Tenant shall be governed by the provisions of
      Section 14.3 hereof.

     

    
      
        
        

      

      
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    28.3
        Partial
      Condemnation/Continuation of Lease.
       If
      15%,
      or less, of the floor area of the Building, or 25%, or less, of the land area
      of
      the Demised Premises, shall be taken in such Proceedings, or if more than 15%
      of
      the floor area of the Building or more than 25% of the land area of the Demised
      Premises is taken (but less than the entire Demised Premises), and this Lease
      is
      not terminated as in Section 14.2 hereof provided, this Lease shall, upon
      vesting of title in the Proceedings, terminate as to the parts so taken, and
      Tenant shall have no claim or interest in the award, damages, consequential
      damages and compensation, or any part thereof except as otherwise provided
      in
      Section 14.1. Landlord shall be entitled to and shall receive the total award
      made in such Proceedings, Tenant hereby assigning any interest in such award,
      damages, consequential damages and compensation to Landlord, and Tenant hereby
      waiving any right Tenant has now or may have under present or future law to
      receive any separate award of damages for its interest in the Demised Premises,
      or any portion thereof, or its interest in this Lease except as otherwise
      provided in Section 14.1. The net amount of the award (after deduction of all
      costs and expenses, including attorneys' fees, incurred in connection with
      recovery of the award), shall be held by Landlord and Tenant as co-trustees
      and
      applied as hereinafter provided. Tenant, in such case, covenants and agrees,
      at
      Tenant's sole cost and expense (subject to reimbursement to the extent
      hereinafter provided), promptly to restore that portion of the Improvements
      on
      the Demised Premises not so taken to a complete architectural and mechanical
      unit for the use and occupancy of Tenant as in this Lease provided. In the
      event
      that the net amount of the award (after deduction of all costs and expenses,
      including attorney's fees, incurred in connection with recovery of the award)
      that may be received by Landlord and held by Landlord and Tenant as co-trustees
      in any such Proceedings for physical damage to the Improvements as a result
      of
      such taking is insufficient to pay all costs of such restoration work, Tenant
      shall deposit with Landlord and Tenant as co-trustees such additional sum as
      may
      be required upon the written request of Landlord. The provisions and conditions
      in Article XIX applicable to changes and alterations shall apply to Tenant's
      obligations to restore that portion of the Improvements to a complete
      architectural and mechanical unit. Landlord and Tenant as co-trustees agree
      in
      connection with such restoration work to apply so much of the net amount of
      any
      award (after deduction of all costs and expenses, including attorney's fees)
      that may be received by Landlord and held by Landlord and Tenant as co-trustees
      in any such Proceedings for physical damage to the Improvements as a result
      of
      such taking to the costs of such restoration work thereof and the said net
      award
      for physical damage to the Improvements as a result of such taking shall be
      paid
      out from time to time to Tenant, or on behalf of Tenant, as such restoration
      work progresses upon the written request of Tenant, which shall be accompanied
      by a certificate of the architect or the registered professional engineer in
      charge of the restoration work stating that (a) the sum requested is justly
      due
      to the contractors, subcontractors, materialmen, laborers, engineers, architects
      or other persons, firms or corporations furnishing or supplying work, labor,
      services or materials for such restoration work or as is justly required to
      reimburse Tenant for expenditures made by Tenant in connection with such
      restoration work, and when added to all sums previously paid out by Landlord
      and
      Tenant as co-trustees does not exceed the value of the restoration work
      performed to the date of such certificate; and (b) the net amount of any such
      award for physical damage to the Improvements as a result of such taking
      remaining in the hands of Landlord, together with the sums, if any, deposited
      by
      Tenant with Landlord and Tenant as co-trustees pursuant to the provisions
      hereof, will be sufficient upon the completion of such restoration work to
      pay
      for the same in full. If payment of the award for physical damage to the
      Improvements as a result of such taking, as aforesaid, shall not be received
      by
      Landlord in time to permit payments as the restoration work progresses (except
      in the event of an appeal of the award by Landlord), Tenant shall, nevertheless,
      perform and fully pay for such work without delay (except such delays as are
      referred to in Article XIX hereof), and payment of the amount to which Tenant
      may be entitled shall thereafter be made by Landlord out of the net award for
      physical damage to the Improvements as a result of such taking as and when
      payment of such award is received by Landlord. If Landlord appeals an award
      and
      payment of the award is delayed
      pending appeal Tenant shall, nevertheless, perform and fully pay for such work
      without delay (except such delays as are referred to in Article XIX hereof),
      and
      payment of the amount to which Tenant would have been entitled had Landlord
      not
      appealed the award (in an amount not to exceed the net award prior to such
      appeal) shall be made by Landlord to Tenant as restoration progresses pursuant
      to this Section 14.3. In which event Landlord shall be entitled to retain an
      amount equal to the sum disbursed to Tenant pursuant to the preceding sentence
      out of the net award as and when payment of such award is received by Landlord.
      Tenant shall also furnish Landlord and Tenant as co-trustees with each
      certificate hereinabove referred to, together with evidence reasonably
      satisfactory to Landlord that there are no unpaid bills in respect to any work,
      labor, services or materials performed, furnished or supplied, or claimed to
      have been performed, furnished or supplied, in connection with such restoration
      work, and that no liens have been filed against the Demised Premises, or any
      portion thereof. Landlord and Tenant as co-trustees shall not be required to
      pay
      out any funds when there are unpaid bills for work, labor, services or materials
      performed, furnished or supplied in connection with such restoration work,
      or
      where a lien for work, labor, services or materials performed, furnished or
      supplied has been placed against the Demised Premises, or any portion thereof.
      Upon completion of the restoration work and payment in full therefor by Tenant,
      and upon submission of proof reasonably satisfactory to Landlord that the
      restoration work has been paid for in full and that the Improvements have been
      restored or rebuilt to a complete architectural and mechanical unit for the
      use
      and occupancy of Tenant as provided in this Lease, Landlord and Tenant as
      co-trustees shall pay over to Tenant any portion of the cash deposit furnished
      by Tenant then remaining. To the extent that any award, damages or compensation
      which would otherwise be payable to Landlord and applied to the payment of
      the
      cost of restoration of the Improvements is paid to any mortgagee of Landlord
      and
      applied in payment or reduction of the sum or sums secured by any such mortgage
      or mortgages made by Landlord on the Demised Premises, Landlord shall make
      available for the use of Tenant, in connection with the payment of the cost
      of
      restoring the Improvements an amount equal to the amount of such net award
      payable to the mortgagee. From and after the date of delivery of possession
      to
      the condemning authority pursuant to the Proceedings, a just and proportionate
      part of the Basic Rent, according to the extent and nature of such taking,
      shall
      abate for the remainder of the term of this Lease.

     

    
      
        
        

      

      
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    28.4
        Continuance
      of Obligations.
       In
      the
      event of any termination of this Lease, or any part thereof, as a result of
      any
      such Proceedings, Tenant shall pay to Landlord all Basic Rent and all Additional
      Rent and other charges payable hereunder with respect to that portion of the
      Demised Premises so taken in such Proceedings with respect to which this Lease
      shall have terminated justly apportioned to the date of such termination. From
      and after the date of vesting of title in such Proceedings, Tenant shall
      continue to pay the Basic Rent and Additional Rent and other charges payable
      hereunder, as in this Lease provided, to be paid by Tenant, subject to an
      abatement of a just and proportionate part of the Basic Rent according to the
      extent and nature of such taking as provided for in Sections 14.3 and 14.6
      hereof in respect to the Demised Premises remaining after such
      taking.

     

    28.5
        Adjustment
      of Rent.
       In
      the
      event of a partial taking of the Demised Premises under Section 14.3 hereof,
      or
      a partial taking of the Demised Premises under Section 14.2 hereof, followed
      by
      Tenant's election not to terminate this Lease, the fixed Basic Rent payable
      hereunder during the period from and after the date of vesting of title in
      such
      Proceedings to the termination of this Lease shall be reduced to a sum equal
      to
      the product of the Basic
      Rent provided for herein multiplied by a fraction, the numerator of which is
      the
      value of the Demised Premises after such taking and after the same has been
      restored to a complete architectural unit, and the denominator of which is
      the
      value of the Demised Premises prior to such taking.

     

    29.

    ASSIGNMENT,
      SUBLETTING, ETC.

     

    29.1
        Restriction
      on Transfer.
       Tenant
      shall not sublet the Demised Premises, or any portion thereof, nor assign,
      mortgage, pledge, transfer or otherwise encumber or dispose of this Lease,
      or
      any interest therein, or in any manner assign, mortgage, pledge, transfer or
      otherwise encumber or dispose of its interest or estate in the Demised Premises,
      or any portion thereof, without obtaining Landlord's prior written consent
      in
      each and every instance, which consent shall not be unreasonably withheld or
      delayed, provided the following conditions are complied with:

     

    29.1.1  Any
      assignment of this Lease shall transfer to the assignee all of Tenant's right,
      title and interest in this Lease and all of Tenant's estate or interest in
      the
      Demised Premises.

     

    29.1.2  At
      the time of any assignment or subletting, and at the time when Tenant requests
      Landlord's written consent thereto, this Lease must be in full force and effect,
      without an Event of Default.

     

    
      
        
        

      

      
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    29.1.3  Any
      such assignee shall assume, by written, recordable instrument, in form and
      content satisfactory to Landlord, the due performance of all of Tenant's
      obligations under this Lease, including any accrued obligations at the time
      of
      the effective date of the assignment, and such assumption agreement shall state
      that the same is made by the assignee for the express benefit of Landlord as
      a
      third party beneficiary thereof. A copy of the assignment and assumption
      agreement, both in form and content satisfactory to Landlord, fully executed and
      acknowledged by assignee, shall be sent to Landlord ten days prior to the
      effective date of such assignment.

     

    29.1.4  In
      the case of a subletting, a copy of any sublease fully executed and acknowledged
      by Tenant and the sublessee shall be mailed to Landlord ten days prior to the
      effective date of such subletting, which sublease shall be in form and content
      acceptable to Landlord.

     

    29.1.5  Such
      assignment or subletting shall be subject to all the provisions, terms,
      covenants and conditions of this Lease, and Tenant-assignor (and the guarantor
      or guarantors of this Lease, if any) and the assignee or assignees shall
      continue to be and remain liable under this Lease, as it may be amended from
      time to time without notice to any assignor of Tenant's interest or to any
      guarantor.

     

    29.1.6  Each
      sublease permitted under this Section 15.1 shall contain provisions to the
      effect that (i) such sublease is only for actual use and occupancy by the
      sublessee; (ii) such sublease is subject and subordinate to all of the terms,
      covenants and conditions of this Lease and to all of the rights of Landlord
      thereunder; and (iii) in the event this Lease shall terminate before the
      expiration of such sublease, the sublessee thereunder will, at Landlord's
      option, attorn to Landlord and waive any rights the sublessee may have to
      terminate the sublease or to surrender possession thereunder, as a result of
      the
      termination of this Lease.

     

    29.1.7  Tenant
      agrees to pay on behalf of Landlord any and all costs of Landlord, including
      reasonable attorney's fees paid or payable to outside counsel, occasioned by
      such assignment or subletting not to exceed $1,000.00. Landlord agrees to
      respond to Tenant's request for consent under this Section 15.1 within 15 days
      after Landlord's receipt of Tenant's written request.

     

    29.2
        Restriction
      From Further Assignment.
       Notwithstanding
      anything contained in this Lease to the contrary and notwithstanding any consent
      by Landlord to any sublease of the Demised Premises, or any portion thereof,
      or
      to any assignment of this Lease or of Tenant's interest or estate in the Demised
      Premises, no sublessee shall assign its sublease nor further sublease the
      Demised Premises, or any portion thereof, and no assignee shall further assign
      its interest in this Lease or its interest or estate in the Demised Premises,
      or
      any portion thereof, nor sublease the Demised Premises, or any portion thereof,
      without Landlord's prior written consent in each and every instance which
      consent shall not be unreasonably withheld or unduly delayed. No such assignment
      or subleasing shall relieve Tenant from any of Tenant's obligations in this
      Lease contained.

     

    29.3
        Tenant's
      Failure to Comply.
       Tenant's failure to comply with all of the foregoing provisions and
      conditions of this Article XV shall (whether or not Landlord's consent is
      required under this Article), at Landlord's option, render any purported
      assignment or subletting null and void and of no force and effect.

     

    29.4
        Sharing
      of Excess Rent.
       If
      Landlord consents to Tenant assigning its interest under this Lease or
      subletting all or any portion of the Demised Premises, Tenant shall pay to
      Landlord (in addition to Rent and all other amounts payable by Tenant under
      this
      Lease) 50 percent of the rents and other considerations payable by such assignee
      or subtenant in excess of the Rent otherwise payable by Tenant from time to
      time
      under this Lease after deducting Tenant's reasonable out-of-pocket reletting
      costs. For the purposes of this computation,
      the additional amount payable by Tenant shall be determined by application
      of
      the rental rate per square foot for the Demised Premises or any portion thereof
      sublet. Said additional amount shall be paid to Landlord within 30 days of
      Tenant's receipt of such Rent or other considerations from the assignee or
      subtenant.

     

    29.5
        Assignment
      to Affiliates.
       So
      long as there is no Event of Default of the Lease, Tenant shall have the right
      to assign this Lease to any corporation or other entity which is controlled
      by,
      under the control of, or under common control with Tenant, or any corporation
      into which Tenant may be merged or consolidated, or which purchases all or
      substantially all of the assets of Tenant (each an "Affiliate of Tenant");
      provided, however, (i) Tenant shall not be released from its obligations
      under this Lease, (ii) Landlord shall be given at least 15 days prior
      written notice of the assignment, (iii) Landlord shall be given a copy of
      the document effecting the assignment at least 15 days prior to the date on
      which the assignment shall occur, and (iv) from and after the date of the
      assignment, Tenant shall be jointly and severally liable with the Affiliate
      of
      Tenant with respect to all obligations of Tenant under this Lease.

     

    
      
        
        

      

      
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    29.6
       Permitted
      Subleases.
      So long
      as there is no Event of Default of this Lease, Tenant shall have the right
      to
      enter into up to three subleases so long as Tenant and each such sublease comply
      with the obligations of Sections 15.1(d), 15.1(e), and 15.1(f) and so long
      as Tenant complies strictly with the following conditions: (i) each
      subtenant must be one of Tenant's suppliers, (ii) the term of each sublease
      shall not exceed one year and must expire no later than the expiration date
      of
      the Lease or on any earlier termination date of the Lease, (iii) the total
      amount of square footage subject to all subleases, in the aggregate, shall
      not
      exceed 30,000 square feet of floor area, and (iv) the permitted use in each
      sublease shall be for storage only.

     

    30. 
      

    SUBORDINATION,
      NONDISTURBANCE,

    NOTICE
      TO MORTGAGEE AND ATTORNMENT

     

    30.1
       Subordination
      by Tenant.
      This
      Lease and all rights of Tenant therein, and all interest or estate of Tenant
      in
      the Demised Premises, or any portion thereof, shall be subject and subordinate
      to the lien of any mortgage, deed of trust, security instrument or other
      document of like nature ("Mortgage"), which at any time may be placed upon
      the
      Demised Premises, or any portion thereof, by Landlord, and to any replacements,
      renewals, amendments, modifications, extensions or refinancing thereof, and
      to
      each and every advance made under any Mortgage. Such subordination shall be
      conditioned on the holder of the Mortgage agreeing not to disturb Tenant's
      rights under the Lease so long as no Event of Default exists. Tenant agrees
      at
      any time hereafter, and from time to time on demand of Landlord, to execute
      and
      deliver to Landlord any instruments, releases or other documents that may be
      reasonably required for the purpose of subjecting and subordinating this Lease
      to the lien of any such Mortgage so long as such instrument, release or other
      document provides that the holder of the Mortgage agrees not to disturb Tenant's
      rights under this Lease so long as no Event of Default exists. It is agreed,
      nevertheless, that so long as no Event of Default exists, that such
      subordination agreement or other instrument, release or document shall not
      interfere with, hinder or molest Tenant's right to quiet enjoyment under this
      Lease, nor the right of Tenant to continue to occupy the Demised Premises,
      and
      all portions thereof, and to conduct its business thereon in accordance with
      the
      covenants, conditions, provisions, terms and agreements of this Lease; provided,
      however, that the holder of the Mortgage and its successors shall not be bound
      by the provisions of Section 21.3. The lien of any such Mortgage shall not
      cover
      Tenant's trade fixtures or other personal property located in or on the Demised
      Premises.
      If there
      is a Mortgage in effect as of the execution date of this Lease, Landlord agrees
      to obtain from the holder of the Mortgage a subordination and nondisturbance
      agreement containing the terms set forth in this Section 16.1.

     

    30.2
       Landlord's
      Default.
      In
      the
      event of any act or omission of Landlord constituting a default by Landlord,
      Tenant shall not exercise any remedy until Tenant has given Landlord prior
      written notice of such act or omission and until a 30-day period of time to
      allow Landlord or the mortgagee to remedy such act or omission shall have
      elapsed following the giving of such notice; provided, however, if such act
      or
      omission cannot, with due diligence and in good faith, be remedied within such
      30-day period, the Landlord and/or mortgagee shall be allowed such further
      period of time as may be reasonably necessary provided that it shall have
      commenced remedying the same with due diligence and in good faith within said
      30-day period. In the event Landlord's act or omission which constitutes a
      Landlord's default hereunder results in an immediate threat of bodily harm
      to
      Tenant's employees, agents or invitees, or damage to Tenant's property (a
      "Special Landlord Default"), Tenant may proceed to cure the default without
      prior notice to Landlord provided, however, in that event Tenant shall give
      written notice to Landlord as soon as possible after commencement of such cure.
      Nothing herein contained shall be construed or interpreted as requiring any
      mortgagee to remedy such act or omission.
      If
      Landlord fails to cure a Special Landlord Default under this Section 16.2 after
      two written notices of such Special Landlord Default are given to Landlord
      by
      Tenant as provided in this Section 16.2 and if Landlord does not contest the
      fact that Landlord is in default of the Lease, then Landlord shall reimburse
      Tenant the reasonable costs of Tenant's cure of the Special Landlord Default
      within 30 days after Tenant's invoice for the reasonable costs of such cure,
      setting forth in reasonable detail the work performed.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    30.3
       Attornment.
      If
      any
      mortgagee shall succeed to the rights of Landlord under this Lease or to
      ownership of the Demised Premises, whether through possession or foreclosure
      or
      the delivery of a deed to the Demised Premises, then, upon the written request
      of such mortgagee so succeeding to Landlord's rights hereunder, Tenant shall
      attorn to and recognize
      such mortgagee as Tenant's landlord under this Lease, and shall promptly execute
      and deliver any instrument that such mortgagee may reasonably request to
      evidence such attornment (whether before or after making of the mortgage).
      In
      the event of any other transfer of Landlord's interest hereunder, upon the
      written request of the transferee and Landlord, Tenant shall attorn to and
      recognize such transferee as Tenant's landlord under this Lease and shall
      promptly execute and deliver any instrument that such transferee and Landlord
      may reasonably request to evidence such attornment if such instrument also
      provides that such transferee agrees to recognize Tenant's rights under the
      Lease except for those in Section 21.3.

     

    31. 

    SIGNS

     

    31.1
       Tenant's
      Signs.
      Tenant
      may erect signs on the exterior or interior of the Building or on the landscaped
      area adjacent thereto, provided that such sign or signs (a) do not cause any
      structural damage or other damage to the Building; (b) do not violate applicable
      Laws; and (c) do not violate any existing restrictions affecting the Demised
      Premises.
      Tenant
      shall first obtain Landlord's prior written consent as to any sign, which
      consent shall not be unreasonably withheld or delayed.

     

    32.

    REPORTS
      BY TENANT

     

    32.1
       Annual
      Statements.
      Upon
      request by Landlord at any time after 135 days after the end of the applicable
      fiscal year of Tenant, Tenant shall deliver to Landlord (within 15 days after
      receipt of written request) a copy of its audited financial statement, including
      the certification of its auditor, and similar financial statement of any
      guarantor of Tenant's obligations under this Lease.

     

    33.

    CHANGES
      AND ALTERATIONS

     

    33.1
       Tenant's
      Changes and Alterations.
      Tenant
      shall have the right at any time, and from time to time during the term of
      this
      Lease, to make such changes and alterations, structural or otherwise, to the
      Building, improvements and fixtures hereafter erected on the Demised Premises
      as
      Tenant shall deem necessary or desirable in connection with the requirements
      of
      its business, which such changes and alterations (other than changes or
      alterations of Tenant's movable trade fixtures and equipment) shall be made
      in
      all cases subject to the following conditions, which Tenant covenants to observe
      and perform:

     

    33.1.1 Permits.
      No
      change or alteration shall be undertaken until Tenant shall have procured and
      paid for, so far as the same may be required from time to time, all municipal,
      state and federal permits and authorizations of the various governmental bodies
      and departments having jurisdiction thereof, and Landlord agrees to join in
      the
      application for such permits or authorizations whenever such action is
      necessary, all at Tenant's sole cost and expense, provided such applications
      do
      not cause Landlord to become liable for any cost, fees or
      expenses.

     

    33.1.2 Compliance
      with Plans and Specifications. Before
      commencement of any change, alteration, restoration or construction (hereinafter
      sometimes referred to as "Work") involving in the aggregate an estimated cost
      of
      more than Ten Thousand and no/100 Dollars ($10,000.00) or which in Landlord's
      reasonable judgment would materially alter the mechanical, structural, or
      electrical systems of the Improvements, Tenant shall (i) furnish Landlord with
      detailed plans and specifications of the proposed change or alteration; (ii)
      obtain Landlord's prior written consent, which consent shall not be unreasonably
      withheld (but such consent may be withheld if the change or alteration would,
      in
      the reasonable judgment of Landlord, impair the value or usefulness of the
      Land
      or Improvements, or any substantial part thereof to Landlord); (iii) obtain
      Landlord's prior written approval of a licensed architect or licensed
      professional engineer selected and paid for by Tenant, who shall supervise
      any
      such work (hereinafter referred to as "Alterations Architect or Engineer");
      (iv)
      obtain Landlord's prior written approval of detailed plans and specifications
      prepared and approved in writing by said Alterations Architect or Engineer,
      and
      of each amendment and change thereto; and (v) furnish to Landlord a surety
      company performance bond issued by a surety company licensed to do business
      in
      the state in which the Demised Premises are located and reasonably acceptable
      to
      Landlord in an amount equal to the estimated cost of such work guaranteeing
      the
      completion thereof within a reasonable time thereafter (1) free and clear of
      all
      mechanic's liens or other liens, encumbrances, security interests and charges,
      and (2) in accordance with the plans and specifications approved by Landlord.
      Notwithstanding the foregoing, Tenant may make alterations which do not affect
      the Building's structure or the Building's systems or equipment, provided the
      expenditures therefor do not exceed $50,000.00, without Landlord's prior written
      consent so long as Tenant gives Landlord a written description of the proposed
      alterations at least 15 days prior to commencement of the alterations so that
      Landlord may post a notice of nonresponsibility.

     

    
      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

    

    

    33.1.3 Value
      Maintained. Any
      change or alteration shall, when completed, be of such character as not to
      materially reduce the value of the Demised Premises or the Building to which
      such change or alteration is made below its value to Landlord immediately before
      such change or alteration, nor shall such change or alteration reduce the area
      or cubic content of the Building, nor change the character of the Demised
      Premises or the Building as to use without Landlord's express written
      consent.

     

    33.1.4 Compliance
      with Laws. All
      Work done in connection with any change or alteration shall be done promptly
      and
      in a good and workmanlike manner and in compliance with all building and zoning
      laws of the place in which the Demised Premises are situated, and with all
      laws,
      ordinances, orders, rules, regulations and requirements of all federal, state
      and municipal governments and appropriate departments, commissions, boards
      and
      officers thereof, and in accordance with the orders, rules and regulations
      of
      the Board of Fire Underwriters where the Demised Premises are located, or any
      other body exercising similar functions. The cost of any such change or
      alteration shall be paid in cash so that the Demised Premises and all portions
      thereof shall at all times be free of liens for labor and materials supplied
      to
      the Demised Premises, or any portion thereof. The Work of any change or
      alteration shall be prosecuted with reasonable dispatch, delays due to strikes,
      lockouts, acts of God, inability to obtain labor or materials, governmental
      restrictions or similar causes beyond the control of Tenant excepted. Tenant
      shall obtain and maintain, at its sole cost and expense, during the performance
      of the Work, workers' compensation insurance covering all persons employed
      in
      connection with the Work and with respect to which death or injury claims could
      be asserted against Landlord or Tenant or against the Demised Premises or any
      interest therein, together with comprehensive general liability insurance for
      the mutual benefit of Landlord and Tenant with limits of not less than One
      Million Dollars ($l,000,000.00) in the event of injury to one person, Three
      Million Dollars ($3,000,000.00) in respect to any one accident or occurrence,
      and Five Hundred Thousand Dollars ($500,000.00) for property damage, and the
      fire insurance with "extended coverage" endorsement required by Section 6.1
      hereof shall be supplemented with "builder's risk" insurance on a completed
      value form or other comparable coverage on the Work. All such insurance shall
      be
      in a company or companies authorized to do business in the state in which the
      Demised Premises are located and reasonably satisfactory to Landlord, and all
      such policies of insurance or certificates of insurance shall be delivered
      to
      Landlord endorsed "Premium Paid" by the company or agency issuing the same,
      or
      with other evidence of payment of the premium satisfactory to
      Landlord.

     

    33.1.5 Property
      of Landlord.
      All
      improvements and alterations (other than Tenant's trade fixtures and equipment,
      no matter how affixed to the Building, including the components of the clean
      room) made or installed by Tenant shall immediately, upon completion or
      installation thereof, become the property of Landlord without payment therefor
      by Landlord, and shall be surrendered to Landlord on the expiration of the
      term
      of this Lease.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    33.1.6 Location
      of Improvements. No
      change, alteration, restoration or new construction shall be in or connect
      the
      Improvements with any property, building or other improvement located outside
      the boundaries of the parcel of land described in Exhibit "A" attached, nor
      shall the same obstruct or interfere with any existing
      easement.

     

    33.1.7 Removal
      of Improvements. As
      a
      condition to granting approval for any changes or alterations, Landlord may
      require Tenant to agree that Landlord, by written notice to Tenant, given at
      or
      prior to the time of granting such approval, may require Tenant to remove any
      improvements, additions or installations installed by Tenant in the Demised
      Premises at Tenant's sole cost and expense, and repair and restore any damage
      caused by the installation and removal of such improvements, additions, or
      installations; provided, however, the only improvements, additions or
      installations which Tenant shall remove shall be those specified in such notice.
      All improvements, additions or installations installed by Tenant which did
      not
      require Landlord's prior approval shall be removed by Tenant as provided for
      in
      this Section 19.1(g), unless Tenant has obtained a written waiver of such
      condition from Landlord.

     

    33.1.8 Written
      Notification Required.
      Tenant shall notify Landlord in writing 30 days prior to commencing any
      alterations, additions or improvements to the Demised Premises which have been
      approved by Landlord so that Landlord shall have the right to record and post
      notices of non-responsibility on the Demised Premises.

     

    34.

