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OFFICE LEASE AGREEMENT

Office Lease Agreement

OFFICE LEASE AGREEMENT | Document Parties: IPEX, INC | CA-LA JOLLA  CENTRE  LIMITED  PARTNERSHIP, | AICI,  Inc., You are currently viewing:
This Office Lease Agreement involves

IPEX, INC | CA-LA JOLLA CENTRE LIMITED PARTNERSHIP, | AICI, Inc.,

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Title: OFFICE LEASE AGREEMENT
Date: 4/5/2005

OFFICE LEASE AGREEMENT, Parties: ipex  inc , ca-la jolla  centre  limited  partnership  , aici   inc.
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                             OFFICE LEASE AGREEMENT

                                   CALIFORNIA

                                Short Form Lease

 

THIS OFFICE LEASE   AGREEMENT   (the "Lease") is made and entered into as of April

1, 2005,   by and between   CA-LA JOLLA   CENTRE   LIMITED   PARTNERSHIP,   a Delaware

limited    partnership    ("Landlord")   and   AICI,   Inc.,   a   Nevada    corporation

("Tenant").   Pursuant to the terms of this Lease,   Landlord   agrees to lease the

Premises (hereinafter defined) to Tenant and Tenant agrees to lease the Premises

from   Landlord.   The Lease   includes the   following   exhibits   and   attachments:

Exhibit A (Outline and Location of   Premises),   Exhibit B (Expenses   and Taxes),

Exhibit C (Work   Letter,   if   required),   Exhibit   D   (Commencement   Letter,   if

required),   Exhibit E (Building   Rules and   Regulations),   Exhibit F (Additional

Provisions, if required), and Exhibit G (Parking Agreement).

 

1.   Basic Lease Information

 

1.01 "Building"   shall mean the building located at 9255 Towne Center Drive, San

Diego,   California,   commonly   known as La Jolla   Centre   II.   "Rentable   Square

Footage of the Building" is deemed to be 148,278 square feet.   "Property"   shall

mean the   Building   and the   parcel(s)   of land on which it is located.   "Common

Areas" shall mean the portion of the Building and Property   that are   designated

by Landlord for the common use of tenants and others.

 

      1.02 "Premises"   shall mean the area shown on Exhibit A to this Lease. The

Premises are located on the 2nd floor and known as Suite No. 235. The   "Rentable

Square Footage of the Premises" is deemed to be 896 square feet.

 

      1.03 "Base Rent":

 

-------------------------- ---------------------------- ------------------------

         Period                      Annual Rate                   Monthly

                                 Per Square Foot                Base Rent

-------------------------- ---------------------------- ------------------------

    4/1/05 - 3/31/06                  $31.80                      $2,374.40

-------------------------- ---------------------------- ------------------------

 

      1.04   "Tenant's   Pro Rata Share":   0.6043%.   Tenant shall pay Tenant's Pro

Rata Share of Taxes and Expenses in accordance Exhibit B of this Lease

 

      1.05 "Base Year" for Taxes: 2005; "Base Year" for Expenses: 2005. -

 

      1.06 "Term":   A period of 12 months.   Subject to Section 2, the Term shall

commence on April 1, 2005 (the "Commencement Date") and, unless terminated early

in accordance with this Lease, end on March 31, 2006 (the "Termination Date").

 

      1.07 "Security Deposit": $2,611.84.

 

      1.08 "Broker(s)": None.

 

      1.09 "Permitted Use": General office use.

 

      1.10 "Notice Addresses":

 

<TABLE>

<CAPTION>

<S>                                                      <C>   

            Landlord:                                   Tenant:

            CA-La Jolla Centre Limited Partnership      Prior to the Commencement Date:

            c/o Equity Office Management, L.L.C.

            9255 Towne Center Drive                     ___________________________

            Suite 800                                   ___________________________

            San Diego, California 92121                 ___________________________

            Attn: Property Manager                      ___________________________

                                                       ___________________________     

      

                                                       From and after the Commencement Date:

      

                                                        ___________________________

                                                       ___________________________

                                                       ___________________________

                                                        ___________________________

                                                       ___________________________

                                                       ___________________________

</TABLE>

      

             A copy of any   notices to Landlord   shall be sent to Equity   Office,

            One Market,   600 Spear Tower,   San   Francisco,   CA 94105,   Attn: Los

            Angeles Regional Counsel.

