Document:

NORM
      DODD EMPLOYMENT AGREEMENT 

     

    This
      Employment Agreement ("Agreement") is made by and between Barnabus Energy,
      Inc.
      dba Open Energy Corporation (the "Company") and Norm Dodd ("Employee")
      (individually, a "party" and together, the "parties"). This Agreement shall
      be
      effective once signed by all parties. In consideration of the Employee’s
      employment (or continued employment, as the case may be), as well as the payment
      by the Company to the Employee, of the sum of One (1) Dollar, the receipt and
      sufficiency which is hereby acknowledged, and the consideration set out herein,
      the Employee agrees to the following terms of employment:

     

    1.  Position.
      Employee will be President of East Coast Operations and will report directly
      to
      David P. Saltman, Chief Executive Officer. Employee shall have such executive
      responsibilities to and shall perform such executive services for the
      Corporation as may be consistent with his title. Employee's precise
      responsibilities and job description are subject to change at any time in the
      sole and absolute discretion of Company. Employee shall devote full time and
      attention to the business of the Company during the term of this Agreement
      and
      shall perform all duties as may be required of Employee.

     

    2.  Term.
      The initial term of this Agreement will begin on April 1, 2006 and shall
      terminate on March 31, 2007, unless sooner terminated (“Initial Term”). If
      employment continues beyond the Initial Term, Employee will be employed on
      an
      indefinite basis. 

     

    3.  Compensation.
      Employee's compensation shall consist of an annual salary, discretionary
      bonuses, standard employee benefits, and stock options as described in Exhibit
      A. 

     

    3.1.1
      Base
      Salary.
      The
      Company shall pay to Employee a base salary of CDN $167,000
      per annum, which may be increased from time to time in such amounts as are
      determined by the Board of Directors of the Corporation. The term “Base Salary”
shall refer to the Base Salary as so increased. The Base Salary will be payable
      in installments monthly. The Base Salary and all other remuneration paid to
      the
      Executive shall be subject to applicable employment and income tax withholding
      taxes. 

     

    3.1.2
      Bonuses.
      The
      Company may, in its sole, absolute and unfettered discretion, pay Employee
      a
      bonus payment as may be determined by the Board of Directors. The fact and
      the
      amount of the bonus will be in the Company's sole, absolute and unfettered
      discretion and based upon the Company's performance as well as whether Employee
      meets performance objectives as defined at the beginning of each year. The
      Employee must be actively employed in order to be considered for a bonus, and
      there is no entitlement to a bonus, subsequent the Employee’s termination,
      whether such termination is lawful or unlawful. 

     

    3.1.3
      Stock
      Options.
      The
      Company hereby agrees to provide the Employee 200,000 stock options (the "Stock
      Options") with an exercise price of $1.50 per share, which options shall vest
      quarterly in accordance with Exhibit A. Subject to the provisions of Exhibit
      A,
      Employee shall have no right to any unvested Stock Options should Employee's
      employment terminate before all the Stock Options are vested. The Employee
      must
      be actively employed in order for the Stock Options to vest, and there is no
      entitlement to Stock Options, subsequent to the Employee’s termination, whether
      such termination is lawful or unlawful. 

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    3.1.4
      Benefits.
      Employee shall be eligible to participate in the standard fringe benefits
      package and incentive compensation plans generally made available to the
      executive management employees of the Company, as such benefits may be
      determined, changed, or rescinded from time to time by the Company's Board
      of
      Directors.

     

    3.1.5
      Expenses.
      The
      Company shall reimburse Employee for any and all expenses reasonably incurred
      by
      the Employee in the course and scope of Employee's duties and which are
      substantiated in accordance with Company's reasonable policies and
      procedures.

     

    4.  Termination.

     

    4.1  
       By
      the
      Company for Just Cause.

     

    4.1.1 Definition
      of for Just Cause.
      Company
      may terminate Employee's employment immediately at any time for just cause.
      In
      this Agreement, the term "just cause" means: (A) the commission of an act or
      omission which would constitute a felony; (B) negligence or malfeasance; (C)
      breach of fiduciary duties to Company, (D) gross neglect of duties or (E) any
      other action or omission which significantly adversely affects the Company's
      business, financial condition, prospect or reputation. 

     

    4.1.2 Effect
      of Termination for Just Cause.
      If
      Employee is terminated for just cause, this Agreement shall immediately and
      without notice terminate on the date of termination of employment and Employee
      shall be entitled to receive only the Base Salary then in effect, through the
      date of termination. All other obligations to Employee pursuant to this
      Agreement will become automatically terminated and completely extinguished.
      Any
      failure of the Company to exercise its right to terminate the employment of
      Employee as a result of the existence of any just cause shall not constitute
      or
      be construed as a waiver of its right to terminate such employment and this
      Agreement for such just cause or for another just cause. 

     

    4.2  
       Death
      or Disability of Employee. 
      This Agreement shall terminate automatically in the event of the death or
      Disability of Employee.  In the event of Employee's death, Employee (or
      Employee's heirs) shall be entitled to receive only the Base Salary then in
      effect through the date of termination and stock options pursuant to the Stock
      Option Grant Vesting Provisions of Exhibit A, attached hereto.  All other
      Company obligations to Employee pursuant to this Agreement will become
      automatically terminated and completely extinguished.   In the event
      of Employee's disability, Employee shall be entitled to receive only the Base
      Salary then in effect through the date of termination. All other Company
      obligations to Employee pursuant to this Agreement will become automatically
      terminated and completely extinguished.  As used herein, the term
      "Disability" shall mean Employee's inability to perform the essential functions
      of the position, with or without reasonable accommodation, as a result of a
      mental or physical disability or where the reasonable accommodation would result
      in undue hardship to the Company.  In the event of a Disability, the
      termination date will be the date on which the Board of Directors, makes such
      a
      determination.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    4.3   
      Termination
      Without Just Cause.
      The
      Company will not terminate Employee other than for just cause during the Initial
      Term. After the Initial Term, the Company may in its sole and absolute
      discretion terminate Employee's employment without cause at any time,
      immediately upon delivery of written notice to the Employee. 

     

    4.3.1
      If
      the Company terminates Employee's employment without just cause after the
      Initial Term, the Company agrees to pay Employee an amount equal to the greater
      of: 

     

    
      
        
          	
                	    (i)    	
                  six
                    (6) months Base Salary on the regularly scheduled pay periods
                    following
                    the date of termination or,

                

        

      

    

     

    
      
        
          	
                	    (ii)   	
                  the
                    minimum entitlement to notice (or pay in lieu thereof), and/or
                    severance
                    pay, which is required pursuant to the Employment
                    Standards legislation
                    of the jurisdiction in which the Employee is employed.
                    

                

        

      

    

     

    Further,
      if the Company terminates Employee after the Initial Term, all or any other
      entitlement to additional salary, bonus, stock options, and/or benefits of
      any
      kind, shall cease immediately upon the date of Termination.

     

    4.3.2
      Employee’s
      Right to Terminate.
      Employee may terminate this Agreement upon 60 days written notice by Employee
      to
      the Company. Upon receiving notice of termination, the Company may elect to
      accelerate the effective date of termination, provided that Employee shall
      be
      paid the base salary through the end of such sixty (60) day notice period or
      the
      end of the term of this Agreement, whichever comes first. 

     

    5.  Nondisclosure
      of Confidential Information.
      The
      protection of confidential information is essential to the Company. To protect
      such information, Employee shall not, during the term of this Agreement or
      at
      any time thereafter, impart to anyone or use any confidential information or
      trade secrets Employee may acquire in the performance of Employee's duties,
      except as required by law. 

     

    6.  No
      Solicitation. Employee agrees that during Employee's employment and for a
      one year period after the termination of said employment, Employee will not
      directly or indirectly solicit for hire any current employees of the
      Company.

     

    7.  Assignment
      of Inventions. Employee
      agrees that all inventions that (a) are developed using equipment, supplies,
      facilities or trade secrets of the Company, (b) result from work performed
      by
      Employee for the Company, or (c) relate to the Company's business or current
      or
      anticipated research and development as of the inception of Solar Roofing
      Systems Inc. in March of 2003 (collectively “Inventions”), will be the sole and
      exclusive property of the Company and are hereby irrevocably assigned by
      Employee to the Company.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    8.  Assignment
      of Other Rights. In addition to the foregoing assignment of Inventions to
      the Company, Employee hereby irrevocably transfers and assigns to the Company:
      (a) all worldwide patents, patent applications, copyrights, mask works, trade
      secrets and other intellectual property rights in any Invention; and (b) any
      and
      all "Moral Rights" (as defined below) that Employee may have in or with respect
      to any Invention. Employee also hereby forever waives and agrees never to assert
      any and all Moral Rights Employee may have in or with respect to any Invention,
      even after termination of employment behalf of the Company. "Moral Rights"
      mean
      any rights to claim authorship of an invention to object to or prevent the
      modification of any Invention, or to withdraw from circulation or control the
      publication or distribution of any Invention, and any similar right, existing
      under judicial or statutory law of any country in the world, or under any
      treaty, regardless of whether or not such right is denominated or generally
      referred to as a "moral right."

     

    9.  Work
      for Hire. Employee acknowledges and agrees that any copyrightable works
      prepared by Employee within the scope of employment are "works for hire" under
      the Copyright Act and that the Company will be considered the author and owner
      of such copyrightable works.

     

    10.  Human
      Resources Policy and Procedures. Employee agrees to review and abide by
      reasonable personnel policies as well as any Employee Handbook issued by
      Company. Employee understands that Company has the right to modify or rescind
      any policies and procedures for any reason and without notice, except the policy
      regarding at-will employment.

     

    11.  General
      Provisions.

     

    11.1  Governing
      Law and Forum.
      This
      Agreement shall be governed in accordance with the laws of the Province of
      Ontario. Any disputes arising out of Employee's employment or this Agreement
      shall be brought in Toronto, Ontario.

     

    11.2  Severability.
      If any
      provision in this Agreement is held by a court of competent jurisdiction to
      be
      invalid, void or unenforceable, the remaining provisions shall nevertheless
      continue in full force without being impaired or invalidated in any
      way.

     

    11.3  Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which so
      executed shall be deemed to be an original and such counterparts shall together
      constitute one and the same Agreement.

     

    11.4  Entire
      Agreement.
      This
      Agreement contains all of the terms agreed upon by the parties with respect
      to
      the subject matter of this Agreement, and supersedes any and all prior
      agreements, arrangements, communications, understandings, documents or rules,
      either oral or in writing, between the parties for the employment of Employee,
      and contain all of the covenants and agreements between the parties for such
      employment in any manner whatsoever. Each party to this Agreement acknowledges
      that no representations, inducements, promises or agreements, orally or
      otherwise, have been made by any party or anyone acting on behalf of any party
      which are not embodied in this Agreement. Any modification of this Agreement
      will be effective only if in writing signed by Employee and Company's
      President.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    
      	 	 	 
	 	
              BARNABUS
                ENERGY, INC.

            
	 
 	 
 	 
 
	Dated: April
              4,
              2006                                               
              	By:  	/s/ David
              Saltman
	 	
              
David
              P. Saltman, Chief Executive Officer
	 	 
	Dated: April 4,
              2006                                               
              	/s/ Norm
              Dodd
	 	
              
                

              

              Norm
                Dodd, President

            
	 	 

    

     

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    Exhibit
      A

     

    Stock
      Option Grant Vesting Provisions

     

    

    Provided
      that the Agreement has not earlier been terminated, on each December 31, March
      31, June 30 and September 30 commencing June 30, 2006 and ending on March 31,
      2009, all the Stock Options that remain unvested shall vest as set forth in
      the
      following table:

    

    
      	
              Date
                of

              Vesting

            	
              Stock
                

              Options

              Vesting

              on
                Date

            	
              Aggregate

              Options

              Vested

              Through
                Date

            	
              Options

              Remaining

              Unvested

            
	 	 	 	
              200,000

            
	
              30-Jun-06

            	
              16,667

            	
              16,667

            	
              183,333

            
	
              30-Sep-06

            	
              16,667

            	
              33,333

            	
              166,667

            
	
              31-Dec-06

            	
              16,667

            	
              50,000

            	
              150,000

            
	
              31-Mar-07

            	
              16,667

            	
              66,667

            	
              133,333

            
	
              30-Jun-07

            	
              16,667

            	
              83,333

            	
              116,667

            
	
              30-Sep-07

            	
              16,667

            	
              100,000

            	
              100,000

            
	
              31-Dec-07

            	
              16,667

            	
              116,667

            	
              83,333

            
	
              31-Mar-08

            	
              16,667

            	
              133,333

            	
              66,667

            
	
              30-Jun-08

            	
              16,667

            	
              150,000

            	
              50,000

            
	
              30-Sep-08

            	
              16,667

            	
              166,667

            	
              33,333

            
	
              31-Dec-08

            	
              16,667

            	
              183,333

            	
              16,667

            
	
              31-Mar-09

            	
              16,667

            	
              200,000

            	
              0

            

    

    

    In
      addition to the foregoing vesting milestones, all Stock Options immediately
      vest
      upon a termination of this Agreement due to the death or Disability of the
      Employee in accordance with Section 4.2 of the Agreement.

    

    All
      Stock
      Option amounts in this Exhibit A shall be adjusted for increases in authorized
      shares, stock splits, consolidations, reorganizations and similar transactions.
      All section references herein are to sections of the Agreement of which this
      Exhibit is a part.FIRST
      AMENDMENT TO LEASE

     

    This
      is
      the First Amendment to Lease entered into this 17th
      day of
      May, by and between Open Energy
      Corporation, a Nevada Corporation, successor in interest to Barnabus Energy
      Corporation,
      hereinafter called “Tenant” and Generation Properties, L.P., a California
      Limited Partnership,
      hereinafter called “Landlord”.

     

    WHEREAS,
      Landlord and Tenant entered into a Lease Agreement dated September 13, 2005,
      for
      real
      property located in the City of Solana Beach, County of San Diego, State of
      California, as
      more
      particularly described in said Lease Agreement as 514 Via de la Valle, Suite
      200, Solana Beach,
      California, 92075.

     

    WHEREAS,
      Landlord and Tenant now desire to amend and modify certain terms of the
      aforesaid Lease as hereinafter set forth. Therefore, the Lease is hereby amended
      as follows:

     

    1. Premises: As
      part
      of this Agreement, Tenant shall add Suite 208, consisting
      of approximately 755 Rentable Square Feet

     

    2. Term: June
      01,
      2006 - May 31, 2009

     

    3. Rate: $
      2.90
      per Rentable S.F.

     

    4. Annual
      Rate Increases: Three
      and
      one-half percent (3.5%)

     

    5. Extension:
      One
      (1)
      Three (3) year extension at the then current market rent.

     

    
      	
            	●	
              “In
                order for Tenant to exercise option Tenant must provide written
                notification to the Landlord no less than ninety (90) days and no
                more
                than
                one hundred twenty (120) days prior to the expiration date of the
                original
                term”.