    MISCELLANEOUS
      PROVISIONS

     

    34.1
       Entry
      by Landlord.
      Tenant
      agrees to permit Landlord and authorized representatives of Landlord to enter
      upon the Demised Premises at all reasonable times during ordinary business
      hours
      after reasonable prior notice (except in the case of emergency) for the purpose
      of inspecting the same and making any necessary repairs to comply with any
      laws,
      ordinances, rules, regulations or requirements of any public body, or the Board
      of Fire Underwriters, or any similar body. Tenant shall have the right to
      accompany Landlord in connection with any such entry. Landlord must follow
      Tenant's procedure for entering into Tenant's clean room. Nothing herein
      contained shall imply any duty upon the part of Landlord to do any such work
      which, under any provision of this Lease, Tenant may be required to perform
      and
      the performance thereof by Landlord shall not constitute a waiver of Tenant's
      default in failing to perform the same. Landlord may, during the progress of
      any
      work, keep and store upon the Demised Premises all necessary materials, tools
      and equipment. Unless caused by Landlord's negligence or willful misconduct,
      Landlord shall not in any event be liable for inconvenience, annoyance,
      disturbance, loss
      of
      business or other damage to Tenant by reason of making repairs or the
      performance of any work in or about the Demised Premises or on account of
      bringing material, supplies and equipment into, upon or through the Demised
      Premises during the course thereof, and the obligations of Tenant under this
      Lease shall not be thereby affected in any manner whatsoever, provided,
      however,
      that
      Landlord agrees to use commercially reasonable efforts not to interfere with
      Tenant's business operations.

     

    34.2
       Exhibition
      of Demised Premises.
      Landlord
      is hereby given the right during usual business hours at any time during the
      term of this Lease after giving Tenant reasonable prior notice to enter upon
      the
      Demised Premises and to exhibit the same for the purpose of mortgaging or
      selling the same. During the last six months of the term unless Tenant exercises
      an option to extend described in Section 21.1, Landlord shall be entitled to
      display on the Demised Premises, in such manner as to not unreasonably interfere
      with Tenant's business, signs indicating that the Demised Premises are for
      rent
      or sale and suitably identifying Landlord or its agent. Tenant agrees that
      such
      signs may remain unmolested upon the Demised Premises and that Landlord may
      exhibit said premises to prospective tenants during said period.

     

    34.3
       Indemnification
      by Tenant.
      To
      the
      fullest extent allowed by law, Tenant shall at all times indemnify, defend
      and
      hold Landlord and Landlord's shareholders, employees and managing agent harmless
      against and from any and all claims, costs, liabilities, actions and damages
      (including, without limitation, reasonable attorneys' fees and costs) by or
      on
      behalf of any person or persons, firm or firms, corporation or corporations,
      arising from the conduct or management, or from any work or things whatsoever
      done in or about the Demised Premises, and will further indemnify, defend and
      hold Landlord harmless against and from any and all claims arising during the
      term of this Lease, from any condition of the Improvements or the Demised
      Premises, or arising from any breach or default on the part of Tenant in the
      performance of any covenant or agreement on the part of Tenant to be performed,
      pursuant to the terms of this Lease, or arising from any act or negligence
      of
      Tenant, its agents, servants, employees or licensees, or arising from any
      accident, injury or damage whatsoever caused to any person, firm or corporation
      occurring during the term of this Lease, in or about the Demised Premises,
      in
      each case unless caused by the negligence or willful misconduct of Landlord
      or
      its employees, agents, or contractors, and from and against all costs,
      attorney's fees, expenses and liabilities incurred in or about any such claim
      or
      action or proceeding brought thereon; and in case any action or proceeding
      be
      brought against Landlord by reason of any such claim, Tenant, upon notice from
      Landlord, covenants to defend such action or proceeding by counsel reasonably
      satisfactory to Landlord. Tenant's obligations under this Section 20.3 shall
      be
      insured by contractual liability endorsement on Tenant's policies of insurance
      required under the provisions of Section 6.2 hereof.
      Landlord
      agrees to indemnify, defend, and hold Tenant and Tenant's shareholders and
      employees harmless against any and all claims, costs, liabilities, actions
      and
      damages (including reasonable attorneys' fees and costs) caused by Landlord's
      breach of this Lease; provided,
      however,
      that
      Landlord shall never be liable for consequential damages such as lost profits,
      punitive damages, or any loss or damage to Tenant's property, the risk of loss
      of which shall be borne by Tenant.

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    34.4
       Notices.
      All
      notices, demands and requests which may be or are required to be given, demanded
      or requested by either party to the other shall be in writing. All notices,
      demands and requests shall be sent by United States registered or certified
      mail, postage prepaid or by an independent overnight courier service, addressed
      as follows:

     

    
      	
              To
                Landlord:

            	
              Opus
                Northwest, L.L.C.

            
	 	
              915 –
                118th Avenue SE

            
	 	
              Bellevue,
                WA 98005

            
	 	
              Attn:
                Thomas B. Parsons

            
	 	
              Telephone:       (425)
                453-4100

            
	 	
              Facsimile:         (425)
                453-1712

            
	 	 
	
              With
                a copy to:

            	
              Opus,
                L.L.C.

            
	 	
              10350
                Bren Road West

            
	 	
              Minnetonka,
                MN 55343

            
	 	
              Attn:
                Legal Department

            
	 	
              Telephone:
                (612) 656-4444

            
	 	
              Facsimile:  
                (612) 656-4755

            
	 	 
	
              With
                a copy to:

            	
              Property
                Manager at the address described in 
Section 3.1 of the
                Lease

            
	 	 
	
              With
                a copy to:

            	
              Ball
                Janik LLP

            
	 	
              101
                SW Main Street

            
	 	
              Suite
                1100

            
	 	
              Portland,
                OR 97204

            
	 	
              Attn:
                Barbara W. Radler

            
	 	
              Phone:
                (503) 228-2525

            
	 	
              Fax:
                (503) 295-1058

            
	 	 
	
              To
                Tenant:

            	
              Merix
                Corporation

            
	 	
              1521
                Poplar Lane

            
	 	
              Forest
                Grove, OR 97116

            
	 	
              Attn:
                Terri Timberman, Chief Administrative Officer

            
	 	
              Phone:
                (503) 359-2646

            
	 	
              Fax:
                (503) 357-1504

            

    

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    
      	
              With
                a copy to:

            	
              Merix
                Corporation

            
	 	
              1521
                Poplar Lane

            
	 	
              Forest
                Grove, OR 97116

            
	 	
              Attn:
                Janie S. Brown, VP & CFO

            
	 	
              Phone:
                (503) 359-2653

            
	 	 
	
              With
                a copy to:

            	
              Perkins
                Coie LLP

            
	 	
              1211
                SW 5th Avenue, Suite 1500

            
	 	
              Portland,
                OR 97204

            
	 	
              Attn:
                Christopher Matthews

            
	 	
              Phone:
                (503) 727-2000

            
	 	
              Fax:
                (503) 727-2222

            

    

     

    or
      at
      such other place as Landlord may from time to time designate by written notice
      to Tenant. Notices, demands and requests which shall be served upon Landlord
      by
      Tenant, or upon Tenant by Landlord, in the manner aforesaid, shall be deemed
      to
      be sufficiently served or given for all purposes hereunder at the time such
      notice, demand or request shall be mailed or delivered to a
      courier.

     

    34.5
       Quiet
      Enjoyment.
      Landlord
      covenants and agrees that Tenant, upon paying the Basic Rent and Additional
      Rent, and upon observing and keeping the covenants, agreements and conditions
      of
      this Lease on its part to be kept, observed and performed, shall lawfully and
      quietly hold, occupy and enjoy the Demised Premises (subject to the provisions
      of this Lease) during the term of this Lease without hindrance or molestation
      by
      Landlord or by any person or persons claiming under Landlord.

     

    34.6
       Landlord's
      Continuing Obligations.
      The
      term
      "Landlord," as used in this Lease so far as covenants or obligations on the
      part
      of Landlord are concerned, shall be limited to mean and include only the owner
      or owners at the time in question of the fee of the Demised Premises, and in
      the
      event of any transfer or transfers or conveyance in which the transferee assumes
      the Landlord's obligations under this Lease accruing after the date of such
      transfer, the then grantor shall be automatically freed and relieved from and
      after the date of such transfer or conveyance of all liability as respects
      the
      performance of any covenants or obligations on the part of Landlord contained
      in
      this Lease thereafter to be performed, provided that any funds in the hands
      of
      such landlord or the then grantor at the time of such transfer, in which Tenant
      has an interest, shall be turned over to the grantee, and any amount then due
      and payable to Tenant by Landlord or the then grantor under any provision of
      this Lease shall be paid to Tenant. The covenants and obligations contained
      in
      this Lease on the part of Landlord shall, subject to the aforesaid, be binding
      on Landlord's successors and assigns, during and in respect of their respective
      successive periods of ownership. Nothing herein contained shall be construed
      as
      relieving Landlord of its obligations under Article II or Section 21.2 of this
      Lease, or releasing Landlord from any obligation to complete the cure of any
      breach by Landlord during the period of its ownership of the Demised
      Premises.

     

    34.7
       Estoppel.
      Landlord
      and Tenant shall, each without charge at any time and from time to time, within
      ten days after written request by the other party, certify by written
      instrument, duly executed, acknowledged and delivered to any mortgagee, assignee
      of a mortgagee, proposed mortgagee, or to any purchaser or proposed purchaser,
      or to any other person dealing with Landlord, Tenant or the Demised
      Premises:

     

    34.7.1 That
      this Lease (and all guaranties, if any) is unmodified and in full force and
      effect (or, if there have been modifications, that the same is in full force
      and
      effect, as modified, and stating the modifications);

     

    34.7.2 The
      dates to which the Basic Rent or Additional Rent have been paid in
      advance;

     

    34.7.3 Whether
      or not there are then existing any breaches or defaults by such party or the
      other party known by such party under any of the covenants, conditions,
      provisions, terms or agreements of this Lease, and specifying such breach or
      default, if any, or any setoffs or defenses against the enforcement of any
      covenant, condition, provision, term or agreement of this Lease (or of any
      guaranties) upon the part of Landlord or Tenant (or any guarantor), as the
      case
      may be, to be performed or complied with (and, if so, specifying the same and
      the steps being taken to remedy the same); and

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    34.7.4 Such
      other factual statements or certificates as either party may reasonably request.
      

     

    It
      is the
      intention of the parties hereto that any statement delivered pursuant to this
      Section 20.7 may be relied upon by any of such parties dealing with Landlord,
      Tenant or the Demised Premises. If Tenant does not deliver such statement to
      Landlord within such 10 day period, Landlord, and any prospective purchaser
      or
      encumbrancer of the Demised Premises or the Building, may conclusively presume
      and rely upon the following facts: (i) that the terms and provisions of this
      Lease have not been changed except as otherwise represented by Landlord; (ii)
      that this Lease has not been cancelled or terminated and is in full force and
      effect, except as otherwise represented by Landlord; that the current amounts
      of
      the Basic Rent and Security Deposit are as represented by Landlord; that any
      changes made against the Security Deposit are uncontested and valid; that there
      have been no subleases or assignments of the Lease; (iii) that not more than
      one
      month's Basic Rent or other charges have been paid in advance; and (iv) that
      Landlord is not in default under the Lease. In such event, Tenant shall be
      estopped from denying the truth of such facts.

     

    34.8
       Authority.
      The
      person signing this Lease on behalf of Tenant represents and warrants to
      Landlord that he or she has full power and authority to bind Tenant to the
      terms
      of this Lease. Tenant hereby represents and warrants to Landlord that
      (i) Tenant is a corporation duly organized, validly existing, and in good
      standing under the laws of the State of Oregon, (ii) this Lease has been
      duly authorized, executed, and delivered by Tenant, and (iii) this Lease is
      binding in all respects on Tenant.

     

    34.9
       Memorandum
      of Lease.
      Upon
      not
      less than ten days prior written request by either party, the parties hereto
      agree to execute and deliver to each other a Memorandum Lease, in recordable
      form, setting forth the following:

     

    34.9.1 The
      date of this Lease;

     

    34.9.2 The
      parties to this Lease;

     

    34.9.3 The
      term of this Lease and options to extend;

     

    34.9.4 The
      legal description of the Demised Premises;

     

    34.9.5 The
      right of first opportunity described in Section 21.3; and

     

    34.9.6 Such
      other matters reasonably requested by either party to be stated
      therein.

     

    34.10
       Severability.
      If
      any
      covenant, condition, provision, term or agreement of this Lease shall, to any
      extent, be held invalid or unenforceable, the remaining covenants, conditions,
      provisions, terms and agreements of this Lease shall not be affected thereby,
      but each covenant, condition, provision, term or agreement of this Lease shall
      be valid and in force to the fullest extent permitted by law. This Lease shall
      be construed and be enforceable in accordance with the laws of the state in
      which the Demised Premises are located.

     

    34.11
       Successors
      and Assigns.
      The
      covenants and agreements herein contained shall bind and inure to the benefit
      of
      Landlord, its successors and assigns, and Tenant and its permitted successors
      and assigns.

     

    34.12
       Captions.
      The
      caption of each article of this Lease is for convenience and reference only,
      and
      in no way defines, limits or describes the scope or intent of such article
      or of
      this Lease.

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    34.13
       Relationship
      of Parties.
      This
      Lease does not create the relationship of principal and agent, or of
      partnership, joint venture, or of any association or relationship between
      Landlord and Tenant, the sole relationship between Landlord and Tenant being
      that of landlord and tenant.

     

    34.14
       Entire
      Agreement.
      All
      preliminary and contemporaneous negotiations are merged into and incorporated
      in
      this Lease. This Lease together with the Exhibits contains the
      entire agreement between the parties and shall not be modified or amended in
      any
      manner except by an instrument in writing executed by the parties
      hereto.

     

    34.15
       No
      Merger.
      There
      shall be no merger of this Lease or the leasehold estate created by this Lease
      with any other estate or interest in the Demised Premises by reason of the
      fact
      that the same person, firm, corporation or other entity may acquire, hold or
      own
      directly or indirectly, (a) this Lease or the leasehold interest created by
      this
      Lease or any interest therein, and (b) any such other estate or interest in
      the
      Demised Premises, or any portion thereof. No such merger shall occur unless
      and
      until all persons, firms, corporations or other entities having an interest
      (including a security interest) in (1) this Lease or the leasehold estate
      created thereby, and (2) any such other estate or interest in the Demised
      Premises, or any portion thereof, shall join in a written instrument expressly
      effecting such merger and shall duly record the same.

     

    34.16
       Possession
      and Use.
      Tenant
      acknowledges that the Demised Premises are the property of Landlord and that
      Tenant has only the right to possession and use thereof upon the covenants,
      conditions, provisions, terms and agreements set forth in this
      Lease.

     

    34.17
       No
      Surrender During Lease Term.
      No
      surrender to Landlord of this Lease or of the Demised Premises, or any portion
      thereof, or any interest therein, prior to the expiration of the term of this
      Lease shall be valid or effective unless agreed to and accepted in writing
      by
      Landlord and consented to in writing by all contract vendors and mortgagees,
      and
      no act or omission by Landlord or any representative or agent of Landlord,
      other
      than such a written acceptance by Landlord consented to by all contract vendors
      and the mortgagees, as aforesaid, shall constitute an acceptance of any such
      surrender.

     

    34.18
       Surrender
      of Demised Premises.
      At
      the
      expiration of the term of this Lease, Tenant shall surrender the Demised
      Premises in the same condition as the same were in upon delivery of possession
      thereto at the Commencement Date of the term of this Lease, reasonable wear
      and
      tear excepted, but restored to Shell Condition (as defined below), and subject
      to the provisions of Article XIII, and shall surrender all keys to the
      Demised Premises to Landlord at the place then fixed for the payment of Basic
      Rent and shall inform Landlord of all combinations on locks, safes and vaults,
      if any. "Shell Condition" shall mean a condition for use by a typical
      distribution use tenant, as reasonably determined by Landlord. For example,
      Tenant shall make all sloping floors level, as designated by Landlord, and
      Tenant shall remove its special piping and equipment. Tenant shall, at the
      expiration of the term of this Lease, Tenant shall at such time remove all
      of
      its property therefrom and all alterations and improvements placed thereon
      by
      Tenant if so requested by Landlord pursuant to the terms of Section 9.1(g).
      Tenant shall repair any damage to the Demised Premises caused by such removal,
      and any and all such property not so removed shall, at Landlord's option, become
      the exclusive property of Landlord or be disposed of by Landlord, at Tenant's
      cost and expense, without further notice to or demand upon Tenant. If the
      Demised Premises be not surrendered as above set forth, Tenant shall indemnify,
      defend and hold Landlord harmless against loss or liability resulting from
      the
      delay by Tenant in so surrendering the Demised Premises, including, without
      limitation any claim made by any succeeding occupant founded on such delay.
      Tenant's obligation to observe or perform this covenant shall survive the
      expiration or other termination of this Lease.

     

    All
      property of Tenant not removed within 30 days after the last day of the term
      of
      this Lease shall be deemed abandoned. Tenant hereby appoints Landlord its agent
      to remove all property of Tenant from the Demised Premises upon termination
      of
      this Lease and to cause its transportation and storage for Tenant's benefit,
      all
      at the sole cost and risk of Tenant and Landlord shall not be liable for damage,
      theft, misappropriation or loss thereof and Landlord shall not be liable in
      any
      manner in respect thereto. Tenant shall pay all costs and expenses of such
      removal, transportation and storage. Tenant shall reimburse Landlord upon demand
      for any expenses incurred by Landlord with respect to removal or storage of
      abandoned property and with respect to restoring said Demised Premises to good
      order, condition and repair.

     

    
      
        
        

      

      
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    34.19
       Holding
      Over.
      In the
      event Tenant remains in possession of the Demised Premises after expiration
      of
      this Lease, and without the execution of a new lease, it shall be deemed to
      be
      occupying the Demised Premises as a tenant from month to month, subject to
      all
      the provisions, conditions and obligations of this Lease insofar as the same
      can
      be applicable to a month-to-month tenancy, except that the Basic Rent shall
      be
      escalated to 150% of the then current Basic Rent for the Demised
      Premises.

     

    34.20
       Landlord
      Approvals.
      Any
      approval by Landlord or Landlord's architects and/or engineers of any of
      Tenant's drawings, plans and specifications which are prepared in connection
      with any construction of improvements respecting the Demised Premises shall
      not
      in any way be construed or operate to bind Landlord or to constitute a
      representation or warranty of Landlord as to the adequacy or sufficiency of
      such
      drawings, plans and specifications, or the improvements to which they relate,
      for any reason, purpose or condition, but such approval shall merely be the
      consent of Landlord, as may be required hereunder, in connection with Tenant's
      construction of improvements relating to the Demised Premises in accordance
      with
      such drawings, plans and specifications.

     

    34.21
       Survival.
      All
      obligations (together with interest or money obligations at the Maximum Rate
      of
      Interest) accruing prior to expiration of the term of this Lease shall survive
      the expiration or other termination of this Lease.

     

    34.22
       Attorneys'
      Fees.
      In the
      event of any litigation or judicial action in connection with this Lease or
      the
      enforcement thereof, the prevailing party in any such litigation or judicial
      action shall be entitled to recover all costs and expenses of any such judicial
      action or litigation (including, but not limited to, reasonable attorneys'
      fees
      and paralegals' fees) from the other party
      whether
      incurred in the litigation or other action or on any appeal or review
      thereof.

     

    34.23
       Landlord's
      Limited Liability.
      Tenant
      agrees to look solely to Landlord's interest in the Demised Premises and the
      proceeds thereof for recovery of any judgment from Landlord, it being agreed
      that Landlord (and if Landlord is a partnership, its partners, whether general
      or limited, and if Landlord is a corporation, its directors, officers or
      shareholders) shall never be personally liable for any personal judgment or
      deficiency decree or judgment against it.

     

    34.24
       Broker.
      Tenant
      and Landlord represent that they have dealt directly with and only with Cushman
      & Wakefield of Oregon, Inc. and Ossey Patterson Co. in connection with this
      Lease and that no other broker has negotiated or participated in negotiations
      of
      this Lease or is entitled to any commission in connection therewith. Tenant
      shall indemnify and hold Landlord harmless from and against any and all
      commissions, fees and expenses and all claims therefor by any broker, salesman
      or other party in connection with or arising out of Tenant's action in entering
      into this Lease, except for the commissions of Cushman & Wakefield of
      Oregon, Inc. and Ossey Patterson Co.
      Landlord
      shall indemnify and hold Tenant harmless from and against any and all
      commissions, fees and expenses and all claims therefor by any broker, salesman
      or other party in connection with or arising out of Landlord's action in
      entering into this Lease, and Landlord shall pay the commissions due Cushman
      & Wakefield of Oregon, Inc. and Ossey Patterson Co. pursuant to Landlord's
      separate written agreement with such brokers.

     

    34.25
       Governing
      Law.
      This
      Lease shall be governed by the laws of the State of Oregon. All covenants,
      conditions and agreements of Tenant arising hereunder shall be performable
      in
      the county wherein the Demised Premises are located. Any suit arising from
      or
      relating to this Lease shall be brought in the county wherein the Demised
      Premises are located, and the parties hereto waive the right to be sued
      elsewhere.

     

    34.26
       Joint
      and Several Liability.
      All
      parties signing this Lease as Tenant shall be jointly and severally liable
      for
      all obligations of Tenant.

     

    34.27
       Time
      is of the Essence.
      Time is
      of the essence with respect to the performance of every provision of this Lease
      in which time of performance is a factor.

    
      
        
        

      

      
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    35.

    ADDITIONAL
      PROVISIONS

     

    35.1
       Options
      to Extend

     

    35.1.1 General.
      Tenant shall have the right, subject to the provisions of this
      Section 21.1, to extend the Initial Term for three consecutive and
      successive periods of five years each (each a "Renewal Term") provided that
      (a) this Lease is in full force and effect; (b) no Event of Default
      exists at the time of exercise of the right of renewal or at the time set for
      commencement of the Renewal Term in question; (c) Tenant exercises its
      right to the Renewal Term by giving Landlord written notice of its election
      at
      least nine (9) months before the first day of the Renewal Term; and (d) the
      Renewal Term shall be upon the same terms, covenants and conditions as provided
      in the Lease, except that the monthly Basic Rent shall be the Basic Rent for
      the
      Renewal Term as set forth in Section 21.1(b) of this
      Lease.

     

    35.1.2 Extended
      Term Basic Rent

     

    35.1.2.1 Determination
      of Market Rent.
      The
      monthly Basic Rent during each Renewal Term shall be 100 percent of the monthly
      market rate for a five year term for comparable space leased on comparable
      terms
      in the Portland, Oregon area ("Market Rent") but in no event less than one
      hundred percent (100%) of the Basic Rent payable in the period immediately
      preceding the Renewal Term. Landlord shall give Tenant notice of Landlord's
      estimation of Market Rent within 10 business days after receiving Tenant's
      notice exercising its option to renew. If Tenant disagrees with such estimate,
      it shall notify Landlord in writing thereof within 10 business days of Tenant's
      receipt of its notice. If Tenant fails to notify Landlord that it disagrees
      with
      the estimation within said 10 business day period, Tenant shall be deemed to
      have agreed to the Market Rent proposed by Landlord. If there is a disagreement
      on such estimation, the parties shall promptly meet to attempt to resolve their
      differences. If the differences as to Market Rent are not resolved within 25
      days of the date Tenant receives Landlord's initial estimate of Market Rent,
      then the parties shall submit the matter to appraisal in accordance with Section
      21.1(b) so that Market Rent is determined before the first day of the Renewal
      Term, or Tenant may give Landlord written notice within 3 business days after
      expiration of the 25-day period that Tenant withdraws the notice exercising
      its
      right of renewal and this Lease shall expire as of the expiration of the Initial
      Term.

     

    35.1.2.2 Appraisal
      Process.
      If the
      parties are unable to reach agreement on Market Rent during the period specified
      in Section 21.1(b), then Landlord or Tenant (the "Moving Party") may give notice
      to the other demanding appraisal and naming an appraisal company. The recipient
      of such notice (the "Recipient") shall, within 10 days after receiving the
      Moving Party's notice, give notice to the Moving Party naming an appraisal
      company selected by the Recipient. Each appraiser shall be a member of the
      American Institute of Appraisers and shall have not less than 10 years
      experience in the appraisal of properties like the Demised Premises in the
      greater Portland metropolitan area. If the Recipient fails to notify the Moving
      Party of the name of the appraisal company it has selected within said 10 day
      period, the appraisal company selected by the Moving Party shall determine
      the
      Market Rent for the Renewal Term. The appraiser(s) shall determine the Basic
      Rent for the Renewal Term, which shall be the monthly amount per square foot
      that a willing, comparable tenant would pay and a willing, comparable landlord
      would accept, in an arms-length lease for comparable space in a comparable
      building at a comparable site for a comparable period of time, giving
      consideration to the rent rates per square foot, the standard of measurement
      by
      which square footage is measured, the type and extent of liability under any
      escalation clauses and all other applicable conditions of tenancy (which is
      a
      more detailed description of the Market Rate). The Market Rate shall not be
      less
      than 100% of the Basic Rent payable under the Lease in the period immediately
      preceding the Renewal Term. The appraiser(s) shall render a decision in writing
      to Landlord and Tenant simultaneously within 20 days of their appointment.
      Any
      decision in which the appraiser appointed by Landlord and the appraiser
      appointed by Tenant concur shall be binding and conclusive upon the
      parties.

     

    35.1.3 Arbitration.
      If
      the two appraisers are unable to agree upon a determination of Market Rent
      within 20 days after appointment of the appraiser(s), they shall appoint a
      third
      appraiser, who shall be an impartial person with qualifications similar to
      those
      required of the first two appraisers. If the initial two appraisers are unable
      to agree upon such appointment within 5 days after expiration of the 20 day
      period, the third appraiser shall be selected by the parties themselves, if
      they
      can agree, within a further period of 10 days. If the parties do not so agree,
      then either party, on behalf of both, may request appointment of such a
      qualified person by the then presiding judge of the Multnomah County Circuit
      Court acting in his private non-judicial capacity. The other party shall not
      raise any question as to such judge's full power and jurisdiction to entertain
      the application for and make the appointment, and the parties agree to indemnify
      the presiding judge against all claims arising out of the presiding judge's
      appointment of an appraiser. If the Market Rent cannot be determined by
      agreement between the two appraisers selected by Landlord and Tenant, or
      settlement between the parties during the course of appraisal, the Market Rent
      shall be determined by the three appraisers in accordance with the following
      procedure. Each of the two appraisers originally selected by the parties shall
      prepare a written statement of his determination of the Market Rent, supported
      by the reasons therefor, with counterpart copies for each party and the third
      appraiser. The appraisers shall arrange for a simultaneous exchange of their
      Market Rent determinations. The role of the third appraiser shall be to select
      which of the two proposed determinations most closely approximates his
      determination of the Market Rent. The third appraiser shall have no right to
      propose a middle ground or any modification of either of the two proposed Market
      Rents. The appraisers shall attempt to decide the issue within 10 days after
      the
      appointment of the third appraiser. The Market Rent chosen by the third
      appraiser shall constitute the decision of the appraisers and be
      final and
      binding upon the parties.

    
      
        
        

      

      
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    35.1.4 Resolution.
      In
      the event of a failure, refusal or inability of any appraiser to act, his
      successor shall be appointed by him, but in the case of the third appraiser,
      his
      successor shall be appointed in the manner described above for appointment
      of
      the third appraiser. The appraisers shall have the right to consult experts
      and
      competent authorities with factual information or evidence pertaining to a
      determination of Market Rent, but any such consultation shall be made in the
      presence of both parties with full right on their
      parts to cross-examine. The appraiser(s) shall render the determination of
      Market Rent in writing, with counterpart copies to each party. The appraisers
      shall have no power to modify the provisions of this Lease. Each party shall
      pay
      the fees and expenses of its respective appraiser and both shall share equally
      the fees and expenses of the third appraiser, if any. Each party shall pay
      the
      attorneys' fees and expenses of its counsel and the fees and expenses of any
      witnesses called by that party. Time is of the essence in connection with the
      establishment of Market Rent. If the Market Rent for a Renewal Term is not
      determined before the first day
      of the Renewal Term, Tenant shall continue to pay Basic Rent in the amount
      payable during the immediately preceding period until the Basic Rent for the
      Renewal Term is determined. Within 10 business days after the Basic Rent for
      the
      Renewal Term has been determined, Tenant shall pay to the Landlord the excess,
      if any, of the Basic Rent due at the rate set by the appraiser(s) over the
      Basic
      Rent actually paid during any expired portion of the Renewal
      Term.