 

2.   Possession.

 

      2.01 Intentionally omitted.

 

       2.02   The   Premises   are   accepted   by   Tenant   in "as is"   condition   and

configuration   without any   representations or warranties by Landlord.   Landlord

shall not be liable for any failure to deliver possession of the Premises or any

other   space due to the   holdover or   unlawful   possession   of such space by any

party. In such event,   the   commencement   date for such space shall be postponed

until the date Landlord delivers   possession of the Premises to Tenant free from

occupancy by any party.

 

 

                                        1

<PAGE>

 

3. Rent.   Tenant shall pay Landlord,   without any setoff or deduction,   all Base

Rent and Additional Rent due for the Term (collectively   referred to as "Rent").

"Additional   Rent"   means   all sums   (exclusive   of Base   Rent)   that   Tenant is

required to pay   Landlord   under this Lease.   Tenant shall pay and be liable for

all rental,   sales and use taxes (but excluding   income taxes),   if any, imposed

upon or measured by Rent. Base Rent and recurring   monthly charges of Additional

Rent shall be due and payable in advance on the first day of each calendar month

without   notice or demand.   All other   items of Rent shall be due and payable by

Tenant   on or   before   30 days   after   billing   by   Landlord   provided   that the

installment of Base Rent and   Additional   Rent for the first full calendar month

of the Term shall be payable upon the   execution   of this Lease by Tenant.   Rent

shall be made payable to the entity and sent to the address Landlord designates.

Tenant   shall pay   Landlord   an   administration   fee equal to 5% of all past due

Rent. In addition,   past due Rent shall accrue   interest at 12% per annum.   Rent

for any partial   month   during the Term shall be   prorated.   No   endorsement   or

statement   on a check or letter   accompanying   payment   shall be   considered   an

accord and   satisfaction.   Tenant's covenant to pay Rent is independent of every

other covenant in this Lease.

 

4.   Compliance   with Laws; Use. The Premises shall be used for the Permitted Use

and for no other use whatsoever.   Tenant shall comply with all statutes,   codes,

ordinances,   orders,   rules and   regulations   of any   municipal or   governmental

entity   ("Laws")   regarding   the   operation   of Tenant's   business   and the use,

condition, configuration and occupancy of the Premises. Tenant shall comply with

the rules and   regulations of the Building   attached as Exhibit E and such other

reasonable rules and regulations as adopted by Landlord from time to time.

 

5.   Security   Deposit. The Security   Deposit shall be delivered to Landlord upon

the execution of this Lease by Tenant and held by Landlord without liability for

interest   (unless   required by Law) as security for the   performance of Tenant's

obligations. The Security Deposit is not an advance payment of Rent or a measure

of damages. Landlord may use all or a portion of the Security Deposit to satisfy

past due Rent, cure any Default (defined in Section 17), or to satisfy any other

loss or damage   resulting   from   Tenant's   Default as provided in Section 18. If

Landlord   uses any   portion   of the   Security   Deposit,   Tenant   shall on demand

restore the Security Deposit to its original   amount.   Landlord shall return any

unapplied   portion of the   Security   Deposit to Tenant   within 45 days after the

later to occur of: (a)   determination of the final Rent due from Tenant;   or (b)

the later to occur of the   Termination   Date or the date Tenant   surrenders   the

Premises to Landlord   in   compliance   with   Section   24.   Landlord   shall not be

required to keep the Security Deposit   separate from its other accounts.   Tenant

hereby waives the provisions of Section 1950.7 of the California   Civil Code, or

any successor Laws now or hereafter in effect.

