EXHIBIT 10.13

LEASE

[San Diego Science Center / Aethlon Medical, Inc.]

THIS LEASE ("LEASE") is dated for reference purposes only July 1, 2004, by and between SAN DIEGO SCIENCE CENTER LLC, a California limited liability company ("LANDLORD"), and AETHLON MEDICAL, INC., a Nevada corporation ("TENANT").

1.1 Landlord hereby leases to Tenant and Tenant hereby leases from Landlord during the term of this Lease, on the terms and conditions set forth herein, those certain premises ("PREMISES") consisting of approximately 3,200 square feet of Rentable Area in the building (the "BUILDING") at 3030 Bunker Hill Street, San Diego, California, on real property legally described on EXHIBIT A attached hereto and incorporated herein by this reference. The Premises consist of approximately 811 square feet of Rentable Area on the third floor of the Building and 2,389 square feet of Rentable Area on the first floor of the Building. The Building consists of approximately 105,364 square feet of Rentable Area. The Building, the real property upon which the Building is located, and all landscaping, parking facilities, and other improvements and appurtenances related thereto are hereinafter collectively referred to as the "PROJECT." The site plan for the Project is attached hereto as EXHIBIT B, and the Premises are outlined on EXHIBIT C. All portions of the Project which are for the non-exclusive use of tenants of the Project, including without limitation interior entrance ways, lobbies, corridors, stairwells, elevators, equipment rooms, and rest rooms, and exterior roadways, driveways, sidewalks, parking areas, and landscaped areas, are hereinafter referred to as "COMMON AREAS."

         Approximately 3,200 square feet.

2.1.2    Basic Annual Rent:
         $90,240 ($2.35 per square foot per month for
         3,200 square feet of Rentable Area, subject
         to adjustment pursuant to Sections 6.1 and
         8.3)

2.1.3    Monthly Installment of Basic Annual Rent:
         $7,520 ($2.35 per square foot per month for
         3,200 square feet of Rentable Area, subject
         to adjustment pursuant to Sections 6.1 and
         8.3)

            1

2.1.4    Tenant's Pro Rata Share:
         3.04% of the Operating Expenses as
         determined pursuant to Section 7.3(a) and
         subject to adjustment pursuant to Section
         8.3.

2.1.5    (a)     Term Commencement Date:
                 July 9, 2004

         (b)     Term Expiration Date:
                 July 8, 2006

2.1.6    Security Deposit:

         (a)     Cash in the amount of $12,000.00
                 representing one (1) month's base
                 rent and estimated Operating
                 Expenses, and

         (b)     Cash in the amount of $1,000
                 representing advance deposit on Exit
                 Phase I Report as required per
                 Section 39.12.

2.1.7    Permitted Use:
         Uses permitted in Section 10.1

2.1.8    Address for Rent Payment and Notices to
         Landlord:

         San Diego Science Center LLC
         c/o Phase 3 Properties, Inc.
         8910 University Center Lane, Suite 265
         San Diego, CA   92122

         Address for Notices to Tenant Prior to
         Occupancy:

         Jim Joyce
         Aethlon Medical, Inc.
         7825 Fay Avenue, Suite 200
         La Jolla, CA  92037

         Address for Notices to Tenant After
         Occupancy:

         Jim Joyce
         Aethlon Medical, Inc.
         3030 Bunker Hill Street, Suite 4000
         San Diego, CA  92109

2.1.9    (a)     Landlord's Broker:
                 Phase 3 Properties, Inc.
                 8910 University Center Lane,
                 Suite 265
                 San Diego, CA 92122

2.2. The following exhibits are attached hereto and incorporated herein by this reference:

                 Exhibit A    Legal Description of Real Property
                 Exhibit B    Site Plan of the Project
                 Exhibit C    Outline of the Premises
                 Exhibit D    Acknowledgment of Term Commencement Date
                 Exhibit E    Schematic Showing Tenant Improvements
                 Exhibit F    Architectural Drawings of Tenant
                              Improvements
                 Exhibit G    Rules and Regulations
                 Exhibit H    Services to be Provided by Landlord
                 Exhibit I    Fitness Center Waiver of Liability
                 Exhibit J    Approved Contractors
                 Schedule 1   List of Removable Property (Section 17.7)

3.       TERM.
         -----

3.1 This Lease shall take effect upon the last date of execution hereof by each of the parties hereto, and each of the provisions hereof shall be binding upon and inure to the benefit of Landlord and Tenant from the last date of execution hereof by each of the parties hereto.