     

    35.2
       Initial
      Improvements

     

    35.2.1 Landlord's
      Improvements.
      Landlord will cause to be constructed the base building shell improvements
      described on Exhibit "C" ("Landlord's Improvements"), to be paid for as provided
      in Section 21.2(c).

     

    35.2.2 Tenant's
      Improvements.
      Landlord will cause to be constructed, to be paid for as provided in Section
      21.2(c), all improvements (other than Landlord's Improvements) ("Tenant's
      Improvements") to be designed as provided in this Section 21.2. Tenant's
      Improvements become the property of Landlord and a part of the Building
      immediately upon installation. Landlord's Improvements and Tenant's Improvements
      are sometimes collectively referred to in this Lease as the "Initial
      Improvements."

     

    35.2.3 Improvement
      Allowance.
      Landlord agrees to pay up to $4,540,100.00 (the "Improvement Allowance") for
      Landlord's Costs (defined below). Tenant shall pay all of Landlord's Costs
      which
      are in excess of the Improvement Allowance plus Landlord's Fee and the Warranty
      Fee (as defined below) within thirty (30) days after Landlord's billing to
      Tenant therefor. Landlord may bill Tenant such amounts on a monthly basis,
      at
      Landlord's option, as progress payments, which Tenant shall pay within thirty
      (30) days after billing therefor. "Landlord's Costs" are all direct and indirect
      costs, fees, and expenses related to the Land and the Initial Improvements
      including, without limitation, all costs, fees, and expenses related to the
      acquisition of the Land, obtaining all permits and governmental approvals for
      the Initial Improvements, designing, constructing, and installing the Initial
      Improvements, general conditions, document preparation, costs of drawing plans
      and specifications, builders risk and liability insurance costs, and all labor,
      materials, supplies, and equipment used for any of the foregoing, plus any
      excise or sales tax imposed on any of the foregoing. A preliminary budget,
      which
      is subject to change, of Landlord's Costs is attached as Exhibit "G". All of
      Landlord's Costs are subject to change except that the cost of the items
      described on Exhibit "G" next to which an asterisk (*) is placed shall equal
      the
      amount for such items set forth in Exhibit "G". After the Final Plans are
      completed, Landlord will prepare an updated budget and, thereafter, the
      Designated Representatives shall meet at least every other week to update the
      budget. Landlord's Fee shall equal five percent (5%) of the total of Landlord's
      Costs in excess of $4,540,100.00. The Warranty Fee shall equal one percent
      (1%)
      of costs, fees, and expenses of labor, materials, supplies, and equipment for
      construction of the Initial Improvements (the "Warranty Fee"). If Landlord
      incurs any costs, fees or expenses to repair or replace any of the Initial
      Improvements under Landlord's construction warranty or replacement obligations
      as described in this Lease, such amount shall be deducted from the Warranty
      Fee.
      Any amount not so paid from the Warranty Fee within sixteen (16) months
      following the date of Substantial Completion of the Tenant Improvements shall
      be
      reimbursed to Tenant, if and to the extent, Tenant pays the Warranty Fee as
      required by this Section 21.2(c). Such payment shall be made within 30 days
      after the end of such 16-month period. Landlord is not obligated to pay or
      incur
      any amounts that exceed the Improvement Allowance. If Landlord's Costs exceed
      the Improvement Allowance, Tenant will pay the excess to Landlord in cash as
      Additional Rent as provided above but in no event later than upon Substantial
      Completion of the Tenant's Improvements. Within 10 days after Landlord's demand
      therefor accompanied by reasonable documentation of such costs, Tenant will
      also
      pay, as Additional Rent, all of Landlord's Costs (including lost rent) resulting
      from any Tenant Delay. If Landlord reasonably estimates that the cost of the
      Initial Improvements will exceed the Improvement Allowance, Landlord may require
      Tenant to deposit with Landlord, before Landlord commences construction of
      Initial Improvements, an amount equal to the amount by which the cost of the
      Initial Improvements exceeds the Improvement Allowance.

    
      
        
        

      

      
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    35.2.4 Property
      Manager/Site Superintendent.
      Landlord is the general contractor for the Initial Improvements. In connection
      with installing the Initial Improvements, Landlord will utilize a project
      manager and site superintendent, the fees of which are payable by Tenant on
      a
      weekly basis as a direct cost of the Initial Improvements. The fee for the
      project manager shall equal $2,800.00 per week, the fee for the assistant
      project manager shall equal $2,400.00 per week, and the fee for the
      superintendent shall equal $2,800.00 per week.

     

    35.2.5 Shell
      Plan.
      Landlord will provide Tenant with a shell plan for Landlord's Improvements
      (a) adequate for Landlord to prepare working drawings for Landlord's
      Improvements; (b) showing, in reasonable detail, the design and appearance
      of the finishing material Landlord will use in connection with installing
      Landlord's Improvements without additional requests for information; and
      (c) containing such other detail or description as may be necessary for
      Landlord to adequately define the scope of Landlord's Improvements. Tenant
      will
      have five business days to review and approve or make recommendations for change
      in the shell plan. Any disapproval or recommendation for change will specify
      both the requested change and the reason for the change with particularity.
      Landlord will promptly make revisions to the proposed shell plan necessary
      to
      obtain Tenant's approval. Landlord and Tenant will indicate their agreement
      to
      the shell plan by initialing two sets thereof.

     

    35.2.6 Working
      Drawings and Specifications.
      After the shell plan has been established, Landlord will provide Tenant with
      the
      final working drawings and specifications (the "Final Plans"). When Landlord
      requests Tenant to specify details or layouts, Tenant will specify the same,
      within two business days after Landlord's request, so as not to delay completion
      of the Final Plans. Tenant will approve the Final Plans in writing within five
      business days after receiving the same. If Tenant disapproves the Final Plans
      within the five business day period described in this section, Landlord will
      revise the Final Plans and submit the same to Tenant for approval. Tenant will
      have the same approval rights and approval time period with respect to the
      revised Final Plans as Tenant had with respect to the initial Final Plans as
      described in this section. Landlord will seal as required by law the Final
      Plans
      after Tenant approves the same and will submit the same for permits and
      construction bids. Landlord will promptly notify Tenant of any changes to the
      Final Plans that are required by the City of Wood Village (the "City"). Tenant
      will approve or disapprove the required changes in writing within two business
      days after receiving notice of the same. Tenant will not withhold its approval
      except for reasonable cause and will not act in an arbitrary or capricious
      manner in connection with approving the Final Plans or any changes thereto
      required by City. If Tenant fails to notify Landlord of Tenant's approval or
      disapproval of the Final Plans or City's required changes thereto within the
      five or two business day periods described in this section, or fails to specify
      any details or layouts within the two business day period described in this
      section, such failure is deemed to be a Tenant Delay and the Target Date is
      automatically extended day for day for each day of delay after the date by
      which
      Tenant was obligated to approve the Final Plans or specify the details or
      layouts.

    
      
        
        

      

      
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    35.2.7 Changes
      to Final Plans.
      Tenant will notify Landlord of any desired revisions to the Final Plans Tenant
      approved under Section 21.2(f). If Landlord approves the revisions (such
      approval not to be unreasonably withheld or delayed), Landlord will revise
      the
      Final Plans accordingly and will notify Tenant of the additional cost of the
      Initial Improvements and the anticipated delay in completing the Initial
      Improvements caused by such revisions. Tenant will approve or disapprove the
      increased cost and delay within five business days after Landlord notifies
      Tenant of the additional cost and delay. If Tenant fails to notify Landlord
      of
      its approval or disapproval of the additional cost and delay within the five
      business day period, Tenant is deemed to have disapproved the additional cost
      or
      delay. If Tenant disapproves the additional cost or delay, Tenant is deemed
      to
      have withdrawn its proposed revisions to the Final Plans. If incident to a
      requested revision to the Final Plans, Landlord stops work pending resolution
      of
      whether Tenant finally approves or disapproves a proposed revision (for such
      five business day period or such longer time as Landlord waits for Tenant’s
      decision regarding such change), then whether or not Tenant ultimately approves
      or disapproves the proposed revision and its attendant additional cost or delay,
      any delay resulting from the work stoppage will constitute a Tenant
      Delay.

     

    35.2.8 Substantial
      Completion
      of Tenant's Improvements.
      Tenant is solely responsible for the design and permitting of Tenant's
      Improvements. Landlord is not responsible therefor. Landlord will use
      commercially reasonable efforts to achieve substantial completion of Tenant's
      Improvements as soon as commercially reasonable after Substantial Completion
      of
      Landlord's Improvements and receipt of all building permits necessary to
      construct Tenant's Improvements, subject to Excused Delays. If Landlord fails
      to
      timely prosecute construction of the Tenant Improvements in a manner reasonably
      consistent with the final project schedule developed and approved by Landlord
      and Tenant after completion of the plans for Tenant's Improvements (the "TI
      Schedule"), Tenant shall have the right to take the following action:
      (i) provide written notification to Landlord setting forth with
      particularity the failure or failures by Landlord to timely conform to the
      TI
      Schedule, and setting forth no less than a period of fourteen (14) days from
      Landlord's receipt of such written notice for Landlord to respond thereto;
      (ii) within fourteen (14) calendar days of receipt of such notice set forth
      above, Landlord shall respond in writing to Tenant, setting forth with
      particularity either that construction of Tenant's Improvements has returned
      to
      conformance with the TI Schedule, or those actions Landlord is taking to bring
      the construction of Tenant's Improvements back into conformance with the TI
      Schedule within a reasonable period of time; and (iii) if Landlord fails to
      so timely respond as set forth above, or if construction of Tenant's
      Improvements is not returned to conformance with the TI Schedule within a
      reasonable period of time, Tenant shall have the right to terminate Landlord's
      work as general contractor for the Tenant Improvements no less than ten (10)
      days after Tenant provides Landlord written notification of such termination.
      Effective with the termination date as determined in this paragraph, Landlord
      shall submit to Tenant an itemization of all of Landlord's Costs computed as
      a
      percentage of Landlord's Costs, and Tenant shall pay such final invoicing within
      30 days after billing therefor.

    
      
        
        

      

      
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    35.2.9 Punch
      List.
      Within ten days after Substantial Completion of the Tenant's Improvements,
      Landlord and Tenant will inspect the Premises and develop a punch list. Landlord
      will complete (or repair, as the case may be) the items described on the punch
      list with commercially reasonable diligence and speed, subject to delays caused
      by Tenant Delays and Force Majeure. If Tenant refuses to inspect the Premises
      with Landlord within the ten-day period, Tenant is deemed to have accepted
      the
      Premises as delivered, subject to Section 21.2.(j).

     

    35.2.10 Construction
      Warranty.
      Subject to the TI Warranty Maximum described below, Landlord warrants Tenant's
      Improvements against defective workmanship and materials for a period of one
      year after Substantial Completion of Tenant's Improvements. Landlord warrants
      Landlord's Improvements against defective workmanship and materials for a period
      of one year after Substantial Completion of Landlord's Improvements. Landlord's
      sole obligation under this warranty is to repair or replace, as necessary,
      any
      defective item caused by poor workmanship or materials if Tenant notifies
      Landlord of the defective item within such applicable one-year period. Landlord
      has no obligation to repair or replace any item after such one year period
      expires except as provided in Section 8.1. Payment for Landlord's warranty
      obligations shall be made from the Warranty Fee described in Section 21.2(c).
      The cost of Landlord's compliance with Landlord's obligations under this Section
      21.2(j) pertaining to Tenant's Improvements shall not exceed that portion of
      the
      Warranty Fee applicable to the Tenant's Improvements, which amount is equal
      to
      one percent (1%) of costs, fees, and expenses of labor, materials, supplies,
      and
      equipment for construction of Tenant's Improvements (the "TI Warranty Maximum").
      THE WARRANTY TERMS PROVIDE TENANT WITH ITS SOLE AND EXCLUSIVE REMEDIES FOR
      INCOMPLETE OR DEFECTIVE WORKMANSHIP OR MATERIALS OR OTHER DEFECTS IN THE
      PREMISES IN LIEU OF ANY CONTRACT, WARRANTY OR OTHER RIGHTS, WHETHER EXPRESSED
      OR
      IMPLIED, THAT MIGHT OTHERWISE BE AVAILABLE TO TENANT UNDER APPLICABLE LAW.
      ALL
      OTHER WARRANTIES ARE EXPRESSLY DISCLAIMED.

     

    35.2.11 Representatives.
      "Designated Representative" means any person authorized to speak and act on
      behalf of Landlord or Tenant and upon whom the other will fully and
      unconditionally be entitled to rely for any and all purposes of this Section
      21.2 until such designation will be revoked or altered as hereinafter provided.
      Landlord hereby appoints Bruce A. Wood and John F. Gordon as its
      Designated Representatives. Tenant hereby appoints Mike Clause as its Designated
      Representative. Either party may change its Designated Representative(s) by
      notice to the other, but no such change or revocation of the power of a
      Designated Representative will affect any approval or consent given by a party's
      Designated Representative prior to the other party receiving notice of
      revocation of such Designated Representative's appointment. Landlord or Tenant's
      approval or consent to any matter arising under this Section 21.2 will
      conclusively be evidenced by the signature of one of its Designated
      Representative(s).

     

    35.2.12 Defined
      Terms.
      For
      purposes of this Lease, the following terms shall have the following
      meanings:

     

    "Certificate
      of Occupancy" means a certificate of occupancy or similar document or permit
      (whether conditional, unconditional, temporary or permanent) that must be
      obtained from the appropriate governmental authority as a condition to a
      tenant's lawful occupancy of space in the Building.

     

    "Final
      Plans" means the final working drawings and specifications Landlord prepares
      for
      Landlord's Improvements after receiving Tenant's space plan for Landlord's
      Improvements.

     

    "Force
      Majeure" means acts of God; strikes; lockouts; labor troubles; inability to
      procure (or delay in procuring) materials; any weather condition which delays
      work even if not unusual, such as rain; governmental laws or regulations;
      casualty, orders or directives of any legislative, administrative, or judicial
      body or any governmental department; receipt of all required building permits
      for Landlord's Improvements after September 15, 2000; inability to obtain
      or delay in obtaining any required licenses, permissions or authorizations
      (despite diligent, commercially reasonable pursuit of such permits, licenses,
      permissions or authorizations); action or non-action of public utilities, and
      other similar or dissimilar causes beyond Landlord's reasonable
      control.

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    "Punch
      List" means a list of items not completed by Landlord in connection with the
      Tenant's Improvements or Tenant's Improvements items in need of repair prepared
      in accordance with Section 21.2(i).

     

    "Substantial
      Completion" means, with respect to Landlord's Improvements, the date on which
      the shell building and the roof structure are water tight, with utilities
      operational to the Building, and sufficiently completed such that Tenant may
      begin to move in its horizontal DES Line and its press system and, with respect
      to Tenant's Improvements, either (a) the date a Certificate of Occupancy is
      issued for the Premises or (b) if the City or other appropriate authority does
      not require that a Certificate of Occupancy or other similar document be issued
      for the Premises, the date Tenant is reasonably able to occupy and use the
      Premises for its intended purposes; provided, however, that if either of the
      events subparagraph (a) or (b) describes is delayed or prevented because of
      work
      Tenant is responsible for performing in the Premises, "Substantial Completion"
      means the date that Landlord has performed all of Landlord's work that is
      necessary for either of the events subparagraph (a) or (b) describes to occur
      and Landlord has made the Premises available to Tenant for the performance
      of
      Tenant's work.

     

    "Tenant"
      means the tenant identified in the Lease and such Tenant's permitted successors
      and assigns. In any provision relating to the conduct, acts or omissions of
      "Tenant," the term "Tenant" includes the tenant identified in the Lease and
      such
      Tenant's agents, employees, contractors, invitees, successors, assigns and
      others using the Premises or on the Property with Tenant's expressed or implied
      permission.

     

    "Tenant
      Delays" means any delay caused or contributed to by Tenant, including, without
      limitation, Tenant's ordering of any long lead time item(s), Tenant's failure
      to
      timely approve any plans, including the shell plan for Landlord's Improvements
      within the time period provided in this Lease, Tenant's failure to timely
      respond to any other request from Landlord for a response or approval within
      the
      time period reasonably requested by Landlord, Tenant's failure to timely prepare
      or approve the Final Plans within the time period provided in this Lease and
      any
      delay from any revisions Tenant proposes to approved Final Plans. Tenant Delays
      also include, without limitation, any delay due to Tenant's failure to comply
      strictly with Tenant's obligations set forth in the schedule attached as Exhibit
      "E" or to do what is reasonably requested by Landlord to facilitate Landlord's
      compliance with the schedule attached as Exhibit "E".

     

    "Warranty
      Terms" means, collectively, the Punch List and construction warranty provisions
      of Section 21.2 (j) of the Lease.

     

    35.3
       Right
      of First Opportunity to Make Offer.
      Landlord agrees that, prior to presenting a bona fide offer to sell the Demised
      Premises to any party or accepting a bona fide offer to purchase the Demised
      Premises, Landlord shall first give written notice to Tenant of its desire
      to
      sell the Demised Premises and give Tenant ten days within which to make an
      offer
      to Landlord to purchase the Demised Premises. If Tenant desires, Landlord agrees
      to negotiate with Tenant in good faith during such ten-day period. If Landlord
      and Tenant do not enter into a binding agreement pertaining to the purchase
      and
      sale of the Demised Premises within such ten day period, Tenant's rights under
      this Section 21.3 shall terminate and be of no further force or effect
      except that such rights shall revive after a sale of the Demised Premises is
      closed and shall be applicable to the successor Landlord, on a one-time basis,
      in accordance with the same terms and conditions of this Section 21.3. This
      right of first opportunity to make an offer shall not apply to a sale of the
      Demised Premises to any Affiliate of Landlord. That is, Landlord shall be free
      to sell the Demised Premises to an Affiliate of Landlord without regard to
      this
      Section 21.3. "Affiliate of Landlord" shall mean any Person (defined below)
      directly or indirectly controlling, controlled by or under common control with,
      Landlord. For purposes of this definition, the term "control" (including the
      correlative meanings of the terms "controlling", "controlled by" and "under
      common control with"), as applied with respect to any Person, shall mean the
      possession, directly or indirectly, of the power to direct or cause the
      direction of the management policies of such Person whether through the
      ownership of voting securities or by contract or otherwise. Without limiting
      the
      generality of the foregoing, the phrase "Affiliate of Landlord" shall include
      Gerald Rauenhorst, a trust for the benefit of Gerald Rauenhorst and/or members
      of his family or their issue, Opus, L.L.C., Opus Corporation, or the parent
      or
      subsidiary of any of them, or a partner, limited liability company, corporation
      or other entity directly or indirectly comprised of all or some of the above
      or
      a fund managed or initiated by any of the foregoing. A "Person" shall mean
      an
      individual, trust, estate, corporation, limited partnership, general
      partnership, limited liability company or other entity. The right of first
      opportunity to make an offer shall not be applicable to any holder of any
      Mortgage as defined in Section 16.1 or to any successor to such
      holder.

    
      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      

    

    

    35.4
       Conditions
      Subsequent The
      effectiveness of this Lease is conditioned on Landlord purchasing the Land.
      If
      Landlord does not purchase the Land, this Lease shall be thereby terminated
      and
      Landlord shall reimburse Tenant's actual and reasonable out-of-pocket
      third-party expenses incurred in connection with its design of the Tenant
      Improvements and the negotiation of this Lease, in an amount not to exceed
      $25,000, within 30 days after receipt of copies of paid invoices evidencing
      such
      expenses. Landlord also retains the right to terminate this Lease (without
      reimbursement of any costs to Tenant) if Landlord does not obtain design review
      approval from the City of Wood Village (or on appeal of such decision) on terms
      and conditions reasonably acceptable to Landlord.

     

    IN
      WITNESS WHEREOF,
      each of
      the parties hereto has caused this Lease to be duly executed as of the day
      and
      year first above written.

     

    
      	
              LANDLORD:

            	
              OPUS
                NORTHWEST, L.L.C., a Delaware limited 
liability
                company

            
	 	 	
               

            
	 	
              By

            	
               

            
	 	
              Its

            	
               

            
	 	 	 
	 	
              By

            	
               

            
	 	
              Its

            	
               

            
	 	 	 
	
              TENANT:

            	
              MERIX
                CORPORATION, an Oregon corporation

            
	 	 	 
	 	
              By

            	
               

            
	 	
              Its

            	
               

            
	 	 	 
	 	
              By

            	
               

            
	 	
              Its

            	
               

            

    

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    EXHIBIT "A"
      To Master Lease

     

    The
      parcel of land referred to in the attached Lease, sometimes referred to therein
      as a part of the "Demised Premises," is a tract of land which will be outlined
      on the Final Plans. Landlord may seek a partition of the real property which
      is
      described below. The legal description of the Land may be revised by Landlord
      so
      long as the Land contains the land on which the Initial Improvements are
      constructed. The Land is situated in the City of Wood Village, County of
      Multnomah, State of Oregon, and is on the parcel legally described as
      follows:

     

    PARCEL
      1:

     

    A
      part of
      Section 27, Township 1 North, Range 3 East, of the Willamette Meridian, in
      the
      City of Wood Village, County of Multnomah and State of Oregon, described as
      follows:

     

    Commencing
      at a point in the North line of the Addison C. Dunbar Donation Land Claim,
      which
      is 2484.49 feet, more or less, East from the Northwest corner of said claim,
      being at a cross in the top of a stone 4 feet by 3 feet in diameter and 2 feet
      above ground and is the stone referred to in Deed to Thomas Huntington, recorded
      April 10, 1883 in Book 68, page 27, Deed Records, being also the Northeast
      corner of the M.C. Heslin Tract as described in Deed recorded May 2, 1917 in
      Book 729, page 463, Deed Records; thence South 0°30'
      East
      510.35 feet to the true point of beginning of the tract to be described; being
      the Southwest corner of the Arnston Tract as described in Corrective Deed
      recorded January 26, 1948 in Book 1238, page 456, Deed Records; thence South
      0°30'
      East
      333.65 feet; thence North 79°10'
      East
      parallel to the North line of Barr Road (N.E. Halsey Street) 190 feet; thence
      South 0°30'
      East
      200 feet to the North line of said road; thence North 79°10'
      East
      on said North road line 228.5 feet to the Southwest corner of the Rossi Tract
      as
      described in Deed recorded May 11, 1955 in Book 1721, page 469, Deed Records;
      thence North 0°30'
      West
      on the West line of said Rossi Tract, 533.65 feet to the Southeast corner of
      said Arnston Tract; thence South 79°10'
      West
      418.5 feet to the true point of beginning.

     

    EXCEPT
      that portion thereof described as follows:

     

    Beginning
      at a 5/8 inch iron rod set by Survey No. 37850, Multnomah County Survey Records,
      at the Northeast corner of that tract of land described as Parcel 2 in Deed
      recorded December 27, 1991 in Book 2491, page 743, Multnomah County Deed
      Records; thence along the East line of said tract South 00°30'30"
      East, a distance of 533.86 feet to the Northerly right of way line of N.E.
      Halsey Street; thence along said Northerly line, South 79°02'37"
      West, a distance of 20.34 feet to a 5⁄8 inch iron rod with yellow plastic cap
      stamped "WYEAST SURVEYS PLS 2393"; thence parallel with and 20 feet Westerly
      of
      said East line, North 00°30'30"
      West, a distance of 533.86 feet to the North line of said tract; thence along
      said North line, North 79°03'03"
      East, a distance of 20.34 feet to the point of beginning.

     

    ALSO
      EXCEPTING THEREFROM the Southerly 5 feet conveyed to Multnomah County by Deed
      recorded January 21, 2000 as Fee No. 2000-013442 AND ALSO recorded February
      23,
      2000 as Fee No. 2000-025196.

     

    PARCEL
      11:

     

    A
      tract
      of land situated in the Southeast quarter of Section 27, Township 1 North,
      Range
      3 East, of the Willamette Meridian, in the City of Wood Village, County of
      Multnomah and State of Oregon, being more particularly described as
      follows:

     

    Beginning
      at a 5⁄8 inch iron rod set by Survey No. 34125, Multnomah County Survey Records,
      at the Southwest corner of that tract of land described in Deed recorded October
      3, 1979 in Book 1388, page 695, Multnomah County Deed Records; thence along
      the
      West line of said tract, North 00°30'30"
      West, a distance of 54.56 feet to a 5⁄8 inch iron rod with yellow plastic cap
      stamped "WYEAST SURVEYS PLS 2393; thence North 79°03'03"
      East, a distance of 397.97 feet to a 5⁄8 inch iron rod with yellow plastic cap
      stamped "WYEAST SURVEYS PLS 2393"; thence parallel with and 20 feet Westerly
      of
      the East line of said tract, South 00°30'30"
      East, a distance of 54.56 feet to the South line of said tract; thence along
      said South line, South 79°03'03"
      West, a distance of 397.97 feet to the point of beginning.

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    PARCEL
      III:

     

    Beginning
      at a point 2,484.49 feet East of the Northwest corner of A.C. Dunbar Donation
      Land Claim in Sections 26, 27, 34 and 35, Township 1 North, Range 3 East, of
      the
      Willamette Meridian, in the City of Wood Village, County of Multnomah and State
      of Oregon, said point of beginning being the Southwest corner of a tract of
      land
      conveyed by Perle E. Marshall, et al, to S.A. Arnston and Mae Arnston, by Deed
      Recorded October 24, 1935 in Book 312, page 103, Deed Records; running thence
      from said point of beginning South 0 30' East 510.35 feet to a point;
      thence North 79°10'
      East
      418.5 feet to a point; thence North 0°30'
      West
      430.35 feet to a point in the Southerly line of the right-of-way of O.R. &
N. Railroad Company; thence to a Northwesterly direction tracing the Southerly
      line of said Railroad right-ofway to the Northeasterly corner of said tract
      of
      land described and conveyed in the aforementioned Deed by said Perle E.
      Marshall, et al to S.A. Arnston and Mae Arnston; running thence South
      0°30'
      East
      tracing the Easterly line of said tract 100 feet, more or less, to the Southeast
      corner thereof; thence Westerly along the South line of said tract 20 feet,
      more
      or less, to the point of beginning,

     

    EXCEPTING
      THEREFROM that portion conveyed to Dean R. Bramon and Beth D. Bramon by Deed
      recorded January 16, 1997 as Fee No. 97008522 and more particularly described
      as
      follows:

     

    A
      tract
      of land situated in the Southeast quarter of Section 27, Township 1 North,
      Range
      3 East, of the Willamette Meridian, in the City of Wood Village, County of
      Multnomah and State of Oregon, and being more particularly described as
      follows:

     

    Beginning
      at a 5/8 inch iron rod set by Survey No. 34125, Multnomah County Survey Records,
      at the Southwest corner of that tract of land described in Deed recorded October
      3, 1979 in Book 1388, page 695, Multnomah County Deed Records; thence along
      the
      West line of said tract, North 00°30'30"
      West, a distance of 54.56 feet to a 5/8 inch iron rod with yellow plastic cap
      stamped "Wyeast Surveys PLS 2393"; thence North 79°03'03"
      East, a distance of 397.97 feet to a 5/8 inch iron rod with yellow plastic
      cap
      stamped "Wyeast Surveys PLS 2393"; thence parallel with and 20 feet Westerly
      of
      the East line of said tract, South 00°30’30"
      East, a distance of 54.56 feet to the South line of said tract; thence along
      said South line, South 79°03
      '03"
      West, a distance of 397.97 feet to the point of beginning.

