Document:

United States Securities and Exchange Commission EDGAR Filing

EXHIBIT 10.4

BOCA CORPORATE CENTER AND CAMPUS

OFFICE

LEASE

Between

BRE/BOCA CORPORATE CENTER L.L.C., 

a Delaware limited liability company,

and

MEDICAL CONNECTIONS, INC.,

a Florida corporation

TABLE OF CONTENTS

				
	 
	 
	Page

	 
	 
	 
	 

	ARTICLE 1

	 
	Premises and Term

	1

	ARTICLE 2

	 
	Base Rent

	1

	ARTICLE 3

	 
	Additional Rent

	2

	ARTICLE 4

	 
	Commencement of Term and Delivery of Possession

	5

	ARTICLE 5

	 
	Condition of Premises

	6

	ARTICLE 6

	 
	Use and Rules

	6

	ARTICLE 7

	 
	Services and Utilities

	7

	ARTICLE 8

	 
	Alterations and Liens

	10

	ARTICLE 9

	 
	Repairs

	12

	ARTICLE 10

	 
	Casualty Damage

	13

	ARTICLE 11

	 
	Insurance, Subrogation, and Waiver of Claims

	14

	ARTICLE 12

	 
	Condemnation

	15

	ARTICLE 13

	 
	Return of Possession

	16

	ARTICLE 14

	 
	Holding Over

	17

	ARTICLE 15

	 
	No Waiver

	17

	ARTICLE 16

	 
	Attorneys’ Fees and Jury Trial

	18

	ARTICLE 17

	 
	Personal Property Taxes, Rent Taxes and Other Taxes

	18

	ARTICLE 18

	 
	Subordination, Attornment and Mortgagee Protection

	18

	ARTICLE 19

	 
	Estoppel Certificate

	19

	ARTICLE 20

	 
	Assignment and Subletting

	20

	ARTICLE 21

	 
	Rights Reserved By Landlord

	23

	ARTICLE 22

	 
	Landlord’s Remedies

	26

	ARTICLE 23

	 
	Landlord Default

	29

	ARTICLE 24

	 
	Captions, Definitions and Severability

	30

	ARTICLE 25

	 
	Conveyance by Landlord

	37

	ARTICLE 26

	 
	Indemnification

	37

	ARTICLE 27

	 
	Safety and Security Devices, Services and Programs

	38

	ARTICLE 28

	 
	Communications and Computer Lines

	38

	ARTICLE 29

	 
	Hazardous Materials

	40

	ARTICLE 30

	 
	Miscellaneous

	41

	ARTICLE 31

	 
	Offer

	45

	ARTICLE 32

	 
	Notices

	46

-i-

				

TABLE OF CONTENTS

(continued)

				
	 
	 
	Page

	 
	 
	 
	 

	ARTICLE 33

	 
	Real Estate Brokers

	47

	ARTICLE 34

	 
	Security Deposit

	47

	ARTICLE 35

	 
	Option to Extend

	48

	ARTICLE 36

	 
	Right of First Offer

	50

	ARTICLE 37

	 
	Termination Option

	52

	ARTICLE 38

	 
	Bankruptcy

	53

	ARTICLE 39

	 
	Confidentiality

	54

	ARTICLE 40

	 
	Signage

	55

	ARTICLE 41

	 
	Limitation of Liability

	56

	ARTICLE 42

	 
	Mortgagee’s Consent

	56

	ARTICLE 43

	 
	Entire Agreement

	56

	ARTICLE 44

	 
	Radon Gas

	57

-ii-

			
	Exhibit A

	     

	Lease Plan

	Exhibit B

	 
	Work Letter

	Appendix I

	 
	Schedule

	Exhibit C-1

	 
	Supplement to Lease for Emergency Standby Electric Power Service

	Exhibit C-2

	 
	Rate Schedule

	Exhibit D

	 
	Subordination, Non-Disturbance and Attornment Agreement

	Exhibit E

	 
	Amortization Schedule

-iii-

BOCA CORPORATE CENTER AND CAMPUS OFFICE LEASE

4800 BUILDING SUITE 200

THIS BOCA CORPORATE CENTER AND CAMPUS OFFICE LEASE (this “Lease”) is made as of the ____ day of __________, 2008, between BRE/BOCA CORPORATE CENTER L.L.C., a Delaware limited liability company (“Landlord”), and MEDICAL CONNECTIONS, INC., a Florida corporation (“Tenant”), whose address is 2300 Glades Road, Suite 307E, Boca Raton, Florida 33431-7335.

WITNESSETH:

ARTICLE 1

Premises and Term

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord that certain space known as Suite 200 and depicted on Exhibit A attached hereto (the “Premises”), in the building located at 4800 T-Rex Avenue, Boca Raton, Florida 33431 (the “Building”), together with the right to use in common with Landlord, its invitees, tenants and occupants, all Common Areas (as hereinafter defined), including, but not limited to, the lobby areas, stairways, elevators, hallways, lavatories, elevators, parking areas, drives and landscaped areas and all other common facilities contained in the Building or the Complex or used in association therewith, subject to the terms, covenants, conditions and provisions herein contained. The Building is one of a group of buildings located in an office-retail complex commonly known as Boca Corporate Center and Campus (the “Complex”, as further described in Article 24) of which Landlord is the fee simple owner as of the date of this Lease. The term (“Term”) of this Lease shall commence upon the date which is the later to occur of (i) substantial completion of Landlord’s Work (as hereinafter defined), and (ii) issuance of a Certificate of Occupancy for the Premises by the City of Boca Raton, Florida (“Commencement Date”), and shall continue until the last day of the seventh (7th) Lease Year (as hereinafter defined) (“Expiration Date”), unless sooner terminated or hereafter extended as provided herein. Landlord and Tenant agree that for purposes of this Lease the rentable square footage of the Premises is eighteen thousand nine hundred sixty-six (18,966) square feet.

ARTICLE 2

Base Rent

(A)

Base Rent. Tenant shall pay Landlord Base Rent as follows:

				
	

Period

	Annual

Amount*

	Monthly

Amount

	Per Square

  Foot  

	Commencement Date1 through Lease Year 1

	$312,939.00

	$26,078.25

	$16.50

	Lease Year 2

	$322,327.17

	$26,860.60

	$17.00

	Lease Year 3

	$331,996.99

	$27,666.42

	$17.50

	Lease Year 4

	$341,956.89

	$28,496.41

	$18.03

	Lease Year 5

	$352,215.60

	$29,351.30

	$18.57

	Lease Year 6

	$362,782.07

	$30,231.84

	$19.13

	Lease Year 7

	$373,665.53

	$31,138.79

	$19.70

* Based upon 18,966 rentable square feet

1 Subject to one (1) month abatement as provided in Section 2(B) below

plus applicable state and local sales and use taxes due thereon, in advance, on or before the first day of each calendar month during the Term, except that Base Rent and Additional Rent (as herein defined) for the first full calendar month for which Base Rent shall be due, plus applicable state and local sales and use taxes due thereon, together with the Security Deposit, if any, shall be paid when Tenant executes this Lease. If the Term commences on a day other than the first day of a calendar month, or ends on a day other than the last day of a calendar month, Base Rent for such month shall be prorated on the basis of 1/30th of the monthly Base Rent for each day of such month. Base Rent, together with applicable state and local sales and use taxes due thereon, shall be paid without any prior demand or notice therefor, and shall in all events be paid without any deduction, recoupment, set-off or counterclaim, and without relief from any valuation or appraisement laws. Landlord may apply payments received from Tenant to any obligations of Tenant then accrued, without regard to such obligations as may be designated by Tenant. Tenant shall have the right to access the Premises during the last thirty (30) days of Landlord’s Work to the extent legally permissible for the installation of Tenant’s equipment, furniture and fixtures, including, but not limited to, phone lines and data wiring for computers and electronic equipment (“Early Access Period”), subject to the provisions of the Workletter (as defined in said Article 4). During the Early Access Period, Tenant agrees to comply with all of the terms, covenants, conditions and provisions of this Lease, excluding the covenant to pay Base Rent and Additional Rent.

(B)

Rent Abatement. Notwithstanding anything to the contrary contained in this Article 2 or in Article 3 below, and provided Tenant is not in default under this Lease after written notice and the expiration of the applicable cure period, the monthly Base Rent for the Premises and Tenant’s Prorata Share of Taxes and Operating Expenses shall be abated for the first thirty (30) days following the Commencement Date of the Lease (“Abatement Period”). Notwithstanding said abatement, Tenant shall remain obligated to pay all other charges under this Lease. If, however, at any time during the Abatement Period a default occurs and such default is not cured during the applicable notice and cure period, monthly Base Rent and Tenant’s Prorata Share of Taxes and Operating Expenses shall immediately become due and payable for the Abatement Period.

ARTICLE 3

Additional Rent

(A)

Taxes. Tenant shall pay Landlord an amount equal to Tenant’s Prorata Share of Taxes plus applicable state and local sales and use taxes due thereon. The terms “Taxes” and “Tenant’s Prorata Share” shall have the meanings specified therefor in Article 24.

(B)

Operating Expenses. Tenant shall pay Landlord an amount equal to Tenant’s Prorata Share of Operating Expenses plus applicable state and local sales and use taxes due thereon. The term “Operating Expenses” shall have the meaning specified therefor in Article 24 and shall be net of electricity and chilled water, which are metered separately, and net of janitorial for which tenants contract directly with janitorial service companies approved by Landlord.

(C)

Manner of Payment. Taxes and Operating Expenses shall be paid in the following manner:

(i)

Landlord may reasonably estimate in advance the amounts Tenant shall owe for Taxes and Operating Expenses for any full or partial calendar year of the Term. In such 

2

event, Tenant shall pay such estimated amounts, on a monthly basis in installments equal to one-twelfth (1/12th) of the annual estimate plus applicable state and local sales and use taxes due thereon, on or before the first day of each calendar month, together with Tenant’s payment of Base Rent. Such estimate may be adjusted from time to time by Landlord, as it reasonably determines.

(ii)

Within one hundred and twenty (120) days after the end of each calendar year, or as soon thereafter as practicable, Landlord shall provide a statement (the “Statement”) to Tenant showing: (a) the amount of actual Taxes and Operating Expenses for such calendar year, with a listing of amounts for major categories of Operating Expenses, (b) any amount paid by Tenant towards Taxes and Operating Expenses during such calendar year on an estimated basis, and (c) any revised estimate of Tenant’s obligations for Taxes and Operating Expenses for the current calendar year.

(iii)

If the Statement shows that Tenant’s estimated payments were less than Tenant’s actual obligations for Taxes and Operating Expenses for such year, Tenant shall pay the difference plus applicable state and local sales and use taxes due thereon. If the Statement shows an increase in Tenant’s estimated payments for the current calendar year, Tenant shall pay the difference between the new and former estimates, for the period from January 1 of the current calendar year through the month in which the Statement is sent, plus applicable state and local sales and use taxes due thereon. Tenant shall make such payments within thirty (30) days after Landlord sends the Statement.

(iv)

If the Statement shows that Tenant’s estimated payments exceeded Tenant’s actual obligations for Taxes and Operating Expenses, Tenant shall receive a credit for the difference against payments of Rent next due. If the Term shall have expired and no further Rent shall be due, Tenant shall receive a refund of such difference within thirty (30) days after Landlord sends the Statement.

(v)

So long as Tenant’s obligations hereunder are not materially adversely affected thereby, Landlord reserves the right to reasonably change, from time to time, the manner or timing of the foregoing payments. In lieu of providing one Statement covering Taxes and Operating Expenses, Landlord may provide separate statements, at the same or different times. No delay by Landlord in providing the Statement (or separate statements) shall be deemed a default by Landlord or a waiver of Landlord’s right to require payment of Tenant’s obligations for actual or estimated Taxes or Operating Expenses.

(D)

Proration. If the Term commences other than on January 1, or ends other than on December 31, Tenant’s obligation to pay estimated and actual amounts towards Taxes and Operating Expenses for such first or final calendar years shall be prorated to reflect the portion of such years included in the Term. Such proration shall be made by multiplying the total estimated or actual (as the case may be) Taxes and Operating Expenses for such calendar years, by a fraction, the numerator of which shall be the number of days of the Term during such calendar year, and the denominator of which shall be three hundred and sixty-five (365).

(E)

Landlord’s Records. Landlord shall maintain records respecting Taxes and Operating Expenses and determine the same in accordance with sound accounting and management practices, consistently applied. This Lease contemplates the computation of Taxes and Operating Expenses on a full accrual basis. Landlord reserves the right to change to a cash system of accounting and, in such event, Landlord shall make reasonable and appropriate adjustments to ensure that each calendar year includes substantially the same 

3

recurring items. Tenant or its representative (which may be an independent certified public accountant, “CPA”) shall have the right to examine such records during Normal Business Hours at the place or places where such records are normally kept by sending a written request no later than thirty (30) days following the furnishing of the Statement. Tenant may take exception to matters included in Operating Expenses or Taxes, or Landlord’s computation of Tenant’s Prorata Share of either, by sending notice specifying such exception and the reasons therefor to Landlord no later than thirty (30) days after Landlord makes such records available for examination. Such Statement shall be considered final, except as to matters to which exception is taken after examination of Landlord’s records in the foregoing manner and within the foregoing times. Tenant acknowledges that Landlord’s ability to budget and incur expenses depends on the finality of such Statement, and accordingly agrees that time is of the essence of this Section. If Tenant takes exception to any matter contained in the Statement within the time parameters set forth above, Landlord, subject to the provisions of the next sentence, shall refer the matter to a CPA, whose certification as to the proper amount shall be final and conclusive as between Landlord and Tenant, provided that the CPA designated by Landlord shall take into account any exceptions and the basis therefor raised by the CPA designated by Tenant. If Landlord has already retained, in response to another tenant’s exceptions, a CPA to certify one or more of the matters to which Tenant has taken exception, then, upon Landlord’s receipt of such CPA’s certification, Landlord shall provide a copy of the relevant portions thereof to Tenant and, based upon such certification, Landlord shall recalculate, to the extent applicable and for the period of time in question, the amount of those particular matters included in Tenant’s Prorata Share of Taxes or Operating Expenses to which Tenant took exception. Landlord shall allow Tenant a credit against Rent next due for the amount of any overpayment and Tenant shall promptly pay Landlord the amount of any underpayment plus applicable state and local sales and use taxes due thereon. Unless such CPA certification determines that Operating Expenses were overstated by more than five percent (5%), Tenant shall promptly pay the cost of such CPA certification. Compensation to any CPA shall not be determined or paid on a contingency, percentage, bonus or similar basis. Pending resolution of any such exceptions in the foregoing manner, Tenant shall continue paying Tenant’s Prorata Share of Taxes and Tenant’s Prorata Share of Operating Expenses in the amounts determined by Landlord, subject to adjustment after any such exceptions are so resolved.

(F)

Confidentiality of Records. All information obtained through Tenant’s examination of Landlord’s records with respect to financial matters (including, without limitation, costs, expenses, income), as well as any compromise, settlement or adjustment reached between Landlord and Tenant relative to the results of Tenant’s examination shall be held in confidence by Tenant and its officers, agents, and employees and, except as may be required by applicable law or in connection with any court proceeding, arbitration, mediation or other proceeding where such information is relevant, shall not be divulged to any other person, firm, corporation, business organization, consultant, entity or occupant or tenant of the Complex at any time; and Tenant shall cause its accountant or consultant and any of its officers, agents and employees to be similarly bound.

(G)

Rent and Other Charges. Base Rent, Tenant’s Prorata Share of Taxes and Tenant’s Prorata Share of Operating Expenses, plus applicable state and local sales and use taxes due thereon, and any other amounts which Tenant is or becomes obligated to pay Landlord under this Lease or other agreement entered in connection herewith, are sometimes herein referred to collectively as “Rent,” and all remedies applicable to the non-payment of Rent shall be applicable thereto. Applicable state and local sales and use taxes on monthly installments of Rent shall be paid by Tenant to Landlord simultaneously with the monthly payment of Base Rent. All sums payable by Tenant under this Lease shall be paid to Landlord 

4

in legal tender of the United States by wire transfer (in accordance with wire transfer instructions contained on Schedule 3(G) attached hereto and made a part hereof, as same may be amended from time-to-time in accordance with the notice provisions of this Lease) or by check drawn on a U.S. bank (subject to collection), at the address to which notices to Landlord are to be given or to such other party or such other address as Landlord may designate in writing. Landlord’s acceptance of Rent after it shall have become due and payable shall not excuse a delay upon any subsequent occasion or constitute a waiver of any of Landlord’s rights. With respect to such wire transfers, Tenant shall bear the full risk of receipt of funds by 2:00 pm on the date due at Landlord’s depository bank. In the event that Landlord’s lender imposes special collection and bank account procedures on Landlord as a condition of Landlord’s financing, Tenant agrees to cooperate fully with Landlord, at no additional cost to Tenant, in assisting Landlord in complying with such requirements and such modified payment terms shall be deemed to be made a part of this Lease.

(H)

Operating Expense Cap. (i)

Notwithstanding anything to the contrary set forth in this Article, the Controllable Operating Expenses used for computing Tenant’s Prorata Share of Operating Expenses for any calendar year during the Term shall not exceed an amount equal to the Controllable Operating Expense Cap for such calendar year, which is 105% times the amount of the Controllable Operating Expenses taken into account in determining Tenant’s Prorata Share of Operating Expenses for the immediately prior calendar year plus the amount of the unused Controllable Operating Expense Cap, if any, for such prior calendar year. For purposes of this clause (H), the following terms have the meanings specified below: (1) “Controllable Operating Expenses” shall mean all Operating Expenses excluding “Non-Controllable Operating Expenses”; and (2) “Non-Controllable Operating Expenses” shall mean the cost of insurance and utilities, and the cost, net of insurance recoveries, of repairs and restoration due to hurricanes and other extreme weather-related causes, provided that (i) Landlord shall endeavor to minimize the possibility of any shortfall by using commercially reasonable efforts to adequately insure the Building, and (ii) Landlord shall maintain commercially reasonable deductible limits consistent with the practice of other landlords of similar properties in south Florida.

As an example, if the Controllable Operating Expenses in Year 1 of the Lease are $100 and Controllable Operating Expenses for Year 2 are $109, then only $105 may be taken into account in determining Tenant’s Prorata Share of Controllable Operating Expenses for Year 2, and the Controllable Operating Expense Cap for Year 3 is $110.25 (105% times the $105 of Controllable Operating Expenses taken into account in calculating Tenant’s Prorata Share for Year 2).

ARTICLE 4

Commencement of Term and Delivery of Possession

(A)

Term Commencement. If, by July 1,2009, Landlord fails to substantially complete any improvements to the Premises required to be performed by Landlord (“Landlord’s Work”) under the terms and provisions of that certain workletter attached hereto as Exhibit B (“Workletter”) and obtain a Certificate of Occupancy for the Premises, except to the extent that Tenant, its contractors, agents or employees materially and substantially contributed to such delay, Tenant shall have the right to terminate this Lease by written notice to Landlord any time thereafter until Landlord substantially completes any such improvements, obtains a Certificate of Occupancy for the Premises and delivers possession of the Premises to Tenant. Any delay in the Commencement Date shall not subject Landlord to liability for loss or damage resulting 

5

therefrom, and Tenant’s sole recourse with respect thereto shall be a deferral of the payment of Rent and a termination of this Lease, both as described above. Upon any such termination of this Lease, Landlord and Tenant shall be entirely relieved of their obligations hereunder, and any Security Deposit and Rent payments shall be returned to Tenant.

(B)

Delivery of Possession. Landlord agrees to deliver possession of the Premises to Tenant in accordance with the terms of this Lease, provided, however, that Landlord will not be obligated to deliver possession of the Premises to Tenant until Landlord has received from Tenant all of the following: (i) this Lease fully executed by Tenant; (ii) the Security Deposit, and the first monthly installment of Base Rent plus applicable state and local sales and use taxes due thereon in the aggregate amount of $27,773.34; and (iii) executed copies of policies of insurance or certificates thereof as required under Article 11 of this Lease. Neither the Commencement Date nor Tenant’s obligation to pay Rent will be affected or deferred on account of any delay or failure on the part of Tenant to deliver to Landlord the foregoing items in form and substance reasonably satisfactory to Landlord and otherwise in compliance with the terms of this Lease.

ARTICLE 5

Condition of Premises

Subject to Landlord’s obligations to “build out” the Premises, Tenant has inspected the Premises, Building, Complex, Systems and Equipment (as defined in Article 24), or has had an opportunity to do so, and agrees to accept the same “as is” without any agreements, representations, understandings or obligations on the part of Landlord to perform any alterations, repairs or improvements and no representations respecting the condition of the Premises, Building, Complex or Systems and Equipment have been made to Tenant by or on behalf of Landlord, except as expressly provided herein or in any Workletter attached hereto as Exhibit B and signed by the parties.

Notwithstanding the foregoing, Landlord represents that (i) the Building and Complex are currently in compliance, in all material respects, with applicable Law, including The Americans With Disabilities Act, and Tenant shall not be responsible for any expense incurred to bring the Building (including the Premises) or Complex into compliance with applicable Law as of the Commencement Date; (ii) the Premises will be “built out” by Landlord in accordance with the Plans (as defined in the Workletter), and the improvements depicted in the Plans will comply with applicable Law; (iii) the mechanical systems, the roof and the structure of the Premises shall be delivered in good working order and condition and Landlord’s Work shall be completed in accordance with applicable Law; and (iv) all new common area corridors, restrooms and Building lobby will have been completed in accordance with applicable Law. Landlord shall be responsible for the completion of punch list items as described in the Workletter and latent defects in Landlord’s Work reported to Landlord within one (1) year after the Commencement Date.

ARTICLE 6

Use and Rules

(A)

Tenant shall use the Premises for offices and for no other purpose whatsoever, in compliance with the “LIRP” zoning classification currently in place and all other applicable Laws and all covenants, conditions and restrictions of record applicable to Tenant’s use or 

6

occupancy of the Premises, and without disturbing or interfering with any other tenant or occupant of the Building or the Complex. Landlord has advised Tenant that Tenant’s use of the Premises as a corporate headquarters for executive office and ancillary administrative use is permitted under applicable Laws and the covenants, conditions and restrictions of record recorded against the Complex as of the date of this Lease. Tenant shall not use the Premises in any manner so as to cause a cancellation of Landlord’s insurance policies or an increase in the premiums thereunder.

(B)

The precise location of any equipment proposed by Tenant which is intended to serve the Premises and which will be located outside of the Premises within the Building or affixed to the Building or located between and among floors within the Building shall be in conformity with plans and specifications approved in writing in advance by Landlord, in Landlord’s sole discretion, and shall otherwise be in accordance with Building operating regulations. With respect to the location of equipment within the Premises, Landlord shall have the right to review and approve such initial placement and any relocation thereof, with such approval not to be unreasonably withheld or delayed.

(C)

Tenant shall not use the Premises for any unlawful purpose or in any manner that will constitute waste, nuisance or unreasonable annoyance to Landlord or any other tenant of the Building or Complex, or in any manner that will increase the number of parking spaces required for the Building or Complex at full occupancy or otherwise as required by Law.

(D)

With respect to any initial leasehold improvements to be installed by Landlord pursuant to this Lease, Landlord shall obtain the initial certificate of occupancy for the Premises. Any amended or substitute certificate of occupancy necessitated by Tenant’s particular use of the Premises or any Tenant Work or Alterations (as hereinafter defined) made by Tenant in the Premises following the Commencement Date shall be obtained by Tenant at Tenant’s sole expense; provided, however, that the foregoing shall not be construed as Landlord’s consent to any Tenant Work or Alterations of the Premises.

(E)

Tenant shall comply with, and shall cause any subtenants, assignees, occupants, invitees, employees, contractors and agents to comply with, the rules set forth in Rider One attached hereto (the “Rules”). Landlord shall have the right to reasonably amend the Rules and supplement the same with other reasonable rules not expressly inconsistent with this Lease relating to the Building or the Complex, or the promotion of safety, security, care, cleanliness or good order therein, and all such amendments or new rules shall be binding upon Tenant after five (5) days notice thereof to Tenant and shall constitute “Rules” for purposes of this Lease. The Rules shall be applied on a non-discriminatory basis, but nothing herein shall be construed to give Tenant or any other Person any claim, demand or cause of action against Landlord arising out of the violation of any Rules by any other tenant, occupant, or visitor of the Building or Complex, or out of the enforcement or waiver of the Rules by Landlord in any particular instance. To the extent of any inconsistency between the Rules and the provisions of this Lease, the provisions of this Lease shall control.

ARTICLE 7

Services and Utilities

(A)

Landlord shall provide the following services and utilities (the cost of which shall be included in Operating Expenses unless otherwise stated herein):

7

(i)

Electrical service to operate the Common Areas of the Building, and electrical capacity of not less than 8 watts per rentable square foot of the Premises to a point of connection at the Building for Tenant, as is customarily required for the use of standard and customary office lighting, electrical outlets, equipment and accessories consistent with the level of service of other office building properties of the same class, age and in the geographic vicinity of the Building. The cost of separately metering or sub-metering any electrical or other utility service, if any, shall be borne by Tenant, and Tenant shall be responsible for paying all costs and expenses associated with all electricity or other utility services used or consumed in, or provided to, the Premises.

(ii)

Air-conditioning for the Common Areas of the Building to provide a temperature required, in Landlord’s reasonable opinion and in accordance with applicable Law, under normal business operations during “Normal Business Hours” for the Building (which are 7:00 a.m. to 7:00 p.m. on Mondays through Fridays, and 8:00 a.m. to 1:00 p.m. on Saturdays, except on Holidays (as defined in Article 24).

(iii)

Cold water for drinking, lavatory and toilet purposes at those points of supply provided for nonexclusive general use of other tenants at the Building, and, subject to Landlord’s approval, water at Tenant’s expense for any private restrooms and office kitchen requested by Tenant.

(iv)

Operatorless passenger elevator service (if the Building has such equipment serving the Premises) and freight elevator service (if the Building has such equipment serving the Premises), subject to scheduling and reasonable charges by Landlord, in common with Landlord and other tenants and their contractors, agents and visitors. The passenger elevator shall be available twenty-four (24) hours per day, seven (7) days per week, subject to interruption due to maintenance, repair, replacement, and Force Majeure Delays.

(v)

Access to the Premises and the Building 24 hours per day, 365 days a year, subject to reasonable security regulations (such as providing identification to Building security personnel) imposed by Landlord during non-business hours.

(vi)

Replacement of all Building standard lighting tubes and bulbs, if any, located in Common Areas.

(B)

A base building chilled water air conditioning system is currently maintained by Duke Energy Generation Services of Boca Raton, LLC and may hereafter be maintained by another vendor designated by Landlord. Chilled water consumed by Tenant shall be separately metered. Tenant shall be responsible for the cost of the meter and installation thereof and the cost of Tenant’s HVAC and chilled water consumed in the Premises. Tenant shall have the ability to change its cooling days and hours at any time. Tenant shall be permitted to add variable air volume boxes (“VAV’s”) to the ductwork, at locations approved by Landlord, and at Tenant’s expense, to allow Tenant to cool only the Premises upon request. Landlord’s prior written approval shall be required to the plans and specifications for such VAV’s. Tenant shall have the right to install its own supplemental HVAC unit in the Premises, which may run off of the local supplier’s riser, provided that the plans and location for installation of such supplemental HVAC unit are approved by Landlord in writing in advance and all metering and installation charges and costs for consumption shall be at Tenant’s expense.

(C)

Landlord may install and operate meters or any other reasonable system for monitoring or estimating any services or utilities which are not separately metered and are used 

8

by Tenant in excess of those required to be provided by Landlord under this Article (including a system for Landlord’s engineer to reasonably estimate any such excess usage). If such system indicates such excess services or utilities, Tenant shall pay Landlord’s reasonable charges for installing and operating such system and any supplementary air-conditioning, ventilation, heat, electrical or other systems or equipment (or adjustments or modifications to the existing Systems and Equipment), and Landlord’s reasonable charges for such amount of excess services or utilities used by Tenant.

(D)

Landlord does not warrant that any services or utilities will be free from shortages, failures, variations, or interruptions caused by repairs, maintenance, replacements, improvements, alterations, changes of service, strikes, lockouts, labor controversies, accidents, inability to obtain services, fuel, steam, water or supplies, governmental requirements or requests, or other causes beyond Landlord’s reasonable control (each, a “Force Majeure Interruption”). None of the same shall be deemed an eviction or disturbance of Tenant’s use and possession of the Premises or any part thereof, or render Landlord liable to Tenant for abatement of Rent (except as provided in the last sentence of this Section 7(D)), or relieve Tenant from performance of Tenant’s obligations under this Lease. Landlord in no event shall be liable for damages by reason of loss of profits, business interruption or other consequential damages. In the event that services or utilities that Landlord is obligated to provide pursuant to this Lease are interrupted and such interruption is in Landlord’s reasonable control and renders a material portion of the Premises untenantable and Tenant actually ceases operation of its business in such portion of the Premises as a result thereof, then, except as otherwise provided in Article 12 hereof (which provisions shall govern the occurrence of an event described in such Article), then (i) if such condition continues for a period of more than three (3) consecutive business days, Tenant shall be entitled to an abatement of Base Rent and Additional Rent on a proportionate basis with respect to the applicable portion of the Premises for the period of time from the beginning of the three (3) business day period until the day preceding the earlier of the date on which (x) such services or utilities are restored in a manner fit for Tenant’s normal use of the Premises, and (y) Tenant recommences operation of its business in the applicable portion of the Premises, and (ii) if such condition continues for more than sixty (60) days and such condition is in Landlord’s control, the Tenant shall have the right to terminate the Lease upon written notice to Landlord.

(E)

Landlord agrees to provide and maintain an electronically controlled access system for the Common Areas of the Building during the Term (“Electronic Access System”); provided, however, that no representation or warranty with respect to the adequacy, completeness or integrity of the Electronic Access System is made by Landlord, and except for losses attributable to Landlord’s gross negligence or willful misconduct, the risk that any such system or entrance may not be effective, or may malfunction, or be circumvented by a criminal, is assumed by Tenant with respect to Tenant’s property and interest, and Tenant shall obtain insurance coverage to the extent Tenant desires protection against such criminal acts and other losses. Landlord reserves the right to modify, supplement or revise the access system at any time in its reasonable judgment. Said access system is not intended to serve as security for the Premises or otherwise for individual tenant-occupied spaces or suites. Tenant shall be responsible for the cost of all access cards issued with respect to the Premises for the Electronic Access System.

(F)

Tenant shall have the right to provide and maintain a security system within the Premises in accordance with plans and specifications approved by Landlord in accordance with the approval process set forth in the Workletter, or, in the event that such system is installed after completion of the Tenant Work, in accordance with the approval of Alterations under 

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Article 8; provided that Tenant shall provide Landlord with either the necessary codes and keys to gain access to the Premises or an emergency contact person to provide access to the Premises on a 24-hour-a-day, 365-day-a-year basis. Except in the event of an emergency, Landlord shall not modify or suspend Tenant’s security system without Tenant’s prior written consent. In the event of an emergency, if the emergency contact person is not available when needed to provide access, Landlord will have the right to gain access to the Premises by whatever means is reasonably necessary provided that Landlord determines in its reasonable judgment that emergency conditions necessitate such access, and, in such event, Landlord shall not be responsible for any damage caused thereby. Tenant shall be solely responsible for repair of such damage at its sole cost and expense.

(G)

In the event that the Premises is not separately metered, Landlord shall have the exclusive right (i) to choose the company or companies to provide electrical service to the Complex, the Building and the Premises, (ii) to aggregate the electrical service for the Complex, the Building and the Premises with other buildings or properties, (iii) to purchase electrical service through an agent, broker or buyer’s group, and (iv) to change the electrical service provider or manner of purchasing electrical service from time to time. Landlord shall be entitled to receive a reasonable fee (over and above any management fees or other fees) for the services Landlord performs in connection with the selection of utility companies and the administration and negotiation of contracts for the provision of electrical service.

(H)

Landlord shall have no responsibility for the rendering of telephone service to the Premises and Tenant shall arrange for and shall pay directly to the company furnishing the same all charges for such services used in the Premises.

(I)

Subject to the terms contained herein, Landlord reserves the right to interrupt air conditioning, elevator, plumbing, or electrical service, when, in Landlord’s reasonable judgment, such interruption is deemed necessary by reason of accident, emergency or for repairs, alterations, replacements or improvements thereto, provided that Landlord will notify Tenant in advance, except in the case of an emergency, of any such interruption and, if ascertainable, its estimated duration, and will undertake with reasonable diligence the work reasonably necessary to resume such service as promptly as reasonably possible and in a manner and at times so as not to unduly interfere with or impair Tenant’s use and enjoyment of the Premises.

(J)

Upon Tenant’s request, Landlord and Tenant shall enter into a Supplement to Lease for Emergency Standby Electric Power Service in the form of Exhibit C-1 attached hereto and made a part hereof pursuant to which Tenant shall contract for emergency standby electric power service in accordance with the rate schedule set forth in Exhibit C-2 attached hereto and made a part hereof.

ARTICLE 8

Alterations and Liens

(A)

Tenant shall make no additions, changes, alterations or improvements (the “Alterations”) to the Premises or the Systems and Equipment (as defined in Article 24) pertaining to the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Tenant may make non-structural, cosmetic Alterations which do not affect Systems and Equipment or cost in excess of $50,000 in any single instance without Landlord’s consent but otherwise in accordance with the provisions of the Lease. Landlord may impose reasonable requirements as a condition of such consent, including, without limitation, the submission of plans and specifications for Landlord’s 

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prior written approval, which consent shall not be unreasonably withheld or delayed, obtaining necessary permits, posting bonds, obtaining insurance, prior approval of contractors, subcontractors and suppliers, prior receipt of copies of all contracts and subcontracts, contractor and subcontractor lien waivers, affidavits listing all contractors, subcontractors and suppliers, use of union labor (if Landlord uses union labor), affidavits from engineers acceptable to Landlord stating that the Alterations will not adversely affect the Systems and Equipment or the structure of the Building or the Complex, and requirements as to the manner and times in which such Alterations shall be done. All Alterations shall be performed (i) in a good and workmanlike manner and all materials used shall be of a quality comparable to or better than those in the Premises and Building, (ii) in accordance with plans and specifications approved by Landlord, and (iii) in accordance with all applicable legal requirements and requirements of any insurance company insuring the Building or portion thereof. Landlord may require that all such Alterations be performed under Landlord’s supervision. In all cases, Tenant shall pay Landlord a reasonable fee not to exceed $1,000 to cover Landlord’s overhead in reviewing Tenant’s plans and specifications and performing any supervision of the Alterations. If Landlord consents or supervises, the same shall not be deemed a warranty as to the adequacy of the design, workmanship or quality of materials, and Landlord hereby expressly disclaims any responsibility or liability for the same. Landlord shall under no circumstances have any obligation to repair, maintain or replace any portion of the Alterations.

(B)

In accordance with the applicable provisions of the Florida Construction Lien Law and specifically Florida Statutes, Section 713.10, no interest of Landlord whether personally or in the Premises, or in the underlying land or Building of which the Premises are a part, or the leasehold interest aforesaid shall be subject to liens for improvements made by Tenant or caused to be made by Tenant hereunder. Further, Tenant shall have no power or authority to create any lien or permit any lien to attach to the present estate, reversion, or other estate of Landlord in the Premises or in the Building, and all mechanics, materialmen, contractors, artisans and other parties contracting with Tenant or its representatives or privies as to the Premises or any part of the Premises are hereby charged with notice that they must look to the Tenant to secure payment of any bill for work done or material furnished or for any other purpose during this Lease term. The foregoing provisions are made with express reference to Section 713.10 of the Florida Statutes. Landlord has recorded or will record a notice of the foregoing in the Public Records of Palm Beach County, Florida, pursuant to the provisions of Section 713.10 Florida Statutes.

(C)

Tenant shall keep the Complex, the Building and the Premises free from any mechanic’s, materialman’s or similar liens or other such encumbrances in connection with any Alterations on or respecting the Premises not performed by or at the request of Landlord, and shall indemnify and hold Landlord harmless from and against any claims, costs, damages, liabilities, judgments, and expenses (including attorneys’ fees) arising out of the same or in connection therewith. Tenant shall give Landlord notice at least twenty (20) days prior to the commencement of any Alterations on the Premises (or such additional time as may be necessary under applicable Laws), to afford Landlord the opportunity of posting and recording appropriate notices of non-responsibility. In all events Tenant will notify Landlord in writing, for Landlord’s approval, of the identities of any contractors or subcontractors Tenant proposes to use in the Premises at least ten (10) days prior to the beginning of work by any such contractors or subcontractors.

(D)

Notwithstanding the foregoing, if any mechanic’s or other lien shall be filed against the Premises, the Building or the Complex purporting to be for labor or materials furnished or to be furnished at the request of Tenant, then Tenant shall at its expense cause 

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such lien to be discharged by payment or posting of a cash or surety bond (in a manner and an amount, and with a bonding company, satisfactory to Landlord in its sole discretion), or other means satisfactory to Landlord within ten (10) days after written notice to Tenant thereof. If Tenant shall fail to take such action within such ten (10) day period, Landlord may cause such lien to be discharged by payment, bond or otherwise, without investigation as to the validity thereof or as to any offsets or defenses thereto (without limitation as to other remedies available to Landlord under this Lease), and Tenant shall reimburse Landlord for the cost of discharging such lien plus interest thereon at the rate of eighteen percent (18%) per annum, together with an administrative fee of Two Thousand Five Hundred Dollars (“$2,500.00”). Tenant shall indemnify and hold harmless Landlord against any and all claims, costs, damages, liabilities, judgments, and expenses (including attorneys’ fees) which may be brought or imposed against or incurred by Landlord by reason of any such lien or its discharge, and all such sums shall be deemed to be Rent and immediately due and payable upon demand by Landlord.

(E)

Consent to an Alteration shall not constitute consent or authorization by Landlord to the placement of financing by Tenant relating to the Alterations that purports to create any security interest in the Building or that purports to subordinate this Lease to any such financing, and any such effort or agreement by Tenant shall constitute a Default.

(F)

During the construction of any Tenant Work or subsequent Alterations and in the course of the operation of the Building, Landlord shall have authority to reasonably coordinate access to loading areas, freight elevators (if any), the roof, shafts, space and other areas of the Building, and to adopt reasonable rules and regulations pertaining to same, and to approve such Tenant access in accordance with Landlord’s reasonable determination. Tenant will also cause its contractor(s) to coordinate their use of and access to the foregoing with Landlord’s base building contractor, which will have authority to approve such access during construction in accordance with Landlord’s reasonable determination.

ARTICLE 9

Repairs

(A)

Except for damage covered under Article 10 and Landlord’s responsibility to maintain the structural components of the Premises, Tenant shall keep the Premises in good and sanitary condition, working order and repair (including, without limitation, carpet, wall-covering, doors, plumbing and other fixtures, equipment, alterations and improvements whether installed by Landlord or Tenant). In the event that any repairs, maintenance or replacements are required for any item for which Tenant is responsible for under the Lease, Tenant shall promptly arrange for the same either through Landlord for such reasonable charges as Landlord may from time to time establish, or such contractors as Landlord generally uses at the Complex or at the Building or such other contractors as Landlord shall first approve in writing, and in a first class, workmanlike manner approved by Landlord in advance in writing. If Tenant does not promptly make such arrangements after five (5) business days prior written notice to Tenant, Landlord may, but need not, make such repairs, maintenance and replacements, and the costs paid or incurred by Landlord therefor shall be reimbursed by Tenant as Rent within five (5) business days after request by Landlord (together with a service charge for Landlord’s administrative services, in an amount equal to the charge customarily assessed by Landlord to other tenants of the Building for similar work, provided such charge shall in no event exceed fifteen percent (15%) of the actual cost to Landlord of such work). Except for repairs, maintenance and replacements to areas of the Building or the Complex outside the Premises, caused, in whole or in part, as a result of (a) moving any furniture, fixtures, or other property to 

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or from the Premises, or by Tenant or its employees, agents, invitees, licensees, subtenants, visitors or contractors, or (b) the negligence or willful misconduct of Tenant or its employees, agents, invitees, licensees, subtenants, visitors or contractors, or for damage covered under Article 10, Landlord shall, at its sole cost and expense, keep the structure of the Premises, Building and Complex and Common Areas (as defined in Article 24) of the Building and Complex and the Systems and Equipment in a clean and good and sanitary condition, first-class working order and repair and in compliance with applicable Law (the cost of which shall be included in Operating Expenses, as described in Article 24, except as limited therein). Notwithstanding anything to the contrary, the cost of all repairs, and maintenance for the structural components of the Premises, Building and Complex as well as the mechanical systems servicing the Premises shall not be passed through as Operating Expenses except as may be otherwise expressly permitted under this Lease.

(B)

Landlord, its employees, agents, and authorized contractors shall have the right to enter the Premises at all reasonable hours (upon prior notice to Tenant delivered to the Premises except in an emergency) for the purpose of making such alterations, repairs, improvements or additions to the Premises as are otherwise permitted or required to be made by Landlord under this Lease or such alterations, repairs, improvements or additions to the Building or the Complex as Landlord may deem necessary or desirable. In the event of any work undertaken by Landlord in the Premises for the purpose of making alterations, repairs, improvements or additions to the Building or the Complex, Landlord agrees, at Tenant’s option, either to repair any physical damage directly caused by any such work to Tenant’s leasehold improvements, fixtures, merchandise and other physical property located within the Premises or reimburse Tenant for the reasonable expenses incurred by Tenant in order to effect such repairs, provided that Landlord shall not be liable for any such repairs to the extent such repairs are covered by Tenant’s insurance or would be covered by insurance required to be carried by Tenant under this Lease. Landlord agrees to use reasonable means to minimize interference with Tenant’s business or damage to, or loss of, Tenant’s property in the Premises on account of such entry by Landlord. If representatives of Tenant shall not be present to open and permit entry into the Premises at any time when such entry by Landlord is necessary or permitted hereunder, Landlord, its employees and agents may enter by means of a master key (or forcibly in the event of an emergency) without liability to Tenant for such entry and without such entry constituting an eviction of Tenant or termination of this Lease. There shall be no abatement of Rent because of any repairs, alterations, additions or improvements to the Premises, Building or Complex, except as otherwise provided in Article 10 hereof.

ARTICLE 10

Casualty Damage

(A)

If the Premises, or any Common Areas of the Building or of the Complex providing access thereto, shall be damaged by fire or other casualty, Landlord shall use available insurance proceeds to restore the same. Such restoration shall be to substantially the condition prior to the casualty, except for modifications required by zoning and building codes and other Laws or by any Holder (as defined in Article 24), any other modifications to the Common Areas deemed desirable by Landlord (provided access, size and configuration to the Premises is not materially impaired), and except that Landlord shall not be required to repair or replace any of Tenant Work or any Tenant’s furniture, furnishings, fixtures, equipment or other personal property or any Alterations or other improvements in excess of any work performed by Landlord under the terms and provisions of the Workletter or any separate agreement therefor signed by the parties hereto. Landlord agrees to give Tenant written notice within sixty (60) days 

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of the date of the fire or other casualty of the estimated duration of the repair or restoration required or Landlord’s election to terminate the Lease if permitted under clauses (a) through (d) below. If the estimated time for repair or restoration exceeds two hundred seventy (270) days, Tenant shall have the right to terminate this Lease within thirty (30) days of Landlord’s original notice to Tenant. Landlord shall not be liable for any inconvenience or annoyance to Tenant or its visitors, or injury to Tenant’s business resulting in any way from such damage or the repair thereof. However, Landlord shall allow Tenant a proportionate abatement of Rent (Base Rent and Additional Rent) during the time and to the extent the Premises are unfit for occupancy for the purposes permitted under this Lease and not occupied by Tenant as a result thereof (unless Tenant or its employees, agents, or contractors caused the damage). Notwithstanding the foregoing to the contrary, Landlord may elect to terminate this Lease if the Building or the Complex shall be materially damaged by Tenant or its employees, agents, or contractors or if the Building shall be damaged by fire or other casualty or cause such that: (a) repairs to the Premises and access thereto cannot reasonably be completed within one hundred eighty (180) days after the casualty without the payment of overtime or other premiums, (b) more than twenty-five percent (25%) of the Premises is affected by the damage, and fewer than twenty-four (24) months remain in the Term, or any material damage occurs to the Premises during the last twelve (12) months of the Term, (c) any Holder shall require that the insurance proceeds or any portion thereof be used to retire the Mortgage debt (or shall terminate the ground lease, as the case may be), or the damage is not fully covered by Landlord’s insurance policies, or (d) the cost of the repairs, alterations, restoration or improvement work would exceed twenty-five percent (25%) of the replacement value of the Building, or the nature of such work would make termination of this Lease necessary or convenient. Tenant agrees that Landlord’s obligation to restore, and the abatement of Rent and any other remedies provided herein, shall be Tenant’s sole recourse in the event of such damage, and waives any other rights Tenant may have under any applicable Law to terminate the Lease by reason of damage to the Premises, the Building or the Complex. If this Lease has not been sooner terminated by Landlord or Tenant and the repair or restoration is not completed within two hundred seventy (270) days after the date of the fire or other casualty for any reason, including Force Majeure Delay, Tenant may terminate this Lease upon thirty (30) days notice to Landlord, provided that if the repair or restoration is completed within such thirty (30) day period, Tenant’s termination of this Lease shall be null and void and this Lease shall continue in full force and effect in accordance with its terms.

(B)

Landlord shall in no event be obligated to restore any Tenant Work or Alterations made by Tenant, all of which shall be the sole responsibility of Tenant to restore, at Tenant’s sole expense.