            

    

     

    6. Security
      Deposit: Tenant
      Security deposit to be $2189.50

     

    7. Confidential
      Agreement: Landlord
      and Tenant agree to keep all information related to this Lease
      Amendment confidential.

     

    Except
      as
      specifically modified by this Agreement, the Lease remains unchanged and the
      Landlord and Tenant verify, acknowledge and agree that it is in full force
      and
      effect. In the event
      of
      a conflict between the terms of the Lease and the terms of this Amendment,
      the
      terms of this
      Amendment shall prevail.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              LANDLORD:

              GENERATION
                PROPERTIES, L.P.,

              a
                California limited partnership

            	 	
              TENANT:

              OPEN
                ENERGY CORPORATION,

              a
                Nevada Corporation

            
	 	 	 
	
              By:

            	
              TRILOGY
                INVESTMENT GROUP LLC

              a
                California limited liability company,

              (Its
                General Partner)

            	 	 
	 	 	 	 
	
              By:

            	
              

            	 	
              By:

            	
              

            
	 	
              Michael
                D. Marks

              Chief
                Executive Officer

            	 	 	
              David
                Saltman

            
	 	 	 	 	 
	
              Date:
                5/17/06

            	 	
              Date:
                05/16/06

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     DECLARATION
      OF COMMENCEMENT

     

    STATE
      OF
      CALIFORNIA

     

    COUNTY
      OF
      SAN DIEGO

     

    WHEREAS,
      Generation
      Properties, LP as Landlord and Barnabus Energy Corporation, as Tenant,
      entered into that certain Lease Agreement, dated the 13th day
      of
      September 2005, covering
      approximately 1,047 rentable square feet located at 514 Via de la Valle, Suite
      200, Solana Beach, CA 92075, and,

     

    WHEREAS,
      both
      Landlord and Tenant do hereby declare and evidence that the leased premises
      was completed and ready for occupancy on the 1st day
      of
      October 2005 and was acceptable
      in its condition as of that date. The commencement date of said Lease
Agreement
      was the 1st day
      of
      October 2005, and the stated 36-month term of said Lease Agreement
      expires on the 30th day
      of
      September 2008.

     

    WITNESSETH,
      the
      execution hereto this the 13th
      day of
      January 2006.

    

    
      	
              Landlord:

              Generation
                Properties, L.P.

              By:
                Commercial Facilities, Inc.,

              as
                Agent.

            	 	
              Tenant:

              Barnabus
                Energy Corporation

            
	 	 	 
	
              By:

            	
              

            	 	
              By:

            	
              

            
	 	
              Greg
                P. Cartwright CPM®, CCIM®

              Senior
                Vice President

            	 	 	
              David
                Saltman

              President
                & CEO

            
	 	 	 	 	 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    BASIC
      LEASE INFORMATION

    OFFICE
      LEASE

     

    
      	
              Lease
                Date:

            	 	
              September
                15, 2005

            
	 	 	 
	
              Landlord:

            	 	
              Generation
                Properties, L.P.

            
	 	 	 
	
              Managing
                Agent:

            	 	
              COMMERCIAL
                FACILITIES INC.

            
	 	 	 
	
              Landlord's
                Address:

            	 	
              Generation
                Properties, L.P.

              C/o
                Commercial Facilities Inc.

              10951
                Sorrento Valley Road, Suite 2A

              San
                Diego, CA 92121

            
	 	 	 
	
              Tenant:

            	 	
              BARNABAS
                ENERGY CORPORATION

            
	 	 	 
	
              Tenant's
                Address:

            	 	
              514
                Via de la Valle

              Suite
                200

              Solana
                Beach, CA 92075

            
	 	 	 
	
              Legal
                Description of Land:

            	 	
              See
                Exhibit “A”

            
	 	 	 
	
              Premises:

            	 	
              That
                certain three-story building in which the Premises are located,
                

              whose
                mailing address is 514 Via de la Valle, Suite 200, Solana 

              Beach,
                CA 92075.

            
	 	 	 
	
              Rentable
                Area of the
                Premises:

            	 	
              Approximately
                1,047 Rentable square feet

            
	 	 	 
	
              Permitted
                Uses:

            	 	
              General
                Office

            
	 	 	 
	
              Term:

            	 	
              Three
                (3) Years

            
	 	 	 
	
              Term

              Commencement
                Date:

            	 	
               

              September
                15, 2005, or upon substantial completion of Tenant Improvements,
                whichever
                is later. Said improvements must allow Tenant to move in without
                interruption and conduct normal business functions.

            
	 	 	 
	
              Rent:

            	 	
              $3.00
                per Rentable Square Foot

            
	 	 	 
	
              Rent
                Escalations:

            	 	
              Three
                and one-half percent (3.5%) per
                year

            

    

     

    Landlord 
Tenant

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
      foregoing Basic Lease Information is hereby incorporated into and made a part
      of
      this Lease. Each reference in this Lease to any of the terms above shall mean
      the respective information
      herein above set forth and shall be construed to incorporate all of the terms
      provided under
      the
      particular paragraph pertaining to such information. In the event of any
      conflict between
      any Basic Lease Information and the Lease, the latter shall
      control.

    

    
      	
              LESSOR/LANDLORD:

              GENERATION
                PROPERTIES, LP

            	 	
              LESSEE/TENANT:

              BARNANAS
                ENERGY CORPORATION

              a
                California Corporation

            
	
              By:

            	
              TRILOGY
                INVESTMENT GROUP LLC
a
                California Limited Liability Company, 
its
                General Partner

            	 	 
	 	 	 	 
	
              By:   
                

            	
              

            	 	
              By:

            	
              

            
	 	
              Michael
                D. Marks

              President
                & CEO

            	 	 	
              David
                Saltman

              President
                & CEO

            
	 	 	 	 	 
	
              Date:
                September
                15, 2005

            	 	
              Date:
                9.13.05

            

    

     

    Landlord
      Tenant 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    BARNABAS
      ENERGY CORPORATION 
STANDARD
      OFFICE LEASE

     

    This
      lease ("Lease"), dated as of this 13 day
      of September 2005, between Generation
      Properties L.P., a California Limited Partnership ("Landlord"), and Barnabas
      Energy
      Corporation, a Nevada Corporation ("Tenant"), for space in the center located
      at
      514
      Via de la Valle, Solana Beach, California, as more particularly described on
      the
      Legal Description, attached hereto as Exhibit A, shall be upon the terms and
      conditions contained
      hereinafter.

     

    1.
      PREMISES

     

    1.01.  Premises.
      Landlord
      leases to Tenant, subject to the provisions of this Lease,
      the Premises in the Building as set forth in the Basic Lease Information, the
      usable space
      of
      which is shown on the Building Floor Plans, attached hereto as Exhibit B. The
      rentable
      square feet of the Premises, Building and Project shall be as set forth in
      the
      Basic Lease
      Information. Except as otherwise provided in Section 1.07 below, by accepting
      possession of the Premises, Tenant shall be deemed to accept the same in their
      condition existing
      as of the date of such entry and subject to all applicable municipal, county,
      state and federal statutes, laws, ordinances, including zoning ordinances,
      and
      regulations governing and relating to the Tenant's use, occupancy or possession
      of the Premises. Tenant acknowledges that the only warranties and
      representations Landlord has made in connection with the physical condition
      of
      the Premises or Tenant's use of the same upon which Tenant has relied directly
      or indirectly for any purpose are those expressly provided in this
      Lease.

     

    1.02.  Exhibits.
      The
      following Exhibits are attached to this Lease after the signatures
      and by reference thereto are incorporated herein:

     

    Exhibit
      A
— Legal Description 

    Exhibit
      B
—
      Building
      Floor Plan

    Exhibit
      C
— Rules and Regulations

    Exhibit
      D
— Landlord and Tenant's Work 

    Exhibit
      E
—
      Fair
      Market Rent

     

    1.03.     
       Common
      Areas. Tenant
      shall have, as appurtenant to the Premises and subject
      to reasonable rules and regulations from time to time made by Landlord of which
      Tenant
      is
      given notice, the right to the use of the following in common:

     

    (a)     
       Building Common Area. The common stairways and accessways, lobbies,
      entrances, stairs, elevators, maintenance and utility service areas and any
      passageways thereto, and the common pipes, ducts, conduits, wires and
      appurtenant equipment serving the Premises;

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (b)  Project
      Common Area. The common walkways, sidewalks, landscape
      areas, parking spaces and driveways necessary for access to the Project and
      parking
      spaces; and

     

    (c)  Parking
      Area. The common Project parking lot area ("Parking Area").

     

    1.04.     
       Landlord's
      Reserved Rights in Common Areas. Landlord
      reserves the right
      from time to time:

     

    (a)  Building
      Changes. To install, use, maintain, repair, relocate and replace
      any pipes, ducts, conduits, wires and appurtenant meters and equipment for
      service
      to the Building above the ceiling surfaces, below the floor surfaces, within
      the
      walls and in the central core areas.

     

    (b)  Boundary
      Changes. To change the lines of the lot on which the Project stands ("Lot")
      and
      to redesign and restripe the parking facilities around the Building and make
      other reasonable changes and grant other rights thereto, including without
      limitation, the granting of easements, rights of way and rights of ingress
      and
      egress and similar rights to users of parcels adjacent to the Lot.

     

    (c)  Facility
      Changes. To alter or relocate any common areas or other facilities.

     

    (d)  Parking.
      Landlord reserves the right to grant use to portions of the Parking Area to
      tenants.

     

    1.05.  Rentable
      Area. As
      used
      in this Lease, the rentable area of the Premises, Building and Project shall
      be
      the square footage designated in the Basic Lease Information.
      The Annual Base Rent and Operating Expenses for the Premises are not
solely
      and directly attributable to the actual rentable area of the Premises, Building
      or Project
      and in the event that it is determined that the actual rentable area of the
      Premises, Building
      or Project is different from the square footages set forth in the Basic Lease
      Information,
      no modification shall be made to the Base Rent or Operating Expenses set
forth
      in
      the Basic Lease Information.

     

    1.06.  Tenant's
      Parking Entitlements. Tenant
      shall have the right to use three (3)
      parking spaces. Landlord shall have no responsibility for policing or otherwise
      enforcing
      parking rights in the Project.

     

    1.07.  Condition
      of Premises. Landlord
      warrants that, as of the Lease Date, no deferred
      maintenance is required to be performed on any of the electrical, plumbing
      or
      mechanical systems in the Building and that such systems are in good working
      order.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3.
      TERM

     

    3.01.      
       Commencement of Term. The Lease shall be for the Term set forth in the
      Basic Lease Information, commencing upon September
      15, 2005, or upon substantial completion of Tenant improvements,
      whichever is later.

     

    3.02.  Notice
      of
      Lease Dates. Within ten (10) days after Landlord's written request,
      Tenant shall execute a written confirmation of the commencement of the Term
      and
      expiration date of the Term in a form provided by Landlord. Such a notice shall
      be binding upon Tenant unless Tenant objects thereto in writing within such
      ten
      (10) day period.

     

    3.03.  Option
      to
      Extend. Tenant shall have the option to extend the Term of this Lease for one
      (1) additional period of three (3) years (the "Premises Option") at the then
      current
      Fair Market Rent (Exhibit E). The period of the Premises Option is referred
      to
      herein as the "Option Term". Tenant shall have no right or interest to exercise
      the Premises Option unless: (a) Tenant gives the Landlord written notice of
      its
      intent to exercise the Premises Option no sooner than six (6) months and no
      later than three (3) months
      prior to the end of the Term (the "Extension Notice"); (b) Tenant is not in
      default at the time of the extension notice of any of the terms or conditions
      under this Lease prior to the commencement of the Option Term, nor are there
      any
      conditions which with the passage
      of time could result in a default by Tenant at any time with the exception
      of
cured
      late rental payments; and (c) (i) Tenant has not filed for or sought protection
      under any bankruptcy statute, (ii)Tenant has not failed to obtain a vacation
      from any involuntary bankruptcy proceeding within sixty (60) days of such
      filing, (iii)Tenant has not defaulted or there are no events which may cause
      a
      default under any of Tenant's debt or
      indenture obligations. Annual Base Rent during the Option Term shall be as
      set
      forth in Section 4.03 below. Time is of the essence with respect to Tenant's
      exercise of the Premises Option. Tenant's failure to exactly comply with any
      of
      the time or other requirements
      herein, shall cause the Premises Option to automatically expire and, in such
      event,
      this Lease shall terminate upon the expiration of the Term. The option to extend
      the
      Term
      pursuant hereto for the Option Term shall be personal to Tenant and shall not
      be
exercisable
      by or for the benefit of any assignee, subtenant or other transferee of
      Tenant.

     

    3.04.  Days.
      Except for the Rent payment requirements of Articles 4.01 and 4.04,
      when time periods often (10) days or less are provided in this Lease, unless
      "calendar
      days" is expressly stated, such time periods are to be calculated such that
      "days"
      shall mean business days, regardless of whether "business days" is expressly
      stated.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    4.
      RENT

     

    4.01.     
       Base
      Rent. $3.00

     

    (a)     
       Initial
      Term.
      The
      Annual Base Rent shall be the amount set forth in
      the
      Basic Lease Information payable in equal monthly installments of Monthly Base
      Rent as set forth in the Basic Lease Information. Tenant shall pay the Monthly
      Base Rent to Landlord in advance upon the first day of each calendar month
      of
      the Term, at Landlord's address or at such other place designated by Landlord
      in
      a notice to Tenant, without any prior demand therefore and without any
      deduction, abatement or setoff whatsoever,
      in lawful money of the United States of America. If the Term shall commence
      or end on a day other than the first day of a calendar month, then Tenant shall
      pay,
      upon
      the commencement date of the Term and the first day of the last calendar month,
      a pro rata portion of the Monthly Base Rent, prorated on a per diem basis,
      with
respect
      to the portions of the fractional calendar month included in the Term. Prior
      to
September
      15, 2005, Tenant shall pay the first full months installment of the Monthly
      Base
      Rent owing thereunder.

     

    4.02.  Additional
      Rent. All
      charges required to be paid by Tenant hereunder, including
      without limitation, payments for Operating Expenses and any other amounts
      payable under this Lease, shall be considered additional rent for the purposes
      of this Lease
      ("Additional Rent"), and Tenant shall pay Additional Rent as provided in Article
      6.05.
      "Rent" shall mean Base Rent and Additional Rent.

