Document:

WXHIBIT 10.12

EXHIBIT 10.12 

			
		OWNER:       

TENANT:      

SPACE:       

             

LEASE DATE:  

INITIAL TERM:

OPTION:
	Diedrichs Family Partnership, LLLP

A4S Technologies, Inc.

489 N. Denver Avenue,

Loveland, CO  80537

May 27, 2003

2 years

2 year option

LEASE AGREEMENT 

LEASE AGREEMENT 

        THIS
LEASE AGREEMENT, signed by the parties on May 27, 2003, is made by Diedrichs Family
Partnership, LLLP (“Landlord”), and A4S Technologies, Inc. (“Tenant”). 

         1.       
          Definitions. In this Lease, capitalized words or phrases defined below
          shall have the meanings indicated: 

		    A.                             “Area” shall
mean the land commonly known as 489 N. Denver Avenue. The                Area includes
the Leased Premises and any Common Areas.  

		    B.                             “Building” shall
mean the building within the Area in which the Leased                Premises are
located.  

		    C.                             “Common
Areas” shall mean all entrances, exits, driveways, curbs,                walkways,
hallways, parking areas, landscaped areas, rest rooms, loading and                service
areas, and like areas or facilities which are located in the Area that
               Landlord has designated as available for Tenant’s nonexclusive use.  

		    D.                        “Leased
Premises” means:  

	 	
Space
489 N. Denver Avenue, consisting of approximately 2100 square feet, as depicted on
Addendum A hereof. 

		    E.                                                       “Tenant’s
Prorata Share” equals the ratio of the total number of                     square
feet in the Leased Premises to the total number of leasable square feet
                    in the Building or, if there is more than one building, then within
the Area.                     Said Prorata Share is (1.76%) percent, but may change from
time to time if the                     leasable square footage in the Building or the
Area increases or decreases.  

         2.       
          Term/Option to Extend. 

		    A.                             Tenant
shall receive possession of the Leased Premises commencing at 12:00 Noon
               on June 1, 2003. Unless possession is sooner terminated as herein
provided, it                shall end at 12:00 Noon on May 31, 2005.  

		    B.                             Tenant
shall have the first option to extend this Lease from 12:00 Noon on June
               1, 2005 to 12:00 Noon on May 31, 2007. To exercise such option, Tenant
must not                be in default hereunder and this lease shall automatically extend
for the option                period unless Landlord receives Tenant’s written
notice of its intent not                to extend no later than April 1, 2005.  

         3.       
          Utilities. Tenant shall be solely responsible for and promptly pay all
          charges for heat, water, gas, electric, sewer service and any other utility
          service used or consumed on the Leased Premises. If Tenant is responsible for
          any utility that is also provided to other users, or is billed through Landlord,
          Tenant shall, within ten (10) days from presentation of the statement for such
          utility service, pay to Landlord, as additional rent under the terms hereof, the
          full amount of said statement if it represents utility service furnished to the
          Leased Premises only or (100%) percent of said statement if it includes utility
          service to an area greater than the Leased Premises. Landlord and Tenant shall
          review any proration of utilities at the end of the first year of occupancy, at
          which time Landlord shall determine if the present percentage of said total
          utilities is equitable in relation to the use of total services by all Tenants
          and adjust such percentage if necessary. If Landlord so requests, Tenant shall
          arrange with all appropriate utility companies to pay the utilities used on the
          Leased Premises and to have the same billed to Tenant at the address designated
          by Tenant. In no event shall Landlord be liable for any interruption or failure
          in the supply of any such utility to the Leased Premises. 

        If
any utility company serving the Leased Premises determines that an additional service,
impact fee, and/or assessment, or any other type of payment or penalty is necessary due to
Tenant’s use and occupancy of the Building, nature of operation and/or consumption of
utilities, said expense shall be borne solely by Tenant. Said expense shall be paid
promptly, and any repairs or modifications requested by the utility company shall be
performed by Tenant immediately and without any delay. 

         4.       
          Rent. Tenant shall pay the following rent for the Leased Premises: 

		    A.              Base
Monthly Rent. Tenant shall pay the following Base Monthly Rent to
               Landlord, without notice and without deduction or setoff, at the address
of                Landlord as herein set forth, in advance on the first day of each month
during                the term hereof. If appropriate, the Base Monthly Rent for the
first month of                the Lease Term shall be prorated for said partial month.  

	During Lease Term

	For Period Starting
	Period Ending Dates
	Base Monthly Rent of

	06/01/2003	 	 	06/01/2004	 	 	$	    1,040.00	 

        In
addition, Tenant shall pay Tenant’s Prorata Share of real estate taxes, insurance,
and common area maintenance and any other expenses payable or reimbursable by Tenant, as
set forth herein. Through June 1, 2004, such charges are as follows: 

	Square Footage 2100
	Amount
	Per Sq. Ft.
	Monthly

	Base Rental	 	 	$	 12,480	.00	$	    5	.94	$	1,040	.00
	Taxes	 	 	$	  3,150	.00	$	    1	.50	$	262	.50
	Insurance	 	 	 	 	 	 	 	 	 	 	 
		
	
	
	
	
	

	Common Area Charges	 	 	$	  2,310	.00	$	    1	.10	$	192	.50
		
	
	
	
	
	

	TOTALS	 	 	$	 17,940	.00	$	    8	.54	$	1,495	 

        Tenant
shall pay as additional monthly rent any increase in taxes, insurance, utilities and
common area maintenance per Paragraphs 11, 12C, and 16 herein, plus any other increases in
expenses payable or reimbursable by Tenant as set forth herein, being n/a Tenant shall
also pay to Landlord an increase for cost of living adjustment, calculated as set forth in
subparagraph 4B herein, beginning June 1, 2004 and every year thereafter. 

2 

	Base Monthly Rent During Option Period

	For Period Starting
	Period Ending Dates
	Base Monthly Rent of

	06/01/2005	 	 	06/01/2007	 	 	 	   Most current base rent plus CPI 
increase as stated below    	 

		    B.              Adjustments.
Commencing with the rent payment due June 1, 2004 the amount                of the Base
Monthly Rent shall be based on the cost-of-living index published by                the
Bureau of Labor Statistics of the United States Department of Labor (Western
               Region), using the latest available index as the base period. On January 1
of                each year that this Lease Agreement is in effect (including the first
Year and                all subsequent years of any renewal term), the Base Monthly Rent
shall be                computed by dividing the Base Monthly Rent initially due for the
immediately                preceding lease year by the index number for the first full
month that this                Lease is in effect, and then multiplying such amount by
the index number for the                month immediately preceding the initial month of
each year to which such cost of                living adjustment applies. PROVIDED,
HOWEVER, that the Base Monthly Rent be                increased by not less than (3)%.
All adjustments shall be based on the Base                Monthly Rent for the
immediately preceding year and shall therefore be                cumulative. If the
cost-of-living index is adjusted (such as by referring to a                different base
period), an appropriate correlation adjustment shall be made in                the
calculations hereunder.  

         5.       
          Security Deposit. Tenant has paid Landlord $1,495.00 as security for
          Tenant’s payment of rent and performance of the other terms and conditions
          of this Lease. Landlord may deduct from such amount for the reasonable cost of
          repairs to the Leased Premises (ordinary wear and tear excepted), for any rent
          delinquent under the terms hereof, and for any sum advanced by Landlord to cure
          any default of Tenant hereunder. If deductions occur, Tenant shall, within
          fifteen (15) days after notice from Landlord, redeposit with Landlord such
          amounts so expended so as to maintain the deposit in its original amount.
          Failure to so redeposit shall be deemed a failure to pay rent under the terms
          hereof. Nothing herein contained shall limit the liability of Tenant as to any
          damage to the Leased Premises, and Tenant shall be responsible for the total
          amount of any damage and/or loss occasioned by actions of Tenant. Landlord may
          deliver the funds deposited hereunder by Tenant to any purchaser of
          Landlord’s interest in the Leased Premises, whereupon Landlord shall be
          discharged from any further liability with respect to such deposit. Landlord
          shall not be required to pay Tenant any interest on said deposit and may
          commingle said deposit with other funds of Landlord. 