3.2 The term of this Lease will be the period from the later of the date set forth in Section 2.1.5(a) or execution of this Lease by both parties pursuant to Section 3.1("TERM COMMENCEMENT DATE") (hereinafter sometimes referred to as the "Term"), subject to earlier termination of this Lease as provided herein. Landlord and Tenant shall execute a written acknowledgment of the Term Commencement Date and the Term Expiration Date in substantially the form attached hereto as EXHIBIT D and attach it to this Lease as EXHIBIT D-1; however, failure to execute and deliver such acknowledgment shall not affect Tenant's liability hereunder.

3.3 Landlord represents to Tenant that the Premises are Substantially Complete. As used herein, the terms "SUBSTANTIALLY COMPLETE", "SUBSTANTIALLY COMPLETED", and "SUBSTANTIAL COMPLETION" shall mean (i) the City of San Diego has issued an interim or final right to occupy the Premises, and
(ii) Landlord has substantially completed construction of the Tenant Improvements in accordance with EXHIBIT E and EXHIBIT F as certified by Landlord's architect, including (a) the mechanical, electrical, plumbing and other building systems which serve the Premises are in good working order, (b) the lighting, ceiling tiles, and window coverings within the Premises are in good working order, (c) all debris and clutter has been removed from the Premises, (d) exterior windows of the Premises are washed inside and out, (e) lobbies, corridors, stairwells and elevators serving the Premises are substantially complete and in good working order, and (f) the Premises are in compliance with Landlord's warranties set forth in Section 14.2; provided, however, Tenant understands that construction of tenant improvements for other tenants of the Building and in some Common Areas will be ongoing at the time of Substantial Completion of the Tenant Improvements. ".

4.1 Landlord has constructed Tenant Improvements within the Premises for Tenant's use and occupancy ("TENANT IMPROVEMENTS") in conformity with the schematic attached hereto as EXHIBIT E and the architectural drawings listed at EXHIBIT F at its cost and at no cost to Tenant. Tenant shall pay all costs of changes to the Tenant Improvements requested by Tenant and approved by Landlord, or improvements requested by Tenant and approved by Landlord which are not included in EXHIBIT E or EXHIBIT F.

4.2 Prior to entry by Tenant onto the Premises before the Term Commencement Date, for installing fixtures, placement of personal property, or any other purpose, Tenant shall furnish to Landlord evidence satisfactory to Landlord that insurance coverages required of Tenant under the provisions of Article 21 are in effect. Entry by Tenant onto the Premises prior to the Term Commencement Date for such purposes shall be subject to all of the terms and conditions of this Lease other than the payment of Basic Annual Rent and Operating Expenses, shall not interfere with the performance by Landlord or Landlord's contractor with construction activities at the Project, shall be limited to the last ten (10) days prior to the estimated Substantial Completion of the Premises, and shall be made only with the advance written consent of Landlord, which consent shall not be unreasonably withheld. In the event of entry by Tenant or its agents onto the Premises prior to the Term Commencement Date, Tenant agrees to indemnify, protect, defend and hold harmless Landlord and its contractors and agents from any and all loss or damage to property, completed work, fixtures, equipment, materials or merchandise, or from liability for death of or injury to any person arising from Tenant's entry onto the Premises, except to the extent caused by the gross negligence or willful misconduct of Landlord or its agents or contractors.

5.1 Tenant agrees to pay Landlord as Basic Annual Rent for the Premises the sum set forth in Section 2.1.2, subject to adjustment as set forth in Section 6.1 and 8.3, in the equal monthly installments set forth in Section 2.1.3, subject to adjustment as set forth in Sections 6.1 and 8.3, each in advance on the Term Commencement Date and on the first day of each and every calendar month thereafter during the term of this Lease; provided, however, the first two (2) months after the time period set for in Section 3.1 shall be free of the monthly installment of Basic Annual Rent.