ARTICLE 11

Insurance, Subrogation, and Waiver of Claims

Tenant shall maintain during the Term commercial general liability insurance, with limits of not less than Two Million Dollars ($2,000,000) per occurrence and Three Million Dollars ($3,000,000), in the aggregate, combined single limit for personal injury, bodily injury or death, or property damage or destruction (including loss of use thereof) for any one occurrence. Tenant shall also maintain during the Term worker compensation insurance as required by statute, business interruption insurance and “all-risk” property damage insurance covering any Tenant Work or Alterations, Tenant’s personal property, business records, fixtures and equipment for, damage or other loss caused by fire or other casualty or cause including, but not limited to, vandalism and malicious mischief, theft, water damage of any type, including sprinkler 

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leakage, bursting or stoppage of pipes, explosion, business interruption, and other insurable risks in amounts not less than the full insurable replacement value of such property and full insurable value of such other interests of Tenant (subject to reasonable deductible amounts). Neither the issuance of any insurance policy required hereunder nor the minimum limits specified herein with respect to Tenant’s insurance coverage shall be deemed to limit or restrict in any way Tenant’s liability arising under or out of this Lease. Landlord shall, as part of Operating Expenses, maintain during the Term commercial general liability insurance, with limits of not less than Five Million Dollars ($5,000,000) combined single limit for personal injury, bodily injury or death, or property damage or destruction (including loss of use thereof) for any one occurrence. Landlord shall also, as part of Operating Expenses, maintain during the Term worker compensation insurance as required by statute, and primary, non-contributory, extended coverage or “all-risk” property damage insurance, in an amount equal to at least ninety percent (90%) of the full insurable replacement value of the Building (exclusive of the costs of excavation, foundations and footings, and such risks required to be covered by Tenant’s insurance, and subject to reasonable deductible amounts), or such other amount necessary to prevent Landlord from being a co-insured, and such other coverage as Landlord shall deem appropriate or that may be required by any Holder. Tenant agrees upon written request of Landlord, but not more frequently than one per calendar year, to increase the minimum limits of its respective insurance coverage described above from time to time as reasonably necessary in order to reasonably protect the interests of the parties hereto insured thereby, provided such increases are consistent with the increases of other landlords of comparable office building properties in the vicinity of the Complex.

Tenant shall provide Landlord with certificates evidencing such coverage (showing Landlord, Landlord’s managing agent, Landlord’s lender(s) as may exist from time to time, and any other person from time to time designated in writing by notice from Landlord to Tenant as additional insureds) prior to the Commencement Date, which shall state that such insurance coverage may not be changed or cancelled without at least thirty (30) days’ prior written notice to Landlord, and shall provide renewal certificates to Landlord at least thirty (30) days prior to expiration of such policies. Except as provided to the contrary herein, any insurance carried by Landlord or Tenant shall be for the sole benefit of the party carrying such insurance. Any insurance policies hereunder may be “blanket policies” provided that the minimum limits of coverage required under this Article 11 are met. All insurance required hereunder shall be provided by responsible insurers and Tenant’s insurer shall be reasonably acceptable to Landlord. By this Article, Landlord and Tenant intend that their respective property loss risks shall be borne by responsible insurance carriers to the extent above provided, and Landlord and Tenant hereby agree to look solely to, and seek recovery only from, their respective insurance carriers in the event of a property loss to the extent that such coverage is agreed to be provided hereunder. The parties each hereby waive all rights and claims against each other for such losses, and waive all rights of subrogation of their respective insurers. The parties agree that their respective insurance policies are now, or shall be, endorsed such that said waiver of subrogation shall not affect the right of the insured to recover thereunder, so long as no material additional premium is charged therefor.

ARTICLE 12

Condemnation

If the whole or any material part of the Premises, the Building or the Complex shall be taken by power of eminent domain or condemned by any competent authority for any public or quasi-public use or purpose, or if any adjacent property or street shall be so taken or 

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condemned, or reconfigured or vacated by such authority in such manner as to require the use, reconstruction or remodeling of any part of the Premises, the Building or the Complex, or if Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation, Landlord shall have the option to terminate this Lease upon ninety (90) days notice, provided such notice is given no later than ninety (90) days after the date of such taking, condemnation, reconfiguration, vacation, deed or other instrument. Tenant shall have reciprocal termination rights if the operation of Tenant’s business in the ordinary course as conducted immediately prior to the taking or access to the Premises is materially impaired, for the remainder of the Lease Term, as determined by Tenant in its commercially reasonable judgment. If neither condition exists, this Lease shall continue in full force and effect as to the part of the Premises not condemned, except that as of the date title vests in such authority Tenant shall not be required to pay Base Rent and Additional Rent with respect to the part of the Premises condemned. All awards, damages and other compensation paid by such authority on account of such condemnation shall belong to Landlord, and Tenant assigns to Landlord all rights to such awards, damages and compensation. Tenant shall not make any claim against Landlord or the authority for any portion of such award, damages or compensation attributable to damage to the Premises, value of the unexpired portion of the Term, loss of profits or goodwill, leasehold improvements or severance damages. Nothing contained herein, however, shall prevent Tenant from pursuing a separate claim against the authority for the value of furnishings and trade fixtures installed in the Premises at Tenant’s expense and for relocation expenses, provided that such claim shall in no way diminish the award, damages or compensation payable to or recoverable by Landlord in connection with such condemnation.

ARTICLE 13

Return of Possession

At the expiration or earlier termination of this Lease or Tenant’s right of possession to the Premises, Tenant shall surrender possession of the Premises in the condition required under Article 9, ordinary wear and tear excepted, and shall surrender all keys, any key or access cards, and any parking stickers or cards, to Landlord, and advise Landlord as to the combination of any locks or vaults then remaining in the Premises, and shall remove all trade fixtures and personal property. Except as otherwise provided in this Lease, all improvements, fixtures and other items in or upon the Premises (except trade fixtures, furniture, equipment and other personal property belonging to Tenant), whether installed by Tenant or Landlord, shall be Landlord’s property and shall remain upon the Premises, all without compensation, allowance or credit to Tenant. However, Tenant shall promptly remove any items for which Landlord specifically required removal as a condition to the granting of its approval, provided, however, Landlord shall not require removal of customary office improvements installed by Tenant. If Tenant shall fail to perform any repairs or restoration, or fail to remove any items from the Premises or the Complex required hereunder, Landlord may do so, and Tenant shall pay Landlord the cost thereof upon demand with interest at the Default Rate (as hereinafter defined) from the date funds are expended until reimbursement by Tenant. All property removed from the Premises or the Complex by Landlord pursuant to any provisions of this Lease or any Law may be handled or stored by Landlord at Tenant’s expense, and Landlord shall in no event be responsible for the value, preservation or safekeeping thereof. All property which is not removed from the Premises or which is not retaken from storage by Tenant within thirty (30) days after expiration or earlier termination of this Lease or of Tenant’s right to possession to the Premises, shall at Landlord’s option be conclusively deemed to have been conveyed by Tenant to Landlord as if by bill of sale without payment by Landlord. Unless prohibited by applicable Law, 

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Landlord shall have a lien against such property for the costs incurred in removing and storing the same.

ARTICLE 14

Holding Over

Tenant shall have no right to occupy the Premises or any portion thereof after the Expiration Date or after termination of this Lease or of Tenant's right to possession pursuant to Article 22 hereof. If Tenant, or any party claiming by, through or under Tenant, does not immediately surrender the Premises upon the expiration or earlier termination of the Lease Term, Tenant shall become a tenant by the month and the rent shall be increased to equal the greater of (a) fair market rent for the Premises, or (b) double the Base Rent, Additional Rent and other sums (plus applicable state and local sales and use taxes due thereon) that would have been payable pursuant to the provisions of this Lease if the Term of this Lease had continued during such holdover period (the “Applicable Rent”), together with all damages sustained by Landlord on account thereof. The Applicable Rent shall be computed on a monthly basis and shall be payable on the first day of such holdover period and the first day of each calendar month thereafter during such holdover period until the Premises have been vacated. In addition, at any time while Tenant remains in possession, Landlord may also elect, by written notice to Tenant and not otherwise, to have such retention of possession constitute an extension of this Lease for one (1) year at two hundred percent (200%) of the Applicable Rent. Landlord’s acceptance of such rent shall not constitute consent by Landlord to Tenant’s holdover possession and shall not in any manner adversely affect Landlord’s other rights and remedies, including Landlord’s right to evict Tenant and to recover damages. Landlord’s acceptance of such rent or any lesser sum shall be construed as a payment on account and not in satisfaction of damages for such holding over. In addition, Landlord may exercise any and all remedies available to it at law or in equity to recover possession of the Premises, and for damages.

ARTICLE 15

No Waiver

No provision of this Lease will be deemed waived by either party unless expressly waived in writing signed by the waiving party. No waiver shall be implied by delay or any other act or omission of either party. No waiver by either party of any provision of this Lease shall be deemed a waiver of such provision with respect to any subsequent matter relating to such provision, and Landlord’s consent or approval respecting any action by Tenant shall not constitute a waiver of the requirement for obtaining Landlord’s consent or approval respecting any subsequent action. Acceptance of Rent by Landlord shall not constitute a waiver of any breach by Tenant of any term or provision of this Lease. No acceptance of a lesser amount than the Rent herein stipulated shall be deemed a waiver of Landlord’s right to receive the full amount due, nor shall any endorsement or statement on any check or payment or any letter accompanying such check or payment be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the full amount due. The acceptance of Rent or of the performance of any other term or provision from any Person other than Tenant, including any Transferee, shall not constitute a waiver of Landlord’s right to approve any Transfer.

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ARTICLE 16

Attorneys’ Fees and Jury Trial

(A)

In the event of any litigation between the parties, the prevailing party shall be entitled to obtain, as part of the judgment, all reasonable attorneys’ fees, costs and expenses incurred in connection with such litigation, except as may be limited by applicable Law.

(B)

Landlord and Tenant waive trial by jury in any action, proceeding, claim or counterclaim brought in connection with any matter arising out of or in any way connected with this Lease, the landlord-tenant relationship, Tenant’s use or occupancy of the Premises or any claim of injury or damage. Tenant consents to service of process and any pleading relating to any such action at the Premises; provided, however, that nothing herein shall be construed as requiring such service at the Premises. Landlord and Tenant waive any objection to the venue of any action filed in any court situated in the jurisdiction in which the Building is located and waive any right under the doctrine of forum non conveniens or otherwise, to transfer any such action filed in any such court to any other court.

ARTICLE 17

Personal Property Taxes, Rent Taxes and Other Taxes

Tenant shall pay, within thirty (30) days of notice thereof, but in any event before delinquency, any personal property, business, rent or other taxes or fees that are now or hereafter levied, assessed or imposed upon Tenant’s use or occupancy of the Premises, the conduct of Tenant’s business in the Premises or Tenant’s equipment, fixtures, furnishings, inventory or personal property. If any such tax or fee is enacted or altered so that such tax or fee is levied against Landlord or so that Landlord is responsible for collection or payment thereof, Tenant shall pay to Landlord as Additional Rent the amount of such tax or fee (plus applicable state and local sales and use taxes due thereon) within thirty (30) days of its having been assessed, but in no event in a fashion as to constitute a delinquency in the payment of such taxes, fees or assessments. Tenant shall also promptly pay any sales or use tax or other local tax now or hereafter in existence that is imposed. Any sales or use taxes imposed on Rent shall be paid by Tenant to Landlord simultaneously with the monthly payment of Base Rent. All tax obligations hereunder shall be deemed Additional Rent.

ARTICLE 18

Subordination, Attornment and Mortgagee Protection

Subject to the provisions contained herein, this Lease is subject and subordinate to all Mortgages (as defined in Article 24) now or hereafter placed upon the Building or the Complex, provided such Mortgage holder shall agree to provide a non-disturbance instrument in customary form by which such Mortgage holder accepts this Lease and Tenant’s rights hereunder and shall not disturb Tenant’s quiet possession in the event of a foreclosure or deed in lieu of foreclosure, so long as Tenant does not default and fail to cure within the time permitted hereunder. If any foreclosure proceedings are initiated by any Holder or a deed in lieu is granted, Tenant agrees to attorn and pay Rent to any Holder which is a successor to Landlord hereunder or a purchaser at a foreclosure sale and to execute and deliver any instruments necessary or appropriate to evidence or effectuate such attornment (provided such Holder or purchaser shall agree to accept this Lease and not disturb Tenant’s occupancy, so long as 

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Tenant does not default and fail to cure within the time permitted hereunder). Any Holder may elect to make this Lease prior to the lien of its Mortgage, by written notice to Tenant, and if the Holder of any prior Mortgage shall require, this Lease shall be prior to any subordinate Mortgage. Tenant shall execute such documentation as Landlord may reasonably request from time to time, in order to confirm the matters set forth in this Article in recordable form. As long as any Mortgage is outstanding, Tenant agrees that Tenant shall not cancel, surrender, terminate, assign, amend or modify, or enter into any agreement to cancel, surrender, terminate, assign, amend or modify the Lease, without the prior written approval of such holder. A cancellation or surrender of this Lease without the prior written consent of the Holder (except as may be specifically contemplated under this Lease) which is in violation of the foregoing prohibition shall be voidable. In the event of any default on the part of Landlord arising out of or accruing under this Lease, whereby the validity or the continued existence of this Lease might be impaired or terminated by Tenant, or Tenant might have a claim for partial or total eviction or abatement of rent, Tenant shall not pursue any of its rights with respect to such default or claim, and no notice of termination of this Lease as a result of such default shall be effective, unless and until Tenant has given written notice of such default or claim to the applicable Holder simultaneously with its notice to Landlord (provided that Landlord has provided Tenant in writing with the appropriate notice address for such Holder) and granted to such Holder the period of time granted to Landlord under the Lease to cure or to undertake the elimination of the basis for such default or claim; it being expressly understood that such Holder’s right to cure any such default or claim shall not be deemed to create any obligation for such Holder to cure or to undertake the elimination of any such default or claim and will not toll any cure periods provided for under the Lease.

Notwithstanding anything to the contrary set forth in this Article 18, Landlord agrees to use commercially reasonable efforts to obtain from the Holder of the current Mortgage on the Complex, a Subordination, Non-Disturbance and Attornment Agreement substantially in the form of Exhibit D attached hereto and made a part hereof (“SNDA”) within thirty (30) days of the execution of this Agreement. If, notwithstanding Landlord’s commercially reasonable efforts to do so, Landlord is unable to obtain the SNDA by September 1, 2008, Tenant, as its sole and exclusive remedy, may terminate this Lease whereupon neither party shall have any further rights or obligations hereunder, provided that (i) Landlord shall promptly return any prepaid Rent and the Security Deposit to Tenant, and (ii) all provisions of this Lease which expressly survive the expiration or earlier termination of this Lease shall remain in full force and effect in accordance with their respective terms.

ARTICLE 19

Estoppel Certificate

Landlord and Tenant shall each from time to time (in such capacity, “Responding Party”), within ten (10) business days after written request from the other party (“Requesting Party’), execute, acknowledge and deliver a statement certifying that (i) this Lease is unmodified and in full force and effect or, if modified, stating the nature of such modification and certifying that this Lease as so modified, is in full force and effect (or if this Lease is claimed not to be in force and effect, specifying the ground therefor) and any dates to which the Rent has been paid in advance, and the amount of monthly installments of Base Rent and Additional Rent, plus applicable state and local sales and use taxes due thereon, and any Security Deposit, (ii) there are not, to the Responding Party’s knowledge, any uncured defaults on the part of the Requesting Party hereunder, or specifying such defaults if any are claimed, (iii) Tenant is in possession of the Premises, if that is the case; (iv) the Responding Party has no off-sets or 

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defenses to the performance of its obligations under this Lease (or if the Responding Party believes there are any off-sets or defenses, a full and complete explanation thereof); (v) the Premises have been completed in accordance with the terms and provisions hereof or the Workletter, Tenant has accepted the Premises and the condition thereof and of all improvements thereto and has no claims against Landlord or any other party with respect thereto; and (vi) certifying as to such other matters as the Requesting Party may reasonably request, or as may be requested by the Requesting Party’s current or prospective Holders, insurance carriers, auditors, and prospective purchasers. Any such statement may be relied upon by any such parties. If the Responding Party shall fail to execute and return such statement within the time required herein, the Responding Party shall be deemed to have agreed with the matters set forth therein.

ARTICLE 20

Assignment and Subletting

(A)

Transfers. Tenant shall not, without the prior written consent of Landlord, which consent shall not be unreasonably withheld, as further described below: (i) assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, by operation of law or otherwise, (ii) sublet the Premises or any part thereof, or (iii) permit the occupancy of the Premises by any Persons (as defined in Article 24) other than Tenant and its employees (all of the foregoing are hereinafter sometimes referred to collectively as “Transfers” and any Person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a “Transferee”). If Tenant shall desire Landlord’s consent to any Transfer, Tenant shall notify Landlord in writing, which notice shall include: (a) the proposed effective date (which shall not be less than thirty (30) nor more than one hundred and eighty (180) days after Tenant’s notice), (b) the portion of the Premises to be Transferred (herein called the “Subject Space”), (c) the terms of the proposed Transfer and the consideration therefor, the name and address of the proposed Transferee, and a copy of all documentation pertaining to the proposed Transfer, and (d) current financial statements of the proposed Transferee certified by an officer, partner or owner thereof, and any other information to enable Landlord to determine the financial responsibility, character, and reputation of the proposed Transferee, nature of such Transferee’s business and proposed use of the Subject Space, and such other information as Landlord may reasonably require. If Landlord requests additional information, Tenant’s notice will not be deemed to have been received and Landlord may withhold consent to such Transfer until Landlord receives and has a reasonable opportunity to review such additional information. Any Transfer made without complying with this Article shall, at Landlord’s option, be null, void and of no effect, or shall constitute a Default under this Lease. Whether or not Landlord shall grant consent, Tenant shall pay $1,000.00 towards Landlord’s review and processing expenses, as well as any reasonable legal fees incurred by Landlord, within thirty (30) days after written request by Landlord.

(B)

Approval. Landlord will not unreasonably withhold its consent to any proposed Transfer of the Subject Space to the Transferee on the terms specified in Tenant’s notice and will endeavor to respond to Tenant’s request (accompanied by all documentation required under Section 20(A) above) within fifteen (15) business days of submission. The parties hereby agree that it shall be reasonable under this Lease and under any applicable Law for Landlord to withhold consent to any proposed Transfer where one or more of the following applies (without limitation as to other reasonable grounds for withholding consent): (i) the Transferee is of a character or reputation or engaged in a business which is not consistent with the quality of the Complex, or would be a significantly less prestigious occupant of the Complex than Tenant, (ii) 

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the Transferee intends to use the Subject Space for purposes which are not permitted under this Lease, (iii) the Subject Space is not regular in shape with appropriate means of ingress and egress suitable for normal renting purposes, (iv) the Transferee is either a government (or agency or instrumentality thereof) or an occupant of the Complex, (v) the proposed Transferee does not have a reasonable financial condition in relation to the obligations to be assumed in connection with the Transfer, (vi) Tenant has committed and failed to cure a Default at the time Tenant requests consent to the proposed Transfer, (vii) in the judgment of Landlord, such a Transfer would violate any term, condition, covenant, or agreement of the Landlord involving the Complex or any other tenant’s lease within it; or (viii) any other basis which Landlord reasonably deems appropriate. If Landlord wrongfully withholds its consent to any Transfer, Tenant’s sole and exclusive remedy therefor shall be to seek specific performance of Landlord’s obligation to consent to such Transfer.

(C)

Transfer Premium. If Landlord consents to a Transfer, and as a condition thereto which the parties hereby agree is reasonable, Tenant shall pay Landlord fifty percent (50%) of any Transfer Premium derived by Tenant from such Transfer. “Transfer Premium” shall mean all rent, additional rent or other consideration paid by such Transferee in excess of the Rent payable by Tenant under this Lease (on a monthly basis during the Term, and on a per rentable square foot basis, if less than all of the Premises is transferred), after deducting therefrom (on a monthly basis) the reasonable expenses incurred by Tenant, amortized over the balance of the Term, for any changes, alterations and improvements to the Premises, any other economic concessions or services provided to the Transferee, and any customary brokerage commissions paid in connection with the Transfer if acceptable written evidence of such expenditures is provided in advance to Landlord. If part of the consideration for such Transfer shall be payable other than in cash, Landlord’s share of such non-cash consideration shall be in such form as is reasonably satisfactory to Landlord. The percentage of the Transfer Premium due Landlord hereunder shall be paid within ten (10) days after Tenant receives any Transfer Premium from the Transferee. The provisions of this Section 20(C) shall not be applicable to a Tenant Affiliate.

(D)

Recapture. Notwithstanding anything to the contrary contained in this Article, Landlord shall have the option, by giving written notice to Tenant within thirty (30) days after receipt of Tenant’s notice of any proposed Transfer, to recapture the Subject Space. Such recapture notice shall cancel and terminate this Lease with respect to the Subject Space as of the date stated in Tenant’s notice as the effective date of the proposed Transfer (or at Landlord’s option, shall cause the Transfer to be made to Landlord or its agent, in which case the parties shall execute the Transfer documentation promptly thereafter). If this Lease shall be canceled with respect to less than the entire Premises, the Rent reserved herein shall be prorated on the basis of the number of rentable square feet retained by Tenant in proportion to the number of rentable square feet contained in the Premises, this Lease as so amended shall continue thereafter in full force and effect, and upon request of either party, the parties shall execute written confirmation of the same. The provisions of this Section 20(D) shall not be applicable to a Tenant Affiliate.

(E)

Terms of Consent. If Landlord consents to a Transfer: (a) any Transfer shall be made only if, and shall not be effective until, the Transferee shall execute, acknowledge and deliver to Landlord an agreement in form and substance reasonably satisfactory to Landlord whereby the Transferee shall assume the obligations of this Lease on the part of Tenant to be performed or observed, (b) the terms and conditions of this Lease, including among other things, Tenant’s (or any Transferee’s) liability for the Subject Space, shall in no way be deemed to have been waived or modified and the original named Tenant (and any Transferee, as the case may be) shall remain fully liable for the payment of Rent and additional Rent and for the 

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other obligations of this Lease on the part of Tenant to be performed or observed, (c) such consent shall not be deemed consent to any further Transfer by either Tenant or a Transferee, (d) except as otherwise provided in this Lease, no Transferee shall succeed to any rights provided in this Lease to terminate this Lease prior to the Expiration Date, such right being deemed personal to Tenant, (e) Tenant shall deliver to Landlord promptly after execution, an original executed copy of all documentation pertaining to the Transfer in a form reasonably acceptable to Landlord, and (f) Tenant shall furnish upon Landlord’s request a complete statement, certified by an independent certified public accountant, or Tenant’s chief financial officer, setting forth in detail the computation of any Transfer Premium Tenant has derived and shall derive from such Transfer. Landlord or its authorized representatives shall have the right at all reasonable times to audit the books, records and papers of Tenant relating to any Transfer, and shall have the right to make copies thereof. If the Transfer Premium respecting any Transfer shall be found understated, Tenant shall within thirty (30) days after demand pay the deficiency, and if understated by more than two percent (2%), Tenant shall pay Landlord’s costs of such audit. Any sublease hereunder shall be subordinate and subject to the provisions of this Lease, and if this Lease shall be terminated during the term of any sublease, Landlord shall have the right to: (i) treat such sublease as canceled and repossess the Subject Space by any lawful means, or (ii) require that such subtenant attorn to and recognize Landlord as its landlord under any such sublease. If Tenant shall Default and fail to cure within the time permitted for cure under Section 22(A), Landlord is hereby irrevocably authorized, as Tenant’s agent and attorney-in-fact, to direct any Transferee to make all payments under or in connection with the Transfer directly to Landlord (which Landlord shall apply towards Tenant’s obligations under this Lease) until such Default is cured. 

(F)

Certain Transfers. For purposes of this Lease, the term “Transfer” shall also include (a) if Tenant is a partnership or a limited liability company, the withdrawal or change, voluntary, involuntary or by operation of law, of a majority of the partners or members, as the case may be, or a transfer of a majority of partnership interests or membership interests, as the case may be, within a twelve month period, or the dissolution of the partnership or the limited liability company, as the case may be, and (b) if Tenant is a corporation whose stock is not publicly held and not traded through an exchange or over the counter, the dissolution, merger, consolidation or other reorganization of Tenant, or within a twelve month period: (i) the sale or other transfer of more than an aggregate of fifty percent (50%) of the voting shares of Tenant (other than to immediate family members by reason of gift or death), (ii) the sale, mortgage, hypothecation or pledge of more than an aggregate of fifty percent (50%) of Tenant’s net assets, or (iii) the issuance of shares by the corporation to any new shareholders, provided that any of the foregoing results in a change of a “control” of Tenant.

(G)

Permitted Transfers. Notwithstanding anything to the contrary in this Article 20, Tenant may permit the Premises to be used by, or may sublease the Premises or assign this Lease to (i) Tenant’s parent company, (ii) any party which is wholly owned or controlled by Tenant of which owns or controls Tenants or which is owned by a company which owns of controls Tenant, or (iii) any party into which Tenant is merged, consolidated or reorganized, or to which all or substantially all of Tenant’s assets or stock are sold, without Landlord’s consent, provided: (a) Landlord shall receive a copy of the executed transfer document promptly after execution, (b) Tenant shall remain liable under this Lease, (c) the Transferee shall expressly assume and agree to perform all of Tenant’s obligations under this Lease, (d) Tenant is not then in Default beyond any applicable cure period, and (e) the resulting Transferee, in the case of a party described in clause (G)(ii) above, shall have a net worth which is equal to, or greater than, the net worth of Tenant immediately prior to such Transfer; such Transferee being herein referred to a “Tenant Affiliate”. No Tenant Affiliate who is an assignee shall further assign this 

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Lease and no Tenant Affiliate who is a sublessee shall assign or encumber its sublease or further sublet all or any part of the Premises to any Person other than to an entity controlling, controlled by or under common control with Tenant, except in accordance with the provisions of this Article 20 (other than this Section 20(G)) and any event resulting in such Tenant Affiliate ceasing to be an entity controlling, controlled by or under common control with Tenant shall be deemed to be a Transfer of this Lease requiring the prior consent of Landlord, and Tenant shall thereupon be required to comply with all provisions of this Article 20 (other than this Section 20(G)). For purposes of the immediately foregoing, “control,” means ownership of more than fifty percent (50%) of the issued and voting stock of a corporation, or membership interest of a limited liability company or the power to control the same, or general partnership control of a partnership. It is Landlord’s intent to permit assignment of this Lease and subletting pursuant to this Section 20(G) exclusively as an accommodation to the bona fide and legitimate business needs of Tenant, and notwithstanding the provisions hereof, no assignment of this Lease or sublease of the Premises without Landlord’s consent hereunder shall be permitted where the sole or primary purpose of such assignment or subletting is to Transfer this Lease or to permit occupancy of the Premises by a third party in avoidance of Landlord’s consent, or in the case of a purchase or other acquisition by any corporation or other entity of all or substantially all of Tenant’s assets, where this Lease constitutes all or a substantial portion of such assets.

ARTICLE 21

Rights Reserved By Landlord

In connection with entering the Premises to exercise any of the rights reserved by Landlord under this Article 21, Landlord shall (a) provide reasonable advance written or oral notice to Tenant’s on-site manager or other appropriate person (except in emergencies, or for routine matters), and (b) take reasonable steps to minimize any interference with Tenant’s business. Except to the extent expressly limited by the provisions of this Article 21, Landlord reserves full rights to control the Complex (which rights may be exercised without subjecting Landlord to claims for constructive eviction, abatement of Rent, damages or other claims of any kind subject to the terms contained in the Lease), including more particularly, but without limitation, the following rights. Further, all such rights by Landlord shall be exercised by Landlord in a commercially reasonable manner as to not unreasonably interfere with Tenant’s operation of its business or its access thereto:

(A)

To change the name or street address of the Complex or any part thereof; install and maintain signs on the exterior and interior of the Complex or any part thereof; retain at all times, and use in appropriate instances, keys to all doors within and into the Premises; grant to any Person the right to conduct any business or render any service at the Complex, whether or not it is the same or similar to the use permitted Tenant by this Lease; and have access for Landlord and other tenants of the Building to any mail chutes located on the Premises according to the rules of the United States Postal Service.

(B)

To enter the Premises by means of a master key at reasonable hours upon reasonable prior notice to Tenant (except in an emergency, in which case entry can be at any hour with no notice) for reasonable purposes: including inspection and supplying cleaning service or other services to be provided Tenant hereunder, to show the Premises, at reasonable hours, to current and prospective mortgage lenders, ground lessors, insurers, and prospective purchasers, and if Tenant does not exercise a renewal option within the time period required under this Lease, to tenants and brokers. If Tenant shall abandon the Premises at any time, or shall vacate the same during the last three (3) months of the Term, without, in either instance, 

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written notice of its intention to re-enter and resume operations in the Premises, upon prior written notice to Tenant, Landlord may decorate, remodel, repair, or alter the Premises.

(C)

To limit or prevent access to the Complex and the Building or any parts thereof, shut down elevator service, activate elevator emergency controls, or otherwise take such action or preventive measures deemed necessary by Landlord for the safety of tenants or other occupants of the Complex or the protection of the Complex and other property located thereon or therein, in case of fire, invasion, insurrection, riot, civil disorder, public excitement or other dangerous condition, or threat thereof.

(D)

To decorate and to make alterations, additions and improvements, structural or otherwise, in or to the Complex or any part thereof, including the Building, and to any adjacent building, structure, parking facility, land, street or alley (including without limitation changes and reductions in corridors, lobbies, toilets, stairs, parking facilities and other public areas and the installation of kiosks, planters, sculptures, displays, escalators, mezzanines, and other structures, facilities, amenities and features therein, and changes for the purpose of connection with or entrance into or use of the Building or the Complex in conjunction with any adjoining or adjacent building or buildings, now existing or hereafter constructed). In connection with such matters, or with any other repairs, maintenance, improvements or alterations, in or about the Building and the Complex, Landlord may erect scaffolding and other structures reasonably required, and during such operations may enter upon the Premises and take into and upon or through the Premises, all materials required to make such repairs, maintenance, alterations or improvements, and may close public entry ways, other public areas, restrooms, stairways or corridors and Tenant agrees to pay Landlord for overtime and similar expenses incurred if such work is done other than during ordinary business hours at Tenant’s request.

(E)

To substitute for the Premises other premises (herein referred to as the “Relocation Premises”) at the Complex, subject to the following terms, conditions and qualifications: (i) the Relocation Premises shall be similar to the Premises in area, configuration and accessability, (ii) Landlord shall give Tenant prior written notice as early as practicable but in no event less than ninety (90) days before making such change, and the parties shall execute an amendment to the Lease confirming the change within thirty (30) days after either party shall request the same; (iii) if Tenant shall already have taken possession of the Premises: (a) Landlord shall pay reasonable expenses of Tenant in moving from the Premises to the Relocation Premises, including movers, electrical work, computer systems and wiring, reinstalling the Tenant’s personal property and equipment in the Relocation Premises, replacing stationery and business cards rendered unusable by such relocation, and improving the Relocation Premises so that they are substantially similar to the Premises in all material respects, including the quality of materials used in the initial build-out of the Premises, and, (b) such move shall be made during evenings, weekends, or otherwise so as to incur the least inconvenience to Tenant; and (iv) the relocation is necessary to accommodate either (a) an existing tenant of the Complex which leases a significant amount of space in the Complex and desires to lease additional space in the Complex and will require the leasing of the original Premises and the 6,500 square foot space also located on the 2nd floor of the Building to such existing tenant, or (b) a prospective tenant which desires to lease a significant amount of space in the Complex and will require the leasing of the original Premises and the 6,500 square foot space also located on the 2nd floor of the Building to such prospective tenant; and (v) the abatement of Base Rent for the Relocation Premises for the first sixty (60) days of Tenant’s occupancy of the Relocation Premises, provided that Tenant shall continue to be obligated to pay Tenant’s Prorata Share of Taxes and Tenant’s Prorata Share of Expenses and all other charges under this Lease (exclusive of Base Rent) for such sixty (60) day period. Tenant waives 

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any claim for damages, abatement of Rent or loss of profits due to such relocation. Tenant shall cooperate with Landlord in connection with any relocation, including, without limitation, providing timely responses to any requests for review and approval of proposed plans for tenant improvements to the Relocation Premises. Upon the date of such relocation, the Relocation Premises shall become and be deemed the Premises hereunder and all the terms and conditions of this Lease shall be applicable to the Relocation Premises, including, without limitation, the right of Landlord to again relocate Tenant pursuant to this Section 21(E), but in no event more frequently than once every five (5) years during the Term, including any renewal or extension periods.

(F)

To install, use and maintain in and through the Premises pipes, conduits, wires, ducts or mechanical installations serving the Building or other parts of the Complex. Tenant agrees that there shall be no construction of partitions or other obstructions which might interfere with the moving or the servicing of equipment of Landlord to or from the enclosures containing such installations and Tenant further agrees that neither Tenant, nor its servants, employees, agents, visitors, licensees, or contractors shall at any time tamper with, adjust, or otherwise in any manner affect Landlord’s mechanical installations.

(G)

To take any other action which Landlord deems reasonable in connection with the operation, maintenance, marketing, or preservation of the Building or the Complex.

(H)

To sell one or more or all of the buildings in the Complex.

(I)

To approve the weight, size, and location of safes or other heavy equipment or articles, which articles may be moved in, about, or out of the Complex, the Building or the Premises only at such times and in such manner as Landlord shall direct, at Tenant’s sole risk and responsibility.

(J)

To re-determine the rentable square footage of the Premises, the Building or the Complex (or any part thereof) at any time during the Term by remeasuring the area thereof in accordance with the then current American National Standards Institute (“NASI”)/Building Owners and Managers Association International (“BOMA”) measurement standards so long as any such remeasurement shall not result in an increase or decrease in Base Rent as set forth in this Lease for the balance of the Term.

(K)

To grant to anyone the exclusive right to conduct any particular business in the Building not inconsistent with Tenant’s permitted use of the Premises.

(L)

Landlord reserves for itself the exclusive use of all portions of the roof of the Building and all interstitial space within the buildings and Complex. Tenant acknowledges that Landlord may have reserved certain risers, pads, roof locations, and similar areas of the Building for lease to tenants who have in excess of building standard need for such areas.

(M)

From time-to-time and at any time, to test building equipment, including but not limited to, stand-by electric power equipment and facilities, and Landlord shall not be liable in the event of any temporary interruption of service arising from or relating to such testing.

(N)

To exclude from the Complex portions of the real property (and the improvements located thereon) not underlying the Building; to make alterations or additions to the Building, and to any other buildings or improvements within the Complex; to construct, or permit others to construct, other buildings or improvements within the Complex, including, 

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without limitation, the construction of additional stories on any such building or buildings, the construction of buildings adjoining any such buildings or the construction of multi-level, elevated, underground or other parking facilities within the Complex.

ARTICLE 22

Landlord’s Remedies

(A)

Default. The occurrence of any one or more of the following events shall constitute a “Default” by Tenant if not cured within the applicable time permitted for cure specified below, and shall give rise to Landlord’s remedies set forth in Section 22(B), below: (i) failure by Tenant to make when due any payment of Rent, provided that, on up to two (2) occasions in any twelve (12) month period, there shall exist no Default unless Tenant shall have been given written notice of such failure and shall not have made the payment within five (5) days following the giving of such notice; (ii) failure by Tenant to observe or perform any of the terms or conditions of this Lease to be observed or performed by Tenant other than the payment of Rent, or as provided below, unless such failure is cured within thirty (30) days after notice [provided, if such an asserted default is not reasonably subject to cure within said thirty (30) day period, and Tenant has commenced a cure within said original thirty (30) period that is reasonably calculated to effect the cure within a reasonable time, and Tenant continues to diligently prosecute the cure to completion, Tenant shall be granted an additional reasonable time to effect the cure to completion; (iii) failure by Tenant to comply with the Rules, unless such failure is cured within five (5) business days after notice (provided, if the nature of Tenant’s failure is such that more than five (5) business days time is reasonably required in order to cure, Tenant shall not be in Default if Tenant commences to cure within such period and thereafter diligently prosecutes a cure to completion); (iv) the failure to take possession of the Premises within sixty (60) days after the Commencement Date, whether or not Tenant thereafter continues to pay Rent due under this Lease; (v) any material misrepresentation herein, or material misrepresentation or omission in any financial statements or other materials provided by Tenant in connection with negotiating or entering this Lease or in connection with any Transfer under Article 20; (vi) failure by Tenant to cure within any applicable times permitted thereunder any default under any other lease for space at the Complex or any other buildings owned or managed by Landlord or its affiliates, now or hereafter entered into by Tenant (and any Default hereunder not cured within the times permitted for cure herein shall, at Landlord’s election, constitute a default under any such other lease or leases). The notice and cure periods provided herein are in lieu of, and not in addition to, any notice and cure periods provided by Law.

(B)

Remedies. (i) If a Default occurs and is not cured within the applicable time permitted for cure under Section 22(A), Landlord shall have the rights and remedies set forth in this Article 22, which shall be distinct, separate and cumulative with and in addition to any other right or remedy allowed under any Law or other provisions of this Lease:

(a)

Terminate this Lease and Tenant's right of possession; or

(b)

Enter upon and take possession of the Premises without terminating this Lease. 

In the event of Landlord's exercise of any of the foregoing rights and remedies, Tenant shall immediately surrender the Premises to Landlord. If Tenant fails to do so, Landlord, without waiving any other remedy it may have, may enter upon and take possession of the Premises 

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and expel or remove Tenant and any other person who may be occupying such Premises or any part thereof, without being liable for prosecution or any claim of damages therefor. The provisions of this Article shall operate as a notice to quit, any other notice to quit or notice of Landlord's intention to re-enter the Premises being hereby expressly waived. No re-entry or taking of possession of the Premises by Landlord shall be construed as an election on Landlord’s part to terminate this Lease unless a written notice of such intention is given to Tenant or unless a termination of this Lease is decreed by a court of competent jurisdiction. If Landlord elects to either terminate this Lease or Tenant's right of possession, all obligations of Landlord under this Lease to be done and performed by Landlord shall cease, without prejudice, and Landlord shall have the right to recover from Tenant all Rent and other sums accrued through the later to occur of (x) termination of this Lease, or (y) Landlord's recovery of possession of the Premises. 

(ii) Whether or not this Lease is terminated, Tenant shall remain liable for Base Rent, Additional Rent and other Rent (plus applicable state and local sales and use taxes due thereon), and damages which may be due or sustained prior to such Default, all costs, fees, and expenses (including, without limitation, reasonable attorneys’ fees, brokerage fees, and expenses incurred in placing the Premises in first-class rentable condition) incurred by Landlord in pursuit of its remedies and in renting the Premises to others from time to time. Tenant shall also be liable for additional damages (but in no event any consequential or punitive damages) which at Landlord’s election shall be either:

(a)

an amount equal to Base Rent, Additional Rent and other Rent (plus applicable state and local sales and use taxes due thereon) which would have become due during the remainder of the Term, less the amount of rental, if any, which Landlord receives during such period from others to whom the Premises may be rented (other than any rent payable as a result of any failure of such other person to perform any of its obligations), which damages shall be computed and payable in monthly installments, in advance, on the first day of each calendar month following Tenant’s Default and continuing until the date on which the Term would have expired but for Tenant’s Default. Separate suits may be brought to collect any such damages for any month(s), and such suits shall not in any manner prejudice Landlord’s right to collect any such damages for any subsequent month(s), or Landlord may defer any such suit until after the expiration of the Term, in which event the cause of action shall be deemed not to have accrued until the expiration of the Term; or

(b)

an amount equal to the present value (as of the date of the termination of this Lease) of the difference between (i) Base Rent, Additional Rent and other Rent (plus applicable state and local sales and use taxes due thereon), which would have become due during the remainder of the Term, and (ii) the fair market rental value of the Premises for the same period, which damages shall be payable to Landlord in one lump sum on demand. For purpose of this clause, present value shall be computed by discounting at a rate equal to two (2) whole percentage points above the discount rate then in effect at the Federal Reserve Bank nearest to the location of the Complex (or, if such rate is not reasonably available, such substitute rate as Landlord reasonably shall select).

(C)

Landlord’s Option To Re-let. Upon Landlord's election to re-enter, as herein provided, or to take possession pursuant to legal proceedings or pursuant to any notice provided for by Law, Landlord may (but shall not be obligated to) from time to time, with or without terminating this Lease, make such alterations and make such repairs as may be necessary in order to relet the Premises or any part thereof for such term or terms (which may be for a term extending beyond the Term of this Lease) and at such rental or rentals and upon 

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such other terms and conditions as Landlord in its sole discretion may deem advisable. All such reletting shall be considered as on the account and for the benefit of Tenant and Tenant shall be in no way relieved of its obligations under this Lease as a result of such reletting and shall remain responsible for any deficiency arising therefrom through the end of the Term of this Lease. Landlord agrees to use commercially reasonable efforts to relet the Premises and mitigate its damages in the event of a termination of this Lease or of Tenant’s right of possession of the Premises. Upon each such reletting, all rentals received by Landlord from such reletting shall be applied: first, to the payment of any indebtedness other than Rent due hereunder from Tenant to Landlord; second, to the payment of any costs and expenses of such reletting, including brokerage fees and attorneys' fees and costs of such alterations and repairs; third, to the payments of Rent due and unpaid hereunder, and the residue, if any, shall be held by Landlord and applied in payment of future Rent as the same may become due and payable hereunder. If such rentals received from such reletting during any month shall be less than that to be paid during that month by Tenant hereunder (after taking into account the foregoing application of such rentals), Tenant shall pay any such deficiency to Landlord. Such deficiency shall be calculated and paid monthly. 

(i)

Notwithstanding any such reletting without termination of this Lease, Landlord may at any time thereafter elect to terminate this Lease for such previous Default. If Landlord at any time terminates this Lease for any Default, in addition to any other remedies it may have, Landlord may recover from Tenant all damages Landlord may incur by reason of such Default (excluding any consequential or punitive damages), including the cost of recovering the Premises, reasonable attorneys' fees, and including the worth at the time of such termination of the excess, if any, of the amount of Rent and charges equivalent to Rent reserved in this Lease for the remainder of the stated Term over the then reasonable rental value of the Premises for the remainder of the Term, of which amounts shall be immediately due and payable from Tenant to Landlord. In determining the Rent which would be payable by Tenant hereunder, subsequent to Default, the provisions of Section 22(B)(ii)(b) shall govern.

(D)

Specific Performance and Collection of Rent. Landlord shall at all times have the rights and remedies (which shall be cumulative with each other and cumulative and in addition to those rights and remedies available under Section 22(B) above or any Law or other provision of this Lease or at equity), without prior demand or notice except as required by applicable Law: (i) to seek any declaratory, injunctive or other equitable relief, and specifically enforce provisions of this Lease to the maximum extent permitted under applicable Law, or restrain or enjoin a violation or breach of any provision hereof, and (ii) to sue for and collect any unpaid Rent which has accrued. Any and all remedies set forth in this Lease: (i) shall be in addition to any and all other remedies Landlord may have at law or in equity, (ii) shall be cumulative, and (iii) may be pursued successively or concurrently as Landlord may elect. The exercise of any remedy by Landlord shall not be deemed an election of remedies or preclude Landlord from exercising any other remedies in the future.

(E)

Late Charges and Interest. Tenant shall pay, as additional Rent, a service charge of Two Hundred Dollars ($200.00) for bookkeeping and administrative expenses, if Rent is not received within five (5) business days after its due date. In addition, any Rent paid more than five (5) business days after its due date shall accrue interest from the due date at the Default Rate until payment is received by Landlord, and Tenant shall pay Landlord a late charge for any Rent payment which is paid more than five (5) days after its due date equal to five percent (5%) of such payment. Such service charge and interest payments shall not be deemed consent by Landlord to late payments, nor a waiver of Landlord’s right to insist upon timely payments at any time, nor a waiver of any remedies to which Landlord is entitled as a result of the late payment 

28

of Rent. Landlord may cure, at any time, without notice except as otherwise herein provided, any Default by Tenant under this Lease; and whenever Landlord so elects, all costs and expenses incurred by Landlord in curing such a Default, including, without limitation, reasonable attorneys’ fees, together with interest on the amount of costs and expenses so incurred at the Default Rate shall be paid by Tenant to Landlord on demand, and shall be recoverable as Rent. Landlord's acceptance of Rent or any other payments due pursuant to this Lease, with knowledge by Landlord of any Default by Tenant under this Lease, or subsequent to issuance to Tenant of a demand to cure a Default under this Lease, shall not be deemed to be a waiver of Landlord's right to demand cure of that Default, or to be a waiver of Landlord's right to proceed against Tenant for said Default.

(F)

Other Matters. No re-entry or repossession, repairs, changes, alterations and additions, reletting, acceptance of keys from Tenant, or any other action or omission by Landlord shall be construed as an election by Landlord to terminate this Lease or Tenant’s right to possession, or accept a surrender of the Premises, nor shall the same operate to release the Tenant in whole or in part from any of Tenant’s obligations hereunder, unless express written notice of such intention is sent by Landlord or its agent to Tenant. Landlord shall be under no obligation to observe or perform any provision of this Lease on its part to be observed or performed which accrues after the date of any Default by Tenant hereunder not cured within the times permitted hereunder. The times set forth herein for the curing of Defaults by Tenant are of the essence of this Lease.

(G)

Landlord’s Lien. Tenant hereby acknowledges pursuant to Florida Statutes Sec.83.08 that Landlord shall have a landlord's lien for Rent and Additional Rent, as defined in this Lease, on all property of Tenant, or its subtenants or assigns, usually kept on the Premises and as to all other property of Tenant wherever located, subject to the priorities set forth in said statute.