 

6. Building Services. Landlord shall furnish Tenant with the following services:

(a) water service for use in the base building   lavatories;   (b) customary   heat

and air conditioning in season during standard Building service hours,   although

Tenant   shall have the right to receive   HVAC   service   during   hours other than

standard service hours by paying   Landlord's then standard charge for additional

HVAC   service and   providing   such   reasonable   prior   notice as is specified by

Landlord;    (c)   standard   janitor   service;    (d)   elevator   service;   and   (e)

electricity.   Electricity   used by Tenant in the Premises   shall,   at Landlord's

option, be paid for by Tenant either:   (i) through inclusion in Expenses (except

as provided for excess   usage);   (ii) by a separate   charge payable by Tenant to

Landlord;   or (iii) by separate charge billed by the applicable utility company.

Tenant's use of electrical   service shall not exceed the standard   usage for the

Building.   Landlord's failure to furnish,   or any interruption,   diminishment or

termination   of,   services due to the   application   of Laws,   the failure of any

equipment,   the performance of repairs,   improvements   or   alterations,   utility

interruptions or the occurrence of an event of Force Majeure (defined in Section

25.02) shall not render   Landlord   liable to Tenant,   constitute a   constructive

eviction of Tenant,   give rise to an abatement of Rent,   nor relieve Tenant from

the obligation to fulfill any covenant or agreement.

 

7.   Leasehold   Improvements.   All improvements in and to the Premises, including

any    Alterations    (defined    in   Section    8.02)    (collectively,    "Leasehold

Improvements")   shall   remain upon the   Premises at the end of the Term   without

compensation to Tenant, provided that Tenant, at its expense, in compliance with

the National   Electric Code or other applicable Laws, shall remove, on or before

the Termination Date, any electronic,   fiber, phone and data cabling and related

equipment (collectively,   "Cable") installed by or for the benefit of Tenant. In

addition,   Landlord,   by written   notice to Tenant at least 30 days prior to the

Termination   Date, may require   Tenant,   at its expense,   to remove any Landlord

Work or Alterations that, in Landlord's   reasonable   judgment,   are not standard

office   improvements and are of a nature that would require material removal and

repair costs (collectively referred to as "Required   Removables").   Tenant shall

repair any damage caused by the installation or removal of the Cable or Required

Removables.

 

8.   Repairs and Alterations.

 

       8.01   Tenant   shall   periodically   inspect the   Premises   to identify   any

conditions   that are   dangerous   or in need of   maintenance   or repair and shall

promptly provide   Landlord with notice of any such conditions.   Tenant shall, at

its sole cost and expense,   promptly   perform all maintenance and repairs to the

Premises that are not Landlord's   express   responsibility   under this Lease, and

shall keep the Premises in good condition and repair,   reasonable   wear and tear

excepted.   If Tenant   fails to make any repairs to the Premises for more than 15

days after   notice from   Landlord   (although   notice shall not be required in an

emergency),   Landlord may make the repairs,   and Tenant shall pay the reasonable

cost of the repairs,   together with an administrative   charge in an amount equal

to 10% of the cost of the repairs.   Landlord shall perform all   maintenance   and

repairs upon the:   (a)   structural   elements of the   Building;   (b)   mechanical,

electrical,   plumbing   and   fire/life   safety   systems   serving the   Building in

general; (c) Common Areas; (d) roof of the Building; (e) exterior windows of the

Building;   and (f) elevators serving the Building.   Tenant hereby waives any and

all rights under and benefits of subsection 1 of Section 1932, and Sections 1941

and 1942 of the   California   Civil Code, or any similar or successor Laws now or

hereinafter in effect.

 

 

                                       2

<PAGE>

 

      8.02 Tenant shall not make alterations, repairs, additions or improvements

or install any Cable (collectively   referred to as "Alterations")   without first

obtaining the written consent of Landlord in each instance,   which consent shall

not be unreasonably   withheld.   In order to obtain such approvals,   Tenant shall

furnish Landlord with plans and specifications;   names of contractors acceptable

to   Landlord;   required   permits and   approvals;   evidence of   contractor's   and

subcontractor's   insurance in amounts reasonably required by Landlord and naming

Landlord and the Landlord   Related   Parties as an   additional   insured;   and any

security for   performance   in amounts   reasonably   required by Landlord.   Tenant

shall   reimburse   Landlord   for   any   sums   paid by   Landlord   for   third   party

examination of Tenant's   plans for   Alterations.   In addition,   Tenant shall pay

Landlord a fee for   Landlord's   oversight and   coordination   of any   Alterations

equal to 10% of the   cost of the   Alterations.   Upon   completion,   Tenant   shall

furnish   "as-built"   plans for Alterations,   completion   affidavits and full and

final waivers of lien.