         6.       
          Use of Premises. Tenant shall use the Leased Premises for Office/Shop and
          for no other purpose whatsoever except with Landlord’s written consent.
          Tenant shall not allow any accumulation of trash or debris on the Leased
          Premises or within any portion of the Area. All receiving and delivery of goods
          and merchandise and all removal of garbage and refuse shall be made only by way
          of the rear and/or other service door provided therefor. If the Leased Premises
          has no such door, these matters shall be handled in a manner satisfactory to
          Landlord. No material may be stored outside the Leased Premises, unless first
          approved by Landlord in writing, and then in only such areas as Landlord
          designates. Tenant shall not commit or suffer any waste on the Leased Premises
          nor shall Tenant permit any nuisance to be maintained on the Leased Premises or
          permit any disorderly conduct or other activity having a tendency to annoy or
          disturb any occupants of any part of the Area or any adjoining property. 

3 

         7.       
          Laws and Regulations. Tenant shall, at its sole cost and expense, comply
          with all laws and regulations of any governmental entity, board, commission or
          agency having jurisdiction over the Leased Premises. Tenant agrees not to
          install any electrical equipment that overloads any electrical paneling,
          circuitry or wiring and further agrees to comply with the requirements of the
          insurance underwriter or any governmental authorities having jurisdiction
          thereof. 

         8.       
          Landlord’s Rules and Regulations. Landlord reserves the right to
          adopt and promulgate rules and regulations applicable to the Leased Premises and
          from time to time amend or supplement said rules or regulations. Notice of such
          rules and regulations and amendments and supplements thereto shall be given to
          Tenant, and Tenant agrees to comply with and observe such rules and regulations
          and amendments and supplements thereto provided that the same apply uniformly to
          all tenants of Landlord in the Area. 

         9.       
          Parking. All vehicles used by Tenant or Tenant’s employees shall be
          parked only in areas designated by Landlord. Tenant shall ensure that
          Tenant’s employees park only in the areas so designated. If Landlord
          requests, Tenant shall provide Landlord with the license numbers of
          Tenant’s vehicles and the vehicles of Tenant’s employees. 

         10.       
          Control of Common Areas. All Common Areas shall at all times be subject
          to the exclusive control and management of Landlord. 

         11.       
          Taxes. 

		    A.              Real
Property Taxes and Assessments. Tenant shall pay to Landlord on the
               first day of each month, one-twelfth of Tenant’s Prorata Share of an
real                estate taxes and general and special assessments, as additional rent.
If the                first and last years of the Lease Term are not calendar years, the
obligations                of Tenant hereunder shall be prorated for the number of days
during the calendar                year that this Lease is in effect. Landlord shall each
year determine                Tenant’s Prorata Share of taxes and assessments for
the prior year. If                Tenant has paid less than Tenant’s Prorata Share
for the prior year, Tenant                shall pay the deficiency to Landlord with the
next payment of Base Monthly Rent;                if Tenant has paid in excess of Tenant’s
Prorata Share for the prior year,                Landlord shall forthwith refund said
excess to Tenant.  

		    B.              Personal
Property Taxes. Tenant shall be responsible for, and shall pay
               promptly when due, any and all taxes and assessments levied or assessed
against                any furniture, fixtures, equipment and items of a similar nature
that Tenant                installs or locates in or about the Leased Premises.  

		    C.              Rent
Tax. If a special tax, charge or assessment is imposed or levied                upon
the rents paid or payable hereunder or upon the right of Landlord to
               receive rents hereunder (other than to the extent that such rents are
included                as a part of Landlord’s income for the purpose of an income
tax), Tenant                shall reimburse Landlord for the amount of such tax within
fifteen (15) days                after Landlord makes demand therefor upon Tenant.  

4 

         12.       
          Insurance. 

		    A.              Landlord.
Landlord shall procure and maintain such fire and casualty,                loss of rents
and liability insurance for the Area and the Building as it deems                proper
and appropriate from time to time. Such insurance shall not cover any of
               Tenant’s property, and Tenant shall have no interest in any of the
proceeds                of such insurance. Landlord shall not be required to procure any
insurance for                Tenant’s benefit.  

		    B.              Tenant’s
Insurance. Tenant shall, at its sole cost and expense,                insure on a
full replacement cost basis all of Tenant’s property located in                the
Leased Premises, including inventory, fixtures, leasehold improvements and
               contents, against loss resulting from fire or other casualty. Tenant shall
               procure, pay for, and maintain comprehensive public liability insurance
               providing coverage from and against any loss or damage occasioned by an
accident                or casualty on, about or adjacent to the Leased Premises. Said
liability policy                shall be written on an “occurrence basis” with
limits of not less then                $1,000,000 bodily injury liability coverage and
$300,000 property damage                liability coverage. Certificates for such
insurance shall be delivered to                Landlord and shall provide that said
insurance shall not be changed, modified,                reduced or canceled without
thirty (30) days’ prior written notice to                Landlord. Landlord shall be
named as a coinsured on all of Tenant’s                insurance policies hereunder.  

		    C.              Tenant’s
Share of Landlord Insurance. Tenant shall pay Tenant’s                Prorata
Share of the cost of insurance secured by Landlord pursuant to
               subparagraph 12A. Payment shall be made on the first day of each month as
               additional rent. Such Prorata Share shall be subject to change from time
to                time, as and when the cost of such insurance increases or decreases, or
               Tenant’s Prorata Share changes.  

		    D.              Mutual
Subrogation Waiver. Landlord and Tenant hereby grant to each                other, on
behalf of any insurer providing fire and extended coverage to either                of
them covering the Leased Premises, Building or other improvements thereon or
               contents thereof, a waiver of any right of subrogation any such insurer of
one                party may acquire against the other or as against Landlord or Tenant
by virtue                of payment of any loss under such insurance. Such a waiver shall
be effective so                long as Landlord and Tenant are empowered to grant such
waiver under the terms                of their respective insurance policy or policies,
and such waiver shall stand                mutually terminated as of the date either
Landlord or Tenant gives notice to the                other that the power to grant such
waiver has been so terminated.  

         13.       
          Trash Removal. The Association shall contract and pay for trash removal
          service for the Leased Premises. 

         14.       
          Maintenance Obligations of Landlord. Except as herein otherwise
          specifically provided for, Landlord shall keep and maintain the roof, foundation
          and external walls (but not windows or doors) of the Building in good repair and
          condition. Tenant shall repair and pay for any damage to the roof, foundation
          and external walls caused by Tenant’s action, negligence or fault. 

5 

         15.       
          Maintenance Obligations of Tenant. Subject only to the maintenance
          obligations of Landlord as herein provided for, Tenant shall, during the entire
          Lease Term, including all extensions thereof, at Tenant’s sole cost and
          expense, keep and maintain the Leased Premises in good condition and repair,
          including specifically the following: 

		    A.              Heating
and Air Conditioning Systems. Tenant shall maintain the heating                and
air conditioning systems for the Leased Premises in good working condition.
               Tenant shall contract and pay for the normal maintenance of the heating
and air                conditioning systems, through a service company acceptable to
Landlord. Tenant                shall not be liable for more than $500.00 of repair or
replacement costs that                occur in any calendar year.  

		    B.              Electrical
Systems. Tenant shall maintain the electrical systems in good                working
order and make all required repairs and replacements. Tenant has                inspected
the existing electrical systems and acknowledges that all such systems                are
in good repair and working order. Tenant shall be responsible for replacing
               light bulbs and other small items, in any event.  