     

    PARCEL
      IV:

     

    A
      tract
      of land situated in the Southeast quarter of Section 27, Township 1 North,
      Range
      3 East, of the Willamette Meridian, in the City of Wood Village, County of
      Multnomah and State of Oregon, and being more particularly described as
      follows:

     

    Beginning
      at a 5/8 inch iron rod set by Survey No. 37850, Multnomah County Survey Records,
      at the Northeast corner of that tract of land described as Parcel 2 in Deed
      recorded December 27, 1991 in Book 2491, page 743, Multnomah County Deed
      Records; thence along the East line of said tract, South 00°30'30"
      East, a distance of 533.86 feet to the Northerly right-of-way line of NE Halsey
      Street; thence along said Northerly line, South 79°02'37"
      West, a distance of 20.34 feet to a 5/8 inch iron rod with yellow plastic cap
      stamped "Wyeast Surveys PLS 2393"; thence parallel with and 20 feet Westerly
      of
      said East line, North 00°30'30"
      West, a distance of 533.86 feet to the North line of said tract; thence along
      said North line, North 79°03'03"
      East, a distance of 20.34 feet to the point of beginning.

     

    EXCEPTING
      THEREFROM the Southerly 5 feet conveyed to Multnomah County by Warranty Deed
      recorded February 23, 2000 as Fee No. 2000-025197.

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    EXHIBIT
      "B" To Master lease

     

    PERMITTED
      ENCUMBRANCES

     

    1. Sewer
      Easement in favor of the City of Wood Village recorded on October 3, 1973,
      in Book 952 at Page 607.

     

    2. Utilities
      Easement recorded on January 16, 1997, as Fee
      No. 97008523.

     

    3. Easement
      for slope and utilities recorded on January 31, 2000, as Fee No.
      2000-013442, and recorded on February 23, 2000, as Fee No. 2000-025196, in
      favor of Multnomah County.

     

    4. Required
      utility easements for development.

     

    5. Wetlands
      deed restriction to be recorded as required by the Division of State
      Lands.

     

    6. Covenants,
      conditions, restrictions, and easements ("CCRs") required by any governmental
      or
      public authority or imposed in connection with the development of the Land;
      provided,
      however,
      that
      any CCRs imposed by Landlord other than in connection with obtaining
      governmental approvals or utilities shall be first approved by Tenant, which
      approval shall not be unnecessarily withheld or delayed.

     

    7. Access
      Easement to be recorded providing for access to the Premises and to adjoining
      property. The terms of the access easement shall include the obligation of
      Tenant to share equally in the cost of maintenance, repair, and replacement
      of
      the paved access road after its initial construction (which is part of
      Landlord's Improvements). Tenant shall have a right to approve the access
      easement which approval shall not be unreasonably withheld or
      delayed.

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

    EXHIBIT "C"
      To Master Lease

     

    OUTLINE
      PLANS

     

    Those
      plans prepared by VLMK Engineers dated ____________________, consisting of
      the
      following pages:

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

    EXHIBIT "D"
      To Master Lease

     

    FORM
      OF LETTER OF CREDIT

     

    Beneficiary:
      

     

    OPUS
      NORTHWEST, L.L.C.

    c/o
      Opus
      Northwest Management, L.L.C.

    10350
      Bren Road West

    Minnetonka,
      MN 550343

     

    
      	
              Date:
                _______________, 2000

            
	 
	
              Expiration
                Date: _______________, 2001

            
	 
	
              Reference
                No.: ________________

            

    

     

    Ladies
      and Gentlemen: 

     

    We
      hereby
      establish our irrevocable Letter of Credit No. __________ in your favor by
      order
      and for the account of _________________________, for an amount not to exceed
      U.S.$__________. The proceeds of this Letter of Credit are available to you
      from
      time to time upon presentation of your sight draft on us, accompanied by a
      written certificate described below.

     

    This
      Letter of Credit is transferable (including, without limitation, any pledge
      or
      collateral assignment) by you to any person or entity, upon your written
      notification to us. Any and all fees or costs payable to us in connection with
      such transfer will be the sole responsibility of Merix Corporation, and any
      failure to pay the same will not affect the transferability hereof.

     

    This
      Letter of Credit is subject to partial drawing. In the event of a partial draw
      on this Letter of Credit, the amount drawn will be endorsed on the reverse
      side
      of this Letter of Credit and this Letter of Credit returned to you or the
      person(s) or entity(ies) to whom this Letter of Credit may be transferred in
      accordance with the preceding paragraph.

     

    We
      hereby
      agree with you that drafts drawn under and in accordance with the terms of
      this
      credit will be duly honored immediately upon presentation and delivery of your
      sight draft if presented at this office; Letter of Credit Department,
      ________________________________ [United States Address], at any time or times
      prior to the expiration hereof, accompanied by a written certificate duly
      executed by you, certifying that a Draw Event exists under that certain Net
      Lease Agreement, dated as of ______________, 2000, by and between you and Merix
      Corporation,
      and
      that you have the right pursuant to the terms of such Lease to draw upon this
      Letter of Credit. Such sight draft and written certification may be in
      the
      form of Exhibit
      A
      attached
      hereto and made a part hereof.

     

    This
      Letter of Credit is subject to the Uniform Customs And Practice For Documentary
      Credits, International Chamber of Commerce — Publication 590.

     

    
      	
              Very
                truly yours,

            
	 
	
              [L/C
                Bank]

            
	 	 
	
              By:

            	
               

            
	 	 
	
              Its:

            	
               

            

    

    
      
        
        

      

      
        D-1

        
          

        

      

      
        
        

      

    

    EXHIBIT "E"
      To Master Lease

    DESIGN
      AND CONSTRUCTION SCHEDULE

    
      
        
        

      

      
        E-1

        
          

        

      

      
        
        

      

    

    EXHIBIT "F"
      To Master Lease

     

    TENANT'S
      QUESTIONNAIRE

     

    Merix
      Corporation- Proposed Mass-Lamination Facility

     

    
      	
              Operator:

            	
              Merix
                Corporation

            
	 	
              P.O
                Box 3000

            
	 	
              1521
                Poplar Lane

            
	 	
              Forest
                Grove, OR 97116

            
	 	
              Phone:
                (503) 359-9300

            
	 	
              http://www.merix.com

            
	 	 
	
              Operations:

            	
              Printed
                Circuit Board “Mass-Lamination” Facility

            
	 	 
	
              SIC
                Code:

            	
              3672

            
	 	 
	
              Founded:

            	
              1994

            
	 	 
	
              Employees:

            	
              1200

            

    

     

    Note:
      The following information is based upon the current (8/16/00) intentions of
      Merix Corporation with regard to startup of a proposed mass-lamination facility.
      The technology for manufacturing of circuit boards is very dynamic, and future
      changes affecting the accuracy of this information are likely.

     

    Description
      of Manufacturing Processes:

     

    Manufacturing
      processes that will be required for implementation of a mass-lamination facility
      are primarily associated with printed circuit board inner layer manufacturing.
      The primary process operations include photo tooling, pre-clean, photoresist
      application, print, DES (develop, etch, & strip), AOI (automated optical
      inspection), oxide, lamination, and de-flash, and drill. A description of each
      of these processes follows.

     

    Photo
      Tooling.
      Photo
      Tooling operations will include a film plotter and developing
      capability.

     

    Pre-Clean.
      Planned
      pre-clean operations utilize a chemical washing process. Incoming laminate
      material (copper clad sheets of FRP) is alternately sprayed with solutions
      of
      sulfuric acid and sodium hydroxide to remove any incoming contaminants. Typical
      contaminants include fingerprint oils and anti-tarnish coatings.

     

    Photoresist
      Application.
      Photoresist is applied by heating a sheet of photoactive acrylic polymer and
      pressing it directly on to the surface of the laminate material.

     

    Print.
      The
      photoresist material is imprinted by exposure to UV light through a photographic
      film. The film and equipment is periodically cleaned using small quantities
      of
      isopropyl alcohol and n-heptane.

     

    DES.
      The
      develop step uses potassium carbonate solution to remove any un-polymerized
      photoresist. The etch step uses a cupric chloride etchant (typically
      hydrochloric acid and hydrogen peroxide or sodium chlorate) to remove exposed
      copper. The strip step removes the remaining polymerized photoresist from the
      laminate using a proprietary stripper solution (typically potassium or sodium
      hydroxide, or ethanolamine and tetramethyl ammonium hydroxide).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    AOI.
      Automated Optical Inspection is performed after DES to ensure that the circuitry
      is correct prior to any further processing.

     

    Oxide.
      The
      oxide process adds topography to the surface of the remaining copper in
      preparation for lamination. Typical process steps include microetch, oxide,
      and
      preservative.

     

    Lamination.
      In the
      lamination step, the various circuit layers of are ordered, interleaved with
      partially cured FRP sheets, and bonded together with heat and pressure.

     

    De-Flash.
      In this
      step, the laminated boards are trimmed to size.

     

    Drill.
      All
      holes necessary for components and layer interconnects are drilled in the
      product.

     

    Description
      of Primary Facilities Support Systems:

     

    Utilities.
      Anticipated
      utility needs include compressed air, steam, chilled water, vacuum/dust
      collection, and enhanced purity water. Systems to provide these utilities would
      consume electricity, natural gas, and water.

     

    Wastewater
      Pre-treatment. Wastewater
      generated from manufacturing processes would be pretreated as required to meet
      requirements for discharge to a POTW (publicly owned treatment works.) The
      primary chemicals used for this pretreatment would include lime and sulfuric
      acid.

     

    Potential
      Contaminants on Site:

     

    The
      primary potential contaminants of interest would be copper, isopropyl alcohol,
      n-heptane, and silver. The silver is associated with the film work, but
      quantities will likely be low. The only other metal of concern from this list
      is
      copper which is used as the inner layer conductor. The isopropyl alcohol and
      n-heptane are used in hand cleaning operations, and the inventory of these
      materials inventory will likely be less than 110 gallons of each.

     

    The
      chemicals stored in the largest quantities on site will be copper (in sheets),
      hydrochloric acid (in totes), hydrogen peroxide (in totes) (or sodium chlorate),
      sodium hydroxide (in totes), proprietary amine stripper (in totes), sulfuric
      acid (in totes), sodium carbonate (in totes), cupric chloride solution (6000
      gallon storage tank), and calcium hydroxide (lime for wastewater pre-treatment
      in totes.)

     

    Engineering
      Controls:

     

    Chemical
      Use & Storage Areas (Including Waste &
Wastewater.)
      THE
      DESIGN of wet process and chemical storage areas would include the
      following:

     

    
      	 	
              ·

            	
              Sloped
                berms and sumps with chemical resistant coatings for secondary
                containment. 

            

    

    
      	 	
              ·

            	
              Remote
                reagent dispensing from <330 gallon totes, wherever practicable.
                

            

    

    
      	 	
              ·

            	
              Containment
                and sumps at all truck loading and unloading areas isolated from
                stormwater system. 

            

    

    
      	 	
              ·

            	
              Only
                sanitary system drains lines to be located under the floor.
                

            

    

    
      	 	
              ·

            	
              No
                underground storage tanks. 

            

    

     

    Air
      Emission Sources.
      Emissions controls would be applied to all significant sources of regulated
      emissions.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Environmental
      Permits Required:

     

    The
      following Environmental Permits and/or notifications are
      anticipated:

     

    
      	 	
              ·

            	
              Industrial
                wastewater pre-treatment Permit.

            

    

    
      	 	
              ·

            	
              Air
                Contaminant Discharge Permit.

            

    

    
      	 	
              ·

            	
              Notification
                of Hazardous Waste Generation.

            

    

    
      	 	
              ·

            	
              Exemption
                from Stormwater Pollution Prevention planning
                requirements.

            

    

     

    To
      the
      best of my knowledge, and belief, the information contained herein is true
      and
      correct.

     

    
      	
              Date:August
                16, 2000

            	 	
              Stephen
                G. Edward

            
	 	 	 
	 	 	
              Name

            
	 	 	
               

            
	 	 	 
	 	 	
              Signature

            
	 	 	 
	 	 	
              Environmental
                Compliance Manager

            
	 	 	 
	 	 	
              Title

            

    

     

    Regulatory
      Contacts & References:

     

    Merix
      Corporation has a history of responsible environmental management. The following
      are regulatory contacts within the State of Oregon who have past or present
      experience with Merix environmental personnel and/or activities at existing
      and/or former operations. Merix has every reason to believe that these entities
      would be able to provide an objective perspective on Merix’s historical
      environmental commitment and performance.

     

    General
      Regulatory Perspective:

     

    Marianne
      Fitzgerald

     

    Pollution
      Prevention Coordinator

     

    Oregon
      Department of Environmental Quality

     

    Office
      of
      the Director

     

    811
      SW
      Sixth

     

    Portland,
      OR 97204

     

    Phone:
      503-229-5946

     

    mailto:Marianne.Fitzgerald@state.or.us

     

    Industrial
      Wastewater Discharge:

     

    Kathleen
      Caldwell

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Source
      Control Investigator

     

    Unified
      Sewerage Agency

     

    Water
      Quality Lab Facility

     

    2550
      SW
      Hillsboro Highway

     

    Hillsboro,
      OR 97123-9379

     

    Phone:
      503-846-8926 

     

    mailto:CaldwelK@USA-Cleanwater.org

     

    Air
      Quality:

     

    Greg
      Grunow

     

    Environmental
      Specialist, Air Quality Program

     

    Oregon
      Department of Environmental Quality

     

    Northwest
      Region

     

    2020
      SW
      Fourth Ave., Suite 400

     

    Portland,
      OR 97201-4987

     

    Phone:
      503-229-5571

     

    mailto:Greg.Grunow@state.or.us

     

    Hazardous
      Waste:

     

    Susan
      Schewczyk Yarbrough

     

    Environmental
      Specialist, Hazardous Waste Section

     

    Department
      of Environmental Quality

     

    Northwest
      Region

     

    2020
      SW
      Fourth Ave., Suite 400

     

    Portland,
      OR 97201-4987

     

    Phone:
      503-229-5563

     

    mailto:Susan.Shewczyk@state.or.us
      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      “B” To Sub Lease

     

    Sublandlord
      Removal Work

     

    [TO
      BE ATTACHED UPON MUTUAL AGREEMENT OF SUBLANDLORD AND
      SUBTENANT]

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Exhibit
      “C” To Sublease

     

    Description
      of Equipment

     

    [TO
      BE ATTACHED UPON MUTUAL AGREEMENT OF SUBLANDLORD AND
      SUBTENANT]Exhibit
      4.1

     

    
      
        

      

    

     

    SECURITIES
      PURCHASE AGREEMENT

     

    By
      and Between

     

    MDWERKS,
      INC.

     

    and

     

    VICIS
      CAPITAL MASTER FUND

     

    DATED
      MARCH 31, 2008

     

      
        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SECURITIES
      PURCHASE AGREEMENT

     

    This
      SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated this 31st day of March,
      2008, is made by and between MDWERKS, INC., a Delaware corporation (the
“Company”), and VICIS CAPITAL MASTER FUND (the “Purchaser”), a series of the
      Vicis Capital Master Trust, a trust formed under the laws of the Cayman
      Islands.

     

    RECITALS

     

    WHEREAS,
      pursuant to the terms and conditions of this Agreement, the Company wishes
      to
      issue and sell to the Purchaser the following securities (collectively, the
      “Securities”): (a) 750 shares (the “Preferred Shares”) of the Company’s
      Series B Convertible Preferred Stock, par value $.001 per share (the “Series B
      Preferred Stock”), with such terms, rights and preferences as are set forth in
      the Amended and Restated Certificate of Designation for the Series B Preferred
      Stock set forth on Exhibit
      A
      attached
      hereto; and (b) a Series H Warrant to purchase an aggregate of 53,333,334
      shares of common stock, par value $.001 per share (the “Common Stock”), of the
      Company initially at an exercise price of $0.75 per share in the form attached
      hereto as Exhibit
      B
      (the
“Series H Warrant” or the “Warrant”).

     

    WHEREAS,
      the Purchaser desires to purchase such Securities from the Company according
      to
      the terms hereinafter set forth.

     

    WHEREAS,
      pursuant to those certain Securities Purchase Agreements, dated
      September 28, 2007, and January 18, 2008, by and among the Company, Vicis
      and the purchasers named therein (“Prior Purchase Agreements”), Vicis is the
      holder of: (1) 250 shares of Series B Preferred Stock; (2) Series F Warrants
      (“Series F Warrants”) to purchase an aggregate of 1,875,000 shares of the
      Company’s Common Stock and (3) Series G Warrants to purchase an aggregate of
      1,250,000 shares of the Company’s Common Stock, (“Series G Warrants”, together
      with the Series F Warrants, the “Existing Vicis Warrants”). 

     

    WHEREAS,
      as inducement for Vicis ’s acquisition of securities hereunder, the Company has
      agreed to amend the terms of the Certificate of Designation for the Company’s
      Series B Preferred Stock, as hereinafter set forth.

     

    WHEREAS,
      Purchaser is the holder of that certain Convertible Note (the “Bridge Note”)
      issued by the Company on December 3, 2007 in the principal amount of
      $575,000.

     

    WHEREAS,
      by its terms, the Bridge Note and all accrued and unpaid interest thereon
      (“Bridge Note Interest”) automatically converts into the Securities acquired by
      Purchaser hereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    NOW,
      THEREFORE, 
      the
      Company and the Purchaser hereby agree as follows:

     

    ARTICLE
      I

    PURCHASE
      AND SALE OF THE SECURITIES

     

    1.1 Purchase
      and Sale of the Securities.
      Subject
      to the terms and conditions hereof and in reliance on the representations and
      warranties contained herein, or made pursuant hereto, the Company will issue
      and
      sell to the Purchaser, and the Purchaser will purchase from the Company at
      the
      closing of the transactions contemplated hereby (the “Closing”), the Securities
      for $7,500,000 (the “Purchase Price”) consisting of the following: (a)
      $6,925,000  in cash, less the sum of (i) Bridge Note Interest in the amount
      of $15,205.56, and (ii) the fee owed to Vicis pursuant to Section 12.9
      hereof in the amount of $100,000 (the “Cash Payment”); and (b) the
      surrender of the Bridge Note and Existing Vicis Warrants to the Company for
      cancellation.

     

    1.2 Closing.
      The
      Closing shall be deemed to occur at the offices of Quarles & Brady, LLP, 411
      East Wisconsin Avenue, Milwaukee, Wisconsin, at 5:00 p.m. CDT on March 31,
      2008,
      or at such other place, date or time as mutually agreeable to the parties (the
      “Closing Date”). 

     

    1.3 Closing
      Matters.
      On the
      Closing Date, subject to the terms and conditions hereof, the following actions
      shall be taken:

     

    (a) The
      Company, against delivery of payment of the Purchase Price in accordance with
      Section 1.3(b), will deliver to the Purchaser the documents set forth in Section
      5.4 hereof.

     

    (b) The
      Purchaser shall deliver to the Company the Cash Payment by wire transfer of
      immediately available funds in accordance with the instructions of the
      Company.

     

    1.4 Subsequent
      Financings.
      

     

    (a) Other
      than in connection with a Permitted Financing (defined below), for the 12-month
      period following the Closing Date, the Purchaser shall have the right to
      participate
      pro
      rata, pari passu
      with
      Gottbetter Capital Master, Ltd. (“Gottbetter”) based upon Gottbetter’s and
      Purchaser’s respective aggregate investment amounts (including initial and
      subsequent investments) in the Company’s securities set forth in Schedule 1.4(a)
      hereto, collectively, up to 100% of each such subsequent financing that involves
      the sale of securities of the Company and results in gross proceeds to the
      Company in excess of $250,000 (each such financing, a “Subsequent
      Financing”).  In the event Gottbetter elects not to participate in a
      Subsequent Financing, the Purchaser also shall have the right to participate
      in
      such Subsequent Financing to the extent and in the amount that Gottbetter does
      not participate. At least 15 days prior to the making or accepting an offer
      for
      a Subsequent Financing, the Company shall deliver to the Purchaser a written
      notice of its intention to effect a Subsequent Financing and the details of
      such
      Subsequent Financing (a “Subsequent Financing Notice”). The Subsequent
      Financing Notice shall describe in reasonable detail the proposed terms of
      such
      Subsequent Financing, the amount of proceeds intended to be raised thereunder
      and the Person with whom such Subsequent Financing is proposed to be effected,
      and shall include, as an attachment thereto, a term sheet or similar document
      relating thereto.    If the Purchaser elects to participate in
      the Subsequent Financing, the closing of such Subsequent Financing shall be
      as
      mutually agreed between the parties participating in such Subsequent Financing.
      If by 6:30 p.m. (Eastern Time) on the fifteenth day after the Purchaser has
      received the Subsequent Financing Notice, the Purchaser fails to notify the
      Company of its election to participate or elects to participate in an amount
      that is less than the total amount of the Subsequent Financing, then the Company
      may effect the remaining portion of such Subsequent Financing on the terms
      and
      with the Persons set forth in the Subsequent Financing Notice.  The Company
      must provide the Purchaser with a second Subsequent Financing Notice, and the
      Purchaser will again have the right of participation set forth above in this
      Section 1.4(a), if the Subsequent Financing subject to the initial Subsequent
      Financing Notice is not consummated for any reason on the terms set forth in
      such Subsequent Financing Notice within 60 days after the date of the initial
      Subsequent Financing Notice. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (b) In
      the
      event that the Purchaser elects to participate in a Subsequent Financing, the
      Purchaser may, at its option, on one occasion only, exchange any or all shares
      of Series B Preferred Stock held by the Purchaser for securities issued in
      the
      Subsequent Financing at a rate of 1 Preferred Share for each $11,500 of
      securities issued in the Subsequent Financing.

     

    (c) Notwithstanding
      the foregoing, Section 1.4(a) shall not apply in respect to the issuance of
      the
      following (each, a “Permitted Financing”): (i) shares of Common Stock or Common
      Stock options, warrants or other rights to purchase Common Stock issued to
      employees, officers, directors or consultants of the Company pursuant to any
      stock, option, equity incentive or similar plan duly adopted by the Board of
      Directors of the Company or shares of Common Stock issued upon exercise of
      any
      option or warrant or conversion of any convertible security issued pursuant
      to
      any stock, option, equity incentive or similar plan duly adopted by the Board
      of
      Directors of the Company, (ii) securities issued upon the exercise of or
      conversion of any securities issued pursuant to this Agreement, (iii) Common
      Stock issued upon the exercise or conversion of options, warrants, preferred
      stock or convertible debt instruments issued and outstanding on the date of
      this
      Agreement; provided that, (A) such securities have not been amended since the
      date of this Agreement to increase the number of such securities or underlying
      Common Stock or (B) to decrease the exercise or conversion price of any such
      security (except in the case of (A) and (B) pursuant to any anti-dilution or
      price reset provisions or otherwise that are in effect as of the date hereof),
      (iv) securities issued pursuant to acquisitions or strategic transactions,
      provided any such issuance shall only be to a Person which is, itself or through
      its subsidiaries, an operating company in a business synergistic with the
      business of the Company and in which the Company receives benefits in addition
      to the investment of funds, but shall not include an issuance or transaction
      in
      which the Company is issuing securities primarily for the purpose of raising
      capital or to an entity whose primary business is investing in securities,
      and
      (v) securities issued in connection with loans made to the Company or Xeni
      Financial Services, Corp. for the purpose of financing loans from the Company
      or
      its subsidiaries to healthcare providers as part of the business of Xeni
      Financial Services, Corp.

     

    1.5 Amendments
      to Existing Vicis Securities.
      

     

    (a) For
      no
      consideration in addition to the Purchase Price paid by Purchaser, the Company
      shall: (i) amend and restate its Certificate
      of Designation for the Series B Preferred Stock
      in the
      form set
      forth
      on Exhibit
      A
      attached
      hereto.
      

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II

    SECURITY
      DOCUMENTS 

     

    2.1 Company
      Security Documents.
      

     

    (a) Security
      Agreement.
      All of
      the obligations of the Company under the Preferred Shares shall be secured
      by a
      lien on all the personal property and assets of the Company now existing or
      hereinafter acquired granted pursuant to that certain Security Agreement dated
      September 28, 2007 between the Company and the Purchaser (the “Security
      Agreement”). The parties acknowledge and agree that the term “Obligations”
as
      defined in the Security Agreement, includes all obligations of the Company
      to
      the Purchaser, including without limitation, those obligations of the Company
      under the Series B Preferred Stock and Transaction Documents (as defined herein
      in Section 3.6). Such lien is and shall remain expressly subordinated and junior
      to the liens of Gottbetter as is set forth in the Security Agreement.

     

    (b) Guaranty.
      All of
      the obligations of the Company under the Preferred Shares shall be guaranteed
      pursuant to those certain guaranty agreements (each, a “Guaranty Agreement” and
      collectively, the “Guaranty Agreements”), each dated September 28, 2007 between
      Purchaser and each of the following subsidiaries of the Company (each a
“Subsidiary and collectively, the “Subsidiaries”): MDwerks
      Global Holdings, Inc., a corporation, organized under the laws of the State
      of
      Florida (“MGHI”), Xeni Medical Systems, Inc., a corporation organized under the
      laws of the State of Delaware (“XMSI”), Xeni Financial Services Corp., a
      corporation organized under the laws of the State of Florida (“XFSC”), Xeni
      Medical Billing, Corp., a corporation organized under the laws of the State
      of
      Delaware (“XMBC”), and Patient Payment Solutions, Inc., a corporation organized
      under the laws of the State of Florida (“PPS”).
      Each
      Subsidiary acknowledges and agrees that the term “Obligations”
as
      defined in the applicable Guaranty Agreement, includes all obligations of the
      Company to the Purchaser, including without limitation, those obligations of
      the
      Company under the Series B Preferred Stock and Transaction Documents.

     

    (c) Guarantor
      Security Documents.
      All of
      the obligations of each Subsidiary under its Guaranty Agreement shall be secured
      by a lien on all the personal property and assets of such Subsidiary now
      existing or hereinafter acquired granted pursuant those certain guarantor
      security agreements (each, a “Guarantor Security Agreement” and collectively,
      the “Guarantor Security Agreements”), each dated September 28, 2007 between
      Purchaser and each Subsidiary. Each Subsidiary acknowledges and agrees that
      the
      term “Obligations”
as
      defined in the applicable Guarantor Security Agreement, includes all obligations
      of the Company to the Purchaser, including without limitation, those obligations
      of the Company under the Series B Preferred Stock and Transaction Documents.
      The
      parties further acknowledge and agree that the lien on the personal property
      of
      XFSC does not include the accounts receivable of XFSC as is set forth in XFSC’s
      security agreement with Purchaser and that liens granted pursuant to the
      Guarantor Security Agreements are and shall remain expressly subordinated and
      junior to the liens of Gottbetter as further set forth in the Guarantor Security
      Agreements. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY

     

    The
      Company hereby represents and warrants to the Purchaser as of the date of this
      Agreement as follows: 

     

    3.1 Organization
      and Qualification.
      The
      Company is a corporation duly organized and validly existing and in good
      standing under the laws of the jurisdiction in which it is incorporated, and
      has
      all requisite corporate power and authority to carry on its business as now
      conducted. The Company is duly qualified as a foreign corporation to do business
      and is in good standing in every jurisdiction in which its ownership of property
      or the nature of the business conducted by it makes such qualification
      necessary, except to the extent that the failure to be so qualified or be in
      good standing would not have a Material Adverse Effect. As used in this
      Agreement, “Material Adverse Effect” means any material adverse effect on the
      business, properties, assets, operations, results of operations, or condition
      (financial or otherwise) of the Company and its Subsidiaries, taken as a whole,
      or on the transactions contemplated hereby or by the agreements and instruments
      to be entered into in connection herewith, or on the authority or ability of
      the
      Company to perform its obligations in all material respects under the
      Transaction Documents.