ARTICLE 23

Landlord Default

If Landlord shall fail to perform any term or provision under this Lease required to be performed by Landlord, Landlord shall not be deemed to be in default hereunder nor subject to any claims for damages of any kind, unless such failure shall have continued for a period of thirty (30) days after written notice thereof by Tenant; provided, if the nature of Landlord’s failure is such that more than thirty (30) days are reasonably required in order to cure, Landlord shall not be in default if Landlord commences to cure such failure within such thirty (30) day period, and thereafter diligently prosecutes a cure to completion. The aforementioned periods of time permitted for Landlord to cure shall be extended for any period of time during which Landlord is delayed in, or prevented from, curing due to fire or other casualty, strikes, lock-outs or other labor troubles, shortages of equipment or materials, governmental requirements, power shortages or outages, acts or omissions by Tenant or other Persons, and other causes beyond Landlord’s reasonable control. If Landlord shall fail to cure within the times permitted for cure herein, Landlord shall be in default of this Lease and Tenant shall have all rights and remedies under law, including the right to terminate this Lease if any such uncured default is of a material nature which deprives Tenant of its use and occupancy of the Premises other than on a temporary basis or to a de minimis extent. Further, in recognition that Landlord must receive timely payments of Rent in order to operate the Complex, Tenant shall have no right of self-help to perform repairs or any other obligation of Landlord, and shall have no right to withhold, set-off, or abate Rent except as otherwise provided herein. Tenant may offset against the Rent 

29

otherwise due from Tenant under this Lease the amount of any final, non-appealable judgment entered against Landlord.

ARTICLE 24

Captions, Definitions and Severability

The captions of the Articles and Sections of this Lease are for convenience of reference only and shall not be considered or referred to in resolving questions of interpretation. If any term or provision of this Lease shall be found invalid, void, illegal, or unenforceable with respect to any particular Person by a court of competent jurisdiction, it shall not affect, impair or invalidate any other terms or provisions hereof, or its enforceability with respect to any other Person, the parties hereto agreeing that they would have entered into the remaining portion of this Lease notwithstanding the omission of the portion or portions adjudged invalid, void, illegal, or unenforceable with respect to such Person.

(A)

“Additional Rent” means Tenant’s Prorata Share of Taxes and Tenant’s Prorata Share of Operating Expenses and any other amounts due under this Lease with the exception of Base Rent and the Security Deposit.

(B)

“Building” shall mean the structure identified in Article 1 of this Lease.

(C)

“Business Day” means a Monday, Tuesday, Wednesday, Thursday or Friday which is not any of the Holidays.

(D)

“Complex” shall mean the Building, together with the other buildings comprising the Boca Corporate Center and Campus office/retail complex identified in Article 1 of this Lease and any common or public areas or facilities, easements, corridors, lobbies, sidewalks, loading areas, driveways, landscaped areas, skywalks, parking garages and lots, and any and all other structures or facilities operated or maintained in connection with or for the benefit of the Building and the Complex, and all parcels or tracts of land on which all or any portion of the Complex or any of the other foregoing items are located, and any fixtures, machinery, equipment, apparatus, Systems and Equipment, furniture and other personal property located thereon or therein and used in connection therewith, whether title is held by Landlord or its affiliates. Possession of areas necessary for utilities, services, safety and operation of the Complex, including the Systems and Equipment, fire stairways, perimeter walls, space between the finished ceiling of the Premises and the slab of the floor or roof of the Building there above, and the use thereof together with the right to install, maintain, operate, repair and replace the Systems and Equipment, including any of the same in, through, under or above the Premises in locations that will not materially adversely interfere with Tenant’s use of the Premises, its operation of its business and/or access to the Premises, are hereby excepted and reserved by Landlord, and not demised to Tenant. The Complex shall, at Landlord’s option, also be deemed to include or exclude such buildings or structures as Landlord shall from time to time designate, and shall initially include such buildings and structures (and related facilities and parcels on which the same are located) as Landlord shall have incorporated by reference in Article 1.

(E)

“Common Areas” shall mean those portions of the Building and the Complex, as the same may exist from time to time, designated by Landlord from time to time for the common use of all tenants, including any other facilities, lobbies, hallways, passageways, elevators, stairways, mechanical spaces, restrooms, service areas, storage areas, entrance ways, driveways, loading ramps, public corridors, fire escapes and the like, all of which shall be 

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subject to Landlord’s exclusive control and management. Landlord shall maintain the Common Areas in accordance with all applicable Laws. Further, Landlord agrees that at all times during the Term, subject to interruptions based upon Force Majeure Delay, fire or other casualty or condemnation, there shall be available for Tenant’s non-exclusive use, on a first-come, first-served basis, the number of parking spaces which represents Tenant’s prorata share based upon applicable Law and the square footage of the Premises. Landlord reserves the right, in Landlord’s sole discretion, to change from time to time the dimensions and location of the Common Areas, to create any additional improvements in the Common Areas or to alter or remove any improvements existing from time to time in the Common Areas, and to convert areas previously designated by Landlord as part of the Common Areas to an area leased to one or more tenants, or to designate as part of the Common Areas an area previously leased by Landlord to one or more tenants, provided that any exercise of such rights does not materially adversely interfere with the Premises, the operation of Tenant’s business and/or access to the Premises.

(F)

“Default Rate” shall mean eighteen percent (18%) per annum, or the highest rate permitted by applicable Law, whichever shall be less.

(G)

“Environmental Law” means any present and future Law and any amendments (whether common law, statute, rule, order, regulation or otherwise), permits and other requirements or guidelines of governmental authorities applicable to the Building or the Land and relating to the environment and environmental conditions or to any Hazardous Material (including, without limitation, CERCLA, 42 U.S.C. § 9601 et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq., the Clean Air Act, 33 U.S.C. § 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the Safe Drinking Water Act, 42 U.S.C. § 300f et seq., the Emergency Planning and Community Right-To-Know Act, 42 U.S.C. § 1101 et seq., the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq., and any so-called “Super Fund” or “Super Lien” law, any Law requiring the filing of reports and notices relating to hazardous substances, environmental laws administered by the Environmental Protection Agency, and any similar state and local Laws, all amendments thereto and all regulations, orders, decisions, and decrees now or hereafter promulgated thereunder concerning the environment, industrial hygiene or public health or safety).

(H)

“Governmental Authority” shall mean the United States, the State of Florida and any political subdivision thereof or any local public or quasi-public authority, agency, department, commission, board, bureau or instrumentality of either of them including, with respect to matters pertaining to insurance, boards of fire underwriters to the extent they have power to impose conditions on the issuance of policies or the coverage thereof.

(I)

“Hazardous Materials” means (a) asbestos and any asbestos containing material and any substance that is then defined or listed in, or otherwise classified pursuant to, any Environmental Law or any other applicable Law as a “hazardous substance,” “hazardous material,” “hazardous waste,” “infectious waste,” “toxic substance,” “toxic pollutant” or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, or Toxicity Characteristic Leaching Procedure (TCLP) toxicity, (b) any petroleum and drilling fluids, produced waters, and other wastes associated with the exploration, development or production of crude oil, natural gas, or geothermal resources, and (c) any petroleum product, polychlorinated biphenyls, urea formaldehyde, radon gas, radioactive material (including any 

31

source, special nuclear, or by-product material), medical waste, chlorofluorocarbon, lead or lead-based product, and any other substance whose presence could be detrimental to the Building or the Land or hazardous to health or the environment.

(J)

“Holder” shall mean the holder of any Mortgage at the time in question.

(K)

“Holidays” shall mean all federally observed holidays, including New Year’s Day, President’s Day, Good Friday, Memorial Day, Independence Day, Labor Day, Veterans’ Day, Thanksgiving Day and Christmas Day.

(L)

“Landlord” and “Tenant” shall be applicable to one or more Persons as the case may be, and the singular shall include the plural, and the neuter shall include the masculine and feminine; and if there be more than one, the obligations thereof shall be joint and several. For purposes of any provisions indemnifying or limiting the liability of Landlord, the term “Landlord” shall include Landlord’s present and future partners, beneficiaries, trustees, officers, directors, employees, shareholders, principals, agents, members, managers, affiliates, successors and assigns. For purposes of any provisions indemnifying or limiting the liability of Tenant, the term “Tenant” shall include Tenant’s present and future partners, beneficiaries, trustees, officers, directors, employees, shareholders, principals, agents, members, managers, affiliates, successors and assigns.

(M)

“Law” shall mean all federal, state, county and local governmental and municipal laws, statutes, ordinances, rules, regulations, codes, decrees, orders and other such requirements, applicable equitable remedies and decisions by courts in cases where such decisions are considered binding precedents in the state in which the Complex is located, and decisions of federal courts applying the Laws of such State.

(N)

“Lease Year” shall mean a period of twelve (12) consecutive months, the first Lease Year to commence on the Commencement Date; provided, however, that if the Commencement Date is not the first day of a month, the first Lease Year shall commence on the Commencement Date and shall continue for the balance of the month in which the Commencement Date occurs and for a period of twelve (12) consecutive months thereafter. Each succeeding Lease Year shall be a period of twelve (12) consecutive months commencing immediately upon the expiration of the prior Lease Year.

(O)

“Mortgage” shall mean all mortgages, deeds of trust, and other monetary such encumbrances now or hereafter placed upon the Complex or Building, or any part thereof, and all renewals, modifications, consolidations, replacements or extensions thereof, and all indebtedness now or hereafter secured thereby and all interest thereon.

(P)

“Operating Expenses” shall mean all expenses, costs and amounts (other than Taxes) of every kind and nature which are, subject to the exclusions below, paid, incurred, or accrued for by or on behalf of Landlord during any calendar year any portion of which occurs during the Term, because of or in connection with the ownership, management, repair, maintenance, replacement, restoration, leasing and operation of the Complex, including without limitation, any amounts paid for: (a) utilities for the Complex, including but not limited to electricity, power, gas, steam, chilled water, oil or other fuel, water, sewer, lighting, heating, air conditioning and ventilating, (b) permits, licenses and certificates necessary to operate, manage and lease the Complex, (c) insurance applicable to the Complex, not limited to the amount of coverage Landlord is required to provide under this Lease, (d) supplies, tools, equipment and materials used in the operation, repair and maintenance of the Complex, (e) management, 

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accounting, legal, inspection, consulting, concierge, additional security measures, and other services, (f) any equipment rental (or installment equipment purchase or equipment financing agreements), or management agreements (including the cost of any management fee actually paid thereunder and the fair rental value of any office space provided thereunder, up to customary and reasonable amounts), (g) wages, salaries and other compensation, benefits (including the fair value of any parking privileges provided) and costs for all persons engaged in the management, operation, maintenance or security of the Complex, and employer’s Social Security taxes, unemployment taxes or insurance, and any other taxes which may be levied on such wages, salaries, compensation and benefits (including, without limitation, costs of uniforms), (h) payments under any easement, operating agreement, declaration, restrictive covenant, or instrument pertaining to the sharing of costs in any planned development or association in which Landlord as the owner of the Complex is a member, (i) operation, repair, and maintenance of all Systems and Equipment and components thereof (including replacement of components), janitorial service, alarm and security service, window cleaning, trash removal, elevator maintenance, cleaning of walks, parking facilities and building walls, removal of ice and snow, replacement of wall and floor coverings, ceiling tiles and fixtures in lobbies, corridors, restrooms and other common or public areas or facilities, maintenance and replacement of shrubs, trees, grass, sod and other landscaped items, irrigation systems, drainage facilities, fences, curbs, and walkways, re-paving and re-striping parking facilities, roof repairs and other capital expenditures, (j) costs of any service not provided to the Complex on the Commencement Date but thereafter provided by Landlord in the prudent management of the Complex, (k) any business, professional and occupational license tax paid by Landlord with respect to the Complex; and (l) any personal property tax payable with respect to Landlord’s property located at the Complex that is used in connection with the maintenance, repair, or operation of the Complex. If any area within the Complex (or within the Building, as the case may be) available for lease is not fully occupied during all or a portion of any calendar year, Landlord may, in accordance with sound accounting and management practices, determine the amount of variable Operating Expenses (i.e. those items which vary according to occupancy levels) that would have been paid had such area been fully occupied, and the amount so determined shall be deemed to have been the amount of variable Operating Expenses for such year. If during all or any part of a Lease Year, Landlord does not furnish any particular item of work or service which would constitute an item of “Operating Expenses” to ninety-five percent (95%) of the Complex (or the Building, if Tenant’s Prorata Share is being determined on a Building basis) because less than all of the Complex (or the Building, if Tenant’s Prorata Share is being determined on a Building basis) is occupied, then an adjustment shall be made in computing Operating Expenses for such Lease Year (or partial Lease Year) so that Operating Expenses shall be increased for such Lease Year (or partial Lease Year) to the amount that reasonably would have been incurred had Landlord provided such item of work or service to ninety-five percent (95%) of the aggregate leaseable area of the Complex (or the Building, if Tenant’s Prorata Share is being determined on a Building basis) for the entire Lease Year (or partial Lease Year). Notwithstanding the foregoing, Operating Expenses shall not, however, include:

(i)

depreciation, interest and amortization on Mortgages, and other debt costs or ground lease payments, if any; legal fees in connection with leasing, tenant disputes or enforcement of leases; real estate brokers’ leasing commissions; improvements or alterations to tenant spaces; the cost of providing any service directly to and paid directly by, any tenant; any costs expressly excluded from Operating Expenses elsewhere in this Lease; costs of any items to the extent such items are reimbursed by an insurance company or another third party; and

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(ii)

capital expenditures, except those: (a) made primarily to reduce Operating Expenses, or to comply with insurance requirements or any Laws or other governmental requirements, or (b) for replacements (as opposed to additions or new improvements) of non-structural items located in the Common Areas of the Complex (or the Building, as the case may be) and required to keep such areas in good condition; provided, all such permitted capital expenditures (together with reasonable financing charges) shall be amortized for purposes of this Lease over the shorter of: (i) their useful lives, (ii) the period during which the reasonably estimated savings in Operating Expenses equals the expenditures, or (iii) three (3) years.

(iii)

(a) utilities and janitorial services provided directly to Tenant or any other tenant of the Building or Complex; (b) late fees incurred by Landlord for late payments of any bills; (c) any legal fees, accounting fees, management fees, costs or related expenses incurred in connection with any dispute with other tenants of the Landlord; or (d) any cost incurred with respect to Landlord’s leasing activities, including but not limited to, costs of any tenant improvements for the benefit of another tenant, leasing commissions or fees paid to any real estate broker.

(iv)

costs for any management fee paid by Landlord in excess of 5% of gross rents.

Further, notwithstanding anything to the contrary contained in this Lease, Tenant will not be responsible for any expenses incurred to bring the Building, Common Areas or the Complex into compliance with any Law in existence prior to the Commencement Date of the Lease. Operating Expenses may, however, include expenses incurred to bring the Common Areas of the Building or Complex into compliance with any new Law or change in existing Law following the Commencement Date.

In the alternative, Landlord may elect to determine Operating Expenses on the basis of, or in connection with, the ownership, management, repair, maintenance, replacement, restoration, leasing and operation of the Building, but taking into account and allocating to the Building all expenses, costs and disbursements paid or incurred by Landlord in connection with the Complex generally including all other areas and improvements, in addition to the Building, which may be provided by Landlord for the general use in common of the tenants of the Complex and their respective officers, agents, employees, invitees and customers and for the servicing of the Complex. Landlord reserves the right to determine Tenant’s Prorata Share of Operating Expenses and Tenant’s Prorata Share of Taxes on the basis of the ratio of the rentable square footage of the Premises to the rentable square footage of the Building as opposed to the ratio of the rentable square footage of the Premises to the rentable square footage of the Complex, as further described in Section 24(T) below.

(Q)

“Person” shall mean an individual, trust, partnership, joint venture, association, corporation, and any other entity.

(R)

“Rent” shall have the meaning specified therefor in Section 3(G).

(S)

“Systems and Equipment” shall mean any plant, machinery, transformers, duct work, cable, wires, and other equipment, facilities, and systems designed to supply heat, ventilation, air conditioning and humidity or any other services or utilities, or comprising or serving as any component or portion of the electrical, gas, steam, plumbing, sprinkler, communications, alarm, security, or fire/life/safety systems or equipment, or any other 

34

mechanical, electrical, electronic, computer or other systems or equipment for the Building or the Complex, or any portion thereof.

(T)

“Taxes” shall mean all federal, state, county, or local governmental or municipal taxes, fees, charges or other impositions of every kind and nature, whether general, special, ordinary or extraordinary (including without limitation, real estate taxes, general and special assessments, transit taxes, water and sewer rents, taxes or fees based upon the receipt of rent or other revenue including gross receipts or sales taxes applicable to the receipt of rent or service or value added taxes (unless required to be paid by Tenant under Article 17), personal property taxes imposed upon this Lease, any ground lease, the fixtures, machinery, equipment, apparatus, Systems and Equipment, appurtenances, furniture and other personal property used in connection with the Complex which Landlord or any ground lessor shall pay during any calendar year, any portion of which occurs during the Term (without regard to any different fiscal year used by such government or municipal authority), because of or in connection with the ownership, management, repair, maintenance, restoration, leasing and operation of the Complex. Notwithstanding the foregoing, there shall be excluded from Taxes all excess profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and succession taxes, estate taxes, federal and state income taxes, and other taxes to the extent applicable to Landlord’s general or net income (as opposed to rents, receipts or income attributable to operations at the Complex or the Building, as the case may be); provided, however, if a tax or excise on income is levied or assessed by any governmental entity, in lieu of or as a substitute for, in whole or in part, real estate taxes or other ad valorem taxes, any such tax or excise shall constitute and be included within the term “Taxes.” If the method of taxation of real estate prevailing at the time of execution hereof shall be, or has been altered, so as to cause the whole or any part of the taxes now, hereafter or heretofore levied, assessed or imposed on real estate to be levied, assessed or imposed on Landlord or any ground lessor, wholly or partially, as a capital levy or otherwise, or on or measured by the rents or other revenue received therefrom, then such new or altered taxes attributable to the Complex (or the Building, as the case may be) shall be included within the term “Taxes,” except that the same shall not include any enhancement of said tax attributable to other income of Landlord. Any expenses incurred by Landlord or any ground lessor in attempting to protest, reduce or minimize Taxes shall be included in Taxes in the calendar year such expenses are paid. Tax refunds shall be deducted from Taxes in the year they are received by Landlord, but if such refund shall relate to Taxes paid in a prior year of the Term, and the Lease shall have expired, Landlord shall mail Tenant’s Prorata Share of such net refund (after deducting expenses and attorneys’ fees), up to the amount Tenant paid towards Taxes during such year, to Tenant’s last known address. If Taxes for any period during the Term or any extension thereof, shall be increased after payment thereof by Landlord, for any reason, including, without limitation, error or reassessment by applicable governmental or municipal authorities, Tenant shall pay Landlord upon demand Tenant’s Prorata Share of such increased Taxes plus applicable state and local sales and use taxes thereon. Tenant shall pay increased Taxes whether Taxes are increased as a result of increases in the assessments or valuation of the Complex or of the Building (as the case may be) (whether based on a sale, change in ownership or refinancing of the Complex, or the Building, as the case may be, or otherwise) increases in the tax rates, reduction or elimination of any rollbacks or other deductions available under current law, scheduled reductions of any tax abatement, as a result of the elimination, invalidity or withdrawal of any tax abatement, or for any other cause whatsoever. Notwithstanding the foregoing, if any Taxes shall be paid based on assessments or bills by a governmental or municipal authority using a fiscal year other than a calendar year, Landlord may elect to average the assessments or bills for the subject calendar year, based on the number of months of such calendar year included in each such assessment or bill.

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(U)

“Tenant’s Prorata Share” of Taxes and Operating Expenses is currently 1.176% and is determined by dividing the rentable square footage of the Premises by the rentable square footage of the Complex on the last day of the calendar year for which Taxes or Operating Expenses are being determined (the rentable square footage of the Complex being one million six hundred twelve thousand seven hundred thirty-nine (1,612,739)] square feet as of April 1, 2007. Tenant acknowledges that “rentable square footage of the Premises” has been determined under this Lease by measuring from the outside of the exterior walls to the middle of all common walls and multiplying such measurement by a factor of 1.15. At Landlord’s election, the “rentable square footage of the Premises” and the “rentable square footage of the Complex” shall be measured and determined in accordance with ANSI/BOMA Form Z65.1-1996. The “rentable square footage of the Complex” shall include all rentable square footage of all office space leased or available for lease at the Complex as may be reasonably re-determined from time to time by Landlord in accordance with sound accounting and management principles. Landlord shall have the right to determine, in accordance with sound accounting and management principles, Tenant’s Prorata Share of Taxes and Tenant’s Prorata Share of Operating Expenses for all space leased or available for lease at the Complex, in which event, Tenant’s Prorata Share shall be based on the ratio of the rentable square footage of the Premises to the rentable square footage of all space leased or available for lease at the Complex. Similarly, if the Complex or any development of which it is a part shall contain tenants who do not participate in all or certain categories of Taxes or Operating Expenses on a prorata basis, Landlord may include or exclude, in accordance with sound accounting and management principles, the amount of Taxes or Operating Expenses, or such categories of the same, as the case may be, attributable to such tenants, and include or exclude the rentable square footage of their premises (as the case may be), in computing the rentable square footage of the Complex. Landlord may allocate Taxes and Operating Expenses within the Complex or any development of which it is a part, and between the buildings and structures therein and the parcels on which they are located, in accordance with sound accounting and management principles. In the alternative, Landlord shall have the right to determine, in accordance with sound accounting and management principles, Tenant’s Prorata Share of Taxes and Operating Expenses based upon the rentable square footage of the Building (or on the office portion of the Building, as the case may be), in which event Tenant’s Prorata Share shall be based on the ratio of the rentable square footage of the Premises (or on the office portion of the Building, as the case may be) to the rentable square footage of the Building. In such event, the “rentable square footage of the Building” shall include all rentable square footage of all space leased or available for lease at the Building (or on the office portion of the Building, as the case may be) as may be reasonably re-determined from time to time by Landlord in accordance with sound accounting and management principles. Landlord shall have the right to determine, in accordance with sound accounting and management principles, Tenant’s Prorata Share of Taxes and Tenant’s Prorata Share of Operating Expenses for only the office portion of the Building, in which event, Tenant’s Prorata Share shall be based on the ratio of the rentable square footage of the Premises to the rentable square footage of such office portion. Similarly, if the Building or any development of which it is a part shall contain tenants who do not participate in all or certain categories of Taxes or Operating Expenses on a prorata basis, Landlord may include or exclude, in accordance with sound accounting and management principles, the amount of Taxes or Operating Expenses, or such categories of the same, as the case may be, attributable to such tenants, and include or exclude the rentable square footage of their premises (as the case may be), in computing the rentable square footage of the Building.

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ARTICLE 25

Conveyance by Landlord

In case Landlord or any successor owner of the Complex or the Building shall convey or otherwise dispose of any portion thereof in which the Premises are located, to another Person (and nothing herein shall be construed to restrict or prevent such conveyance or disposition), such other Person shall thereupon be and become landlord hereunder and shall be deemed to have fully assumed and be liable for all obligations of this Lease to be performed by Landlord which first arise after the date of conveyance, including the return of any Security Deposit, and Tenant shall attorn to such other Person, and Landlord or such successor owner shall, from and after the date of conveyance, be free of all liabilities and obligations hereunder not then incurred.

ARTICLE 26

Indemnification

Except to the extent arising from the intentional misconduct or grossly negligent acts of Landlord or Landlord’s agents or employees, and notwithstanding any termination of this Lease, Tenant shall defend, indemnify and hold harmless Landlord from and against any and all claims, demands, liabilities, damages, judgments, orders, decrees, actions, proceedings, fines, penalties, costs and expenses, including without limitation, court costs and attorneys’ fees arising from or relating to (a) any loss of life, damage or injury to person, property or business occurring in or from the Premises caused by or in connection with any negligent act or omission of, Tenant, any other occupant of the Premises, or any of their respective agents, employees, contractors or guests, (b) any failure by Tenant to comply with any statutes, ordinances, regulations or orders of any Governmental Authority, (c) any failure by Tenant to perform any of the agreements, terms, covenants or conditions of this Lease required to be performed by Tenant, or (d) any obligation under any worker’s compensation and/or employers’ liability claims of Tenant’s employees. Without limiting the generality of the foregoing, Tenant specifically acknowledges that the indemnity undertaking herein shall apply to claims in connection with or arising out of any “Tenant Work” as described in Article 8, the installation, maintenance, use or removal of any “Lines” located in or serving the Premises as described in Article 28, and the transportation, use, storage, maintenance, generation, manufacturing, handling, disposal, release or discharge of any “Hazardous Material” as described in Article 29 to the extent caused by Tenant (whether or not any of such matters shall have been theretofore approved by Landlord), except to the extent that any of the same arises from the intentional misconduct or grossly negligent acts of Landlord or Landlord’s agents or employees. In case Landlord, its agents or employees shall be made a party to any litigation commenced by or against Tenant which relates to Tenant’s indemnity described above, Tenant shall indemnify, defend and hold them harmless and shall pay all costs, expenses, and reasonable attorneys’ fees incurred or paid by them in connection with such litigation. The obligations assumed herein shall survive the expiration or sooner termination of this Lease. The foregoing indemnity shall be in addition to, and shall not be in discharge of or in substitution for, any of the insurance requirements or any other indemnity provisions of this Lease.

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ARTICLE 27

Safety and Security Devices, Services and Programs

Safety and security devices, services and programs provided by Landlord, if any, while intended to deter crime and ensure safety, may not in given instances prevent theft or other criminal acts, or ensure safety of persons or property. The risk that any safety or security device, service or program may not be effective, or may malfunction, or be circumvented by a criminal, is assumed by Tenant with respect to Tenant’s property and interests, and Tenant shall obtain insurance coverage to the extent Tenant desires protection against such criminal acts and other losses, as further described in Article 11. Tenant agrees to cooperate in any reasonable safety or security program developed by Landlord or required by Law.

Landlord and Tenant recognize the existence of certain social or political problems (including domestic or international threats or acts of violence, terrorism, and war) which have created, or may create, the necessity for employment of extreme security measures in the day-to-day operation of the Building and the Complex. Tenant agrees to cooperate in any security measures instituted by Landlord, required by Law, or otherwise recommended by law enforcement or other governmental officials in response to such social or political problems. Tenant further agrees to the exercise by Landlord and its agents, within their sole discretion, of such security measures as, but not limited to, the search of all persons entering or leaving the Complex or the Building, the evacuation of the Complex or the Building for cause, suspected cause, or for drill purposes, the denial or limitation of any access to the Complex or the Building and other such actions that it deems necessary to diminish, discourage or prevent any threat of property damage or bodily injury. Expenses incurred by Landlord in connection with the development, implementation and provision of such security measures shall be included in Operating Expenses. The exercise of such security measures by Landlord and the resulting interruption of service to, or cessation or diminution of Tenant’s business, if any, shall never be deemed an eviction or disturbance of Tenant’s use and possession of the Premises, or any part thereof, or render Landlord liable to Tenant for any resulting damages or relieve Tenant from Tenant’s obligations under this Lease.

ARTICLE 28

Communications and Computer Lines

Tenant may install, maintain, replace, remove or use any communications or computer wires, cables and related electronic signal transmission devices (collectively the “Lines”) at the Building which are located in or serving the Premises, provided: (a) Tenant shall obtain Landlord’s prior written consent, use an experienced and qualified contractor approved in writing by Landlord, and comply with all of the other provisions of Article 8, (b) any such installation, maintenance, replacement, removal or use shall comply with all Laws applicable thereto and good work practices, and shall not interfere with the use of any then existing Lines at the Complex, (c) an acceptable number of spare Lines and space for additional Lines shall be maintained for existing and future occupants of the Complex, as determined in Landlord’s reasonable opinion, (d) if Tenant at any time uses any equipment that may create an electromagnetic field exceeding the normal insulation ratings of ordinary twisted pair riser cable or cause radiation higher than normal background radiation, the Lines therefor (including riser cables) shall be appropriately insulated to prevent such excessive electromagnetic fields or radiation, (e) as a condition to permitting the installation of new Lines, Landlord may require that Tenant remove existing Lines located in or serving the Premises, (f) Tenant’s rights shall be 

38

subject to the rights of any regulated telephone company, and (g) Tenant shall pay all costs in connection therewith. Landlord reserves the right to require that Tenant remove any Lines located in or serving the Premises which are installed in violation of these provisions, or which are at any time in violation of any Laws or represent a dangerous or potentially dangerous condition provided that notwithstanding anything to the contrary, Tenant shall not be responsible to remove any Lines installed by any party other than Tenant.

Landlord may (but shall not have the obligation to): (i) install new Lines at the Complex, (ii) create additional space for Lines at the Complex, and (iii) reasonably direct, monitor or supervise the installation, maintenance, replacement and removal of, the allocation and periodic re-allocation of available space (if any) for, and the allocation of excess capacity (if any) on, any Lines now or hereafter installed at the Complex or the Building, as the case may be, by Landlord, Tenant or any other party (but Landlord shall have no right to monitor or control the information transmitted through such Lines). Such rights shall not be in limitation of other rights that may be available to Landlord by Law or otherwise. If Landlord exercises any such rights, Landlord may charge Tenant for the costs attributable to Tenant, or may include those costs and all other costs in Operating Expenses under Article 24 (including without limitation, costs for acquiring and installing Lines and risers to accommodate new Lines and spare Lines, any associated computerized system and software for maintaining records of Line connections, and the fees of any consulting engineers and other experts); provided, any capital expenditures included in Operating Expenses hereunder shall be amortized (together with reasonable finance charges) over the period of time prescribed by Article 24.

Notwithstanding anything to the contrary contained in Article 13, Landlord reserves the right to require that Tenant remove any or all Lines installed by or for Tenant within or serving the Premises upon termination of this Lease, provided Landlord so notifies Tenant within thirty (30) days following the Commencement Date. Any Lines not required to be removed pursuant to this Article shall, at Landlord’s option, become the property of Landlord (without payment by Landlord). If Tenant fails to remove such Lines as required by Landlord, or violates any other provision of this Article, Landlord may, after twenty (20) days written notice to Tenant, remove such Lines or remedy such other violation, at Tenant’s expense (without limiting Landlord’s other remedies available under this Lease or applicable Law). Tenant shall not, without the prior written consent of Landlord in each instance, grant to any third party a security interest or lien in or on the Lines, and any such security interest or lien granted without Landlord’s written consent shall be null and void. Except to the extent arising from the intentional misconduct or grossly negligent acts of Landlord or Landlord’s agents or employees, Landlord shall have no liability for damages arising from, and Landlord does not warrant that the Tenant’s use of any Lines will be free from the following (collectively, the “Line Problems”): (x) any eavesdropping or wire-tapping by unauthorized parties, (y) any failure of any Lines to satisfy Tenant’s requirements, or (z) any shortages, failures, variations, interruptions, disconnections, loss or damage caused by the installation, maintenance, replacement, use or removal of Lines by or for other tenants or occupants at the Complex, by any failure of the environmental conditions or the power supply for the Complex to conform to any requirements for the Lines or any associated equipment, or any other problems associated with any Lines by any other cause. Under no circumstances shall any Line Problems not within the reasonable control of Landlord be deemed an actual or constructive eviction of Tenant, render Landlord liable to Tenant for abatement of Rent, or relieve Tenant from performance of Tenant’s obligations under this Lease. Landlord in no event shall be liable for damages by reason of loss of profits, business interruption or other consequential damage arising from any Line Problems not within the reasonable control of Landlord.

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ARTICLE 29

Hazardous Materials

(A)

Tenant shall not transport, use, store, maintain, generate, manufacture, handle, dispose, release or discharge any “Hazardous Material” (as defined below) upon or about the Complex, or permit Tenant’s employees, agents, contractors, and other occupants of the Premises to engage in such activities upon or about the Complex. However, the foregoing provisions shall not prohibit the transportation to and from, and use, storage, maintenance and handling within, the Premises of substances customarily used in offices (or such other business or activity expressly permitted to be undertaken in the Premises under Article 6), provided: (a) such substances shall be used and maintained only in such quantities as are reasonably necessary for such permitted use of the Premises, strictly in accordance with applicable Law and the manufacturers’ instructions therefor, (b) such substances shall not be disposed of, released or discharged on the Complex, and shall be transported to and from the Premises in compliance with all applicable Laws, and as Landlord shall reasonably require, (c) if any applicable Law or Landlord’s trash removal contractor requires that any such substances be disposed of separately from ordinary trash, Tenant shall make arrangements at Tenant’s expense for such disposal directly with a qualified and licensed disposal company at a lawful disposal site (subject to scheduling and approval by Landlord), and shall ensure that disposal occurs frequently enough to prevent unnecessary storage of such substances in the Premises, and (d) any remaining such substances shall be completely, properly and lawfully removed from the Complex upon expiration or earlier termination of this Lease. At the expiration or earlier termination of this Lease, Tenant shall surrender the Premises to Landlord free of Hazardous Materials caused by Tenant or by anyone for whom Tenant is legally responsible, except to the extent any Hazardous Materials or violation of Environmental Laws was caused by the conduct or actions of Landlord or its agents or employees or from any other party other than Tenant, its agents or employees or anyone for whom Tenant is legally responsible.

(B)

Tenant shall promptly notify Landlord of: (i) any enforcement, cleanup or other regulatory action taken or threatened by any governmental or regulatory authority with respect to the presence of any Hazardous Material on the Premises caused by Tenant or by anyone for whom Tenant is legally responsible, or the migration thereof from or to other property, (ii) any demands or claims made or threatened by any party against Tenant or the Premises relating to any loss or injury resulting from any Hazardous Material, (iii) any release, discharge or non-routine, improper or unlawful disposal or transportation of any Hazardous Material on or from the Premises by Tenant or by anyone for whom Tenant is legally responsible, and (iv) any matters where Tenant is required by Law to give a notice to any governmental or regulatory authority respecting any Hazardous Material on the Premises. Landlord shall have the right (but not the obligation) to join and participate as a party in any legal proceedings or actions affecting the Premises initiated in connection with any Environmental Law. At such times as Landlord may reasonably request, Tenant shall provide Landlord with a written list identifying any Hazardous Material then used, stored, or maintained upon the Premises, the use and approximate quantity of each such material, a copy of any material safety data sheet (“MSDS”) issued by the manufacturer therefor, written information concerning the removal, transportation and disposal of the same, and such other information as Landlord may reasonably require or as may be required by Law.

(C)

If any Hazardous Material is released, discharged or disposed of by Tenant or any other occupant of the Premises, or their employees, agents or contractors, on or about the Complex in violation of the foregoing provisions, Tenant shall immediately, properly and in 

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compliance with applicable Laws clean up and remove the Hazardous Material from the Complex and any other affected property and clean or replace any affected personal property (whether or not owned by Landlord), at Tenant’s expense. Such clean up and removal work shall be subject to Landlord’s prior written approval (except in emergencies), and shall include, without limitation, any testing, investigation, and the preparation and implementation of any remedial action plan required by any governmental body having jurisdiction or reasonably required by Landlord. If Tenant shall fail to comply with the provisions of this Article within five (5) days after written notice by Landlord, or such shorter time as may be required by Law or in order to minimize any hazard to Persons or property, Landlord may (but shall not be obligated to) arrange for such compliance directly or as Tenant’s agent through contractors or other parties selected by Landlord, at Tenant’s expense (without limiting Landlord’s other remedies under this Lease or applicable Law). The provisions of this Article 29 will survive the termination or expiration of this Lease, and any renewals, extensions or expansions thereof.

(D)

Landlord has no actual knowledge of any violation of Environmental Laws relating to the presence of Hazardous Material in, on, or under the Premises. Tenant shall not be responsible for Hazardous Materials introduced by Landlord or by any other tenant or occupant of the Complex in violation of Environmental Laws.

ARTICLE 30

Miscellaneous

(A)

Binding Upon Parties. Each of the terms and provisions of this Lease shall be binding upon and inure to the benefit of the parties hereto, their respective heirs, executors, administrators, guardians, custodians, successors and assigns, subject to the provisions of Article 20 respecting Transfers; and all references herein to Landlord and Tenant shall be deemed to include all such parties. The term “Landlord” as used in this Lease, so far as covenants or obligations on the part of Landlord are concerned, shall be limited to mean only the owner or owners of the Building or the Complex, as the case may be, at the time in question.

(B)

No Recording. Landlord and Tenant agree that in no event and under no circumstances shall this Lease be recorded. A short-form memorandum may be recorded at Landlord’s sole election. Tenant represents, warrants and covenants to Landlord that upon the expiration or termination of this Lease, Tenant at its sole cost and expense shall at Landlord’s request, deliver to Landlord a fully executed quitclaim and release agreement in recordable form wherein Tenant quitclaims, conveys, assigns and releases to Landlord any and all of Tenant’s interest in this Lease and the Premises, the Building and the Complex.

(C)

Governing Law. This Lease shall be construed in accordance with the Laws of the state in which the Complex is located.

(D)

Survival. All obligations or rights of either party arising during or attributable to the period ending upon expiration or earlier termination of this Lease shall survive such expiration or earlier termination.

(E)

Quiet Enjoyment. Landlord agrees that, if Tenant timely pays the Rent and performs the terms and provisions hereunder, and subject to all other terms and provisions of this Lease, Tenant shall hold and enjoy the Premises during the Term, free of lawful claims by any Person acting by or through Landlord.

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(F)

Light and Air. This Lease does not grant any legal rights to “light and air” outside the Premises nor any particular view or cityscape visible from the Premises.

(G)

Intentionally Omitted.

(H)

Time of Essence. Time is of the essence of this Lease and each and all of its provisions.

(I)

Severability. The invalidity or unenforceability of any provision of this Lease shall not affect or impair any other provisions.

(J)

Joint and Several. If Tenant is comprised of more than one party, each such party shall be jointly and severally liable for Tenant’s obligations under this Lease.

(K)

Force Majeure. Notwithstanding anything in this Lease to the contrary, Landlord shall not be chargeable with, or liable to Tenant for, anything or in any amount for any failure to perform or delay caused by any of the following (“Force Majeure Delays”): fire; earthquake; explosion; flood; hurricane; the elements; acts of God or the public enemy; actions, restrictions, limitations or interference of governmental authorities or agents; enforcement of Laws; war, terrorist act or acts, invasion; insurrection; rebellion; riots; strikes or lockouts; inability to perform, control or prevent which is beyond the reasonable control of Landlord; and any such failure or delay due to said causes or any of them shall not be deemed a breach of or default in the performance of this Lease by Landlord; provided, however, lack of funds shall not be deemed a Force Majeure Delay. Notwithstanding anything in the Lease to the contrary, Tenant shall not be chargeable with, or liable to, Landlord for any failure of Tenant to perform or any delay in Tenant’s performance caused by any Force Majeure Delays described above; provided, however, Force Majeure Delay shall not be applicable to the payment of sums due under this Lease.

(L)

Headings. The Article and Section headings herein are for convenience of reference and shall in no way define, increase, limit or describe the scope or intent of any provision of this Lease.

(M)

Pronouns. Any pronoun used in place of a noun shall indicate and include the masculine or feminine, the singular or plural number, individuals, firms or corporations, and their and each of their respective successors, executors, administrators, assigns, according to the context hereof.

(N)

Special Events. Tenant shall not, without the prior written consent of Landlord, schedule, advertise or undertake any public exposition, promotion or other type of special event at the Premises. Any approval of Landlord to a special event may include, but not be limited to, at Landlord’s option, to conditions such as guidelines for traffic and pedestrian control, security, parking and other considerations in the interest of maintaining the health and safety for both Tenant’s invitees as well as that of other tenants, all at Tenant’s cost and expense. In addition, Landlord may, in its sole discretion, require Tenant to have delivered a bond by a surety acceptable to Landlord to guaranty any financial undertakings of any indemnification.

(O)

Intentionally Omitted.

(P)

Withholding Consent. Notwithstanding anything to the contrary contained in this Lease, if any provision of this Lease expressly or impliedly obligates Landlord not to 

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unreasonably withhold its consent or approval, an action for declaratory judgment or specific performance will be Tenant’s sole right and remedy in any dispute as to whether Landlord has breached such obligation.

(Q)

Common Areas. Tenant and its employees, invitees, subtenants and licensees shall have the nonexclusive right to use the Common Areas as constituted from time to time, such use to be in common with Landlord, other tenants of the Complex and other persons entitled to use the same, and subject to such reasonable rules and regulations governing the use as Landlord may from time to time prescribe. Except in the event of an emergency, Landlord agrees to give Tenant prior notice of any work to be performed by Landlord in the Common Areas which would materially interfere with access to the Building or the Premises or services provided to the Premises other than on a temporary basis.

(R)

Parking. During the Lease Term, Tenant and its officers, employees, agents, customers and invitees shall have the right to the non-exclusive use of unreserved public parking spaces (as distinguished from parking areas or portions thereof that are or may be specifically reserved from time-to-time during the Term hereof) on a first come, first served basis and Landlord agrees that there shall be the number of parking spaces required under local laws and codes. Tenant and its personnel shall comply with all reasonable rules and regulations promulgated by Landlord or Landlord’s parking area manager for the orderly functioning of the parking areas of the Complex. In addition to the foregoing, and subject to the terms and provisions of this Lease, Landlord agrees to provide Tenant four (4) reserved parking spaces at a mutually-acceptable location. Landlord reserves the right to relocate all or some of Tenant’s reserved parking spaces so long as such remain in reasonable proximity to the original parking spaces. Tenant and its personnel shall comply with all reasonable rules and regulations promulgated by Landlord or Landlord’s parking area manager for the orderly functioning of the parking areas of the Complex.

(S)

Cafeteria Service. For so long as there is cafeteria service in the Complex, Tenant may not open or operate a cafeteria or food service operation of any nature within the Premises, and shall not import food or food products within the Premises without Landlord’s consent, which may be granted, denied or conditioned in Landlord’s sole and absolute discretion. Tenant may obtain food service by direct arrangement with any cafeteria operator (it being understood that Landlord is making no representation or warranty that cafeteria service will be available). Notwithstanding the foregoing, Tenant shall be allowed to have an operating kitchen area in the Premises, subject to Landlord’s review and approval of plans and specifications therefor, with a microwave/toaster, for Tenant’s employees use only.

(T)

Vending Machines. Tenant shall not obtain, or accept for use in the Premises, vending machines or pay telephones, or other similar services from any persons other than those specifically designated by Landlord to offer or distribute such services.

(U)

Sprinklers. If the Board of Fire Underwriters of any bureau, department or official of the state or city government having jurisdiction shall require that any changes, modifications, alterations, or additional sprinkler heads or other similar equipment in the Premises be made or supplied by reason of any change in Tenant’s business from the use of the Premises originally contemplated by this Lease, or any changes in the location of partitions, trade fixtures, or other contents of the Premises after initial occupancy or if any such changes, modifications, alterations, additional sprinkler heads or other equipment become necessary to prevent the imposition of a penalty or charge against the full allowance for a sprinkler system in the initial insurance rate as fixed by the appropriate board or authority, or by a fire insurance company, 

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Tenant shall be liable to Landlord for the cost of such changes, modifications, alterations, additional sprinkler heads or such other equipment, together with a reasonable service charge for Landlord’s administrative services which shall be payable as Additional Rent upon three (3) days’ notice to Tenant. The amount of such service charge shall be equal to the charge customarily assessed by Landlord to other tenants of the Building for similar work.

(V)

Carpooling, Mass Transit and Traffic Control. Tenant acknowledges that, due to the nature and size of the Complex, Landlord may be required by applicable governmental authorities to participate in, and require tenants to participate in, carpool programs, mass transit programs, flexible shift and other flexible time programs and other traffic reduction programs and measures. Tenant agrees to participate in and comply with such programs and measures required by applicable governmental authorities or agreed to by Landlord with respect to the Complex or Building.

(W)

Association. The Complex and the Building in which the Premises are located are subject to a Declaration of Restrictive Covenants, Easements and Conditions (the “Declaration”) which governs certain matters with respect to the development, management and maintenance of the Complex and Building and surface water management, drainage and other aspects of the Complex. The Declaration provides for the creation of a property owner’s association (“Association”) to perform certain management, operational and maintenance obligations pursuant thereto. The Association has the authority to and does levy fees and assessments against the Complex, including the Building, to pay for the obligations of the Association. This Lease is subject to the Declaration and to the rights of the Association pursuant thereto. Additionally, fees and assessments of the Association paid by Landlord with respect to the Complex and the Building are and shall be deemed Operating Expenses.

(X)

Incentive Programs. Landlord may, from time to time, apply for various loans, grants or other incentive programs which may enhance the value of the Complex (“Incentive Programs”). It is anticipated that certain applications for Incentive Programs may require a tenant or other occupant of portions of the Building to be the applicant, co-applicant or participating party in applying for or securing the Incentive Program(s). Within five (5) Business Days of Landlord’s request, Tenant shall, at Landlord’s expense, execute, to the extent required as to any Incentive Program, any and all applications, petitions and/or other documentation in support of the Incentive Program. In any instance in which an Incentive Program is applied for and secured, Tenant hereby irrevocably assigns and quit-claims to Landlord any and all rights and interests which Tenant may claim in and to any benefits or proceeds of the Incentive Programs. The assignment contained in the immediately preceding sentence is self-effectuating without need for further confirmation to be effective; however, at the request of Landlord, Tenant shall execute and deliver such assignments or confirmations with supporting documentation as may from time-to-time be required by Landlord in furtherance of this Section. Landlord covenants with Tenant that Tenant shall not incur any liability or obligation by virtue of or associated with the application, processing or any participation in the securing of any Incentive Program. Except to the extent necessary in processing an application for an Incentive Program all information received by Tenant or any employee, shareholder, attorney, accountant or other party acting by, through or under Tenant shall and remain confidential as proprietary information owned and reserved solely by Landlord and the dissemination of which without prior approval of Landlord shall constitute a Default under this Lease. Landlord may exclusively, and its sole option, prepare a memorandum of this Section which shall be executed by Tenant upon request of Landlord, and at no cost to Tenant, and which may be recorded in the Official Records of Palm Beach County, Florida.