		    C.              Plumbing
Systems. Tenant agrees to maintain the plumbing systems in good
               working order and make all required repairs or replacements. Tenant shall
not                clog or obstruct the plumbing fixtures or pipes with any foreign or
               inappropriate object and shall be liable for all costs arising therefrom.  

		    D.              Glass
and Doors. Tenant shall promptly repair and replace all glass and
               doors.  

		    E.              Tenant’s
Responsibility. Tenant shall be responsible for all repairs                on the
Leased Premises that become necessary due to the intentional or negligent
               action or inaction of Tenant, Tenant’s employees, or Tenant’s
               customers or other invitees. Tenant shall also be responsible for any
repairs or                replacements elsewhere in the Building or Area that become
necessary due to the                intentional or negligent action or inaction of
Tenant, Tenant’s employees,                or Tenant’s customers and other
invitees. Such responsibility shall                supersede any responsibility
undertaken by Landlord in this Lease.  

		    F.              Liability
for Overload. Tenant shall not overload the floors of any part                of the
Leased Premises and shall be responsible for the repair or replacement of
               any damage to the Leased Premises, the Building or the Area which result
from                such overloading by Tenant or Tenant’s movement of heavy
articles therein                or thereon.  

	 	
Inspection
of the Leased Premises — “As Is” Condition. Tenant has inspected the
Leased Premises and accepts them in the condition that they exist as of the date of this
Lease, including, but not limited to, all mechanical, plumbing and electrical systems and
the condition of the interior except: None.  

		    G.              Tenant’s
Failure to Maintain Premises. Should Tenant neglect to keep                and
maintain the Leased Premises as required herein, Landlord shall have the
               right, but not the obligation, to have the work done. All reasonable costs
plus                a ten percent (10%) overhead charge therefor shall be charged to
Tenant as                additional rental, payable with the rental next due.  

6 

         16.       
          Common Area Maintenance. Tenant shall pay Tenant’s Prorata Share of
          the total costs incurred for the operation, maintenance and repair of the Common
          Areas. Such expenses include, but are not limited to, the costs and expenses
          incurred for the operation, maintenance and repair of parking areas (including
          restriping but not repaving); removal of snow; utilities for common lighting and
          signs; insurance; security to protect and secure the Building and the Area; all
          common utilities, including water to maintain landscaping; replanting in order
          to maintain the appearance of landscaped areas; supplies; the cost of personnel
          to implement such services; and (1.76%) percent of all such operational
          maintenance and repair costs to cover Landlord’s administrative and
          overhead costs. These costs shall be estimated on an annual basis by Landlord
          and shall be adjusted upward or downward depending on the actual costs for the
          preceding twelve months. If the actual costs are greater than the estimated
          costs, Tenant shall pay the difference between the estimated costs and
          Tenant’s Prorata Share of the actual costs to Landlord with the next
          payment of Base Monthly Rent. If the actual costs are less than the estimated
          cost, Landlord shall forthwith refund the amount of Tenant’s excess payment
          to Tenant. 

         17.       
          Inspection of and Right of Entry to Leased Premises — Regular,
          Emergency, Reletting. Landlord and Landlord’s agents and employees may
          enter and inspect the Leased Premises during regular business hours; may show it
          to prospective purchasers or lenders; or may make such repairs, alterations,
          improvements or additions as Landlord deems necessary. Landlord and
          Landlord’s agents and employees may also enter the Leased Premises at any
          hour, if an emergency exists or reasonably appears to exist. Landlord shall be
          allowed to take all materials into and upon the Leased Premises that may be
          required therefor, without constituting an eviction of Tenant in whole or in
          part, and the rent reserved shall in no way abate while such repairs,
          alterations, improvements or additions are being made, by reason of loss or
          interruption of business of Tenant or otherwise. During the six months prior to
          the expiration of the term of this Lease or any renewal thereof, Landlord may
          exhibit the Leased Premises to prospective tenants and may place upon the Leased
          Premises the usual notices indicating that the Leased Premises are for lease or
          sale. 

         18.       
          Alteration — Changes and Additions — Responsibility. Unless
          Landlord’s approval is first secured in writing, Tenant shall not install
          or erect inside partitions, add to existing electric power service, add
          telephone outlets, add light fixtures, install additional heating and/or air
          conditioning equipment or fixtures or make any other changes or alterations to
          the interior or exterior of the Leased Premises. Any such changes or alterations
          shall be made at the sole cost and expense of Tenant. At the end of this Lease,
          all such fixtures, equipment, additions, changes and/or alterations (except
          trade fixtures installed by Tenant) shall be and remain the property of
          Landlord; provided however, Landlord shall have the option to require Tenant to
          remove any or all such fixtures, equipment, additions or alterations and restore
          the Leased Premises to the condition existing immediately prior to such change
          or installation, normal wear and tear excepted, all at Tenant’s cost and
          expense. All such work shall be done in a good and workmanlike manner and shall
          consist of new materials unless Landlord otherwise agrees. Any and all repairs,
          changes and/or modifications thereto shall be the responsibility and at the cost
          of Tenant. Landlord may require adequate security from Tenant assuring no
          mechanic’s liens on account of work done on the Leased Premises by Tenant
          and may post the Leased Premises, or take such other action as is then permitted
          by law, to protect Landlord and the Leased Premises against mechanic’s
          liens. Landlord may also require adequate security to assure Landlord that the
          Leased Premises will be restored to their original condition upon termination of
          this Lease. 

7 

         19.       
          Sign Approval. Tenant shall not erect, install or place on or about the
          Leased Premises any sign or other advertising material without the express prior
          written approval of Landlord. All signs must meet applicable code regulations
          and be properly permitted. 

         20.       
          Landlord’s Right to Make Changes and Additions. Landlord reserves
          the right to make alterations or additions to the Building or Area at any time.
          Landlord also reserves the right to construct other buildings and/or
          improvements in the Area and to make alterations or additions thereto, all as
          Landlord shall determine. Easements for light and air are not included in the
          leasing of the Leased Premises to Tenant. Landlord further reserves the
          exclusive right to the roof of the Building of which the Leased Premises are a
          part. Landlord also reserves the right at any time to relocate, vary and adjust
          the size of any of the improvements or Common Areas, PROVIDED, HOWEVER, that all
          such changes shall be in compliance with the requirements of governmental
          authorities having jurisdiction over the Area. 

         21.       
          Damage or Destruction of Leased Premises. If the Leased Premises or the
          Building are totally destroyed by fire or other casualty or so badly damaged
          that, in the opinion of Landlord, it is not feasible to repair or rebuild same,
          Landlord shall have the right to terminate this Lease upon written notice to
          Tenant. Such notice shall be given within 75 days after such fire or other
          casualty occurs. If the Leased Premises are partially damaged by fire or other
          casualty, not caused by Tenant’s negligence, and are not rendered
          untenantable thereby, as determined by Landlord, an appropriate reduction of the
          rent shall be allowed until repair thereof shall be substantially completed.
          Landlord shall undertake and complete such repairs with due diligence; if such
          repairs are not completed within 150 days after the fire or other casualty,
          Tenant may terminate this Lease by giving written notice of termination to
          Landlord at any time prior to the completion of such work. 

         22.       
          Condemnation Taking. If the entire Leased Premises is taken for
          quasi-public purposes by any governmental entity or other entity having the
          power of condemnation, this Lease shall terminate as of the date that legal
          title to the Leased Premises vests in the condemning authority or the date such
          authority takes possession of the Leased Premises, whichever is earlier. If only
          a portion of the Leased Premises is so taken, Lessor may either terminate this
          Lease as of the date title or possession is transferred as set forth above,
          whichever is earlier, or continue this Lease in effect, in which event the Base
          Monthly Rent and Tenant’s Prorata Share of taxes, insurance, and common
          area charges shall be equitably adjusted. 