 

9. Entry by   Landlord.   Landlord   may enter the   Premises to inspect or show the

Premises, to clean and make repairs,   alterations or additions and to perform or

facilitate maintenance,   repairs, alterations or additions to any portion of the

Building. Except in emergencies or to provide Building services,   Landlord shall

provide Tenant with reasonable   prior verbal notice of entry.   Entry by Landlord

shall not constitute a   constructive   eviction or entitle Tenant to an abatement

or reduction of Rent.

 

10. Assignment and Subletting. Tenant shall not, directly or indirectly, assign,

sublease,   transfer   or encumber   any   interest in this Lease or allow any third

party to use any   portion   of the   Premises   (collectively   or   individually,   a

"Transfer")   without the prior written consent of Landlord,   which consent shall

not be unreasonably withheld if Landlord does not exercise its recapture rights.

Any attempted Transfer in violation of this Article shall be a Default by Tenant

and shall, at Landlord's   option, be void. Within 15 business days after receipt

of executed copies of the transfer   documentation   and such other information as

Landlord   may request,   Landlord   shall   either:   (a) consent to the Transfer by

execution of a consent   agreement in a form   reasonably   designated by Landlord;

(b) refuse to consent   to the   Transfer;   or (c)   recapture   the   portion of the

Premises that Tenant is proposing to Transfer.   If Landlord   exercises its right

to recapture,   the Lease shall automatically be amended to delete the applicable

portion   of   the   Premises   effective   on the   proposed   effective   date   of the

Transfer.   Tenant   hereby   waives   the   provisions   of Section   1995.310   of the

California   Civil Code, or any similar or successor   Laws, now or hereinafter in

effect, and all other remedies,   including, without limitation, any right at law

or   equity to   terminate   this   Lease,   on its own   behalf   and,   to the   extent

permitted under all applicable Laws, on behalf of the proposed transferee. In no

event shall any Transfer   release or relieve   Tenant from any   obligation   under

this Lease.   Tenant shall pay Landlord a review fee of $1,500.00 for   Landlord's

review of any requested Transfer. Tenant shall pay Landlord, as Additional Rent,

50% of all rent and other   consideration   which Tenant receives as a result of a

Transfer   that is in excess of the Rent   payable to Landlord   for the portion of

the Premises and Term covered by the Transfer. If Tenant is in Default, Landlord

may require that all sublease   payments be made   directly to Landlord,   in which

case Tenant shall receive a credit   against Rent in the amount of Tenant's share

of payments received by Landlord.

 

11.   Liens.   Tenant shall not permit   mechanics or other liens to be placed upon

the Property or Premises in connection with any work   purportedly done by or for

the benefit of Tenant or its transferees. Tenant shall, within 10 days of notice

from Landlord,   fully discharge any lien by settlement or by bonding or insuring

over   the   lien in the   manner   prescribed   by Law.   Tenant's   failure   to fully

discharge the lien within such 10 day period shall be a Default.   In addition to

any other remedies   available to Landlord as a result of such Default by Tenant,

Landlord may bond,   insure over or otherwise   discharge   the lien.   Tenant shall

reimburse   Landlord   for   any   amount   paid   by   Landlord,    including,   without

limitation, reasonable attorneys' fees.