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(Y)

Compliance with Executive Order 13224 and the Patriot Act. Tenant hereby represents, certifies and warrants to Landlord as follows: (i) neither Tenant nor any person or entity that directly owns a 10% or greater equity interest in it nor any of its officers, directors or managing members is a person or entity with whom United States persons or entities are restricted from doing business under regulations of the United States Treasury Department's Office of Foreign Asset Control (“OFAC”) (including those persons and entities named on OFAC’s Specially Designated and Blocked Persons List ("SDN List")) or under Executive Order 13224 (the “Executive Order”) signed on September 24, 2001, and entitled “Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism”), or under other governmental action; (ii) that Tenant is not, directly or indirectly for itself or for or on behalf of any person, group, entity, or nation on the SDN List, engaged in, conspiring to engage in, or facilitating any transaction that evades or avoids, or has the purpose of evading or avoiding, or violates, any of the prohibitions set forth in the Executive Order or the Uniting and Strengthening America by Providing Appropriate Tools Required To Intercept and Obstruct Terrorism Act of 2001 (as amended from time to time, the "Patriot Act"); (iii) that Tenant’s activities do not violate the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001, any other applicable laws regarding money laundering activities, or the regulations or orders promulgated under the foregoing (as any of the foregoing may be amended from time to time, the “Money Laundering Act”); and (iv) that, throughout the term of this Lease, Tenant shall comply with the Executive Order, the Patriot Act, and the Money Laundering Act. Tenant represents and warrants to Landlord that Tenant has taken, and shall continue to take at all times following the execution of this Lease, all steps, as required or suggested by Law, to ensure that the funds invested in the Tenant and/or used by Tenant to make payments under this Lease are derived from transactions that do not violate the Laws of the United States and from permissible sources under the Laws of the United States (or, to the extent such funds originate outside the United States, do not violate, and are permissible under, the laws of the jurisdiction in which they originated). Notwithstanding anything in this Lease to the contrary, Tenant acknowledges and agrees that any breach of the foregoing representations, certifications and warranties shall be a default under this Lease (not subject to any notice or cure period) and Landlord shall have all rights and remedies under this Lease, and at law and in equity, including but not limited to forcible eviction and the right to terminate this Lease. Tenant hereby agrees to defend, indemnify and hold harmless Landlord from and against any and all claims, damages, losses, risks, liabilities, fines, penalties, forfeitures and expenses (including costs and attorneys’ fees) arising from or related to any breach of its obligations under, or of its representations, certification and warranties set forth in, this Section. 

(Z)

Unrelated Business Income. If Landlord is advised by its counsel at any time that any part of the payments by Tenant to Landlord under this Lease may be characterized as unrelated business income under the United States Internal Revenue Code and its regulations, then Tenant shall enter into any amendment proposed by Landlord to avoid such income, so long as the amendment does not require Tenant to make more payments or accept fewer services from Landlord, than this Lease provides. 

ARTICLE 31

Offer

The submission and negotiation of this Lease shall not be deemed an offer to enter the same by Landlord, but the solicitation of such an offer by Tenant. Tenant agrees that its execution of this Lease constitutes its firm offer to enter the same, provided that Landlord will not deposit any Security Deposit or prepaid Rent until the full execution and delivery of the 

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Lease by both Landlord and Tenant and approval by Landlord’s Lender if required. Tenant acknowledges that execution of this Lease by Landlord may be subject to the written approval of Landlord’s lender, which approval Landlord will obtain, using its commercially reasonable efforts prior to its execution and delivery of a signed counterpart of this Lease.

ARTICLE 32

Notices

Except as expressly provided to the contrary in this Lease, every notice or other communication to be given by either party to the other with respect hereto or to the Premises or Complex, shall be in writing and shall not be effective for any purpose unless the same shall be served personally or by national air courier service, or United States certified mail, return receipt requested, postage prepaid, addressed as follows:

To Landlord:

c/o Blackstone Real Estate Advisors L.P..

345 Park Avenue

New York, NY 10154

Attention: Marshall K. Findley

- and to:

c/o BREA Property Management of Florida L.L.C.

5000 T-Rex Avenue, #100

Boca Raton, Florida 33431

Attention: Property Manager

- with a copy to:

Audrey E. Selin, Esquire

Neal, Gerber & Eisenberg LLP

2 N. LaSalle Street, Suite 2200

Chicago, IL 60602

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To Tenant:

Medical Connections, Inc.

2300 Glades Road

Suite 307E

Boca Raton, Florida 33431

Attn: Anthony Nicolosi

(prior to the Commencement Date and after the Commencement

Date, to the Premises)

- with a copy to:

Stacey Halpern, Esquire

Broad and Cassel

One North Clematis Street

Suite 500

West Palm Beach, Florida 33401

Either party hereto may change its address to which said notice shall be delivered or mailed by giving written notice of such change to the other party hereto, as herein provided. Every notice or other communication hereunder shall be deemed to have been given as of the third (3rd) Business Day following the date of such mailing (or as of any earlier date evidenced by a receipt from such national air courier service or the United States Postal Service) or the next Business Day after deposit with a national air courier service or immediately if personally delivered. Notices not sent in accordance with the foregoing shall be of no force or effect until received or refusal of receipt by the foregoing parties at such addresses required herein.

ARTICLE 33

Real Estate Brokers

Tenant and Landlord each represent that it has dealt only with CB Richard Ellis (whose commission, if any, shall be paid by Landlord pursuant to separate agreement) as brokers, agents or finder in connection with this Lease and each party agrees to indemnify, defend and hold the other party harmless from all damages, judgments, liabilities and expenses (including reasonable attorneys’ fees) arising from any claims or demands of any other broker, agent or finder with whom such party has dealt for any commission or fee alleged to be due in connection with its participation in the procurement of Tenant or the negotiation with Tenant of this Lease.

ARTICLE 34

Security Deposit

Tenant shall deposit with Landlord the sum of $200,000.00 (“Security Deposit”) no later than one (1) business day after the full execution and delivery of this Lease by both parties. The Security Deposit shall serve as security for the prompt, full and faithful performance by Tenant of the terms and provisions of this Lease. In the event that Tenant is in Default hereunder and fails to cure within any applicable time permitted under this Lease, or in the event that Tenant owes any amounts to Landlord upon the expiration of this Lease, then following written notice and a 3-business day cure period, Landlord may use or apply the whole or any part of the Security Deposit for the payment of Tenant’s obligations hereunder. The use or application of the Security Deposit or any portion thereof shall not prevent Landlord from exercising any other 

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right or remedy provided hereunder or under any Law and shall not be construed as liquidated damages. In the event the Security Deposit is reduced by such use or application, Tenant shall deposit with Landlord within three (3) business days after written notice, an amount sufficient to restore the full amount of the Security Deposit. Except as may be required by Law, Landlord shall not be required to keep the Security Deposit separate from Landlord’s general funds or pay interest on the Security Deposit. In no event shall the Security Deposit be considered an advanced payment of Rent, and in no event shall Tenant be entitled to use the Security Deposit for the payment of Rent. Any remaining portion of the Security Deposit shall be returned to Tenant within sixty (60) days after Tenant has vacated the Premises in accordance with Article 13. If the Premises shall be expanded at any time, or if the Term shall be extended at an increased rate of Rent, the Security Deposit shall thereupon be proportionately increased. Landlord shall transfer the unused portion of the Security Deposit, if any, to any purchaser of the Building. Upon such transfer, Tenant shall look solely to such purchaser for return of the Security Deposit; and Landlord shall be relieved of any liability with respect to the Security Deposit. The holder of any Mortgage shall not be liable for the return of the Security Deposit unless such Mortgage holder actually receives the Security Deposit.

Notwithstanding the foregoing, so long as no Default on the part of Tenant shall exist under this Lease, which remains uncured beyond any applicable cure period, the Security Deposit in the original amount of $200,000 shall be reduced by $50,000 after the expiration of each of the third, fourth and fifth Lease Years with $50,000 remaining as the Security Deposit under this Lease from and after the sixth Lease Year. Each reduction shall occur and the amount of the Security Deposit so reduced shall be refunded to Tenant upon the later to occur of: (i) thirty (30) days following Tenant’s written request to Landlord following the expiration of the third, fourth and fifth Lease years, or (ii) sixty (60) days following the expiration of the third, fourth and fifth Lease Years.

ARTICLE 35

Option to Extend

Tenant, its successors and permitted assigns, are hereby granted the option (“Extension Option”) to extend the term of this Lease for one (1) additional period of five (5) Lease Years (“Extension Term”). The Extension Option shall only be exercised with respect to the entire Premises then being leased. Tenant shall exercise the Extension Option by giving irrevocable and unconditional written notice to Landlord not less than two hundred seventy (270) days prior to the Expiration Date. If Tenant fails to give written notice to Landlord within such time period, then the Extension Option shall be null and void and of no further force or effect. Tenant’s right to exercise the Extension Option shall be subject to the conditions that, at the time of the exercise of the Extension Option and at the commencement of the Extension Term, (i) this Lease shall be in full force and effect and (ii) no Default on the part of Tenant shall exist under this Lease which has remained uncured beyond any applicable time period. Upon exercise of the Extension Option, all references in this Lease to the Term shall be deemed to be references to the Term as extended by the Extension Term. The term “Lease Year” as used in this Article 35 means each twelve (12) month period, commencing with the first day of the Extension Term, without regard to calendar years.

The Extension Term shall be on the same terms and conditions as are contained in this Lease, except that (i) there will be no additional extension option, (ii) Base Rent applicable to the Premises for the Extension Term shall be determined as provided below, plus applicable state and local sales and use taxes due thereon, and (iii) any initial rent abatement or 

48

allowances which are in the nature of economic concessions or inducements shall not be applicable to the Extension Term. In addition to Base Rent, Tenant shall pay Additional Rent and other Rent plus applicable state and local sales and use taxes due thereon, during the Extension Term as provided in this Lease. With respect to the time frames set forth herein, time is of the essence.

Base Rent per annum per rentable square foot of the Premises during the Extension Term shall be the Current Market Rate for lease terms commencing on or about the date of commencement of the Extension Term. The term “Current Market Rate” means the prevailing net rental rate per rentable square foot under office leases recently executed for comparable space in the Complex and in comparable buildings in the area in which the Complex is located. The determination of Current Market Rate shall take into consideration that this is a net lease; any differences in definitions of rentable square feet or rentable area with respect to which rental rates are computed; the value of rent abatements, allowance (for demolition, space planning, architectural and engineering fees, construction, moving expenses or other purposes), the creditworthiness of Tenant; and other pertinent factors. The Current Market Rate may include an escalation of a fixed net rental rate (based on a fixed step or index) then prevailing in the market.

Within ten (10) days of receiving Tenant’s notice of the exercise of the Extension Option, Landlord shall give Tenant notice of Landlord’s determination of the Current Market Rate for such Extension Term and the basis for such determination. If Tenant disagrees with Landlord’s determination of the Current Market Rate, Landlord and Tenant shall negotiate in good faith and attempt to agree on the Current Market Rate. If the parties do not so agree on the Current Market Rate within ten (10) days of the date of Landlord’s notice, Landlord and Tenant shall submit the determination of Current Market Rate to binding arbitration unless the parties otherwise mutually agree in their respective sole discretion. In such event, Landlord and Tenant shall attempt to agree on an arbitrator within ten (10) days after the notice of such election. If they fail, after good faith efforts, to agree on an arbitrator within such ten (10) day period, Landlord and Tenant shall each appoint a fit and impartial person as arbitrator who shall have had at least ten (10) years’ active and current experience in the commercial real estate industry and the Boca Raton, Florida leasing market. Such an appointment shall be signified in writing by each party to the other. The arbitrators so appointed shall appoint a third arbitrator who shall have had at least ten (10) years’ active and current experience in the commercial real estate industry and the Boca Raton, Florida leasing market within ten (10) days after the appointment of the second arbitrator. In the case of the failure of such arbitrators to agree upon a third arbitrator, such third arbitrator shall be appointed by the American Arbitration Association, or its successor, from its qualified panel of arbitrators, and shall be a person having at least ten (10) years’ active and current experience in the commercial real estate industry and the Boca Raton, Florida office leasing market. In the case either party shall fail to appoint an arbitrator within a period of ten (10) days after written notice from the other party to take such appointment, then the American Arbitration Association shall appoint an arbitrator having at least ten (10) years’ active and current experience in the commercial real estate industry and the Boca Raton, Florida office leasing market for the failing party. Each of Landlord and Tenant shall furnish each of the three arbitrators with a copy of their respective final determination of Base Rent pursuant to this Section.

The third arbitrator shall proceed with all reasonable dispatch to determine Current Market Rent, provided, however, that in determining the Current Market Rate such arbitrator shall only be entitled to select either Landlord’s final determination of Current Market Rate or Tenant’s final determination of Current Market Rate, and in no event shall the arbitrator have the 

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right (i) to average the final determination of Current Market Rate of Landlord or Tenant or (ii) to choose another amount. The decision of such arbitrator shall in any event be rendered within thirty (30) days after his/her appointment, or within such other period as the parties shall agree, and such decision shall be in writing and in duplicate, one counterpart thereof to be delivered to each of the parties. The arbitration shall be conducted in accordance with the rules of the American Arbitration Association (or its successor) and applicable Law and this Article, which shall govern to the extent of any conflict between this Article and the rules of the American Arbitration Association and the decision of the third arbitrator shall be reviewable only to the extent provided by the rules of the American Arbitration Association and shall be otherwise be binding, final and conclusive on the parties. Each party shall pay the fees of the arbitrator it chose or was chosen for it by the American Arbitration Association and the fees of its counsel and the party whose final determination was not selected as the Current Market Rent shall pay for the fees of the third arbitrator and the reasonable and necessary expenses incident to the proceedings.

If Tenant exercises the Extension Option provided here, Landlord shall prepare an amendment to this Lease (the “Extension Amendment”) reflecting the changes in the Base Rent, Term and Expiration Date. A copy of the Extension Amendment shall be (i) sent to Tenant within a reasonable time after receipt of Tenant’s notice exercising the Extension Option and the determination of Current Market Rate, and (ii) executed by Tenant and Landlord and delivered to each other within ten (10) business days thereafter, but otherwise valid exercise of the Extension Option contained herein shall, at Landlord’s option, be fully effective whether or not the Extension Amendment is executed.

If Tenant fails to exercise the Extension Option provided herein, the Extension Option shall terminate, and shall be null and void and of no further force and effect. Tenant’s exercise of the Extension Option shall not operate to cure any Default by Tenant of any terms or provisions of this Lease, nor to extinguish or impair any rights or remedies of Landlord arising by virtue of such Default. If this Lease or Tenant’s right to possession of the Premises shall terminate in any manner whatsoever before Tenant shall exercise the option herein provided, then immediately upon the occurrence of any of the foregoing, the Extension Option herein granted to extend the Term with respect to the Premises, shall simultaneously terminate and become null and void. Under no circumstances whatsoever shall any sublessee have any right to exercise the Extension Option granted herein.

ARTICLE 36

Right of First Offer

(A)

If, at any time during the Term, Landlord shall desire to lease any office space on the second (2nd) floor of the Building adjacent and contiguous to the Premises (any such space is herein referred to as a “Right of First Offer Space”) to a third party other than the existing tenant or occupant of any such space, Landlord shall first give Tenant notice (“Landlord’s ROFO Notice”) of the Right of First Offer Space which Landlord desires to lease, Landlord’s determination of the Fair Market Rental Value of such space, the date such space is expected to be available, and the other economic and business terms and conditions upon which Landlord is willing to lease such Right of First Offer Space to Tenant. The lease term of such Right of First Offer Space shall be coterminous with the Term of the Lease if at least sixty (60) months remain in the current Term of the Lease and, if exercised, any Renewal Term of the Lease. Provided that (x) this Lease shall be in full force and effect, and (y) Tenant is not in Default under this Lease after written notice and the expiration of the applicable cure period, 

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Tenant shall have the right, exercisable by written notice to Landlord within ten (10) business days of the date of receipt of Landlord’s ROFO Notice (“ROFO Exercise Period”), the time of the giving of such notice being of the essence of this Article, to lease the Right of First Offer Space specified in Landlord’s ROFO Notice upon the terms and conditions contained therein; provided, however, that if Tenant objects to Landlord’s determination of Fair Market Rental Value as stated in Landlord’s ROFO Notice, Tenant shall include in Tenant’s exercise notice Tenant’s determination of Fair Market Rental Value. In the event that Tenant fails to exercise its right as aforesaid within said ten (10) business days of the date of receipt of Landlord’s ROFO Notice, then, except to the extent set forth in Section 36(E) below, Tenant shall be deemed to have waived its rights under this Article with respect to the Right of First Offer Space described in Landlord’s ROFO Notice, Landlord shall have the absolute right to lease the Right of First Offer Space specified in Landlord’s ROFO Notice to any other person or entity, and Tenant shall have no further rights with respect to such Right of First Offer Space, except as otherwise provided herein.

(B)

In the event that Tenant validly exercises its right to lease the Right of First Offer Space described in Landlord’s ROFO Notice, but Landlord and Tenant do not agree upon the Fair Market Rental Value of the Right of First Offer Space that is the subject of Landlord’s ROFO Notice, then each party’s determinations of Fair Market Rental Value, as indicated in Landlord’s ROFO Notice and in Tenant’s exercise notice, shall become their respective Estimates of Fair Market Rental Value and the parties shall proceed to determine Fair Market Rental Value through the use of designated brokers and the process set forth in accordance with Article 35. Tenant agrees to accept the Right of First Offer Space “as is” without any agreements, representations, understandings or obligations on the part of Landlord to perform any alterations, repairs or improvements and no representations regarding the condition of the Right of First Offer Space have been made to Tenant by or on behalf of Landlord. Except as otherwise provided in this Section and in the Landlord’s ROFO Notice, the Right of First Offer Space described in Landlord’s ROFO Notice shall be leased upon the same terms and conditions in effect under this Lease, as may be amended from time to time, including the payment of Tenant’s Prorata Share of Taxes and Operating Expenses, and other Rent and charges applicable to the Right of First Offer Space as provided in this Lease (it being understood that any economic concessions or inducements, applicable to the Premises, including without limitation, any Rent abatement or any tenant improvement or construction allowances, shall not be applicable to the Right of First Offer Space).

(C)

Upon determination of the Fair Market Rental Value, Landlord and Tenant shall enter into an amendment of the Lease acceptable to Landlord providing for (a) the inclusion of such Right of First Offer Space in the Premises, (b) the specification of Base Rent applicable to the Right of First Offer Space, and (c) a modification of the definition of Tenant’s Prorata Share to accurately represent the percentage that the rentable area of the Premises, together with the rentable area of such Right of First Offer Space, bears to the total rentable area of the Complex. A copy of such amendment shall be (i) sent to Tenant within a reasonable time after determination of the Fair Market Rental Value, and (ii) executed by Tenant and Landlord and delivered to each other within ten (10) business days thereafter, but an otherwise valid exercise of the option contained herein shall, at Landlord’s option, be fully effective whether or not any such amendment is executed.

(D)

The commencement date of any Right of First Offer Space shall be delayed and Tenant’s obligation to pay Rent with respect to such Right of First Offer Space shall be postponed if Landlord fails to deliver possession of such Right of First Offer Space to Tenant by the date (i) set forth in the applicable Landlord’s ROFO Notice or (ii) by the date otherwise 

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agreed to in writing by the parties (such date being the, in each instance, the “First Offer Space Commencement Date”) for any reason, including but not limited to holding over by any tenant or occupants of such space. Any delay in the commencement date of any Right of First Offer Space shall not subject Landlord to any liability for loss or damage resulting therefrom, and Tenant’s sole remedy and recourse with respect thereto shall be the postponement of Rent with respect to such Right of First Offer Space and shall constitute full settlement of all claims that Tenant might otherwise have against Landlord by reason of such space not being ready for possession by Tenant on the First Offer Space Commencement Date.

(E)

Tenant’s election to lease any Right of First Offer Space pursuant to the Right of First Offer set forth herein shall not operate to cure any default by Tenant of any of the terms or provisions in the Lease, nor to extinguish or impair any rights or remedies of Landlord arising by virtue of such default. Under no circumstances whatsoever shall any sublessee of Tenant have any right to exercise the Right of First Offer. Tenant’s rights under this Section shall terminate if (i) this Lease or Tenant’s right to possession of the Premises is terminated, or (ii) Tenant fails to timely exercise the Right of First Offer as provided under this Section, time being of the essence with respect to Tenant’s exercise of the Right of First Offer and with respect to all other time frames set forth in this Section. Notwithstanding anything herein to the contrary, in the event that any portion of the Right of First Offer Space becomes available during the last year of the Term, Tenant may not exercise its Right of First Offer unless it simultaneously exercises (or previously exercised, as the case may be) its Extension Option set forth in this Lease and Tenant’s rights under this Section shall terminate if less than eighteen (18) months remain in the Extension Term, if exercised.

ARTICLE 37

Termination Option

Landlord grants to Tenant the option to terminate the Lease (“Termination Option”), effective as of any date after the fifth Lease Year (“Termination Date”), provided that (i) at the time the Termination Option is exercised and at all times thereafter, the Lease is in full force and effect and no Default exists; (ii) Tenant delivers written notice of termination (“Termination Notice”) to Landlord not less than two hundred seventy (270) days prior to the intended Termination Date (which intended Termination Date shall be specified in such written notice); (iii) all Base Rent, Additional Rent and any other amounts payable under the Lease shall be paid through and apportioned as of the Termination Date; (iv) Tenant shall have paid to Landlord, at the times specified below, (a) the “Unamortized Amount,” as defined herein, of (x) Landlord’s Work and (y) the brokerage commissions paid by Landlord for the negotiation and consummation of this Lease, together with interest on (a) and (b) above (collectively, “Transaction Costs”), at the rate of ten percent (10%) per annum, from the date when first paid or credited. The term “Unamortized Amount,” as used in this Article 37, shall mean that portion of the Transaction Costs which remains unamortized as of the Termination Date, based upon a full amortization on a straight-line basis over a term of sixty (60) months, as shown on the amortization schedule attached as Exhibit E hereto and made a part hereof; and (b) an amount equal to the aggregate of two (2) months’ of Base Rent and Additional Rent at the then-current rates (collectively, the “Termination Fee”). The Termination Fee shall be paid to Landlord with the Termination Notice; (v) Tenant shall surrender the Premises in the condition required under the Lease; and (vi) neither party shall have any rights, liabilities or obligations under the Lease for the period accruing after the Termination Date, except those which, by the provisions of the Lease, expressly survive the termination of the term of the Lease. Upon the timely and valid exercise of the Termination Option, the Termination Option shall be self-operative and no 

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additional agreement between Landlord and Tenant shall be necessary to effectuate such termination; provided, however, Landlord and Tenant shall, for their mutual convenience, execute a termination agreement prior to the Termination Date. The Termination Option is personal to Tenant and under no circumstances whatsoever shall any assignee or sublessee of Tenant have any right to exercise the Termination Option. Tenant’s rights under this Article 37 shall be null and void and of no further force or effect if (i) the Lease or Tenant’s right to possession of the Premises is terminated; (ii) Tenant assigns any of its interest in this Lease or sublets any portion of the Premises; or (iii) Tenant fails to timely exercise the Termination Option under this Article 37, time being of the essence with respect to Tenant’s exercise of the Termination Option and with respect to all other time frames set forth in this Article 37.

ARTICLE 38

Bankruptcy

(A)

The following shall be “Events of Bankruptcy” under this Lease: (i) Tenant becomes insolvent, as that term is defined in Title 11 of the United States Code (the “Bankruptcy Code”), or under the insolvency laws of any state (the “Insolvency Laws”); (ii) appointment of a receiver or custodian for any property of Tenant, or the institution of a foreclosure or attachment action upon any property of Tenant, (iii) filing of a voluntary petition by Tenant under the provisions of the Bankruptcy Code or Insolvency Laws; (iv) filing of an involuntary petition against Tenant as the subject debtor under the Bankruptcy Code or Insolvency Laws, which either (a) is not dismissed within thirty (30) days of filing, or (b) results in the issuance of an order for relief against the debtor; or (v) Tenant’s making or consenting to an assignment for the benefit of creditors or a composition of creditors.

(B)

Upon occurrence of an Event of Bankruptcy, Landlord shall have all rights and remedies available pursuant to Article 22; provided, however, that while a case in which Tenant is the subject debtor under the Bankruptcy Code is pending, Landlord shall not exercise its rights and remedies pursuant to Article 22 so long as (i) the Bankruptcy Code prohibits the exercise of such rights and remedies, and (ii) Tenant or its trustee in Bankruptcy (“Trustee”) is in compliance with the provisions of Section 36(C) below.

(C)

If Tenant becomes the subject debtor in a case pending under the Bankruptcy Code, then Landlord’s right to terminate this Lease pursuant to Section 36(B) shall be subject, to the extent required by the Bankruptcy Code, to any rights of Trustee to assume or assign this Lease pursuant to the Bankruptcy Code. Trustee shall not have the right to assume or assign this Lease unless Trustee promptly (i) cures all defaults under this Lease, (ii) compensates Landlord for monetary damages incurred as a result of such defaults, (iii) provides adequate assurance of future performance on the part of Tenant as debtor in possession or of the assignee of Tenant, and (iv) complies with all other requirements of the Bankruptcy Code. This Lease may be terminated in accordance with Section 36(B) if the foregoing criteria for assumption or assignment are not met, or if Tenant, Trustee or such assignee defaults under this Lease after such assumption or assignment. Adequate assurance of future performance, as used in this Section 36(C), shall mean that all of the following minimum criteria must be met: (a) Tenant’s gross receipts in the ordinary course of business during the thirty (30) day period immediately preceding the initiation of the case under the Bankruptcy Code must be greater than two (2) times the next monthly installment of the Base Rent and additional Rent; (b) both the average and median of Tenant’s monthly gross receipts in the ordinary course of business during the six (6) month period immediately preceding the initiation of the case under the Bankruptcy Code must be greater than two (2) times the next monthly installment of the Base 

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Rent and additional Rent; (c) Tenant must pay its estimated pro rata share of the cost of all services performed or provided by Landlord (whether directly or through agents or contractors and whether or not previously included as part of the Base Rent) in advance of the performance or provision of such services; (d) Trustee must agree that Tenant’s business shall be conducted in a first-class manner, and that no liquidating sale, auction or other non-first-class business operation shall be conducted in the Premises; (e) Trustee must agree that the use of the Premises as stated in this Lease shall remain unchanged and that no prohibited use shall be permitted; (f) Trustee must agree that the assumption or assignment of this Lease shall not violate or affect the rights of other tenants in the Building; (g) Trustee must pay to Landlord at the time the next monthly installment of the Base Rent is due, in addition to such installment, an amount equal to the monthly installments of the Base Rent and additional Rent due for the next two (2) months thereafter, such amount to be held as a security deposit; and (h) all assurances of future performance specified in the Bankruptcy Code must be provided.

ARTICLE 39

Confidentiality

(A)

Landlord and Tenant acknowledge that the terms and provisions of this Lease have been negotiated based upon a variety of factors, occurring at a coincident point in time, including, but not limited to: (i) the individual principals involved and the financial strength of Tenant, (ii) the nature of Tenant’s business and use of the Premises, (iii) the current leasing market place and the economic conditions affecting rental rates, (iv) the present and projected tenant mix of the Building, and (v) the projected juxtaposition of tenants on the floor(s) upon which the Premises are located and the floors within the Building. Therefore, recognizing the totality, uniqueness, complexity and interrelation of the aforementioned factors, Tenant agrees to use its commercially reasonable efforts not to disseminate in any manner whatsoever, (whether by word of mouth, mechanical reproduction, physical tender or by any manner of visual or aural transmission or review) the terms and conditions of this Lease to third parties who could in any way be considered presently or in the future as prospective tenants for this or any other leasehold property with which Landlord may be involved.

(B)

Additionally, Tenant agrees that information concerning Landlord and Boca Corporate Center and Campus and the financial and other terms of this Lease, are confidential and proprietary information and Tenant agrees that it will not duplicate or disclose any such information to any person in any manner unless such duplication, use, or disclosure is specifically authorized by Landlord in writing. Confidential and proprietary information is not meant to include any information that is in the public domain. In addition, Tenant agrees to keep the financial terms and conditions as contained herein confidential, with the following exceptions:

(i)

Tenant may disclose the contents of this Lease to its accountants, advisors, potential investors and other third parties similarly situated (“Recipient”), and shall notify such Recipients of the confidentiality provisions contained herein; 

(ii)

Tenant may disclose such information as required by court order;

(iii)

Tenant may disclose such information as required by the securities laws and other laws and regulations of the United States of America; and

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(iv)

Tenant shall issue no press release or statement to the media regarding this Lease without the Landlord’s prior approval, which approval shall not be unreasonably withheld.

For purposes of this Article 37, “Tenant” shall include the officers, employees, directors and representatives of Tenant, and Tenant covenants and agrees to exercise its commercially reasonable efforts to cause such persons to comply with the terms hereof. Tenant shall be liable for the failure of any such person to comply therewith unless Tenant can demonstrate by clear and convincing evidence that it has exercised best efforts to do so and that, notwithstanding such commercially reasonable efforts, compliance has not been achieved.

(C)

The provisions of this Article 39 shall not prevent or prohibit Tenant from disclosure of confidential and proprietary information to prospective assignees, subtenants, purchasers or affiliates of Tenant or investors in Tenant or Tenant’s affiliates on a strictly “need to know basis”, provided that Tenant shall advise such third parties of the restrictions set forth in this Article 39.

ARTICLE 40

Signage

No signs, advertisements or notices shall be painted or affixed to windows, doors or other parts of the Building, except those of such color, size, style and in such places as are first approved in writing by Landlord. No decorations, posters, banners, decorative lights or other items shall be placed in or affixed to or painted on the windows or adjacent to the windows in a location visible from the exterior of the Premises. All tenant identification directory signage in the Complex shall be installed by Landlord, at Landlord’s cost and expense, and standard suite signage at the entrance to the Premises shall be installed by Landlord, at Tenant’s cost and expense, using the standard graphics for the Building. If Landlord approves any additional signs to be installed by Tenant, such signs (a) shall comply with the terms of this Lease, all applicable Laws and the requirements of any covenants, conditions and restrictions of record affecting the Complex and the requirements of the City of Boca Raton, Florida, and any other governmental authority with jurisdiction, and (b) shall be removed by Tenant, with any damage to the Premises or Building, as the case may be, caused by such removal repaired and the Premises or Building, as the case may be, restored, at the sole cost and expense of Tenant, upon the expiration or sooner termination of the Term.

Subject to approval by all applicable governmental authorities, Landlord shall install a monument sign in front of the Building, at Landlord’s sole cost and expense, and permit Tenant to maintain an identity panel on such monument sign. The design, fabrication, installation and maintenance of such identification panel shall be at Landlord’s sole cost and expense. Tenant’s right to maintain identification signage on any Building monument sign is predicated upon Tenant leasing not less than 15,000 rentable square feet of the Premises and occupying not less than 15,000 rentable square feet of the Premises. Upon termination or expiration of the Lease or of Tenant’s right to possession of the Premises under the Lease or in the event Tenant ceases to occupy the required portion of the Premises, Landlord shall, at Tenant’s sole cost and expense, remove Tenant’s identification panel from the monument sign and restore and repair the parts of such monument sign affected by the installation or removal of said signage to the condition existing prior to the addition of Tenant’s name or to a condition reasonably acceptable to Landlord.

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ARTICLE 41

Limitation of Liability

Any property stored or placed by Tenant or its invitees in or about the Premises, the Building or the Complex shall be at the sole risk of Tenant, and Landlord shall not in any manner be held responsible therefor. If any employee of Landlord receives any package or article delivered for Tenant, then such employee shall be acting as Tenant’s agent for such purpose and not as Landlord’s agent. Furthermore, it is expressly understood and agreed by and between the parties hereto, anything herein to the contrary notwithstanding, that each and all of the representations, warranties, covenants, undertakings, and agreements herein made on the part of any Landlord while in form purporting to be the representations, warranties, covenants, undertakings, and agreements of such Landlord are nevertheless each and every one of them made and intended, not as personal representations, warranties, covenants, undertakings, and agreements by such Landlord or for the purpose or with the intention of binding such Landlord personally, but are made and intended for the purpose only of subjecting such Landlord’s interest in the Complex (as it exists from time to time and at any time) to the terms of the Lease and for no other purpose whatsoever. The liability of Landlord to Tenant for any default by Landlord under the Lease or arising in connection herewith or with Landlord’s operation, management, leasing, repair, renovation, alteration, or any other matter relating to the Complex, the Building or the Premises, shall be limited to the interest of Landlord in the Complex (as it exists from time to time and at any time). Tenant agrees to look solely to Landlord’s interest in the Complex (as it exists from time to time and at any time) for the recovery of any judgment against Landlord, and Landlord shall not be personally liable for any such judgment or deficiency after execution thereon. The limitations of liability contained in this provision shall apply equally and inure to the benefit of Landlord’s present and future partners, beneficiaries, officers, directors, trustees, members, managers, shareholders, agents and employees, and their respective partners, members, shareholders, legal representatives, heirs, successors and assigns. Under no circumstances shall any present or future shareholder, officer or director of Landlord (if Landlord is a corporation), general or limited partner of Landlord (if Landlord is a partnership), manager or member of Landlord (if Landlord is a limited liability company), or trustee or beneficiary (if Landlord or any partner of Landlord is a trust) have any liability for the performance of Landlord’s obligations under the Lease.

ARTICLE 42

Mortgagee’s Consent

This Lease is subject to and conditioned upon, any required consent or approval being granted without any fee, charge or condition that is unacceptable to Landlord, by Landlord’s mortgagee(s).

ARTICLE 43

Entire Agreement

This Lease, together with Rider One, Schedule 3(G) and Exhibits A, B, C, D and E (WHICH COLLECTIVELY ARE HEREBY INCORPORATED WHERE REFERRED TO HEREIN AND MADE A PART HEREOF AS THOUGH FULLY SET FORTH), contains all the terms and provisions between Landlord and Tenant relative to the matters set forth herein and no prior or contemporaneous agreement or understanding pertaining to the same shall be of any force or 

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effect, except any such contemporaneous agreement specifically referring to and modifying this Lease, signed by both parties. Without limitation as to the generality of the foregoing, Tenant hereby acknowledges and agrees that Landlord’s leasing agents and field personnel are only authorized to show the Premises and negotiate terms and conditions for leases subject to Landlord’s final approval, and are not authorized to make any agreements, representations, understandings or obligations, binding upon Landlord, respecting the condition of the Premises, the Complex or the Building, suitability of the same for Tenant’s business, or any other matter, and no such agreements, representations, understandings or obligations not expressly contained herein or in such contemporaneous agreement shall be of any force or effect. Neither this Lease, nor any Riders or Exhibits referred to above may be modified, except in writing signed by both parties.

ARTICLE 44

Radon Gas

Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal or state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county health department.

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease, under seal, as of the day and year first above written.

						
	 
	     

	     

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	TENANT:

	 
	 
	 
	 
	 

	 
	 
	 
	MEDICAL CONNECTIONS, INC.,

	WITNESSES:

	 
	a Florida corporation

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	By:

	 

	Print Name:

	 
	 
	Name:

	 

	 
	 
	 
	Its:

	 

	 
	 
	 
	 

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58

RIDER ONE

RULES AND REGULATIONS

The following Rules and Regulations have been formulated for the safety and well-being of all tenants of the Building and to ensure compliance with all municipal and other requirements. Strict adherence to these Rules and Regulations is necessary to guarantee that each and every tenant will enjoy a safe and unannoyed occupancy in the Building in accordance with the Lease. Any continuing violation of these Rules and Regulations by Tenant, after notice from Landlord, shall be deemed to be an Default under the Lease.

Landlord may, upon request by any tenant, waive the compliance by such tenant to any of these Rules and Regulations, provided that (i) no waiver shall be effective unless signed by Landlord or Landlord’s authorized agent, (ii) any such waiver shall not relieve such tenant from the obligation to comply with such Rule and Regulation in the future unless expressly consented to by Landlord, (iii) no waiver granted to any tenant shall relieve any other tenant from the obligation of complying with the Rules and Regulations unless such other tenant has received a similar waiver in writing from Landlord, and (iv) any such waiver by Landlord shall not relieve Tenant from any obligation or liability of Tenant to Landlord pursuant to the Lease for any loss or damage occasioned as a result of Tenant’s failure to comply with any such Rule or Regulation.

1.

The sidewalks, entrances, passages, courts, elevators, vestibules, stairways, corridors, halls and other parts of the Building not occupied by any tenant shall not be obstructed or encumbered by any tenant or used for any purpose other than ingress and egress to and from the Premises, and if the Premises are situated on the ground floor of the Building, then Tenant shall, at its own expense, keep the sidewalks and curbs directly in front of the Premises clean and free from ice and snow. Landlord shall have the right to control and operate the public portions of the Building and the facilities furnished for common use of the tenants in such manner as Landlord deems best for the benefit of the tenants generally. No tenant shall permit the visit to the Premises of persons in such numbers or under such conditions as to interfere with the use and enjoyment by other tenants of the entrances, corridors, elevators and other public portions or facilities of the Building.

2.

No awnings or other projections shall be attached to any wall of the Building without the prior written consent of Landlord. No drapes, blinds, shades or screens shall be attached to or hung in, or used in connection with, any window or door of the Premises, without the prior written consent of Landlord, provided such consent shall not be unreasonably withheld. Such awnings, projections, curtains, blinds, shades, screens or other fixtures must be of a quality, type, design and color, and attached in the manner, approved by Landlord.

3.

No showcases or other articles shall be put in front of or affixed to any part of the exterior of the Building, nor placed in the halls, corridors or vestibules without the prior written consent of Landlord.

4.

The water and wash closets and other plumbing fixtures shall not be used for any purposes other than those for which they were constructed, and no sweepings, rubbish, rags, chemicals, paints, cleaning fluids 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.

R1-1

5.

There shall be no marking, painting, drilling into or in any way defacing the Building or any part of the Premises visible from public areas of the Building. Tenant shall not construct, maintain, use or operate within the Premises any electrical device, wiring or apparatus in connection with a loud speaker system or other sound system, except as reasonably required for its communication system and approved prior to the installation thereof by Landlord, which approval shall not be unreasonably withheld. No such loudspeaker or sound system shall be constructed, maintained, used or operated outside of the Premises.

6.

No bicycles, vehicles, animals, birds or pets of any kind shall be brought into or kept in or about the Premises, and no cooking (except for hot-plate or microwave cooking by Tenant’s employees for their own consumption, the equipment for and location of which are first approved by Landlord) shall be done or permitted by any tenant on the Premises. No tenant shall cause or permit any unusual or objectionable odors to be produced upon or to permeate from the Premises.

7.

The use of the Premises by each tenant was approved by Landlord prior to execution of the Lease and such use may not be changed from the Permitted Use without the prior approval of Landlord, which approval shall not be unreasonably withheld. No space in the Building shall be used for manufacturing of goods for sale in the ordinary course of business, for the storage of merchandise for sale in the ordinary course of business or for the sale at auction of merchandise, goods or property of any kind.

8.

No tenant shall make any unseemly or disturbing noises or disturb or interfere with occupants of the Building or neighboring buildings or Premises or those having business with them whether by the use of any musical instrument, radio, talking machine, unmusical noise, whistling, singing or in any other way. No tenant shall throw anything out of the doors or windows or down the corridors or stairs.

9.

No flammable, combustible or explosive fluid, chemical, asbestos or other hazardous substance or any other material harmful to tenants of the Building shall be brought, installed in or kept upon the Premises. No space heaters, fans or individual air conditioning units may be used in the Premises. Any electrical or extension cords deemed to be a fire hazard by Landlord in Landlord’s sole discretion shall be removed.

10.

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. The doors leading to the corridors or main halls shall be kept closed during business hours except as they may be used for ingress or egress. Each tenant shall, upon the termination of its tenancy, restore to the Landlord all keys of stores, offices, storage and toilet rooms either furnished to, or otherwise procured by, such tenant, and in the event of the loss of any keys so furnished, such tenant shall pay to Landlord the cost thereof.

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SCHEDULE 3(G)

WIRE TRANSFER INSTRUCTIONS

			
	BANK:

	     

	Harris Bank NA, Chicago, Illinois

	  

	 
	 

	ACCOUNT NAME:

	 
	BRE/Boca Corporate Center L.L.C. for the secured interest

In favor of Barclays Capital Real Estate Inc. as lender

	  

	 
	 

	ABA NO.

	 
	071000288

	  

	 
	 

	ACCOUNT NO.

	 
	194-470-1

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EXHIBIT A

(Floor plan(s) showing Premises cross-hatched)

[To be inserted upon approval of Landlord and Tenant]

A-1

EXHIBIT B

WORKLETTER AGREEMENT

THIS WORKLETTER AGREEMENT ("Workletter") is made a part of that certain Lease between Medical Connections, Inc., as Tenant, and BRE/Boca Corporate Center, L.L.C., as Landlord, relating to Premises at Building 4800 in T-Rex Corporate Center, Boca Raton, Florida, which Premises are more fully identified in the Lease. Capitalized terms used herein, unless otherwise defined in this Workletter, shall have the respective meanings assigned to them in the Lease.

For and in consideration of the agreement to lease the Premises and the mutual covenants contained herein and in the Lease, Landlord and Tenant hereby agree as follows:

1.

Work.

(a)

Landlord shall cause to be performed the Work (as defined below) in the Premises as shown on, and in accordance with, the Plans (as defined below), provided that the Work shall not include wiring the Premises for telephone or data lines [provided the cost thereof may be reimbursed out of the Landlord’s Contribution (as hereinafter defined) to the extent funds are available for such purpose] and shall not include, even if depicted on the Plans, any furniture or office equipment. Subject to "Tenant Delay" and "Force Majeure Delay" (as those terms are defined in Paragraph 2 below), Landlord shall proceed diligently to endeavor to cause the Work to be completed and obtain a certificate of occupancy by the appropriate governmental authority in accordance with the estimated construction schedule attached as Appendix I hereto and made a part hereof (the “Schedule”) and substantial completion and receipt of a certificate of occupancy by the appropriate governmental authority to occur no later than July 1, 2009 (such date being referred to herein as the "Substantial Completion Date"). It is agreed that construction of the Work reflected on the final Approved Plans (as defined below) will be completed using Building standard methods, materials and finishes, except as otherwise specified in the Approved Plans. Except for Landlord’s Contribution to be provided by Landlord hereunder, Tenant shall be responsible for the payment of all costs incurred by Landlord in connection with the Work (“Cost of the Work”) in excess of Landlord’s Contribution, subject to the provisions of this Workletter. Tenant shall receive prior written notice from Landlord and shall have the right to approve, which approval shall not be unreasonably withheld or delayed, any costs associated with the Work that are to be paid out of Landlord’s Contribution prior to payment thereof by Landlord. As shown on the Schedule, Tenant shall have the right to approve architectural fees as well as costs of the general contractor, which approval shall not be unreasonably withheld or delayed. Change orders will be forwarded to Tenant prior to approval by Landlord. Landlord shall provide Tenant with a monthly schedule showing amounts expended to date from Landlord’s Contribution and the remaining balance thereof. Tenant shall pay such amount within five (5) days after demand therefor. If such amount is not paid when due, it shall bear interest at the default rate provided in the Lease. Landlord agrees to competitively bid the work to at least three (3) qualified contractors and shall use its commercially reasonable discretion in selecting the most economical contractor for the work.

(b)

Landlord shall cause its space planner to prepare a complete and detailed space plan of the Premises depicting all office layouts and setting forth all specifications for materials and finishes therein, including wall finishes, floor finishes, office layout, furniture and partition layout, telephone lines, data lines, electrical outlets, and other miscellaneous decorative appointments ("Space Plans"). The Space Plans shall be delivered to Tenant reasonably 

B-1

promptly following Tenant's execution of the Lease. Tenant shall indicate its approval or disapproval of the Space Plans within three (3) business days after receipt, with specific details of the points that are disapproved and suggested changes ("Disapproved Details"). With respect to the Disapproved Details, Landlord shall, within five (5) business days of receipt of Tenant's disapproval, revise the Space Plans in a manner designed to eliminate Tenant’s disapproval. Tenant shall again review the revised Space Plans within three (3) business days of receipt of the revised Space Plans. The foregoing process shall continue until Tenant has approved the Space Plans.

Based upon the Space Plans approved by Landlord and Tenant, Landlord will cause the Plans (as defined herein) to be prepared to Tenant’s reasonable satisfaction. The Plans shall be (i) provided to Tenant reasonably promptly following Tenant’s approval of the Space Plans and (ii) reasonably approved by Tenant no more than five (5) business days following receipt thereof, including any reasonable Disapproved Details thereto. Landlord shall modify the Plans to reasonably accommodate Tenant's comments prior to being resubmitted to Tenant, as reasonably determined by Landlord, and submit the revised Plans to Tenant for approval. Tenant shall not unreasonably withhold its approval of the Plans. This process shall continue until Landlord and Tenant have approved the Plans. Failure by Tenant to approve, or disapprove together with its Disapproved Details, as the case may be, of the Plans within the applicable time period provided above shall be deemed approval by Tenant of the Plans. All improvements described in the Approved Plans may be referred to, collectively, as the "Work." The Plans shall be subject to Landlord's approval and the approval of all local governmental authorities requiring approval of the work or the Approved Plans. Landlord agrees not to unreasonably withhold its approval of the Space Plans or the Plans; provided, however, that Landlord shall not be deemed to have acted unreasonably if it withholds its approval of the Space Plans or the Plans because, in Landlord's reasonable opinion: the Work as shown is likely to adversely affect Building systems and equipment, the structure of the Building or the safety of the Building or its occupants; the Work as shown might impair Landlord's ability to furnish services to Tenant or other tenants; the Work would increase the cost of operating the Building or the Complex; the Work would violate any governmental laws, rules or ordinances (or interpretations thereof); the Work contains or uses hazardous or toxic materials or substances; the Work would adversely affect the appearance of the Building; or the Work might adversely affect another tenant's premises. The foregoing reasons, however, shall not be exclusive of the reasons for which Landlord may withhold consent, whether or not such other reasons are similar or dissimilar to the foregoing. To the extent that changes are required to the Plans (or the Work) by any local governmental official, the Plans shall be amended in accordance with the changes so required and Tenant shall be advised of such changes.