        In
either a total or partial condemnation, Landlord shall have the exclusive right to any
award made by the condemning authority, and Tenant hereby waives and relinquishes any and
all claim Tenant may have against such award and all other claims for compensation or
damages against Landlord arising from such condemnation. 

         23.       
          Assignment or Subletting. Tenant may not assign this Lease or sublet the
          Leased Premises or any part thereof, without the written consent of Landlord,
          which consent shall not be unreasonably withheld. No such assignment or
          subletting, if approved by Landlord, shall relieve Tenant of any of its
          obligations hereunder, and the performance or nonperformance of any of the
          covenants herein contained by subtenants shall be considered as the performance
          or the nonperformance by Tenant. 

8 

         24.       
          Warranty of Title. Subject to the provisions of Paragraphs 26, 27, 28,
          and 29 hereof, Landlord covenants it has good right to lease the Leased Premises
          in the manner described herein and that Tenant shall peaceably and quietly have,
          hold, occupy and enjoy the Leased Premises during the term of the Lease. 

         25.       
          Access. Landlord shall provide Tenant nonexclusive access to the Leased
          Premises through and across land and/or other improvements owned by Landlord.
          Landlord shall have the right, during the term of this Lease, to designate, and
          to change, such nonexclusive access. 

         26.       
          Subordination. Tenant agrees that this Lease shall be subordinate to any
          mortgage, trust deed or ground lease that may now exist or which may hereafter
          be placed upon the Leased Premises and to any and all advances to be made
          thereunder, and to the interest thereon, and all renewals, replacements and
          extensions thereof. Tenant shall execute and deliver whatever instruments may be
          required for the above purposes, and if it fails to do so within ten (10) days
          after demand in writing, does hereby make, constitute and irrevocably appoint
          Landlord as is attorney-in-fact and in its name, place and stead so to do. In
          the event of the sale or assignment of Landlord’s interest in the Area or
          in the Building or in the event of any proceedings brought for the foreclosure
          of or in the event of exercise of the power of sale under any mortgage made by
          Landlord covering the Leased Premises, Tenant shall attorn to the purchaser and
          recognize such purchaser as Landlord under this Lease. 

         27.       
          Easements. Landlord shall have the right to grant any easement on, over,
          under and above the Area for such purposes as Landlord determines, provided that
          such easements do not materially interfere with Tenant’s occupancy and use
          of the Leased Premises. 

         28.       
          Tenant’s Hold Harmless and Indemnification Agreement. Tenant shall
          indemnify and hold Landlord harmless from and against any and all claims,
          losses, expenses, costs, judgments, and/or demands, including court costs and
          attorney’s fees, suffered or incurred by Landlord, arising from activities
          of Tenant on the Leased Premises or in the Building or in the Area or on account
          of any operation or action by Tenant and from and against all claims arising
          from any breach or default on the part of Tenant or any act of negligence of
          Tenant, its agents, contractors, servants, employees, licensees, or invitees; or
          any accident, injury or death of any person or damage to any property in or
          about the Leased Premises, the Building or the Area. 

         29.       
          Acts or Omission of Others. Landlord, its employees and agents, shall not
          be responsible or liable to Tenant or to Tenant’s guests, invitees,
          employees, agents or any other person or entity, for any loss or damage that may
          be caused by the acts or omissions of other tenants, their guests or invitees,
          occupying any other part of the Building or the Area or by persons who are
          trespassers on or in the Building or the Area, or for any loss or damage caused
          by resulting from the bursting, stoppage, backing up or leaking of water, gas,
          electricity or sewers or caused in any other manner whatsoever. 

9 

         30.       
          Interest on Past Due Obligations. Any amount due to Landlord not paid
          when due shall bear interest at two (2%) percent per month from due date until
          paid. Payment of such interest shall not excuse or cure any default by Tenant
          under this Lease. 

         31.       
          Late Charge. Landlord shall have the right to collect from Tenant, in
          addition to any amounts due under Paragraph 30 above, a monthly collection
          service charge for any payment due to Landlord hereunder which is delinquent ten
          (10) days or longer, said charge being ten percent (10%) of said payments,
          whichever sum shall be greater. 

         32.       
          Holding Over — Double Last Month’s Rent. If Tenant remains in
          possession of the Leased Premises after the termination of this Lease, whether
          by expiration of the lease term or otherwise, without a written agreement as to
          such possession, Tenant shall be deemed a month-to-month tenant. The Monthly
          Base Rent during such holdover tenancy shall be double the Monthly Base Rent
          paid for the last month of tenancy under this Lease, excluding any free rent
          concessions which may have been made for the last month of the Lease. No holding
          over by Tenant shall operate to renew or extend this Lease without the written
          consent of Landlord to such renewal or extension having been first obtained.
          Tenant shall indemnify Landlord against loss or liability resulting from the
          delay by Tenant in surrendering possession of the Leased Premises including,
          without limitation, any claims made with regard to any succeeding occupancy
          bounded by such holdover period. 

         33.       
          Modification or Extensions. No modification or extension of this Lease
          shall be binding upon the parties hereto unless in writing and signed by the
          parties hereto. 

         34.       
          Status Statement. If Landlord requests, Tenant agrees to execute,
          acknowledge and deliver to Landlord a statement in writing certifying that this
          Lease is unmodified and in full force and effect (or if there have been
          modifications, that the same are in full force and effect as modified and
          stating the modifications); Tenant has accepted and occupied the Leased
          Premises; Tenant has not paid rent in advance; Tenant is not aware of any prior
          assignment of this Lease by Landlord; Tenant has no offsets against the rent or
          claims against Landlord; amount of the total monthly rent then being paid by
          Tenant hereunder; and, the date to which rent and other charges have been paid. 

         35.       
          Notice. All notices, demands and requests which may be or are required to
          be given by either party to the other shall be in writing. Those given to Tenant
          shall be properly given if served on Tenant or an employee of Tenant, posted on
          the Leased Premises, or sent to Tenant by United States registered or certified
          mail, return receipt requested, properly sealed, stamped and addressed to Tenant
          at the Leased Premises as follows: 

	 	
A4S
Technologies, Inc.          
         3973 Montana Hwy 35        
           Kalispell, MT
 59901 

or at such other place as Tenant may
from time to time designate in a written notice to Landlord. Those given to Landlord shall
be properly given if personally served on Landlord or if sent to Landlord, United States
registered or certified mail, return receipt requested, properly sealed, stamped and
addressed to Landlord at 

10 

	 	
Diedrichs
Family Partnership, LLLP 
P.O. Box 270154 
Fort Collins, CO 80527 

or at such other place as Landlord
may from time to time designate in a written notice to Tenant. Any notice given by mailing
shall be effective as of the date of mailing. 

         36.       
          Memorandum of Lease — Notice to Mortgagee. Landlord and Tenant agree
          not to place this Lease of record, but upon the request of either party to
          execute and acknowledge a recordable short form lease indicating the names and
          respective addresses of Landlord and Tenant; the Leased Premises; the
          commencement and termination dates of the Lease Term and options for renewal, if
          any, but omitting rent and other terms of this Lease. Tenant consents to
          Landlord’s assignment of rents and of Landlord’s interest in this
          Lease to a mortgagee, if the same be made by Landlord. Tenant further agrees, if
          requested to do so by Landlord, that it will give to said mortgagee a copy of
          any request for performance by Tenant to Landlord or notice of default given by
          Tenant to Landlord, and if Landlord fails to cure such default, Tenant will give
          said mortgagee a sixty (60) day period in which to cure the same. Said period
          shall begin with the last day on which Landlord could cure such default before
          Tenant has the right to exercise any remedy by reason of such default. All
          notices to the mortgagee shall be sent by United States registered or certified
          mail, postage prepaid, return receipt requested. 