     

    3.2 Subsidiaries.
      The
      Company has no subsidiaries other than the Subsidiaries. The Company owns,
      directly or indirectly, all of the capital stock of each Subsidiary, free and
      clear of any and all Liens (as defined in Section 8.3), except Permitted Liens
      (as defined in Section 8.3), and all the issued and outstanding shares of
      capital stock of each Subsidiary are validly issued and are fully paid,
      non-assessable and free of preemptive and similar rights. Each Subsidiary is
      a
      corporation duly organized and validly existing and in good standing under
      the
      laws of the jurisdiction in which it is incorporated, and has all requisite
      corporate power and authority to carry on its business as now conducted. Each
      Subsidiary is duly qualified as a foreign corporation to do business and is
      in
      good standing in every jurisdiction in which its ownership of property or the
      nature of the business conducted by it makes such qualification necessary,
      except to the extent that the failure to be so qualified or be in good standing
      would not have a Material Adverse Effect. 

     

    3.3 Compliance.
      

     

    (a) Neither
      the Company nor any Subsidiary (i) is in default under or in violation of
      (and no event has occurred that has not been waived that, with notice or lapse
      of time or both, would result in a default by the Company or any Subsidiary
      under), nor has the Company or any Subsidiary received notice of a claim that
      it
      is in default under or that it is in violation of, any indenture, loan or credit
      agreement or any other agreement or instrument to which it is a party or by
      which it or any of its properties is bound, except such that, individually
      or in
      the aggregate, such default(s) and violations(s) would not have a Material
      Adverse Effect, (ii) is in violation of any order of any court, arbitrator
      or governmental body, or (iii) is in violation of any of the provisions of
      its certificate or articles of incorporation, bylaws or other organizational
      or
      charter documents.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (b) The
      business of the Company and each Subsidiary is presently being conducted in
      accordance with all applicable foreign, federal, state and local governmental
      laws, rules, regulations and ordinances (including, without limitation, rules
      and regulations of each governmental and regulatory agency, self regulatory
      organization and Trading Market applicable to the Company or any Subsidiary),
      except such that, individually or in the aggregate, the noncompliance therewith
      would not have a Material Adverse Effect. The Company has all franchises,
      permits, licenses, consents and other governmental or regulatory authorizations
      and approvals necessary for the conduct of its business as now being conducted
      by it unless the failure to possess such franchises, permits, licenses, consents
      and other governmental or regulatory authorizations and approvals, individually
      or in the aggregate, would not have a Material Adverse Effect, and the Company
      has not received any written notice of proceedings relating to the revocation
      or
      modification of any of the foregoing. For purposes of this Agreement, “Trading
      Market” means the following markets or exchanges on which the Common Stock is
      listed or quoted for trading on the date in question: the NYSE Arca, OTC
      Bulletin Board, the American Stock Exchange, the New York Stock Exchange, the
      Nasdaq National Market or the Nasdaq Capital Market.

     

    3.4 Capitalization.

     

    (a) As
      of the
      date hereof and without giving effect to the sale of Securities at Closing
      as
      contemplated hereby, the Company’s authorized capital stock consists of (1)
      100,000,000 shares of Common Stock, par value $.001 per share, of which
      12,940,065 shares are outstanding and (2) 10,000,000 shares of preferred stock,
      par value $.001 per share, of which (x) 1,000 shares have been designated as
      Series A Convertible Preferred Stock, par value $0.001 per share, of which
      2
      shares are outstanding, and (y) 1,000 shares have been designated as Series
      B
      Convertible Preferred Stock, par value $0.001, of which 250 shares are
      outstanding. All of such outstanding shares have been, or upon issuance will
      be,
      validly issued, are fully paid and nonassessable. 29,192,604 shares of Common
      Stock are reserved for issuance upon the exercise or conversion of all
      outstanding warrants, convertible notes, options, or other securities
      exchangeable, convertible or exercisable into shares of Common Stock.

     

    (b) Except
      for the Securities, or as disclosed in Schedule 3.4(b) attached
      hereto:

     

    (i) no
      holder
      of shares of the Company’s capital stock has any preemptive rights or any other
      similar rights or has been granted or holds any Liens or encumbrances suffered
      or permitted by the Company;

     

    (ii) there
      are
      no outstanding options, warrants, scrip, rights to subscribe to, calls or
      commitments of any character whatsoever relating to, or securities or rights
      convertible into, or exercisable or exchangeable for, any shares of capital
      stock of the Company or any Subsidiary, or contracts, commitments,
      understandings or arrangements by which the Company or any Subsidiary is or
      may
      become bound to issue additional shares of capital stock of the Company or
      any
      Subsidiary or options, warrants, scrip, rights to subscribe to, calls or
      commitments of any character whatsoever relating to, or securities or rights
      convertible into, or exercisable or exchangeable for, any shares of capital
      stock of the Company or any Subsidiary;

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (iii) there
      are
      no outstanding debt securities, notes, credit agreements, credit facilities
      or
      other agreements, documents or instruments evidencing Indebtedness (as defined
      in Section 3.13 hereof) of the Company or any Subsidiary in excess of $100,000
      or by which the Company or a Subsidiary is or may become bound and involves
      Indebtedness in excess of $100,000;

     

    (iv) there
      are
      no financing statements securing obligations in any material amounts, either
      singly or in the aggregate, filed in connection with the Company or its
      Subsidiaries;

     

    (v) there
      are
      no agreements or arrangements under which the Company or any Subsidiary is
      obligated to register the sale of any of their securities under the Securities
      Act of 1933, as amended (the “Securities Act”); 

     

    (vi) there
      are
      no outstanding securities or instruments of the Company or any Subsidiary that
      contain any redemption or similar provisions, and there are no contracts,
      commitments, understandings or arrangements by which the Company or any
      Subsidiary is or may become bound to redeem a security of the Company or a
      Subsidiary;

     

    (vii) there
      are
      no securities or instruments containing antidilution or similar provisions
      that
      will be triggered by the issuance of the Securities; and

     

    (viii) the
      Company does not have any stock appreciation rights or “phantom stock” plans or
      agreements or any similar plan or agreement.

     

    3.5 Issuance
      of Securities.
      

     

    (a) The
      Securities to be issued hereunder are duly authorized and, upon payment and
      issuance in accordance with the terms hereof, shall be free from all taxes,
      Liens and charges with respect to the issuance thereof. As of the Closing Date,
      the Company has authorized and has reserved free of preemptive rights and other
      similar contractual rights of stockholders, a number of its authorized but
      unissued shares of Common Stock equal to one hundred percent (100%) of the
      aggregate number of shares of Common Stock to effect the conversion of the
      Preferred Shares (the “Conversion Shares”) and one hundred percent (100%) of the
      aggregate number of shares of Common Stock to effect the exercise of the Warrant
      (the “Warrant Shares”).

     

    (b) The
      Conversion Shares and Warrant Shares, when issued and paid for upon conversion
      of the Preferred Shares and exercise of the Warrant, as the case may be, will
      be
      validly issued, fully paid and nonassessable and free from all taxes, Liens
      and
      charges with respect to the issue thereof, with the holders being entitled to
      all rights accorded to a holder of the Common Stock. 

     

    (c) Assuming
      the accuracy of each of the representations and warranties made by the Purchaser
      and set forth in Article IV hereof (and assuming no change in applicable law
      and
      no unlawful distribution of the Securities by the Purchaser or other Persons),
      the issuance by the Company to the Purchaser of the Securities is exempt from
      registration under the Securities Act.

     

    
      
        
        

      

      
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    3.6 Authorization;
      Enforcement; Validity.
      The
      Company has the requisite corporate power and authority to enter into and
      perform its obligations under this Agreement, that certain Amended and
      Restated Registration Rights Agreement to be entered into between the
      Company and the Purchaser on even date herewith in the form attached hereto
      as
Exhibit
      C
      (the
“Registration Rights Agreement”), which amends and restates that certain
      Registration Rights Agreement dated as of September 28, 2007 (the “Prior
      Registration Rights Agreement”), as amended by that certain First Amendment to
      the Registration Rights Agreement, dated January 18, 2008, the Security
      Agreement, the Certificate of Designations for the Series B Preferred Stock,
      the
      Warrant, and each of the other agreements or instruments entered into by the
      parties hereto in connection with the transactions contemplated by this
      Agreement (collectively, the “Transaction Documents”) and to issue the
      Securities (including without limitation, the Conversion Shares and Warrant
      Shares) in accordance with the terms hereof and thereof. The execution and
      delivery of the Transaction Documents by the Company and the consummation by
      the
      Company of the transactions contemplated hereby and thereby, including, without
      limitation, and the issuance of the Preferred Shares, and the Warrant, have
      been
      duly authorized by the Board, and no further consent or authorization is
      required by the Company, the Board or its stockholders. This Agreement and
      the
      other Transaction Documents have been duly executed and delivered by the
      Company, and constitute the legal, valid and binding obligations of the Company
      enforceable against the Company in accordance with their respective terms,
      except (i) as limited by general equitable principles and applicable bankruptcy,
      insolvency, reorganization, moratorium, fraudulent conveyance and other laws
      of
      general application affecting enforcement of creditors’ rights and remedies
      generally, (ii) as limited by laws relating to the availability of specific
      performance, injunctive relief or other equitable remedies and (iii) insofar
      as
      indemnification and contribution provisions may be limited by applicable law
      or
      by principles of public policy thereunder.

     

    3.7 Dilutive
      Effect.
      The
      Company understands and acknowledges that its obligation to issue the Conversion
      Shares and Warrant Shares upon conversion of the Preferred Shares and exercise
      of the Warrant, as the case may be, is absolute and unconditional regardless
      of
      the dilutive effect that such issuance may have on the ownership interests
      of
      other stockholders of the Company.

     

    3.8 No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by the Company of the transactions contemplated hereby
      and
      thereby (including, without limitation, the reservation for issuance of the
      Conversion Shares and Warrant Shares) will not (i) result in a violation of
      any articles or certificate of incorporation, any certificate of designations,
      preferences and rights of any outstanding series of preferred stock or bylaws
      of
      the Company or any Subsidiary or (ii) conflict with, or constitute a
      default (or an event which with notice or lapse of time or both would become
      a
      default) under, or give to others any rights of termination, amendment,
      acceleration or cancellation of, any material agreement, indenture or instrument
      to which the Company or any Subsidiary is a party (except where such defaults,
      conflicts, rights of termination, amendment, acceleration or cancellation have
      been waived or postponed until the fulfillment of the Company’s obligations
      under the Transaction Documents), or (iii) result in a violation of any
      federal, state, local or foreign statute, rule, regulation, order, judgment
      or
      decree (including federal and state securities laws and regulations and rules
      and regulations of any governmental or any regulatory agency, self-regulatory
      organization, or Trading Market applicable to the Company) or by which any
      property or asset of the Company are bound or affected, except in the case
      of
      clauses (ii) and (iii), for such breaches, violations or defaults as would
      not
      be reasonably expected to have a Material Adverse Effect. 

     

    
      
        
        

      

      
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    3.9 Governmental
      Consents.
      Except
      for (i) filings
      required under the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”) to disclose the existence of the transactions contemplated by this
      Agreement, (ii) the filing of a registration statement pursuant to the
      Registration Rights Agreement (as defined in Section 3.6),
      (iii) application(s) to each Trading Market for the listing of the
      Conversion Shares and Warrant Shares for trading thereon in the time and manner
      required thereby, and (iv) the filing of Form D with the Commission and
      such filings as are required to be made under applicable state securities
      laws,
      the
      Company is not required to obtain any consent, authorization or order of, or
      make any filing or registration with, any court, governmental or any regulatory
      agency, self-regulatory organization or any other Person (as defined in Section
      3.12) in order for it to execute, deliver or perform any of its obligations
      under or contemplated by the Transaction Documents, in each case, in accordance
      with the terms hereof or thereof. The
      Company is unaware of any facts or circumstances relating to the Company or
      its
      Subsidiaries which might prevent the Company from obtaining or effecting any
      of
      the foregoing.

     

    3.10 Registration
      and Approval of Sale of Securities.
      Based
      in material part upon the representations and warranties herein (and in the
      other Transaction Documents) of the Purchaser, the Company has complied and
      will
      comply with all applicable federal and state securities laws in connection
      with
      the offer, issuance and sale of the Securities hereunder (except in the case
      of
      state securities laws, for any failures to comply that, individually or in
      the
      aggregate, will not have a Material Adverse Effect). Assuming the accuracy
      of
      the representations and warranties in Article IV hereof (and assuming no change
      in applicable law and no unlawful distribution of the Securities by the
      Purchaser or other Persons), no registration under the Securities Act is
      required for the offer and sale of the Securities by the Company to the
      Purchaser as is contemplated hereby. Neither the Company nor any Person acting
      on its behalf, directly or indirectly, has or will sell, offer to sell or
      solicit offers to buy any of the Securities or similar securities to, or solicit
      offers with respect thereto from, or enter into any negotiations relating
      thereto with, any Person, or has taken or will take any action so as to either
      (a) bring the issuance and sale of any of the Securities under the
      registration provisions of the Securities Act or applicable state securities
      laws, or (b) trigger shareholder approval provisions under the rules or
      regulations of any Trading Market. Neither the Company nor any of its affiliates
      that it controls, nor any Person acting on its or their behalf, has: (x) engaged
      in any form of general solicitation or general advertising (within the meaning
      of Regulation D under the Securities Act) in connection with the offer or sale
      of any of the Securities; or (y) directly or indirectly made any offers or
      sales
      of any security or solicited any offers to buy any security under circumstances
      that would cause the offering of the Securities pursuant to this Agreement
      to be
      integrated with prior offerings by the Company for purposes of the Securities
      Act in a manner that would prevent the Company from selling the Securities
      pursuant to Regulation D and Rule 506 thereof under the Securities Act, nor
      will
      the Company or any of its affiliates that it controls or Persons acting on
      its
      or their behalf engage in any form of general solicitation or take any action
      or
      steps that would cause the offering of the Securities to be integrated with
      other offerings. 

     

    
      
        
        

      

      
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    3.11 Placement
      Agent’s Fees.
      No
      brokerage or finder’s fee or commission are or will be payable to any Person
      with respect to the transactions contemplated by this Agreement based upon
      arrangements made by the Company or any of its affiliates. The Company agrees
      that it shall be responsible for the payment of any placement agent’s fees,
      financial advisory fees, or brokers’ commissions (other than for Persons engaged
      by the Purchaser or any of its affiliates) relating to or arising out of the
      transactions contemplated hereby. The Company shall pay, and hold the Purchaser
      harmless against, any liability, loss or expense (including, without limitation,
      reasonable attorney’s fees and out-of-pocket expenses) arising in connection
      with any claim for any such fees or commissions.

     

    3.12 Litigation.
      Except
      as disclosed in Schedule 3.12 or as disclosed in the SEC Documents, there is
      no
      action, suit, written notice of violation, or written notice of any proceeding
      pending or, to the knowledge of the Company, threatened against or affecting
      the
      Common Stock or the Company, any Subsidiary or any of their respective executive
      officers, directors or properties before or by any court, arbitrator,
      governmental or administrative agency, regulatory authority (federal, state,
      county, local or foreign), self regulatory authority or Trading Market
      (collectively, an “Action”) which (i) adversely affects or challenges the
      legality, validity or enforceability of any of the Transaction Documents or
      the
      Securities or (ii) would, if there were an unfavorable decision, have or
      reasonably be expected to result in a Material Adverse Effect. To the Company’s
      knowledge, neither the Company nor any Subsidiary, nor any director or executive
      officer thereof (in his/her capacity as such), is or, within the last five
      years, has been the subject of any Action involving a claim of violation of
      or
      liability under federal or state securities laws or a claim of breach of
      fiduciary duty. To the knowledge of the Company, there has not been, and there
      is not pending or threatened in writing, any investigation by the United States
      Securities and Commission (the “Commission” or “SEC”) involving the Company or
      any current director or executive officer of the Company. The Commission has
      not
      issued any stop order or other order suspending the effectiveness of any
      registration statement filed by the Company under the Exchange Act or the
      Securities Act. There is no action, suit, claim, investigation, arbitration,
      alternate dispute resolution proceeding or other proceeding pending or, to
      the
      knowledge of the Company, threatened in writing against or involving the Company
      or any of its properties or assets, which individually or in the aggregate,
      would reasonably be expected to have a Material Adverse Effect. There are no
      outstanding orders, judgments, injunctions, awards or decrees of any court,
      arbitrator or governmental or regulatory body against the Company or any
      executive officers or directors of the Company in their capacities as such,
      which individually or in the aggregate, would reasonably be expected to have
      a
      Material Adverse Effect.

     

    
      
        
        

      

      
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    3.13 Indebtedness
      and Other Contracts.
      Except
      as disclosed in the SEC Documents (as defined in Section 3.14), neither the
      Company nor any Subsidiary (a) has any outstanding Indebtedness (as defined
      below in this Section 3.13), (b) is a party to any contract, agreement or
      instrument, the violation of which, or default under, by any other party to
      such
      contract, agreement or instrument would result in a Material Adverse Effect,
      (c) is in violation of any term of or in default under any contract,
      agreement or instrument relating to any Indebtedness, except where such
      violations and defaults would not result, individually or in the aggregate,
      in a
      Material Adverse Effect, or (d) is a party to any contract, agreement or
      instrument relating to any Indebtedness, the performance of which, in the
      judgment of the Company’s officers, has or is expected to have a Material
      Adverse Effect. For purposes of this Agreement: (x) “Indebtedness” of any
      Person means, without duplication (i) all indebtedness for borrowed money,
      (ii) all obligations issued, undertaken or assumed as the deferred purchase
      price of property or services (other than trade payables entered into in the
      ordinary course of business), (iii) all reimbursement or payment
      obligations with respect to letters of credit, surety bonds and other similar
      instruments, (iv) all obligations evidenced by notes, bonds, debentures or
      similar instruments, including obligations so evidenced incurred in connection
      with the acquisition of property, assets or businesses, (v) all
      indebtedness created or arising under any conditional sale or other title
      retention agreement, or incurred as financing, in either case with respect
      to
      any property or assets acquired with the proceeds of such indebtedness (even
      though the rights and remedies of the seller or bank under such agreement in
      the
      event of default are limited to repossession or sale of such property),
      (vi) all monetary obligations under any leasing or similar arrangement
      which, in connection with generally accepted accounting principles, consistently
      applied for the periods covered thereby, is classified as a capital lease,
      (vii) all indebtedness referred to in clauses (i) through (vi) above
      secured by (or for which the holder of such Indebtedness has an existing right,
      contingent or otherwise, to be secured by) any mortgage, Lien, pledge, change,
      security interest or other encumbrance upon or in any property or assets
      (including accounts and contract rights) owned by any Person, even though the
      Person which owns such assets or property has not assumed or become liable
      for
      the payment of such indebtedness, and (viii) all Contingent Obligations in
      respect of indebtedness or obligations of others of the kinds referred to in
      clauses (i) through (vii) above; (y) “Contingent Obligation” means, as
      to any Person, any direct or indirect liability, contingent or otherwise, of
      that Person with respect to any indebtedness, lease, dividend or other
      obligation of another Person if the primary purpose or intent of the Person
      incurring such liability, or the primary effect thereof, is to provide assurance
      to the obligee of such liability that such liability will be paid or discharged,
      or that any agreements relating thereto will be complied with, or that the
      holders of such liability will be protected (in whole or in part) against loss
      with respect thereto; and (z) “Person” means an individual, a limited
      liability company, a partnership, a joint venture, a corporation, a trust,
      an
      unincorporated organization and a government or any department or agency
      thereof.

     

    
      
        
        

      

      
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    3.14 Financial
      Information; SEC Documents.
      The
      Company has filed all reports required to be filed by it under the Exchange
      Act,
      including pursuant to Section 13(a) or 15(d) thereof, for the two years
      preceding the date hereof (or such shorter period as the Company was required
      by
      law to file such material) (the foregoing materials, including the exhibits
      thereto, being collectively referred to herein as the “SEC Documents”) on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Documents prior to the expiration of any such extension.
      As
      of their respective dates, the SEC Documents complied in all material respects
      with the requirements of the Securities Act and the Exchange Act and the rules
      and regulations of the Commission promulgated thereunder, and none of the SEC
      Documents, when filed, contained any untrue statement of a material fact or
      omitted to state a material fact required to be stated therein or necessary
      in
      order to make the statements therein, in light of the circumstances under which
      they were made, not misleading; provided, however, that the Company makes no
      representation as to the information included in any SEC Documents prepared
      by
      third parties and included therein, and the Company makes no representation
      as
      to the accuracy of information contained in third party studies and reports
      cited in the SEC Documents. Each registration statement and any amendment
      thereto filed by the Company during the two years preceding the date hereof
      pursuant to the Securities Act and the rules and regulations thereunder, as
      of
      the date such statement or amendment became effective, complied as to form
      in
      all material respects with the Securities Act and did not contain any untrue
      statement of a material fact or omit to state any material fact required to
      be
      stated therein or necessary in order to make the statements made therein not
      misleading; provided, however, that the Company makes no representation as
      to
      the information included in any SEC Documents prepared by third parties and
      included therein, and the Company makes no representation as to the accuracy
      of
      information contained in third party studies and reports cited in the SEC
      Documents; and each prospectus filed pursuant to Rule 424(b) under the
      Securities Act, as of its issue date and as of the closing of any sale of
      securities pursuant thereto did not contain any untrue statement of a material
      fact or omit to state any material fact required to be stated therein or
      necessary in order to make the statements made therein, in the light of the
      circumstances under which they were made, not misleading; provided, however,
      that the Company makes no representation as to the information included in
      any
      SEC Documents prepared by third parties and included therein and the Company
      makes no representation as to the accuracy of information contained in third
      party studies and reports cited in the SEC Documents. The financial statements
      of the Company included in the SEC Documents comply in all material respects
      with applicable accounting requirements and the rules and regulations of the
      Commission with respect thereto as in effect at the time of filing. Such
      financial statements have been prepared in accordance with United States
      generally accepted accounting principles applied on a consistent basis during
      the periods involved (“GAAP”), except as may be otherwise specified in such
      financial statements or the notes thereto and except that unaudited financial
      statements may not contain all footnotes required by GAAP and remain subject
      to
      year end adjustments, and fairly present in all material respects the financial
      position of the Company and its consolidated subsidiaries as of and for the
      dates thereof and the results of operations and cash flows for the periods
      then
      ended, subject, in the case of unaudited statements, to normal year-end audit
      adjustments.

     

    3.15 Absence
      of Certain Changes or Developments.
      Except
      as disclosed in Schedule 3.15 attached hereto or as disclosed in the SEC
      Documents or as contemplated herein and in the Transaction Documents, since
      December 31, 2007:

     

    (a) there
      has
      been no Material Adverse Effect, and no event or circumstance has occurred
      or
      exists with respect to the Company or its businesses, properties, operations
      or
      financial condition, which, under Exchange Act, Securities Act, or rules or
      regulations of any Trading Market, requires public disclosure or announcement
      by
      the Company but which has not been so publicly announced or disclosed;

     

    (b) the
      Company has not:

     

    (i) issued
      any stock, bonds or other corporate securities or any right, options or warrants
      with respect thereto, except pursuant to the exercise or conversion of
      securities outstanding as of such date;

     

    (ii) borrowed
      any amount in excess of $250,000 or incurred or become subject to any other
      liabilities in excess of $250,000 (absolute or contingent) except current
      liabilities incurred in the ordinary course of business which are comparable
      in
      nature and amount to the current liabilities incurred in the ordinary course
      of
      business during the comparable portion of its prior fiscal year, as adjusted
      to
      reflect the current nature and volume of the business of the
      Company;

     

    
      
        
        

      

      
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    (iii) discharged
      or satisfied any Lien or encumbrance in excess of $250,000 or paid any
      obligation or liability (absolute or contingent) in excess of $250,000, other
      than current liabilities paid in the ordinary course of business and payments
      of
      principal and interest to Gottbetter;

     

    (iv) declared
      or made any payment or distribution of cash or other property to stockholders
      with respect to its stock, or purchased or redeemed, or made any agreements
      so
      to purchase or redeem, any shares of its capital stock, in each case in excess
      of $50,000 individually or $100,000 in the aggregate;

     

    (v) sold,
      assigned or transferred any other tangible assets, or canceled any debts or
      claims, in each case in excess of $250,000, except in the ordinary course of
      business;

     

    (vi) sold,
      assigned or transferred any patent rights, trademarks, trade names, copyrights,
      trade secrets or other intangible assets or intellectual property rights in
      excess of $250,000, or disclosed any proprietary confidential information to
      any
      person except to customers in the ordinary course of business;

     

    (vii) suffered
      any material losses or waived any rights of material value, whether or not
      in
      the ordinary course of business, or suffered the loss of any material amount
      of
      prospective business;

     

    (viii) made
      any
      changes in employee compensation except in the ordinary course of business
      and
      consistent with past practices;

     

    (ix) made
      capital expenditures or commitments therefor that aggregate in excess of
      $250,000;

     

    (x) entered
      into any material transaction, whether or not in the ordinary course of business
      that has not been disclosed in the SEC Documents;

     

    (xi) made
      charitable contributions or pledges in excess of $10,000;

     

    (xii) suffered
      any material damage, destruction or casualty loss, whether or not covered by
      insurance;

     

    (xiii) experienced
      any material problems with labor or management in connection with the terms
      and
      conditions of their employment; 

     

    (xiv) altered
      its method of accounting, except to the extent required by GAAP;

     

    (xv) issued
      any equity securities to any officer, director or affiliate (as such term is
      defined in Rule 144 of the Securities Act), except pursuant to existing Company
      stock, option, equity incentive or similar incentive plans; or 

     

    
      
        
        

      

      
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    (xvi) entered
      into an agreement, written or otherwise, to take any of the foregoing
      actions.

     

    3.16 Solvency.
      The
      Company has not taken, nor does it have any intention to take, any steps to
      seek
      protection pursuant to any bankruptcy or similar law. The Company does not
      have
      any actual knowledge nor has it received any written notice that its creditors
      intend to initiate involuntary bankruptcy proceedings or any actual knowledge
      of
      any fact that, as of the date hereof, would reasonably lead a creditor to do
      so.
      After giving effect to the transactions contemplated hereby to occur at the
      Closing, the Company will not be Insolvent (as hereinafter defined). For
      purposes of this Agreement, “Insolvent” means (i) the Company is unable to
      pay its debts and liabilities, subordinated, contingent or otherwise, as such
      debts and liabilities become absolute and matured, (ii) the Company intends
      to incur or believes that it will incur debts that would be beyond its ability
      to pay as such debts mature or (iii) the Company has unreasonably small
      capital with which to conduct the business in which it is engaged as such
      business is now conducted and is proposed to be conducted.

     

    3.17 Off-Balance
      Sheet Arrangements.
      There
      is no transaction, arrangement, or other relationship between the Company and
      an
      unconsolidated or other off balance sheet entity that is required to be
      disclosed by the Company in its Exchange Act filings and is not so disclosed
      or
      that if made or not made would be reasonably likely to have a Material Adverse
      Effect.

     

    3.18 Foreign
      Corrupt Practices.
      None of
      the Company, any Subsidiary, nor any of their respective directors, officers,
      agents, employees or other Persons acting on behalf of such subsidiaries has,
      in
      the course of their respective actions for or on behalf of the Company or any
      of
      its subsidiaries (a) used any corporate funds for any unlawful contribution,
      gift, entertainment or other unlawful expenses relating to political activity,
      (b) made any direct or indirect unlawful payment to any foreign or domestic
      government official or employee from corporate funds, (c) violated or is in
      violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977,
      as
      amended or (d) made any unlawful bribe, rebate, payoff, influence payment,
      kickback or other unlawful payment to any foreign or domestic government
      official or employee.

     

    3.19 Transactions
      With Affiliates.
      Except
      as set forth in the SEC Documents or as disclosed in Schedule 3.19 attached
      hereto, none of the officers, directors or employees of the Company is presently
      a party to any transaction with the Company or any Subsidiary (other than for
      ordinary course services as employees, officers or directors), including any
      contract, agreement or other arrangement providing for the furnishing of
      services to or by, providing for rental of real or personal property to or
      from,
      or otherwise requiring payments to or from any such officer, director or
      employee or, to the knowledge of the Company, any corporation, partnership,
      trust or other entity in which any such officer, director, or employee has
      a
      substantial interest or is an officer, director, trustee or
      partner.