 

12.   Indemnity   and   Waiver   of   Claims.   Except   to the   extent   caused   by the

negligence   or willful   misconduct of Landlord or the Landlord   Related   Parties

(defined   below),   Tenant   shall   indemnify,   defend and hold   Landlord   and the

Landlord Related Parties harmless against and from all liabilities, obligations,

damages,   penalties,   claims, actions,   costs, charges and expenses,   including,

without limitation,   reasonable   attorneys' fees and other professional fees (if

and to the extent permitted by Law),   which may be imposed upon,   incurred by or

asserted   against   Landlord or any of the Landlord   Related Parties by any third

party and arising out of or in connection with any damage or injury occurring in

the   Premises or any acts or   omissions   of Tenant or any of Tenant's   officers,

employees or agents   (collectively the "Tenant Related Parties") or any of their

transferees,   contractors   or   licensees.   Except   to the   extent   caused by the

negligence   or   willful   misconduct   of Tenant or the   Tenant   Related   Parties,

Landlord shall   indemnify,   defend and hold Tenant harmless against and from all

liabilities,   obligations,   damages, penalties,   claims, actions, costs, charges

and expenses,   including,   without   limitation,   reasonable   attorneys' fees and

other   professional   fees (if and to the extent   permitted by Law), which may be

imposed   upon,   incurred   by or   asserted   against   Tenant or any of the   Tenant

Related   Parties by any third party and arising out of or in connection with any

acts or   omissions of Landlord or any of the Landlord   Related   Parties.   Tenant

hereby   waives   all claims   against   and   releases   Landlord   and its   trustees,

members, principals,   beneficiaries,   partners, officers, directors,   employees,

Mortgagees and agents (the "Landlord   Related   Parties") from all claims for any

injury to or death of persons, damage to property or business loss in any manner

related   to (a) acts of God,   (b) acts of third   parties,   (c) the   bursting   or

leaking of any tank,   water closet,   drain or other pipe,   (d) the inadequacy or

failure of any   security   services,   personnel or   equipment,   or (e) any matter

outside of the reasonable control of Landlord.

 

13.   Insurance.    Tenant   shall   maintain   the   following   insurance   ("Tenant's

Insurance"):   (a)   Commercial   General   Liability   Insurance   applicable   to the

Premises and its   appurtenances   providing,   on an occurrence   basis,   a minimum

combined   single   limit of   $2,000,000.00;   (b)   Property/Business   Interruption

Insurance   written on an All Risk or Special   Cause of Loss form,   with coverage

for   broad   form   water   damage   including    earthquake   sprinkler   leakage,   at

replacement cost value and with a replacement   cost endorsement   covering all of

Tenant's business and trade fixtures, equipment, movable partitions,   furniture,

merchandise   and   other   personal    property   within   the   Premises    ("Tenant's

Property")   and any   Leasehold   Improvements   performed by or for the benefit of

Tenant; (c) Workers' Compensation Insurance as required by Law and in amounts as

may be required by   applicable   statute and Employers   Liability   Coverage of at

least $1,000,000.00 per occurrence. Any company writing Tenant's Insurance shall

have an A.M.   Best   rating   of not less   than   A-VIII.   All   Commercial   General

Liability   Insurance   policies   shall   name   Landlord   (or   its   successors   and

assigns), the managing agent for the Building (or any successor),   Equity Office

Properties   Trust,   EOP   Operating   Limited   Partnership   and   their   respective

members, principals,   beneficiaries,   partners, officers, directors,   employees,

and agents,   and other   designees of Landlord and its successors as the interest

of such designees shall appear, as additional   insureds.   In addition,   Landlord

shall be named as a loss payee with   respect to   Property/Business   Interruption

 

 

                                       3

<PAGE>

 

Insurance on the   Leasehold   Improvements.   All   policies of Tenant's   Insurance

shall   contain   endorsements   that the   insurer(s)   shall give   Landlord and its

designees   at   least   30   days'   advance   written   notice   of any   cancellation,

termination,   material   change   or   lapse of   insurance.   Tenant   shall   provide

Landlord with a certificate of insurance   evidencing Tenant's Insurance prior to

the   earlier to occur of the   Commencement   Date or the date   Tenant is provided

with   possession   of the   Premises,   and   thereafter as necessary to assure that

Landlord always has current certificates evidencing Tenant's Insurance.