         37.       
          Controlling Law. This Lease shall be construed consistently with the laws
          of the State of Colorado. Any dispute resulting in litigation hereunder shall be
          resolved in court proceedings instituted in Larimer County and in no other
          jurisdiction. 

         38.       
          Landlord Not a Partner With Tenant. Nothing contained in this Lease shall
          be deemed to make Landlord a partner, agent, associate of or in joint venture
          with Tenant in the conduct of Tenant’s business, it being expressly
          understood and agreed that the relationship between the parties hereto is and
          shall at all times remain solely that of landlord and tenant. 

         39.       
          Partial Invalidity. If any term, covenant or condition of this Lease or
          the application thereof to any person or circumstance shall, be ruled invalid or
          unenforceable to any extent, the remainder of this Lease or the application of
          such term, covenant or condition to persons and circumstances other than those
          to which it has been held invalid or unenforceable, shall not be affected
          thereby, and each term, covenant and condition of this Lease shall be valid and
          shall be enforced to the fullest extent permitted by law. 

         40.       
          Default — Remedies. 

		    A.              Late
Charge. The Base Monthly Rent plus Tenant’s Prorata Share of
               taxes, insurance, and Common Area charges shall be due on the first day of
each                month. If said items have not been paid in full by the tenth (10th)
day of a                month, a late charge as provided for in Paragraph 31 shall be due
and payable.                The existence of such late charge shall not waive or release
Landlord’s                right to declare Tenant in breach hereunder if such rent
has not been paid in                full by the first day of the month in which it is
due.  

11 

		    B.              Breach/Default.
Upon breach of this Lease for failure to pay the rent                (including Monthly
Base Rent, Tenant’s Prorata Share of taxes, insurance,                and Common
Area charges) in full or upon Tenant’s failure to pay utilities                or
any other monetary item in full, when required hereunder, Landlord may give
               Tenant written notice specifying such breach and allowing ten (10)
business days                for cure thereof. If Tenant fails to cure such breach within
said grace period,                by paying in full all amounts required to cure such
breach (including, but not                limited to, any late charge that may accrue
during said grace period), Landlord                may declare Tenant in default under
this Lease.  

	 	        If
Tenant fails to timely perform any non-monetary obligation of this Lease, Landlord shall
have the right to give written notice to Tenant specifying such breach and allowing
fifteen (15) days thereafter for cure. Tenant may cure such breach by tendering
performance in full as required hereunder during such grace period or, if such breach is
of such a nature that it can not be cured by diligent effort during such grace period,
Tenant may cure its breach by undertaking a course of performance within such grace
period and diligently pursuing it thereafter. If Tenant fails to cure its breach within
said grace period, Landlord may declare Tenant in default hereunder.  

		    C.              Remedies.
If Tenant shall default in the payment of rent or in the                keeping of any of
the terms, covenants or conditions of this Lease to be kept                and/or
performed by Tenant, Landlord may immediately, or at any time thereafter,
               reenter the Leased Premises and remove all persons and property therefrom,
               without being liable to indictment, prosecution for damage therefor, or
for                forcible entry and detainer, and repossess and enjoy the Leased
Premises,                together with all additions thereto or alterations and
improvements thereof.                Landlord may, at its option, at any time and from
time to time thereafter, relet                the Leased Premises or any part thereof for
the account of Tenant or otherwise,                and receive and collect the rents
therefore and apply the same first to the                payment of such expenses as
Landlord may have incurred in recovering possession                and for putting the
same in good order and condition for rerental, and expense,                commissions
and charges paid by Landlord in reletting the Leased Premises. Any                such
re1etting may be for the remainder of the term of this Lease or for a
               longer or shorter period. In lieu of reletting such Leased Premises,
Landlord                may occupy the same or cause the same to be occupied by others.  

	 	        Whether
or not the Leased Premises or any part thereof be relet, Tenant shall pay Landlord the
rent and all other charges required to be paid by Tenant up to the time of the expiration
of this Lease or such recovery of possession, as the case may be, and thereafter, Tenant,
if required by Landlord, shall pay to Landlord until the end of the term of this Lease,
the equivalent of the amount of all rent reserved herein and all other charges required
to be paid by Tenant, less the net amount received by Landlord for such reletting if any.
Unless waived by written notice from Landlord to Tenant, no action taken by Landlord to
obtain possession of the Leased Premises or to recover any amount due to Landlord
hereunder shall betaken as a waiver of Landlord’s right to require full and complete
performance by Tenant of all terms hereof, including payment of all amounts due
hereunder, or as an election by Landlord to terminate this Lease.  

	 	        If
the Leased Premises are reoccupied by Landlord pursuant hereto, and regardless of whether
the Leased Premises shall be relet or possessed by Landlord, all fixtures, additions,
furniture, and the like then on the Leased Premises may be retained by Landlord.  

12 

		    D.              Abandonment.
In the event Tenant is in default under the terms hereof                and, by the sale
determination of Landlord, has abandoned the Leased Premises,                Landlord
shall have the right to remove all Tenant’s property from the                Leased
Premises and dispose of said property in such a manner as determined best
               by Landlord, at the sale cost and expense of Tenant and without liability
of                Landlord for the actions so taken.  

		    E.              Insolvency
— Bankruptcy. If Tenant makes an assignment of                Tenant’s
business or property for the benefit of creditors, or, if                Tenant’s
leasehold interest hereunder shall be levied upon by execution or                seized
by virtue of any writ of any court of law, or, if application be made for
               the appointment of a receiver for the business or property of Tenant, or,
if a                petition in bankruptcy shall be filed by or against Tenant, then and
in any such                case, at Landlord’s option, with or without notice,
Landlord may terminate                this Lease and immediately retake possession of the
Leased Premises without the                same working any forfeiture of the obligations
of Tenant hereunder.  

		    F.              Other
Remedies. In addition to remedies granted Landlord by the terms
               hereof, Landlord shall have available any and all rights and remedies
available                under the statutes of the State of Colorado. No remedy herein or
otherwise                conferred upon or reserved to Landlord shall be considered
exclusive of any                other remedy but shall be cumulative and shall be in
addition to every other                remedy given hereunder or now or hereafter
existing at law or in equity or by                statute. Further, all powers and
remedies given by this Lease to Landlord may be                exercised, from time to
time, and as often as occasion may arise or as may be                deemed expedient. No
delay or omission of Landlord to exercise any right or                power arising from
any default shall impair any such right or power or shall be                considered to
be a waiver of any such default or acquiescence thereof. The                acceptance of
rent by Landlord shall not be deemed to be a waiver of any breach                of any
of the covenants herein contained or of any of the rights of Landlord to
               any remedies herein given.  

         41.       
          Tenant’s Remedies. Upon Landlord’s breach of this Lease, Tenant
          shall have the right to give notice to Landlord specifying such breach and
          allowing fifteen (15) business days thereafter for cure of such breach. If the
          breach is of such a nature that it cannot be cured by diligent effort during
          such grace period, Landlord may cure its breach by undertaking a course of
          performance within such grace period and diligently pursuing it thereafter. If
          Landlord fails to cure its breach within said grace period, Tenant may pursue
          all remedies available to Tenant at law or in equity. PROVIDED, HOWEVER, that
          all rent (including Base Monthly Rent, plus Tenant’s Prorata Share of
          taxes, insurance, and common area charges), and payment of all other monetary
          obligations required of Tenant by this Lease shall be due and payable without
          deduction or setoff. 

         42.       
          Legal Proceedings — Responsibilities. In the event of breach or
          default by either party, the other party shall be entitled to recover all costs
          and expenses of enforcement, including reasonable attorney’s fees, whether
          or not litigation is actually commenced. In the event of proceeding at law or in
          equity by either party hereto, the defaulting party shall pay all costs and
          expenses, including all reasonable attorney’s fees incurred by the
          nondefaulting party in pursuing such remedy, if such nondefaulting party is
          awarded substantially the relief requested. 