5.2 In addition to Basic Annual Rent, Tenant agrees to pay to Landlord as additional rent ("ADDITIONAL RENT"), at the times hereinafter specified in this Lease (i) Tenant's Pro Rata Share (as defined in Section 7.4(a) and as set forth in Section 2.1.4, subject to adjustment pursuant to
Section 8.3) of Operating Expenses as provided in Article 7 and (ii) all other amounts that Tenant assumes or agrees to pay under the provisions of this Lease, including but not limited to any and all other sums that may become due by reason of any default of Tenant under this Lease or failure on Tenant's part to comply with the agreements, terms, covenants and conditions of this Lease to be performed by Tenant.

5.3 Basic Annual Rent and Additional Rent shall together be denominated "RENT." Except as expressly set forth in this Lease, Rent shall be paid to Landlord, without notice, demand, abatement, suspension, deduction, setoff, counterclaim, or defense, in lawful money of the United States of America, at the office of Landlord as set forth in Section 2.1.8 or to such other person or at such other place as Landlord may from time to time designate in writing.

5.4 In the event the Term of this Lease commences or ends on a day other than the first day of a calendar month, then the Rent for such fraction of a month shall be prorated for such period on the basis of a thirty
(30) day month and shall be paid at the then current rate for such fractional month prior to the commencement of the partial month.

6.1 The Basic Annual Rent then in effect (and as previously increased pursuant to this Section 6.1) shall be increased each year by three percent (3%) on each annual anniversary of the Term Commencement Date for so long as this Lease continues in effect.

7.1 As used herein, the term "OPERATING EXPENSES" shall include:

(a) Government impositions including, without limitation, real and personal property taxes and assessments (but excluding personal property taxes and assessments of other tenants of the Project) levied upon the Project or any part thereof; amounts due under any improvement bond upon the Project and assessments levied in lieu thereof (except to the extent they represent costs related to the initial construction of the Project); any tax on or measured by gross rentals received from the rental of space in the Project or tax based on the square footage of the Building to the extent such tax is in lieu of or in the nature of a property tax (not an income tax, but a tax based on revenue in the nature of a property tax if imposed in the future); and any utilities surcharges or any other costs levied, assessed or imposed by, or at the direction of, or resulting from statutes or regulations, or interpretations thereof promulgated by, any federal, state, regional, municipal or local government authority in connection with the use or occupancy of the Building or Project, and any expenses, including the reasonable cost of attorneys or experts, reasonably incurred by Landlord in seeking reduction by the taxing authority of the applicable taxes not to exceed the amount of any such reduction, less tax refunds obtained as a result of an application for review thereof.

(b) Except as set forth in Section 7.2 below, all other costs paid or incurred by Landlord which, in accordance with generally accepted accounting principles as applied to the operation and maintenance of first class buildings, are properly chargeable to the maintenance and operation of the Project including, by way of examples and not as a limitation upon the generality of the foregoing, costs of (i) maintenance, repairs and replacements to improvements within the Project as appropriate to maintain the Project in first class condition; (ii) utilities furnished to the Project (except those utilities which are separately metered and paid by individual tenants); (iii) sewer fees; (iv) trash collection; (v) cleaning (including windows); (vi) maintenance of landscape and grounds; (vii) maintenance of drives and parking areas, including periodic resurfacing; (viii) reasonable and customary security services; (ix) maintenance, repair, and replacement of reasonable and customary security devices; (x) building supplies; (xi) maintenance, repair, and replacement of equipment utilized for operation and maintenance of the Project;

(xii) costs of maintenance, repairs and replacements of mechanical, electrical, plumbing, sprinkler, and other systems of the Project; (xiii) insurance premiums; (xiv) portions of insured losses deductible by reason of insurance policy terms (insurance deductibles); (xv) periodic review of Hazardous Material Inventories (as defined in Section 39.6) to confirm compliance with applicable building and fire code requirements; (xvi) service contracts for work of a nature before referenced; (xvii) costs of services of independent contractors retained to do work of a nature before referenced at reasonable and customary rates; (xviii) costs of compensation (including employment taxes and fringe benefits) of all persons who perform regular and recurring duties connected with the day-to-day operation and maintenance of the Project at reasonable and customary rates; and (xviii) reasonable costs of management services equal to four percent (4%) of the Basic Annual Rent; provided, however, that any costs for repairs or replacements which would be deemed of a "capital" nature under generally accepted accounting principles shall be amortized over the useful life of the repair or replacement as determined under Internal Revenue Service guidelines, and Tenant shall pay only that portion of the costs which are amortized over the balance of the term, payable at the time the costs are incurred to the extent Tenant's share of the costs are less than $1.75 per square foot of Rentable Area of the Premises, with the balance payable on a monthly basis during the balance of the term.