     

    3.20 Insurance.
      Except
      as disclosed in Schedule 3.20, the Company and each Subsidiary are insured
      by
      insurers of recognized financial responsibility against such losses and risks
      and in such amounts as management of the Company believes to be prudent and
      customary in the businesses in which the Company and each Subsidiary are
      engaged. Neither the Company nor any Subsidiary has been refused any insurance
      coverage sought or applied for and neither the Company nor any Subsidiary has
      any reason to believe that it will not be able to renew its existing insurance
      coverage as and when such coverage expires or to obtain similar coverage from
      similar insurers as may be necessary to continue its business at a cost that
      would not have a Material Adverse Effect.

     

    
      
        
        

      

      
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    3.21 Employee
      Relations.
      Neither
      the Company nor any Subsidiary is a party to any collective bargaining agreement
      or employs any member of a union. No Executive Officer of the Company (as
      defined in Rule 501(f) of the Securities Act) has notified the Company that
      such
      officer intends to leave the Company or otherwise terminate such officer’s
      employment with the Company. No Executive Officer of the Company, to the
      knowledge of the Company, is, or is now, in violation of any material term
      of
      any employment contract, confidentiality, disclosure or proprietary information
      agreement, non-competition agreement, or any other contract or agreement or
      any
      restrictive covenant, and, to the actual knowledge of the Company, the continued
      employment of each such executive officer does not subject the Company or any
      Subsidiary to any liability with respect to any of the foregoing matters. The
      Company and each Subsidiary are in compliance with all federal, state, local
      and
      foreign laws and regulations respecting employment and employment practices,
      terms and conditions of employment and wages and hours, except where failure
      to
      be in compliance would not, either individually or in the aggregate, reasonably
      be expected to result in a Material Adverse Effect. 

     

    3.22 Title.
      Except
      as set forth in the SEC Documents or Schedule 3.22, the Company and each
      Subsidiary have good and marketable title to all personal property owned by
      them
      which is material to their respective business, in each case free and clear
      of
      all Liens. Any real property and facilities held under lease by the Company
      or
      any Subsidiary are held by them under valid, subsisting and enforceable leases
      with such exceptions as are not material and do not interfere with the use
      made
      and proposed to be made of such property and buildings by the Company or any
      Subsidiary.

     

    3.23 Intellectual
      Property Rights.
      The
      Company and its Subsidiaries own or possess the rights to use all patents,
      trademarks, domain names (whether or not registered) and any patentable
      improvements or copyrightable derivative works thereof, websites and
      intellectual property rights relating thereto, service marks, trade names,
      copyrights, licenses and authorizations which are necessary for the conduct
      of
      its business as now conducted (collectively, the “Intellectual Property Rights”)
      without any conflict with the rights of others, except any failures as,
      individually or in the aggregate, are not reasonably likely to have a Material
      Adverse Effect. Neither the Company nor any Subsidiary has received a written
      notice that the Intellectual Property Rights used by the Company or any
      Subsidiary violates or infringes upon the rights of any Person. To the knowledge
      of the Company, all such Intellectual Property Rights are enforceable and there
      is no existing infringement by another Person of any of the Intellectual
      Property Rights. The Company and its Subsidiaries have taken reasonable measures
      to protect the value of the Intellectual Property Rights. 

     

    3.24 Environmental
      Laws.
      The
      Company and each of its Subsidiaries (a) are in compliance with any and all
      Environmental Laws (as hereinafter defined), (b) have received all permits,
      licenses or other approvals required of them under applicable Environmental
      Laws
      to conduct their respective businesses and (c) are in compliance with all
      terms and conditions of any such permit, license or approval where, in each
      of
      the foregoing clauses (a), (b) and (c), the failure to so comply could be
      reasonably expected to have, individually or in the aggregate, a Material
      Adverse Effect. The term “Environmental Laws” means all federal, state, local or
      foreign laws relating to pollution or protection of human health or the
      environment (including, without limitation, ambient air, surface water,
      groundwater, land surface or subsurface strata), including, without limitation,
      laws relating to emissions, discharges, releases or threatened releases of
      chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes
      (collectively, “Hazardous Materials”) into the environment, or otherwise
      relating to the manufacture, processing, distribution, use, treatment, storage,
      disposal, transport or handling of Hazardous Materials, as well as all
      authorizations, codes, decrees, demands or demand letters, injunctions,
      judgments, licenses, notices or notice letters, orders, permits, plans or
      regulations issued, entered, promulgated or approved thereunder.

     

    
      
        
        

      

      
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    3.25 Tax
      Matters.
      The
      Company and each of its Subsidiaries (a) have made or filed all federal and
      state income and all other tax returns, reports and declarations required by
      any
      jurisdiction to which it is subject, (b) have paid all taxes and other
      governmental assessments and charges that are material in amount, shown or
      determined to be due on such returns, reports and declarations, except those
      being contested in good faith and (c) have set aside on its books
      reasonably adequate provision for the payment of all taxes for periods
      subsequent to the periods to which such returns, reports or declarations apply,
      except where such failure would not have a Material Adverse Effect. There are
      no
      unpaid taxes in any material amount claimed to be due by the taxing authority
      of
      any jurisdiction, and the officers of the Company know of no basis for any
      such
      claim.

     

    3.26 Sarbanes-Oxley
      Act;
      Internal Accounting and Disclosure Controls.
      The
      Company is in compliance in all material respects with the requirements of
      the
      Sarbanes-Oxley Act of 2002 that are effective as of the date hereof and
      applicable to it, and any and all rules and regulations promulgated by the
      SEC
      thereunder that are effective and applicable to it as of the date hereof. The
      Company maintains a system of internal accounting controls sufficient, in the
      judgment of the Company’s board of directors, to provide reasonable assurance
      that (i) transactions are executed in accordance with management’s general
      or specific authorizations, (ii) transactions are recorded as necessary to
      permit preparation of financial statements in conformity with GAAP and to
      maintain asset accountability, (iii) access to assets is permitted only in
      accordance with management’s general or specific authorization and (iv) the
      recorded accountability for assets is compared with the existing assets at
      reasonable intervals and appropriate actions are taken with respect to any
      differences. The
      Company has established disclosure controls and procedures (as defined in
      Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
      disclosure controls and procedures to ensure that material information relating
      to the Company, including its Subsidiaries, is made known to the certifying
      officers by others within those entities, particularly during the period in
      which the Company’s most recently filed periodic report under the Exchange Act,
      as the case may be, is being prepared. The Company’s certifying officers have
      evaluated the effectiveness of the Company’s controls and procedures as of the
      date prior to the filing date of the most recently filed periodic report under
      the Exchange Act (such date, the “Evaluation Date”). The Company presented in
      its most recently filed periodic report under the Exchange Act the conclusions
      of the certifying officers about the effectiveness of the disclosure controls
      and procedures based on their evaluations as of the Evaluation Date. Since
      the
      Evaluation Date, there have been no significant changes in the Company’s
      internal controls (as such term is defined in Item 307(c) of Regulation S-B
      under the Exchange Act) or, to the Company’s knowledge, in other factors that
      could significantly affect the Company’s internal controls. The
      Company maintains and will continue to maintain a standard system of accounting
      established and administered in accordance with United States GAAP and the
      applicable requirements of the Exchange Act.

     

    
      
        
        

      

      
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    3.27 Investment
      Company Status.
      The
      Company is not, and immediately after receipt of payment for the Securities
      will
      not be, an “investment company,” an “affiliated person” of, “promoter” for or
“principal underwriter” for, or an entity “controlled” by an “investment
      company,” within the meaning of the Investment Company Act.

     

    3.28 Material
      Contracts.
      Each
      contract of the Company that involves expenditures or receipts in excess of
      $250,000 (each, a “Material Contract”) is in full force and effect and is valid
      and enforceable in accordance with its terms. The Company is and has been in
      full compliance with all applicable terms and requirements of each Material
      Contract and no event has occurred or circumstance exists that (with or without
      notice or lapse of time) may contravene, conflict with or result in a violation
      or breach of, or give the Company or any other entity the right to declare
      a
      default or exercise any remedy under, or to accelerate the maturity or
      performance of, or to cancel, terminate or modify any Material Contract. The
      Company has not given or received from any other Person any notice or other
      communication (whether oral or written) regarding any actual, alleged, possible
      or potential violation or breach of, or default under, any Material
      Contract.

     

    3.29 Inventory.
      All
      inventory of the Company consists of a quality and quantity usable and salable
      in the ordinary course of business, except for obsolete items and items of
      below-standard quality, all of which have been or will be written off or written
      down to net realizable value on the unaudited consolidated balance sheet of
      the
      Company and its Subsidiaries as of December 31, 2007. The quantities of each
      type of inventory (whether raw materials, work-in-process, or finished goods)
      are not excessive, but are reasonable and warranted in the present circumstances
      of the Company.

     

    3.30 No
      Disagreements with Accountants.
      There
      are no disagreements of any kind presently existing, or reasonably anticipated
      by the Company to arise, between the Company and the accountants formerly or
      presently employed by the Company.

     

    3.31 Ranking
      of Series B Preferred Stock.
      No
      capital stock of the Company is senior to or ranks pari
      passu
      with the
      Series B Preferred Stock in right of payment, whether with respect of payment
      of
      redemptions, interest, damages or upon liquidation or dissolution or
      otherwise.

     

    3.32 Manipulation
      of Price.
      The
      Company has not, and to its knowledge no one acting on its behalf has, taken,
      directly or indirectly, any action designed to cause or to result or that could
      reasonably be expected to cause or result, in the stabilization or manipulation
      of the price of any security of the Company to facilitate the sale or resale
      of
      any of the Securities.

     

    3.33 Listing
      and Maintenance Requirements.
      The
      Company has not, in the 12 months preceding the date hereof, received notice
      from any Trading Market on which the Common Stock is or has been listed or
      quoted to the effect that the Company is not in compliance with the listing
      or
      maintenance requirements of such Trading Market. The Company is in compliance
      with all such maintenance requirements.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    3.34 Application
      of Takeover Protections.
      The
      Company and its Board of Directors have taken all necessary action, if any,
      in
      order to render inapplicable any control share acquisition, business
      combination, poison pill (including any distribution under a rights agreement)
      or other similar anti-takeover provision under the Company’s Certificate of
      Incorporation (or similar charter documents) or the laws of its state of
      incorporation that is or could become applicable to the Purchaser as a result
      of
      the Purchaser and the Company fulfilling their obligations or exercising their
      rights under the Transaction Documents, including without limitation the
      Company’s issuance of the Securities and the Purchaser’s ownership of the
      Securities.

     

    3.35 Disclosure.
      All
      written disclosure provided to the Purchaser regarding the Company, its business
      and
      the
      transactions contemplated hereby,
      including the Schedules to this Agreement, furnished by or on behalf of the
      Company are true and correct and do not contain any untrue statement of a
      material fact or omit to state any material fact necessary in order to make
      the
      statements made therein, in light of the circumstances under which they were
      made, not misleading; provided however, the Company makes no representation
      as
      to studies and reports prepared by third parties not engaged by the Company
      and
      included in the materials delivered to Purchaser.

     

    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES OF THE PURCHASER

     

    The
      Purchaser hereby represents and warrants to the Company as of the date of this
      Agreement as follows:

     

    4.1 Organization;
      Authority.
      The
      Purchaser is an entity duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its organization with full right,
      corporate or partnership power and authority to enter into and to consummate
      the
      transactions contemplated by the Transaction Documents and otherwise to carry
      out its obligations thereunder. The execution, delivery and performance by
      the
      Purchaser of the transactions contemplated by this Agreement have been duly
      authorized by all necessary corporate or similar action on the part of the
      Purchaser. Each Transaction Document to which it is a party has been duly
      executed by the Purchaser, and when delivered by the Purchaser in accordance
      with the terms hereof, will constitute the valid and legally binding obligation
      of the Purchaser, enforceable against it in accordance with its terms, except
      (i) as limited by general equitable principles and applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws of general application
      affecting enforcement of creditors’ rights generally, (ii) as limited by laws
      relating to the availability of specific performance, injunctive relief or
      other
      equitable remedies and (iii) insofar as indemnification and contribution
      provisions may be limited by applicable law.

     

    4.2 Own
      Account.
      The
      Purchaser understands that the Securities are “restricted securities” and have
      not been registered under the Securities Act or any applicable state securities
      law and is acquiring the Securities as principal for its own account and not
      with a view to or for distributing or reselling such Securities or any part
      thereof except in compliance with the Securities Act, has no present intention
      of distributing any of such Securities and has no arrangement or understanding
      with any other persons regarding the distribution of such Securities (this
      representation and warranty not limiting the Purchaser’s right to sell the
      Securities pursuant to a Registration Statement (defined below) or otherwise
      in
      compliance with applicable federal and state securities laws), except in
      compliance with the Securities Act. The Purchaser is acquiring the Securities
      hereunder in the ordinary course of its business. The Purchaser does not have
      any agreement or understanding, directly or indirectly, with any Person to
      distribute any of the Securities.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    4.3 Purchaser
      Status.
      At the
      time the Purchaser was offered the Securities, it was, and at the date hereof
      it
      is, and on each date on which it exercises any warrant issued by the Company,
      it
      will be either: (i) an “accredited investor” as defined in Rule 501(a)(1),
      (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified
      institutional buyer” as defined in Rule 144A(a) under the Securities Act.

     

    4.4 Experience
      of Such Purchaser.
      The
      Purchaser, either alone or together with its representatives, has such
      knowledge, sophistication and experience in business and financial matters
      so as
      to be capable of evaluating the merits and risks of the prospective investment
      in the Securities, and has so evaluated the merits and risks of such investment.
      The Purchaser is able to bear the economic risk of an investment in the
      Securities and, at the present time, is able to afford a complete loss of such
      investment.

     

    4.5 General
      Solicitation.
      The
      Purchaser is not purchasing the Securities as a result of any advertisement,
      article, notice or other communication regarding the Securities published in
      any
      newspaper, magazine or similar media or broadcast over television or radio
      or
      presented at any seminar or any other general solicitation or general
      advertisement.

     

    4.6 No
      Short Position.
      Neither
      the Purchaser nor any of its affiliates has an open short position in the Common
      Stock of the Company. From and after Closing, the Purchaser will not use any
      share of Common Stock acquired pursuant to this Agreement to cover any short
      position until such time as the Registration Statement covering such share
      of
      Common Stock has been declared effective by the Commission. For purposes of
      this
      Agreement a “short sale” or “short position” includes, without limitation, all
“short sales” as defined in Rule 200 promulgated under Regulation SHO under the
      1934 Act and all types of direct and indirect stock pledges, forward sale
      contracts, options, puts, calls, swaps and similar arrangements (including
      on a
      total return basis), and sales and other transactions through non-US broker
      dealers or foreign regulated brokers. 

     

    ARTICLE
      V

    CONDITIONS
      TO CLOSING OF THE PURCHASER

     

    The
      obligation of the Purchaser to purchase the Securities at the Closing is subject
      to the fulfillment to the Purchaser’s satisfaction on or prior to the Closing
      Date of each of the following conditions, any of which may be waived by such
      Purchaser:

     

    5.1 Representations
      and Warranties Correct.
      The
      representations and warranties in Article III hereof shall be true and correct
      when made, and shall be true and correct on the Closing Date with the same
      force
      and effect as if they had been made on and as of the Closing Date.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    5.2 Performance.
      All
      covenants, agreements and conditions contained in this Agreement to be performed
      or complied with by the Company on or prior to the Closing Date shall have
      been
      performed or complied with by the Company in all material respects.

     

    5.3 No
      Impediments.
      Neither
      the Company nor the Purchaser shall be subject to any order, decree or
      injunction of a court or administrative agency of competent jurisdiction that
      prohibits the transactions contemplated hereby or would impose any material
      limitation on the ability of such Purchaser to exercise full rights of ownership
      of the Securities. At the time of the Closing, the purchase of the Securities
      to
      be purchased by the Purchaser hereunder shall be legally permitted by all laws
      and regulations to which the Purchaser and the Company are subject.

     

    5.4 Other
      Agreements and Documents.
      The
      Company shall have delivered the following agreements and
      documents:

     

    (a) Certificates,
      registered in the name of the Purchaser, representing the Preferred
      Shares;

     

    (b) The
      Series H Warrant in the form of Exhibit
      B
      attached
      hereto;

     

    (c) [Intentionally
      Omitted]

     

    (d) The
      Registration Rights Agreement in the form of Exhibit
      C
      hereto,
      executed by the Company;

     

    (e) An
      opinion of counsel to the Company, dated the date of the Closing, substantially
      in the form of Exhibit
      D
      hereto,
      with such exceptions and limitations as shall be reasonably acceptable to
      counsel to the Purchaser;

     

    (f) The
      Irrevocable Transfer Agent Instructions, substantially in the form of
Exhibit
      E
      attached
      hereto, shall have been delivered to the Company’s transfer agent.

     

    (g) To
      the
      extent necessary, Financing Statements on Form UCC-1 with respect to all
      personal property and assets of the Company and each Subsidiary; 

     

    (h) A
      Certificate of Good Standing from the state of incorporation of the Company
      and
      each Subsidiary; 

     

    (i) A
      certificate of the Company’s CEO, dated the Closing Date, certifying
      (i) the fulfillment of the conditions specified in Sections 5.1 and 5.2 of
      this Agreement, (ii) the Board resolutions approving this Agreement and the
      transactions contemplated hereby, and (iii) other matters as the Purchaser
      shall reasonably request; and

     

    (j) A
      completed and duly executed Florida documentary stamp tax return on Form
      DR-228.

     

    
      
        
        

      

      
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    5.5 Certificate
      of Designations.
      The
      Company shall have filed the Amended and Restated Certificate of Designations
      for the Series B Preferred Stock in the form attached hereto as Exhibit
      A
      with the
      Delaware Secretary of State.

     

    5.6 Trading
      Markets.
      The
      listing or trading of the Conversion Shares and Warrant Shares on each Trading
      Market shall have been approved by such Trading Market authority.

     

    5.7 Gottbetter
      Consent.
      The
      Company shall have obtained the consent of Gottbetter to the transactions
      contemplated hereby.

     

    5.8 Lock
      Up and Leak Out Agreements.
      The
      persons set forth on Schedule
      5.8
      shall
      have executed and delivered to Purchaser a Lock-Up Leak-Out Agreement with
      respect to the Common Stock of the Company owned by them in a form reasonably
      satisfactory to the Purchaser.

     

    5.9 Due
      Diligence Investigation.
      No fact
      shall have been discovered, whether or not reflected in the Schedules hereto,
      which in the Purchaser’s determination would make the consummation of the
      transactions contemplated by this Agreement not in the Purchaser’s best
      interests.

     

    ARTICLE
      VI

    CONDITIONS
      TO CLOSING OF THE COMPANY

     

    The
      Company’s obligation to sell the Securities at the Closing is subject to the
      fulfillment to its satisfaction on or prior to the Closing Date of each of
      the
      following conditions:

     

    6.1 Representations.
      The
      representations made by the Purchaser pursuant to Article IV hereof shall
      be true and correct when made and shall be true and correct on the Closing
      Date.

     

    6.2 No
      Impediments.
      Neither
      the Company nor the Purchaser shall be subject to any order, decree or
      injunction of a court or administrative agency of competent jurisdiction that
      prohibits the transactions contemplated hereby or would impose any material
      limitation on the ability of the Purchaser to exercise full rights of ownership
      of the Securities. At the time of the Closing, the purchase of the Securities
      to
      be purchased by the Purchaser hereunder shall be legally permitted by all laws
      and regulations to which the Purchaser and the Company are subject.

     

    6.3 Cancellation
      of Existing Vicis Warrants.
      The
      Purchaser shall have surrendered for cancellation the Existing Vicis
      Warrants.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VII

    AFFIRMATIVE
      COVENANTS

     

    The
      Company hereby covenants and agrees, so long as any Preferred Share remains
      outstanding, as follows:

     

    7.1 Maintenance
      of Corporate Existence.
      The
      Company shall and shall cause its subsidiaries to, maintain in full force and
      effect its corporate existence, rights and franchises and all material terms
      of
      licenses and other rights to use licenses, trademarks, trade names, service
      marks, copyrights, patents or processes owned or possessed by it and necessary
      to the conduct of its business, except where the failure to maintain such
      corporate existence, rights, franchises, licenses and rights to use licenses,
      trademarks, trade names, service marks, copyrights, patents or processes would
      not (a) result in a Material Adverse Effect or (b) materially adversely affect
      the rights of Purchaser under any Transaction Document.

     

    7.2 Maintenance
      of Properties.
      The
      Company shall and shall cause its subsidiaries to, keep each of its properties
      necessary to the conduct of its business in good repair, working order and
      condition, reasonable wear and tear excepted, and from time to time make all
      needful and proper repairs, renewals, replacements, additions and improvements
      thereto; and the Company shall and shall its subsidiaries to at all times comply
      with each material provision of all material leases to which it is a party
      or
      under which it occupies property.

     

    7.3 Payment
      of Taxes.
      The
      Company shall and shall cause its subsidiaries to, promptly pay and discharge,
      or cause to be paid and discharged when due and payable, all lawful taxes,
      assessments and governmental charges or levies imposed upon the income, profits,
      assets, property or business of the Company and its subsidiaries; provided,
      however, that any such tax, assessment, charge or levy need not be paid if
      the
      validity thereof shall be contested timely and in good faith by appropriate
      proceedings, if the Company or its subsidiaries shall have set aside on its
      books adequate reserves with respect thereto, and the failure to pay shall
      not
      be prejudicial in any material respect to the holders of the Securities, and
      provided, further, that the Company or its subsidiaries will pay or cause to
      be
      paid any such tax, assessment, charge or levy forthwith upon the commencement
      of
      proceedings to foreclose any Lien which may have attached as security therefor.
      

     

    7.4 Payment
      of Indebtedness.
      The
      Company shall, and shall cause its subsidiaries to, pay or cause to be paid
      when
      due all Indebtedness incident to the operations of the Company or its
      subsidiaries (including, without limitation, claims or demands of workmen,
      materialmen, vendors, suppliers, mechanics, carriers, warehousemen and
      landlords) which, if unpaid might become a Lien (except for Permitted Liens)
      upon the assets or property of the Company or its subsidiaries, except where
      the
      Company (or its subsidiary, as the case may be) disputes the payment of such
      Indebtedness in good faith by appropriate proceedings.

     

    7.5 Reservation
      of Common Stock.
      The
      Company shall continue to reserve, free of preemptive rights and other similar
      contractual rights of stockholders, a number of its authorized but unissued
      shares of Common Stock not less than one hundred percent (100%) of the aggregate
      number of shares of Common Stock to effect the conversion of the Preferred
      Shares and one hundred percent (100%) of the aggregate number of shares of
      Common Stock to effect the exercise of the Warrant.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    7.6 Maintenance
      of Insurance.
      The
      Company shall and shall cause its subsidiaries to, keep its assets which are
      of
      an insurable character insured by financially sound and reputable insurers
      against loss or damage by theft, fire, explosion and other risks customarily
      insured against by companies in the line of business of the Company or its
      subsidiaries, in amounts sufficient to prevent the Company and its subsidiaries
      from becoming a co-insurer of the property insured; and the Company shall and
      shall cause its subsidiaries to maintain, with financially sound and reputable
      insurers, insurance against other hazards and risks and liability to persons
      and
      property to the extent and in the manner customary for companies in similar
      businesses similarly situated or as may be required by law, including, without
      limitation, general liability, fire and business interruption insurance, and
      product liability insurance as may be required pursuant to any license agreement
      to which the Company or its subsidiaries is a party or by which it is
      bound.

     

    7.7 Notice
      of Adverse Change.
      The
      Company shall promptly give notice to all holders of any Securities (but in
      any
      event within seven (7) days) after becoming aware of the existence of any
      condition or event which constitutes, or the occurrence of, any of the
      following:

     

    (a) any
      Event
      of Default (as hereinafter defined);

     

    (b) any
      other
      event of noncompliance by the Company or its subsidiaries under this Agreement
      in any material respect;

     

    (c) the
      institution of an action, suit or proceeding against the Company or any
      subsidiary before any court, administrative agency or arbitrator, including,
      without limitation, any action of a foreign government or instrumentality,
      which, if adversely decided, would result in a Material Adverse Effect whether
      or not arising in the ordinary course of business; or

     

    (d) any
      information relating to the Company or any subsidiary which would reasonably
      be
      expected to result in a material adverse effect on its inability to perform
      its
      obligations of under any Transaction Document. 

     

    Any
      notice given under this Section 7.7 shall specify the nature and period of
      existence of the condition, event, information, development or circumstance,
      the
      anticipated effect thereof and what actions the Company has taken and/or
      proposes to take with respect thereto.

     

    7.8 Compliance
      With Agreements.
      The
      Company shall and shall cause its subsidiaries to comply in all material
      respects, with the terms and conditions of all material agreements, commitments
      or instruments to which the Company or any of its subsidiaries is a party or
      by
      which it or they may be bound. 

     

    7.9 Other
      Agreements.
      The
      Company shall not enter into any agreement in which the terms of such agreement
      would restrict or impair the right or ability to perform of the Company under
      any Transaction Document.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    7.10 Compliance
      With Laws.
      The
      Company shall and shall cause each of its subsidiaries to duly comply in all
      material respects with any material laws, ordinances, rules and regulations
      of
      any foreign, federal, state or local government or any agency thereof, or any
      writ, order or decree, and conform to all valid requirements of governmental
      authorities relating to the conduct of their respective businesses, properties
      or assets.

     

    7.11 Protection
      of Licenses, etc.
      The
      Company shall and shall cause its subsidiaries to, maintain, defend and protect
      to the best of their ability licenses and sublicenses (and to the extent the
      Company or a subsidiary is a licensee or sublicensee under any license or
      sublicense, as permitted by the license or sublicense agreement), trademarks,
      trade names, service marks, patents and applications therefor and other
      proprietary information owned or used by it or them, (except where the failure
      to defend and protect such licenses and sublicenses would not (a) result in
      a
      Material Adverse Effect or (b) materially adversely affect the rights of
      Purchaser under any Transaction Document) and shall keep duplicate copies of
      any
      licenses, trademarks, service marks or patents owned or used by it, if any,
      at a
      secure place selected by the Company.

     

    7.12 Accounts
      and Records; Inspections.

     

    (a) The
      Company shall keep true records and books of account in which full, true and
      correct entries will be made of all dealings or transactions in relation to
      the
      business and affairs of the Company and its subsidiaries in accordance with
      GAAP
      applied on a consistent basis.

     

    (b) The
      Company shall permit each holder of any Securities or any of such holder’s
      officers, employees or representatives during regular business hours of the
      Company, upon reasonable notice and as often as such holder may reasonably
      request, to visit and inspect the offices and properties of the Company and
      its
      subsidiaries and to make extracts or copies of the books, accounts and records
      of the Company or its subsidiaries at such holder’s expense.

     

    (c) Nothing
      contained in this Section 7.12 shall be construed to limit any rights which
      a
      holder of any Securities may otherwise have with respect to the books and
      records of the Company and its subsidiaries, to inspect its properties or to
      discuss its affairs, finances and accounts.

     

    7.13 Maintenance
      of Office.
      The
      Company will maintain its principal office at the address of the Company set
      forth in Section 12.6 of this Agreement where notices, presentments and demands
      in respect of this Agreement and any of the Securities may be made upon the
      Company, until such time as the Company shall notify the holders of the
      Securities in writing, at least thirty (30) days prior thereto, of any change
      of
      location of such office.

     

    7.14 Use
      of
      Proceeds.
      The
      Company shall use all the proceeds received from the sale of the Securities
      pursuant to this Agreement solely for the purpose of working capital; the
      Company will not use such proceeds for the purpose of paying Indebtedness for
      borrowed money except for principal and interest payments, when due, owed to
      Gottbetter pursuant to promissory notes issued on October 19 and November 9,
      2006, respectively, in the aggregate principal amount of $5,000,000.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    7.15 Payment
      of the Preferred Share Dividends.
      The
      Company shall pay the dividends on, and redeem, the Preferred Shares, in the
      time, the manner and the form as provided in the Certificate of Designation
      for
      the Series B Preferred Stock.