 

14.   Subrogation.   Landlord   and   Tenant   hereby   waive   and shall   cause   their

respective   insurance carriers to waive any and all rights of recovery,   claims,

actions   or   causes   of action   against   the   other for any loss or damage   with

respect   to   Tenant's   Property,   Leasehold   Improvements,    the   Building,   the

Premises, or any contents thereof,   including rights, claims, actions and causes

of action based on negligence,   which loss or damage is (or would have been, had

the insurance required by this Lease been carried) covered by insurance. For the

purposes of this waiver,   any   deductible   with   respect to a party's   insurance

shall be   deemed   covered   by and   recoverable   by such   party   under   valid and

collectable policies of insurance.

 

15. Casualty Damage. Landlord, by notice to Tenant within 60 days of the date of

the fire or other   casualty (a   "Casualty"),   shall have the right to   terminate

this Lease if all or any part of the   Premises   is damaged to the extent that it

cannot reasonably be repaired within 120 days after the date of the Casualty. If

this Lease is not terminated, Landlord shall promptly and diligently restore the

Premises.   Such restoration   shall be to   substantially   the same condition that

existed   prior   to the   Casualty,   except   for   modifications   required   by Law.

However, in no event shall Landlord be required to spend more than the insurance

proceeds received by Landlord. Upon notice from Landlord, Tenant shall assign or

endorse over to Landlord (or to any party   designated   by Landlord) all property

insurance   proceeds   payable to Tenant under Tenant's   Insurance with respect to

any Leasehold Improvements   performed by or for the benefit of Tenant;   provided

if the estimated cost to repair such Leasehold   Improvements   exceeds the amount

of insurance proceeds received by Landlord from Tenant's insurance carrier,   the

excess   cost of such   repairs   shall   be paid by   Tenant   to   Landlord   prior to

Landlord's   commencement of repairs. Within 15 days of demand, Tenant shall also

pay Landlord for any   additional   excess   costs that are   determined   during the

performance of the repairs.   Landlord shall not be liable for any   inconvenience

to   Tenant,   or   injury   to   Tenant's   business,   resulting   in any way from the

Casualty or the repair thereof.   Provided that Tenant is not in Default,   during

any period of time that all or a material   portion of the   Premises   is rendered

untenantable as a result of a Casualty,   the Rent shall abate for the portion of

the Premises that is untenantable and not used by Tenant. The provisions of this

Lease,   including   this   Section 15,   constitute   an express   agreement   between

Landlord   and Tenant with respect to any and all damage to, or   destruction   of,

all or any part of the Premises,   the Building, the Property or the Project, and

any Laws,   including,   without   limitation,   Sections 1932(2) and 1933(4) of the

California   Civil Code,   with   respect to any rights or   obligations   concerning

damage or   destruction   in the   absence   of an   express   agreement   between   the

parties,   and any similar or successor Laws now or hereinafter in effect,   shall

have no   application   to this Lease or any damage or   destruction   to all or any

part of the Premises, the Building or the Property.

 

 

16. Condemnation.   Either party may terminate this Lease if any material part of

the Premises is taken or condemned for any public or quasi-public use under Law,

by eminent   domain or private   purchase in lieu thereof (a   "Taking").   Landlord

shall   also have the right to   terminate   this Lease if there is a Taking of any

portion of the Building or Property   which would have a material   adverse effect

on Landlord's ability to profitably   operate the remainder of the Building.   The

terminating party shall provide written notice of termination to the other party

within 45 days after it first   receives   notice of the Taking.   The   termination

shall be effective as of the effective date of any order granting possession to,

or vesting legal title in, the condemning   authority.   All compensation   awarded

for a Taking, or sale proceeds, shall be the property of Landlord. Tenant hereby

waives any and all rights it might   otherwise have pursuant to Section   1265.130

of the California Code of Civil Procedure, or any similar or successor Laws.

 

17. Events of Default. In addition to any other default   specifically   described

in this Lease,   each of the   following   occurrences   shall be considered to be a

"Default":   (a)   Tenant's   failure to pay any   portion of Rent when due,   if the

failure continues for 3 days after written notice to Tenant,   which notice shall

be in satisfaction of, and not in addition to, notice required by Law ("Monetary

Default");   or (b) Tenant's   failure   (other than a Monetary   Default) to comply

with any term, provision, condition or covenant of this Lease, if the failure is

not cured within 10 days after written   notice to Tenant,   which notice shall be

in satisfaction   of, and not in addition to, notice   required by Law,   provided,

however,   if Tenant's   failure to comply   cannot   reasonably   be cured within 10

days,   Tenant   shall be   allowed   additional   time (not to exceed 60 days) as is

reasonably   necessary   to cure the failure so long as Tenant   commences   to cure

within 10 days and Tenant diligently pursues the cure to completion.