     

    4.03.  Escalation.
      The
      Base
      Rent shall be adjusted during the Term as provided in the Basic Lease
      Information. During the Option Term, the Annual Base Rent shall be subject
      to an
      annual increase, effective as of each anniversary of the Term Commencement
      Date
      ("Adjustment Date"), to reflect a fixed increase of three and one-half
      percent (3.5%)

     

    4.04.  Late
      Payment. If
      any
      installment of Rent is not paid promptly on the first of
      the
      month or otherwise when due, the unpaid amounts shall bear interest at the
      interest rate
      set
      forth in Article 12.02(e) from the date due to the date of payment. In addition,
      Tenant
      acknowledges that the late payment of any installment of Rent will cause
Landlord
      to incur certain costs and expenses not contemplated under this Lease, the
      exact
amount
      of
      which are extremely difficult or impractical to fix. These costs and expenses
      will
      include, without limitation, administrative and collection costs and processing
      and accounting
      expenses. Therefore, if any installment of rent is not received by Landlord
      from
      Tenant when the installment is due, Tenant shall immediately pay to Landlord
      a
charge
      for administration, collection and accounting expenses equal to ten percent
      (10%) of the amount of such delinquent amounts due in addition to the
      installment of Rent then owing
      with interest at the interest rate set forth in Article 12.02(e), regardless
      of
      whether or
      not a
      notice of default or notice of termination has been given by Landlord. Tenant
      shall
      not
      incur the obligation to pay the foregoing charge for late payment of rent until
      ten (10)
      days
      after rent is due. Landlord and Tenant agree that the late payment charge
      represents a reasonable estimate of Landlord's costs and expenses and is fair
      compensation
      to Landlord for its loss suffered by Tenant's nonpayment of any amounts
when
      due
      and payable pursuant to this Lease. This provision shall not relieve Tenant
      from
      payment of Rent at the time and in the manner herein specified.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    4.05.     
       Security
      Deposit. Upon
      the
      execution of this Lease, Tenant shall pay $3,141.00,
      to secure the performance by Tenant of its obligations under the Lease,
      including without limitation Tenant's obligations (i) to pay Basic Monthly
      Rent
      and Additional Rent, (ii) to repair damages to the Premises and/or the Project
      caused by Tenant or Tenant's agents, employees, contractors, licensees, and
      invitees (collectively, "Tenant's Invitees"), (iii) to clean the Premises upon
      the termination of this Lease, with the
      exception of normal wear and tear, and (iv) to remedy any other defaults by
      Tenant in the
      performance of any of its obligations under the Lease. If Tenant commits any
      default under this Lease, Landlord may, at its election, use the Security
      Deposit to cure such defaults, and to compensate Landlord for all damage
      suffered by Landlord from such defaults, including, without limitation,
      reasonable attorneys fees and costs incurred by Landlord.
      Upon demand by Landlord, Tenant shall promptly pay to Landlord a sum
equal
      to
      any portion of the Security Deposit so used by Landlord, in order to maintain
      the Security
      Deposit in the amount set forth herein. Following the Expiration Date or earlier
      termination of this Lease, and within the time frame required by applicable
      law
      or thirty (30) days following final walkthrough, Landlord shall deliver to
      Tenant, at Tenant's last known address, any portion of the Security Deposit
      not
      used by Landlord, as provided in this
      Paragraph. Landlord may commingle the Security Deposit with Landlord's other
      funds
      and
      Landlord shall not pay interest on such Security Deposit to Tenant.

     

    5.
      INSURANCE

     

    5.01.     
       Special
      Form Coverage. At
      all
      times during the Term, Landlord shall procure
      and maintain in full force and effect with respect to the Project, a policy
      or
policies
      of all risk insurance (special form insurance including sprinkler, vandalism
      and
malicious
      mischief coverage, and any other endorsements required by the holder of any
      fee
      or leasehold mortgage) in an amount equal to one hundred percent (100%) of
      the
      full replacement value (replacement cost new, including debris removal, and
      demolition) thereof
      and any other insurance Landlord deems customary and reasonable. At all times
      during
      the Term, Tenant shall procure, pay for and maintain in full force and effect
      a
      similar policy of insurance, naming Landlord and Managing Agent as an additional
      insured with respect to property of every description and kind owned by Tenant
      upon the Premises or the Building, or for which Tenant is legally liable,
      including, without limitation,
      trade fixtures, furniture, equipment and all tenant improvements owned or
      installed by or on behalf of Tenant (but not with respect to those owned by
      Landlord), insuring
      one hundred percent (100%) of the full replacement value of said property and
      tenant improvements. All policy proceeds shall be used for the repair and
      replacement of the
      property damaged or destroyed unless this Lease shall cease and terminate under
      the provisions
      on excessive damage or destruction set forth in Article 10.03
      below.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      
        5.02. Liability
          Coverage. Ten
          (10)
          days prior to Tenant’s earliest occupancy of the
          Premises, Tenant shall provide Landlord with certificates of insurance
          for all
          of Tenant’s
          insurance policies required hereunder so that Landlord may determine whether
          Tenant’s insurance policies are in such forms, amounts and are written by such
          insurance companies
          as required by Landlord. Tenant shall, at its own cost and expense, keep
          and
          maintain in full force during the Term, a policy or policies of broad form
          commercial general
          liability insurance with and cross-liability endorsements (insuring Tenant’s
indemnification
          obligations under this Lease, including Article 5.09 hereof) written by
          an
insurance
          company approved by Landlord in the form customary to the locality, insuring
          Tenant’s
          activities with respect to the Premises and/or Building against loss, damage
          or
liability
          for personal and bodily injury (including wrongful death) of any person
          and loss
or
          damage
          to property occurring in, upon or about the Premises covering personal
          and
          bodily injury in the amounts of not less than Two Million Dollars ($2,000,000)
          per person and Two Million Dollars ($2,000,000) per occurrence and covering
          property damage in the amount of not less than One Million Dollars ($1,000,000)
          per occurrence. Landlord
          and Managing Agent shall be named as an additional insured with respect
          to
          liability arising out of Tenant’s activity.

         

        5.03. Worker’s
          Compensation Insurance. Tenant
          shall, at its own cost and expense,
          keep and maintain in full force during the Term, a policy or policies of
          worker’s compensation
          insurance, in statutory amounts and limits, and employer’s liability insurance
          with limits as follows: bodily injury each accident in the amount of not
          less
          than One Million Dollars ($1,000,000), bodily injury/disease each employee
          in an
          amount not less than One Million Dollars ($1,000,000), and a bodily
          injury/disease policy limit of not less than One Million Dollars
          ($1,000,000).

         

        5.04. Insurance
          Certificates. Tenant
          shall furnish to Landlord, no more than ten (10) days prior to the earlier
          of
          Tenant’s occupancy of the Premises (as permitted by Section
          3.02) or the Term Commencement Date of this Lease and thereafter no more
          than
thirty
          (30) days prior to the expiration of each such policy, a certificate of
          insurance issued by the insurance carrier of liability and property insurance
          carried by Tenant pursuant
          hereto. Said certificates shall expressly provide that such policies shall
          not
          be cancelable or subject to reduction of coverage or otherwise be subject
          to
          modification except
          after thirty (30) days’ prior written notice to the parties named as additional
insureds
          in this Article 5. Landlord, its successors and assigns, and any nominee
          of
Landlord
          holding any interest in the Premises, including without limitation, any
          ground
          lessor and the holder of any fee or leasehold mortgage, shall be named
          as
          additional insureds under each such policy of insurance maintained by Tenant
          pursuant to this Lease.

         

        5.05. Tenant’s
          Failure. If
          Tenant
          fails to maintain any insurance required in this Lease, Tenant shall be
          liable
          for any loss or cost resulting from said failure. Notwithstanding
          the foregoing, Landlord may at Landlord’s sole discretion, but shall not
be
          required to, procure said insurance on Tenant’s behalf and charge Tenant the
          premium for
          such
          policies. This Article 5.05 shall not be deemed to be a waiver of any of
          Landlord’s
          rights and remedies under any other section of this Lease.

        
          
            
            

          

          
            6

            
              

            

          

           

        

         

        5.06. Waiver
          of Subrogation. Any
          policy or policies of fire, extended coverage or
          similar casualty insurance, which either party obtains in connection with
          the
          Premises, or Tenant’s personal property therein, shall, to the extent the same
          can be obtained without unreasonable expense, include a clause or endorsement
          denying the insurer any rights of subrogation against the other party to
          the
          extent rights have been waived by the insured prior to the occurrence of
          injury
          or loss. Landlord and Tenant waive any rights of recovery against the other
          for
          injury or loss due to hazards covered by insurance containing such a waiver
          of
          subrogation clause or endorsement to the extent of the injury or loss covered
          thereby.

         

        5.07. Tenant’s
          Property and Fixtures. Tenant
          shall assume the risk of damage to
          any
          furniture, equipment, machinery, goods, supplies or fixtures which are
          or remain
the
          property of Tenant or as to which Tenant retains the right of removal from
          the
Premises.

         

        5.08. Indemnification
          of Landlord. To
          the
          fullest extent permitted by law, Tenant
          agrees with Landlord that Landlord, Landlord’s agents and employees shall not be
liable
          for any damage or liability of any kind or for any injury to or death of
          persons, or damage to property of Tenant or any other person occurring
          from any
          cause whatsoever related to the use, improvement, occupancy or enjoyment
          of the
          Premises by Tenant or any person thereon or holding under Tenant, and caused
          by
          the negligence or willful misconduct of Tenant and Tenant shall indemnify
          protect, defend and hold Landlord, Landlord’s agents and employees, the
          Premises, Building, Project, Lot and Landlord’s related property, harmless from
          and against (i) any and all liability, fines, penalties, losses, damages,
          costs
          and expenses, demands, causes of action, claims or judgments arising from
          or
          growing out of any injury to any person or persons or any damage to any
          property
          as a result of any accident or other occurrence during the Term occasioned
          as a
          result of Tenant’s or Tenant’s officers, employees, agents, servants,
          subtenants, concessionaires,
          licensees, contractors or invitees negligence or willful misconduct in
          the
use,
          maintenance, occupation or operation of the Premises during the Term, (ii)
          all
          liens, claims and demands related to the use of the Premises and its facilities
          during the Term, or any repairs, alterations or improvements which Tenant
          may
          make or cause to be made upon the Premises, and (iii) from and against
          all legal
          costs and charges, including attorneys’ fees, incurred in and about any of such
          matters and the defense of any action arising
          out of the same or in discharging the Building, Project, Lot and Landlord’s
          related property
          or any part thereof from any and all liens, charges or judgments which
          may
          accrue or be placed thereon by reason of any act or omission of the Tenant;
          provided, however, that Tenant shall not be required to indemnify Landlord
          for
          any damage or injury arising as a result of the negligence or willful misconduct
          of Landlord, Landlord’s agents
          or
          employees. Landlord shall indemnify, defend and hold Tenant and its agents
          and
          employees harmless from all costs, damages, claims, liabilities and expenses
          (including reasonable attorneys fees), losses and court costs for personal
          injury, death or property damage arising from incidents occurring on or
          about
          the Premises or Building and
          caused by the negligence or willful misconduct of Landlord, its agents,
          employees or invitees.

        
          
            
            

          

          
            7

            
              

            

          

           

        

         

        5.09.
          Earthquake
          and Flood Insurance. In
          addition to any other insurance policies
          carried by Landlord in connection with the Project, Landlord may elect
          to
          procure and maintain in full force and effect during the Term, with respect
          to
          the Project, a policy of earthquake/volcanic action and flood and/or surface
          water insurance, including rental value insurance against abatement or
          loss of
          rent in the case of damage or loss covered under such earthquake/volcanic
          and
          flood and/or surface water insurance, in an amount up to one hundred percent
          (100%) of the full insurance replacement value (including debris removal
          and
          demolition) of the Project improvements. In the event that the cost of
          such
          insurance is not included in the Operating Expenses for the Base Calendar
          Year,
          and Landlord elects to procure such insurance after the Base Calendar Year,
          the
          Base Calendar Year Operating Expenses shall be adjusted to reflect the
          Operating
          Expenses Landlord would have paid had Landlord carried such insurance in
          the
          Base Calendar Year.

         

        6.
          OPERATING EXPENSES

         

        [Sections
          6.01 - 6.09 intentionally deleted]

         

            6.10.
Services
          and Utilities. Landlord
          shall cause the Common Areas to be kept in a neat, clean and orderly condition,
          property lighted and landscaped, similar to the condition
          of similar office projects in the vicinity of the Project. Tenant shall
          pay the
cost
          of
          all utilities delivered to the Premises whether or not separately metered
          and
          billed. Landlord
          shall not be liable for
          any
          failure or interruption of any utility or service, and Tenant shall not
          be
          entitled to any reduction or abatement of Rent except as provided in the
          following sentence on account
          of any such failure or interruption, unless such failure or interruption
          is
          shown by Tenant
          to
          be directly attributable to the negligence or intentional acts of Landlord,
          its
agents
          or
          employees. In the event of any such interruption or failure of any services
          or
utilities
          provided in this Lease resulting from the negligence or intentional acts
          of
          Landlord, Landlord's agents or employees, Tenant's sole remedy shall be
          the
          equitable abatement of Base Rent for the duration of the interruption or
          failure, which abatement shall
          not
          commence until Tenant has first provided notice to Landlord and given two
          (2)
days
          to
          cure such interruption or failure.

      

    

    
       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

          6.11.
        Special
        Services.

       

              (a) Additional
        Services. In
        the event Landlord provides any utilities or
        services to Tenant beyond the standard services set forth in Section 6.08
        of
        this Lease, Tenant
        shall pay Landlord for such special services as Additional Rent.

       

              (b) Utility
        Consumption.
        Intentionally Deleted.

       

      7.REPAIRS
        AND MAINTENANCE

       

          7.01. Tenant
        Repairs and Maintenance. Tenant shall, at Tenant's own expense, operate
        the Premises in a clean, sanitary and safe condition and keep the integrity
        and
        quality of the Premises, all walls, ceilings, lights, fixtures, and floor
        coverings thereof, in substantially the same condition as received by Tenant,
        reasonable wear and tear excepted. Tenant shall be responsible for any
        janitorial costs for their Suite. Tenant shall be responsible for the cost
        of
        any repairs due to damage caused by Tenant's active negligence
        or willful misconduct. Tenant waives the right to make repairs at Landlord's
        expense
        under any law, statute or ordinance now or hereafter in effect (including
        the
        provisions of California Civil Code Section 1942 and any successive sections
        or
        statutes of a similar nature). Tenant waives all rights to recover any losses
        or
        damages (including interference with or injury to Tenant's business) provided
        Landlord is not negligent in performing
        repairs or maintenance. Other than Landlord's negligence in or failure to
        perform
        repair or maintenance, it is expressly understood and agreed that Tenant
        shall
        be solely responsible for and look solely to its insurance for any such damage
        and losses.

       

          7.02. Inspection
        of Premises. Landlord shall give Tenant reasonable prior written
        notice for entrance into the Premises. Landlord, at reasonable times, may
        enter
        the Premises to complete construction undertaken by Landlord on the Premises
        or
        Building, to inspect, improve, clean or repair the same, to inspect the
        performance by Tenant of the terms and conditions hereof and to affix reasonable
        signs and displays, show the Premises to prospective purchasers, tenants
        and
        lenders and for all other purposes as Landlord shall reasonably deem necessary.
        Subject to the foregoing, Landlord shall keep and maintain in good and
        first-class condition and repair the structural components of the building
        such
        as supports, foundations and roof.