7.2 Notwithstanding the foregoing, Tenant shall not be responsible for the payment of the following costs and expenses:

(a) costs incurred for the construction of the Project (including the current renovation of the Project into a biotech facility);

(b) costs incurred for the repair, maintenance or replacement of the structural components of the footings, foundation, ground floor slab, and load bearing walls of the Building (but excluding painting and ordinary maintenance and repair of exterior surfaces, which are Operating Expenses under Section 7.1(b));

(c) costs recovered under any construction or materials warranty procured by Landlord, pursuant to Section 14.4 or otherwise, to the extent paid pursuant to the warranty;

(d) costs of any kind, including attorneys fees, incurred to correct any defects in design, materials or construction of the Project;

(e) costs, expenses and penalties (including without limitation attorneys' fees) incurred as a result of the use, storage, removal or remediation of any toxic or hazardous substances or other environmental contamination not caused by Tenant or its employees, contractors, agents, representatives, or invitees;

(f) interest, principal, points and other fees on debt or amortization of any debt secured in whole or part by all or any portion of the Project (provided that interest upon a government assessment or improvement bond payable in installments is an Operating Expense under Section 7.1(a));

(g) costs incurred in connection with the financing, sale or acquisition of the Project or any portion thereof;

(h) costs, expenses, and penalties (including without limitation attorneys' fees) incurred due to the violation by Landlord of any underlying deed of trust or mortgage affecting the Project or any portion thereof;

(i) depreciation and amortization of any type (provided this exclusion is not intended to delete from Operating Expenses actual costs of maintenance, repairs and replacements which are otherwise included within Operating Expenses);

(j) any costs incurred as a result of Landlord's violation of any statute, ordinance or other source of applicable law, or breach of contract or tort liability to any other party, including without limitation, any third party, or Landlord's employees, contractors, agents or representatives;

(k) costs incurred in leasing or procuring tenants (including, without limitation, lease commissions, advertising expenses, attorneys' fees and expenses of renovating space for tenants);

(l) advertising, marketing, media and promotional expenditures regarding the Project and costs of signs identifying the owner, lender or any contractor thereof;

(m) any wages, fees, salaries, benefits or other compensation of the executive employees or principals of Landlord;

(n) any rentals and related expenses incurred in leasing equipment which may be classified as capital expenditures under generally accepted accounting principles; provided, however, leasing and other expenses of the deionized water system will be included in Operating Expenses.

(o) any net income, franchise, capital stock, estate or inheritance taxes or taxes which are the personal obligation of Landlord or of another tenant of the Project;

(p) expenses which relate to preparation of rental space for other occupants of the Project, including without limitation building, license and inspection costs, incurred with respect to the installation of improvements made for other occupants of the Project or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant tenant space in the Project for other occupants in the Project.

(q) legal expenses arising out of the initial construction of the Project or any Tenant Improvements or for the enforcement of the provisions of any tenant leases other than this Lease;

(r) the cost of any work or service performed for or facilities furnished to another occupant of the Project at such occupant's cost;

(s) any interest or penalties imposed upon Landlord by any taxing authority for late payment or otherwise;

(t) any other expense otherwise chargeable as part of the cost of operation and maintenance but which is not of general benefit to the Project but is primarily for the benefit of one or more specific tenants;

(u) Landlord's charitable or political contributions;

(v) the amount of any payments to subsidiaries and affiliates of Landlord for services to the Project or for supplies or other materials to the extent that the cost of such services, supplies or materials exceeds the cost which would have been paid had the services, supplies or materials been provided by unaffiliated parties on a competitive basis (provided, however, any fee for management services paid to an affiliate of Landlord shall be in the amount set forth in Section 7.1[b]); and

(w) electric power or other utility costs for which Tenant directly contracts with a public service company.