 

18. Remedies.

 

      18.01   Upon the   occurrence   of any   Default   under   this   Lease,   whether

enumerated   in Section 17 or not,   Landlord   shall have the option to pursue any

one or more of the following   remedies   without any notice   (except as expressly

prescribed   herein) or demand whatsoever (and without limiting the generality of

the foregoing,   Tenant hereby   specifically waives notice and demand for payment

of Rent or other   obligations,   except for those notices   specifically   required

pursuant   to the terms of Section 17 or this   Section 18, and waives any and all

other notices or demand requirements imposed by applicable law):

 

            (a)   Terminate   this Lease and Tenant's   right to   possession of the

Premises   and recover   from   Tenant an award of damages   equal to the sum of the

following:

 

                  (i) The Worth at the Time of Award of the   unpaid   Rent   which

had been earned at the time of termination;

 

 

                                       4

<PAGE>

 

                  (ii) The Worth at the Time of Award of the amount by which the

unpaid   Rent which would have been earned   after   termination   until the time of

award   exceeds   the amount of such Rent loss that   Tenant   affirmatively   proves

could have been reasonably avoided;

 

                  (iii)   The   Worth at the Time of Award of the   amount by which

the unpaid Rent for the balance of the Term after the time of award   exceeds the

amount of such Rent loss that Tenant   affirmatively   proves could be   reasonably

avoided;

 

                  (iv) Any other amount necessary to compensate Landlord for all

the detriment either   proximately caused by Tenant's failure to perform Tenant's

obligations   under this Lease or which in the ordinary course of things would be

likely to result therefrom; and

 

                  (v) All such other   amounts in   addition   to or in lieu of the

foregoing as may be permitted from time to time under applicable law.

 

                  The "Worth at the Time of Award" of the amounts referred to in

parts (i) and (ii) above,   shall be computed by allowing   interest at the lesser

of a per annum   rate   equal to:   (A) the   greatest   per annum   rate of   interest

permitted from time to time under applicable law, or (B) the Prime Rate plus 5%.

For   purposes   hereof,   the "Prime   Rate" shall be the per annum   interest   rate

publicly   announced   as its   prime   or base   rate by a   federally   insured   bank

selected   by   Landlord   in the State of   California.   The   "Worth at the Time of

Award" of the amount   referred   to in part   (iii),   above,   shall be computed by

discounting   such amount at the discount rate of the Federal Reserve Bank of San

Francisco at the time of award plus 1%;

 

            (b) Employ the remedy   described in California Civil Code ss. 1951.4

(Landlord   may   continue   this   Lease   in   effect   after   Tenant's    breach   and

abandonment   and   recover   Rent as it   becomes   due,   if Tenant has the right to

sublet or assign, subject only to reasonable limitations); or

 

             (c)   Notwithstanding   Landlord's exercise of the remedy described in

California Civil Code ss. 1951.4 in respect of an event or events of default, at

such time   thereafter as Landlord may elect in writing,   to terminate this Lease

and Tenant's right to possession of the Premises and recover an award of damages

as provided above in Paragraph 18.01(a).

 

      18.02 The subsequent acceptance of Rent hereunder by Landlord shall not be

deemed to be a waiver of any preceding breach by Tenant of any term, covenant or

condition of this Lease,   other than the failure of Tenant to pay the particular

Rent so accepted, regardless of Landlord's knowledge of such preceding breach at

the time of   acceptance of such Rent. No waiver by Landlord of any breach hereof

shall be effective unless such waiver is in writing and signed by Landlord.