       

          7.03. Liens.
        Tenant shall promptly pay and discharge all claims for work or labor
        done, supplies furnished or services rendered at the request of Tenant and
        shall
keep
        the
        Premises and Building free and clear of all mechanics' and materialmen's
        liens
in
        connection therewith. Landlord shall have the right to post or keep posted
        on
        the Premises,
        or in the immediate vicinity thereof, any notices of non-responsibility for
        any
construction,
        alteration or repair of the Premises by Tenant. If any such lien is filed,
        Landlord
        may, after Landlord has first provided notice to Tenant and given Tenant
        seven
(7)
        days
        to remove such lien, but shall not be required to, take such action or pay
        such
        amount as may be necessary to remove such lien; and, Tenant shall pay to
        Landlord as Additional Rent any such amounts expended by Landlord within
        five
        (5) days after notice is received from Landlord of the amount expended by
        Landlord.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      8.
        FIXTURES, PERSONAL PROPERTY AND ALTERATIONS

       

      8.01. Fixtures
        and Personal Property. Tenant,
        at Tenant's expense, may install any
        necessary trade fixtures, equipment and furniture in the Premises; provided,
        that such items
        are
        installed and are removable without damage to the structure or improvements
        of
the
        Building. Landlord reserves the right to approve or disapprove of curtains,
        draperies, shades,
        paint or other interior improvements visible from outside the Premises on
        wholly
        aesthetic grounds which shall not be unreasonably withheld. Such improvements
        must be submitted for Landlord's written approval prior to installation,
        or
        Landlord may remove or
        replace such items at Tenant's sole expense. Said trade fixtures, equipment
        and
furniture
        shall remain Tenant's property and shall be removed by Tenant upon expiration
        of
        the
        Term, or earlier termination of this Lease. At Landlord's option, Landlord
        may
        notify Tenant in writing not to remove said improvements. Tenant shall repair,
        at Tenant's
        sole expense, all damage caused by the installation or removal of trade
        fixtures, equipment, furniture or temporary improvements. If Tenant fails
        to
        remove the foregoing items
        within ten (10) days of the termination of this Lease, Landlord may (i) keep
        and
        use them,
        wherein Tenant surrenders possession of title and waives all rights of
        possession, or (ii) remove any or all of them and cause them to be stored
        or
        sold in accordance with applicable
        law.

       

      8.02. Alterations.
        Tenant
        shall not make or allow to be made any alterations, additions
        or improvements to the Premises, either at the inception of this Lease or
        subsequently during the Term, without obtaining the prior written consent
        of
        Landlord, which consent shall not be unreasonably withheld. Tenant shall
        deliver
        to Landlord full and
        complete plans and specifications of all such alterations, additions or
        improvements, and
        no
        such work shall be commenced by Tenant until Landlord has given its written
        approval thereof. Landlord does not expressly or implicitly covenant or warrant
        that any plans or specifications submitted by Tenant are safe or that the
        same
        comply with any applicable
        laws, lawful ordinances, etc. Further, Tenant shall indemnify and hold
Landlord
        harmless from any loss, cost or expense, including attorneys' fees and costs,
        incurred by Landlord as a result of any defects in design, materials or
        workmanship resulting
        from Tenant's alterations, additions or improvements to the Premises. All
        repairs,
        alterations, additions, and restoration by Tenant hereinafter required or
        permitted shall
        be
        done in a good and workmanlike manner and in compliance with all applicable
        laws
        and
        lawful ordinances, by-laws, regulations and orders of any federal, state,
        county, municipal
        or other public authority and of the insurers of the Building. Tenant shall
        not
permit
        liens of any kind to be imposed upon the Premises or Building and Tenant
        shall
        discharge of record any such liens or post adequate security or bond within
        five
        (5) days after
        written notice thereof. Tenant shall reimburse Landlord for Landlord's
        reasonable charges
        for reviewing and approving or disapproving plans and specifications for
        any
        alterations proposed by Tenant. Tenant shall insure the alterations under
        Tenant's all risk insurance
        policy or policies as set forth in Article 5.01. Tenant shall require that
        any
contractors
        used by Tenant carry a comprehensive liability insurance policy covering
        bodily
        injury in the amounts of Two Million Dollars ($2,000,000) per person and
        Two
Million
        Dollars ($2,000,000) per occurrence and covering property damage in the amount
        of
        One
        Million Dollars ($1,000,000). Tenant shall obtain, on behalf of Tenant and
        at
Tenant's
        sole cost and expense, before proceeding with any alteration the cost of
        which
        exceeds Ten Thousand Dollars ($10,000) a completion and lien indemnity bond,
        or
        other surety,
        reasonably satisfactory to Landlord for such alteration. Landlord may require
        proof
        of
        such insurance prior to commencement of any work on the Premises.

       

      
        
          
          

        

        
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          8.03.
        Removal
        of Alterations. All
        alterations, additions and improvements shall remain
        the property of Tenant until termination of this Lease, at which time they
        shall
        be and
        become the property of Landlord; provided, however, Landlord may, by written
        notice at any time prior to the date which is thirty (30) days before the
        expiration of the Term (or immediately upon any sooner termination of the
        Lease)
        identify those items of Tenant's alterations, additions or improvements which
        Landlord shall require Tenant to remove at the termination of this Lease.
        If
        Landlord requires Tenant to remove any such alterations,
        additions or improvements, Tenant shall at its sole cost, remove the identified
        items
        on
        or before the expiration or sooner termination of this Lease and repair any
        damage
        to
        the Premises and/or the Building caused by such removal. Landlord shall,
        upon
        giving Tenant consent, inform Tenant if Landlord will require said alteration
        to
        be removed at expiration of Lease.

       

      9.
        USE AND COMPLIANCE WITH LAWS

       

          9.01.
        General
        Use and Compliance with Laws. Tenant
        shall only use the Premises
        for the Permitted Uses specified in the Basic Lease Information and for no
        other
use
        without the prior written consent of Landlord. Tenant shall, at Tenant's
        sole
        cost and expense, comply with all of the requirements of municipal, county,
        state, federal and other applicable governmental authorities now in force,
        or
        which may hereafter be in force, pertaining to Tenants permitted use of the
        Premises, Project, Building, Lot and Parking Area and secure any necessary
        permits therefore and shall faithfully observe, in the use of the Premises,
        Project, Building, Lot and Parking Area, all municipal, county, state, federal
        and other applicable governmental entities' requirements which are now in
        force,
        or
        which may hereafter be in force. Without limiting the generality of the
foregoing
        sentence, Landlord agrees that Landlord shall be responsible for making
alterations
        to the Premises which Landlord is required to maintain or repair if such
        alterations
        are required by changes in the law after the Term Commencement Date, and
        are
        not
        required as a result of (1) Tenant's particular manner of occupancy or manner
        of
use
        of
        the Premises, Project, Lot and/or Parking Area, (2) the Improvements or any
        alterations, additions or improvements to the Premises (including, without
        limitation, the installation
        of Tenant's trade fixtures, equipment and furnishings in the Premises. Tenant,
        in Tenant's use and occupancy of the Premises, shall not subject the Premises
        to
        any use which would tend to damage any portion thereof or which shall in
        any way
        increase the existing rate of any insurance on the Building or any portion
        thereof or cause any cancellation of any insurance policy covering the Building
        or portion thereof. Tenant shall not do or permit to be done anything which
        would obstruct or interfere with the rights of or injure other Tenants or
        occupants of the Project.

      
        
          
          

        

        
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      9.02.      
        Signs.
        Tenant
        shall not install any sign on the Premises or Building unless Tenant receives
        prior written approval from Landlord for such sign, which shall not be
unreasonably
        withheld. Any sign placed by Tenant on the Premises, Project, Building or
        Lot
        shall
        be installed at Tenant's sole cost and expense and shall contain only Tenant's
        name, or the name of any affiliate of Tenant actually occupying the Premises,
        and no advertising
        matter. Tenant shall remove any such sign upon termination of this Lease
        and
        shall
        return the Premises to their condition prior to the placement or erection
        of
        said sign.
        At
        Tenant's request, Tenant may be placed on a waiting list for a panel on the
        monument signage. Said sign would be individually lettered and conform with
        the
        sign plan
        (including city ordinances) and would be subject to landlords consent, which
        may
        not be unreasonably withheld, conditioned, or delayed.

       

      9.03.       Parking
        Access.In
        addition to the general obligation of Tenant to comply with laws and without
        limitation thereof, Landlord shall not be liable to Tenant nor shall this
        Lease
        be affected if any parking privileges appurtenant to the Premises are impaired
        by reason of any moratorium, initiative, referendum, statute, regulation,
        or
        other governmental decree or action which could in any manner prevent or
        limit
        the parking rights
        of
        Tenant hereunder. Any governmental charges or surcharges or other monetary
        obligations
        imposed relative to parking rights with respect to the Premises, Project,
        Building
        and Lot shall be considered as Impositions and shall be payable by Tenant
        under
the
        provisions of Article 6 hereinabove.

       

      9.04.       Floor
        Load.Other
        than is provided in Exhibit B - "Preliminary Plans", Tenant
        shall not place a load upon any floor of the Premises which exceeds the load
        per
square
        foot which such floor is designed to carry and which is then allowed by
        law.

       

      9.05.       Deliveries.All
        deliveries to and from the Premises shall be made in such a
        manner
        and during the time periods reasonably specified by Landlord so as to cause
        the
minimum
        amount of interference with the business of other tenants.

       

      10.
        DAMAGE AND DESTRUCTION

       

      10.01.    
        Reconstruction.
        If
        the
        Premises are damaged or destroyed during the Term
        by
        any cause not attributable to Tenant, its agents, employees or invitees,
        Landlord shall,
        to
        the extent that insurance proceeds are available therefore and are not applied
        by any
        lender against payment of an existing loan on the Project, Building or Lot,
        except as hereinafter
        provided, diligently repair or rebuild them to substantially the condition
        in
which
        they existed immediately prior to such damage or destruction. If, however,
        insurance
        proceeds are not sufficient to pay the full cost of reconstruction of the
        Premises, Landlord may either terminate this Lease or promptly and diligently
        reconstruct the Premises to the extent necessary to restore Landlord's Work
        in
        the Premises as described in Exhibit D, and Tenant shall be obligated for
        the
        restoration of all of the items specified as Tenant's Work in said Exhibit
        D in
        the event of such reconstruction, as well as Tenant's other leasehold
        improvements (but not with respect to those improvements owned by Landlord),
        trade fixtures and other personal property on the
        Premises.

      
        
          
          

        

        
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      10.2.  Rent
        Abatement. If
        any
        portion of the Premises is damaged or destroyed during the Term to the extent
        that such portion is rendered unusable by Tenant, it is agreed
        that Tenant shall look solely to Tenant's business interruption insurance
        for
        any damages
        or losses arising from substantial interference with the operation of Tenant's
        business
        by reason of such damage or destruction. Tenant would have beneficial
occupancy
        without obligation to pay base rent for the first month of the
        term.

       

      10.3.  Excessive
        Damage or Destruction. If
        the
        Building is damaged or destroyed
        to the extent that Landlord determines that it cannot, with reasonable
        diligence, be fully repaired or restored by Landlord within one hundred eighty
        (180) days after the date of the damage or destruction, Landlord or Tenant
        may
        terminate this Lease. Notwithstanding the fact that the Premises have been
        damaged or destroyed, Landlord shall reasonably determine whether the Building
        can be fully repaired or restored within the one hundred eighty (180) day
        period, and Landlord's determination shall be binding upon
        Tenant. Landlord shall notify Tenant of its determination, in writing, within
        forty-five
        (45) days after the date of the damage or destruction whether it elects to
        fully
repair
        or
        restore the Building. If Landlord determines that the Building can be fully
        repaired
        or restored within the one hundred eighty (180) day period, or if Landlord
        determines that such repair or restoration cannot be made within said period,
        but Landlord
        does not elect to terminate within forty-five (45) days from the date of
        Landlord's
        determination, this Lease shall remain in full force and effect and Landlord
        shall diligently repair and restore the damage as soon as reasonably
        possible.

       

      10.04.    
        Uninsured
        Casualties. Notwithstanding
        anything contained herein to the contrary,
        in the event of damage to or destruction of all or any portion of the Building
        which is not fully covered by the insurance proceeds received by Landlord
        under
        the insurance policies required under Article 5.01 hereinabove (without regard
        to Landlord's deductible for such policies), Landlord may terminate this
        Lease
        by written notice to Tenant, given within forty-five (45) days after the
        date of
        notice to Landlord that said damage
        or
        destruction is not so covered. If Landlord does not elect to terminate this
        Lease,
        the Lease shall remain in full force and effect and Landlord shall commence
        reconstruction and restoration of Landlord's Work in the Premises as described
        in Exhibit D and shall diligently repair or rebuild Landlord's Work to
        substantially the condition in which it existed immediately prior to such
        damage
        or destruction. 

      
        
          
          

        

        
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      10.05.   
        Damage
        Near the End of Term. In
        the
        event of damage to or destruction of
        all or
        any material portion of the Premises during the last year of the Lease Term
        which is not fully covered by the insurance proceeds received by Landlord
        under
        the insurance policies required under Article 5.01 herein above or which
        cannot
        be fully repaired prior to the last six (6) months of the Lease Term, Landlord
        and Tenant each shall have the option to terminate this Lease by giving written
        notice to the other of the exercise
        of such option within thirty (30) days after such damage or destruction,
        in
        which event
        this Lease shall cease and terminate as of the date of service of such notice;
        provided,
        however, that in the event that damage or destruction of all or any portion
        of
the
        Premises occurs which cannot be repaired prior to the last six (6) months
        of the
        Lease Term,
        but
        which Landlord reasonable determines can be completed within thirty (30)
        days of
        the event of damage or destruction, neither Landlord nor Tenant shall have
        the
        option to terminate this Lease. For purposes of this section 10.05, a "material"
        portion of the Premises shall mean more than twenty-five percent (25%) of
        the
        full replacement value of the Premises.

       

      10.06.   
        Waiver.With
        respect to any destruction which Landlord is obligated to repair
        or
        may elect to repair under the terms of this Article 10, Tenant hereby waives
        all
rights
        to
        terminate this Lease pursuant to rights otherwise presently or hereafter
        accorded by
        law to
        tenants, except as expressly otherwise provided herein.

       

      11.
        EMINENT DOMAIN

       

      11.01.   
        Total
        Condemnation.If
        the
        whole of the Premises is acquired or condemned
        by eminent domain, inversely condemned or sold in lieu of condemnation, for
        any
        public or quasi-public use or purpose ("Condemned"), then the Term shall
        terminate as of the date of title vesting in such proceeding, and Rent shall
        be
        adjusted as of
        the
        date of such termination. Tenant shall immediately notify Landlord of any
        such
occurrence.