7.3 Tenant shall pay to Landlord on the first day of each calendar month of the Term of this lease, as Additional Rent, Landlord's written good faith estimate of Tenant's Pro Rata Share (as set forth in 2.1.4) of Operating Expenses with respect to the Project for such month.

(a) "TENANT'S PRO RATA SHARE" under this Lease shall mean the percentage set forth in Section 2.1.4 (subject to adjustment pursuant to Section 8.3), determined by dividing the Rentable Area of the Premises by the total Rentable Area of the Project.

(b) Within sixty (60) days after the conclusion of each calendar year, Landlord shall furnish to Tenant in writing a statement (the "ANNUAL OPERATING EXPENSE STATEMENT") showing in reasonable detail the actual Operating Expenses and Tenant's Pro Rata Share of Operating Expenses for the previous calendar year. Any additional sum due from Tenant to Landlord shall be due and payable within thirty (30) days of Tenant's receipt of such statement. If the amounts paid by Tenant pursuant to this Section 7.3 exceed Tenant's Pro Rata Share of Operating Expenses for the previous calendar year, the difference shall be credited by Landlord against the Rent next due and owing from Tenant; provided that, if the Lease term has expired, Landlord shall accompany said statement with payment for the amount of such difference. (c) Any amount due under this Section 7.3 for any period which is less than a full month shall be prorated for such fractional month.

(d) Notwithstanding this Section 7.3, Operating Expenses which can fairly and reasonably be allocated to one or more tenants of the Project shall be so allocated, and shall be separately scheduled in the Landlord's written good faith estimate and Landlord's Annual Operating Expense Statement.

7.5 Tenant shall have the right, at Tenant's expense, upon reasonable notice during reasonable business hours, to review that portion of Landlord's books, records, invoices, and other data which are relevant to preparation of the Annual Operating Expense Statement provided any request for such review shall be furnished within one hundred eighty (180) days after

Tenant's receipt of such statement as to prior year's Operating Expenses. If the amount of Operating Expenses relating to the Premises identified on such annual statement is found to exceed the actual Operating Expenses of the Premises, Landlord shall, within twenty (20) days after Tenant's request therefor, refund to Tenant the amount of overpayment by Tenant. In addition, if such review reveals that the Operating Expenses paid by Tenant in any year exceed one hundred five percent (105%) of the actual Operating Expenses which should have been paid by Tenant in such year, Landlord shall reimburse Tenant for the reasonable cost of such review within 10 business days following Tenant's written request for the cost of such review. In all other cases, Tenant shall pay for the reasonable cost of the review.

7.6 Operating Expenses for the calendar year in which Tenant's obligation to pay them commences and in the calendar year in which such obligation ceases shall be prorated. Expenses such as taxes, assessments and insurance premiums which are incurred for an extended time period shall be prorated based upon time periods to which applicable so that the amounts attributed to the Premises relate in a reasonable manner to the time period wherein Tenant has an obligation to pay Operating Expenses.

8.1 The Rentable Area of the Project is determined by making separate calculations of the Rentable Area of each floor of the Building, and totaling the Rentable Area of each floor within the Building. The Rentable Area of a floor is calculated by measuring to the outside finished surface of each permanent outer building wall where the wall intersects or joins the floor, or where it would have intersected the floor except for recessed entryways, windows and the like (also known as the "drip line", measured from where the outside finished surface of the second floor wall intersects the roof). The full area calculated as set forth above is included as Rentable Area of the Project without deduction for (i) columns and projections, (ii) vertical penetrations such as stairwells, elevator shafts, flues, pipe shafts, vertical ducts, atriums, and the like, or their enclosing walls corridors, (iii) entrance ways, lobbies, corridors, equipment rooms, and rest rooms, and the like, or their enclosing walls, or (iv) any other unusable area of any nature.

8.2 The term "RENTABLE AREA" when applied to the Premises is the area to be occupied exclusively by Tenant plus a pro rata allocation of Rentable Area within the Project which is not then utilized or expected to be utilized exclusively by Tenant or other tenants of the Project, including but not limited to the portions of the Building devoted to columns, projections, vertical penetrations, entrance ways, lobbies, corridors, equipment rooms, rest rooms, lunch rooms, conference rooms, library, and fitness center. If the Premises are separated from space occupied by another tenant, the Rentable Area shall be measured to the center of any interior demising walls.