13 

         43.       
          Administrative Charges. In the event any check, bank draft or negotiable
          instrument given for any money payment hereunder shall be dishonored at any time
          and from time to time, for any reason whatsoever not attributable to Landlord,
          Landlord shall be entitled, in addition to any other remedy that may be
          available (1) to make an administrative charge of $100.00 or three times the
          face value of the check, bank draft or negotiable instrument, whichever is
          smaller, and (2) at Landlord’s sole option, to require Tenant to make all
          future rental payments in cash or cashier’s check. 

         44.       
          Hazardous Materials and Environmental Considerations. 

		    A.                             Tenant
covenants and agrees that Tenant and its agents, employees, contractors
               and invitees shall comply with all Hazardous Materials Laws (as
hereinafter                defined). Without limiting the foregoing, Tenant covenants and
agrees that it                will not use, generate, store or dispose of, nor permit the
use, generation,                storage or disposal of Hazardous Materials (as
hereinafter defined) on, under or                about the Leased Premises, or will it
transport or permit the transportation of                Hazardous Materials to or from
the Leased Premises, except in full compliance                with any applicable
Hazardous Materials Laws. Any Hazardous Materials located on                the Leased
Premises shall be handled in an appropriately controlled environment                which
shall include the use of such equipment (at Tenant’s expense) as is
               necessary to meet or exceed standards imposed by any Hazardous Materials
Laws                and in such a way as not to interfere with any other tenant’s
use of its                premises. Upon breach of any covenant contained herein, Tenant
shall, at                Tenant’s sole expense, cure such breach by taking all
action prescribed by                any applicable Hazardous Materials Laws or by any
governmental authority with                jurisdiction over such matters.  

		    B.                             Tenant
shall inform Landlord at any time of (i) any Hazardous Materials it
               intends to use, generate, handle, store or dispose of, on or about or
transport                from, the Leased Premises and (ii) of Tenant’s discovery of
any event or                condition which constitutes a violation of any applicable
Hazardous Materials                Laws. Tenant shall provide to Landlord copies of all
communications to or from                any governmental authority or any other party
relating to Hazardous Materials                affecting the Leased Premises.  

		    C.                             Tenant
shall indemnify and hold Landlord harmless from any and all claims,
               judgments, damages, penalties, fines, costs, liabilities, expenses or
losses                (including, without limitation, diminution on value of the Leased
Premises,                damages for loss or restriction on use of all or part of the
Leased Premises,                sums paid in settlement of claims, investigation of site
conditions, or any                cleanup, removal or restoration work required by any
federal, state or local                governmental agency, attorney’s fees,
consultant fees and expert fees)                which arise as a result of or in
connection with any breach of the foregoing                covenants or any other
violation contained herein shall also accrue to the                benefit of the
employees, agents, officers, directors and/or partners of                Landlord.  

		    D.                             Upon
termination of this Lease and/or vacation of the Leased Premises, Tenant
               shall properly remove all Hazardous Materials. Landlord shall grant to
Tenant                and its agents or contractors such access to the Leased Premises as
is necessary                to accomplish such removal. Landlord may require Tenant, at
Tenant’s                expense, to complete an environmental audit by a duly
qualified firm to ensure                that the Leased Premises are free from Hazardous
Materials and in compliance                with all applicable regulations.  

14 

		    E.                             “Hazardous
Materials” shall mean (a) any chemical, material, substance                or
pollutant which poses a hazard to the Leased Premises or to persons on or
               about the Leased Premises or would cause a violation of or is regulated by
any                Hazardous Materials Laws, and (b) any chemical, material or substance
defined as                or included in the definitions of “hazardous substances,”               “hazardous
wastes,” “hazardous materials,” “extremely                hazardous
waste,” “restricted hazardous waste,” “toxic
               substances,” “regulated substances,” or words of similar
import                under any applicable federal, state or local law or under the
regulations                adopted or publications promulgated pursuant thereto,
including, but not limited                to, the Comprehensive Environmental Response
Compensation and Liability Act of                1980, as amended 42 U.S.C. Section 9601,
et seq.; the Hazardous Materials                Transportation Act, as amended 49 U.S.C.
Sec. 1801, et seq.; the Resource                Conservation and Recovery Act, as
amended, 42 U.S.C. Sec. 6901, et seq.; the                Solid Waste Disposal Act, 42
U.S.C. Section 6991 et seq.; the Federal Water                pollution Control Act, as
amended, 33 US.C. Section 1251, et seq.; and Sections                15-15-101, et seq.;
25-16-101, et seq.; 25-7-101, et seq.; and 25-8-101 et seq.;                of the
Colorado Revised Statutes. “Hazardous Materials Laws” shall                mean
any federal, state or local laws, ordinances, rules, regulations, or
               policies (including, but not limited to, those laws specified above)
relating to                the environmental, health. and safety or the use, handling,
transportation,                production, disposal, discharge or storage of Hazardous
Materials, or to                industrial hygiene or the environmental conditions on,
under or about the Leased                Premises. Said term shall be deemed to include
all such laws as are now in                effect or as hereafter amended and all other
such laws as may hereafter be                enacted or adopted during the term of this
Lease.  

		    F.                             Landlord
acknowledges that Tenant shall have no liability or responsibility for                any
Hazardous Material located on the Leased Premises prior to Tenant’s
               taking possession hereunder. Landlord acknowledges and agrees that all
costs and                liabilities of dealing with any such pre-existing Hazardous
Material shall be                the sole responsibility of Landlord, who shall hold
Tenant harmless therefrom.  

         45.       
          Entire Agreement. It is expressly understood and agreed by and between
          the parties hereto that this Lease sets forth all the promises, agreements,
          conditions, and understandings between Lessor and/or its agents and Lessee
          relative to the Leased Premises and that there are no promises, agreements,
          conditions, or understandings either oral or written, between them or other than
          are herein set forth. 

         46.       
          Guarantee and Financial Statements. This Lease and Tenant’s
          performance hereunder shall be personally guaranteed by the execution of a
          Guarantee Agreement in the form attached hereto, signed by n/a A current
          financial statement of Tenant and of any parties so guaranteeing this Lease
          shall be provided to Landlord upon execution hereof and annually thereafter, if
          so requested by Landlord. 

15 

         47.       
          Exhibit Attached. This Lease includes the Interior Space Plan, a Lease
          Exhibit, which is incorporated herein and made a part of this Lease Agreement. 

         48.       
          Miscellaneous. All marginal notations and paragraph headings are for
          purposes of reference and shall not affect the true meaning and intent of the
          terms hereof. Throughout this Lease, wherever the words “Landlord” and
          “Tenant” are used, they shall include and imply to the singular,
          plural, persons both male and female, companies, partnerships and corporations,
          and in reading said Lease, the necessary grammatical changes required to make
          the provisions hereof mean and apply as aforesaid shall be made in the same
          manner as though originally included in said Lease. 

         49.       
          Role of Broker. The Group, Inc. has acted as a licensed real estate
          broker for the negotiation of this Lease. Both parties acknowledge that said
          real estate broker has acted as a transaction broker, only, and that both
          parties have been advised to review this Lease with their own legal, accounting,
          and financial advisers, prior to signing it. Landlord shall be solely
          responsible for payment of any commission due The Group, Inc., relative to this
          transaction and shall hold Tenant harmless therefrom. 

         50.       
          Additional Provisions. The parties agree to the following: Tenant may
          have possession of the premises upon the signing of this lease and paying of the
          deposit hereunder. 

	 	
Window
Molding         
          Carpet Cleaning 

        IN
WITNESS WHEREOF, the parties hereto have signed this Lease Agreement on the dates shown by
their respective signatures. 