Landlord approval of the Plans shall in no way be deemed to be (i) an acceptance or approval of any element therein contained which is in violation of any applicable laws, ordinances, regulations or other governmental or insurance requirements, or (ii) an assurance that work done pursuant to the Approved Plans will comply with all applicable laws (or with the interpretations thereof) or satisfy Tenant's objectives and needs. If Landlord shall provide full MEP engineering services to Tenant, the cost of such services shall be paid from Landlord’s Contribution. As used herein, the term "Approved Plans" shall mean the Plans (as hereinafter defined), as and when approved in writing by Landlord and Tenant. As used herein, the term "Plans" shall mean the full and detailed architectural and engineering plans and specifications covering the Work (including, without limitation, architectural, mechanical and electrical working drawings for the Work).

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(c)

The Cost of the Work may include, without limitation, (1) costs of labor, hardware, equipment and materials, contractors' charges for overhead and fees, and so-called "general conditions" (including rubbish removal, utilities, freight elevators, hoisting, field supervision, building permits, occupancy certificates, inspection fees, utility connections, bonds, insurance, sales taxes, and the like), (2) the Plans, including, without limitation, all revisions thereto, and engineering reports, or other studies, reports or tests, air balancing or related work in connection therewith, and (3) Landlord's costs. "Work" herein means: (i) the improvements and items of work shown on the final Approved Plans (including Change Orders (as defined herein)), and (ii) any demolition, preparation or other work required in connection therewith, including without limitation, structural or mechanical work, additional HVAC equipment or sprinkler heads, or modifications to any building mechanical, electrical, plumbing or other systems and equipment or relocation of any existing sprinkler heads, either within or outside the Premises required as a result of the layout, design, or construction of the Work or in order to extend any mechanical distribution, fire protection or other systems from existing points of distribution or connection, or in order to obtain building permits for the work to be performed within the Premises (unless Landlord requires that the Plans be revised to eliminate the necessity for such work). 

(d)

In connection with the Premises, provided that Tenant is not in default under the Lease beyond any applicable cure period, Landlord shall contribute ("Landlord’s Contribution") up to Forty-Five and No/100 Dollars ($45.00) per rentable square foot of the Premises, i.e. Eight Hundred Fifty-Three Thousand Four Hundred Seventy and No/100 Dollars ($853,470.00), toward the Cost of the Work and the initial receipt of the certificate of occupancy.  Landlord’s Contribution is applicable only in connection with the foregoing costs, and shall not be available for any improvements or alterations made subsequent to substantial completion of the Work and initial receipt of a certificate of occupancy. Landlord shall pay the approved contractor directly up to Landlord’s Contribution and Tenant shall have no obligation to pay any monies with regard to the Work except as may be otherwise set forth herein. If any portion of Landlord’s Contribution shall not be so used, Landlord shall be entitled to the savings and Tenant shall receive no credit therefor. If Landlord terminates the Lease or Tenant's right to possession based on a default by Tenant which remains uncured after written notice and the expiration of the applicable cure period, Tenant shall repay Landlord on demand the unamortized amount of Landlord’s Contribution theretofore disbursed, as additional damages, without in any way limiting Landlord's other rights or remedies. Tenant shall be responsible for the payment of any portion of the Cost of the Work exceeding Landlord’s Contribution, provided that Landlord’s Contribution shall be disbursed in full prior to any payment by Tenant for the Cost of the Work.

2.

Delays in Work. Notwithstanding the date provided in the Lease for the Commencement Date, Tenant's obligation to pay Rent thereunder shall not commence until Landlord shall have substantially completed all Work to be performed by Landlord in the Premises as set forth in Paragraph l hereof and obtained a certificate of occupancy from all applicable governmental authorities; provided, however, if Landlord shall be delayed in substantially completing the Work for any reason set forth in the following subparagraphs (a) through (f) ("Tenant Delay"), the Commencement Date, Rent Commencement Date, nor the payment of Rent thereunder shall be affected or deferred on account of such delay:

(a)

Tenant's failure to furnish any reasonable information required for the completion, and Tenant approval, of the Space Plans or the Plans within the time frames set forth in Paragraph 1 above, or required for the completion of Landlord's Work as set forth in writing by the Landlord to Tenant; or

B-3

(b)

Tenant's failure, for a period of fifteen (15) days or more, to agree upon Plans acceptable to Tenant; or

(c)

Tenant's request for or use of unique materials, finishes or installations or construction procedures which are substantially different from that which is standard or customary for the Building, or resulting in the Work required by the Approved Plans (as same may be revised from time to time) taking longer to complete under standard construction procedures (e.g., without use of overtime or additional shifts and without necessitating other measures to expedite long lead time items) than originally projected by Landlord at the execution of the Lease (i.e., when Landlord developed its schedule for construction of the Work without the benefit of the Plans); or

(d)

Tenant's material changes in the Work or the Plans (notwithstanding Landlord's approval of any such material changes); or

(e)

any other act, omission or delay by Tenant, its agents or contractors or persons employed by any of such persons delaying substantial completion of the Work, subject to Force Majeure as defined in the Lease.

3.

Completion — Punch List.

(a)

When Landlord's construction manager, in its reasonable discretion, considers the Work to be substantially complete or about to be substantially completed and has obtained a certificate of occupancy, Landlord shall notify Tenant as to the date or anticipated date of substantial completion and its receipt of a certificate of occupancy and of a reasonable time and date for inspection of the Work. If such time and date for inspection are not reasonably acceptable to Tenant, Landlord and Tenant shall mutually agree upon another time and date, provided that Tenant and Landlord shall not unreasonably delay such inspection. Tenant agrees to inspect the Premises at such time and on such date and to execute at the time of such inspection Landlord's form of inspection report which shall be prepared by Landlord's construction manager and shall list items designated by said construction manager as not yet completed and any additional items which Landlord and Tenant, in good faith, agree are not yet completed (said list is hereinafter referred to as a "Punch List"). If Tenant does not appear for inspection on the date designated or agreed upon, Tenant shall be deemed to have accepted the Premises as substantially completed and Landlord or its representative may execute such Punch List on behalf of both Landlord and Tenant. Tenant agrees that, at the request of Landlord from time to time after the initial inspection, Tenant shall initial such Punch List or execute revised Punch Lists to reflect completion or partial completion of prior Punch List items. Landlord agrees to complete all such Punch List items as soon as practicable, subject to Force Majeure, but in no event later than sixty (60) days from creation of the Punch List.

(b)

At any time after substantial completion of the Work and receipt of a certificate of occupancy, Landlord may, upon notice to Tenant, enter the Premises to complete Punch List items, and such entry by Landlord or its agents, employees or contractors for such purpose shall not constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any abatement or diminution of rent, or relieve Tenant from any of its obligations under the Lease, or impose any other liability upon Landlord or its agents, employees or contractors provided Landlord shall attempt to minimize any interruption to Tenant’s business, if applicable.

(c)

The phrases "substantial completion" or "substantially complete" shall mean that the Work has been completed except for such incomplete items as would not materially interfere 

B-4

with the use of the Premises for its intended uses, as described in the Lease (but excluding items not included in the Work which are required for use of the Premises for such purposes). The Work shall be deemed to be substantially complete on the date on which the Work would have been substantially complete but for Tenant Delay, provided a certificate of occupancy has been issued for the Premises.

4.

Access by Tenant or Tenant’s Contractor Prior to Commencement of Term. 

(a)

Landlord, at Landlord's reasonable discretion, may permit Tenant and Tenant's agents, suppliers, contractors, subcontractors and workmen (collectively, "Tenant's Contractors"), who have been approved by Landlord as hereinafter provided, to enter the Premises prior to the Commencement Date to enable Tenant to do such things as may be required by Tenant to make the Premises ready for Tenant's occupancy.

(b)

Tenant shall notify Landlord of the identity of Tenant's Contractors not less than three (3) days prior to the initial entry into the Premises by any such Tenant's Contractors, and Landlord shall have the right to approve or disapprove any of Tenant's Contractors.

(c)

Tenant agrees that if permission is granted Tenant for entry under this Paragraph, then (i) Tenant and Tenant's Contractors and their activities in the Premises and Building will not unreasonably interfere with or delay the completion of the Work to be done by Landlord and will not interfere with other construction by Landlord, its contractors and subcontractors and their agents and employees or occupants of the Building and their contractors in or about the Premises or Building, and (ii) Landlord, its contractors and subcontractors and their agents and employees shall have priority over Tenant and Tenant's Contractors in performing work within the Premises or Building, including, without limitation, the use of hoists and elevators.

(d)

Landlord shall have the right to withdraw its permission given under this Paragraph 4 upon written or oral notice to Tenant if Landlord determines that any interference or delay has been or may be caused. Tenant agrees that any such entry into the Premises shall be at Tenant's own risk and Landlord shall not be liable in any way for any injury, loss or damage which may occur to any of the Tenant's property or installations made in the Premises.

(e)

Tenant shall promptly pay to each of Tenant's Contractors when due the cost of all Work done by such Tenant's Contractor and, if required by Landlord, shall deliver to Landlord evidence of payment to each such party, together with contractors' affidavits, partial and full and final waivers of all liens for labor, service or materials and such other documents as Landlord may request.

(f)

Any work performed by Tenant or Tenant's Contractors shall be done in a first-class workmanlike manner using only building standard materials and shall comply with all of Landlord's rules and requirements and all applicable laws, ordinances, rules and regulations of governmental departments or agencies.

(g)

Any work done by Tenant or Tenant's Contractors will be scheduled and coordinated through Landlord and shall be performed under the supervision and control of Landlord to the extent Landlord determines to be reasonably necessary.

(h)

Tenant agrees to protect, defend, indemnify and save harmless Landlord and its officers, directors, partners, employees and agents from all liabilities, costs, damages, fees and 

B-5

expenses arising out of or connected with the activities of Tenant or Tenant's Contractors in or about the Premises or Building, including, without limitation, the cost of any repairs to the Premises or Building necessitated by activities of Tenant or Tenant's Contractors. In addition, prior to the initial entry into the Building or the Premises by Tenant or any of Tenant's Contractors, Tenant shall furnish Landlord, at Tenant's sole cost, with policies of insurance required by the Lease and with any additional insurance covering Landlord and its officers, directors, partners, employees and agents as insured parties, with such coverages and in such amounts as Landlord may then require, in order to insure Landlord and its officers, directors, partners, employees or agents against loss or liability for injury or death or damage to property arising out of or connected with any activities of Tenant or Tenant's Contractors. Tenant acknowledges that the foregoing indemnity shall be in addition to the insurance requirements set forth herein and shall not be in discharge of or in substitution for same.

(i)

Tenant has no authority or power to cause or permit any lien or encumbrance of any kind whatsoever, whether created by act of Tenant, operation of law or otherwise, to be attached to or be placed upon Landlord's title or interest in the Premises, Building or underlying land, and any and all liens and encumbrances created by Tenant shall attach to Tenant's interest only. Tenant covenants and agrees not to suffer or permit any lien of mechanics or materialmen or others to be placed upon the Premises, Building or land with respect to work or service claimed to have been performed for, or materials claimed to have been furnished to, Tenant or the Premises by Tenant's Contractors, and in case of any such lien attaching, Tenant covenants and agrees to cause it to be immediately released and removed of record. In the event that such lien is not immediately released and removed within ten (10) days after such lien, or notice thereof, is filed, Landlord, at its sole option, may take all action necessary to release and remove such lien (without any duty to investigate the validity thereof) and Tenant shall promptly upon notice reimburse Landlord for all sums, costs and expenses (including attorneys' fees) incurred by Landlord in connection with such lien.

5.

Waiver of Claims. Tenant hereby waives all claims by the Tenant except those arising from Landlord's failure to complete in due course the incomplete items, if any, described on the Punch List except for all claims caused by Landlord’s negligence or willful misconduct. THE FOREGOING CONSTITUTES LANDLORD'S ONLY WARRANTY. ALL IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE EXPRESSLY NEGATED AND WAIVED.

6.

Changes in the Work.

(a)

Landlord or any contractor of Landlord may, upon notice to Tenant, make minor changes in the Work arising during the construction process not inconsistent with the intent hereof. In addition, after prior notice to Tenant (which notice need not be in writing), the Work may be changed (and the Plans will be revised by Landlord subject to Tenant’s approval) to reflect changes required by any local government inspectors.

(b)

Tenant may make changes in the Work by submitting to Landlord the required revised Plans for approval or disapproval or advising Landlord in writing and with specificity. In the event Tenant submits revised Plans which are approved by Landlord, Landlord will thereafter submit a proposal (the "Proposal") to Tenant for approval showing (i) the cost resulting from the proposed changes and (ii) the delay in completion of the Work anticipated as a result of the proposed changes (it being understood that Tenant's request for a change may constitute "Tenant Delay" pursuant to Paragraph 2 and the date of substantial completion shall not be delayed or extended by reason thereof). The Proposal shall include a form of Change 

B-6

Order which shall set forth the anticipated time to perform such change(s) and the anticipated cost of such change(s) ("Change Order"). Tenant may approve the Proposal by executing and delivering the Change Order, along with, if applicable, the payment required in the Change Order (if such Change Order would cause the cost of the work to exceed Landlord’s Contribution), to Landlord within the time period specified in the Proposal (or within forty-eight (48) hours, if no period is required). If Tenant fails to approve or comment on the Proposal within the specified time period, Tenant shall be deemed to have abandoned its request for changes in the Work and Landlord may proceed with the Work without regard to such requested changes. If at any time Tenant has requested changes, or Landlord has delivered a Proposal to Tenant and Tenant has not yet approved the Proposal, Landlord may at its election cease any portions of the Work affected by such changes, and delays caused by such cessation of Work shall constitute a "Tenant Delay" as defined in Paragraph 2 hereof.

7.

Miscellaneous.

(a)

Notwithstanding anything to the contrary contained in the Lease, any notice given by Landlord to Tenant in connection with the Work or matters set forth in this Workletter shall be given to Anthony Nicolosi, President, at 2300 Glades Road, Suite 307E, Boca Raton, Florida 33431, E-mail: anicolosi@medicalconnections,com, Fax: (561) 353-4246 and can be communicated to such individual verbally or in writing, telephonically, by facsimile transmission, by regular United States Postal Service mail, or by the other means of mail delivery specified in the Lease.

(b)

Except as herein expressly set forth or in the Lease, Landlord has no agreement with Tenant and has no obligation to do any other work with respect to the Premises. Any other work in the Premises which Tenant may be permitted by Landlord to perform shall be done at Tenant's sole cost and expense and in accordance with the terms and conditions of the Lease, and the terms and provisions of Paragraph 4 of this Workletter and such other requirements as Landlord deems necessary or desirable. Any additional work or alterations to the Premises desired by Tenant after the Lease Commencement Date shall be subject to the provisions of the Lease.

(c)

Landlord is entitled to all available investment tax credits, if any, for Work paid for and property acquired by Landlord pursuant to the Lease and this Workletter. Nothing in the Lease or this Workletter shall be construed as an agreement by Landlord to pass any investment tax credits through to Tenant.

(d)

Time is of the essence of this Workletter.

(e)

This Workletter shall not be deemed applicable to any additional space added to the original Premises at any time or from time to time, whether by any options under the Lease or otherwise, or to any portion of the original Premises or any additions thereto in the event of a renewal or extension of the original term of the Lease, whether by any options under the Lease or otherwise, unless expressly so provided in the Lease or any amendment or supplement thereto.

(f)

The liability of Landlord hereunder or under any amendment hereto or any instrument or document executed in connection herewith (including, without limitation, the Lease) shall be limited to and enforceable solely against Landlord's interest in the Complex and shall be subject to the terms of the Lease.

B-7

APPENDIX I

Schedule

										
	Medical Connections Schedule

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Item

	 
	 
	 
	 
	 
	 
	Day

	 
	Date

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Tenant approves fit plan and architectural fee schedule

	 
	Friday

	 
	6/20/2008

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Architect prepares space plan

	 
	 
	 
	 
	Wednesday

	 
	7/2/2008

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Tenant approves space plan

	 
	 
	 
	 
	Wednesday

	 
	7/9/2008

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Architect completes permit set

	 
	 
	 
	 
	Friday

	 
	8/8/2008

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Tenant/LL approve permit set

	 
	 
	 
	 
	Friday

	 
	8/15/2008

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Construction Documents out to three bidders

	 
	 
	Wednesday

	 
	8/20/2008

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Contractor to file for permit

	 
	 
	 
	 
	Wednesday

	 
	8/27/2008

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Bids due

	 
	 
	 
	 
	 
	 
	Wednesday

	 
	9/10/2008

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	LL to Provide Tenant With Cost Comparison

	 
	 
	Tuesday

	 
	9/16/2008

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	LL/Tenant Award Contact

	 
	 
	 
	 
	Friday

	 
	9/19/2008

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Receipt of permit

	 
	 
	 
	 
	 
	Friday

	 
	10/24/2008(1)

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Substantial Completion and receipt of certificate of occupancy

	 
	Friday

	 
	1/16/2009(2)

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	(1)

allows 8 weeks for permit

(2)

allows 12 weeks for construction

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

B-8

EXHIBIT C-1

SUPPLEMENT TO LEASE FOR EMERGENCY STANDBY ELECTRIC POWER SERVICE

BOCA CORPORATE CENTER AND CAMPUS

THIS SUPPLEMENT TO LEASE FOR EMERGENCY STANDBY ELECTRIC POWER SERVICE (“Supplement”) is made as of ______________, ____ (“Agreement Date”) between BRE/BOCA CORPORATE CENTER L.L.C., a Delaware limited liability company (“Landlord”) and __________________ (“Tenant”).

RECITALS:

A.

Tenant has entered into that certain lease with Landlord described on Exhibit “A” attached hereto and made a part hereof for the premises therein described (“Premises”).

B.

Landlord has available standby electric power generators and related equipment (collectively, “Generators”), which are used under Landlord’s Standby Power Facilities Program (“Power Program”) to provide emergency standby electric power service at Boca Corporate Center and Campus, Boca Raton, Florida (“Complex”) for Landlord’s operation of the Complex and to tenants of the Complex and others who wish to subscribe for emergency standby electric power service (collectively, “Subscribers”).

C.

Tenant has elected to subscribe under the Power Program for emergency standby electric power service to the Premises, and Landlord has agreed to make emergency standby electric power service available to the Premises up to the Capacity Reservation, as hereinafter defined (“Standby Power Service”), subject to and upon the terms and conditions set forth in this Supplement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt whereof and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

1.

Relationship to Lease. This Supplement shall form a part of the Lease. In the event of any inconsistency between the terms of the Lease and the terms of this Supplement as they relate or apply to the Power Program or Standby Power Service, the terms of this Supplement shall control. Capitalized terms used in this Supplement and not otherwise defined herein shall have the same meanings as provided in the Lease.

2.

Term. The term of this Supplement shall commence on the Agreement Date and continue for the balance of the term of the Lease, as the same may be sooner terminated or hereafter extended pursuant to the terms of the Lease. Tenant’s rights under this Agreement shall automatically terminate and be null and void upon the expiration or earlier termination of the Lease or Tenant’s right to possession of the Premises.

3.

Capacity Reservation and Reservation Charge. In consideration of the sum of _____________________________ Dollars ($____________) for the initial Term of the Lease (“Capacity Reservation Charge”), which shall be paid to Landlord by federal wire transfer of immediately available funds no later than the Agreement Date, Tenant shall be entitled to _________________ megawatts of capacity on the Generators for the Premises (“Capacity 

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Reservation”). For any renewal or extension of the Term of the Lease pursuant to the provisions of the Lease or otherwise, Tenant shall pay a supplemental charge (“Supplemental Capacity Reservation Charge”) of $_________________ for each renewal or extension term of the Lease, in advance, on or before the first day of the applicable renewal or extension term (“Extension Commencement Date”). If Tenant fails to pay the Capacity Reservation Charge on or before the Agreement Date, or the Supplemental Capacity Reservation Charge on or before the Extension Commencement Date, time being of the essence, this Supplement shall automatically terminate without further notice or action by Landlord, and Landlord may reserve for its own use or sell to other Subscribers the Standby Power Service theretofore reserved for Tenant. The Capacity Reservation Charge and Supplemental Capacity Reservation Charge (if applicable) are non-refundable and shall not be subject to proration, credit, rebate or abatement for any cause whatsoever, except as expressly provided in Paragraph 4(d) below.

4.

Served Systems.

(a)

Standby Power Service is limited to serving (i) Tenant’s equipment and systems located within the Premises and specifically identified by Tenant on Exhibit “B” attached hereto and made a part hereof (collectively, “Served Systems”), and (ii) the Complex’s central air conditioning service (“Complex AC”) to the Premises, or if Complex AC is not supplied to the Premises because Tenant has installed a separate or supplemental air conditioning system in the Premises (“Premises AC”), Standby Power Service may be applied to the Premises AC; provided, however, in no event shall more than forty (40%) percent of the Standby Power Service reserved for Tenant under the Capacity Reservation (“40% Limitation”) be used for Complex AC to the Premises or Premises AC, as the case may be. For purposes of this Agreement, “Served Systems” shall include Complex AC to the Premises or Premises AC, whichever is applicable, in either instance subject to the 40% Limitation. Tenant shall include on Exhibit “B” hereto the power required for each piece of equipment included in the Served Systems, including, without limitation, the Complex AC to the Premises or Premises AC, whichever is applicable, subject to the 40% Limitation, and shall further designate on Exhibit “B” which of the Served Systems are ”non-essential Served Systems” for purposes of this Agreement.

(b)

Tenant shall cause the Served Systems to be connected to electrical panels or breakers separate from the main panels and breakers for the Premises so as to permit the disconnection of all electrical systems and equipment, other than the Served Systems, from the Power Program. Tenant shall be solely responsible for the compatibility of the Served Systems with the Generators, including, but not limited to, electrical systems, wire, conduit, panels, transformers, switchgear and breakers in the Premises. Before the Served Systems may be connected to the Generator, Tenant shall make, at Tenant’s sole cost and expense, any and all modifications and enhancements to the Served Systems necessary for such compatibility with the Generators. Landlord shall have no liability or responsibility for damage or injury to the Premises, the Served Systems or any of Tenant’s equipment or personnel due to any such installation, connection or incompatibility, all such liability being expressly waived by Tenant. Before connecting the Served Systems to the Generator, Tenant shall disconnect any equipment which is not included in the Served Systems identified on Exhibit “B” hereto.

(c)

Commencing on the Agreement Date, Landlord and its employees, agents, contractors and representatives shall have a non-exclusive right of access to and through the Premises at all times to the extent reasonably necessary for the implementation of the Power Program and the provision of Standby Power Service to the Premises in accordance with the provisions of this Supplement, including the installation, testing, maintenance, operation, repair, 

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replacement and removal of any cabling or other appurtenances connecting the Served Systems to the Generators, provided that (i) Landlord shall make reasonable efforts to minimize interference with Tenant’s use and enjoyment of the Premises, and (ii) Landlord shall endeavor to provide Tenant with forty-eight (48) hours notice prior to any access to the Premises other than for emergency repairs. Landlord shall have twenty-four (24) hours access to the Premises for any emergency work in connection with the Served Systems, Complex AC or Power Program.

(d)

Tenant acknowledges that Landlord has made no representation, warranty or guarantee as to the adequacy, effectiveness or efficiency of the Generators to provide an emergency source of power to the Premises or the Served Systems, or any portion thereof, or to Complex AC, at any time during the Term (even if it is determined that the Generators have or may have excess capacity). Tenant further acknowledges that the Generators are intended to first service the emergency power needs of Landlord with respect to the Common Areas of the Complex, and the emergency power needs of other Subscribers who are using the Generators as of the Agreement Date, before the transfer of Standby Power Service to the Premises. If, at any time during the term of this Supplement, Landlord elects to discontinue the Power Program or Landlord reasonably determines that Tenant’s use of the Generators adversely impacts the Complex or the use of any other Subscriber’s premises, Landlord may so notify Tenant, and Landlord may require Tenant to discontinue use of the Generators no later than the earlier of one hundred twenty (120) days after Landlord’s notice, or the date, if any, required under applicable Law (“Termination Date”). In such event, Tenant’s use of the Generators and subscription under the Power Program shall be null and void from and after the Termination Date, and Landlord should refund to Tenant the unamortized Capacity Reservation Charge (amortized over the initial Term of the Lease) or the unamortized Supplemental Capacity Reservation Charge (amortized over the applicable renewal or extension term), whichever is applicable, within thirty (30) days of Tenant’s disconnection of the Served Systems from the Generators. Notwithstanding the foregoing, Landlord shall not have the right to terminate Tenant’s use of the Generators to allow Subscriber which is not currently using the Generators to use the Generators for its emergency power needs.

5.

Generator Operation.

(a)

Tenant’s Temporary Generators. If Landlord has heretofore permitted Tenant to operate a temporary backup generator for the Premises, Tenant shall, within ten (10) days after the Agreement Date, disconnect such temporary backup generator and remove the same from the Complex and restore the portion of the Complex affected to the condition existing prior to the installation of such temporary backup generator.

(b)

Emergency Service Use. Tenant acknowledges that the Generators are intended for limited emergency backup use and neither the Generators nor the fuel storage tanks for the Generators are either designed or have the capacity for more than limited and temporary use. 

(c)

Start-up Delay. In the event of a power failure (“Outage”), the Generators are designed to start up over a period of thirty (30) minutes. Landlord shall not be liable or responsible for any direct, indirect, consequential or special damages that may occur due to an interruption of Tenant’s business or business operations, or to the Premises or Tenant’s equipment, the Served Systems or Complex AC or Premises AC, whichever is applicable, due to any delay in the start-up of the Generators. Tenant shall be responsible to provide for its own backup uniform power supply to the Premises and the Served Systems to address any start-up delay of the Generators. 

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(d)

Emergency Representative: Tenant designates ________________________ and __________________ as its “Emergency Representatives” in the event of an Outage or other emergency. The Emergency Representatives shall have full authority to act on behalf of Tenant in the event of an Outage or other emergency and shall be available to meet with Landlord and the emergency representatives of other Subscribers to implement emergency procedures established by Landlord in the event of an Outage or other emergency. Tenant shall provide to Landlord, in writing, after-hours contact information for the Emergency Representatives, including, but not limited to, home addresses and telephone numbers, cellular telephone numbers and pager numbers. Notices to Tenant under this Supplement shall be deemed made to Tenant if made to either or both of the Emergency Representatives. Tenant shall notify Landlord, in writing, of any changes in the identity or after-hours contact information of the Emergency Representatives. The Emergency Representatives shall participate in emergency drills conducted by Landlord from time to time.

(e)

Generator Operation During Extended Outage. For purposes hereof, any Outage lasting more than one (1) hour shall be deemed an “Extended Outage”. Tenant acknowledges that the fuel storage capacity of the Generators is not sufficient for continuous or extended use of the Generators to meet the emergency power needs of Landlord and all Subscribers under the Power Program. In the event of an Extended Outage or a series of Outages, Landlord, in its sole and exclusive discretion, shall have the right, but not the obligation, to regulate, reduce and limit the availability of emergency standby electric power service to Subscribers, including Tenant, under the Power Program in order to meet the generator recommendations of the Federal Emergency Management Agency, the safety of all tenants of the Complex and all Subscribers under the Power Program, the availability of fuel supplies or the operating conditions and requirements of the Generators.

In order to administer the Power Program in the best interests of the Complex, Landlord has established the following rules, procedures and protocols for responding to an Extended Outage (which rules, procedures and protocols may be amended at any time and from time to time as provided, in Paragraph 5[i] below):

(i)

Definitions:

Level One Outage: An Extended Outage lasting more than one (1) hour, but anticipated by Landlord, in Landlord’s sole and exclusive judgment, to last less than three (3) hours.

Level Two Outage: An Extended Outage lasting or anticipated by Landlord, in Landlord’s sole and exclusive judgment, to last more than three (3) hours, but less than twenty-four (24) hours.

Level Three Outage: An Extended Outage lasting or anticipated by Landlord, in Landlord’s sole and exclusive judgment, to last more than twenty-four (24) hours.

(ii)

Extended Outage Protocols:

In the event of an Extended Outage, Landlord shall advise Tenant, to the extent feasible, of the anticipated level of the Extended Outage, and Tenant shall comply with the following emergency protocols of the applicable level of the Extended Outage, which protocols may be amended by Landlord at any time and from time to time in accordance with Paragraph 5(i) below (“Protocols”):

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Level One Outage: The operation of the Served Systems, as contemplated under this Supplement, may continue. 

Level Two Outage: The operation of the Served Systems, as contemplated under this Supplement, may continue. Tenant shall turn off or disconnect all equipment and systems in the Premises which do not constitute Served Systems (“Non-Served Systems”) within thirty (30) minutes to one (1) hour of Landlord’s notice of the Level Two Outage. Tenant’s personnel not required in the operation of the Served Systems may be required by Landlord to immediately vacate the Premises and the Complex, and Tenant shall otherwise comply with Landlord’s emergency procedures and rules promulgated from time to time in accordance with the Lease or this Supplement. Landlord may, in Landlord’s sole and exclusive judgment, (i) reduce or eliminate Complex AC, (ii) reduce or eliminate non-emergency Common Area systems and services, including, but not limited to, the operation of the cafeteria, conference centers and other amenities or services provided by Landlord to tenants of the Complex, or (iii) require Tenant to turn off or disconnect non-essential Served Systems within thirty (30) minutes to one (1) hour of Landlord’s request.

Level Three Outage: Only the essential Served Systems designated on Exhibit “B” hereto may be permitted to operate during a Level Three Outage. Tenant shall turn off or disconnect all non-essential Served Systems and Non-Served Systems within one (1) hour of Landlord’s notice of a Level Three Outage. Tenant’s personnel not required in the operation of the essential Served Systems shall immediately vacate the Premises and the Complex, and Tenant shall otherwise comply with Landlord’s emergency procedures and rules promulgated from time to time in accordance with the Lease and this Supplement. Landlord may, in Landlord’s sole and exclusive judgment, (i) reduce or eliminate Complex AC, (ii) reduce or eliminate non-emergency Common Area systems and services, including, but not limited to, the operation of the cafeteria, conference centers and other amenities or services provided by Landlord to tenants of the Complex, or (iii) require Tenant to turn off, reduce or disconnect all Served Systems (essential and non-essential) due to the unavailability of fuel to service the Generators. During a Level Three Outage, Landlord shall report to Tenant as to the status of the Level Three Outage, anticipated actions by Landlord and the availability of fuel supplies, and shall use reasonable efforts to notify Tenant of an impending planned shut down of Standby Power Service at least one (1) hour prior to such shutdown. Tenant shall, upon Landlord’s request, immediately disconnect all non-essential Served Systems from the Standby Power Service and otherwise cooperate with Landlord to maximize fuel supplies and the obtaining of additional fuel supplies. Tenant acknowledges that in the event of a Level Three Outage, fuel may become exhausted and additional fuel unavailable, in which event the Generators may be shut down and Standby Power Service discontinued to the Premises, the Served Systems and Non-Served Systems, in whole or in part, all without liability to Landlord. 

(f)

Generator Maintenance Program. Landlord has entered into a service agreement for the maintenance of the Generators with a generator maintenance company selected by Landlord. The service agreement provides for maintenance of the Generators in accordance with the National Fire Protection Agency Level 2 standards for emergency generators. Copies of the service agreement and repair records for the Generators shall be kept at the management 

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offices of the Complex for inspection by Tenant upon reasonable prior written notice during Business Hours.

(g)

Planned Maintenance. Landlord may interrupt or reduce the availability of Standby Power Service for a reasonable duration, upon prior notice to Tenant, for the purpose of performing ordinary maintenance, repairs, replacements, connections or changes of or to the Generators or any other equipment or appurtenances related thereto, including any of the foregoing which is required by good engineering and operating practices or by manufacturers’ specifications. Landlord shall attempt to restore the availability of Standby Power Service as soon as is reasonably possible.

(h)

Non-Scheduled Interruption. Landlord shall have the right to interrupt or reduce Standby Power Service for a duration determined necessary by Landlord, without prior notice to Tenant, if (i) a Force Majeure Delay (as hereafter defined) has occurred that causes or requires such interruption or reduction of Standby Power Service, or (ii) the Served Systems or the Premises have become dangerous in Landlord’s judgment and, as a result thereof, Landlord believes that such interruption or reduction is necessary to prevent injury to persons or damage to property or to prevent the interruption or reduction of emergency standby electric power service to other Subscribers.

(i)

Rules. Tenant shall comply with, and shall cause any subtenants, assignees, occupants, invitees, employees, contractors and agents to comply with, the rules, procedures and Protocols set forth in this Supplement (collectively, “Rules”). Landlord shall have the right to reasonably amend the Rules and supplement the same with other reasonable rules relating to the Power Program not expressly inconsistent with this Supplement, and all such amendments or new rules shall be binding upon Tenant after five (5) days notice thereof to Tenant and shall constitute “Rules” for purposes of this Supplement. The Rules shall be applied on a non-discriminatory basis among the Subscribers, but nothing herein shall be construed to give Tenant or any other Person any claim, demand or cause of action against Landlord arising out of the violation of any Rules by any other Subscriber or out of the enforcement or waiver of the Rules by Landlord in any particular instance.

6.

Excess Demand Load. Tenant may not exceed the Capacity Reservation during any Outage. If Tenant exceeds the Capacity Reservation during an Outage (“Excess Demand”), Landlord may, in Landlord’s sole and exclusive judgment, require Tenant to immediately disconnect non-essential Served Systems and reduce the actual load to the Generators to a level less than the Capacity Reservation. If Tenant fails to take such immediate action, Landlord may reduce Standby Power Service to the Premises so that the actual load does not exceed the Capacity Reservation. Alternatively, if there is sufficient capacity for emergency standby electric power service to the Common Areas and other Subscribers, as determined by Landlord in its sole and exclusive judgment, Landlord may charge Tenant an additional fee for the Excess Demand equal to two hundred percent (200%) of the then current Capacity Reservation Charge or the Supplemental Capacity Reservation Charge, whichever is applicable, prorated for the actual load in excess of the Capacity Reservation (“Excess Demand Fee”). The foregoing rights and remedies are in addition to Landlord’s other rights and remedies under this Supplement and at law or in equity, and any additional Rules promulgated or implemented by Landlord in the event of an Extended Outage. The Excess Demand Fee shall be billed by Landlord and paid by Tenant, as Additional Rent under the Lease, within ten (10) Business Days of written demand therefor by Landlord.

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7.

Use Charges. 

(a)

Tenant shall pay for the fuel consumed by the Generators during an Extended Outage in the proportion that Tenant’s electrical usage during such Extended Outage bears to the aggregate electrical usage of all Subscribers consuming fuel during such Extended Outage (“Tenant’s Power Share”).

(b)

The cost of fuel for Outages which are not Extended Outages and all other costs of maintaining, repairing, testing and servicing the Generators and implementing the Power Program shall be treated, budgeted and invoiced as Operating Expenses under the Lease; however, such costs shall not be limited by any provisions of the Lease limiting Tenant’s Prorata Share of Operating Expenses or Overhead Rent. In the alternative, Landlord may bill Tenant’s Power Share directly to Tenant, which shall be payable by Tenant in monthly, quarterly, semi-annually or annual installments, as determined by Landlord under the Power Program.

8.

Covenants of Tenant. Tenant covenants that: 

(a)

Tenant shall not add any additional systems or equipment to the Generator at any time without the prior written consent of Landlord, which Landlord may withhold for any reason or no reason, in Landlord’s sole and exclusive discretion. Alternatively, Landlord may condition its consent upon Tenant’s payment of an additional charge or fee reasonably proportional for such inclusion to the Served Systems;

(b)

Tenant shall not cause or voluntarily permit any modification or alteration to any of the Served Systems or the Premises which would have the affect of increasing the level of electrical demand for the Premises or which would adversely affect the Generators or Landlord’s ability to provide emergency standby electric power service under the Power Program for the operation of the Complex or to other Subscribers; and

(c)

Tenant shall maintain, repair and replace, at Tenant’s sole cost and expense, the Served Systems as necessary and appropriate in accordance with prudent and sound engineering practices so that the Served Systems are in proper condition to receive, distribute and use Standby Power Service without damage to the Served Systems, Complex AC, Generators or the other Subscribers.

9.

Default by Tenant; Termination by Landlord. Upon the occurrence of any one (1) or more of the following events, upon notice to Tenant and a five (5) business day opportunity to cure (except in the event of an emergency), Landlord may discontinue the delivery of Standby Power Service to the Premises and terminate this Supplement and cause Tenant to remove, at Tenant’s sole cost and expense, all equipment connecting the Premises and Served Systems to the Generators:

(a)

Tenant’s failure to pay any charges, including, but not limited to, the Capacity Reservation Charge, Supplemental Capacity Reservation Charge or Excess Demand Fee, as and when due; 

(b)

A default by Tenant under the Lease which is not cured within any applicable cure period under the Lease; or 

(c)

Tenant’s actual electric load connected to the Generators increases in excess of the Capacity Reservation and Tenant fails to immediately disconnect such of Tenant’s 

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equipment so as not to exceed the Capacity Reservation (unless Landlord, in Landlord’s sole and exclusive discretion, and subject to availability and price, elects to increase the Capacity Reservation).

10.

No Waiver. No provision of this Supplement will be deemed waived by either party unless expressly waived in writing signed by the waiving party. No waiver shall be implied by delay or any other act or omission of either party. No waiver by either party of any provision of this Supplement shall be deemed a waiver of such provision with respect to any subsequent matter relating to such provision. Acceptance of any fee or charge by Landlord shall not constitute a waiver of any breach by Tenant of any term or provision of this Lease. No acceptance of a lesser amount than the fee or charge stipulated herein shall be deemed a waiver of Landlord’s right to receive the full amount due nor shall any endorsement or statement on any check or payment or any letter accompanying such check or payment be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the full amount due.

11.

Permitted Assignment. 

(a)

This Supplement, and the Capacity Reservation, shall not be transferred, assigned, subcontracted, or sold by Tenant, in whole or part, other than in connection with a permitted Transfer of the Lease to a Transferee approved by Landlord or otherwise deemed approved by Landlord under the Lease, but only so long as such Transferee does not require or present a demand load greater than that of Tenant. 

(b)

Landlord may assign its obligations, rights and duties under this Supplement separate and apart from the Lease, and in all events without the consent of Tenant. In such event, this Supplement shall continue in full force and effect without change, abatement or offset, and Landlord shall be automatically relieved of all liability and obligations under this Supplement so long as such are expressly assumed in writing by the assignee.

12.

Force Majeure Delays. Landlord’s ability to install, maintain and operate the Generators and to provide Standby Power Service to the Premises in accordance with this Supplement are subject to the occurrence of Force Majeure Delays.

13.

Indemnity. Notwithstanding any termination of this Supplement, Tenant shall defend, indemnify and hold harmless Landlord from and against any and all claims, demands, liabilities, damages, judgments, orders, decrees, actions, proceedings, fines, penalties, costs and expenses, including without limitation, court costs and reasonable attorneys’ fees arising from or relating to (a) any loss of life, damage or injury to person, property or business occurring in or from the Premises or the Complex and caused by or in connection with (i) the performance of any of Tenant’s obligations under this Supplement with respect to the Premises, Served Systems, Non-Served Systems or Complex AC, or (ii) any violation of the terms of this Supplement, or (iii) any other act or omission of, Tenant, any other occupant of the Premises, or any of their respective agents, employees, contractors or guests, (b) any failure by Tenant to comply with any Rules, Protocols or Laws with respect to Tenant’s obligations under this Supplement, or (c) any failure by Tenant to perform any of the agreements, terms, covenants or conditions of this Supplement required to be performed by Tenant. Without limiting the generality of the foregoing, Tenant specifically acknowledges that the indemnity undertaking herein shall apply to claims in connection with or arising out of the transportation, use, storage, maintenance, generation, manufacturing, handling, disposal, release or discharge of any Hazardous Material (whether or not any of such matters shall have been theretofore approved 

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by Landlord). In case Landlord, its agents or employees, shall be made a party to any litigation commenced by or against Tenant, then Tenant shall indemnify, defend and hold them harmless and shall pay all costs, expenses, and reasonable attorneys’ fees incurred or paid by them in connection with such litigation. The obligations assumed herein shall survive the expiration or sooner termination of this Supplement. The foregoing indemnity shall be in addition to, and shall not be in discharge of or in substitution for, any of the insurance requirements or any other indemnity provisions of this Supplement or the Lease.

14.

Waiver of Claims. TENANT HEREBY WAIVES AND RELEASES LANDLORD, ITS MEMBERS, PARTNERS, AFFILIATES, SUBSIDIARIES, OFFICERS, EMPLOYEES AND AGENTS FROM ALL CLAIMS, DEMANDS, DAMAGES, LIABILITIES, COSTS AND EXPENSES WITH RESPECT TO LANDLORD’S PROVISION, REGULATION, REDUCTION, LIMITATION OR DISCONTINUATION OF EMERGENCY STANDBY ELECTRIC POWER SERVICE, OR LANDLORD’S DECISIONS, ACTS OR OMISSIONS RELATING THERETO, OR THE INABILITY OF LANDLORD TO DELIVER STANDBY POWER SERVICE, IN WHOLE OR IN PART, FOR ANY REASON WHATSOEVER, OR THE OPERATION, MAINTENANCE, REPAIR OR REPLACEMENT OF THE GENERATORS EXCEPT TO THE EXTENT OF LANDLORD’S NEGLIGENCE OR WILLFUL MISCONDUCT. TENANT FURTHER AGREES THAT LANDLORD SHALL NOT BE LIABLE FOR, AND TENANT WAIVES, ALL CLAIMS FOR LOSS OR DAMAGE TO TENANT’S BUSINESS OR LOSS, THEFT OR DAMAGE TO TENANT’S PROPERTY OR THE PROPERTY OF ANY PERSON CLAIMING BY, THROUGH OR UNDER TENANT, INCLUDING, WITHOUT LIMITATION, ANY DIRECT, INDIRECT, CONSEQUENTIAL OR SPECIAL DAMAGES RESULTING FROM THE INSTALLATION, OPERATION, MAINTENANCE, REPAIR OR REPLACEMENT OF THE GENERATORS OR THE PROVISION OF EMERGENCY STANDBY ELECTRIC POWER SERVICE TO THE PREMISES PURSUANT TO THIS SUPPLEMENT. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TENANT AGREES THAT TENANT’S SUBSCRIPTION FOR EMERGENCY STANDBY ELECTRIC POWER SERVICE SHALL BE AT TENANT’S OWN RISK.

15.

Waiver of Warranties. ALL WARRANTIES OF LANDLORD, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE REGARDING THE GENERATORS OR THE PROVISION OF EMERGENCY STANDBY ELECTRIC POWER SERVICE PURSUANT TO THIS SUPPLEMENT ARE HEREBY DISCLAIMED.

16.

Landlord Exculpation. THE LIABILITY OF LANDLORD (AND ANY SUCCESSOR LANDLORD) TO TENANT FOR ANY DEFAULT BY LANDLORD UNDER THIS SUPPLEMENT SHALL BE LIMITED SOLELY AND EXCLUSIVELY TO THE INTEREST OF LANDLORD IN THE COMPLEX. TENANT SHALL LOOK SOLELY TO LANDLORD’S INTEREST IN THE COMPLEX FOR RECOVERY OF ANY JUDGMENT OR AWARD AGAINST LANDLORD. LANDLORD SHALL NOT HAVE ANY PERSONAL LIABILITY UNDER THIS SUPPLEMENT, AND TENANT EXPRESSLY WAIVES AND RELEASES SUCH PERSONAL LIABILITY ON BEHALF OF ITSELF AND ALL PERSONS CLAIMING BY, THROUGH OR UNDER TENANT. IN NO EVENT SHALL LANDLORD BE LIABLE UNDER ANY CIRCUMSTANCES FOR INJURY OR DAMAGE TO, OR INTERFERENCE WITH, TENANT’S BUSINESS, INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS, LOSS OF RENTS OR OTHER REVENUES, LOSS OF BUSINESS OPPORTUNITY, LOSS OF GOODWILL OR LOSS OF USE, IN EACH CASE, HOWEVER OCCURRING.

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17.

Miscellaneous. 

(a)

Binding Upon Parties. Each of the terms and provisions of this Supplement shall be binding upon and inure to the benefit of the parties hereto, their respective heirs, executors, administrators, guardians, custodians, legal representatives, successors and assigns, subject to the provisions of Paragraph 11 above; and all references herein to Landlord and Tenant shall be deemed to include all such parties. The term “Landlord” as used in this Supplement, so far as covenants or obligations on the part of Landlord are concerned, shall be limited to mean only the owner or owners of the Complex at the time in question.

(b)

Governing Law. This Supplement shall be construed in accordance with the laws of the state in which the Complex is located.

(c)

Severability. The invalidity or unenforceability of any provision of this Lease shall not affect or impair any other provisions.

(d)

Headings. The Article and Paragraph headings herein are for convenience of reference and shall in no way define, increase, limit or describe the scope or intent of any provision of this Supplement.

(e)

Pronouns. Any pronoun used in place of a noun shall indicate and include the masculine or feminine, the singular or plural number, individuals, firms or corporations, and their and each of their respective successors, executors, administrators, assigns, according to the context hereof.