     

    7.16 SEC
      Reporting Requirements.
      For so
      long as the Purchaser beneficially owns any of the Securities, and until such
      time as all the Conversion Shares and Warrant Shares are saleable by the
      Purchaser without restriction as to volume or manner of sale under Rule 144
      under the Securities Act, the Company shall timely file all reports required
      to
      be filed with the Commission pursuant to the Exchange Act, and the Company
      shall
      not terminate its status as an issuer required to file reports under the
      Exchange Act even if the Exchange Act or the rules and regulations thereunder
      would permit such termination. As long as the Purchaser owns Securities,
      Conversion Shares or Warrant Shares, the Company will prepare and furnish to
      the
      Purchaser and make publicly available in accordance with Rule 144 or any
      successor rule such information as is required for the Purchaser to sell the
      Securities under Rule 144 without regard to the volume and manner of sale
      limitations. The Company further covenants that it will take such further action
      as any holder of Securities, Conversion Shares or Warrant Shares may reasonably
      request, all to the extent required from time to time to enable such Person
      to
      sell such Securities, Conversion Shares or Warrant Shares without registration
      under the Securities Act within the limitation of the exemptions provided by
      Rule 144.

     

    7.17 Listing
      Maintenance.
      The
      Company hereby agrees to use best efforts to maintain the listing or trading
      of
      the Common Stock on a Trading Market. The Company further agrees, if the Company
      applies to have the Common Stock traded on any other Trading Market, it will
      include in such application all of the Conversion Shares and Warrant Shares,
      and
      will take such other action as is necessary to cause all of the Conversion
      Shares and Warrant Shares to be listed on such other Trading Market as promptly
      as possible. The Company will take all action reasonably necessary to continue
      the listing and trading of its Common Stock on, and will comply in all respects
      with the Company’s reporting, filing and other obligations under the bylaws or
      rules of, each such Trading Market on which the Company’s Common Stock is listed
      or trades. 

     

    7.18 Disclosure
      of Transaction.
      The
      Company shall issue a press release describing the material terms of the
      transactions contemplated hereby (the “Press Release”) and shall also file with
      the Commission a Current Report on Form 8-K (the “Form 8-K”) describing the
      material terms of the transactions contemplated hereby (and attaching as
      exhibits thereto this Agreement, the Registration Rights Agreement, the Security
      Agreement, the Guaranty Agreements, the Guarantor Security Agreements, each
      form
      of Warrant and the Press Release) as soon as practicable following the Closing
      Date but in no event more than four (4) Trading Days (defined below) following
      the Closing Date, which Press Release and Form 8-K shall be subject to prior
      review and reasonable comment by the Purchaser. For purposes of this Agreement,
      “Trading Day” means any day during which the principal Trading Market on which
      the Common Stock is listed or traded shall be open for trading.

     

    7.19 Further
      Assurances.
      From
      time to time the Company shall execute and deliver to the Purchaser and the
      Purchaser shall execute and deliver to the Company such other instruments,
      certificates, agreements and documents and take such other action and do all
      other things as may be reasonably requested by the other party in order to
      implement or effectuate the terms and provisions of this Agreement and any
      of
      the Securities.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    7.20 Implementation
      of Series B Preferred Shareholders’ Rights to Elect Directors.
      Promptly
      after Closing, the Company shall take the following actions:

     

    (a) amend
      its
      bylaws and take such other action at any such time as necessary to implement
      the
      rights of holders of Series B Preferred Stock to nominate and elect two (2)
      members of the board of directors as set forth in the Certificate of Designation
      for the Series B Preferred Stock beginning with the first meeting of the
      shareholders of the Company following Closing; and

     

    (b) expand
      the current size of the board by two (2) members and appoint persons, who will
      be designated by the Purchaser, to fill the newly-created vacancies; provided
      that, the Company shall not be obligated to appoint a designee if (i) the
      nomination of such designee would violate rules, regulations or other standards
      of the Commission or the Trading Market, or (ii) the designee does not meet
      the Company’s written director qualification standards.

     

    7.21 Authorization
      of and Reservation of Additional Shares of Common Stock.
      Promptly after Closing, the Company shall use its commercially reasonably best
      efforts to: (a) file an amendment to its certificate of incorporation to
      increase the number of authorized shares of the Company’s Common Stock available
      for issuance in order to reserve for issuance of the Conversion Shares
a
      number
      of its authorized but unissued shares of Common Stock equal to one hundred
      twenty-five percent (125%) of the aggregate number of shares of Common Stock
      to
      effect the conversion of the Preferred Shares; and (b) take
      all action necessary to reserve out of the newly-authorized Common Stock for
      issuance of the Conversion Shares a
      number
      of its authorized but unissued shares of Common Stock equal to one hundred
      twenty-five percent (125%) of the aggregate number of shares of Common Stock
      to
      effect the conversion of the Preferred Shares

     

    For
      purposes of Articles VII-IX, the term “subsidiary” shall be deemed to include
      each Subsidiary and any subsidiary of the Company acquired or formed after
      the
      date hereof.

     

    ARTICLE
      VIII

    NEGATIVE
      COVENANTS

     

    The
      Company hereby covenants and agrees, so long as more than 12.5% of the aggregate
      amount of authorized shares of Series B Preferred Stock remain outstanding
      (or
      such amount as adjusted for stock splits, recapitalizations and similar
      transactions), it will not (and not allow any subsidiary to), without the prior
      written consent of the holder(s) of more than 50% of number of shares of Series
      B Preferred Stock outstanding (the “Majority Holders”), directly or indirectly:

     

    8.1 Distributions
      and Redemptions.
      (i) Except with respect to the Series B Preferred Stock, declare or pay any
      dividends or make any distributions to any holder(s) of any shares of capital
      stock of the Company or (ii) purchase, redeem or otherwise acquire for
      value, directly or indirectly, any shares of Common Stock of the Company or
      warrants or rights to acquire such Common
      Stock, except as may be required by the terms of the Series B Preferred Stock;
      or (iii) purchase, redeem or otherwise acquire for value, directly or
      indirectly, any shares of preferred stock of the Company or warrants or rights
      to acquire such stock, except as may be required by the terms of such preferred
      stock.

     

    
      
        
        

      

      
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    8.2 Reclassification.
      Effect
      any reclassification, combination or reverse stock split of the Common
      Stock.

     

    8.3 Liens.
      Except
      as provided in this Agreement, create, incur, assume or permit to exist any
      mortgage, lien, pledge, charge, security interest or other encumbrance, or
      any
      interest or title of any vendor, lessor, lender or other secured party to or
      of
      the Company or any subsidiary under any conditional sale or other title
      retention agreement or any capital lease, upon or with respect to any property
      or asset of the Company or any subsidiary (each, a “Lien” and collectively,
“Liens”), except that the foregoing restrictions shall not apply
      to:

     

    (a) liens
      for
      taxes, assessments and other governmental charges, if payment thereof shall
      not
      at the time be required to be made, and provided such reserve as shall be
      required by generally accepted accounting principles consistently applied shall
      have been made therefor;

     

    (b) liens
      of
      workmen, materialmen, vendors, suppliers, mechanics, carriers, warehouseman
      and
      landlords or other like liens, incurred in the ordinary course of business
      for
      sums not then due or being contested in good faith, if an adverse decision
      in
      which contest would not materially affect the business of the
      Company;

     

    (c) liens
      existing on the date hereof securing Indebtedness of the Company or any
      subsidiary that are senior to liens on the same assets held by the Purchaser
      and
      that are filed prior to the date hereof and disclosed in Schedule 3.22
      hereto;

     

    (d) liens
      securing Indebtedness of the Company or any subsidiary which is in an aggregate
      principal amount not exceeding $250,000 and which liens are subordinate to
      liens
      on the same assets held by the Purchaser;

     

    (e) statutory
      liens of landlords, statutory liens of banks and rights of set-off, and other
      liens imposed by law, in each case incurred in the ordinary course of business
      (i) for amounts not yet overdue or (ii) for amounts that are overdue
      and that are being contested in good faith by appropriate proceedings, so long
      as such reserves or other appropriate provisions, if any, as shall be required
      by generally accepted accounting principles shall have been made for any such
      contested amounts;

     

    (f) liens
      incurred or deposits made in the ordinary course of business in connection
      with
      workers’ compensation, unemployment insurance and other types of social
      security, or to secure the performance of tenders, statutory obligations, surety
      and appeal bonds, bids, leases, government contracts, trade contracts,
      performance and return-of-money bonds and other similar obligations (exclusive
      of obligations for the payment of borrowed money);

     

    (g) any
      attachment or judgment lien not constituting an Event of Default;

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    (h) easements,
      rights-of-way, restrictions, encroachments, and other minor defects or
      irregularities in title, in each case which do not and will not interfere in
      any
      material respect with the ordinary conduct of the business of the Company or
      any
      of its subsidiaries;

     

    (i) any
      (i) interest or title of a lessor or sublessor under any lease,
      (ii) restriction or encumbrance that the interest or title of such lessor
      or sublessor may be subject to, or (iii) subordination of the interest of
      the lessee or sublessee under such lease to any restriction or encumbrance
      referred to in the preceding clause (ii), so long as the holder of such
      restriction or encumbrance agrees to recognize the rights of such lessee or
      sublessee under such lease;

     

    (j) liens
      in
      favor of customs and revenue authorities arising as a matter of law to secure
      payment of customs duties in connection with the importation of
      goods;

     

    (k) any
      zoning or similar law or right reserved to or vested in any governmental office
      or agency to control or regulate the use of any real property;

     

    (l) liens
      securing obligations (other than obligations representing debt for borrowed
      money) under operating, reciprocal easement or similar agreements entered into
      in the ordinary course of business of the Company and its subsidiaries;

     

    (m) the
      replacement, extension or renewal of any lien permitted by this Section 8.3
      upon
      or in the same property theretofore subject or the replacement, extension or
      renewal (without increase in the amount or change in any direct or contingent
      obligor) of the Indebtedness secured thereby; and

     

    (n) Liens
      on
      accounts receivable, security interests, loan documents, reserve accounts and
      the proceeds thereof of the Company and its subsidiaries securing obligations
      under any Permitted Financing Indebtedness (defined below); provided that such
      Liens are: (i) placed on assets of the Company and its subsidiaries not securing
      obligations of the Company to Purchaser under the Transaction Documents; or
      (ii)
      expressly subordinated to the Liens on the assets of the Company and its
      subsidiaries granted to Purchaser under the Transaction Documents.

     

    All
      of
      the foregoing Liens described in subsections (a) – (n) above shall be
      referred to as “Permitted Liens”.

     

    8.4 Indebtedness.
      Create,
      incur, assume, suffer, permit to exist, or guarantee, directly or indirectly,
      any Indebtedness, excluding, however, from the operation of this
      covenant:

     

    (a) Indebtedness
      to the extent disclosed in the SEC Documents filed prior to the date hereof
      and
      otherwise existing on the date hereof;

     

    (b) Indebtedness
      which may, from time to time be incurred or guaranteed by the Company which
      in
      the aggregate principal amount does not exceed $250,000 and is subordinate
      to
      the Indebtedness under this Agreement;

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (c) the
      endorsement of instruments for the purpose of deposit or collection in the
      ordinary course of business;

     

    (d) Indebtedness
      relating to contingent obligations of the Company and its subsidiaries under
      guaranties in the ordinary course of business of the obligations of suppliers,
      customers, and licensees of the Company and its subsidiaries;

     

    (e) Indebtedness
      relating to loans from the Company to its subsidiaries;

     

    (f) Indebtedness
      relating to capital leases in an amount not to exceed $250,000; 

     

    (g) accounts
      or notes payable arising out of the purchase of merchandise, supplies,
      equipment, software, computer programs or services in the ordinary course of
      business; 

     

    (h) Indebtedness
      of XFSC to Northern Healthcare LLC or its affiliates in connection with a
      revolving credit facility not to exceed $2.5 million to be used by XFSC to
      provide financing to certain clients of Medical Solutions Management, Inc.;
      or

     

    (i) Indebtedness
      of the Company and its subsidiaries to a third party relating to a credit
      facility or similar financing arrangement not to exceed $25 million between
      such
      third party and XFSC. 

     

    The
      foregoing Indebtedness described in subsections (h) – (i) above shall be
      referred to as “Permitted Financing Indebtedness”. 

     

    8.5 Capital
      Stock.
      Except
      for issuances to the Purchaser, issue any equity security that is senior to
      or
      ranks pari
      passu
      with the
      Series B Preferred Stock, whether with respect to right of payment of
      redemptions, interest, damages or upon liquidation or dissolution or
      otherwise.

     

    8.6 Liquidation
      or Sale.
      Sell,
      transfer, lease or otherwise dispose of 10% or more of its consolidated assets
      (as shown on the most recent financial statements of the Company or the
      subsidiary, as the case may be) in any single transaction or series of related
      transactions (other than the sale of inventory in the ordinary course of
      business), or liquidate, dissolve, recapitalize or reorganize in any form of
      transaction.

     

    8.7 Change
      of Control Transaction. Enter into a Change in Control Transaction. For
      purposes of this Agreement, “Change in Control Transaction” means the occurrence
      of (a) an acquisition by an individual or legal entity or “group” (as
      described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective
      control (whether through legal or beneficial ownership of capital stock of
      the
      Company, by contract or otherwise) of in excess of fifty percent (50%) of the
      voting securities of the Company (except that the acquisition of Securities
      by
      the Purchaser shall not constitute a Change in Control for purposes of this
      Section), (b) a replacement at one time or over time of more than one-half
      of the members of the Board of the Company which is not approved by a majority
      of those individuals who are members of the Board on the date hereof (or by
      those individuals who are serving as members of the Board on any date whose
      nomination to the Board was approved by a majority of the members of the Board
      who are members on the date hereof), (c) the merger or consolidation of the
      Company or any subsidiary of the Company in one or a series of related
      transactions with or into another entity (except in connection with a merger
      involving the Company solely for the purpose, and with the sole effect, of
      reorganizing the Company under the laws of another jurisdiction; provided that
      the certificate of incorporation and bylaws (or similar charter or
      organizational documents) of the surviving entity are substantively identical
      to
      those of the Company and do not otherwise adversely impair the rights of the
      Purchaser), or (d) the execution by the Company of an agreement to which
      the Company is a party or by which it is bound, providing for any of the events
      set forth above in (a), (b) or (c).

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    8.8 Amendment
      of Charter Documents.
      Amend
      or waive any provision of the Certificate of Incorporation or Bylaws of the
      Company in any way that materially adversely affects the rights of the Purchaser
      without the prior written consent of the Purchaser. 

     

    8.9 Loans
      and Advances.
      Except
      for loans and advances outstanding as of the Closing Date and loans and advances
      to clients through XFSC, directly or indirectly, make any advance or loan to,
      or
      guarantee any obligation of, any Person, except for intercompany loans or
      advances and those provided for in this Agreement. Notwithstanding anything
      to
      the contrary contained herein, Purchaser hereby consents, pursuant to the terms
      of this Agreement to the following loans made by the Company to Patient Access
      Solutions, Inc. (“PAS”), each of which is evidenced by a secured promissory
      note: 

    

      
        	
                Principal
                  Amount

              	 	
                Date

              
	 	 	 
	
                $

              	
                25,000

              	 	
                September
                  30, 2007

              
	
                $

              	
                25,000

              	 	
                October
                  15, 2007

              
	
                $

              	
                16,667

              	 	
                October
                  30, 2007

              
	
                $

              	
                16,667

              	 	
                November
                  15, 2007

              
	
                $

              	
                16,667

              	 	
                November
                  30, 2007

              
	
                $

              	
                16,667

              	 	
                December
                  15, 2007

              
	
                $

              	
                16,667

              	 	
                December
                  31, 2007

              

      

    

     

    8.10 Transactions
      with Affiliates.

     

    (a) Make
      any
      intercompany transfers to XFSC of monies or other assets in any single
      transaction or series of transactions, except as otherwise permitted in this
      Agreement.

     

    (b) Engage
      in
      any transaction with any of the officers, directors, employees or affiliates
      of
      the Company or of its subsidiaries, except on terms no less favorable to the
      Company or the subsidiary as could be obtained in an arm’s length
      transaction.

     

    (c) Divert
      (or permit anyone to divert) any business or opportunity of the Company or
      subsidiary to any other corporate or business entity.

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    8.11 Other
      Business.
      Enter
      into or engage, directly or indirectly, in any business other than the business
      currently conducted or proposed to be conducted as of the date of this Agreement
      by the Company or any subsidiary, except where the entry into such new lines
      of
      business in the aggregate does not involve expenditures by the Company or its
      Subsidiaries in excess of $250,000 in a calendar year or the issuance of
      securities in the aggregate with a value in excess of $250,000 in a calendar
      year.

     

    8.12 Investments.
      Make
      any investments in excess of $250,000 in a calendar year in the aggregate in,
      or
      purchase any stock, option, warrant, or other security or evidence of
      Indebtedness of, any Person (exclusive of any subsidiary), other than (i)
      obligations of the United States Government or certificates of deposit or other
      instruments maturing within one year from the date of purchase from financial
      institutions with capital in excess of $50 million; (ii) loans made to, and
      purchases of accounts receivable of, healthcare providers in the ordinary course
      of business of XFSC and (iii) loans in the aggregate amount of $133,335 from
      the
      Company to PAS.

     

    8.13 Registration
      Statements.
      Without
      the consent of the Purchaser, file any registration statement with the
      Commission until the earlier of: (i) 60 Trading Days following the date that
      a
      registration statement or registration statements registering all the Conversion
      Shares and Warrant Shares is declared effective by the Commission; and (ii)
      the
      date the Conversion Shares and Warrant Shares are saleable by Purchaser under
      Rule 144 under the Securities Act without limitation as to volume or manner
      of
      sale; provided that this Section shall not prohibit the Company from filing
      a
      registration statement on Form S-4 or other applicable from for securities
      to be
      issued in connection with acquisitions of businesses by the Company or its
      subsidiaries, or post effective amendments to registration statements that
      were
      declared effective prior to the date hereof or to a registration statement
      filed
      with the Commission on Forms S-4 or S-8. 

     

    8.14 Expand
      the Board of Directors.
      Except
      as required by this Agreement, expand the size of the Board of Directors of
      the
      Company.

     

    ARTICLE
      IX

    EVENTS
      OF DEFAULT

     

    9.1 Events
      of Default.
      The
      occurrence and continuance of any of the following events shall constitute
      an
      event of default under this Agreement (each, an “Event of Default” and,
      collectively, “Events of Default”):

     

    (a) if
      the
      Company shall default in the payment of any dividend on or redemption of any
      Preferred Share when the same shall become due and payable; and in each case
      such default shall have continued without cure for five (5) Trading Days after
      written notice (a “Default Notice”) is given to the Company of such
      default;

     

    (b) if
      the
      Company shall default in the performance of any of the covenants contained
      in
      Articles VII or VIII hereof and (i) such default shall have continued without
      cure for ten (10) Trading Days after a Default Notice is given to the Company
      or
      (ii) such default shall have materially adversely affected the Purchaser
      regardless of any action taken by the Company to cure such default;

     

    (c) [Intentionally
      Omitted]

    
      
        
        

      

      
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    (d) the
      suspension from listing, without subsequent listing on any one of, or the
      failure of the Common Stock to be listed or quoted on at least one of the
      following: the OTC Bulletin Board, the American Stock Exchange, the Nasdaq
      Global Market, the Nasdaq Capital Market or The New York Stock Exchange, Inc.
      for a period of ten (10) consecutive Trading Days and such suspension from
      listing (or listing on an alternate exchange or quotation system) is not cured
      within ten (10) days after the tenth (10th)
      consecutive day of such suspension from listing; 

     

    (e) the
      Company’s notice to the Purchaser, including by way of public announcement, at
      any time, of its inability to comply for any reason or its intention not to
      comply with proper requests for issuance of Conversion Shares upon conversion
      of
      Preferred Shares or issuance of Warrant Shares upon exercise of the Warrant;
      

     

    (f) the
      Company shall fail to (i) timely deliver the shares of Common Stock upon
      conversion of the Preferred Shares or exercise of a Warrant by the fifth (5th)
      Trading Day after the date of delivery required therefor or otherwise in
      accordance with the provisions of the Transaction Documents, (ii) file a
      Registration Statement in accordance with the terms of the Registration Rights
      Agreement, or (iii) make the payment of any fees and/or liquidated damages
      under
      this Agreement or any Transaction Document, which failure in the case of items
      (i) and (iii) of this Section is not remedied within five (5) Trading Days
      after
      the incurrence thereof and, solely with respect to item (iii) above, five (5)
      Trading Days after the Purchaser delivers a Default Notice to the Company of
      the
      incurrence thereof; 

     

    (g) [Intentionally
      Omitted]

     

    (h) if
      the
      Company shall default in the performance of any other material agreement or
      covenant contained in this Agreement or the Transaction Documents and such
      default shall not have been remedied to the satisfaction of the Purchaser within
      thirty-five (35) days after a Default Notice shall have been given to the
      Company;

     

    (i) if
      any
      material representation or warranty made in this Agreement, any Transaction
      Document or in or any certificate delivered by the Company or its subsidiaries
      pursuant hereto or thereto shall prove to have been incorrect in any material
      respect when made;

     

    (j) the
      Company shall (A) default in any payment of any amount or amounts of principal
      of or interest on any Indebtedness (other than the Indebtedness hereunder)
      the
      aggregate principal amount of which Indebtedness is in excess of
      $250,000 or
      (B)
      default in the observance or performance of any other agreement or condition
      relating to any such Indebtedness or contained in any instrument or agreement
      evidencing, securing or relating thereto, or any other event shall occur or
      condition exist, the effect of which default or other event or condition is
      to
      cause, or to permit the holder or holders or beneficiary or beneficiaries of
      such Indebtedness to cause with the giving of notice if required, such
      Indebtedness to become due prior to its stated maturity;

     

    (k) if
      any of
      the Company or its subsidiaries shall default in the observance or performance
      of any term or provision of an agreement to which it is a party or by which
      it
      is bound, which default will have a Material Adverse Effect and such default
      is
      not waived or cured within the applicable grace period provided for in such
      agreement;

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    (l) if
      a
      final judgment which, either alone or together with other outstanding final
      judgments against the Company and its subsidiaries, exceeds an aggregate of
      $250,000 shall be rendered against the Company or any subsidiary and such
      judgment shall have continued undischarged or unstayed for thirty-five (35)
      days
      after entry thereof; or

     

    (m) the
      Company or any subsidiary shall (i) apply for or consent to the appointment
      of,
      or the taking of possession by, a receiver, custodian, trustee or liquidator
      of
      itself or of all or a substantial part of its property or assets, (ii) make
      a
      general assignment for the benefit of its creditors, (iii) commence a voluntary
      case under the United States Bankruptcy Code (as now or hereafter in effect)
      or
      under the comparable laws of any jurisdiction (foreign or domestic), (iv) file
      a
      petition seeking to take advantage of any bankruptcy, insolvency, moratorium,
      reorganization or other similar law affecting the enforcement of creditors’
rights generally, (v) acquiesce in writing to any petition filed against it
      in
      an involuntary case under United States Bankruptcy Code (as now or hereafter
      in
      effect) or under the comparable laws of any jurisdiction (foreign or domestic),
      or admit in writing its inability to pay its debts (vi) issue a notice of
      bankruptcy or winding down of its operations or issue a press release regarding
      same, or (vii) take any action under the laws of any jurisdiction (foreign
      or
      domestic) analogous to any of the foregoing; or 

     

    (n) a
      proceeding or case shall be commenced in respect of the Company or any of its
      subsidiaries, without its application or consent, in any court of competent
      jurisdiction, seeking (i) the liquidation, reorganization, moratorium,
      dissolution, winding up, or composition or readjustment of its debts, (ii)
      the
      appointment of a trustee, receiver, custodian, liquidator or the like of it
      or
      of all or any substantial part of its assets in connection with the liquidation
      or dissolution of the Company or any of its subsidiaries or (iii) similar relief
      in respect of it under any law providing for the relief of debtors, and such
      proceeding or case described in clause (i), (ii) or (iii) shall continue
      undismissed, or unstayed and in effect, for a period of sixty (60) days or
      any
      order for relief shall be entered in an involuntary case under United States
      Bankruptcy Code (as now or hereafter in effect) or under the comparable laws
      of
      any jurisdiction (foreign or domestic) against the Company or any of its
      subsidiaries or action under the laws of any jurisdiction (foreign or domestic)
      analogous to any of the foregoing shall be taken with respect to the Company
      or
      any of its subsidiaries and shall continue undismissed, or unstayed and in
      effect for a period of thirty (30) days; or.

     

    9.2 Remedies.

     

    (a) Upon
      the
      occurrence and continuance of an Event of Default, the Purchaser may at any
      time
      (unless all defaults shall theretofore have been remedied) at its option, by
      written notice or notices to the Company require the Company to immediately
      redeem in cash all or a portion of the Preferred Shares held by the Purchaser
      at
      a price per share equal to one hundred twenty-five percent (125%) of the Stated
      Value of the Series B Preferred Stock plus all accrued and unpaid dividends
      thereon at the time of such request. The remedy conferred by this Section 9.2(a)
      shall not be exclusive of any other remedy provided by any Transaction Document
      or now or hereafter available at law, in equity, by statute or
      otherwise.

     

    (b) The
      Purchaser, by written notice or notices to the Company, may in its own
      discretion waive an Event of Default and its consequences and rescind or annul
      such declaration; provided that, no such waiver shall extend to or affect any
      subsequent Event of Default or impair any right resulting therefrom.

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    (c) In
      case
      any one or more Events of Default shall occur and be continuing, the Purchaser
      may proceed to protect and enforce its rights by an action at law, suit in
      equity or other appropriate proceeding, whether for the specific performance
      of
      any agreement contained herein or in any Transaction Document or for an
      injunction against a violation of any of the terms hereof or thereof, or in
      aid
      of the exercise of any power granted hereby or thereby or by law. In case of
      a
      default in the payment of any dividend on or redemption of any Preferred Share,
      the Company will pay to the Purchaser such further amount as shall be sufficient
      to cover the cost and the expenses of collection, including, without limitation,
      actual attorney’s fees, expenses and disbursements. No course of dealing and no
      delay on the part of a Purchaser in exercising any rights shall operate as
      a
      waiver thereof or otherwise prejudice such Purchaser’s rights. No right
      conferred hereby or by any Transaction Document upon the Purchaser shall be
      exclusive of any other right referred to herein or therein or now available
      at
      law in equity, by statute or otherwise.