		
	                                     

Witness 

/s/ Alicia Pendleton 

As to Landlord

                                     

Witness 

___________________________________ 

As to Tenant 

___________________________________ 

As to Tenant 
	LANDLORD:

Diedrichs Family Partnership, LLLP

By: /s/ Arleen R. Brown

TENANT:

A4S Technologies, Inc.

By: Michael Siemens

President/CEO

By:____________________________EXHIBIT 10.13

EXHIBIT 10.13 

FINANCING TERMS
AGREEMENT 

A4S TECHNOLOGIES, INC. 

489 N. Denver Avenue
Loveland, CO 80537 
Tel: 888 825-0247 
Fax: 888 837-7665 

April 12, 2005
Offering to terminate on
April 18, 2005  

SALE OF SECURED
PROMISSORY NOTES AND WARRANTS 

		
	Issuer:
	A4S Technologies, Inc. (A4S or the Company).

	Securities/Amount:
	Up to  $1,000,000.00  in forty  (40)  Units  (Units) of $25,000 in
exchange  for  bridge  notes  (Bridge  Note(s))  and  warrants  to purchase  the  Company's   Common  Stock   (Bridge   Warrant(s)and
Extension Warrant(s)).

	Lender(s):
	High Capital Funding,  LLC (HCF) and other "accredited"  investors
as defined in  Regulation  D of the  Securities  Act of 1933.  See
signature  pages  hereto  for  names,  addresses,   and  principal
amounts  of  Bridge   Note(s)   and   minimum   number  of  Bridge
Warrant(s)  being  purchased.  The Lender(s) shall have the right,
subject  to  applicable  state and  federal  securities  laws,  to
assign  the  Bridge  Note(s)  and/or  the  Bridge  Warrant(s)  and
Extension  Warrant(s).  An initial  Lender and/or an assignee of a
Bridge   Note(s)   and/or  a  Bridge   Warrant(s)   and  Extension
Warrant(s)  is herein  referred to as a "Bridge  Note Holder" or a
"Bridge  Warrant  Holder" or an  "Extension  Warrant  Holder"  and
collectively, as a "Holder(s)."

	Selling Agent:
	The  Company has   retained   Newbridge   Securities   Corporation
(Selling  Agent) to assist it with the  private  placement  of the
Units.  The  Selling  Agent has been  retained  on a best  efforts
basis, and  will  receive  a fee of  10% of the  amount  of Bridge
Note(s) sold,  and shall receive  Selling Agent  Warrants equal to
10% of the  number of  Bridge  Warrants  issued to the  Lender(s).
The Company has  also agreed to  indemnify the  Selling Agent, its
directors,  officers,  agents,  employees and controlling  persons
against certain liabilities and to pay certain expenses.

1 

		
	Use of Proceeds:
	Working Capital

	Term of Note:
	Maturity  Date:  The  Company  plans to raise  between  $7,000,000
and  $10,000,000  in an initial  public  offering to be co-managed
by   Bathgate   Capital   Partners   and   Newbridge    Securities
Corporation  (Public  Offering).  The principal amount and accrued
and  unpaid  interest  on the  Bridge  Note(s)  will  be  due  and
payable on October 17, 2005,  unless extended as provided  herein,
except  that in the event of the  closing of the  Public  Offering
(Public  Offering  Closing),  the principal amount and accrued and
unpaid   interest   will  become   immediately   due  and  payable
(Maturity  Date).  Upon the written  request of the Selling  Agent
the Bridge Note(s)  Holder(s)  agree to  automatically  extend the
payment  of  the  Bridge  Notes  past  the  Maturity  Date  to the
earlier of a Public  Offering  Closing or December  16,  2005.  In
addition,  in the event  there is no Public  Offering  Closing  by
the  Maturity  Date,  upon the  written  request of the Company to
the Bridge  Note(s)  Holder(s),  the payment of the Bridge Note(s)
will be extended to the  earlier of a Public  Offering  Closing or
January  16,  2006.   Upon  such  Company  request  the  Extension
Warrants (as defined herein) will become exercisable.

	Interest and Pre-Payment:
	Interest  will  accrue  on the  principal  amount  of  the  Bridge
Note(s) at the rate of eight (8%)  percent  per annum,  based on a
360-day  year until the  Maturity  Date (as defined  below) and at
eighteen  (18%)  percent per annum  thereafter.  The Company  will
have the right to prepay  without  penalty  any amount  owed under
the Bridge Note(s) in whole or in part at any time.

	First Closing Date:
	The first  Closing of the Unit  offering  (First  Closing) will be
held  when  the  Company,   through  its  counsel,   has  received
offering   proceeds   of  not  less  than   $500,000.   Additional
Closings  shall be  scheduled  at the  mutual  convenience  of the
Selling  Agent  and  the  Company,  but  in  no  event  shall  any
Closings  extend  past  April 18,  2005,  unless  mutually  agreed
between the Selling Agent and the Company.

	Security:
	Repayment  of the  Bridge  Note(s)  shall be  secured by a lien on
all assets of the Company which shall be  subordinated  to no more
than  $500,000 of secured debt from First  Interstate  Bank or any
replacement  institutional  lender,  and which  shall be senior to
all other indebtedness of the Company.

2 

		
	Warrants:
	100 % warrant  coverage:  At Closing each  Lender(s)  will receive
Bridge   Warrant(s)   to  purchase  a  number  of  shares  of  the
Company's  Common  Stock equal to the  quotient  of the  principal
amount of such  Lender(s)'  Bridge  Note(s),  divided by the lower
of (a)  $7.00;  or (b)  the  Public  Offering  Price.  The  Bridge
Warrant(s)  will have an  exercise  price  per share  equal to the
Public  Offering  Price.  The Bridge  Warrants will be exercisable
for five  years and three  months  from the final  Closing of this
Unit  offering,  provided that if the Company files a registration
statement for a Public Offering,  then the Bridge  Warrant(s) will
not be  exercisable  until the earlier of 90 days after the Public
Offering  closing  and six  months  after the filing of the Public
Offering  registration  statement.  Subject to the  exercisability
limitations  in the  foregoing  sentence,  the  Bridge  Warrant(s)
will provide for  cashless  exercise if, at any time after one (1)
year from the First  Closing,  the Company does not have available
both an effective  registration  statement and current  prospectus
covering  the  issuance or resale of the  Company's  Common  Stock
issued or issuable  upon  exercise of the Bridge  Warrant(s).  The
Bridge Warrant(s) will be non-callable.

	Extension Warrant Coverage:
	At Closing,  each Lender(s) will receive  Extension  Warrant(s) to
purchase a number of shares of the  Company's  Common  Stock equal
to  the  quotient  of  50%  of  the   principal   amount  of  such
Lender(s') Bridge Note,  divided by the lower of (a) $7.00; or (b)
the  Public  Offering  Price.  The  Extension  Warrant(s)  have an
exercise  price per share equal to the lower of (a) $7.00;  or (b)
the  Public   Offering  Price  (Regular   Exercise).   The  shares
underlying  the Extension  Warrants are referred to hereinafter as
the  "Extension   Warrant   Shares."  Each  Holder  shall  have  a
one-time  option to exercise the Extension  Warrants to purchase a
number of  shares of the  Company's  Common  Stock at an  exercise
price per share of $.01  (Extension  Option  Shares) and receive a
number of  Extension  Option  Shares equal to 40% of the number of
Extension   Warrant   Shares  such  Holder  would  have   received
pursuant  to a Regular  Exercise..  If a Holder  elects the option
of the  reduced  exercise  price  per  share,  then the  Extension
Warrants  will be deemed  exercised in full and  thereafter  void.
The  term,   registration   rights  and  other   features  of  the
Extension  Warrants  shall be  otherwise  identical  to the Bridge
Warrants.