8.3 The Rentable Area as set forth in Section 2.1.1 is an estimate of the area which constitutes the Rentable Area of the Premises, which, at the request of either Landlord or Tenant made within ninety (90) days after the Term Commencement Date, shall be adjusted in accordance with measurement and

written certification of the Project architect. If the Rentable Area as determined hereunder is more or less than the Rentable Area set forth in Section 2.1.1, Basic Annual Rent, monthly installments of Basic Annual Rent, and Tenant's Pro Rata Share of Operating Expenses shall be adjusted upward or downward, as the case may be, based on the actual Rentable Area of the Premises.

9.1 Concurrently with the execution of this Lease, Tenant shall deposit with Landlord cash in the amount set forth in Section 2.1.6, to be held by Landlord as security for the faithful performance by Tenant of all of the terms, covenants, and conditions of this Lease to be kept and performed by Tenant during the term and any extension term hereof. If Tenant defaults with respect to any provision of this Lease, including but not limited to any provision relating to the payment of Rent, and subject to any notice requirements and cure periods for Tenant's benefit set forth in Article 24, Landlord may (but shall not be required to) draw from the security deposit the amount required to cure the default, and to use, apply or retain the security deposit for the payment of any Rent or any other sum in default, or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant's default. The security deposit shall not be deemed to be held by Landlord in trust, need not be segregated from other funds of Landlord, and shall not bear interest. Landlord is hereby granted a security interest in the security deposit pursuant to the provisions of the California Commercial Code, which security interest shall be perfected by Landlord taking possession of the security deposit.

9.2 In the event Landlord applies any portion of the security deposit in accordance with the terms of this Lease, Tenant shall within ten (10) days after another request therefor replenish the security deposit to the full amount set forth above.

9.3 The security deposit shall be transferable by Landlord to a successor Landlord and to Landlord's mortgage lender which is a beneficiary of a deed of trust encumbering the Premises, provided such lender agrees to hold the security deposit pursuant to the terms of this Lease.

9.4 In the event of bankruptcy or other debtor/creditor proceedings against Tenant, the security deposit shall be deemed to be applied first to the payment of Rent and other charges due Landlord for all periods prior to the filing of such proceedings.

9.5 Landlord shall deliver the security deposit to any purchaser of Landlord's interest in the Premises, and thereupon Landlord shall be discharged from any further liability with respect thereto provided that such purchaser has agreed to assume in writing the obligations of Landlord hereunder. This provision shall also apply to any subsequent transfers.

9.6 The security deposit shall be returned to Tenant within thirty (30) days following the later of the expiration of the Lease or the date Tenant fully vacates the Premises, except for amounts which are needed by Landlord to cure any default by Tenant.

10.1 Tenant may use the Premises only for laboratory research and development and related administrative, office and other ancillary uses as permitted by (i) the applicable zone under the City of San Diego Land Development Code, (ii) any other laws, regulations, ordinances, and permits applicable to the Project, and (iii) all covenants, conditions and restrictions recorded against the property, and shall not use the Premises, or permit or suffer the Premises to be used for any other purpose without the prior written consent of Landlord.

10.2 Tenant shall conduct its business operations and use the Premises in compliance with all federal, state, and local laws, regulations, ordinances, requirements, permits and approvals applicable to the Premises. Tenant shall not use or occupy the Premises in violation of any law or regulation or the certificate of occupancy issued for the Building, and shall, upon five (5) days written notice from Landlord, discontinue any use of the Premises which is declared by any governmental authority having jurisdiction to be a violation of law or the certificate of occupancy. Tenant shall comply with any direction of any governmental authority having jurisdiction which shall, by reason of the nature of Tenant's use or occupancy of the Premises, impose any duty upon Tenant or Landlord with respect to the Premises or with respect to Tenant's particular use or occupation thereof. Tenant shall not be deemed to be in default of the foregoing obligation if it has the right to appeal such directive and Tenant prosecutes such appeal in a timely fashion and in a manner that does not impose or threaten to impose any lien, charge or other obligation on Landlord or any portion of the Project.