       

      11.02.   
        Partial
        Condemnation.If
        any
        part of the Premises is partially Condemned,
        and such partial condemnation renders the Premises unusable for the business
        of
        the Tenant, as reasonably determined by Landlord and Tenant, or in the event
        a
        substantial portion of the Building is Condemned, as reasonably determined
        by
        Landlord and Tenant, then the Term shall terminate as of the date of title
        vesting in such proceeding and Rent shall be adjusted to the date of
        termination. If such condemnation is not sufficiently extensive to render
        the
        Premises unusable for the business of Tenant, as reasonably determined by
        Landlord and Tenant, or less than a substantial portion of the Building
        is Condemned, then Landlord shall promptly restore the Premises to a condition
        comparable
        to its condition immediately prior to such condemnation less the portion
        thereof
        lost in such condemnation, and this Lease shall continue in full force and
        effect except that after the date of such title vesting the Base Rent shall
        be
        appropriately reduced as reasonably determined by Landlord.

       

      11.03.   
        Landlord's
        Award.If
        the
        Premises are wholly or partially condemned, then,
        subject to the provision of Article 11.04 below, Landlord shall be entitled
        to
        the entire award paid for such condemnation, and Tenant waives any right
        or
        claim to any part
        thereof from Landlord or the condemning authority.

      
        
          
          

        

        
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      11.04.   
        Tenant's
        Award.Tenant
        shall have the right to claim and recover from the condemning authority,
        but not
        from Landlord, such compensation as may be separately awarded or recoverable
        by
        Tenant in Tenant's own right on account of any and all costs or loss incurred
        by
        Tenant including, without limitation, removing Tenant's merchandise, furniture,
        fixtures, leasehold improvements and equipment to a new location.

       

      11.05.   
        Temporary
        Condemnation.If
        the
        whole or any part of the Premises shall be
        Condemned for any temporary public or quasi-public use or purpose, this Lease
        shall remain in effect and Tenant shall be entitled to receive for itself
        such
        portion or portions of any award made for such use with respect to the period
        of
        the taking which is within the
        Term.
        If a temporary condemnation remains in force at the expiration or earlier
        termination
        of this
        Lease,
        Tenant shall pay to Landlord a sum equal to the reasonable cost of
        performing any obligations required of Tenant by this Lease with respect
        to the
surrender
        of the Premises, including without limitation, repairs and maintenance, and
        upon
        such payment such obligations shall be deemed satisfied. If a temporary
condemnation
        is for an established period which extends beyond the Term, the Lease shall
        terminate as of the date of occupancy by the condemning authority, and the
        damages shall be as provided in Articles 11.03 and 11.04 hereinabove and
        Rent
        shall be adjusted to the date of occupancy.

       

      11.06.   
        Notice
        and Execution.Landlord
        shall, immediately upon service of process in connection with any condemnation
        or potential condemnation, give Tenant notice
        in
        writing thereof. Tenant shall immediately execute and deliver to the Landlord
        all instruments that may be required to effectuate the provisions of this
        Article.

       

      12.
        DEFAULT

       

      12.01.    
         Events
        of Default. The
        occurrence of any of the following events shall constitute an "Event of Default"
        on the part of Tenant:

       

      (a)  Abandonment.
        Without
        payment of rent or abandonment of the Premises
        (absence from the Premises for thirty (30) consecutive days or more, without
        a
        Landlord-approved assignee or sublessee, shall conclusively be deemed an
        abandonment or vacation of the Premises, except for renovation or remodeling
        and
        provided Landlord has written notice thereof;

       

      (b)  Payment.
        Failure
        to pay any installment of Base Rent, Additional Rent or other moneys due
        and
        payable hereunder upon the date when said payment is due.

       

      (c)  Performance.
        Default
        in the performance of any of Tenant's covenants,
        agreements or obligations hereunder (except default in the payment of Rent,
        Additional
        Rent or other moneys), where such failure is curable and continues uncured
        for
        ten
        (10) business days after written notice by Landlord to Tenant, provided that
        if
        the nature of the default cannot be reasonably cured within ten (10) days,
        Tenant shall not be deemed in default if it shall commence curing the default
        within such ten (10) day period and
        diligently prosecutes same to completion;

      
        
          
          

        

        
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      (d)  Assignment.
        A
        general assignment by Tenant for the benefit of creditors or any Unauthorized
        Assignment as defined below in Article 13;

       

      (e)  Bankruptcy.
        The
        filing of a voluntary petition by Tenant, or the filing
        of
        an involuntary petition by any of Tenant's creditors seeking the rehabilitation,
        liquidation
        or reorganization of Tenant under any law relating to bankruptcy, insolvency
        or
        other
        relief of debtors;

       

      (f)  Receivership.
        The
        appointment of a receiver or other custodian to take possession of substantially
        all of Tenant's assets or of this leasehold;

       

      (g)  Insolvency,
        Dissolution, Etc.
        Tenant
        shall become insolvent or unable
        to
        pay its debts, or shall fail generally to pay its debts as they become due;
        or
        any court
        shall enter a decree or order directing the winding up or liquidation of
        Tenant
        or of substantially all of its assets; or Tenant shall take any action toward
        the dissolution or winding up of its affairs or the cessation or suspension
        of
        its use of the Premises;

       

      (h)     
         Attachment.
        Attachment, execution or other judicial seizure of substantially all of Tenant's
        assets or this leasehold; or

       

      (i)       
        Hazardous
        Materials Release.
        Any
        on-site or off-site contamination
        or violation of any Health and Safety Laws as set forth in Article
        14.

       

      12.02.     
        Landlord's
        Remedies.

       

      (a)     
         Abandonment.
        If
        Tenant vacates or abandons the Premises (as set forth in Article 12.01(a)),
        this
        Lease shall continue in effect, Landlord shall not be deemed to have
        terminated this Lease other than by written notice of termination from
        Landlord, and Landlord shall have all of the remedies of a landlord provided
        by
        Article 1951.4
        of
        the Civil Code of the State of California. At any time subsequent to vacation
        or
        abandonment of the Premises by Tenant, Landlord may give notice of termination
        and shall
        thereafter have all of the rights hereinafter set forth.

       

      (b)      
        Termination.
        Following the occurrence of any Event of Default, Landlord
        shall have the right, so long as the default continues, to terminate this
        Lease
        by written notice to Tenant setting forth: (i) the default; (ii) the
        requirements to cure it; and (iii) a demand for possession, which shall be
        effective ten (10) business days after it is given
        or
        upon expiration of the times specified in Article 12.01 hereinabove, whichever
        is later.

      
        
          
          

        

        
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    (c) Possession.
      Following termination under subsection (b), without prejudice
      to any other remedies Landlord may have by reason of Tenant's default or of
      such
      termination, Landlord may then or at anytime thereafter, (i) peaceably re-enter
      the Premises, or any part thereof, upon voluntary surrender by Tenant or expel
      or remove Tenant
      therefrom and any other persons occupying them, using such legal proceedings
      as
are
      then
      available; (ii) repossess and enjoy the Premises, or relet the Premises or
      any
      part thereof for such term or terms (which may be for a term extending beyond
      the Term) at such rental or rentals and upon such other terms and conditions
      as
      Landlord in its sole discretion
      shall determine, with the right to make reasonable alterations and repairs
      to the Premises;
      and (iii) remove all personal property therefrom and, at Landlord's option,
      retain all or any of such personal property (and title thereto shall thereupon
      vest in Landlord without compensation to Tenant) or dispose of all or any of
      such personal property,
      in any manner, without compensation to Tenant. In the event Landlord
removes
      all or any of Tenant's personal property pursuant to the foregoing provisions,
      Tenant shall pay to Landlord, upon demand, the actual expense of such removal
      and disposition and the cost of repairing any damage to the Premises resulting
      from such removal.

     

    (d) Recovery.
      Following termination under subsection (b), Landlord shall
      have all the rights and remedies of a landlord provided by Article 1951.2 of
      the
Civil
      Code of the State of California. The amount of damages which Landlord may
recover
      following termination under subsection (b) shall include: (i) the worth at
      the
      time of
      the
      award of the unpaid rent and other amounts which had been earned at the time
      of
termination;
      (ii) the worth at the time of the award of the amount by which the unpaid rent
      which would have been earned after termination until the time of the award
      exceeds the amount of such rental loss that Tenant proves could have been
      reasonably avoided; (iii) the worth at the time of the award of the amount
      by
      which the unpaid Rent for the balance of the Term after the time of award
      exceeds the amount of rental loss Tenant proves could be reasonably avoided;
      and
      (iv) any other amount necessary to compensate Landlord for all detriment
      proximately caused by Tenant's failure to perform its obligations under this
      Lease. The "worth at the time of the award" of the amount referred to in
      (i) and (ii) above shall be computed by allowing interest thereon at the Default
      Rate (as
      set
      forth below). The "worth at the time of the award" of the amount referred to
      in
(iii)
      above shall be computed by discounting such amount at the Default Rate (as
      set forth below).
      Tenant hereby covenants and agrees that the Rent Abatement granted by
Landlord
      to Tenant pursuant to this Lease is granted by Landlord upon Landlord's and
      Tenant's presumption that Tenant shall remain on the Premises for the entire
      five (5) years duration of the Term and, therefore, in the event of termination
      under Article 12.02(b),
      such abatement of Base Rent shall be forfeited by Tenant, and the "worth at
      the
time
      of
      award" of the Base Rent unpaid by Tenant pursuant to the Lease, shall include
      damages in the amount of any and all Base Rent previously abated plus interest
      thereon as otherwise provided in the Lease.

     

    (e) Additional
      Remedies.
      In
      addition to the foregoing remedies, Landlord
      shall, so long as this Lease is not terminated, have the right to remedy any
      default
      of Tenant to maintain or improve the Premises without terminating this Lease,
      to
incur
      expenses on behalf of Tenant in seeking a new subtenant, or to cause a receiver
      to be appointed to administer the Premises and new or existing subleases, and
      to
      add to the Rent
      payable hereunder all of Landlord's reasonable costs in so doing, with interest
      at the lower
      of
      the prime rate of interest at the time of said default charged by Wells Fargo
      Bank N.A. plus three percent (3%) or the maximum lawful rate.

     

    
      
        
        

      

      
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    (f) Other.
      If
      Tenant causes or threatens to cause a breach of any of the covenants,
      agreements, terms or conditions contained in this Lease, Landlord shall be
      entitled to retain all sums held by Landlord by any trustee or in any account
      provided for herein, to enjoin such breach or threatened breach, and to invoke
      any right and remedy allowed at law or in equity or by statute or otherwise
      as
      though re-entry, summary proceedings
      and other remedies were not provided for in this Lease. As used in this
Article,
      the term "threatens" is limited to delivery to Landlord of a written statement
      by Tenant indicating Tenant's intent to cause a breach or Tenant's anticipation
      of its uncured default in the performance of, any of the covenants, agreements,
      terms or conditions contained in this Lease.

     

    (g) Cumulative.
      Each
      right and remedy 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.
      The exercise or beginning of the exercise by Landlord of any one or more of
      the
      rights or remedies provided for in this Lease, or now or hereafter existing
      at
      law or in equity or by statute or otherwise, shall not preclude the simultaneous
      or later exercise by Landlord
      of any or all other rights or remedies provided for in this Lease or now or
      hereafter existing at law or in equity or by statute or otherwise.

     

    (h)
      No
      Waiver.
      No
      failure by Landlord to insist upon the strict performance
      of any term hereof or to exercise any right or remedy consequent upon a breach
      thereof, and no acceptance of full or partial payment of Rent during the
      continuance of any such breach shall constitute a waiver of any such breach
      or
      of any such term. Efforts by Landlord to mitigate the damages caused by Tenant's
      breach of this Lease shall not be construed to be a waiver of Landlord's right
      to recover damages under this Article 12. Nothing in this Article 12 affects
      the
      right of Landlord to indemnification by Tenant in accordance with Article 5.08
      hereinabove for liability arising prior to the termination of this Lease for
      personal injuries or property damage.

     

    13.
      ASSIGNMENT AND SUBLETTING

     

    13.01.
      Assignment
      and Subletting; Prohibition. Tenant
      shall not assign, mortgage,
      pledge, hypothecate or otherwise transfer, this Lease, in whole or in part,
      or
      any interest therein, nor sublet or permit occupancy by any party other than
      Tenant of all or any part of the Premises (each of the foregoing is hereinafter
      sometimes referred to as a "Transfer"), without the prior written consent of
      Landlord in each instance, which consent shall not be unreasonably withheld.
      Notwithstanding the foregoing, Tenant may
      assign its interest in this Lease or sublet any portion of the Premises pursuant
      thereto without
      the Landlord's consent, if made to any corporation which controls, is controlled
      by
      or is
      under common control with the Tenant, so long as Tenant provides Landlord
with
      prior written notice of any such assignment or subletting, together with
      information reasonably
      required by the Landlord to identify such assignee, or sublessee, and the notice
      address thereof. As material consideration for this Lease, Tenant hereby agrees
      to provide the following written materials to Landlord regarding any proposed
      Transfer for Landlord's
      approval: (i) the proposed Transfer agreement to Landlord for Landlord's
approval;
      (ii) the certified financial statements of the transferee for the three (3)
      years prior to the proposed Transfer; (iii) detailed summaries of the
      transferee's business operations; (iv) a detailed credit report of the
      transferee; and (v)banking references for the transferee. Landlord shall have
      the right to review the written material submitted by Tenant
      regarding such Transfer for a period of ten (10) business days following
Landlord's
      receipt of such material to consent or decline to consent to such Transfer.
      No
      Transfer by Tenant shall relieve Tenant of any obligation under this Lease,
      including Tenant's
      obligation to pay Base Rent and Additional Rent hereunder. Any purported
Transfer
      contrary to the provisions hereof without Landlord's consent ("Unauthorized
      Transfer")
      shall be void. The consent by Landlord to any Transfer shall not constitute
      a
waiver
      of
      the necessity for such consent to any subsequent Transfer. As Additional Rent
      hereunder, Tenant shall reimburse Landlord for actual legal and other expenses
      incurred by Landlord in connection with any request by Tenant for Landlord's
      consent to the Transfer provided, however, in no event shall such fees exceed
      Five Hundred dollars ($500.00). Such amount shall be reimbursed by Tenant to
      Landlord within ten (10) days following the submission to Tenant of a copy
      of
      the written invoice from Landlord's counsel
      itemizing such costs and fees payable by Landlord with respect to any request
      by
Tenant
      for Landlord's consent to such a Transfer, whether or not Landlord ultimately
      approves such Transfer

     

    
      
        
        

      

      
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    13.02
      Bonus Rental.
      If
      for
      any assignment or sublease, Tenant receives rent or other
      consideration, either initially or over the term of the assignment or sublease,
      in excess of the Rent called for hereunder, or in case of the sublease of a
      portion of the Premises, in excess of such Rent fairly allocable to such
      portion, after appropriate adjustments
      to assure that all other payments called for hereunder are appropriately taken
      into
      account, Tenant shall pay to Landlord, as Additional Rent hereunder, fifty
      percent (50%) of the excess of each such payment of rent or other consideration
      received by Tenant over Tenant's customary and reasonable costs and expenses
      of
      making the assignment
      or sublease (which costs and expenses shall be amortized over the term of the
      assignment or sublease), which shall be due and payable by Tenant to Landlord
      promptly after
      its
      receipt by Tenant.