3 

		
	Registration Rights:
	The Company will include the resale of the shares  underlying  the
Bridge  Warrants  and the  Extension  Warrants  (collectively  the
Bridge  Warrants  Shares)  in  its  Public  Offering  registration
statement  subject to a six-month  lock-up from the IPO closing on
the  sale of such  shares  by the  Holder(s).  In the  event  that
during the period  starting on the  six-month  anniversary  of the
IPO closing and ending on the  two-year  anniversary  of the Final
Closing the Bridge  Warrants Shares  (including  shares that could
be  received  pursuant  to  a  cashless  exercise  of  the  Bridge
Warrants or Extension  Warrants)  may not be sold pursuant to: (a)
an  effective  registration  statement  with a current  prospectus
available,  or (b) Rule 144 under the  Securities Act of 1933, the
Bridge  Warrant  Holder(s)  shall  be paid a cash fee of 2% of the
original  principal  amount of the Bridge  Note(s) for each period
of up to ten days that such sales may not be effected.

	Default Provisions:
	A majority-in-interest  of the Lender(s),  including HCF, shall be
required to give  written  notice of any default  under the Bridge
Note(s)  and/or to give a written  waiver of any default under the
Bridge Note(s).

	Anti Dilution Provisions:
	If at any time  from  the  date of the  First  Closing  until  the
conversion  of the  Bridge  Note(s)  or  exercise  of  the  Bridge
Warrant(s)  and the  Extension  Warrant(s)  the  Company  issues a
stock dividend,  combines  outstanding shares into a lesser number
of shares  (reverse  split) or increases the number of outstanding
shares  without  the  receipt of new full  consideration  (forward
split),  then the number of shares  into which the Bridge  Note(s)
may be  converted  or for  which  the  Bridge  Warrant(s)  and the
Extension  Warrant(s)  may be  exercised  , shall be  adjusted  to
reflect  such  event  so  that  the  relative   interests  of  the
Holder(s)  shall be fully  protected from dilution  resulting from
such an event.  Notice of the required  adjustment  including  the
number of shares and the new  exercise/conversion  price  shall be
promptly   mailed  to  each   Holder   subsequent   to  each  such
adjustment event.

	Jurisdiction/Choice of Law:
	All  transaction  documents  shall be  governed  by and  construed
under the laws of the state of Colorado  as applied to  agreements
entered  into and to be  performed  entirely  within  the state of
Colorado  without  giving  effect to  principles  of  conflicts of
law.  The  parties  irrevocably  consent to the  jurisdiction  and
venue of the state and  federal  courts  located in Denver,  CO in
connection  with any action  relating to this  transaction.  At or
prior  to  any  Closing,  the  Lender(s)  shall  receive  a  legal
opinion from Company  counsel in form and  substance  satisfactory
to  HCF as to  the  validity  and  enforceability  of  the  Bridge
Note(s),   Bridge  Warrants,   Extension   Warrants  and  Security
Agreement.

4 

		
	Binding Agreement:
	All parties  executing this  Financing  Terms  Agreement  shall be
legally  bound by the above terms and shall  execute  such further
documents   (Further   Documents),   which  may  include   without
limitation  subscription   document(s),   Bridge  Note(s),  Bridge
Warrant(s),  Extension  Warrant(s)  and a Security  Agreement.  If
there  are  any  inconsistencies   between  this  Financing  Terms
Agreement  and any such Further  Documents  executed in connection
with  this   transaction,   the  terms  of  this  Financing  Terms
Agreement  shall govern.  This  Financing  Terms  Agreement may be
signed in two or more  counterparts,  all of which taken  together
shall  constitute  an  original.  Facsimile  signatures  shall  be
deemed to be original signatures.

		
	A4S Technologies, Inc.

By: ________________________________

          (signature)

    ________________________________

        (name and title)
	Date:  ______________

5

SIGNATURE PAGE OF
LENDER(S) TO A4S TECHNOLOGIES, INC. 
FINANCING TERMS
AGREEMENT 

		
	                                        

(Name of Entity)

By:  _______________________________    

  

     _______________________________    

            Name & Title                

                                        

Date:  ___________________              

Address:                                

                                        

                                        

Telephone No.:                          

Fax No.:

Tax ID#/SS#:

Email:
	Bridge Note Amount

$_______________________

Minimum Number of Bridge

Warrants                

________________________  

Minimum Number of  

Extension Warrants 

_________________________

6 

SIGNATURE PAGE OF
LENDER(S) TO A4S TECHNOLOGIES, INC. 

FINANCING TERMS
AGREEMENT 

		
	                                       

Name:   ______________________________

Sig:    ______________________________ 

       

Joint Name:  _________________________ 

                                       

                                       

Sig:    ______________________________ 

                                       

Date:  _______________________________

Address:                               

                                       

                                       

Telephone No.:

Fax No.:                               

Tax ID#/SS#:                           

Email:
	Bridge Note Amount

$_______________________

Minimum Number of Bridge 

Warrants                 

_________________________ 

Minimum Number of 

Extension Warrants

__________________________

7 

ACCREDITED INVESTOR
DECLARATION 

        THE
UNITS BEING OFFERED BY THE COMPANY ARE SECURITIES AS THAT TERM HAS BEEN DEFINED IN THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THAT ACT IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION PROVIDED BY
SECTIONS 3(b) and 4(2) AND AS PROVIDED BY REGULATION D OF THE ACT, AND ARE SUBJECT TO
RESTRICTIONS ON TRANSFER. FURTHER, THESE SECURITIES MAY BE SOLD PURSUANT TO EXEMPTIONS
FROM REGISTRATION IN THE VARIOUS STATES, AND MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER IN SUCH JURISDICTIONS. 

        The
undersigned represents to the Company and the Selling Agent that the Securities are being
acquired for investment for the undersigned’s own account, not as a nominee or agent,
and without a view to distribution thereof. The undersigned is an experienced investor,
can bear the economic risk of an investment in the Securities, and has such knowledge and
experience in financial or business matters that the undersigned is capable of evaluating
the merits and risks of the investment in the Securities. The undersigned has had the
opportunity to ask questions and to receive answers from the Company regarding the terms
and conditions of this offering and the business, prospects and financial condition of the
Company. The undersigned is aware that an investment in the Company involves a high degree
of risk. 

        The
undersigned qualifies as an “Accredited Investor,” as defined in Rule 501 of
Regulation D promulgated by the Securities and Exchange Commission under the Act, based on
one or more of the following (check the appropriate numbered paragraphs): 

          	 	 ______  (1)	
                 A private business development company as defined in Section 202(a)(22)
               of the Investment Advisors Act of 1940; 

               

          	 	______  (2) 	
               An organization described in Section 501(c)(3) of the Internal Revenue
               Code, corporation, Massachusetts or similar business trust, limited liability
               company, or partnership not formed for the purpose of investing in the
               Securities, with total assets in excess of $5,000,000; 

               

          	 	______  (3)  	
                A director, executive officer, member, or general partner of the issuer
               of the Securities being offered or sold, or any director, executive officer, or
               general partner of a general partner of that issuer; 

               

          	 	______  (4)  	
               A natural person whose individual net worth, or joint net worth with
               that person’s spouse, at the time of purchase, exceeds $1,000,000; 

               

          	 	______  (5)  	
                A natural person who had an individual income in excess of $200,000 in
               each of the two most recent years, or joint income with that person’s
               spouse of $300,000 in each of those years and has a reasonable expectation of
               reaching those levels in the current year; 

               

          	 	______  (6)  	
                Any trust, with total assets in excess of $5,000,000, not formed for
               the specific purpose of acquiring the Securities offered, whose purchase is
               directed by a sophisticated person as described in Section 506(b)(2)(ii); or 

               

          	 	______  (7)  	
               Any entity in which all of the equity owners are accredited investors. 

               

Date:   
______________________________  

Signed:   
  ____________________________  

Please print name:  _______________________________  

Address:  
____________________________________________________________________________________  

Tax I.D. No.:   _______________________________  

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]