 

      18.03 TENANT HEREBY WAIVES ANY AND ALL RIGHTS CONFERRED BY SECTION 3275 OF

THE CIVIL CODE OF   CALIFORNIA   AND BY SECTIONS   1174 (c) AND 1179 OF THE CODE OF

CIVIL   PROCEDURE OF CALIFORNIA   AND ANY AND ALL OTHER LAWS AND RULES OF LAW FROM

TIME TO TIME IN EFFECT   DURING THE LEASE TERM   PROVIDING   THAT TENANT SHALL HAVE

ANY RIGHT TO REDEEM,   REINSTATE OR RESTORE THIS LEASE   FOLLOWING ITS TERMINATION

BY REASON OF TENANT'S BREACH.   TENANT ALSO HEREBY WAIVES,   TO THE FULLEST EXTENT

PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR

RELATING TO THIS LEASE.

 

      18.04 No right or remedy herein   conferred upon or reserved to Landlord is

intended to be exclusive of any other right or remedy,   and each and every right

and remedy   shall be   cumulative   and in   addition   to any other right or remedy

given hereunder or now or hereafter existing by agreement,   applicable law or in

equity. In addition to other remedies provided in this Lease,   Landlord shall be

entitled, to the extent permitted by applicable law, to injunctive relief, or to

a decree compelling performance of any of the covenants, agreements,   conditions

or provisions of this Lease,   or to any other remedy   allowed to Landlord at law

or in equity.   Forbearance   by Landlord   to enforce one or more of the   remedies

herein   provided   upon an event of default   shall not be deemed or   construed to

constitute a waiver of such default.

 

      18.05 If Tenant is in Default of any of its non-monetary obligations under

the Lease,   Landlord   shall have the right to perform such   obligations.   Tenant

shall reimburse   Landlord for the cost of such   performance upon demand together

with an administrative   charge equal to 10% of the cost of the work performed by

Landlord.

 

      18.06 This   Section 18 shall be   enforceable   to the   maximum   extent such

enforcement is not prohibited by applicable law, and the unenforceability of any

portion thereof shall not thereby render unenforceable any other portion.

 

19.   Limitation of Liability.

 

      THE LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) SHALL BE LIMITED

TO THE LESSER OF (A) THE INTEREST OF LANDLORD IN THE PROPERTY, OR (B) THE EQUITY

INTEREST   LANDLORD WOULD HAVE IN THE PROPERTY IF THE PROPERTY WERE ENCUMBERED BY

THIRD PARTY DEBT IN AN AMOUNT EQUAL TO 70% OF THE VALUE OF THE PROPERTY.   TENANT

SHALL LOOK SOLELY TO LANDLORD'S INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY

JUDGMENT   OR AWARD   AGAINST   LANDLORD OR ANY   LANDLORD   RELATED   PARTY.   NEITHER

LANDLORD   NOR ANY   LANDLORD   RELATED   PARTY SHALL BE   PERSONALLY   LIABLE FOR ANY

JUDGMENT OR DEFICIENCY   AND IN NO EVENT SHALL   LANDLORD OR ANY LANDLORD   RELATED

PARTY BE LIABLE TO TENANT FOR ANY LOST PROFIT,   DAMAGE TO OR LOSS OF BUSINESS OR

ANY FORM OF SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGE. BEFORE FILING SUIT FOR AN

ALLEGED   DEFAULT BY LANDLORD,   TENANT SHALL GIVE   LANDLORD AND THE   MORTGAGEE(S)

(DEFINED   IN SECTION 22 BELOW)   WHOM   TENANT HAS BEEN   NOTIFIED   HOLD   MORTGAGES

(DEFINED IN SECTION 22 BELOW),   NOTICE AND   REASONABLE   TIME TO CURE THE ALLEGED

DEFAULT.

 

 

                                       5

<PAGE>

 

20. Relocation. Landlord, at its expense, at any time before or during the Term,

may relocate Tenant from the Premises to space of reasonably comparable size and

utility   ("Relocation   Space") within the Building or other buildings within the

same project upon 60 days' prior   written   notice to Tenant.   From and after the

date of the   relocation,   "Premises"   shall refer to the   Relocation   Space into

which   Tenant has been moved and the Base Rent and Tenant's Pro Rata Share shall

be adjusted based o


 
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