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IN WITNESS WHEREOF, the parties hereto have executed this Supplement as of the day and year first above written.

							
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	BRE/BOCA CORPORATE CENTER L.L.C.,

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	a Delaware limited liability company

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
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EXHIBIT A

LEASE

Lease dated __________________ between _________________________________, as landlord, and ______________________________________________, as tenant, as amended from time to time.

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EXHIBIT B

SERVED SYSTEMS (INCLUDING CENTER AC TO THE PREMISES OR PREMISES AC, SUBJECT TO THE 40% LIMITATION)

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EXHIBIT C-2

RATE SCHEDULE

The current cost schedule for the generator facility is as follows:

1 MW

=

$600,000

1⁄2 MW

=

$352,000

1⁄4 MW

=

$ 90,000

Subject to availability, Landlord and Tenant will analyze the amount of backup power Tenant requires and if Tenant elects, Tenant can pay to be connected to the backup power in accordance with the cost schedule above. Tenant can either pay for their backup power connection up front or over the term of their Lease subject to a three percent (3%) annual escalation.

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EXHIBIT D

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

RECORDING REQUESTED BY AND 

AFTER RECORDING, RETURN TO:

Thacher Proffitt & Wood LLP

50 Main Street

White Plains, New York 10606

Attn: Joseph S. Nicotra

SPACE ABOVE THIS LINE RESERVED FOR RECORDER’S USE

SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

This Subordination, Non-Disturbance and Attornment Agreement (“Agreement”), is made as of this _____ day of ________________, 200__ among BARCLAYS CAPITAL REAL ESTATE INC., a Delaware corporation (together with its successors, assigns and/or affiliates, “Lender”), BRE/Boca Corporate Center L.L.C., a Delaware limited liability company (“Landlord”), and _______________________, a _________________________ (“Tenant”).

Background

A.

Lender has agreed to make a loan to Landlord (such loan may be made by Lender or one of its affiliates which is a designee of Lender) in the original principal amount $190,000,000 (“Loan”), which will be secured by a mortgage, deed of trust or similar security instrument (either, “Security Instrument”) on Landlord’s property described more particularly on Exhibit A attached hereto (“Property”).

B.

Tenant is the present lessee under that certain lease agreement between Landlord and Tenant dated ________________, as thereafter modified and supplemented (“Lease”), demising a portion of the Property described more particularly in the Lease (“Leased Space”).

C.

A requirement of the Loan is that Tenant’s Lease be subordinated to the Security Instrument. Landlord has requested Tenant to so subordinate the Lease in exchange for Lender’s agreement not to disturb Tenant’s possession of the Leased Space upon the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises of this Agreement, and intending to be legally bound hereby, the parties hereto agree as follows:

D-1

1.

Subordination. Subject to the terms of this Agreement, Tenant agrees that the Lease and all of the terms, covenants and provisions thereof, and all estates, options and rights created under the Lease, hereby are subordinated and made subject to the lien and effect of the Security Instrument (including, without limitation, all renewals, increases, modifications, spreaders, consolidations, replacements and extensions thereof), as if the Security Instrument had been executed and recorded prior to the Lease.

2.

Nondisturbance. Lender agrees that no foreclosure (whether judicial or nonjudicial), deed-in-lieu of foreclosure, or other sale of the Property in connection with enforcement of the Security Instrument or otherwise in satisfaction of the Loan shall operate to terminate or modify in any material manner the Lease or Tenant’s rights to quiet enjoyment thereunder to possess and use the Leased Space and all of Tenant’s rights under the Lease, provided that Tenant is not in default of the Lease beyond any applicable cure periods.

3.

Attornment. Tenant agrees to attorn to and recognize as its landlord under the Lease each party acquiring legal title to the Property by foreclosure (whether judicial or nonjudicial) of the Security Instrument, deed-in-lieu of foreclosure, or other sale in connection with enforcement of the Security Instrument or otherwise in satisfaction of the Loan (“Successor Owner”). Provided that the conditions set forth in Section 2 above are met at the time Successor Owner becomes owner of the Property, Successor Owner shall perform all obligations of the landlord under the Lease arising from and after the date title to the Property is transferred to Successor Owner. In no event, however, will any Successor Owner be: (a) liable for any default, act or omission of any prior landlord under the Lease; except to the extent that such default is continuing beyond all notice and cure periods at the time Successor Owner becomes the owner of the Property; (b) subject to any offset or defense which Tenant may have against any prior landlord under the Lease; (c) bound by any payment of rent or additional rent made by Tenant to Landlord more than 30 days in advance, except to the extent that such wums are actually transferred to Successor Owner; (d) bound by any modification or supplement to the Lease, or waiver of Lease terms, made without Lender’s written consent thereto; (e) liable for the return of any security deposit or other prepaid charge paid by Tenant under the Lease, except to the extent such amounts were actually received by Lender; (f) liable or bound by any right of first refusal or option to purchase all or any portion of the Property; or (g) liable for construction or completion of any improvements to the Property or as required under the Lease for Tenant’s use and occupancy (whenever arising), other than with respect to the Landlord's obligations with respect to the initial buildout of the Premises as described in the Lease and the Workletter attached thereto. Although the foregoing provisions of this Agreement are self-operative, Tenant agrees to execute and deliver to Lender or any Successor Owner such further instruments as Lender or a Successor Owner may from time to time request in order to confirm this Agreement. If any liability of Successor Owner does arise pursuant to this Agreement, such liability shall be limited to Successor Owner’s interest in the Property.

4.

Prior Assignment; Rent Payments; Notice to Tenant Regarding Rent Payments. Tenant has no knowledge of any prior assignment or pledge of the rents accruing under the Lease by Landlord. Tenant hereby consents to that certain Assignment of Leases and Rents from Landlord to Lender executed in connection with the Loan. Tenant acknowledges that the interest of the Landlord under the Lease is to be assigned to Lender solely as security for the purposes specified in said assignment, and Lender shall have no duty, liability or obligation whatsoever 

D-2

under the Lease or any extension or renewal thereof, either by virtue of said assignments or by any subsequent receipt or collection of rents thereunder, unless Lender shall specifically undertake such liability in writing. Tenant agrees not to pay rent more than one (1) month in advance unless otherwise specified in the Lease. After notice is given to Tenant by Lender that Landlord is in default under the Security Instrument and that the rentals under the Lease are to be paid to Lender directly pursuant to the assignment of leases and rents granted by Landlord to Lender in connection therewith, Tenant shall thereafter pay to Lender all rent and all other amounts due or to become due to Landlord under the Lease. Landlord hereby expressly authorizes Tenant to make such payments to Lender upon reliance on Lender’s written notice (without any inquiry into the factual basis for such notice or any prior notice to or consent from Landlord) and hereby releases Tenant from all liability to Landlord in connection with Tenant’s compliance with Lender’s written instructions.

5.

Lender Opportunity to Cure Landlord Defaults. Tenant agrees that, until the Security Instrument is released by Lender, it will not exercise any remedies under the Lease following a Landlord default without having first given to Lender (a) written notice of the alleged Landlord default, which shall be given simultaneously with notice thereof to Landlord and (b) the same cure period afforded to Landlord under the terms of the Lease to cure such default. Notwithstanding the foregoing, if Lender's only way to cure a default is to take possession of the Property and Lender initiates the process to take possession of the Property through, including, without limitation, a foreclosure or a deed in lieu of foreclosure, and Lender diligently pursues such a cure, then Lender shall have such additional time as may be necessary to take possession of the Property and to effectuate such cure. Tenant acknowledges that Lender is not obligated to cure any Landlord default, but if Lender elects to do so, Tenant agrees to accept cure by Lender as that of Landlord under the Lease and will not exercise any right or remedy under the Lease for a Landlord default. Performance rendered by Lender on Landlord’s behalf is without prejudice to Lender’s rights against Landlord under the Security Instrument or any other documents executed by Landlord in favor of Lender in connection with the Loan.

6.

Right to Purchase. Tenant covenants and acknowledges that it has no right or option of any nature whatsoever, whether pursuant to the Lease or otherwise, to purchase the Property or the real property of which the Property is a part, or any portion thereof or any interest therein and to the extent that Tenant has had, or hereafter acquires any such right or option, the same is hereby acknowledged to be subject and subordinate to the Security Instrument and is hereby waived and released as against Lender.

7.

Miscellaneous.

(a)

Notices. All notices and other communications under this Agreement are to be in writing and addressed as set forth below such party’s signature hereto. Default or demand notices shall be deemed to have been duly given upon the earlier of: (i) actual receipt; (ii) one (1) business day after having been timely deposited for overnight delivery, fee prepaid, with a reputable overnight courier service, having a reliable tracking system; (iii) one (1) business day after having been sent by telecopier (with answer back acknowledged) provided an additional notice is given pursuant to (ii); or (iv) three (3) business days after having been deposited in any post office or mail depository regularly maintained by the U.S. Postal Service and sent by certified mail, postage prepaid, return receipt requested, and in the case of clause 

D-3

(ii) and (iv) irrespective of whether delivery is accepted. A new address for notice may be established by written notice to the other parties; provided, however, that no address change will be effective until written notice thereof actually is received by the party to whom such address change is sent.

(b)

Entire Agreement; Modification. This Agreement is the entire agreement between the parties hereto with respect to the subject matter hereof, and supersedes and replaces all prior discussions, representations, communications and agreements (oral or written). This Agreement shall not be modified, supplemented, or terminated, nor any provision hereof waived, except by a written instrument signed by the party against whom enforcement thereof is sought, and then only to the extent expressly set forth in such writing.

(c)

Binding Effect; Joint and Several Obligations. This Agreement is binding upon and inures to the benefit of the parties hereto and their respective heirs, executors, legal representatives, successors, and assigns, whether by voluntary action of the parties or by operation of law. No Indemnitor may delegate or transfer its obligations under this Agreement.

(d)

Unenforceable Provisions. Any provision of this Agreement which is determined by a court of competent jurisdiction or government body to be invalid, unenforceable or illegal shall be ineffective only to the extent of such determination and shall not affect the validity, enforceability or legality of any other provision, nor shall such determination apply in any circumstance or to any party not controlled by such determination.

(e)

Duplicate Originals; Counterparts. This Agreement may be executed in any number of duplicate originals, and each duplicate original shall be deemed to be an original. This Agreement (and each duplicate original) also may be executed in any number of counterparts, each of which shall be deemed an original and all of which together constitute a fully executed Agreement even though all signatures do not appear on the same document.

(f)

Construction of Certain Terms. Defined terms used in this Agreement may be used interchangeably in singular or plural form, and pronouns shall be construed to cover all genders. Article and section headings are for convenience only and shall not be used in interpretation of this Agreement. The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or other subdivision; and the word “section” refers to the entire section and not to any particular subsection, paragraph of other subdivision; and “Agreement” and each of the Loan Documents referred to herein mean the agreement as originally executed and as hereafter modified, supplemented, extended, consolidated, or restated from time to time.

(g)

Governing Law. This Agreement shall be interpreted and enforced according to the laws of the State where the Property is located (without giving effect to its rules governing conflict of laws).

(h)

Consent to Jurisdiction. Each party hereto irrevocably consents and submits to the exclusive jurisdiction and venue of any state or federal court sitting in the county and state where the Property is located with respect to any legal action arising with respect to this Agreement and waives all objections which it may have to such jurisdiction and venue.

D-4

(i)

WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY HERETO WAIVES AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS AGREEMENT.

[Remainder of page is blank; signatures appear on next page.]

D-5

IN WITNESS WHEREOF, this Agreement is executed this __ day of ____________, 200__.

TENANT:

		
	 

	[insert Tenant’s name]                                        

	 
	 

	 
	 

	By:

	 

	 
	Name:

	 
	Title:

Tenant Notice Address:

Medical Connections, Inc.

2300 Glades Road

Suite 307E

Boca Raton, Florida 33431

Attn: Anthony Nicolosi

[Signatures continue on next page.]

D-6

LANDLORD:

BRE/Boca Corporate Center L.L.C., a Delaware

limited liability company

		
	By:

	 

	 
	Name:

	 
	Title:

Landlord Notice Address:

c/o Blackstone Real Estate Acquisitions IV L.L.C.

345 Park Avenue

New York, New York 10154

Attn: Marshall Findley

[Signatures continue on next page.]

D-7

LENDER:

BARCLAYS CAPITAL REAL ESTATE INC.

		
	By:

	 

	 
	Name:

	 
	Title:

Lender Notice Address:

Barclays Capital Real Estate Inc.

200 Park Avenue

New York, NY 10166

Attn: CMBS Servicing

D-8

Notary Acknowledgement for Tenant:

STATE OF 

)

)

ss.:

COUNTY OF 

)

On this, the __ day of _____________, 20__, before me, the undersigned Notary Public, personally appeared _______________________________ known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument and who acknowledged to me that he/she is an officer of _______________ in the capacity stated and that he/she executed the within instrument in such capacity for the purposes therein contained.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

		
	 
	 

	                                                                          

	Notary Public

D-9

Notary Acknowledgement for Landlord:

STATE OF 

)

)

ss.:

COUNTY OF 

)

On this, the __ day of _____________, 20__, before me, the undersigned Notary Public, personally appeared _______________________________ known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument and who acknowledged to me that he/she is an officer of ________________ in the capacity stated and that he/she executed the within instrument in such capacity for the purposes therein contained. 

IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

Notary Public

		
	 
	 

	                                                                          

	Notary Public

D-10

Notary Acknowledgement for Lender:

STATE OF 

)

)

ss.:

COUNTY OF 

)

On this, the __ day of _____________, 20__, before me, the undersigned Notary Public, personally appeared _______________________________ known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and who acknowledged to me that he/she is an officer of Barclays Capital Real Estate Inc. in the capacity stated and that he/she executed the within instrument in such capacity for the purposes therein contained.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

		
	 
	 

	                                                                          

	Notary Public

D-11

Attach: Exhibit A - Legal Description of the Property

D-12

EXHIBIT E

AMORTIZATION SCHEDULE

													
	 
	 
	$1,021,321.83

10.0%

84

$16,955.15

	 
	Principal 

Interest Rate

Term

Monthly Pmt.

	 
	 
	 
	 
	 
	 
	 
	 

	 
	     

	 
	     

	 
	     

	 
	     

	 
	     

	 
	     

	 

	Mo

	 
	Beg. Balance

	 
	Principal

	 
	Interest

	 
	End Balance

	 
	 
	 
	 

	1

	     

	1,021,321.83

	 
	8,444.14

	 
	8,511.02

	 
	1,012,877.69

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	2

	 
	1,012,877.69

	 
	8,514.50

	 
	8,440.65

	 
	1,004,363.19

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	3

	 
	1,004,363.19

	 
	8,585.46

	 
	8,369.69

	 
	995,777.73

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	4

	 
	995,777.73

	 
	8,657.00

	 
	8,298.15

	 
	987,120.72

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	5

	 
	987,120.72

	 
	8,729.15

	 
	8,226.01

	 
	978,391.58

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	6

	 
	978,391.58

	 
	8,801.89

	 
	8,153.26

	 
	969,589.69

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	7

	 
	969,589.69

	 
	8,875.24

	 
	8,079.91

	 
	960,714.45

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	8

	 
	960,714.45

	 
	8,949.20

	 
	8,005.95

	 
	951,765.26

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	9

	 
	951,765.26

	 
	9,023.77

	 
	7,931.38

	 
	942,741.48

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	10

	 
	942,741.48

	 
	9,098.97

	 
	7,856.18

	 
	933,642.51

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	11

	 
	933,642.51

	 
	9,174.80

	 
	7,780.35

	 
	924,467.71

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	12

	 
	924,467.71

	 
	9,251.25

	 
	7,703.90

	 
	915,216.46

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	13

	 
	915,216.46

	 
	9,328.35

	 
	7,626.80

	 
	905,888.11

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	14

	 
	905,888.11

	 
	9,406.08

	 
	7,549.07

	 
	896,482.03

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	15

	 
	896,482.03

	 
	9,484.47

	 
	7,470.68

	 
	886,997.56

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	16

	 
	886,997.56

	 
	9,563.51

	 
	7,391.65

	 
	877,434.05

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	17

	 
	877,434.05

	 
	9,643.20

	 
	7,311.95

	 
	867,790.85

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	18

	 
	867,790.85

	 
	9,723.56

	 
	7,231.59

	 
	858,067.29

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	19

	 
	858,067.29

	 
	9,804.59

	 
	7,150.56

	 
	848,262.70

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	20

	 
	848,262.70

	 
	9,886.30

	 
	7,068.86

	 
	838,376.40

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	21

	 
	838,376.40

	 
	9,968.68

	 
	6,986.47

	 
	828,407.72

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	22

	 
	828,407.72

	 
	10,051.75

	 
	6,903.40

	 
	818,355.97

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	23

	 
	818,355.97

	 
	10,135.52

	 
	6,819.63

	 
	808,220.45

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	24

	 
	808,220.45

	 
	10,219.98

	 
	6,735.17

	 
	798,000.47

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	25

	 
	798,000.47

	 
	10,305.15

	 
	6,650.00

	 
	787,695.32

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	26

	 
	787,695.32

	 
	10,391.02

	 
	6,564.13

	 
	777,304.30

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

E-1

													
	 
	 
	$1,021,321.83

10.0%

84

$16,955.15

	 
	Principal 

Interest Rate

Term

Monthly Pmt.

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Mo

	 
	Beg. Balance

	 
	Principal

	 
	Interest

	 
	End Balance

	 
	 
	 
	 

	27

	 
	777,304.30

	 
	10,477.62

	 
	6,477.54

	 
	766,826.68

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	28

	 
	766,826.68

	 
	10,564.93

	 
	6,390.22

	 
	756,261.75

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	29

	 
	756,261.75

	 
	10,652.97

	 
	6,302.18

	 
	745,608.78

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	30

	 
	745,608.78

	 
	10,741.75

	 
	6,213.41

	 
	734,867.04

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	31

	 
	734,867.04

	 
	10,831.26

	 
	6,123.89

	 
	724,035.78

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	32

	 
	724,035.78

	 
	10,921.52

	 
	6,033.63

	 
	713,114.26

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	33

	 
	713,114.26

	 
	11,012.53

	 
	5,942.62

	 
	702,101.72

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	34

	 
	702,101.72

	 
	11,104.30

	 
	5,850.85

	 
	690,997.42

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	35

	 
	690,997.42

	 
	11,196.84

	 
	5,758.31

	 
	679,800.58

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	36

	 
	679,800.58

	 
	11,290.15

	 
	5,665.00

	 
	668,510.43

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	37

	 
	668,510.43

	 
	11,384.23

	 
	5,570.92

	 
	657,126.20

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	38

	 
	657,126.20

	 
	11,479.10

	 
	5,476.05

	 
	645,647.10

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	39

	 
	645,647.10

	 
	11,574.76

	 
	5,380.39

	 
	634,072.34

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	40

	 
	634,072.34

	 
	11,671.22

	 
	5,283.94

	 
	622,401.13

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	41

	 
	622,401.13

	 
	11,768.48

	 
	5,186.68

	 
	610,632.65

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	42

	 
	610,632.65

	 
	11,866.55

	 
	5,088.61

	 
	598,766.10

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	43

	 
	598,766.10

	 
	11,965.43

	 
	4,989.72

	 
	586,800.67

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	44

	 
	586,800.67

	 
	12,065.15

	 
	4,890.01

	 
	574,735.52

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	45

	 
	574,735.52

	 
	12,165.69

	 
	4,789.46

	 
	562,569.84

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	46

	 
	562,569.84

	 
	12,267.07

	 
	4,688.08

	 
	550,302.77

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	47

	 
	550,302.77

	 
	12,369.30

	 
	4,585.86

	 
	537,933.47

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	48

	 
	537,933.47

	 
	12,472.37

	 
	4,482.78

	 
	525,461.10

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	49

	 
	525,461.10

	 
	12,576.31

	 
	4,378.84

	 
	512,884.79

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	50

	 
	512,884.79

	 
	12,681.11

	 
	4,274.04

	 
	500,203.68

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	51

	 
	500,203.68

	 
	12,786.79

	 
	4,168.36

	 
	487,416.89

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	52

	 
	487,416.89

	 
	12,893.34

	 
	4,061.81

	 
	474,523.55

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	53

	 
	474,523.55

	 
	13,000.79

	 
	3,954.36

	 
	461,522.76

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	54

	 
	461,522.76

	 
	13,109.13

	 
	3,846.02

	 
	448,413.63

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	55

	 
	448,413.63

	 
	13,218.37

	 
	3,736.78

	 
	435,195.26

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	56

	 
	435,195.26

	 
	13,328.52

	 
	3,626.63

	 
	421,866.73

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	57

	 
	421,866.73

	 
	13,439.60

	 
	3,515.56

	 
	408,427.14

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	58

	 
	408,427.14

	 
	13,551.59

	 
	3,403.56

	 
	394,875.54

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

E-2

													
	 
	 
	$1,021,321.83

10.0%

84

$16,955.15

	 
	Principal 

Interest Rate

Term

Monthly Pmt.

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Mo

	 
	Beg. Balance

	 
	Principal

	 
	Interest

	 
	End Balance

	 
	 
	 
	 

	59

	 
	394,875.54

	 
	13,664.52

	 
	3,290.63

	 
	381,211.02

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	60

	 
	381,211.02

	 
	13,778.39

	 
	3,176.76

	 
	367,432.63

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	367,432.63

	 
	Amount due upon lease

termination for

unamortized commission/TI

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	60,463.68

	 
	Amount due for Base rent for

two months

base rent

	61

	 
	367,432.63

	 
	13,893.21

	 
	3,061.94

	 
	353,539.42

	 
	23,833.94

	 
	Amount due for two months

CAM

	62

	 
	353,539.42

	 
	14,008.99

	 
	2,946.16

	 
	339,530.43

	 
	5,479.35

	 
	Sales Tax at 6.5% for

CAM/Rent

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	63

	 
	339,530.43

	 
	14,125.73

	 
	2,829.42

	 
	325,404.70

	 
	457,209.59

	 
	Total

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	64

	 
	325,404.70

	 
	14,243.45

	 
	2,711.71

	 
	311,161.25

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	65

	 
	311,161.25

	 
	14,362.14

	 
	2,593.01

	 
	296,799.11

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	66

	 
	296,799.11

	 
	14,481.83

	 
	2,473.33

	 
	282,317.28

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	67

	 
	282,317.28

	 
	14,602.51

	 
	2,352.64

	 
	267,714.77

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	68

	 
	267,714.77

	 
	14,724.20

	 
	2,230.96

	 
	252,990.58

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	69

	 
	252,990.58

	 
	14,846.90

	 
	2,108.25

	 
	238,143.68

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	70

	 
	238,143.68

	 
	14,970.62

	 
	1,984.53

	 
	223,173.06

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	71

	 
	223,173.06

	 
	15,095.38

	 
	1,859.78

	 
	208,077.69

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	72

	 
	208,077.69

	 
	15,221.17

	 
	1,733.98

	 
	192,856.51

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	73

	 
	192,856.51

	 
	15,348.01

	 
	1,607.14

	 
	177,508.50

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	74

	 
	177,508.50

	 
	15,475.91

	 
	1,479.24

	 
	162,032.59

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	75

	 
	162,032.59

	 
	15,604.88

	 
	1,350.27

	 
	146,427.71

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	76

	 
	146,427.71

	 
	15,734.92

	 
	1,220.23

	 
	130,692.79

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	77

	 
	130,692.79

	 
	15,866.05

	 
	1,089.11

	 
	114,826.74

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	78

	 
	114,826.74

	 
	15,998.26

	 
	956.89

	 
	98,828.48

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	79

	 
	98,828.48

	 
	16,131.58

	 
	823.57

	 
	82,696.90

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	80

	 
	82,696.90

	 
	16,266.01

	 
	689.14

	 
	66,430.89

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	81

	 
	66,430.89

	 
	16,401.56

	 
	553.59

	 
	50,029.33

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	82

	 
	50,029.33

	 
	16,538.24

	 
	416.91

	 
	33,491.09

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	83

	 
	33,491.09

	 
	16,676.06

	 
	279.09

	 
	16,815.03

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	84

	 
	16,815.03

	 
	16,815.03

	 
	140.13

	 
	(0.00)

	 
	 
	 
	 

E-3Execution CopyDraft: 0701/08/2008

EXHIBIT 10.1

			
	 
	Execution Copy

	 
	Dated the  11th  day of  August  2008

FEISHANG GROUP LIMITED

(as the vendor)

and

CHINA NATURAL RESOURCES, INC.

(as the purchaser)

	 

	 
	AGREEMENT

for the sale and purchase of the entire issued share capital in

NEWHOLD INVESTMENTS LIMITED

	 

	 
	

SOLICITORS

	 

	 
	高 蓋 茨 律 師 事 務 所

35th Floor, Two International Finance Centre,

8 Finance Street,

Central, Hong Kong

Tel: (852) 2511 5100  Fax: (852) 2511 9515

Website: www.klgates.com

Our ref: 4058774-00002/NKA/RKW

	 

THIS AGREEMENT is made the 11th day of August 2008.

BETWEEN:

(1)

FEISHANG GROUP LIMITED, a company incorporated in the British Virgin Islands and having its registered office at TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands (the “Vendor”); and

(2)

CHINA NATURAL RESOURCES, INC., a company incorporated in the British Virgin Islands and having its registered office at P.O. Box 116, Sea Meadow House, Blackburne Highway, Road Town, Tortola, British Virgin Islands (the “Purchaser”).

WHEREAS:

(A)

NEWHOLD INVESTMENTS LIMITED (the “Company”) was incorporated in the British Virgin Islands, and is authorised to issue a maximum of 50,000 shares of a single class each with a par value of US$1.00. As at the date of this Agreement, one such share in the Company has been issued and is fully paid up and is beneficially owned by the Vendor. Further information and particulars of the Company are set out in Part A of Schedule 1.

(B)

FEISHANG YONGFU MINING LIMITED (飞尚永福矿业有限公司) (“Feishang Yongfu”) was incorporated in Hong Kong and has at the date of this Agreement an authorized share capital of HK$5,000,000 divided into 5,000,000 shares of HK$1.00 each, of which one share has been issued and is fully paid up and is beneficially owned by the Company. Further information and particulars of Feishang Yongfu are set out in Part B of Schedule 1.

(C)

洋浦双湖实业发展有限公司 (YANGPU SHUANGHU ENTERPRISE DEVELOPMENT CO., LTD.) (“Yangpu Shuanghu”) is a company organized and existing in the PRC (as defined below) and has at the date of this Agreement a registered capital of RMB1,000,000, all of which is beneficially owned by Feishang Yongfu. Further information and particulars of Yangpu Shuanghu are set out in Part C of Schedule 1.

(D)

贵州永福矿业有限公司 (GUIZHOU YONGFU MINING CO., LTD.) (“Guizhou Yongfu”) is a company organized and existing in the PRC and has at the date of this Agreement a registered capital of RMB16,880,000, of which RMB11,816,000 representing 70% of the entire registered capital of Guizhou Yongfu is beneficially owned by Yangpu Shuanghu. Further information and particulars of Guizhou Yongfu are set out in Part D of Schedule 1.

(E)

As at the date of this Agreement, Guizhou Yongfu owns certain mining rights in relation to a target mine located at Jinsha County, Guizhou, the PRC (the “Target Mine”). Further information and particulars of the Target Mine are set out in Schedule 3.

(F)

As at the Management Account Date (as defined below), the Company and/or its 

1

Subsidiaries (as defined below) were indebted to the Vendor for certain shareholder’s loan. Such loan has no fixed term of repayment, carries no interest and is unsecured.

(G)

The Purchaser is principally engaged in the business of exploration, mining and sales of zinc, iron and other mineral resources in the PRC, whose shares are listed on NASDAQ Capital Market (NasdaqCM: CHNR).

(H)

The Vendor has agreed to sell and the Purchaser has agreed to purchase the Sale Share (as defined below) together with the outstanding indebtedness owing by the Company to the Vendor as at Completion (as defined below) for the Consideration (as defined below) and upon the terms and conditions set out in this Agreement.

NOW IT IS HEREBY AGREED as follows:

1.

DEFINITIONS AND INTERPRETATION

1.01

Definitions

In this Agreement (including the Recitals and the Schedules), unless the context otherwise requires, the following words and expressions shall have the following meanings:

		
	“Assessed Coal Resources”

	means the amount of coal resources of the Target Mine as assessed by the Expert in the Technical Review Report;

	“this Agreement”

	means this agreement as amended, modified or supplemented from time to time;

	“Business Day”

	means any day (other than Saturday or Sunday or public holiday or a day on which a tropical cyclone warning signal no.8 or above or a black rainstorm warning signal is hoisted in Hong Kong at any time between 9:00 a.m. and 5:00 p.m.) on which banks in Hong Kong are open for business;

	“Companies Ordinance”

	means the Companies Ordinance (Chapter 32 of the Laws of Hong Kong);

	“Company”

	has the meaning ascribed thereto in Recital (A);

	“Company Indebtedness”

	means the outstanding indebtedness owing by the Company to the Vendor as at Completion, the benefit of which shall be assigned by the Vendor to the Purchaser upon Completion;

	“Company Indebtedness Assignment”

	means the deed of assignment of the Company Indebtedness in the form set out in Schedule 5;

2

		
	“Completion”

	Means completion of the sale and purchase of the Sale Share and the Company Indebtedness in accordance with Clause 5;

	“Completion Accounts”

	means the consolidated financial statements of the Company and its Subsidiaries for the period up to the Completion Accounts Date, which shall be prepared in conformity with accounting principles generally accepted in the United States of America and to the satisfaction of the Purchaser;

	“Completion Accounts Date”

	means the day immediately preceding the Completion Date (or such other day as the Vendor and the Purchaser may agree in writing) and to include transactions up to 11:59 p.m. (Hong Kong time) on that day;

	“Completion Date”

	means the date referred to in Clause 5.01 (or such other date as the Vendor and the Purchaser may agree in writing);

	“Conditions”

	means the conditions precedent contained or referred to in Clause 4.01;

	“Connected Person”

	has the meaning as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited;

	“Consideration”

	means the total consideration payable for the sale and purchase of the Sale Share and the Company Indebtedness pursuant to Clause 3;

	“Directors”

	means the directors of the Company for the time being;

	“Encumbrance”

	means and includes any mortgage, charge, pledge, lien (otherwise than arising by statute or operation of law), option, hypothecation or other encumbrance, priority or security interest, deferred purchase, title retention, leasing, sale and purchase or sale and leaseback arrangement whatsoever over or in any property, assets or rights of whatsoever nature and includes any agreement for any of the same and “Encumber” shall be construed accordingly;

	“Expert”

	means such geological survey organization as may be appointed by the Purchaser or its agent to compile the Technical Review Report;

3

		
	“Feishang Yongfu”

	has the meaning ascribed thereto in Recital (B);

	“Group”

	means the Company and its Subsidiaries and “member(s) of the Group” shall be construed accordingly;

	“Guizhou Yongfu”

	has the meaning ascribed thereto in Recital (D);

	“HK$”

	means Hong Kong dollars, the lawful currency of Hong Kong;

	“Hong Kong”

	means the Hong Kong Special Administrative Region of the PRC;

	“Intellectual Property”

	means patents, trademarks, service marks, trade names, registered designs, designs, copyrights and other forms of intellectual or industrial property (in each case in any part of the world and whether or not registered or registrable and for the full period thereof and all extensions and renewals thereof and applications for registration of or otherwise in connection with the foregoing), know-how, inventions, formulae, confidential or secret processes and information, computer programs and software, and any other protected rights and assets, and any licences and permissions in connection therewith;

	“Long Stop Date”

	has the meaning ascribed thereto in Clause 4.05;

	“Management Accounts”

	means the unaudited consolidated balance sheets of the Company and each of its Subsidiaries made up to the Management Accounts Date and the unaudited consolidated profit and loss accounts of the Company and each of its Subsidiaries in respect of the period commencing from the date of incorporation of the Company and ended on the Management Accounts Date, copies of which duly certified to be true and correct by a Director are attached hereto marked “Exhibit A”;

	"Management Accounts Date"

	means 7 August 2008;

	‘Mining Rights”

	means the licensed rights to perform mining activities on the Target Mine pursuant to the Permits;

4

		
	“Net Amount”

	means, in the context of the Completion Accounts, the sum equivalent to the amount representing the Assets less the Liabilities less Minority Interests; for this purpose:

(i)

“Assets” means the sum of all the assets of each of the Company and its Subsidiaries as set out in the consolidated balance sheet of the Completion Accounts but excluding the carrying value of the Mining Rights and other intangible assets of the Group arising from or in connection with the Mining Rights or any other mining rights of the Target Mine; and

(ii)

“Liabilities” means the sum of all the indebtedness, obligations and liabilities of each of the Company and its Subsidiaries as set out in the consolidated balance sheet of the Completion Accounts including for the avoidance of doubt all fees, costs and expenses in connection with (x) the compilation of any reports with respect to the exploration rights or the Mining Rights including the assessment of the amount of mineral resources of the Target Mine and matters incidental thereto, (y) the application for the mineral resources exploration permit (矿产资源勘查许可证) of the Target Mine including without limitation premium for the mineral resources exploration rights (探矿权价款) and (z) any other exploration costs (勘探费) in respect of the Target Mine but excluding the Company Indebtedness and the premium payable for the Mining Rights (应交采矿权价款);

(iii) “Minority Interests” means the 30% minority interests of Assets and Liabilities of Guizhou Yongfu owned by Li Qing(李晴)being the other existing shareholder of Guizhou Yongfu;

5

		
	“Permits”

	means and includes:

(i)

the mining right permit no. 5200000711822 (采矿许可证) issued by Guizhou Provincial Department of Land and Resources (贵州省国土资源厅) on 8 November 2007 in connection with the Target Mine and is valid for the period from November 2007 to November 2027; and

(ii)

such other permits and licences as may be issued by any competent authorities in connection with the Target Mine;

	“Post Completion Date”

	has the meaning ascribed thereto in Clause 3.03;

	“PRC”

	means the People’s Republic of China which, for the purpose of this Agreement, shall exclude Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan;

	“proceedings”

	has the meaning ascribed thereto in Clause 12.02;

	“Purchaser’s Solicitors”

	means K&L Gates of 35 Floor, Two International Finance Centre, 8 Finance Street, Central, Hong Kong;

	“Retention Amount”

	has the meaning ascribed thereto in Clause 3.01(c);

	“RMB” 

	means Renminbi, the lawful currency of the PRC;

	“Sale Share”

	means one share with a par value of US$1.00 in the Company representing all the share issued by the Company as at the date of this Agreement and at Completion, to be bought and sold pursuant to Clause 2;

	“Subsidiaries”

	means and includes Feishang Yongfu, Yangpu Shuanghu and Guizhou Yongfu;

	“Subsidiary Shares”

	has the meaning ascribed thereto in Paragraph 4(A)(v) of Schedule 2;

	“Target Mine”

	has the meaning ascribed thereto in Recital (E);

6

		
	“Taxation” or “Tax”

	means and includes all forms of tax, rate, levy, duty, charge, impost, fee, contribution, deduction or withholding of any nature now or hereafter imposed, levied, collected, withheld or assessed by any taxing or other authority in any part of the world and includes any fine, surcharge, interest, additional tax, penalty or other charge payable or claimed in respect thereof;

	“Technical Review Report”

	means the review report with respect to the Mining Rights including without limitation the Assessed Coal Resources of the Target Mine as compiled by the Expert pursuant to Clause 3.02;

	“US$”

	means United States dollars, the lawful currency of the United States of America;

	“Warranties”

	means the representations, warranties and undertakings contained or referred to in Clause 6 and Schedule 2 and “Warranty” means any of the Warranties where the context permits;

	“Yangpu Shuanghu”

	has the meaning ascribed thereto in Recital (C).

1.02

Construction of certain references

In this Agreement where the context admits:

(a)

words and phrases (not otherwise defined in this Agreement) the definitions of which are contained or referred to in the Companies Ordinance shall be construed as having the meanings thereby attributed to them;

(b)

references to ordinances and to statutory provisions shall be construed as references to those ordinances or statutory provisions as respectively modified (on or before the date hereof) or re-enacted (whether before or after the date hereof) from time to time and to any orders, regulations, instruments or subordinate legislation made under the relevant ordinances or provisions thereof and shall include references to any repealed ordinance or provisions thereof which has been so re-enacted (with or without modifications);

(c)

where any statement is qualified by the expression “so far as the Vendor is aware” or “to the best of the knowledge and belief of the Vendor” or any similar expression, that statement shall be deemed to include an additional statement that it has been made after due and careful enquiry;

(d)

references to Clauses, Schedules, Recitals and Exhibits are (unless the context otherwise requires) references to clauses hereof, schedules, recitals and exhibits hereto, references to Paragraphs are, unless otherwise stated, references to paragraphs of the relevant Schedule;

7

(e)

(unless the context otherwise requires) words denoting the singular include the plural and vice versa; words denoting any one gender include all genders; words denoting persons include incorporations, firms, companies, corporations and unincorporated bodies of persons and vice versa;

(f)

(unless otherwise stated) all representations, warranties, undertakings, indemnities, covenants, agreements and obligations given or entered into by more than one person are given or entered into severally.

1.03

Headings

The headings and sub-headings are inserted for convenience only and shall not affect the construction of this Agreement.

1.04

Recitals, Schedules and Exhibits

The Recitals, Schedules and Exhibits form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement and any reference to this Agreement shall include the Recitals, the Schedules and the Exhibits.

8

2.

SALE AND PURCHASE OF SALE SHARE AND COMPANY INDEBTEDNESS

2.01

Upon and subject to the terms and conditions of this Agreement, the Vendor as beneficial owner shall sell and the Purchaser (relying on the representations, warranties and undertakings herein contained) shall purchase with effect from Completion the Sale Share free from all Encumbrances, equities and other third party rights of any nature whatsoever and together with all rights and benefits of any nature whatsoever now or hereafter attaching or accruing to it including all rights to any dividends or other distribution declared paid or made in respect of it after Completion.

2.02

Upon and subject to the terms and conditions of this Agreement, the Vendor as beneficial owner shall sell and the Purchaser (relying on the representations, warranties and undertakings herein contained) shall purchase with effect from Completion the Company Indebtedness free from all Encumbrances, equities and other third party rights of any nature whatsoever and together with all rights and benefits of any nature whatsoever now or hereafter attaching or accruing to it.

2.03

The Vendor hereby waives and agrees to procure before Completion the irrevocable waiver of pre-emption rights and any other restrictions on the transfer or issue which may exist in relation to the Sale Share, whether conferred by the articles of association of the Company or otherwise.

2.04

The Purchaser shall not be obliged to complete the purchase of any of the Sale Share and/or the Company Indebtedness unless the purchase of all the Sale Share and the Company Indebtedness is completed simultaneously.

3.

CONSIDERATION

3.01

Subject as otherwise provided in this Clause 3.01, the total purchase price for the Sale Share and the Company Indebtedness shall be the Consideration which shall be the aggregate of the sum of US$42,000,000 (subject to adjustment as referred to in Clause 3.02) and the Net Amount, and such sum of US$42,000,000 (subject to adjustment as referred to in Clause 3.02) shall be paid and satisfied by the Purchaser in the following manners:-

(a)

the sum of US$10,000,000 as initial deposit and part payment of the Consideration shall be payable to the Vendor within 10 Business Days after the signing of this Agreement;

(b)

the sum of US$27,000,000, minus such amount as shall be required to be deducted from the Consideration pursuant to Clause 3.02, as further part payment of the Consideration shall be payable to the Vendor on Completion; and

(c)

the balance in the sum of US$5,000,000 shall be held by the Purchaser as retention money pending the determination of the Net Amount (the “Retention Amount”), and shall be released to the Vendor or utilized to settle the Net Amount as the case may be in accordance with Clause 3.04.

3.02

As soon as practicable following the signing of this Agreement, the Purchaser shall 

9

appoint the Expert to compile the Technical Review Report within 6 months from the date of this Agreement, and the Purchaser shall procure that the Technical Review Report shall be delivered to the Vendor as soon as practicable after it has been issued by the Expert. For the avoidance of doubt, all fees, costs and expenses incurred by the Purchaser in connection with the compilation of the Technical Review Report by the Expert and matters incidental thereto shall be borne by the Purchaser absolutely. In the event the Assessed Coal Resources shall be less than 120 million metric tons, the Consideration shall be adjusted by deducting the sum of US$0.35 per metric ton for every metric ton of shortfall; and for the avoidance of doubt no adjustment to the Consideration is required in the event the Assessed Coal Resources shall not be less than 120 million metric tons.

3.03

The Vendor shall complete the following matters as soon as reasonably practicable after Completion and in any event no later than 90 days after the Completion Date (or such later date as the parties shall agree in writing) (the “Post Completion Date”):

(a)

prepare the Completion Accounts in conformity with accounting principles generally accepted in the United States of America and to the satisfaction of the Purchaser;

(b)

deliver the Completion Accounts to the Purchaser;

(c)

prepare and certify as correct a computation of the amount of the Net Amount and deliver to the Purchaser such computation together with the Completion Accounts;

(d)

give the Purchaser reasonable access to the working papers of the Vendor with respect to its tasks as aforesaid for the purpose of ascertaining the Net Amount so that the Vendor and the Purchaser may reach agreement to the amount of the Net Amount as stipulated in this Clause 3.03.

3.04

In the event that the Net Amount is:-

(a)

a negative figure, the relevant amount equivalent to such figure shall first be deducted from the Retention Amount in order to set-off such negative figure of the Net Amount so as to bring the Net Amount to zero, and any balance of the Retention Amount after such deduction shall be released and paid by the Purchaser to the Vendor in full and final settlement of the balance of the Consideration, and if and to the extent that the Retention Amount is insufficient for such set-off purpose, the Vendor shall pay the Purchaser in cash US$1 for every US$1 shortfall; or

(b)

zero or a positive figure, the Retention Amount shall be released and paid by the Purchaser to the Vendor in full and final settlement of the balance of the Consideration,

Provided that this settlement by reference to the Completion Accounts and the determination of the Net Amount pursuant to this Clause 3 shall take place within 10 Business Days of the relevant agreement on the Net Amount or at such other time as the Vendor and the Purchaser may agree.

10

3.05

Unless otherwise provided in this Clause 3, all payment by the Purchaser or the Vendor (as the case may be) pursuant to Clauses 3.01 to 3.04 shall be made by way of telegraphic transfer to such bank account or bank draft drawn on a licensed bank in Hong Kong in favour of any person as may be designated in writing by the Vendor or the Purchaser (as the case may be) from time to time (unless the parties shall otherwise agree in writing).

3.06

For the purposes of this Agreement, the Consideration shall comprise the followings:

(a)

the purchase price for the Company Indebtedness shall be the dollar-to-dollar equivalent of the amount of the Company Indebtedness; and

(b)

the purchase price for the Sale Share shall be the aggregate of the sum of US$42,000,000 (subject to adjustment as referred to in Clause 3.02) and the Net Amount less the purchase price for the Company Indebtedness referred to in Clause 3.06(a).

4.

CONDITIONS AND MATTERS BEFORE COMPLETION

4.01

Completion of the sale and purchase herein is conditional upon satisfaction of the following conditions:

(a)

the Purchaser being satisfied in all respects with the results of the due diligence exercise conducted by it concerning, inter alia, the legal, financial, corporate, taxation, contractual, property and trading positions and prospects of the Group;

(b)

all the Warranties given by the Vendor being true and correct in every material respects and remaining so from the date hereof until Completion;

(c)

all necessary actions, consents, permissions, approvals and authorisations having been taken or obtained as may be required in respect of the sale of the Sale Share and the Company Indebtedness and the transactions contemplated by this Agreement having been taken or obtained by the Vendor and the Purchaser;

(d)

the Assessed Coal Resources shall not be less than 100 million metric tons;

(e)

the Permits shall continue to be valid, effective and not being revoked as at Completion.

4.02

The parties shall use their respective best endeavours (insofar as it is within its power) to procure that the Conditions shall be fulfilled and/or satisfied as soon as possible after the signing of this Agreement and in any event no later than the time referred to in Clause 4.05.

4.03

The Purchaser may in its absolute discretion waive, in whole or in part, any of the Conditions set out in Clause 4.01 at any time by notice in writing to the Vendor and any waiver so granted may be subject to such conditions as the Purchaser and the Vendor may agree and each party shall inform the other party as soon as possible on the fulfilment of any of the Conditions.

11

4.04

Each of the parties undertakes to disclose in writing to the other party anything which will or may prevent any of the Conditions from being fulfilled and/or satisfied at or prior to Completion, as applicable, immediately upon it becoming aware of such a situation.

4.05

If any of the Conditions shall not have been fulfilled and/or satisfied (or waived by the Purchaser pursuant to Clause 4.03) by 5:00 p.m. on 31 August 2009 (or such later date as the parties may agree in writing) (the “Long Stop Date”), this Agreement shall lapse and any deposit and/or part payment paid by the Purchaser hereunder shall be refunded to the Purchaser forthwith together with interest thereon at the prime rate for HK$ as may be quoted by The Hongkong and Shanghai Banking Corporation Limited from time to time from the date of the Vendor’s receipt of such deposit and/or part payment up to the date of repayment in full to the Purchaser, and thereupon this Agreement and everything herein contained shall, except for Clauses 1, 4.05, 10.09, 11 and 12, subject to the liability of either party to the other in respect of any antecedent breach of the terms hereof, be null and void and of no further effect.