     

    13.03.
      Scope.
      The
      prohibition against Unauthorized Transfers contained in this Article shall
      be
      construed to include a prohibition against any Transfer by operation of law.
      If
      this Lease or any interest therein be assigned, or if the underlying beneficial
      interest
      of Tenant is transferred, or if the Premises or any part thereof be sublet
      or
      occupied by anybody other than Tenant, Landlord may collect rent from the
      assignee, subtenant
      or occupant and apply the net amount collected to the Rent herein reserved
      and
apportion
      any excess rent so collected in accordance with the terms of the immediately
      preceding
      paragraph, but no such assignment, subletting, occupancy or collection shall
      be
deemed
      a
      waiver of this covenant, or the acceptance of the assignee, subtenant or
      occupant as tenant, or a release of Tenant from the further performance by
      Tenant of covenants
      on the part of Tenant herein contained. No assignment or subletting shall
affect
      the continuing primary liability of Tenant (which, following assignment, shall
      be joint
      and
      several with the assignee), and Tenant shall not be released from performing
      any
      of
      the terms, covenants and conditions of this Lease.

     

    
      
        
        

      

      
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    13.04. Waiver.
      Notwithstanding
      any Transfer, or any indulgences, waivers or extensions
      of time granted by Landlord to any transferee, or failure by Landlord to take
      action against any transferee, Tenant waives notice of any default of any
      transferee and agrees that Landlord may, at its option, proceed against Tenant
      without having taken action
      against or joined such transferee, except that Tenant shall have the benefit
      of
      any indulgences,
      waivers and extensions of time granted to any such transferee. Tenant
further
      waives monetary damages, of whatever land or nature, from Landlord as a result
      of,
      or in
      any way related to any proposed Transfer, whether Landlord consented to such
      Transfer or withholds its consent to such Transfer.

     

    13.05. Release.
      Whenever
      Landlord conveys its interest in the Project, Parking Area,
      Lot
      and/or Building, Landlord shall be automatically released from the further
      performance of covenants on the part of Landlord herein contained, and from
      any
      and all further liability, obligations, costs and expenses, demands, causes
      of
      action, claims or judgments arising from or growing out of, or connected with
      this Lease after the effective date of said release. The effective date of
      said
      release shall be the date Landlord transfers title of the Project to the new
      owner. If requested, Tenant shall execute a form of release and such other
      documentation as may be required to further effect the provisions of this
Article
      13.

     

    13.06. Transfer
      to Affiliate Permitted. Any
      provision in this Lease to the contrary
      notwithstanding, Landlord's consent shall not be required for a Transfer to
      any
      person or entity who controls, is controlled by or is under common control
      with
      Tenant (Tenant Affiliate); provided that before such assignment shall be
      effective, (a) said Tenant Affiliate shall assume, in full, the obligations
      of
      Tenant under this Lease, (b) Landlord shall be given written notice of such
      assignment and assumption, (c) the use of the Premises by the Tenant Affiliate
      shall be as set forth in Section 9.01 and (d) the net worth of the Tenant
      Affiliate is substantially equal to the net worth of Tenant as of the date
      of
      this Lease. For purposes of this section 13.06, the term control means
      possession, directly or indirectly, of the power to direct or cause the
      direction of the management, affairs and policies of anyone, whether through
      the
      ownership of voting securities, by contract
      or otherwise. The bonus rental provisions of Section 13.02 of this Lease shall
      not
      apply
      to an assignment or sublease by Tenant to a Tenant Affiliate."

     

    14.
      HAZARDOUS MATERIALS

     

    14.01.
      Definitions.

     

    
      
        
        

      

      
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    (a) Health
      and Safety Laws.
      "Health
      and Safety Laws" means any and all federal, state or local laws, ordinances,
      rules, decrees, orders, regulations, court decisions and other authority
      relating to hazardous substances, hazardous materials, hazardous waste, toxic
      substances, materials or wastes, environmental conditions on, under or about
      the
      Premises, or soil and ground water conditions, including, but not limited
      to, the Comprehensive Environmental Response, Compensation and Liability Act
      of
      1980
      ("CERCLA"), as amended, 42 U.S.C. ß 9601, et seq., the Resource Conservation and
      Recovery Act ("RCRA"), 42 U.S.C. ß 6901,
      et seq.,
      the Hazardous Materials Transportation Act, 49 U.S.C. ß1801, et seq., the
      Federal Water Pollution Control Act of 1972, 33 U.S.C. ß 1251, et. seq., the
      Safe Drinking Water Act, 42 U.S.C. ß 300f, et seq., the Toxic Substances Control
      Act ("TSCA"), 15 U.S.C. ß 2601, et seq., the Federal Insecticide, Fungicide, and
      Rodenticide Act ("FIFRA"), 7 U.S.C. ß 136, et seq., the Federal Hazardous
      Substances Control Act, 15 U.S.C. ß 1261, et seq., the Noise Control Act of
      1972, 42 U.S.C. ß 4901, et seq., the Occupational Safety and Health Act
      ("OSHA"), 29 U.S.C. ß 651, et seq., the California Hazardous Waste Control Act,
      Cal. Health and Safety Code ß 25100, et seq., the Carpenter-Presley-Tanner
      Hazardous Substances
      Account Act, Cal. Health and Safety Code ß 25300, et seq., the Safe Drinking
      Water and Toxic Enforcement Act of 1986 ("California Proposition 65"), Cal.
      Health and Safety
      Code B 25249.5, et seq., the Porter-Cologne Water Quality Control Act, Cal.
      Water Code ß 13000, et. seq., any amendments to the foregoing, and any similar
      federal, state or local laws, ordinances, rules, decrees, orders or
      regulations.

     

    (b) Hazardous
      Materials.
      "Hazardous Materials" means any chemical, compound, material, substance or
      other
      matter that: (i) is defined as a hazardous substance, hazardous material,
      hazardous waste or toxic substance, material or waste under any Health and
      Safety Law, including, but not limited to, those substances, materials
      or wastes regulated now or in the future under any statutes or regulations;
      (ii)
      is controlled
      or governed by any Health and Safety Law or gives rise to any reporting, notice
      or publication requirements thereunder, or gives rise to any liability,
      responsibility or duty on the part of Tenant or Landlord with respect to any
      third person hereunder; or (iii) is flammable or explosive material, oil or
      any
      other petroleum-based substance, freon,
      asbestos, urea formaldehyde, radioactive material, nuclear medicine material,
      drug, vaccine,
      bacteria, virus, hazardous waste, toxic substance, or related injurious or
      potentially
      injurious material (by itself or in combination with other
      materials).

     

    (c) Off-Site
      Contamination.
      The
      term "Off-Site Contamination" shall mean the presence of any Hazardous
      Materials, associated in any way with Tenant's, its successors' or assigns'
      use
      or occupation of the Premises, transported, arranged for disposal
      of, or disposed of by Tenant or any third party on behalf of Tenant or its
      agents, employees
      or officers to any site or location other than the Premises.

     

    (d) On-Site
      Contamination.
      The
      term "On-Site Contamination" shall mean the presence of any Hazardous Materials
      in, on or under any portion of the Premises.

     

    
      
        
        

      

      
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    14.02.  Use.
      Tenant
      shall not allow any Hazardous Material to be used, generated,
      manufactured, released, stored or disposed of on, under or about, or
transported
      from, the Premises, unless: (a) such use is specifically disclosed to and
approved
      by Landlord in writing prior to such use; and (b) such use is conducted in
      compliance with the provisions of this Article 14. Landlord's consent may be
      withheld in Landlord's
      sole discretion, and, if granted, may be revoked at any time. Landlord may
      approve
      such use subject to reasonable conditions to protect the Premises and Landlord's
      interests.
      Landlord may withhold approval if Landlord determines that such proposed
use
      involves a material risk of a release or discharge of Hazardous Materials or
      a
      violation of any Health and Safety Laws or that Tenant has not provided
      reasonable assurances of its ability to remedy such a violation and fulfill
      its
      obligations under this Article
      14. Notwithstanding the foregoing, Landlord hereby consents to Tenant's use,
      storage
      or disposal of products containing small quantities of Hazardous Materials,
      which products are of a type customarily found in offices and households (such
      as aerosol cans containing insecticides, toner for copies, paints, paint remover
      and the like), provided that Tenant
      shall handle, use, store and dispose of such Hazardous Materials in a safe
      and
      lawful manner and shall not allow such Hazardous Materials to contaminate the
      Premises.

     

    14.03.  Compliance
      With Laws; Handling of Hazardous Materials. Tenant
      shall strictly
      comply with, and shall maintain the Premises in compliance with, all Health
      and
Safety
      Laws. Tenant shall obtain, maintain in effect and comply with the conditions
      of
      all permits, licenses and other governmental approvals required for Tenant's
      operations on
      the
      Premises under any Health and Safety Laws, including, but not limited to, the
      discharge
      of appropriately treated Hazardous Materials into or through any sanitary sewer
      serving
      the Premises. At Landlord's request, Tenant shall deliver copies of, or allow
      Landlord to inspect, all such permits, licenses and approvals. All Hazardous
      Materials removed
      from the Premises shall be removed and transported by duly licensed haulers
      to
duly
      licensed disposal facilities, in compliance with all Health and safety Laws.
      Tenant shall
      be
      responsible for the proper disposal of any mercury-containing fluorescent
lighting
      fixtures. Tenant shall perform any monitoring, testing, investigation, clean-up,
      removal, detoxification, preparation of closure or other required plans and
      any
      other remedial
      work required by any governmental agency or lender or reasonably recommended
      by
      Landlord's environmental consultants as a result of any release or discharge
      or
      potential release or discharge of Hazardous Materials and resulting in
      On-Site
      Contamination or Off-Site Contamination or any violation or potential violation
      of Health
      and Safety Laws by Tenant or any successor or sublessee of Tenant or their
      respective agents, contractors, employees, licensees or invitees (collectively,
      "Remedial Work"). Tenant shall not enter into any settlement agreement, consent
      decree or other compromise with respect to any claims relating to Hazardous
      Materials without notifying Landlord and providing ample opportunity for
      Landlord to intervene.

     

    14.04.  Compliance
      With Insurance Requirements. Tenant
      shall comply with the requirements
      of Landlord's and Tenant's insurers regarding Hazardous Materials and with
      such
      insurers' recommendations based upon prudent industry practices regarding
      management of Hazardous Materials.

     

    
      
        
        

      

      
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    14.05.  Indemnity.
      Tenant
      shall indemnify, protect, defend and hold Landlord (and
      its
      partners and their respective officers, directors, employees and agents), the
      Premises, Building, Lot Parking Areas, and all other areas of the Project
      harmless from and against any and all liabilities, demands, penalties, fines,
      claims, suits, judgments, actions, investigations, proceedings, costs and
      expenses (including attorneys' fees and court costs) arising out of or in
      connection with any breach of any provisions of this Article
      14, directly arising out of any liability of Tenant under any Health and Safety
      Law or
      associated with any On-Site Contamination or any Off-Site Contamination which
      is
      caused, suffered or permitted to be brought upon, kept, used, discharged,
      deposited or leaked
      in
      or about the Premises or any other portion of the Project by Tenant or any
      of
Tenant's
      assigns, agents, employees, contractors or invitees or by anyone in the Premises
      other than Landlord, Landlord's agents, employees or contractors, including,
      but
      not limited to, the use, generation, storage, release, disposal or
      transportation of Hazardous Materials by Tenant, or any successor or sublessee
      of Tenant, or their respective agents, contractors, employees, licensees, or
      invitees, on, under or about the Premises during the Term, and including, but
      not limited to, all consequential damages and the cost of any Remedial
      Work. Any defense by Tenant pursuant to this Article shall be by counsel
      reasonably acceptable to Landlord. Neither the consent by Landlord to the use,
      generation,
      storage, release, disposal or transportation of Hazardous Materials nor the
      strict compliance with all Health and Safety Laws shall excuse Tenant from
      Tenant's indemnification obligations pursuant to this Article 14.05. The
      foregoing indemnity shall be in addition to and not a limitation of the
      indemnification provisions of Article 5.09 of this
      Lease. Tenant's obligations pursuant to this Article 14.05 shall survive the
      termination
      or expiration of the Lease.

     

    14.06.  Notice.
      Each
      party to this Lease shall notify the other party, in writing, as soon
      as
      reasonably possible, and in any event within
      five (5)
      business days after, any of the
      following: (a) a party has knowledge, or it has reasonable cause to believe,
      that any Hazardous Material has been released, discharged or is located on,
      under or about the Premises, whether or not the release or discharge is in
      quantities that would otherwise be reportable to a public agency; (b) a party
      receives any order of a governmental agency requiring any Remedial Work pursuant
      to any Health and Safety Laws; (c) a party receives any warning, notice of
      inspection, notice of violation or alleged violation, or a party receives notice
      or knowledge of any proceeding, investigation of enforcement action, pursuant
      to
      any Health and Safety Laws; or (d) a party receives notice or knowledge of
      any
      claims made or threatened by any third party against that party or the Premises
      relating to any loss or injury resulting from Hazardous Materials or from
violation
      of any Health and Safety Law. If the potential risk of any of the foregoing
      events
      is
      material, the party having notice of such event shall deliver immediate verbal
      notice
      to
      the other party, in addition to written notice as set forth above. Landlord
      and
      Tenant agree to deliver to one another copies of all test results, reports
      and
      business or management
      plans required to be filed with any governmental agency pursuant to any
Health
      and Safety Laws.

     

    
      
        
        

      

      
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    14.07.  Default.
      The
      release or discharge of any Hazardous Material or the violation
      of any Hazardous Materials Law by Tenant or any successor or sublessee of
Tenant
      shall be a material default by Tenant under the Lease. In addition to or in
      lieu
      of the
      remedies available under the Lease as a result of such default, Landlord shall
      have the right,
      without terminating the Lease, to require Tenant to suspend its operations
      and
      activities on the Premises until Landlord is satisfied that appropriate Remedial
      Work has been or is being adequately performed; Landlord's election of this
      remedy shall not constitute a waiver of Landlord's right thereafter to declare
      a
      default and pursue other remedies set forth in the Lease.