     

    ARTICLE
      X

    CERTIFICATE
      LEGENDS

     

    10.1 Legend.
      Each
      certificate representing the Securities shall be stamped or otherwise imprinted
      with a legend substantially in the following form (in addition to any legend
      required by applicable state securities or “blue sky” laws):

     

    NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
      SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
      OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION
      IS
      NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR
      RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY
      BE
      PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
      ARRANGEMENT SECURED BY THE SECURITIES.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    The
      Company shall issue irrevocable instructions to its transfer agent, and any
      subsequent transfer agent, to issue certificates, registered in the name of
      each
      Purchaser or its respective nominee(s), for the Conversion Shares and the
      Warrant Shares in such amounts as specified from time to time by each Purchaser
      to the Company upon conversion of the Preferred Shares or exercise of the
      Warrant in the form of Exhibit
      I
      attached
      hereto (the “Irrevocable
      Transfer Agent Instructions”).
      Prior
      to registration of the Conversion Shares and the Warrant Shares under the
      Securities Act, all such certificates shall bear the restrictive legend
      specified in this Section 10.1. Certificates evidencing the Conversion
      Shares and Warrant Shares shall not contain any legend (including the legend
      set
      forth in Section 10.1 hereof), (i) while a registration statement
      (including the Registration Statement) covering the resale of such security
      is
      effective under the Securities Act, or (ii) following any sale of such
      Conversion Shares or Warrant Shares pursuant to Rule 144, or (iii) if such
      Conversion Shares or Warrant Shares are eligible for sale under Rule 144 by
      the
      Purchaser without limitation as to volume or manner of sale, or (iv) if
      such legend is not required under applicable requirements of the Securities
      Act
      (including judicial interpretations and pronouncements issued by the Staff
      of
      the Commission). The Company shall cause its counsel to issue a legal opinion
      to
      the Company’s transfer agent promptly after the effective date of a registration
      statement covering such Conversions Shares or Warrant Shares, if required by
      the
      Company’s transfer agent, to effect the removal of the legend hereunder. If all
      or any portion of the Preferred Shares or a Warrant is exercised at a time
      when
      there is an effective registration statement to cover the resale of the
      Conversion Shares or the Warrant Shares, such Conversions Shares and Warrant
      Shares, as the case may be, shall be issued free of all legends. The Company
      agrees that following the effective date of the registration statement covering
      Conversion Shares or Warrant Shares or at such time as such legend is no longer
      required under this Section 10.1, it will, no later than five (5) Trading
      Days following the delivery by the Purchaser to the Company or the Company’s
      transfer agent of a certificate representing Conversion Shares or Warrant
      Shares, as the case may be, issued with a restrictive legend (such date, the
      “Delivery Date”), deliver or cause to be delivered to the Purchaser a
      certificate representing such Securities that is free from all restrictive
      and
      other legends. The Company may not make any notation on its records or give
      instructions to any transfer agent of the Company that enlarge the restrictions
      on transfer set forth in this Section. Whenever a certificate representing
      the
      Conversion Shares or Warrant Shares is required to be issued to the Purchaser
      without a legend, in lieu of delivering physical certificates representing
      the
      Conversion Shares or Warrant Shares, provided the Company’s transfer agent is
      participating in the Depository Trust Company (“DTC”) Fast Automated Securities
      Transfer program, the Company shall use its reasonable best efforts to cause
      its
      transfer agent to electronically transmit the Conversion Shares or Warrant
      Shares to the Purchaser by crediting the account of such Purchaser’s Prime
      Broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system
      (to the extent not inconsistent with any provisions of this Agreement).

     

    10.2 Liquidated
      Damages.
      The
      Company understands that a delay in the delivery of unlegended certificates
      for
      the Conversion Shares or the Warrant Shares as set forth in Section 10.1
      hereof beyond the Delivery Date could result in economic loss to the Purchaser.
      If the Company fails to deliver to a Purchaser such shares via DWAC or a
      certificate or certificates pursuant to this Section hereunder by the
      Delivery Date, the Company shall pay to the Purchaser, in cash,
      as
      partial liquidated damages and not as a penalty, for each $500 of Conversion
      Shares or Warrant Shares (based on the closing price of the Common Stock
      reported by the principal Trading Market on the date such Securities are
      submitted to the Company’s transfer agent) subject to Section 10.1, $10 per
      Trading Day (increasing to $15 per Trading Day five (5) Trading Days after
      such
      damages have begun to accrue and increasing to $20 per Trading Day ten (10)
      Trading Days after such damages have begun to accrue) for each Trading Day
      after
      the Legend Removal Date until such certificate is delivered.
      Nothing
      herein shall limit the Purchaser’s right to pursue actual damages for the
      Company’s failure to deliver certificates representing any Securities as
      required by the Transaction Documents, and the Purchaser shall have the right
      to
      pursue all remedies available to it at law or in equity including, without
      limitation, a decree of specific performance and/or injunctive relief.

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    10.3 Sales
      by the Purchaser.
      The
      Purchaser agrees that the removal of the restrictive legend from certificates
      representing Securities as set forth in Section 10.1 is predicated upon the
      Company’s reliance that the Purchaser will sell any Securities pursuant to
      either the registration requirements of the Securities Act, including any
      applicable prospectus delivery requirements, or an exemption
      therefrom.

     

    ARTICLE
      XI

    INDEMNIFICATION

     

    11.1 Indemnification
      by the Company.
      The
      Company agrees to defend, indemnify and hold harmless the Purchaser and shall
      reimburse the Purchaser for, from and against each claim, loss, liability,
      cost
      and expense (including without limitation, interest, penalties, costs of
      preparation and investigation, and the actual fees, disbursements and expenses
      of attorneys, accountants and other professional advisors) (collectively,
“Losses”) directly or indirectly relating to, resulting from or arising out of
      (a) any untrue representation, misrepresentation, breach of warranty or
      non-fulfillment of any covenant, agreement or other obligation by or of the
      Company contained in any Transaction Document or
      in any
      certificate, document, or instrument delivered
      by the
      Company
      to the
      Purchaser pursuant to Section 5.4(i) hereof;
      or (b)
      any action instituted against the Purchaser or its affiliates, by any
      stockholder of the Company who is not an affiliate of the Purchaser, with
      respect to any of the transactions contemplated by the Transaction Documents
      (unless such action is based upon a breach of the Purchaser’s representations,
      warranties or covenants under the Transaction Documents or any agreements or
      understandings the Purchaser may have with any such stockholder or any
      violations by the Purchaser of state or federal securities laws or any conduct
      by the Purchaser which constitutes fraud, gross negligence, willful misconduct
      or malfeasance).

     

    11.2 Indemnification
      by the Purchaser.
      Purchaser shall defend, indemnify and hold harmless the Company and its
      subsidiaries and shall reimburse the Company and its Subsidiaries for, from
      and
      against each Loss directly or indirectly relating to, resulting from or arising
      out of any untrue representation, misrepresentation, breach of warranty or
      non-fulfillment of any covenant, agreement or other obligation by or of the
      Purchaser contained in any Transaction Document delivered to the Company or
      any
      of its subsidiaries pursuant thereto.

     

    11.3 Procedure.
      

     

    (a) The
      indemnified party shall promptly notify the indemnifying party of any claim,
      demand, action or proceeding for which indemnification will be sought under
      this
      Agreement; provided, that the failure of any party entitled to indemnification
      hereunder to give notice as provided herein shall not relieve the indemnifying
      party of its obligations under this Article XI except to the extent that the
      indemnifying party is actually prejudiced by such failure to give notice.

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    (b) In
      case
      any such action, proceeding or claim is brought against an indemnified party
      in
      respect of which indemnification is sought hereunder, the indemnifying party
      shall be entitled to participate in and, unless in the reasonable, good-faith
      judgment of the indemnified party a conflict of interest between it and the
      indemnifying party exists with respect to such action, proceeding or claim
      (in
      which case the indemnifying party shall be responsible for the reasonable fees
      and expenses of one separate counsel for the indemnified party), to assume
      the
      defense thereof with counsel reasonably satisfactory to the indemnified party.
      If the indemnifying party elects to defend any such action or claim, then the
      indemnified party shall be entitled to participate in such defense (but not
      control) with counsel of its choice at its sole cost and expense (except that
      the indemnifying party shall remain responsible for the reasonable fees and
      expenses of one separate counsel for the indemnified party in the event in
      the
      reasonable, good-faith judgment of the indemnified party a conflict of interest
      between it and the indemnifying party exists).

     

    (c) In
      the
      event that the indemnifying party advises an indemnified party that it will
      contest such a claim for indemnification hereunder, or fails, within thirty
      (30)
      days of receipt of any indemnification notice to notify, in writing, such person
      of its election to defend, settle or compromise, at its sole cost and expense,
      any action, proceeding or claim (or discontinues its defense at any time after
      it commences such defense), then the indemnified party may, at its option,
      defend, settle or otherwise compromise or pay such action or claim. In any
      event, unless and until the indemnifying party elects in writing to assume
      and
      does so assume the defense of any such claim, proceeding or action, the
      indemnified party’s costs and expenses arising out of the defense, settlement or
      compromise of any such action, claim or proceeding shall be Losses subject
      to
      indemnification hereunder. 

     

    (d) The
      parties shall cooperate fully with each other in connection with any negotiation
      or defense of any such action or claim and shall furnish to the other party
      all
      information reasonably available to such party which relates to such action
      or
      claim. The each party shall keep the other party fully apprised at all times
      as
      to the status of the defense or any settlement negotiations with respect
      thereto. 

     

    (e) Notwithstanding
      anything in this Article XI to the contrary, the indemnifying party shall not,
      without the indemnified party’s prior written consent, settle or compromise any
      claim or consent to entry of any judgment in respect thereof which imposes
      any
      future obligation on the indemnified party or which does not include, as an
      unconditional term thereof, the giving by the claimant or the plaintiff to
      the
      indemnified party of a release from all liability in respect of such claim.
      The
      indemnification obligations to defend the indemnified party required by this
      Article XI shall be made by periodic payments of the amount thereof during
      the
      course of investigation or defense, as and when the Loss is incurred, so long
      as
      the indemnified party shall refund such moneys if it is ultimately determined
      by
      a court of competent jurisdiction that such party was not entitled to
      indemnification. The indemnity agreements contained herein shall be in addition
      to (i) any cause of action or similar rights of the indemnified party
      against the indemnifying party or others, and (ii) any liabilities the
      indemnifying party may be subject to pursuant to the law. 

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      XII

    MISCELLANEOUS

     

    12.1 Governing
      Law.
      This
      Agreement and the rights of the parties hereunder shall be governed in all
      respects by the laws of the State of New York wherein the terms of this
      Agreement were negotiated.

     

    12.2 Survival.
      Except
      as specifically provided herein, the representations, warranties, covenants
      and
      agreements made herein shall survive the Closing.

     

    12.3 Amendment.
      This
      Agreement may not be amended, discharged or terminated (or any provision hereof
      waived) without the written consent of the Company and the Purchaser.

     

    12.4 Successors
      and Assigns.
      Except
      as otherwise expressly provided herein, the provisions hereof shall inure to
      the
      benefit of, and be binding upon and enforceable by and against, the successors,
      assigns, heirs, executors and administrators of the parties hereto. The
      Purchaser may assign its rights hereunder, and the Company may not assign its
      rights or obligations hereunder without the consent of the Purchaser.

     

    12.5 Entire
      Agreement.
      This
      Agreement, the Transaction Documents and the other documents delivered pursuant
      hereto and simultaneously herewith constitute the full and entire understanding
      and agreement between the parties with regard to the subject matter hereof
      and
      thereof.

     

    12.6 Notices,
      etc.
      All
      notices, demands or other communications given hereunder shall be in writing
      and
      shall be sufficiently given if delivered either personally, by facsimile, or
      by
      a nationally recognized courier service marked for next business day delivery
      or
      sent in a sealed envelope by first class mail, postage prepaid and either
      registered or certified with return receipt, addressed as
      follows:

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    

     

    if
      to the
      Company:

     

    MDwerks,
      Inc.

    1020
      NW 6th Street

    Deerfield
      Beach, FL 33442

    Telephone:
      (954) 389-8300

    Facsimile:
      (954) 427-5871

    Attention:
      Howard B. Katz, CEO

    

    with
      a
      copy to:

     

    Stephen
      P. Katz, Esq.

    Peckar
      & Abramson, P.C.

    70
      Grand
      Avenue

    River
      Edge, NJ 07661

    Telephone:
      (201) 343-3434

    Facsimile:
      (201) 343-6306

    

    if
      to the
      Purchaser:

     

    Vicis
      Capital Master Fund

    Tower
      56,
      Suite 700 

    126
      E.
      56th Street, 7th Floor 

    New
      York,
      NY 10022

    Phone:
      (212) 909-4600

    Fax:
      (212) 909-4601

    Attn:
      Shad Stastney

     

    with
      a
      copy to:

     

    Andrew
      D.
      Ketter, Esq.

    Quarles
      & Brady LLP

    411
      East
      Wisconsin Avenue

    Milwaukee,
      WI 53202

    Phone:
      (414) 277-5629

    Fax:
      (414) 978-8972 

    

    Such
      communications shall be effective immediately if delivered in person or by
      confirmed facsimile, upon the date acknowledged to have been received in return
      receipt, or upon the next business day if sent by overnight courier
      service.

    

    12.7 Delays
      or Omissions.
      No
      delay or omission to exercise any right, power or remedy accruing to any holder
      of any Securities upon any breach or default of the Company under this Agreement
      shall impair any such right, power or remedy of such holder nor shall it be
      construed to be a waiver of any such breach or default, or an acquiescence,
      therein, or of or in any similar breach or default thereafter occurring; nor
      shall any waiver of any single breach or default be deemed a waiver of any
      other
      breach or default theretofore or thereafter occurring. Any waiver, permit,
      consent or approval of any kind or character on the part of any holder of any
      breach or default under this Agreement, or any waiver on the part of any holder
      of any provisions or conditions of this Agreement must be, made in writing
      and
      shall be effective only to the extent specifically set forth in such writing.
      All remedies, either under this Agreement or by law or otherwise afforded to
      any
      holder, shall be cumulative and not alternative.

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    12.8 Severability.
      The
      invalidity of any provision or portion of a provision of this Agreement shall
      not affect the validity of any other provision of this Agreement or the
      remaining portion of the applicable provision. It is the desire and intent
      of
      the parties hereto that the provisions of this Agreement shall be enforced
      to
      the fullest extent permissible under the laws and public policies applied in
      each jurisdiction in which enforcement is sought. Accordingly, if any particular
      provision of this Agreement shall be adjudicated to be invalid or unenforceable,
      such provision shall be deemed amended to delete therefrom the portion thus
      adjudicated to be invalid or unenforceable, such deletion to apply only with
      respect to the operation of such provision in the particular jurisdiction in
      which such adjudication is made.

     

    12.9 Expenses.
      The
      Company shall bear its own expenses and legal fees incurred on its behalf with
      respect to the negotiation, execution and consummation of the transactions
      contemplated by this Agreement and shall pay all documentary stamp or similar
      taxes imposed by any authority upon the transactions contemplated by this
      Agreement or any Transaction Document. Without
      requiring any documentation therefor, the Company will reimburse the Purchaser
      $100,000 for all fees and expenses incurred by it with respect to the
      negotiation, execution and consummation of the transactions contemplated by
      this
      Agreement and the transactions contemplated hereby and due diligence conducted
      in connection therewith, including the fees and disbursements of counsel and
      auditors for the Purchaser. Such reimbursement shall be paid on the Closing
      Date
      by the Purchaser deducting such $100,000 from the Purchase Price. The
      Company shall pay all reasonable, documented third-party fees and expenses
      incurred by the Purchaser in connection with the enforcement of this Agreement
      or any of the other Transaction Documents, including, without limitation, all
      actual reasonable attorneys’ fees and expenses.

     

    12.10 Consent
      to Jurisdiction; Waiver of Jury Trial.
      EACH
      OF
      THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS
      TO
      THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED THE STATE
      AND
      COUNTY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
      RELATING TO THIS AGREEMENT AND THE TRANSACTION DOCUMENTS. EACH OF THE PARTIES
      TO
      THIS AGREEMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
      ANY
      OBJECTION WHICH SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
      OF ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURTS AND ANY CLAIM THAT ANY SUCH
      PROCEEDING BROUGHT IN ANY SUCH COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
      EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
      BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY SUCH LEGAL PROCEEDING. EACH OF THE
      PARTIES TO THIS AGREEMENT HEREBY CONSENTS TO SERVICE OF PROCESS BY NOTICE IN
      THE
      MANNER SPECIFIED IN SECTION 12.6 AND IRREVOCABLY WAIVES, TO THE FULLEST
      EXTENT PERMITTED BY LAW, ANY OBJECTION SUCH PARTY MAY NOW OR HEREAFTER HAVE
      TO
      SERVICE OF PROCESS IN SUCH MANNER.

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    12.11 Titles
      and Subtitles.
      The
      titles of the articles, sections and subsections of this Agreement are for
      convenience of reference only and are not to be considered in construing this
      Agreement.

     

    12.12 Execution.
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf such signature is executed) with the same
      force and effect as if such facsimile signature page were an original
      thereof.

     

    [Signature
      Page Follows]

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have duly executed this Securities Purchase
      Agreement, as of the day and year first above written.

     

    
      	
              COMPANY:

            
	 
	
              MDWERKS,
                INC.

            
	 	  
	
              By:

            	
              /s/
                Howard B. Katz

            
	 	
              Howard
                B. Katz, Chief Executive Officer

            
	 	 
	PURCHASER:
	 	 
	VICIS
              CAPITAL MASTER FUND
	
              By: Vicis
                Capital LLC

            
	 	 
	
              By:

            	
              /s/
                Chris Phillips

            
	
              Name:    

            	
              Chris
                Phillips

            
	
              Title:
                

            	
              Managing
                Director

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    FORM
      OF AMENDED AND RESTATED CERTIFICATE OF DESIGNATIONS OF 

    SERIES
      B CONVERTIBLE PREFERRED STOCK

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    

    FORM
      OF SERIES H WARRANT

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C

    

    FORM
      OF AMENDED AND RESTATED REGISTRATION RIGHTS
      AGREEMENT

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D

    

    FORM
      OF OPINION OF COUNSEL

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      E

    

    FORM
      OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

    

    MDWERKS,
      INC.

     

    as
      of
      March __, 2008

     

    [Name
      and
      address of Transfer Agent]

    Attn:
      _____________

    

    Ladies
      and Gentlemen:

     

    Reference
      is made to that certain Securities Purchase Agreement (the “Purchase
      Agreement”), dated March __, 2008, by and between MDwerks, Inc., a Delaware
      corporation (the “Company”), and the purchaser named therein (the “Purchasers”)
      pursuant to which the Company is issuing to the Purchasers shares of its Series
      B Preferred Stock, par value $0.001 per share (the “Preferred Shares”),
      convertible into shares of the Company’s common stock, par value $0.001 per
      share (the “Common Stock”) and warrants (the “Warrants”) to purchase shares of
      the Company’s Common Stock. This letter shall serve as our irrevocable
      authorization and direction to you (provided that you are the transfer agent
      of
      the Company at such time) to issue shares of Common Stock upon conversion of
      the
      Preferred Shares (the “Conversion Shares”) and exercise of the Warrants (the
“Warrant Shares”) to or upon the order of a Purchaser from time to time upon
      (i) surrender to you of a properly completed and duly executed Conversion
      Notice or Exercise Notice, as the case may be, in the form attached hereto
      as
      Exhibit I and Exhibit II, respectively, (ii) in the case of the conversion
      of Preferred Shares, a copy of the certificate representing the Preferred Shares
      (with the original delivered to the Company) representing the Preferred Shares
      being converted or, in the case of Warrants being exercised, a copy of the
      Warrants (with the original Warrants delivered to the Company) being exercised
      (or, in each case, an indemnification undertaking with respect to such Preferred
      Shares or the Warrants in the case of their loss, theft or destruction), and
      (iii) delivery of a treasury order or other appropriate order duly executed
      by a duly authorized officer of the Company. So long as you have previously
      received written confirmation from counsel to the Company that a registration
      statement covering resales of the Conversion Shares or Warrant Shares, as
      applicable, has been declared effective by the Securities and Exchange
      Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933
      Act”), and you have not received any subsequent notice by the Company or its
      counsel of the suspension or termination of the effectiveness of such
      registration statement, then certificates representing the Conversion Shares
      and
      the Warrant Shares, as the case may be, shall not bear any legend restricting
      transfer of the Conversion Shares and the Warrant Shares, as the case may be,
      thereby and should not be subject to any stop-transfer restriction; provided,
      however, that if you have not previously received written confirmation from
      counsel to the Company that a registration statement covering resales of the
      Conversion Shares or Warrant Shares, as applicable, has been declared effective
      by the SEC under the 1933 Act, then the certificates for the Conversion Shares
      and the Warrant Shares shall bear the following legend:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
      SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
      OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION
      IS
      NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR
      RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY
      BE
      PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
      ARRANGEMENT SECURED BY THE SECURITIES.

     

    A
      form of
      written confirmation from counsel to the Company that a registration statement
      covering resales of the Conversion Shares and the Warrant Shares has been
      declared effective by the SEC under the 1933 Act is attached hereto as Exhibit
      III.

     

    Please
      be
      advised that the Purchasers are relying upon this letter as an inducement to
      enter into the Purchase Agreement, and, accordingly, each Purchaser is a third
      party beneficiary to these instructions.

     

    Please
      execute this letter in the space indicated to acknowledge your agreement to
      act
      in accordance with these instructions. Should you have any questions concerning
      this matter, please contact me at ___________.

     

    
      	
              Very
                truly yours,

            
	 	 
	
              MDWERKS,
                INC.

            
	 	 
	
              By:   

            	 
	
              Name:     

            	 
	
              Title:
                

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              ACKNOWLEDGED
                AND AGREED:

            
	 
	
              [TRANSFER
                AGENT]

            
	 
	
              By:     

            	 
	
              Name:      

            	 
	
              Title:

            	 
	
              Date:

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      I 

     

    MDWERKS,
      INC. 

     

    FORM
      OF CONVERSION NOTICE 

     

    Reference
      is made to the Certificate of Designations Designating the Series B Preferred
      Stock of MDwerks, Inc. (the “Certificate
      of Designations”).
      In
      accordance with and pursuant to the Certificate of Designations, the undersigned
      hereby elects to convert the number of shares of Series B Preferred Stock,
      par
      value $.001 per share (the “Preferred
      Shares”),
      of
      MDwerks, Inc., a Delaware corporation (the “Company”),
      indicated below into shares of Common Stock, par value $.001 per share (the
      “Common
      Stock”),
      of
      the Company, by tendering the stock certificate(s) representing the share(s)
      of
      Preferred Shares specified below as of the date specified below.

     

    Date to effect conversion: _______________________________________________________________________________

    

    Number of shares of Preferred Stock owned prior to conversion: ___________________________________________________

    

    Number of shares of Preferred Stock to be converted: ___________________________________________________________

    

    Stated Value of shares of Preferred Stock to be converted: _______________________________________________________________________

    

    Applicable Conversion Price: _____________________________________________________________________________________________

    

    Number of shares of Common Stock to be issued: ______________________________________________________________________________

    

    Number of shares of Preferred Stock owned subsequent to conversion: ______________________________________________________________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                [HOLDER]

              
	 	 
	
                By:   

              	
                 

              
	
                Name: 

              	 
	
                Title:
                  

              	 

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      II

     

    MDWERKS,
      INC.

     

    FORM
      OF EXERCISE NOTICE

     

    The
      undersigned holder hereby exercises the right to purchase _________________
      of
      the shares of Common Stock (“Warrant
      Shares”)
      of
      MDwerks, Inc., a Delaware corporation (the “Company”),
      evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”).
      Capitalized terms used herein and not otherwise defined shall have the
      respective meanings set forth in the Warrant.

    

    
      	
              Dated:
                

            	 	 	
              Signature

            	  
	 	 	 	 	 
	 	 	 	
              Address

            	  
	 	 	 	 	  
	 	 	 	 	  

    

    

    Number
      of
      shares of Common Stock beneficially owned or deemed beneficially owned by the
      Holder on the date of Exercise: _________________________

     

    The
      undersigned intends that payment of the Warrant Price shall be made as (check
      one or both): 

     

    
      	
              Cash
                Exercise

            	
              _______

            
	
              Cashless
                Exercise

            	
              _______

            

    

     

    In
      the
      event that the holder has elected a Cash Exercise with respect to some or all
      of
      the Warrant Shares to be issued pursuant hereto, the holder shall pay the
      Aggregate Exercise Price in the sum of $___________________ to the Company
      in
      accordance with the terms of the Warrant. 

     

    If
      the
      Holder has elected a Cashless Exercise, a certificate shall be issued to the
      Holder for the number of shares equal to the whole number portion of the product
      of the calculation set forth below, which
      is                         .
      The
      Company shall pay a cash adjustment in respect of the fractional portion of
      the
      product of the calculation set forth below in an amount equal to the product
      of
      the fractional portion of such product and the Closing Sale Price of the shares
      of Common Stock (as reported by Bloomberg) on the date prior to exercise, which
      product is ____________________.

     

    
      	
              Net Number  =
                

            	
              (A
                x B) - (A x C)

            
	 	
              B

            

    

    

    For
      purposes of the foregoing formula:

     

    
      	
              A
                =

            	
              the
                total number of shares with respect to which this Warrant is then
                being
                exercised.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              B
                =

            	
              the
                Closing Sale Price of the shares of Common Stock (as reported by
                Bloomberg) on the date immediately preceding the date of the Exercise
                Notice.

            
	
              C
                =

            	
              the
                Exercise Price then in effect for the applicable Warrant Shares at
                the
                time of such exercise.

            

    

    

    ASSIGNMENT

    

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

    
      	
              Dated:   

            	 	 	
              Signature

            	  
	 	 	 	 	 
	 	 	 	
              Address

            	  
	 	 	 	 	  
	 	 	 	 	  

    

    

    PARTIAL
      ASSIGNMENT

    

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

    
      	
              Dated:    

            	 	 	
              Signature

            	  
	 	 	 	 	 
	 	 	 	
              Address

            	  
	 	 	 	 	  
	 	 	 	 	  

    

    

    FOR
      USE
      BY THE ISSUER ONLY:

    

    This
      Warrant No. W-___ canceled (or transferred or exchanged) this _____ day of
      ___________, _____, shares of Common Stock issued therefor in the name of
      _______________, Warrant No. W-_____ issued for ____ shares of Common Stock
      in
      the name of _______________.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      III

     

    FORM
      OF NOTICE OF EFFECTIVENESS

    OF
      REGISTRATION STATEMENT

     

    [Name
      and
      address of Transfer Agent]

    Attn:
      _____________

    

    Re: MDwerks,
      Inc.

     

    Ladies
      and Gentlemen:

     

    We
      are
      special counsel to MDwerks, a Delaware corporation (the “Company”),
      and
      have represented the Company in connection with that certain Securities Purchase
      Agreement (the “Purchase
      Agreement”),
      dated
      as of March __, 2008, by and among the Company and the purchasers named therein
      (collectively, the “Purchasers”)
      pursuant to which the Company issued to the Purchasers secured convertible
      promissory notes (the “Notes”)
      and
      warrants (the “Warrants”)
      to
      purchase shares of the Company’s common stock, par value $0.001 per share (the
“Common
      Stock”).
      Pursuant to the Purchase Agreement, the Company has also entered into a
      Registration Rights Agreement with the Purchasers (the “Registration
      Rights Agreement”),
      dated
      as of March __, 2008, pursuant to which the Company agreed, among other things,
      to register the Registrable Securities (as defined in the Registration Rights
      Agreement), including the shares of Common Stock issuable upon conversion of
      the
      Notes and exercise of the Warrants, under the Securities Act of 1933, as amended
      (the “1933
      Act”).
      In
      connection with the Company’s obligations under the Registration Rights
      Agreement, on ________________, 2008, the Company filed a Registration Statement
      on Form S-1 (File No. 333-________) (the “Registration
      Statement”)
      with
      the Securities and Exchange Commission (the “SEC”)
      relating to the resale of the Registrable Securities which names each of the
      present Purchasers as a selling stockholder thereunder.

     

    In
      connection with the foregoing, we advise you that a member of the SEC’s staff
      has advised us by telephone that the SEC has entered an order declaring the
      Registration Statement effective under the 1933 Act at [ENTER
      TIME OF EFFECTIVENESS]
      on
[ENTER
      DATE OF EFFECTIVENESS]
      and we
      have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that
      any stop order suspending its effectiveness has been issued or that any
      proceedings for that purpose are pending before, or threatened by, the SEC
      and
      accordingly, the Registrable Securities are available for resale under the
      1933
      Act pursuant to the Registration Statement.

     

    
      	
              Very
                truly yours,

            
	 
	
              [COMPANY
                COUNSEL]

            
	 
	
              By:

            	 

    

    

    
      	cc:	
              [LIST
                NAMES OF PURCHASERS]

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