4.06

From the date of this Agreement until Completion and subject to the Vendor’s receipt of the payment of the initial deposit of the Consideration referred to in Clause 3.01(a), except for the transactions contemplated herein or otherwise with the prior written consent of the Purchaser, the Vendor hereby warrants and undertakes that it will cause each of the Company and any of the Subsidiaries (as the case may be):

(a)

not to conduct any business save those in the ordinary course of business and consistent with past practices or to give effect to this Agreement;

(b)

to maintain in full force and effect its existence;

(c)

to promptly and timely prepare and file any annual reports and tax returns and pay all taxes and assessments, if any, required by law;

(d)

to prepare and keep records in which true and correct entries will be made of all material transactions by and with any of them;

(e)

to duly observe all requirements of governmental authorities unless contested in good faith by appropriate proceedings;

(f)

to promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon its income, profits, property or business unless contested in good faith by appropriate proceedings;

(g)

to at all times comply with the provisions of all contracts, agreements and leases to which it is a party, unless contested in good faith by appropriate proceedings;

(h)

not to modify its memorandum or articles of association or other constitutional documents;

(i)

not to cause or permit its liquidation or dissolution;

(j)

not to institute, or permit to be instituted against it, any proceeding, which 

12

remains undismissed for a period of 30 days after the filing thereof, seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding-up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of any order or relief or the appointment of receiver, trustee or other similar official for it or for any substantial part of its property;

(k)

not to make a general assignment for the benefit of its creditors;

(l)

not to declare or pay any dividend or make any distribution to any of its shareholders;

(m)

not to issue, redeem, sell or dispose of, or create any obligation to issue, redeem, sell or dispose of, any shares of its capital stock and not to issue or agree to issue any shares, warrants or other securities or loan capital or grant or agree to grant any option over or right to acquire or convert into any share or loan capital or otherwise take any action which might result in (i) the Purchaser acquiring on Completion a percentage interest in the Company lower than that contemplated in this Agreement; or (ii) the Company reducing its interest in any of the Subsidiaries;

(n)

not to effect any stock split, reclassification or combination;

(o)

not to make any new borrowing exceeding HK$5,000,000 or its equivalent in aggregate for the Group and not to modify its agreements and other obligations with respect to its indebtedness, including without limitation its loan agreements, indentures, mortgages, debentures, notes and security agreements;

(p)

not to incur, assume, guarantee or otherwise become obligated or liable for any indebtedness (other than in the ordinary course of business to finance operations) or encumber any of its assets or enter into any transaction or contract, or make any commitment relating to its assets or business (other than in the ordinary course of business and in a manner consistent with past practices and on arm’s length terms);

(q)

not to make any acquisition of all or substantially all of the stock or assets of any other person or entity;

(r)

not to take or omit to take any action which could be reasonably anticipated to have a material adverse effect upon its financial condition or assets;

(s)

not to make any advance or loan or other credits to any person or entity, including without limitation the Vendor or any director, shareholder, officer, employee or agent of the Company or any of the Subsidiaries except for intra-Group loan or credits;

(t)

not to give any guarantee, indemnity, surety or security for an amount exceeding HK$5,000,000 or its equivalent in aggregate for the Group (other than in the ordinary course of business and in a manner consistent with past 

13

practices);

(u)

not to compromise, settle, release, discharge or compound any material civil, criminal, arbitration or other proceedings or any material liability, claim, action, demand or dispute or waive any right in relation to any of the foregoing of an amount exceeding HK$1,000,000 or its equivalent in aggregate for the Group;

(v)

not to release, compromise or write off any amount exceeding HK$1,000,000 or its equivalent in aggregate for the Group recorded in the books of account as owing by any of its debtors;

(w)

not to purchase, take on lease or assume possession of any real property or sell assign underlet or otherwise part with possession of the Target Mine or any part thereof in any way whether by way of sub-letting lending sharing or other means;

(x)

not to dispose or agree to dispose of or acquire or agree to acquire any material asset which could reasonably be expected to materially and adversely affect its business as a whole, or enter into any contract which is not in its ordinary course of business and consistent with past practices or which is not on arm’s length terms;

(y)

not to enter into or amend any service agreements with directors or officers or employees (as the case may be) or increase the remuneration payable thereto exceeding HK$100,000 or its equivalent in aggregate for the Group per month;

(z)

not to depart from the ordinary and usual course of its day-to-day business;

(aa)

not to create or permit to arise any lien, charge, pledge, mortgage or other security interest on or in respect of any of its undertaking, property or assets which is not in the ordinary and usual course of its day to day business;

(bb)

not to appoint any directors or officers;

(cc)

not to do any act or matter which would have or which would reasonably be expected to have a material and adverse effect on the financial, trading and operation position or prospects of any of the Company or any of its Subsidiaries;

(dd)

not to permit any of the Permits to lapse or expire without renewal.

4.07

For the avoidance of doubt, all fees, costs and expenses in connection with the application for the mineral resources exploration permit (矿产资源勘查许可证) of the Target Mine including without limitation premium for the mineral resources exploration rights (探矿权价款) and any other exploration costs (勘探费) in respect of the Target Mine, save and except the premium payable for the Mining Rights (应交采矿权价款), incurred prior to Completion shall be borne and discharged by the 

14

Vendor together with the other existing shareholder of Guizhou Yongfu absolutely prior to Completion.

4.08

Notwithstanding any other provisions of this Agreement, the Vendor and the Purchaser hereby expressly agree that from the date of this Agreement until Completion, in the event the Vendor shall have obtained the prior written consent of the Purchaser for the Group to conduct, take or engage in any businesses, actions or transactions in connection with the Target Mine or the Mining Rights, provided that if, and only if, upon granting such prior written consent the Purchaser shall also agree that (subject to Completion taking place in accordance with this Agreement) the Purchaser shall reimburse all reasonable costs and expenses properly incurred by the Vendor (or such other amount as may be agreed between the Vendor and the Purchaser) in respect of such businesses, actions or transactions, the Purchaser shall, subject to verification of such costs and expenses to the satisfaction of the Purchaser, make such reimbursement to the Vendor in full simultaneously upon the settlement of the Net Amount as referred to in Clause 3.04.

5.

COMPLETION

5.01

Completion Date

Subject to Clause 4 and the other terms of this Agreement, Completion shall take place pursuant to this Clause at the offices of the Purchaser’s Solicitors at 35th Floor, Two International Finance Centre, 8 Finance Street, Central, Hong Kong at 3:00 p.m. on the date falling 6 months after the date of this Agreement (or, in the case of the Purchaser having given prior notice in writing to the Vendor, on the date falling 12 months after the date of this Agreement) or at such other time and/or place as the parties may agree in writing, when all (but not part only) of the businesses set out in Clauses 5.02 and 5.03 shall be transacted.

5.02

Vendor’s obligations

On Completion, the Vendor shall:

(a)

deliver or procure to be delivered to the Purchaser :

(i)

duly completed and signed transfer in respect of the Sale Share or such other documents as may be necessary for the transfer of the Sale Share duly executed by the registered holder thereof in favour of the Purchaser or such other person as it may direct together with the relative share certificate;

(ii)

contract notes recording the sale and purchase of the Sale Share duly executed by the Vendor (who is the beneficial owner of the Sale Share) in favour of the Purchaser and/or such other person as it may direct;

(iii)

the Company Indebtedness Assignment duly executed as at the Completion Date by the Vendor and the Company;

(iv)

such waivers, consents and any other documents as the Purchaser may 

15

require to give good title to the Sale Share free from all Encumbrances, equities and other third party rights of any nature whatsoever and to enable the Purchaser and/or its nominee to be registered as the holder of the Sale Share contemplated under this Agreement;

(v)

if any of the same has not been provided prior to Completion, such documents as the Purchaser may require evidencing the fulfilment of the Conditions;

(vi)

all the corporate documents, statutory books and records of each of the Company and the Subsidiaries (which shall be written up to but not including the Completion Date), including without limitation the certificate of incorporation, minutes book, statutory books, registers of members, transfers and directors, common seal, company chop, book of certificates, spare copies of the memorandum and articles of association, audited financial statements and all other books of accounts, corporate records and documents of each of the Company and the Subsidiaries;

(vii)

written confirmation from the Vendor that it is not aware of any act, matter or circumstances which is in breach of or inconsistent with any of the Warranties;

(viii)

written resignation of all the directors and the company secretary and the auditors of each of the Company and the Subsidiaries nominated by the Vendor taking immediate effect after the appointment of the persons nominated by the Purchaser (in the case of the directors and the company secretary) duly executed by the respective persons confirming that they have no claim or right of action against the Company and the Subsidiaries (as the case may be) for any remuneration or compensation for loss of office, termination of employment or otherwise and that they waive all their claims and rights (if they have any) against the Company and the Subsidiaries (as the case may be);

(ix)

the Permits and other documents with respect to the Target Mine;

(x)

evidence that all guarantees given by the Company and/or any of the Subsidiaries in favour of third parties in respect of the performance of the obligations of the Vendor or any other person not being a member of the Group have been released;

(xi)

certified copy of the board resolutions and shareholders’ resolutions of the Vendor approving this Agreement and the transactions hereby contemplated; 

(xii)

a cashier order or a solicitors’ cheque for payment of the Vendor’s share of the stamp duty payable on the transfer of the Sale Share (where applicable);

(b)

cause a board meeting of the Company to be held at which the Directors shall 

16

(inter alia):

(i)

approve the transfer to the Purchaser or its nominee and its registration as member of the Company in respect of the Sale Share (subject to production of duly stamped transfer where applicable) and the issue of the relative certificate;

(ii)

revoke all existing mandates for the operation of all bank accounts of the Company if so required by the Purchaser and issue new mandates giving authority to persons nominated by the Purchaser;

(iii)

change the registered office of the Company to such place as is nominated by the Purchaser;

(iv)

approve and authorise the execution by the Company of the Company Indebtedness Assignment; and

(v)

appoint such persons as the Purchaser may nominate to be validly appointed as additional Directors and the company secretary and upon such appointment forthwith cause all the Directors and the company secretary nominated by the Vendor to resign from their respective offices without any claim for compensation in connection with such resignation against the Company;

(c)

procure that immediately following the board meeting referred to in Clause 5.02(b) such meetings of the boards of directors of the Subsidiaries as the Purchaser shall require are convened to deal with such of the matters referred to in Clause 5.02(b) as the Purchaser shall require;

(d)

cause all property and assets of the Company and any of the Subsidiaries remaining on sites controlled by the Vendor to be delivered on or immediately following Completion to the premises of the Company or otherwise as the Vendor and the Purchaser may agree.

5.03

Purchaser’s obligations

On Completion, the Purchaser shall:

(a)

pay the further part payment of the Consideration to the Vendor pursuant to Clauses 3.01(b); 

(b)

deliver to the Vendor certified copy of the board resolutions of the Purchaser approving this Agreement and the transactions hereby contemplated.

5.04

Obligation to complete

The Purchaser shall not be obliged to complete the purchase of any of the Sale Share and/or the Company Indebtedness unless the purchase of all the Sale Share and the Company Indebtedness is completed in accordance with this Agreement. Without prejudice to any other remedies available to the Purchaser, if in any respect the provisions of Clause 5.02 are not complied with by the Vendor on Completion the Purchaser may:

17

(a)

defer Completion to a date not more than 14 days after the Completion Date (and so that the provisions of this Clause 5.04 shall apply to Completion as so deferred); or

(b)

proceed to Completion so far as practicable (without prejudice to its rights hereunder); or

(c)

rescind this Agreement without prejudice to any other remedy it may have.

5.05

Further assurance

The Vendor hereby irrevocably undertakes to the Purchaser to procure at its own expense the due execution of all such further documents as are necessary to vest in the Purchaser or the Group all such property and rights as are intended to be vested in each of them by or pursuant to this Agreement.

5.06

Right of rescission

Without prejudice to any other right or remedy available to the Purchaser, the Purchaser shall be entitled to rescind this Agreement by notice in writing to the Vendor if prior to Completion it appears that any of the Warranties is not or was not true and accurate in all material respects or if any act or event occurs which, had it occurred on or before the date of this Agreement, would have constituted a breach of any of the Warranties or if there is any non-fulfilment of any of the Warranties which (being capable of remedy) is not remedied prior to Completion.

5.07

Purchaser’s failure to complete

If the Purchaser shall fail to complete the purchase in accordance with the terms and conditions of this Agreement (otherwise than due to the default of the Vendor and/or due to the non-fulfilment of the Conditions on or before the Long Stop Date), then the Vendor shall be entitled to rescind this Agreement by notice in writing to the Purchaser and thereupon that part of the initial deposit and/or part payment paid by the Purchaser hereunder in the sum of US$4,200,000 shall be forfeited to the Vendor absolutely as liquidated damages and not as penalty and the remaining balance of the initial deposit and/or part payment paid by the Purchaser hereunder shall be forthwith returned to the Purchaser, and thereupon the Vendor shall have no further claim of whatsoever nature against the Purchaser, and the Vendor shall not take any action against the Purchaser for damages or for specific performance of this Agreement.

5.08

Vendor’s failure to complete

If the Vendor shall (for any cause save as herein provided) fail to complete the sale in accordance with the terms and conditions of this Agreement, then the Purchaser shall be entitled to rescind this Agreement by notice in writing to the Vendor and thereupon any deposit and/or part payment paid by the Purchaser hereunder shall be returned forthwith to the Purchaser without prejudice to any other right or remedy available to the Purchaser. 

18

6.

REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

6.01

Warranties

(a)

The Vendor hereby represents, warrants and undertakes to the Purchaser (to the intent that the provisions of this Clause shall continue to have full force and effect notwithstanding Completion) in the terms set out in Schedule 2.

(b)

The Vendor acknowledges that the Purchaser is entering into this Agreement in reliance upon representations in the terms of the Warranties made by the Vendor with the intention of inducing the Purchaser to enter into this Agreement and that accordingly the Purchaser has been induced to enter into this Agreement.

(c)

The Vendor hereby represents and warrants to the Purchaser that the Warranties made by the Vendor are true and accurate in all material respects upon the signing of this Agreement and will continue to be true and accurate in all material respects and shall be deemed to be repeated each day thereafter until immediately before Completion, in each case, with reference to the facts and circumstances then existing.

6.02

Warranties to be independent

Each of the Warranties shall be construed as a separate and independent warranty and, save where expressly provided to the contrary, shall not be limited or restricted by reference to or inference from the terms of this Agreement or any other Warranty.

6.03

Pending Completion

The Vendor hereby undertakes that it will procure that (save only as may be necessary to give effect to this Agreement) neither it nor the Company shall do, allow or procure any act or omission in the period up to and including Completion which would constitute a breach of or would be inconsistent with any of the Warranties or which would make any of the Warranties inaccurate or misleading.

6.04

Disclosure

The Vendor hereby undertakes to disclose promptly to the Purchaser in writing immediately upon becoming aware of the same any matter event or circumstance (including any omission to act) which may become known to it after the date of this Agreement and before Completion which constitutes a breach of or is inconsistent with any of the Warranties or which may make any of the Warranties inaccurate or misleading.

6.05

Remaining in force

The Purchaser has entered into this Agreement upon the basis of the Warranties and the same together with any provision of this Agreement which shall not have been fully performed at Completion shall remain in force notwithstanding that Completion shall have taken place.

19

6.06

Knowledge and waiver

(a)

The rights and remedies of the Purchaser in respect of any breach of the Warranties shall not be affected by Completion, by any investigation made by or on behalf of the Purchaser into the affairs of the Company and the Subsidiaries, by any information of which the Purchaser has actual or constructive knowledge, by the Purchaser rescinding or failing to rescind this Agreement, or failing to exercise or delaying the exercise of any right or remedy, or by any other event or matter, except a specific and duly authorised written waiver or release and no single partial exercise of any right or remedy shall preclude any further or other exercise.

(b)

The Vendor hereby agrees with the Purchaser to waive any right which it may have in respect of any misrepresentation, inaccuracy or omission in or from any information or advice supplied or given by the Company or any of the Subsidiaries or its officers, employees or advisers in enabling the Vendor to give the Warranties.

7.

INDEMNITY

7.01

General indemnity

In addition to the rights of the Purchaser at common law in respect of any breach of any of the Warranties and notwithstanding whether all or any of the transactions contemplated by this Agreement shall have been completed, the Vendor covenants with the Purchaser to indemnify and will keep indemnified and save harmless the Purchaser (for itself and as trustee for the Company and the Subsidiaries) and its assigns from and against any and all losses, claims, damages (including interest, penalties, fines and monetary sanctions), liabilities and costs incurred or suffered by the Purchaser by reason of, resulting from, in connection with, or arising in any manner whatsoever out of the breach of any Warranty or covenant or the inaccuracy of any representation of the Vendor contained or referred to in this Agreement or in any agreement, instrument or document delivered by or on behalf of the Vendor in connection therewith provided that the indemnity contained in this Clause shall be without prejudice to any other rights and remedies available to the Purchaser.

7.02

Tax indemnity

In Clause 7, unless the context otherwise requires:

(a)

“event” includes (without limitation) any omission, event, action or transaction whether or not any of the Company or the Subsidiaries is a party thereto, the death of any person, a change in the residence of any person for any Tax purpose, a failure to make sufficient dividend payments to avoid an apportionment or deemed distribution of income and the entering into and completion of this Agreement and references to the result of events on or before the Completion Date shall include the combined result of two or more events one or more of which shall have taken place on or before the Completion Date;

20

(b)

“relief” includes (without limitation) any relief, allowance, credit, set off, deduction or exemption for any Tax purpose;

(c)

reference to income or profits or gains earned, accrued or received shall include income or profits or gains deemed to have been or treated as or regarded as earned, accrued or received for the purposes of any legislation;

(d)

reference to any Tax liability shall include not only any liability to make actual payments of or in respect of Tax but shall also include:

(i)

the loss or reduction in the amount of, or the setting off against income, profits or gains, or against any Tax liability, any relief which would (were it not for the said loss, reduction or setting off) have been available to any of the Company and the Subsidiaries;

(ii)

the loss or reduction in the amount of, or the setting off against any Tax liability, a right to repayment of Tax; and

(iii)

the loss or reduction in the amount of, or the setting off against income, profits or gains earned, accrued or received on or before Completion, or against any Tax liability of, any relief which is not available before Completion but which arises in respect of an event occurring after Completion in circumstances where, but for such loss, reduction or setting off, any of the Company and the Subsidiaries would have had a Tax liability in respect of which the Purchaser would have been able to make a claim under Clauses 7.02 to 7.04;

and in such a case the amount of Tax which could otherwise be saved or relieved, by the relief so lost, reduced or set off (calculated by reference to the rates of Tax in force at the date of this Agreement) or the amount of repayment which would otherwise have been obtained shall be treated as the amount of a Tax liability which has arisen;

(e)

reference to a payment in respect of Tax includes (without limitation) a payment for the surrender of losses or other amounts by way of group relief or for the surrender or transfer of any other relief, a repayment of any such payment and a payment by way of reimbursement, recharge, indemnity or damages.

7.03

The Vendor hereby covenants with and undertakes to pay on demand to the Purchaser and its assigns (for itself and as trustee for the Company and the Subsidiaries) a sum equivalent to the amount of:

(a)

any Tax liability of any of the Company and the Subsidiaries resulting from or by reference to any income, profits or gains earned accrued or received on or before the Completion Date or any event on or before the Completion Date whether alone or in conjunction with other circumstances and whether or not such Tax is chargeable against or attributable to any other person; and

(b)

any Tax liability of any of the Company and the Subsidiaries which is regarded as such pursuant to the provisions of Clause 7.02(d); and

21

(c)

any Tax liability of any of the Company and the Subsidiaries that arises after Completion as a result of an act, omission or transaction by a person other than any of the Company and the Subsidiaries and which liability to Tax falls upon any of the Company and the Subsidiaries as a result of its having been in the same group for Tax purposes as that person at any time before Completion; and

(d)

any Tax liability of any of the Company and the Subsidiaries that would not have been payable had there been no breach of any of the Warranties and which is not the subject of the covenants above; and

(e)

all costs and expenses which are incurred by the Purchaser or any of the Company and the Subsidiaries in connection with any of the matters referred to in Clauses 7.02 to 7.04 or in taking or defending any action under the covenants contained in Clauses 7.02 to 7.04 (including, without prejudice to the generality of the foregoing, all legal and other professional fees and disbursements).

7.04

Notwithstanding Completion, the Vendor shall give all such assistance and provide all such information as the Purchaser shall reasonably request from time to time for the purpose of enabling the Purchaser to make returns and provide information as required to any Tax authority and to negotiate any liability to Tax.

7.05

The indemnity contained in Clauses 7.02 to 7.04 does not cover any claim in respect of Taxation:

(a)

to the extent that provision or reserve in respect thereof has been made for such Taxation in the Completion Accounts; or

(b)

which would not have arisen except wholly as a result of a voluntary act or transaction or series of transactions carried out, or omission, by the Purchaser (or persons deriving title from it) or any of the Company and the Subsidiaries (other than pursuant to a legally binding commitment created on or before Completion) after Completion otherwise than in the ordinary course of its business; or

(c)

to the extent that such claim arises or is incurred as a result of the imposition of Taxation as a consequence of any retrospective change in the law or practice coming into force after the Completion Date or to the extent such claim arises or is increased by an increase in rates of Taxation after the Completion Date with retrospective effect.

8.

ACCESS TO INFORMATION

8.01

From the date of this Agreement until Completion, the Purchaser, its professional advisers and appointed representatives shall have the right, upon reasonable prior notice and causing as little disturbance as possible, to visit the facilities of the Company and the Subsidiaries as they may reasonably require so as to:

(a)

verify the accuracy of the Warranties;

22

(b)

check the existence and condition of the assets thereat; and

(c)

carry out or continue to carry out a review of and an investigation into the assets, liabilities, financial condition, contracts, commitments and the business of the Group.

8.02

The Vendor hereby undertakes with the Purchaser to use its best endeavours to procure that any information and documents reasonably required by the Purchaser or its professional advisers or appointed representatives for the purposes of such review and investigation as are referred to in Clause 8.01 shall be made available within a reasonable time after request including without limitation the following:

(a)

the books of accounts of each of the Company and the Subsidiaries including all accounts ledgers;

(b)

the statutory books of each of the Company and the Subsidiaries or copies thereof;

(c)

a list of the assets, liabilities and receivables of the Company and the Subsidiaries;

(d)

details of all bank accounts of the Company and the Subsidiaries (including, the name and address of the bank with whom the account is kept and the number and nature of the account) and a statement of the credit and debit balance thereon;

(e)

copies of all licences, agreements or such other documents in connection with the management, operation or affairs of the Company or any of the Subsidiaries;

(f)

copies of all banking facility documentation entered into by the Company or any of the Subsidiaries; and

(g)

copies of all guarantees and any security documents entered into by the Company or any of the Subsidiaries after the signing of this Agreement.

9.

COSTS

9.01

Each party to this Agreement shall pay its own costs of and incidental to this Agreement and the sale and purchase hereby agreed to be made unless otherwise provided herein.

9.02

Stamp duty in respect of the transfer of the Sale Share (where applicable) shall be paid equally by the Vendor and the Purchaser and the Vendor shall pay the Purchaser one half of the total stamp duty (where applicable) at Completion and one half of any additional stamp duty assessed to be payable in respect of the transfer of the Sale Share after Completion.

23

10.

PROVISIONS RELATING TO THIS AGREEMENT

10.01

Assignment

This Agreement shall be binding upon and enure to the benefit of each party’s successors and permitted assigns but, except as expressly provided herein, no party shall assign or transfer all or any of its rights or obligations hereunder without the prior written consent of the other parties.

10.02

Whole agreement

This Agreement (together with any documents referred to herein) sets out the entire agreement and understanding between the parties in relation to the transactions hereby contemplated, and supersedes all previous agreements, arrangements and understandings between them with regard to such transactions and neither party is entering into this Agreement or any of the arrangement contemplated hereby in reliance upon any representation or warranty not expressly set out in this Agreement. No provision of this Agreement may be amended or modified otherwise than by the express written agreement of the parties hereto.

10.03

Agreement survives Completion

The Warranties and all other provisions of this Agreement, insofar as the same shall not have been performed at Completion, shall remain in full force and effect notwithstanding Completion.

10.04

Further assurance

Each party shall do and execute or procure to be done and executed all such further acts, deeds, things and documents within its power as may be necessary to give effect to the transactions contemplated by this Agreement.

10.05

Invalidity

In the event that any provision of this Agreement is held to be unenforceable, illegal or invalid by any court of competent jurisdiction, the validity, legality or enforceability of the remaining provisions shall not be affected nor shall any subsequent application of such provisions be affected. In lieu of any such invalid, illegal or unenforceable provision, the parties hereto intend that there shall be added as part of this Agreement a provision as similar in terms to such invalid, illegal or unenforceable provision as may be possible and be valid, legal and enforceable.

10.06

Counterparts

This Agreement may be executed in any number of counterparts or duplicates each of which shall be an original but such counterparts or duplicates shall together constitute one and the same instrument. A party may execute this Agreement on a facsimile copy counterpart and deliver its signature and seal by facsimile.

24

10.07

Time of essence

Time shall be of the essence of this Agreement, both as regards the dates and periods specifically mentioned and as to any dates and periods which may be substituted by agreement in writing between or on behalf of the parties hereto.

10.08

No waiver

No failure or delay by either party hereto in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of the same preclude any further exercise thereof or the exercise of any other right, power or remedy. Without limiting the foregoing, no waiver by either party hereto of any breach by the other party of any provision of this Agreement shall be deemed to be a waiver of any subsequent breach of that or any other provision hereof. The rights and remedies of the parties herein provided are cumulative and not exclusive of any rights and remedies provided by law.

10.09

Confidentiality

Other than such disclosure as may be required by law, NASDAQ, the United States Securities and Exchange Commission, any stock exchange or other competent authority having jurisdiction over the Purchaser or its holding company, or save for the performance of any obligations under this Agreement or in relation to information coming into the public domain otherwise than by breach on the part of the disclosing party of its confidentiality obligations under this Agreement, none of the parties hereto shall make any announcement or release or disclose any information concerning this Agreement or the transactions herein referred to or disclose the identity of the other parties (save disclosure to their respective professional advisers under a duty of confidentiality) without the prior written consent of the other party.

11.

NOTICES

11.01

Any notice required to be given under this Agreement shall be sufficiently given if delivered personally or forwarded by registered post or sent by facsimile transmission to the relevant party at its address or fax number set out below (or such other address or fax number as the addressee has by 5 days prior written notice specified to the other party:

			
	To: the Vendor

	:

	54-55/F, International Business Center, 

168 Fuhua Third Road, Futian District,

Shenzhen, Guangdong 518048, PRC

	Fax Number

	:

	(86) (755) 8299 1769

	Attention

	:

	Mr. Li Feilie 

	To: the Purchaser

	:

	Room 2205, 22/F, 

Shun Tak Centre, West Tower, 

200 Connaught Road, 

Central, Hong Kong

	Fax Number

	:

	(852) 2810 6963

	Attention

	:

	the board of directors

25

			

11.02

Any notice delivered personally shall be deemed to have been served at the time of delivery. Any notice sent by pre-paid registered post shall be deemed to have been served 3 Business Days after the time at which it was posted and in proving such service it shall be sufficient to prove that the notice was properly addressed and posted by prepaid registered letter post and notices sent by facsimile transmission shall be deemed to have been served upon transmission.

12.

LAW AND JURISDICTION

12.01

Law

This Agreement shall be governed by and construed in all respects in accordance with the laws of Hong Kong.

12.02

Jurisdiction

In relation to any legal action or proceedings to enforce this Agreement or arising out of or in connection with this Agreement (“proceedings”), each of the parties irrevocably submits to the non-exclusive jurisdiction of the courts of Hong Kong and waives any objection to proceedings in such courts on the grounds of venue or on the grounds that the proceedings have been brought in any inconvenient forum.

12.03

Submissions not exclusive

The submissions by the parties referred to in Clause 12.02 shall not affect the right of any party to take proceedings in any other jurisdiction nor shall the taking of proceedings in any jurisdiction preclude any party from taking proceedings in any other jurisdiction.

12.04

Process agent

Each of the following parties hereby irrevocably appoints the person set opposite its name below as its agent to receive on its behalf service of proceedings issued out of the courts of Hong Kong in any action or proceedings arising out of or in connection with this Agreement:

			
	Parties

	 
	Names & addresses of agents

	the Vendor

	 
	Feishang Holdings Limited

Room 2205, 22/F, 

Shun Tak Centre, West Tower, 

200 Connaught Road, 

Central, Hong Kong 

	the Purchaser

	 
	Mark Faith Technology Development Limited

Room 2205, 22/F, 

Shun Tak Centre, West Tower, 

200 Connaught Road, 

Central, Hong Kong

AS WITNESS the parties hereto have caused this Agreement to be executed the day and year first above written.

26

SCHEDULE 1

PART A

THE COMPANY

				
	1.

	Name of company

	:

	NEWHOLD INVESTMENTS LIMITED

	2.

	Place of incorporation

	:

	British Virgin Islands

	3.

	Date of incorporation

	:

	3 July 2008

	4.

	Company number

	:

	1491087 

	5.

	Registered office

	:

	P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands

	6.

	Capital structure

	:

	authorised to issue a maximum of 50,000 shares of a single class each with a par value of US$1.00 and one such share has been issued 

	7.

	Registered shareholder

	:

	Feishang Group Limited (1 share)

	8.

	Directors

	:

	Li Feilie

	9.

	Secretary

	:

	N/A

	10.

	Principal activities

	:

	Investment holding

	11.

	Subsidiaries

	:

	(1)

Feishang Yongfu Mining Limited (飞尚永福矿业有限公司) 

(2)

洋浦双湖实业发展有限公司 (Yangpu Shuanghu Enterprise Development Co., Ltd.)

(3)

贵州永福矿业有限公司 (Guizhou Yongfu Mining Co., Ltd.)

27

PART B

 FEISHANG YONGFU

				
	1.

	Name of company

	:

	FEISHANG YONGFU MINING LIMITED (飞尚永福矿业有限公司)

	2.

	Place of incorporation

	:

	Hong Kong

	3.

	Date of incorporation

	:

	25 June 2008

	4.

	Company number

	:

	1250398

	5.

	Registered office

	:

	Room 2105, 21/F, 

Shun Tak Centre, West Tower, 

200 Connaught Road, 

Central, Hong Kong

	6.

	Capital structure

	:

	Authorised share capital – HK$5,000,000 divided into 5,000,000 shares of HK$1.00 each

Issued share capital – HK$1.00 comprising one share of HK$1.00

	7.

	Registered shareholder

	:

	Newhold Investments Limited (1 share)

	(2)

	Directors

	:

	(1)

Li Feilie 

(2)

Wong Wah On Edward

	9.

	Secretary

	:

	Anka Consultants Limited

	10.

	Principal activities

	:

	Investment holding

	11.

	Subsidiaries

	:

	(1)

洋浦双湖实业发展有限公司 (Yangpu Shuanghu Enterprise Development Co., Ltd.)

(2)

贵州永福矿业有限公司 (Guizhou Yongfu Mining Co., Ltd.)

28

PART C

YANGPU SHUANGHU

				
	1.

	Name of company

	:

	洋浦双湖实业发展有限公司 (YANGPU SHUANGHU ENTERPRISE DEVELOPMENT CO., LTD.)

	2.

	Place of incorporation

	:

	the PRC

	3.

	Date of incorporation

	:

	11 May 2004

	4.

	Business Registration Certificate No. 

	:

	460300000010583

	5.

	Validity of Business Registration Certificate

	:

	long term (长期)

	6.

	Registered address 

	:

	Room 101, Block 17, Yiyuan District, Yangpu, Hainan Province, the PRC (中国海南省洋浦怡园小区17栋101房)

	7.

	Registered capital (注册资本)

	:

	RMB1,000,000

	8.

	Paid-up capital (实收资本)

	:

	RMB1,000,000

	9.

	Shareholder

	:

	Feishang Yongfu Mining Limited (飞尚永福矿业有限公司) (100%)

	10.

	Legal representative

	:

	Zhang Huachun(张华春)

	11.

	Directors

	:

	Zhang Huachun(张华春)

	12.

	Principal activities

	:

	Manufacturing and processing of computer and computer peripheral devices, components and parts; provision of relevant technical and maintenance services; technology development and sales of computer hardware and communication products; production and sales of plastic products; production and sales of transformer skeleton; export and import

	13.

	Subsidiaries

	:

	贵州永福矿业有限公司 (Guizhou Yongfu Mining Co., Ltd.)

29

PART D

GUIZHOU YONGFU

				
	1.

	Name of company

	:

	贵州永福矿业有限公司 (GUIZHOU YONGFU MINING CO., LTD.)

	2.

	Place of incorporation

	:

	the PRC

	3.

	Date of incorporation

	:

	27 June 2005

	4.

	Business Registration Certificate No. 

	:

	5201002225168

	5.

	Validity of Business Registration Certificate

	:

	long term (长期)

	6.

	Registered address 

	:

	No. 3-8-20, No. 59 Ruijin North Rd, Yunyan District, Guiyang, Guizhou Province, the PRC (中国贵州省贵阳市云岩区瑞金北路59号3-8-20号)

	7.

	Registered capital (注册资本)

	:

	RMB16,880,000

	8.

	Paid-up capital (实收资本)

	:

	RMB16,880,000

	9.

	Shareholders

	:

	(1) 洋浦双湖实业发展有限公司 (Yangpu Shuanghu Enterprise Development Co., Ltd.) (70%)

(2) Li Qing(李晴)(30%)

	10.

	Legal representative

	:

	Li Qing(李晴)

	11.

	Directors

	:

	(1) Li Feiwen(李非文)

(2) Wu Yuqing(吴裕庆)

(3) Jia Zhigang(贾志刚)

(4) Zhang Xiaoning(张晓宁)

(5) Li Qing(李晴)

	12.

	Principal activities

	:

	Wholesale and retail of mining products and mining equipments

	13.

	Subsidiaries

	:

	Nil

30

SCHEDULE 2

WARRANTIES

1.

INTERPRETATION

(A)

In this Schedule 2 where the context permits:-

All references in this Schedule 2 to the Company shall, other than those in Paragraphs 4(A), 4(B) and 4(C), to the fullest extent permissible by the context in which such references appear, be read and construed as a reference to each of the Company and the Subsidiaries.

2.

INFORMATION

Disclosures

(A)

The facts and information relating to the Group set out in the Recitals, this Agreement and the Schedules and all documents attached hereto are true and accurate in all respects. All information which has been provided to the Purchaser or its representatives or professional advisers by the Vendor or by any directors, officers or employees of the Company or by their respective professional advisers or agents was when given and is now true and accurate in all respects. There is no fact or matter which has not been disclosed which renders any such information untrue, inaccurate or misleading.

(B)

The information relating to the Group disclosed to the Purchaser or its representatives or professional advisers by the Vendor or by any directors, officers or employees of the Company or by their respective professional advisers or agents regarding the current business and prospects of the Company comprises all information which is material for the reasonable assessment of the financial, trading and other prospects of the Group.

3.

COMPLIANCE AND ABILITY TO SELL

(A)

Constitution of the Company

The copies of the memorandum and articles of association and other constitutional documents of the Company supplied to the Purchaser are true, complete and accurate in all respects and have incorporated in or attached to them a copy of every such resolution, document and agreement required by law to be attached to them and the Company has at all times carried on its business and affairs in all respects in accordance with its memorandum and articles of association and other constitutional documents and all such resolutions, documents and agreements.

(B)

Statutory compliance

The Company has been duly incorporated as a limited liability company under the laws of the place of its incorporation and is validly existing and in good standing and has full legal right, power and authority to carry on the business presently carried on 

31

by it and to own the assets used in connection therewith. The Company has complied with the provisions of all applicable laws, regulations (and all orders notices and directions made thereunder) and all applicable codes or practices. All returns, particulars, resolutions and other documents required to be filed with or delivered to the registrar of companies or to any other authority whatsoever by the Company have been correctly and properly prepared and so filed or delivered. The register of members and all other statutory books and records of the Company have been properly kept and written up-to-date and contain a true, accurate and complete record of all the matters which should be dealt with therein. The Company has applied for and has been granted all licences, permits and consents to carry on its existing business in the relevant jurisdiction and all licences, permits and consents are valid and subsisting and the Vendor is not aware of any circumstances which may lead to a revocation or suspension (on temporary or permanent basis) of such licences, permits and consents.

(C)

Power to sell

(i)

The Vendor has full legal right and power and authority to enter into, execute, deliver and perform this Agreement and the other agreements contemplated herein to which it is a party; the entering into, execution, delivery and performance by the Vendor of this Agreement and the other agreements contemplated herein to which it is a party have been duly authorised on the part of the Vendor; and this Agreement and the other agreements contemplated herein to which it is a party will, when executed, constitute legal, valid and binding obligations of the Vendor, enforceable against it in accordance with their respective terms. 

(ii)

The entering into, execution, delivery and performance by the Vendor of this Agreement and the other agreements contemplated herein to which it is a party and the consummation of the transactions contemplated hereby or thereby do not and will not, directly or indirectly:

(a)

contravene any provisions of the memorandum and articles of association or other constitutional documents of the Vendor; and

(b)

violate or conflict with any law or order applicable to the Vendor or any of its businesses or properties.

(iii)

The Vendor shall be entitled to sell and transfer the full legal and beneficial ownership of the Sale Share beneficially owned by it to the Purchaser or its nominee free from Encumbrance at Completion.

4.

CAPITAL STRUCTURE

(A)

Capital of the Company

(i)

The Sale Share constitutes 100% of the share in the share capital of the Company issued by the Company and is fully paid up. There is no Encumbrance or other form of agreement on, over or affecting the Sale Share or any unissued shares, debentures or other securities of the Company and 

32

there is no agreement or commitment to give or create any of the foregoing, no claim has been made by any person to be entitled to any of the foregoing, and no person has the right (whether exercisable now or in the future and whether contingent or not) to call for the issue of any share or loan capital of the Company under any of the foregoing. 

(ii)

The Company has no, and has never had, any subsidiary or shares in any company other than the 100% issued share capital of Feishang Yongfu which is beneficially owned by the Company and is fully paid up (and in Yangpu Shuanghu and Guizhou Yongfu as set out herein). There is no Encumbrance or other form of agreement on, over or affecting such issued shares or any unissued shares, debentures or other securities of Feishang Yongfu and there is no agreement or commitment to give or create any of the foregoing, and no claim has been made by any person to be entitled to any of the foregoing, and no person has the right (whether exercisable now or in the future and whether contingent or not) to call for the issue of any share or loan capital of Feishang Yongfu under any of the foregoing. 

(iii)

Feishang Yongfu has no, and has never had, any subsidiary or shares in any company other than the 100% registered capital of Yangpu Shuanghu which is beneficially owned by Feishang Yongfu and is fully paid up (and in Guizhou Yongfu as set out herein). There is no Encumbrance or other form of agreement on, over or affecting such registered capital or any equity interest, unissued shares, debentures or other securities of Yangpu Shuanghu and there is no agreement or commitment to give or create any of the foregoing, and no claim has been made by any person to be entitled to any of the foregoing, and no person has the right (whether exercisable now or in the future and whether contingent or not) to call for the issue of any share or loan capital of Yangpu Shuanghu under any of the foregoing. 

(iv)

Yangpu Shuanghu has no, and has never had, any subsidiary or shares in any company other than the 70% registered capital of Guizhou Yongfu which is beneficially owned by Yangpu Shuanghu and is fully paid up. There is no Encumbrance or other form of agreement on, over or affecting such registered capital or any equity interest, unissued shares, debentures or other securities of Guizhou Yongfu and there is no agreement or commitment to give or create any of the foregoing, and no claim has been made by any person to be entitled to any of the foregoing, and no person has the right (whether exercisable now or in the future and whether contingent or not) to call for the issue of any share or loan capital of Guizhou Yongfu under any of the foregoing. 

(v)

The issued share capital or registered capital as the case may be beneficially owned by the Company and each of the Subsidiaries as referred to in Paragraph 4(A)(ii), (iii) and (iv) of this Schedule are herein collectively referred to as the “Subsidiary Shares”.

(B)

Ownership

(i) 

The Sale Share is solely legally and beneficially owned by and registered in the name of the Vendor. All rights now attached to the Sale Share are valid, effective, enforceable and subsisting.

33

(ii)

All the Subsidiary Shares are solely legally and beneficially owned by and registered in the name of the Company, Feishang Yongfu, Yangpu Shuanghu as the case may be as set out in Part B, Part C and Part D of Schedule 1 respectively. All rights now attached to the Subsidiary Shares are valid, effective, enforceable and subsisting.

(C)

Business

(i)

Save for the holding of the 100% issued share capital of Feishang Yongfu referred to in Paragraph 4(A)(ii) (and in Yangpu Shuanghu and Guizhou Yongfu as set out in Paragraph 4(A)(iii) and (iv)), the Company does not carry and has never carried on any other business or own any other asset and has not entered into any agreement or arrangement to conduct any business or purchase any asset and is not under any obligation in relation to any of the foregoing.

(ii)

Save for the holding of the 100% registered capital of Yangpu Shuanghu referred to in Paragraph 4(A)(iii) (and in Guizhou Yongfu as set out in Paragraph 4(A)(iv)), Feishang Yongfu does not carry and has never carried on any other business or own any other asset and has not entered into any agreement or arrangement to conduct any business or purchase any asset and is not under any obligation in relation to any of the foregoing.

(iii)

Save for the holding of the 70% registered capital of Guizhou Yongfu referred to in Paragraph 4(A)(iv), Yangpu Shuanghu does not carry and has never carried on any other business or own any other asset and has not entered into any agreement or arrangement to conduct any business or purchase any asset and is not under any obligation in relation to any of the foregoing.

(iv)

Save for the business in connection with the Mining Rights and the holding of the Permits, Guizhou Yongfu does not carry and has never carried on any other business or own any other asset and has not entered into any agreement or arrangement to conduct any business or purchase any asset and is not under any obligation in relation to any of the foregoing.

(D)

Reorganisation of share capital

The Company has not at any time:­

(i)

repaid, redeemed or purchased or agreed to repay, redeem or purchase any of its registered capital or shares, or otherwise reduced or agreed to reduce its issued registered capital or share capital or any class of it; or

(ii)

capitalised or agreed to capitalise in the form of registered capital, shares, debentures or other securities or in paying up any amounts unpaid on any registered capital, shares, debentures or other securities, any profits or reserves of any class or description or passed or agreed to pass any resolution to do so.

(E)

Connected business

The Company:­

34

(i)

is not and has not agreed to become the holder or beneficial owner of any class of any shares, debentures or other securities of any other company (wherever incorporated) other than as expressly set out in this Agreement;

(ii)

is not and has not agreed to become a subsidiary of any other company or under the control of any group of companies or consortium other than as expressly set out in this Agreement;

(iii)

is not and has never been and has not agreed to become a member of any partnership, joint venture, consortium or other unincorporated association.

5.

ACCOUNTS

(A)

General

Save as disclosed in the Management Accounts, the Management Accounts:­

(i)

were prepared in accordance with the requirements of all relevant laws and generally accepted accounting principles and practices in the United States of America, comply with the relevant applicable legislation and are prepared on a basis consistent with preceding accounting periods of the Company and with the books of account of the Company and are true and accurate in all respects;

(ii)

disclose the assets, liabilities and financial condition of the Company as at the Management Accounts Date and of its profits/loss for the financial year ended on such date;

(iii)

contain full provision or reserve for bad and doubtful debts, burdensome contracts or other obligations, obsolescent or slow moving stocks and for depreciation on fixed assets, which provision or reserve was when made and is now adequate;

(iv)

contain a note of all capital commitments of the Company at the Management Accounts Date, which note was when made and is now adequate, fair and not misleading; and

(v)

contain full provision or reserves (as appropriate) for all applicable Taxation.

(B)

Liabilities

Save as disclosed in the Management Accounts, as at the Management Accounts Date the Company had no liabilities known, actual or contingent (including contingent liabilities) which were not disclosed, noted or provided for in the Management Accounts.

(C)

Plant and machinery etc.

Save as disclosed in the Management Accounts, all the fixed and loose plant and machinery, equipment, furniture, fittings and vehicles used by the Company as at the Management Accounts Date are reflected in the Management Accounts, were at the Management Accounts Date and (except for such items as have been disposed of or 

35

realised by the Company in the ordinary course of business) remain in the absolute beneficial ownership of the Company and are free from any Encumbrance, hire or hire purchase agreement or leasing agreement or agreement for payment on deferred terms.

(D)

Profits/loss

The profits/loss of the Company for the period ended on the Management Accounts Date as shown by the Management Accounts and by any audited accounts of the Company for previous periods delivered to the Purchaser and the trend of profits/loss shown by them have not (except as disclosed in them) been affected to a material extent by inconsistencies of accounting practices, by the inclusion of non-recurring items of income or expenditure, by transactions entered into otherwise than on normal commercial terms or by any other factors rendering such profits/loss for all or any of such periods exceptionally high or low.

(E)

Depreciation

Save as disclosed in the Management Accounts, depreciation of the fixed assets of the Company has been made at the relevant rates prescribed by the relevant Tax authorities and no fixed asset has attributed to it a value exceeding the current market value thereof as at the Management Accounts Date.

(F)

Books of account

All accounts, books, ledgers, financial and other necessary records of whatsoever kind of the Company (including all invoices and other records required for Tax)­:-

(i)

have been fully, properly and accurately maintained, are in the possession or access of the Company and contain true and accurate records of all matters including those required to be entered in them by applicable laws and no notice or allegation that any of the same is incorrect or should be rectified has been received from any government authorities having jurisdiction or any other party;

(ii)

do not contain or reflect any material inaccuracies or discrepancies;

(iii)

give and reflect a true and fair view of the matters which ought to appear in them and in particular of the financial, contractual and trading position of the Company and of its plant and machinery, fixed and current assets and liabilities (actual and contingent), debtors and creditors and stock-in-trade; and

(iv)

contain accurate information in accordance with the generally accepted accounting principles in the United States of America relating to all transactions to which the Company has been a party and the Management Accounts do not overstate the value of any asset or understate any liability of the Company as at the Management Accounts Date.