     

    14.08.  Landlord's
      Disclosure. Pursuant
      to the requirements of California Health and Safety Code Section 25359.7,
      Landlord hereby notifies Tenant that Landlord does not know, and does not have
      reasonable cause to believe, that any release of any Hazardous Material has
      come
      to be located on or beneath the Premises, Building or Project. In the event
      Hazardous Materials are later discovered to be present in, on or below
      the
      Premises, Building or Project which is required by any governmental agency
      to
be
      abated
      or removed, the abatement or removal thereof shall, subject to Tenant's
      liability set forth above, be at Landlord's sole cost and expense, including
      any
      costs incurred to comply with any and all rules, regulations, codes, ordinances,
      statutes and other requirements of any lawful governmental authority respecting
      Hazardous Materials and Landlord shall indemnify, defend and hold Tenant
      harmless from any and all claims, judgments,
      demands, causes of action, proceedings or hearings relating to the existence
      of
      Hazardous Materials on or below the Premises, Building or Project.

     

    15.
      OFFSET STATEMENT, ATTORNMENT AND SUBORDINATION

     

    15.01.  Estoppel
      Certificate. Within
      ten (10) business days after request therefore by Landlord, or if on any sale,
      assignment or hypothecation by Landlord of Landlord's interest
      in the Project, Building, Lot and/or Parking Area, or any part thereof, an
      estoppel certificate
      shall be required from Tenant, Tenant shall deliver, in recordable form, such
      a
      certificate to any proposed mortgagee or purchaser, and to Landlord, certifying
      (if such be the case) that (i) this Lease is in full force and effect; (ii)
      the
      date of Tenant's most recent payment of Rent, and that Tenant has no defenses
      or
      offsets outstanding, or stating those offsets or defenses claimed by Tenant;
      (iii) and any other information reasonably requested.
      Tenant's failure to deliver said certificate in time shall be conclusive upon
      Tenant
      that: (i) this Lease is in full force and effect, without modification except
      as
      may be represented by Landlord; (ii) there are no uncured defaults in Landlord's
      performance and Tenant has no right of offset, counterclaim or deduction against
      Rent hereunder; and (iii) no more than one period's Base Rent has been paid
      in
      advance. Failure of Tenant to deliver such a certificate to Landlord or any
      proposed mortgagee or purchaser within ten (10) business days following
      Landlord's request shall constitute a default under the Lease as outlined in
      section 12.

     

    15.02.  Attornment.
      Tenant
      shall, in the event any proceedings are brought for the foreclosure of, or
      in
      the event of exercise of the power of sale under any mortgage or deed of trust
      made by the Landlord, its successors or assigns, encumbering the Premises,
or
      any
      part thereof, or in the event of termination of a ground lease, if any, and
      if
      so requested,
      attorn to the purchaser upon such foreclosure or sale or upon any grant of
      a
deed
      in
      lieu of foreclosure and recognize such purchaser as the Landlord under this
      Lease.

     

    
      
        
        

      

      
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    15.03.  Subordination.
      The
      rights of Tenant hereunder are and shall be, at the election
      of the mortgagee, subject and subordinate to the lien of such mortgage, or
      the
      lien resulting from any other method of financing or refinancing, now or
      hereafter in force
      against the Project, Building, Lot and/or Parking Area, and to all advances
      made
      or hereafter
      to be made upon the security thereof; provided, however, that notwithstanding
      such subordination, so long as Tenant is not in default under any of the terms,
      covenants and
      conditions of this Lease, neither this Lease nor any of the rights of Tenant
      hereunder upon
      Tenant's covenanting that Tenant is not in default hereunder, shall be
      terminated or subject to termination by any trustee's sale, any action to
      enforce the security, or by any proceeding
      or action in foreclosure. If requested, Tenant agrees to execute whatever
documentation
      may be required to further effect the provisions of this Article.

     

    15.04.  Quiet
      Enjoyment. If
      Tenant
      performs all of the terms and conditions of this Lease to be performed by
      Tenant, Landlord agrees that Tenant shall at all times during
      the term of the lease peaceably and quietly hold, occupy and enjoy the Premises
      without
      any manner of hindrance from Landlord or any person lawfully claiming by,
      through or under Landlord.

     

    16. NOTICES

     

    16.01.      
      Notices.
      All
      notices required to be given hereunder shall be in writing (except for notice
      required pursuant to Article 12.01(b)) and shall be (i) personally delivered,
      in which even they shall be deemed received on the date of delivery, (ii) sent
      by certified
      mail, postage prepaid, return receipt requested, or by a professional courier
      company which provides a receipt evidencing delivery, in which event they shall
      be deemed received on the date of delivery as evidenced by the receipt; or
      (iii)
      sent by telecopy.
      Any notice, request, demand, direction or other communication sent by cable,
      telex
      or
      telecopy must be confirmed within forty-eight (48) hours by letter mailed or
      delivered
      in accordance with the foregoing. The Landlord's and Tenant's addresses for
      written
      notices required to be given hereunder shall be the addresses set forth in
      the
      Basic Lease Information, or at such other place designated by advance written
      notice delivered in accordance with the foregoing.

     

    17. SUCCESSORS
      BOUND

     

    17.01.     
      Successors
      Bound. This
      Lease and each of its covenants and conditions shall be binding upon and shall
      inure to the benefit of the parties hereto and their respective
      heirs, successors and legal representatives and their respective assigns,
      subject to
      the
      provisions hereof. Whenever in this Lease a reference is made to the Landlord,
      such
      reference shall be deemed to refer to the person in whom the interest of the
      Landlord shall
      be
      vested and Landlord shall have no obligation hereunder as to any claim arising
      after
      the
      transfer of its interest in the Premises. Any successor or assignee of the
      Tenant who accepts an assignment or the benefit of this Lease and enters into
      possession or enjoyment hereunder shall thereby assume and agree to perform
      and
      be bound by the covenants
      and conditions thereof. Nothing herein contained shall be deemed in any
manner
      to
      give a right of assignment to Tenant without the written consent of
      Landlord.

     

    
      
        
        

      

      
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    18.
      MISCELLANEOUS

     

    18.01.  Waiver.
      No
      waiver
      of any default or breach of any covenant by either party
      hereunder shall be implied from any omission by either party to take 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 waiver,
      and then said waiver shall be
      operative only for the time and to the extent therein stated. Waivers of any
      covenant, term or condition contained herein by either party shall not be
      construed as a waiver of any
      subsequent breach of the same covenant, term or condition. The consent or
      approval by either party to or of any act by either party requiring further
      consent or approval shall not be deemed to waive or render unnecessary their
      consent or approval to or of any subsequent similar acts.

     

    18.02.  Easements.
      Landlord
      reserves the right to (i) subdivide or alter the boundaries
      of the Lot and (ii) grant easements on the Lot and dedicate for public use
      portions
      thereof without Tenant's consent; provided, however, that no such grant or
      dedication
      shall materially interfere with Tenant's use of the Premises. From time to
      time,
      and
      upon Landlord's demand, Tenant shall execute, acknowledge and deliver to
Landlord,
      in accordance with Landlord's instructions, any and all documents, instruments,
      maps or plats necessary to effectuate Tenant's covenants hereunder.

     

    18.03       
      Relocation.
      Intentionally
      deleted.

     

    18.04.  No
      Light, Air or View Easement. Any
      diminution or shutting off of light, air or view by any structure which may
      be
      erected on lands adjacent to or in the vicinity of the Building shall in no
      way
      affect this Lease or impose any liability on Landlord.

     

    18.05.  Corporate
      Authority. If
      Tenant
      executes this Lease as a corporation, each of the persons executing this Lease
      on behalf of Tenant hereby covenants and warrants that: (i) Tenant is a duly
      authorized and existing corporation; (ii) Tenant is qualified to do business
      in
      the State of California; (iii) Tenant has full right and authority to enter
      into
      this Lease; and (iv) each of the persons executing on behalf of Tenant is
      authorized to do so.

     

    18.06.    
       Accord
      and Satisfaction. No
      payment by Tenant or receipt by Landlord of a lesser amount than the Rent herein
      stipulated shall be deemed to be other than on account of the Rent, nor shall
      any endorsement or statement on any check or any letter accompanying
      any check or payment as Rent be deemed an accord and satisfaction, and Landlord
      may accept such check or payment without prejudice to Landlord's right to
      recover the balance of such Rent or pursue any other remedy provided in this
      Lease.

     

    
      
        
        

      

      
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    18.07.  Limitation
      of Landlord's Liability. The
      obligations of Landlord under this Lease shall not constitute personal
      obligations of the individual partners, directors, officers, or shareholders
      of
      Landlord, and in consideration of the benefits accruing hereunder
      to Tenant and notwithstanding anything contained in this Lease to the contrary,
      Tenant hereby covenants and agrees for itself and all of its successors and
      assigns that the liability
      of Landlord for its obligations under this Lease shall be limited solely to,
      and
      Tenant's and its successors' and assigns' sole and exclusive remedy shall be
      against the real
      estate that is the subject of this Lease and Tenant, its successors and assigns
      shall not seek
      recourse against the individual partners, directors, officers or shareholders
      of
Landlord
      or any of their personal assets for such satisfaction.

    

    18.08.  Time.
      Time
      is of
      the essence of every provision hereof.

     

    18.09.  Attorneys'
      Fees. In
      any
      action or proceeding which the Landlord or the Tenant
      may be required to prosecute to enforce its respective rights hereunder, the
      less prevailing party therein agrees to pay all costs incurred by the more
      prevailing party therein,
      including reasonable attorneys' fees, to be fixed by the court, and said costs
      and attorneys'
      fees shall be made a part of the judgment in said action. In any situation
      in which
      a
      dispute is settled other than by action or proceeding, Tenant shall pay all
      Landlord's costs and attorneys' fees related thereto.

     

    18.10.  Captions
      and Article Numbers. The
      captions, article numbers and table of contents appearing in this Lease are
      inserted only as a matter of convenience and in no way
      define, limit, construe or describe the scope or intent or such sections or
      articles of this
      Lease nor in any way affect this Lease.

     

    18.11.  Severability.
      If
      any
      term, covenant, condition or provision of this Lease, or
      the
      application thereof to any person or circumstance, shall to any extent be held
      by a court
      of
      competent jurisdiction to be invalid, void or unenforceable, the remainder
      of
      the terms, covenants, conditions or provisions of this Lease, or the application
      thereof to any person
      or
      circumstance, shall remain in full force and effect and shall in no way be
      affected, impaired or invalidated.

     

    18.12.  Applicable
      Law. This
      Lease, and the rights and obligations of the parties hereto,
      shall be construed and enforced in accordance with the laws of the State of
      California.

     

    18.13.  Submission
      of Lease. The
      submission of this document for examination and negotiation does not constitute
      an offer to lease, or a reservation of, or option for leasing the Premises.
      This
      document shall become effective and binding only upon execution
      and delivery hereof by Landlord. No act or omission of any employee or agent
      of
      Landlord or of Landlord's broker or managing agent shall alter, change, or
      modify any of
      the
      provisions hereof.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    18.14.  Holding
      Over. Should
      Tenant, or any of its successors in interest, hold over
      the
      Premises, or any part thereof, after the expiration of the term of this Lease,
      unless otherwise agreed to in writing, such holding over shall constitute and
      be
      construed as tenancy from month-to-month only, at a monthly rent equal to one
      hundred fifty percent (150%) the monthly Base Rent owed during the final year
      of
      the Term of this Lease
      as
      the same may be extended from time to time. This inclusion of the preceding
      sentence
      shall not be construed as Landlord's permission for Tenant to hold
      over.

     

    18.15.  Surrender.
      Upon
      the
      expiration or earlier termination of this Lease, Tenant
      shall surrender the Premises to Landlord in good order, condition and repair,
      except
      for reasonable wear and tear or as otherwise provided in Articles 8, 10 and
      11.
Tenant
      shall not commit or allow any waste or damage to be committed on any portion
      of
the
      Premises, Building or Project. All property that Tenant is required to surrender
      shall become Landlord's property upon the termination of this Lease. Landlord
      may cause any of
      said
      personal property that is not removed from the Premises within thirty (30)
      days
      after the date of any termination of this Lease to be removed from the Premises
      and stored at Tenant's expense, or, at Landlord's election said personal
      property thereafter shall belong to Landlord without the payment of any
      consideration, subject to the rights of any person holding a perfected security
      interest therein.

     

    18.16.  Rules
      and Regulations. At
      all
      times during the Term, Tenant shall comply with rules and regulations ("Rules
      and Regulations") for the Project, as set forth in Exhibit
      C
      (and such amendments as Landlord may reasonably adopt), attached hereto and
      by
      this
      reference made a part hereof.

     

    18.17.  No
      Nuisance. Tenant
      shall conduct its business and control its agents, employees, invitees and
      visitors in such a manner as not to create any nuisance, or interfere with,
      annoy or disturb any other tenant or Landlord in its operation of the
      Project.

     

    18.18.  Broker.
      Per
      separate agreement

     

    18.19.  Landlord's
      Right to Perform. Upon
      Tenant's failure to perform any obligation
      of Tenant hereunder, including without limitation, payment of Tenant's insurance
      premiums, charges of contractors who have supplied materials or labor to the
      Premises, etc., Landlord shall have the right to perform such obligation of
      Tenant on behalf of Tenant and/or to make payment on behalf of Tenant to such
      parties, provided Landlord has first provided written notice to Tenant and
      given
      Tenant ten (10) days to perform
      such obligation (unless another cure period is provided herein). Tenant shall
      reimburse
      Landlord the reasonable cost of Landlord's performing such obligation on
      Tenant's behalf, including reimbursement of any amounts that may be expended
      by
Landlord,
      plus interest at the rate of three percent (3%) over the prime rate as
      announced, from
      time
      to time, by Wells Fargo Bank, N.A. per annum, as Additional Rent.