(G)

Completion Accounts

As at the Completion Accounts Date, the Company will have no liabilities known, 

36

actual or contingent (including contingent liabilities) which are not disclosed, noted or provided for in the Completion Accounts or included for the computation of the Net Amount in accordance with Clause 3.03.

6.

POST ACCOUNTS DATE EVENTS

Since the Management Accounts Date, the Company, other than as disclosed in the Management Accounts or as contemplated under this Agreement:

(A)

Business

has carried on its business in the ordinary and usual course and without entering into any transaction, assuming any liability or making any payment which is not in the ordinary and usual course of business and without any interruption or alteration in the nature, scope or manner of its business and nothing has been done which would be likely to prejudice the interests of the Purchaser as a purchaser of the Sale Share and the Company Indebtedness;

(B)

Financial position and prospects

has not experienced any deterioration in its financial or trading position or prospects or turnover or suffered any diminution of its assets by the wrongful act of any person and the Company has not had its business, profitability or prospects adversely affected by the loss of any important customer or source of supply or by any abnormal factor not affecting similar businesses to a like extent and there are no facts which are likely to give rise to any such effects;

(C)

Assets and liabilities

has not acquired or disposed of or agreed to acquire or dispose of any assets or assumed or incurred or agreed to assume or incur any liabilities (actual or contingent) otherwise than in the ordinary course of business;

(D)

Distributions and loan repayments

has not declared, made or paid any dividend, bonus or other distribution of capital or income (whether a qualifying distribution or otherwise) and (excluding fluctuations in overdrawn current accounts with bankers) no loan or loan capital of the Company has been repaid in whole or in part or has become due or is liable to be declared due by reason of either service of a notice or lapse of time or otherwise howsoever;

(E)

Liability to Tax

has not carried out or entered into any transaction and no other event has occurred in consequence of which (whether alone or together with any one or more transactions or events occurring before, on or after the date of this Agreement) any liability of the Company to Taxation has arisen or will arise (or would have arisen or would or might arise but for the availability of any relief, allowance, deduction or credit) other than profits tax on the actual income (not chargeable gains or deemed income) of the Company arising from transactions entered into in the ordinary course of business;

37

(F)

Employees

save as already disclosed to the Purchaser in writing, has not made any change to the remuneration, terms of employment, emoluments or pension benefits of any present or former director, officer or employee of the Company to the extent that the amount involved exceeds HK$50,000 or its equivalent in aggregate for the Group per month and has not appointed or employed any additional director, officer or employee whose remuneration shall exceed the sum of HK$600,000 or its equivalent per annum;

(G)

Debts

has not waived or released any debts in whole or in part and has not written off debts in an amount exceeding HK$100,000 or its equivalent in aggregate for the Group in each financial year;

(H)

Contracts

has not entered into contracts involving capital expenditure in an amount exceeding HK$5,000,000 or its equivalent) in aggregate for the Group in each financial year;

(I)

Resolutions

(including any class of its members) has not passed any resolution whether in general meeting or otherwise;

(J)

Stock-in-trade

has not purchased stocks in quantities or at prices materially greater than was the practice of the Company prior to the Management Accounts Date nor at prices materially greater than the then market prices thereof;

(K)

Third party rights

has not become aware that any event has occurred which would entitle any third party to terminate any contract or any benefit enjoyed by it or call in any money before the normal due date therefor;

(L)

Creditors

has paid its creditors within the time agreed with such creditors;

(M)

Borrowings

(other than the Company Indebtedness which shall be assigned by the Vendor to the Purchaser upon Completion) has not borrowed or raised any money or taken any financial facility (except such short term borrowings from bankers as are within the amount of any overdraft facility which was available to the Company as at the Management Accounts Date) or since the Management Accounts Date renegotiated or received any notice from any banker that such banker wishes to renegotiate any overdraft facility available to the Company as at the Management Accounts Date.

38

7.

TRANSACTIONS WITH VENDORS, DIRECTORS AND CONNECTED PERSONS

(A)

Loans and debts

Other than the Company Indebtedness which shall be assigned by the Vendor to the Purchaser upon Completion, there is not outstanding:­

(i)

any indebtedness or other liability (actual or contingent) owing by the Company to the Vendor or any director of the Company or any Connected Person of any of them or owing to the Company by the Vendor or any director of the Company or any Connected Person of any of them; or

(ii)

any guarantee or security for any such indebtedness or liability as aforesaid.

(B)

Contracts and arrangements

(i)

There is not now outstanding, any agreement, arrangement or understanding (whether legally enforceable or not) to which the Company is a party or has an interest and in which the Vendor, or any director of the Company or any Connected Person of any of them is interested whether directly or indirectly, other than as informed to the Purchaser previously.

(ii)

The Company is not a party to nor has its profits or financial position during the last 3 years been affected by any agreement or arrangement which is not entirely of an arm's length nature.

(C)

Intellectual Property

Neither the Vendor nor any director of the Company nor any of their respective Connected Persons either individually, collectively or with any other person are interested in any way whatsoever in any Intellectual Property used and not wholly owned by the Company. 

(D)

Benefits

Neither the Vendor nor any director of the Company nor any of their respective Connected Persons is entitled to or has claimed entitlement to any remuneration, compensation or other benefit from the Company.

8.

FINANCE

(A)

Borrowings

(i)

Other than the Company Indebtedness which shall be assigned by the Vendor to the Purchaser upon Completion, the Company does not have any borrowings other than in the ordinary course of its business which shall be repaid and settled in full by the Company on or before Completion or provided for in the Completion Accounts (as the case may be).

(ii)

The Company has no outstanding loan capital or loan stock.

39

(iii)

The Vendor is the legal and beneficial owner of the Company Indebtedness and shall be entitled to sell, transfer and assign the full legal and beneficial ownership of the Company Indebtedness to the Purchaser or its nominee free from Encumbrance upon Completion.

(iv)

There are no options, right to acquire, Encumbrance or third party rights whatsoever, adverse interest or other form of security on, over or affecting the Company Indebtedness, and there is no agreement or commitment to give or create any of the foregoing and no claim has been made by any person to be entitled to any of the foregoing.

(v)

All rights now attached to the Company Indebtedness are valid, effective, enforceable and subsisting.

(vi)

The Company Indebtedness is still owing by the Company to the Vendor in full and no person other than the Vendor is entitled to demand repayment of the Company Indebtedness from the Company.

(B)

Debts owed to the Company

(i)

The Company does not own the benefit of any debt (whether present or future) other than debts which have accrued to it in the ordinary course of business.

(ii)

All debts owed to the Company are collectable in the ordinary course of business.

(iii)

All debts owing to the Company shown in the Management Accounts (subject to any provision for bad and doubtful debts made in the Management Accounts) were paid in full on their due dates or, if any such debts are not yet due, each such debt is not now regarded by the Company or by the Vendor as irrecoverable in whole or in part.

(C)

Bank accounts

Particulars of the balances on all the Company's bank accounts as at the Completion Date will be reflected in the Completion Accounts and since the Management Accounts Date there have been no payments out of any such bank accounts except for payments in the ordinary course of its business, contractual obligations and the settlement of related parties’ accounts as required by the Purchaser.

(D)

Financial facilities

There is no Encumbrance to which any asset of the Company is subject and in relation to debentures, acceptance lines, overdrafts, loans or other financial facilities outstanding or available to the Company:

(i)

the Vendor has disclosed to the Purchaser in writing full details of them and true and correct copies of all documents relating to them; and

(ii)

neither the Vendor nor the Company has done anything whereby the continuance of any such debenture, acceptance line, overdraft, loan or other financial facility in full force and effect might be affected or prejudiced.

40

(E)

Options, guarantees etc.

The Company is not responsible for the indebtedness of any other person, and in particular but without prejudice to the generality of the foregoing, is not a party to any option or pre-emption right or a party to any guarantee or suretyship or any other obligation (whatever called) to pay, purchase or provide funds (whether by the advance of money, the purchase of or subscription for shares or other securities or the purchase of assets or services or otherwise) for the payment of, or as an indemnity against the consequence of default in the payment of, any indebtedness of any other person.

9.

TAXATION

(A)

Notices and returns

All notices, returns and computations of the Company for the purposes of Taxation have been made punctually on a proper basis and are correct and none of them is, or is likely to be, the subject of any dispute with any fiscal authority.

(B)

Payment of Tax due

All Taxation which the Company is liable to pay prior to Completion and to the extent the due date for payment was prior to the Completion Date has been or will be so paid prior to Completion. To the extent the due date for payment is after the Completion Date, the relevant amount shall be reflected in the Completion Accounts for the computation of the Net Amount.

(C)

Penalties or interest on Tax

The Company has not paid or become liable to pay any penalty, fine or interest charged by virtue of the provisions of any Taxation statute, law, rule or regulation.

(D)

Compliance with Tax collection obligations

(i)

All Tax deductible and payable under any Taxation statute, law, rule or regulation has, so far as is required to be deducted, been deducted from all payments made or treated as made by the Company and all amounts due to be paid to all relevant Tax authorities prior to the date of this Agreement have been so paid.

(ii)

All payments by the Company to any person which ought to have been made under deduction of Tax have been so made and the Company (if required by law to do so) has accounted to all relevant Tax authority for the Tax so deducted.

(iii)

Proper records have been maintained in respect of all such deductions and payments and all applicable regulations have been complied with.

41

(E)

No back duty investigation

The Company has not, save and except for random checks carried out by the relevant Tax authorities in the ordinary course, in the last 3 years been the subject of a discovery, audit or investigation by any Tax authority and there are no facts which are likely to cause a discovery, audit or investigation to be made by any Tax authority.

(F)

Tax provision

Full provision or reserve has been made in the Management Accounts for all Taxation assessed or liable to be assessed on the Company or for which it is accountable in respect of income, profits or gains earned, accrued or received on or before the Management Accounts Date, including distributions made down to such date or provided for in the Management Accounts, and proper provision has been made in the Management Accounts for deferred Taxation in accordance with the applicable accounting standards.

(G)

Anti-avoidance provisions

The Company has not entered into and is not and has not been a party to any scheme or arrangement of which the main purpose, or one of the main purposes, was the avoidance of or the reduction in liability to Taxation.

(H)

Calculation of tax liability

The Company has sufficient records to permit accurate calculation of the Tax liability or relief which would arise upon a disposal or realisation on Completion of each asset owned by the Company as at the Management Accounts Date or acquired by the Company before Completion.

(I)

Claims and disclaimers

The Company has duly submitted all claims and disclaimers the making of which has been assumed for the purposes of the Management Accounts, and will submit, when required, all claims and disclaimers the making of which will be assumed for the purposes of the Completion Accounts.

(J)

Sales at under-value or over-value

The Company has not been a party to any sale or other disposal of an asset either at an under-value or an over-value.

10.

THE TARGET MINE

(A)

General

The particulars of the Target Mine as set out in Schedule 3 are true and accurate in all respects.

42

(B)

Restrictions

Subject to the terms of the Permits, there are no rights, interests, conditions, covenants, restrictions, reservations, licences, mortgages, charges, options, exceptions, stipulations, easements, privileges, Encumbrance, or any disputes or outstanding notices or any other matters or things which may adversely affect the value or the proper enjoyment of the Mining Rights for the purpose of the business now being carried on in connection with the Target Mine by Guizhou Yongfu or which are of an onerous or unusual nature or which are in conflict with the present user thereof.

(C)

Enjoyment

Subject to the terms of the Permits, there are no circumstances which would entitle or require a landlord or any other person to exercise any power of entry upon or of taking possession of the Target Mine; and there are no proposals orders acts or things made and done or, to the best of the knowledge and belief of the Vendor or Guizhou Yongfu, intended to be made or done by any governmental or any other competent authority concerning the compulsory acquisition of the Target Mine.

(D)

Matters affecting the Exploration Rights

Guizhou Yongfu has duly performed, observed and complied with all covenants, restrictions, reservations, conditions, agreements, statutory requirements, bye-laws, orders and other stipulations and regulations affecting the Mining Rights, and the Mining Rights do not contravene the same and (without prejudice to the generality of the foregoing) all outgoings and expenses have been paid to date and no notice of any alleged breach of any of the same has been served on Guizhou Yongfu.

(E)

Possession

(i)

Subject to the terms of the Permits, Guizhou Yongfu is entitled exclusively to the Mining Rights in connection with the Target Mine and no part of the Target Mine is subject to any lease, tenancy, licence or other exploration rights or mining rights or any agreement to grant such lease, tenancy, licence or other exploration rights or mining rights and no person other than Guizhou Yongfu has any exploration rights or mining rights in connection with the Target Mine.

(ii)

There are no closure, demolition or clearance orders, enforcement notices or stop notices affecting the Target Mine or the Mining Rights and there are no circumstances likely to lead to any such order or notice being made.

(F)

Disposal

Pending Completion, Guizhou Yongfu will not transfer, sell, assign or otherwise dispose of the Mining Rights or any part thereof or any interest therein or in any other way deal with or make any arrangement for the sharing of the Target Mine or the Mining Rights or any part thereof or any interest therein or enter into any agreement so to do or accept the surrender of any lease or tenancy without the prior written consent of the Purchaser.

43

(G)

Claims and liabilities

There is no outstanding monetary claim or liability, contingent or otherwise, affecting the Target Mine or the Mining Rights except as disclosed in the Management Accounts or the Completion Accounts as the case may be.

(H)

Use of the Target Mine

(i)

The contemplated use of the Target Mine and the Mining Rights is the lawful permitted use under all applicable laws and regulations and the Permits issued to Guizhou Yongfu are valid and subsisting.

(ii)

The contemplated use of the Target Mine and the Mining Rights is in compliance with the provisions, covenants, terms and conditions of any conditions and any regulations in force relating to the Mining Rights and the Permits, and so far as the Vendor is aware there are no circumstances which are likely to result in the forfeiture, avoidance, withdrawal or non-renewal of or restriction on or amendment to the same.

(I)

Taxes

All Tax and outgoings, save and except the premium payable for the Mining Rights (应交采矿权价款), in respect of the Target Mine and the Mining Rights have been duly paid up to the date hereof and will be paid up to the Completion Date.

(J)

Permits

The Permits have been issued by Guizhou Provincial Department of Land and Resources (贵州省国土资源厅), and are valid and subsisting and shall not be terminated or become invalid or ineffective as a result of Completion and the transactions contemplated under this Agreement.

11.

ASSETS

(A)

Assets and charges

(i)

All assets of the Company which are included in the Management Accounts or have otherwise been represented as being the property of the Company or which were at the Management Accounts Date used or held for the purposes of its business were at the Management Accounts Date in the absolute legal and beneficial ownership of the Company free from all Encumbrances and (except assets disposed of or realised by the Company in the ordinary course of business) the Company is the absolute legal and beneficial owner of and has good and marketable title to all such assets and all such assets are in the possession and control of the Company, except as disclosed in the Management Accounts, the Completion Accounts or this Agreement.

(ii)

All assets which have been acquired by the Company since the Management Accounts Date are (except as aforesaid) now in the absolute legal and 

44

beneficial ownership of the Company and in the possession and control of the Company and none is the subject of any Encumbrance (excepting only liens arising in the normal course of trading) nor has the Company created or agreed to create any Encumbrance or entered into any factoring arrangement, hire-purchase, conditional sale or credit sale agreement.

(B)

Condition of assets

The plant and machinery (including fixed plant and machinery) and all vehicles and office and other equipment and assets shown in the Management Accounts or acquired since the Management Accounts Date or otherwise used in connection with the business of the Company which have not been disposed of in the ordinary course of business:­

(i)

do not contravene any requirement or restriction having the force of law;

(ii)

are in good repair and condition and are regularly maintained and in good working order;

(iii)

are each capable of performing the work for which they were designed or purchased;

(iv)

are not dangerous, unsuitable or in need of renewal or replacement (fair wear and tear excepted) and the vehicles owned by the Company are road-worthy and duly licensed for the purposes for which they are used;

(v)

all the maintenance contracts are in full force and effect in respect of the computer system and all other assets owned or used by the Company which it is normal or prudent to be maintained by outside or specialist contractors.

(C)

Insurance

(i)

All the assets and undertakings of the Company which are of an insurable nature have been and are adequately covered by policies of insurance against fire and all other reasonable risks and liabilities usually insured against in relation to such assets and undertakings by companies carrying on similar businesses or owning assets and properties of a similar nature to those of the Company, and the Company has been and is adequately covered against all liabilities and risks usually insured against by such companies in relation to such of its assets and undertakings and the activities carried out by the Company in its ordinary course of business (including without limitation liability to employees or third parties for personal injury or loss or damage to property, product liability and loss of profit).

(ii)

Particulars of all policies of insurance of the Company now in force have been disclosed to the Purchaser in writing and such particulars are true and correct in all respects and all premiums due on such policies have been duly paid and all such policies are valid and in full force and effect and, to the best of the knowledge and belief of the Vendor, there are no circumstances which might lead to any liability under such insurance being avoided by the insurers or the premiums being increased and there is no claim outstanding under such policy 

45

and the Vendor is not aware of any circumstances likely to give rise to a claim or cause an application for renewal of such policy to be refused.

(iii)

No insurance company has refused to insure the properties, assets or risks of the Company or has imposed conditions (by way of increased premiums or otherwise) for such insurance.

(D)

Retention of title

The Company has not acquired or agreed to acquire any asset on terms that title to such asset does not pass to the Company until full payment is made.

(E)

Equipment leases etc

Rentals payable by the Company under any leasing, hire-purchase or other similar agreement to which it is a party have not been and are not likely to be increased and all such rentals are fully deductible by the Company for Tax purposes.

(F)

Computer System

(i)

Complete and accurate details of the maintenance and servicing history and records of the computer system and software used by the Company have been supplied to the Purchaser and such computer system and software of the Company were acquired new and have not been reconditioned, have been properly used maintained and serviced, have not been (and the Vendor has no reason to believe will be) susceptible to breakdown malfunction or failure and have functioned and are functioning in a manner which would be satisfactory to a reasonably skilled person engaged in the same type of business.

(ii)

The Company has in place adequate back up arrangements to ensure continuance of its business without loss of customers and data, in the event of computer hardware or software breakdown, malfunction or power failure.

12.

BUSINESS

(A)

Licences, permits and consents

The Company has all necessary licences, permits and consents for the proper and effective carrying on of its business and in the manner in which such business is now carried on and all such licences, permits and consents are valid and subsisting and the Vendor does not know of any reason why any of them (including the Permits) should be suspended, cancelled or revoked whether in connection with the purchase by the Purchaser of the Sale Share or the Company Indebtedness or otherwise and so far as the Vendor is aware there are no factors that might in any way prejudice the continuance or renewal of any of those licences, permits or consents and the Company is not restricted by contract from carrying on any activity in any part of the world. The Company has not committed any offence under any applicable laws, rules or regulations or under any licences, permits or consents held by or applicable to it and has complied with all requirements and conditions thereunder whether the same relates to its business or otherwise.

46

(B)

Litigation and arbitration

(i)

The Company is not engaged in any litigation or arbitration proceedings and there are no lawsuits or arbitration proceedings pending or threatened by or against the Company or any person for whose acts or defaults the Company may be vicariously liable.

(ii)

No injunction has been granted against the Company.

(iii)

The Company is not subject to any order or judgment given by any court or governmental agency which is still in force.

(iv)

The Company has not given any undertaking to any court or to any third party arising out of any legal proceedings.

(v)

There is no matter or fact in existence which might give rise to any legal proceedings or arbitration involving the Company including any which might form the basis of any criminal prosecution against the Company.

(vi)

No governmental or other investigation or inquiry is in progress or threatened in respect of the Company or its business and there are no circumstances likely to lead to any of the same. No governmental, regulatory or other public authorities, departments or bodies has instituted or threatened to institute any disciplinary or other proceedings against the Company or has exercised or threatened to exercise any powers under any applicable laws, rules or regulations adversely affecting the business of the Company.

(C)

Delegation of powers

There are in force no powers of attorney given by the Company nor any other authority (express, implied or ostensible) given by the Company to any person to enter into any contract or commitment or do anything on its behalf other than any authority of employees to enter into routine trading contracts in the normal course of their duties.

(D)

Customers and Suppliers

(i)

No significant client, customer or supplier of the Company has ceased or indicated an intention to cease or, to the best of the knowledge and belief of the Vendor, might prior to or as a result of Completion cease to contract with or supply to the Company or might substantially reduce its business with the Company.

(ii)

No circumstance exists which would or might enable any third party to raise any set off or counterclaim against the Company or cause any third party to withhold or delay payment to the Company or cause any supplier to withhold or delay the provision of any goods, products or services to the Company.

(E)

Confidentiality

No disclosure has been made of any of the confidential information, including financial or trade secrets, of the Company save in the ordinary course of business of 

47

the Company and the Company has taken adequate steps to preserve the confidential nature of all such information.

(F)

Records of the Company

(i)

All the accounting records, statutory and other books and records (including the register of members), and other deeds, documents, records, data and information of the Company and its pension and benefit schemes (if any) are, and have since its incorporation been, kept up-to-date, properly, accurately and consistently completed and are a complete and accurate record of all acts and transactions of the Company and of all matters required by law or best business practice to be recorded or registered therein; and the Company has not received any application or request for rectification in connection therewith.

(ii)

The Company does not have any of its records, systems, controls, data or information recorded, stored, maintained, operated or otherwise wholly or partly dependent on or held by any means (including any electronic, mechanical or photographic process whether computerised or not) which (including all means of access thereto and therefrom) are not under the exclusive ownership and direct control of the Company.

(G)

Winding up, insolvency and receivership

(i)

No order has been made or petition presented or resolution passed for the winding up of the Company and no distress, execution or other process has been levied on any of its assets.

(ii)

The Company has not stopped payment and is not insolvent nor unable to pay its debts as they fall due.

(iii)

No administrative or other receiver has been appointed by any person in relation to the business or assets of the Company or any part thereof, nor has any order been made or petition presented for the appointment of an administrator or receiver in respect of the Company.

(iv)

There has been no delay by the Company in the payment of any obligation due for payment.

(H)

Guarantees, warranties and sureties

(i)

The Company has not given any guarantee or warranty or made any representation in respect of articles or trading stock sold or contracted to be sold or service provided or contracted to be provided by it save for any warranty or guarantee implied by law and (save as aforesaid) has not accepted any liability or obligation to service, maintain, repair, take back or otherwise do or not to do anything in respect of any articles, stock or service that would apply after any such article or stock has been delivered by it or service performed by it (as the case may be).

(ii)

No person has given any guarantee of or security for any overdraft, loan or loan facility granted to the Company or any member of the Group.

48

(I)

Documents

All title deeds and other documents required to show title to the assets of the Company (duly stamped where necessary) and all other documents and agreements to which the Company is a party and all other documents, records and correspondence of the business owned by, or which ought to be in the possession or control of, the Company are in the possession or control of the Company.

13.

CONTRACTS

(A)

Onerous contracts

There are no long term contracts (i.e. contracts not terminable by the Company without penalty on 3 months' notice or less) or onerous or unusual or abnormal contracts (i.e. contracts for capital commitments or contracts differing from those necessitated by the ordinary course of business) binding upon the Company, nor is the Company a party to any contract which contains any onerous or other provision material for disclosure to an intending purchaser or owner of the Sale Share or the Company Indebtedness and no expenses or liabilities of a material amount have been incurred by the Company otherwise than for the purpose of the Company's business.

(B)

Material contracts

Copies of all existing contracts to which the Company is a party have been disclosed to the Purchaser in writing. There are no material contracts to which the Company is a party (being contracts in excess of HK$100,000 or its equivalent) which are not entered into in the ordinary and usual course of business and which remains subsisting.. The Company is not a party to or subject to any agreement, transaction, obligation, commitment, understanding, arrangement or liability which remains subsisting and:

(i)

is incapable of complete performance in accordance with its terms within 6 months after the date on which it was entered into or undertaken;

(ii)

cannot readily be fulfilled or performed by the Company on time and without undue or unusual expenditure of money and effort;

(iii)

involves or is likely to involve obligations, restrictions, expenditure or receipts of an unusual, onerous or exceptional nature and not in the ordinary course of business of the Company;

(iv)

requires an aggregate consideration payable by the Company in excess of HK$1,000,000 or its equivalent;

(v)

involves or is likely to involve the supply of goods or services by or to the Company the aggregate sales value of which will represent in excess of ten per cent (10%) of the turnover of the Company for any financial year of the Company;

(vi)

requires the Company to pay any commission, finder’s fee, royalty or the like 

49

in excess of HK$1,000,000 or its equivalent; or

(vii)

is in any way otherwise than in the ordinary and proper course of business of the Company or on arm’s length basis.

(C)

Performance of contracts

(i)

The terms of all contracts of the Company have been complied with by the Company and by the other parties to such contracts in all respects and there are no circumstances likely to give rise to a default by the Company under any such contract.

(ii)

There are no outstanding claims, separately or in the aggregate of material amounts, against the Company on the part of customers or other parties relating to liability for goods or services sold or supplied by the Company and no such claims are threatened or anticipated and there is no matter or fact in existence in relation to goods or services currently sold or supplied by the Company which might give rise to the same.

(iii)

The Company has no knowledge of the invalidity of or grounds for rescission, avoidance or repudiation of any agreement or other transaction to which the Company is a party and has received no notice of any intention to terminate, repudiate or disclaim any such agreement or other transaction.

(D)

Restrictive contracts

There are no agreements in force restricting the freedom of the Company to provide and take goods and services by such means and from and to such persons as it may from time to time think fit.

(E)

Agency and distributorship agreements

The Company is not a party to any subsisting agency or distributorship agreement other than the agreements on normal commercial terms and on arm’s length basis and entered into in the ordinary course of business of the Company.

14.

EMPLOYEES

(A)

Particulars of employees

The particulars and the relevant terms of employment in respect of all the employees of the Company have already been disclosed to the Purchaser in writing and are true and complete in all respects and show in respect of each director, officer and employee of the Company his date of birth, the date on which he commenced employment with the Company and all remuneration payable and other benefits provided or which the Company is bound to provide to each such person and include full particulars of all remuneration arrangements (particularly profit sharing, incentive and bonus arrangements to which the Company is a party whether binding or not) and each director, officer and employee of the Company is listed therein.

50

(B)

Service contracts, etc.

(i)

There is no contract of service in force between the Company and any of its directors, officers or employees which is not terminable by the Company without compensation on one month's notice given at any time.

(ii)

With effect from Completion, there will be no consultancy or management services agreements in existence between the Company and any other person, firm or company. All liabilities of the Company in respect of any consultancy or management services agreements in existence prior to Completion will have been fully settled prior to the Completion Accounts Date.

(iii)

There are no agreements or other arrangements (binding or otherwise) between the Company or any employers' or trade association of which the Company is a member and any trade union or other body or organisation representing its employees.

(C)

Benefits

(i)

Compliance with contractual obligations

There are no amounts owing to present or former directors, officers or employees of the Company other than not more than one month's arrears of remuneration accrued or due or for reimbursement of business expenses incurred within a period of 3 months preceding the date hereof.

(ii)

Obligations provided for in the Accounts

Save to the extent (if any) to which provision or allowance has been made in the Management Accounts or will be made in the Completion Accounts (as the case may be), the Company has not made or agreed to make any payment to or provided or agreed to provide any benefit for any present or former director, officer or employee of the Company nor any dependent of any present or former director, officer or employee of the Company.

(iii)

Future obligations

No moneys or benefits other than in respect of remuneration or emoluments of employment are payable to or for the benefit of any present or former director, officer or employee of the Company.

(D)

Liabilities and payments

Save to the extent (if any) to which provision or allowance has been made in the Management Accounts or will be made in the Completion Accounts (as the case may be):

(i)

no liability has been incurred or is anticipated by the Company for breach of any contract of employment or for services or for severance payments or for redundancy payments or protective awards or for compensation for unfair dismissal or for failure to comply with any order for the reinstatement or 

51

re-engagement of any employee or for any other liability accruing from the termination or variation of any contract of employment or for services; and

(ii)

no gratuitous payment has been made or promised by the Company in connection with the actual or proposed termination or suspension of employment or variation of any contract of employment or for services of any present or former director, officer or employee of the Company.

(E)

Relevant legislation

(i)

Statutory compliance, etc.

The Company has in relation to each of its employees (and so far as relevant to each of its former employees) complied with:

(a)

all obligations imposed on it by all relevant statutes, regulations and codes of conduct and practice affecting its employment of any persons and all relevant orders and awards made thereunder and has maintained current, adequate and suitable records regarding the service, terms and conditions of employment of each of its employees; and

(b)

all collective agreements, recognition agreements and customs and practices for the time being affecting its employees or their conditions of service.

(ii)

Notices

The Company has not been served with any improvement and/or prohibition notices pursuant to any applicable employment or health and safety laws, rules and/or regulations and is not in breach of any provisions of any of the foregoing.

(iii)

Claims by employees

There is no liability or claim against the Company from any employee or former employee outstanding or anticipated.

(F)

Redundancies

Within a period of one year preceding the date of this Agreement, the Company has not given notice of any redundancies.

(G)

Termination of employment

No present director, officer or employee of the Company has given or received notice terminating his employment except as expressly contemplated under this Agreement and Completion will not trigger any "golden parachute" agreement.

(H)

Share and other schemes

The Company does not have in existence nor is it proposing to introduce:

52

(i)

any employee share trust, share incentive scheme, share option scheme or profit sharing scheme for the benefit of all or any of its directors, officers or employees; or

(ii)

any scheme whereunder any director, officer or employee of the Company is entitled to a commission or remuneration of any other sort calculated by reference to the whole or part of the turnover, profits or sales of the Company.

(I)

Disputes and claims

(i)

No dispute exists or can reasonably be anticipated between the Company and a material number or category of its employees and so far as the Vendor is aware there are no wage or other claims outstanding against the Company by any person who is now or has been a director, officer or employee of the Company.

(ii)

The Company has not had during the last 3 years any strike, work stoppages, slow-down, work-to-rule or lock-out by its employees, nor, so far as the Vendor is aware, is any such action anticipated.

(J)

Trade unions

The Company is not a party to any agreement or arrangement with or commitment to any trade unions or staff association nor are any of its employees members of any trade union or staff association.

(K)

Immigration

Each of the employees of the Company who is by law subject to immigration control, has been granted appropriate permission to remain in the PRC or the applicable place in which such employee performs his services under his employment with the Company and has a valid work permit issued in relation to his employment with the Company and has obtained all necessary extensions to his leave to remain in the PRC or the applicable place in which such employee performs his services under his employment with the Company and, so far as the Vendor is aware, there are in existence no grounds upon which any such leave to remain or work permit might be curtailed or the employee may be required to leave the PRC or the place in which such employee performs his services under his employment with the Company. 

(L)

Insurance

(i)

The Company has maintained and maintains valid policies of insurance in respect of employees in accordance with all applicable statutory requirements.

(ii)

Particulars of all policies of insurance of the Company in relation to its employees now in force have been disclosed to the Purchaser in writing and such particulars are true and correct in all respects and all premiums due on such policies have been duly paid and all such policies are valid and in full force and effect and, to the best of the knowledge and belief of the Vendor, there are no circumstances which might lead to any liability under such insurance being avoided by the insurers or the premiums being increased and there is no claim outstanding under such policy and the Vendor is not aware of 

53

any circumstances likely to give rise to a claim or cause an application for renewal of such policy to be refused.

(iii)

No insurance company has refused to insure the employees, assets or risks of the Company or has imposed conditions (by way of increased premiums or otherwise) for such insurance.

15.

PENSION SCHEMES

The Company operates and maintains relevant retirement scheme (the “Scheme”) for the benefit of its employees in full compliance with the relevant applicable laws and regulations of the places where the employees are employed. Full particulars of the Scheme have already been disclosed to the Purchaser in writing and are true and complete in all respects.

Except the Scheme, there is no retirement, pension, provident fund or other similar schemes operated by the Company.

16.

INTELLECTUAL PROPERTY

(A)

Ownership and rights

(i)

The Company is the registered legal and beneficial owner of the Intellectual Property set out in Schedule 4 free from all Encumbrances. All Intellectual Property exploited or used by the Company is in the absolute beneficial ownership of the Company and the Company does not own, use, exploit or have any other interest in any Intellectual Property which has not been disclosed to the Purchaser. In particular but without prejudice to the generality of the foregoing, none of the Intellectual Property disclosed is jointly owned by the Company and a third party.

(ii)

To the best of the knowledge and belief of the Vendor, the business of the Company does not infringe upon any patent, copyright, trademark or any other Intellectual Property rights of any third party.

17.

CONSEQUENCE OF THE PURCHASE OF THE SALE SHARE AND THE COMPANY INDEBTEDNESS

The purchase of the Sale Share or the Company Indebtedness by the Purchaser or compliance with the terms of this Agreement and any change in the current management of the Company:­

(i)

will not cause the Company to lose the contractual benefit of any contractual right or contractual privilege it presently enjoys;

(ii)

will not relieve any person of any obligation to the Company (whether contractual or otherwise) or enable any person to determine any such obligation or any right or benefit enjoyed by the Company or to exercise any right whether under an agreement with or otherwise in respect of the Company;

54

(iii)

will not conflict with or result in the breach of or constitute a default under any of the terms, conditions or provisions of any agreement or instrument to which the Company is now a party or any loan to or mortgage created by the Company or of its memorandum or articles of association or other constitutional documents;

(iv)

will not result in any present or future indebtedness of the Company becoming due and payable or capable of being declared due and payable prior to its stated maturity;

(v)

save where required by the Purchaser, will not cause any director, officer or employee of the Company to leave employment;

(vi)

will not be in conflict with, violate or result in a breach of any law, regulation, order, decree or writ applicable to the Company. 

55

SCHEDULE 3

THE TARGET MINE

				
	1.

	Name of Mining Project

	:

	Yongsheng Coal Mine, Huajuexiang, Jinsha County, Guizhou Province, the PRC (中国贵州省金沙县化觉乡永晟煤矿)

	2.

	Location

	:

	Jinsha County, Guizhou Province, the PRC (中国贵州省金沙县)

	3.

	Licence/Permit

	:

	Mining right permit (采矿许可证) no. 5200000711822 issued by Guizhou Provincial Department of Land and Resources (贵州省国土资源厅) on 8 November 2007 

	4.

	Mining Area

	:

	18.234sq km

	5.

	Validity Period

	:

	November 2007 to November 2027

COAL RESOURCES

According to the Geological Survey Report of Huajue South Sector Gaoshiba - Yazhuping Coal Mine (also known as “Yongsheng Coal Mine”), Jinsha County, Guizhou Province, the PRC (中国贵州省金沙县化觉南段高石坝—压竹坪煤矿勘探地质报告), the estimated coal resources (based on the minimum workable thickness of 0.8m) are: 

		
	Resource Type

	Estimated Coal Resources Volume

	331

	26,010,000 metric tons

	332

	29,450,000 metric tons

	333

	36,360,000 metric tons

	334

	38,930,000 metric tons

	Total

	130,750,000 metric tons

56

SCHEDULE 4

INTELLECTUAL PROPERTY

NIL

57

SCHEDULE 5

THE COMPANY INDEBTEDNESS ASSIGNMENT 

			
	 
	Dated the     day of        2009

FEISHANG GROUP LIMITED 

and

CHINA NATURAL RESOURCES, INC.

and

NEWHOLD INVESTMENTS LIMITED

	 

	 
	DEED OF ASSIGNMENT OF LOAN

	 

	 
	

SOLICITORS

	 

	 
	高 蓋 茨 律 師 事 務 所

35th Floor, Two International Finance Centre,

8 Finance Street,

Central, Hong Kong

Tel: (852) 2511 5100  Fax: (852) 2511 9515

Website: www.klgates.com

Our ref: 4058774-00002/NKA/RKW

	 

58

THIS DEED  is made the     day of          2009

BETWEEN:

(1)

FEISHANG GROUP LIMITED, a company incorporated in the British Virgin Islands and having its registered office at TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands (the “Assingor”); 

(2)

CHINA NATURAL RESOURCES, INC., a company incorporated in the British Virgin Islands and having its registered office at P.O. Box 116, Sea Meadow House, Blackburne Highway, Road Town, Tortola, British Virgin Islands (the “Assignee”); and

(3)

NEWHOLD INVESTMENTS LIMITED, a company incorporated in the British Virgin Islands and having its registered office at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (the "Company").

WHEREAS as at the date hereof the Company is indebted to the Assignor in the sum of [HK$*] (the “Indebtedness”) and the Assignor has agreed to assign the Indebtedness to the Assignee for the consideration of [HK$*] (the “Consideration”) and upon the terms and conditions set out below.

NOW THIS DEED WITNESSETH as follows:

1. 

REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

The Assignor hereby represents and warrants to the Assignee that the Assignor is the absolute legal and beneficial owner of the Indebtedness and has full right and title to the Indebtedness and that the Indebtedness is outstanding and owing from the Company to the Assignor.

2. 

COVENANTS

2.1

The Assignor in respect of the Indebtedness hereby covenants with the Assignee that notwithstanding anything done or omitted by the Assignor or any other person, knowingly or otherwise, the Assignor has and will at all material times have full power, right and authority to assign the Indebtedness on the terms hereof and that the Indebtedness is free of all encumbrances.

2.2

The Assignor hereby covenants with the Assignee to sign or execute such documents and to do such deeds acts or things to secure to the Assignee the full benefit of the interest of the Assignor in and concerning the Indebtedness and to carry into effect or to give legal effect to the provisions of this Deed and the transactions hereby contemplated as and when reasonably requested by the Assignee and at the expense of the Assignee.

2.3

The Assignor hereby covenants with the Assignee immediately on receipt to pay to the Assignee any payments or other money which may be received by the Assignor 

59

from the Company in respect of the Indebtedness and until such payment to hold the same on trust for the Assignee.

3. 

ASSIGNMENT OF INDEBTEDNESS

In pursuance of such agreement and in consideration of the payment of the Consideration paid by the Assignee to the Assignor (the receipt whereof is hereby acknowledged) the Assignor as beneficial owner of the Indebtedness hereby assigns to the Assignee or its nominee or transferee absolutely with effect from the date hereof all the rights, benefits, title and interests of the Assignor in respect of the Indebtedness free from all rights of pre-emption, options, liens, claims, equities, charges, encumbrances or third-party rights of any nature whatsoever together with the full benefit and advantages thereof and all rights, interests, benefits and title attached, accrued or accruing therein and thereto to hold the same unto the Assignee absolutely.

4. 

NOTICE

4.1

The Assignor hereby gives notice to the Company of the assignment effected hereby and the Company accepts such notice and confirms that the Indebtedness is still outstanding.

4.2

The Company hereby covenants with the Assignor and the Assignee that it will as from the date hereof pay to the Assignee any and all of the Indebtedness.

5.

GENERAL PROVISIONS

5.1

Any notice required to be given under this Deed shall be sufficiently given if delivered personally or forwarded by registered post or sent by facsimile transmission to the relevant party at its address or fax number set out below (or such other address or fax number as the addressee has by 5 days prior written notice specified to the other party):

				
	To: the Assignor

	:

	54-55/F, International Business Center, 

168 Fuhua Third Road, Futian District,

Shenzhen, Guangdong 518048, PRC

	Fax Number

	:

	(86) (755) 8299 1769

	Attention

	:

	Mr. Li Feilie 

	 
	 
	 

	To: the Assignee

	:

	Room 2205, 22/F, 

Shun Tak Centre, West Tower, 

200 Connaught Road, 

Central, Hong Kong

	Fax Number

	:

	(852) 2810 6963

	Attention

	:

	the board of directors

60

				
	To: the Company

	:

	Room 2205, 22/F, 

Shun Tak Centre, West Tower, 

200 Connaught Road, 

Central, Hong Kong

	Fax Number

	:

	(852) 2810 6963

	Attention

	:

	the board of directors

5.2

Any notice delivered personally shall be deemed to have been served at the time of delivery. Any notice sent by pre-paid registered post shall be deemed to have been served 3 Business Days after the time at which it was posted and in proving such service it shall be sufficient to prove that the notice was properly addressed and posted by prepaid registered letter post and notices sent by facsimile transmission shall be deemed to have been served upon transmission.

5.3

This Deed shall be binding on and enure for the benefit of each party’s successors and permitted assigns (as the case may be).

6. 

GOVERNING LAW AND JURISDICTION

6.1

This Deed shall be governed by and construed in all respects in accordance with the laws of Hong Kong.

6.2

In relation to any legal action or proceedings to enforce this Deed or arising out of or in connection with this Deed (“proceedings”) each of the parties irrevocably submits to the jurisdiction of the courts of Hong Kong and waives any objection to proceedings in such courts on the grounds of venue or on the grounds that the proceedings have been brought in any inconvenient forum.

6.3

The submissions by the parties referred to in Clause 6.2 shall not affect the right of any party to take proceedings in any other jurisdiction nor shall the taking of proceedings in any jurisdiction preclude any party from taking proceedings in any other jurisdiction.

6.4

Each of the following parties hereby irrevocably appoints the person set opposite its name below as its agent to receive on its behalf service of proceedings issued out of the courts of Hong Kong in any action or proceedings arising out of or in connection with this Deed:

			
	Parties

	 
	Names & addresses of agents

	the Assignor

	 
	Feishang Holdings Limited

Room 2205, 22/F, 

Shun Tak Centre, West Tower, 

200 Connaught Road, 

Central, Hong Kong 

	the Assignee

	 
	Mark Faith Technology Development Limited

Room 2205, 22/F, 

Shun Tak Centre, West Tower, 

200 Connaught Road, 

Central, Hong Kong

61

			
	the Company

	 
	Mark Faith Technology Development Limited

Room 2205, 22/F, 

Shun Tak Centre, West Tower, 

200 Connaught Road, 

Central, Hong Kong

IN WITNESS whereof the parties hereto have caused this Deed to be executed as a deed the day and year first above written.

62

			
	SEALED with the COMMON SEAL of FEISHANG GROUP LIMITED and SIGNED by                         

duly authorised for and on its behalf in the presence of :-

	)

)

)

)

)

)

)

)

)

)

)

)

)

	 

	Signature of witness

	By executing this Deed the signatory warrants that the signatory is duly authorized to execute this Deed on behalf of FEISHANG GROUP LIMITED 

	Name of witness (block letters)

	SEALED with the COMMON SEAL of  CHINA NATURAL RESOURCES, INC. and SIGNED by

                                   duly authorised for and on its behalf in the presence of :-

	)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

	 

	Signature of witness

	By executing this Deed the signatory warrants that the signatory is duly authorized to execute this Deed on behalf of CHINA NATURAL RESOURCES, INC.

	Name of witness (block letters)

	SIGNED by 

duly authorised for and on behalf of NEWHOLD INVESTMENTS  LIMITED in the presence of :-

	)

)

)

)

)

)

)

)

)

)

)

)

)

	 

	Signature of witness

	By executing this Deed the signatory warrants that the signatory is duly authorized to execute this Deed on behalf of NEWHOLD INVESTMENTS LIMITED

	Name of witness (block letters)

63

EXECUTION  PAGE

			
	VENDOR

	 
	 

	SIGNED by LI FEILIE

for and on behalf of FEISHANG GROUP LIMITED in the presence of :

/s/ YUE MING WAI BONAVENTURE

	)

)

)

)

)

)

)

)

)

)

)

)

)

	

/s/ LI FEILIE

	Signature of witness

YUE MING WAI BONAVENTURE

	By executing this Agreement the signatory warrants that the signatory is duly authorized to execute this Agreement on behalf of FEISHANG GROUP LIMITED

	Name of witness (block letters)

			
	PURCHASER

	 
	 

	SIGNED by WONG WAH ON EDWARD

for and on behalf of CHINA NATURAL RESOURCES, INC. in the presence of :

/s/ MA SIN LING

	)

)

)

)

)

)

)

)

)

)

)

)

)

	

/s/ WONG WAH ON EDWARD

	Signature of witness

MA SIN LING

	By executing this Agreement the signatory warrants that the signatory is duly authorized to execute this Agreement on behalf of CHINA NATURAL RESOURCES, INC.

	Name of witness (block letters)

64

EXHIBIT A

NEWHOLD INVESTMENTS LIMITED

CONSOLIDATED BALANCE SHEET

As at 7 August 2008

In RMB Yuan

					
	 
	 
	 
	 
	 

	PROPERTY AND EQUIPMENT

	 
	 
	 
	54,000 

	MINING RIGHT

	 
	 
	106,056,700 

2,110,691 

3,153,561

85,500

111,380

1

	GOODWILL

	 
	 

	CURRENT ASSETS

	 
	 

	Cash and cash equivalents

Other receivables

Deferred expense

Due from a director

	 
	 

	3,350,442

(6,000,000)

 (23,878,151)

	 
	 
	 

	CURRENT LIABILITIES

	 
	 

	Other payable

	 
	 

	Due to a director

	 
	 

	Due to related companies

	 
	 

	

	 
	 
	(29,878,151)

	

(26,527,709)

	NET CURRENT LIABILITIES

	 
	 

	

(77,537,700)

(4,165,004)

 (9,021)

	Long term account payable

	 
	 

	MINORITY INTERESTS

	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	

7

11

(9,039)

	CAPITAL AND RESERVES

Share capital

Comprehensive income

Current year P&L

	 
	 
	 

	 
	 
	 
	 
	(9,021)

65

NEWHOLD INVESTMENTS LIMITED

UNAUDITED CONSOLIDATED INCOME STATEMENT

From 3 July 2008 (date of incorporation) to 7 August 2008

In RMB Yuan

					
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	GENERAL EXPENSES

	 
	 
	 
	9,039 

	 
	 
	 

	 
	 
	 

	PROFIT/ (LOSS) BEFORE INCOME TAXES

	 
	 
	(9,039)

	

	 
	 
	

(9,039)  

	PROFIT/ (LOSS) FOR THE PERIOD 

	 
	 

66

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