     

    18.20.  Mortgage
      Protection. Landlord
      shall not be in default under the terms of this Lease, or by law, unless
      Landlord fails to perform the obligations required of Landlord
      within a reasonable time, but in no event later than thirty (30) days after
      written notice
      by
      Tenant to Landlord and to the holder of any first mortgage or deed of trust
      covering the Premises whose name and address shall have theretofore been
      furnished to Tenant
      in
      writing specifying wherein Landlord has failed to perform such obligation.
      If,
however,
      the nature of Landlord's obligation is such that more than thirty (30) days
      are
      required for performance, Landlord shall not be in default if Landlord commences
      performance within such thirty (30) day period and diligently prosecutes the
      same to completion.
      Should Landlord be deemed to be in material default of this Lease, then
Landlord
      shall be liable to Tenant for all damages sustained by Tenant as a direct result
      of
      Landlord's breach. If any such default materially interferes with Tenant's
      business operation
      in the Premises, Tenant may give Landlord and the holder of any first mortgage
      or deed of trust covering the Premises a second written notice specifying
      exactly the nature of the Landlord's failure and its impact on Tenant's business
      operation in the Premises
      and the further remedial action deemed necessary by Tenant. If such remedial
      action
      is
      not undertaken within thirty (30) days of such second written notice, Tenant
      shall be entitled to terminate this Lease, but in no event earlier than thirty
      (30) days after the second notice to Landlord and the holder of any first
      mortgage or deed of trust covering
      the Premises. Notwithstanding the foregoing, Tenant shall not be entitled to
      terminate
      this Lease as a result of Landlord's default if Landlord is making diligent
      efforts
      to perform the obligations required of Landlord under this Lease. Nothing herein
      contained
      shall be interpreted to mean that Tenant is excused from paying any rent due
      hereunder as a result of any default by Landlord.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    18.21. 
      Nonliability.
      Landlord
      shall not be in default hereunder or be liable for any
      damages directly or indirectly resulting from, nor shall the rental herein
      reserved be abated by reason (unless otherwise provided herein) of (i) the
      interruption of use of the Premises as a result of the installation of any
      equipment in connection with the Premises or
      Building or (ii) any failure to furnish or delay in furnishing any services
      required to be provided
      by Landlord when such failure or delay is caused by accident or any condition
      beyond the reasonable control of Landlord or by the making of necessary repairs
      or improvements to the Premises or to the Building, or the limitation,
      curtailment, rationing or restriction on use of water or electricity, gas or
      any
      other form of energy or any other service
      or utility whatsoever serving the Premises or the Building. Landlord shall
      use
reasonable
      efforts to remedy any interruption in the furnishing of such
      services.

     

    18.22 
      Modification
      for Lender. If,
      in
      connection with obtaining construction, interim
      or permanent financing for the Project or the Building, the lender shall require
      reasonable
      modifications in this Lease as a condition to such financing, Tenant will not
      unreasonably
      withhold, delay or defer its consent thereto, provided that such modifications
      do not increase the obligations of Tenant hereunder or materially adversely
      affect
      the leasehold interest hereby created or Tenant's rights hereunder.

     

    18.23. 
      Recording.
      Neither
      Landlord nor Tenant shall record this Lease without the consent of the other.
      Either party may, at its sole cost and expense, record a short form
      memorandum of this Lease in a form reasonably acceptable to the other
      party.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    18.24.  Entire
      Agreement. This
      Lease sets forth all covenants, promises, agreements,
      conditions and understandings between Landlord and Tenant concerning the
Premises,
      Project, Building and Lot, and there are no covenants, promises, agreements,
      conditions or understandings, either oral or written, between Landlord and
      Tenant other than
      as
      are herein set forth. Except as herein otherwise provided no subsequent
alteration,
      amendment, change or addition to this Lease shall be binding upon Landlord
      or
      Tenant unless reduced to writing and signed by Landlord and Tenant.

     

    18.25.  Special
      Provisions. Section
      purposely deleted.

     

    IN
      WITNESS WHEREOF, the parties have executed this Lease as of the date first
      above-written.

     

    
      	
              LESSOR/LANDLORD:

              GENERATION
                PROPERTIES L.P.

            	 	 	
              LESSEE/TENANT: 

              BARNABAS
                ENERGY

              CORPORATION.

              A Nevada Corporation

            
	
              By:     
TRILOGY
                INVESTMENT GROUP LLC
                

                         
                a California Limited Liability Company,

              its
                General Partner

            	 	 	 
	 	 	 	 
	By:                      
              	 	 	By:                           
              
	
              
                

              

              Michael
                D. Marks 

              President
                & CEO

            	 	 	
              
                

              

              David
                Saltman

              President
                and CEO

            
	 	 	 	 
	Date:
September
              15, 2005	 	 	Date
9-13-05
	 	 	 	 

    

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    Legal
      Description

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

    

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      C

     

    OCEAN
      POINTE

     

    Rules
      and Regulations

     

    1.
      The
      sidewalks, entrances, passages, courts, elevators, vestibules, stairways,
      corridors or halls
      shall nor be obstructed or used for any purposes other than ingress and
      egress.

     

    2. The
      sashes, sash doors, skylights. windows and doors that reflect or admit light
      and
      air into
      halls, passageways or other public places in the Project shall not be covered
      or
      obstructed by any
      Tenant, nor shall any bottles, parcels or other articles be placed on the
      windowsills, without Landlord's
      written consent, which shall not be unreasonably withheld.

     

    3.
      The
      water and wash closets and other plumbing fixtures shall not be used for any
      purpose other than those for which they were constructed, and no sweepings,
      rubbish, rags or other substances shall be thrown therein. All damages resulting
      from any misuse of the fixtures shall be borne by the Tenant who, or whose
      servants, employees, agents, visitors or licensees, shall have
      caused the same.

     

    4. 
      No Tenant shall mark, paint, drill into, or in any way deface any part of the
      Premises or the
      Project. No boring, cutting or stringing of wires or laying of linoleum or
      similar floor coverings
      shall be permitted except with the prior written consent of Landlord and as
      Landlord may
      direct, which
      shall not be unreasonably withheld.

     

    5. 
      No Tenant shall cause or permit any unusual or objectionable odors to be
      produced or permeate the Premises or the Project.

     

    6. 
      The Premises shall not be used for manufacturing or for the storage of
      merchandise except
      as
      such storage that may be required in order to use the Premises for retail
      purposes. No Tenant shall
      engage or pay any employees on the Premises except those actually working for
      such Tenant on the Premises, nor advertise for laborers giving an
      address at
      the
      Premises. The Premises shall not be used for lodging or sleeping, or for any
      illegal purposes.

     

    7.
       No Tenant shall make, or permit to be made, any unseemly or disturbing
      noises or disturb or interfere with other occupants of the Project, or those
      having business with them, whether by the use of any musical instrument, radio
      phonograph, unusual noise, or any other way. No Tenant shall throw anything
      out
      of doors, windows or skylights or down the passageways.

    
       

      
        	
                

                Landlord

              	
                

                Tenant

              

      

       

    

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     8. 
      No Tenant nor any of Tenant's servants, employees, agents, visitors or
      licensees, shall at any
      time
      bring or keep upon the Premises any inflammable, combustible or explosive fluid
      chemical
      or substance (including asbestos),or
      any
      hazardous or toxic
      substances,
      including those that
      are
      defined by any governmental body having authority over the Premises and the
      Project.

     

    9. 
      No additional locks or bolts of any kind shall be placed upon any of the doors
      or windows by any Tenant, nor shall any changes be made in existing locks or
      the
      mechanism thereof.
      Tenant will be furnished with one key for each full-time employee at time the
      Tenant takes
      possession of the Premises. Thereafter, Tenant will be charged for all keys.
      Each Tenant must
      upon
      the termination of its tenancy, restore to the Landlord all keys of stores,
      offices and toilet
      rooms, either furnished to or otherwise procured by, such Tenant. In the event
      of the loss of any keys so furnished, such Tenant shall pay to
      Landlord
      the cost of replacing the same or of changing the lock or locks opened by such
      lost key if Landlord deems it reasonably necessary. Tenant
      and Landlord shall have the Premises re-keyed at Landlord's expense on the
      day
      Tenant takes
      possession of the Premises.

     

    10.
      All
      removals or the carrying in or our of any safes, freight, furniture, or bulky
      matter of any description must take place during the hours which Landlord may
      reasonably determine. The moving of safes or other fixtures or bulky matters
      of
      any kind must be made upon previous notice to the superintendent of the Project
      and under his supervision, and the persons employed by
      any
      Tenant for such work must be acceptable to Landlord. Landlord reserves the
      right
      to inspect
      all safes, freight or other bulky articles to be brought into the Project and
      to
      exclude therefrom
      all safes, freight orother
      bulky articles which violate any of these Rules and Regulations
      or the Lease of which these Rules and Regulations area part. Landlord reserves
      the right
      to
      prescribe the weight and position of all safes which must be placed upon
      supports approved
      by Landlord in order to distribute weight.

     

    11. Landlord
      shall have the right to prohibit any advertising by any Tenant which, in
Landlord's
      opinion, tends to impair the reputation of the Project or its desirability
      as a
      retail and professional
      complex, and upon written notice from Landlord any Tenant shall refrain from
      or
discontinue
      such advertising.

     

    12. Between
      the hours of 10:00 pm and 8:00 am. Landlord reserves the right to exclude from
      the
      Project all persons who have not received clearance as a result of a written
      request fromTenant
      Landlord shall in no case be liable for damages for any error with regard to
      the
admission
      to or exclusion from the Project of any person. In case of a mob riot, public
      excitement
      or other circumstances rendering such action advisable in Landlord's opinion.
      Landlord
      reserves the right to prevent access to
      the
      Project, for the safety of all Tenants and the
      protection
      of the Project.

     

    13. Any
      persons employed by any Tenant to do maintenance work shall while in the Project
      and
      outside of  the Premises, be subject to and under the control and direction
      of the superintendent
      of the Project (but not as an agent or servant of the superintendent or of
      Landlord),
      and Tenant shall be responsible for all acts of such persons. No such person
      shall be allowed
      in the Project after regular hours.

     

    14. All
      doors
      opening onto public corridors shall be kept closed except when in use
      for
      ingress
      and egress.

     

    15. The
      requirements of Tenant, will be amended to only upon application to the Project
      office.

     

    16. Canvassing,
      soliciting and peddling in the Project are prohibited, and each Tenant shall
      cooperate
      to prevent the same.

     

    
      	
              

              Landlord

            	
              

              Tenant

            

    

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    17.
      All
      office equipment of any electrical or mechanical nature shall be placed by
      Tenant in the
      Premises in settings approved by Landlord, to absorb or prevent any vibration,
      noise or annoyance.

     

    18.
      No
      air-conditioning unit or other similar apparatus shall be installed or used
      by
      any Tenant without the written consent of Landlord.

     

    19.
      There
      shall not be used in any space, or in the public halls, either by any Tenant
      or
      others, any
      hand
      trucks except those equipped with rubber tires and rubber side
      guards.

     

    20.
      Landlord shall have the right exercisable without notice or without liability
      to
      any Tenant
      to
      change the name and address of the Project.

     

    21.
      No
      vending machine or machines of any description shall be installed, maintained
      oroperated
      upon the Premises without written consent of Landlord.

     

    22.
      The
      scheduling of moves of Tenant's furniture and equipment in or out of the Project
      is subject
      to the reasonable discretion of Landlord.

     

    23.
      Landlord reserves the right to
      amend
      or
      change these Rules and Regulations to the extent necessary
      as conditions may change or circumstances arise at the Project and all Tenants
      shall be
      bound
      thereby.

    
       

      
        	
                

                Landlord

              	
                

                Tenant

              

      

    

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    
      EXHIBIT
        D

      Landlord
        and Tenants Work

       

      At
        Landlords cost, Landlord shall provide new paint, new carpet, and remove
        cabinetry.

      
        
           

          
            	
                    

                    Landlord

                  	
                    

                    Tenant

                  

          

           

        

      

      
        
          
          

        

        
          36

          
            

          

        

         

      

      EXHIBIT
        "E"

       

      Fair
        Market Rent Determination

       

      	(a)  	
              Not
                later than one hundred (100) days prior to any applicable Extension
                Term,
                Landlord and
                Tenant shall meet in an effort to negotiate, in good faith, the fair
                market rent of the Property
                as of such Extension Term. However, in no event will the new rate
                be less
                than the
                last month of the last year of the initial term. If Landlord and
                Tenant
                have not agreed upon the fair market rent of the Property at least
                ninety
                (90) days prior to the applicable Extension
                Term, the fair market rent shall be determined by appraisal, by one
                or
                more appraisers
                or brokers (herein called "Appraiser(s)"), as provided in Section
                5(b),
                below. If appraiser(s)
                are used, such appraiser(s) shall have at least five (5) years' experience
                in the
                appraisal of commercial/industrial real property in the area in which
                the
                Property is located
                and shall be members of professional organizations such as MAI or
                equivalent. If broker(s)
                are used, such brokers) shall have at least five (5) years' experience
                in
                the sales
                and leasing of commercial/industrial real property in the area in
                which
                the Property is
                located and shall be members of professional organizations such as
                the
                Society of Industrial
                and Office Realtors or equivalent.

            

       

      	(b)  	
              If
                Landlord and Tenant are not able to agree upon the fair market rent
                of the
                Property within the prescribed time period, then Landlord and Tenant
                shall
                attempt to agree in good
                faith upon a single Appraiser not later than seventy-five (75) days
                prior
                to the applicable
                Extension Term. If Landlord and Tenant are unable to agree upon a
                single
                Appraiser
                within such time period, then Landlord and Tenant shall each appoint
                one
                Appraiser
                not later than sixty-five (65) days prior to the applicable Extension
                Term. Within ten
                (10) days thereafter, the two (2) appointed Appraisers shall appoint
                a
                third (3rd) Appraiser.
                If either Landlord or Tenant fails to appoint its Appraiser within
                the
                prescribed time
                period, the single Appraiser appointed shall determine the fair market
                rent of the Property.
                If both parties fail to appoint Appraisers within the prescribed
                time
                periods, then the first Appraiser thereafter selected by a party
                shall
                determine the fair market rent of the Property.
                Each party shall bear the cost of its own Appraiser and the parties
                shall
                share equally
                the cost of the single or third Appraiser, if
                applicable.

            

       

      	(c)  	
              For
                the purposes of such appraisal, the term "fair market rent" shall
                mean the
                price that a ready
                and willing tenant would pay, as of the applicable Extension Term,
                as
                monthly rent to
                a ready and willing landlord of property comparable to the Property
                if
                such property were exposed for lease on the open market for a reasonable
                period of time and taking into
                account all of the purposes for which such property may be used.
                If a
                single Appraiser
                is chosen, then such Appraiser shall determine the fair market rent
                of the
                Property,
                Otherwise, the fair market rent of the Property shall be the arithmetic
                average of
                the two (2) of the three (3) appraisals which are closest in amount,
                and
                the third appraisal
                shall be disregarded. In no event, however, shall the Base Rent be
                reduced
                by reason
                of such computation. Landlord and Tenant shall instruct the Appraiser(s)
                to complete
                the determination of the fair market rent not later than thirty (30)
                days
                prior to the
                applicable Extension Term. If the fair market rent is not determined
                prior
                to the applicable
                Extension Term, than Tenant shall continue to pay to Landlord the
                Base
                Rent applicable
                to the Property immediately prior to such Extension, until the fair
                market
                rent is determined.
                When the fair market rent of the Property is determined, Landlord
                shall
                deliver
                notice thereof to Tenant, and Tenant shall pay to Landlord, within
                ten
                (10) days after
                receipt of such notice, the difference between the Base Rent actually
                paid
                by Tenant to Landlord and the new Base Rent determined
                hereunder.

            

    

     

    Landlord
      Tenant 

     

    
      
        
        

      

      
        37

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