10.3 Tenant shall not do or permit to be done anything which will invalidate or increase the cost (unless Tenant agrees to pay such increased cost) of any fire, extended coverage or any other insurance policy covering the Premises, or which will make such insurance coverage unavailable on commercially reasonable terms and conditions, and shall comply with all rules, orders, regulations and requirements of the insurers of the Premises.

10.4 Subject to the warranty of Landlord in Section 14.3, Tenant shall cause the Premises to comply with the Americans with Disabilities Act of 1990 ("ADA"), and the regulations promulgated thereunder, as amended from time to time. All responsibility for compliance with the ADA relating to the Premises and the activities conducted by Tenant within the Premises after the Term Commencement Date shall be exclusively that of Tenant and not of Landlord, including any duty to make capital improvements, alterations, repairs and replacements to the Premises; provided, however, (i) Landlord shall be responsible for compliance with the ADA to the extent of a violation of Landlord's warranty in Section 14.3; (ii) Landlord shall make all improvements outside of the Premises required for compliance with the ADA (with only the amortized costs of capital improvements payable by Tenant as an Operating Expense under Section 7.1(b)); and (iii) neither Tenant nor Landlord shall be required to make capital improvements, alterations, repairs or replacements to comply with the ADA unless and until required to do so by order of a government entity or court of law exercising proper jurisdiction with regard thereto, subject to any right to appeal or otherwise contest any such order. Any alterations to the Premises made by Tenant for the purpose of complying with the ADA or which otherwise require compliance with the ADA shall be done in accordance with Article 17; provided, that Landlord's consent to such

alterations shall not constitute either Landlord's assumption, in whole or in part, of Tenant's responsibility for compliance with the ADA, or representation or confirmation by Landlord that such alterations comply with the provisions of the ADA.

10.5 Landlord shall identify Tenant on the Building directory in the Building lobby, and shall identify Tenant on a plaque installed beside the main door to the Premises. Tenant may not install any signage outside of the Premises. The expense of the directory, plaque and any and all other signage, if any, shall be paid by Tenant as an Operating Expense pursuant to Article 7.

10.6 No equipment shall be placed at a location within the Building other than a location designed to carry the load of the equipment. Equipment weighing in excess of floor loading capacity shall not be placed in the Building.

10.7 Tenant shall not use or allow the Premises to be used for any unlawful purpose, nor shall Tenant cause, maintain or permit any nuisance or waste in, on, or about the Premises.

10.8 Landlord shall provide services to the Project described on Exhibit H attached hereto, subject to reimbursement by Tenant as Operating Expenses pursuant to Section 7.1(b).

11.1 Landlord and Tenant represent and warrant one to the other that there have been no dealings with any real estate broker or agent in connection with the negotiation of this Lease other than the brokers set forth in Section 2.1.9, whose commission(s) shall be paid by Landlord. Each shall indemnify, defend, protect, and hold harmless the other from any claim of any other broker as a result of any act or agreement of the indemnitor.

11.2 To the best of Tenant's knowledge, without investigation or inquiry, Tenant represents and warrants that no broker or agent has made any representation or warranty relied upon by Tenant in Tenant's decision to enter into this Lease other than as contained in this Lease.

12.1 If, with Landlord's express written consent, Tenant holds possession of all or any part of the Premises after the expiration or earlier termination of this Lease, Tenant shall be deemed a tenant from month to month upon the date of such expiration or earlier termination, and in such case Tenant shall continue to pay in accordance with Article 5 the Basic Annual Rent as adjusted in accordance with Article 6, together with Operating Expenses in accordance with Article 7 and other Additional Rent as may be payable by Tenant, and such month-to-month tenancy shall be subject to every other term, covenant and condition contained herein.

12.2 If Tenant remains in possession of all or any portion of the Premises after the expiration or earlier termination of the term hereof without the express written consent of Landlord, Tenant shall become a tenant at sufferance upon the terms of this Lease except that monthly rental shall be equal to one hundred twenty-five percent (125%) of the Monthly Installment of Basic Annual Rent in effect during the immediately preceding calendar month.

12.3 Acceptance by Landlord of Rent after such expiration or earlier termination shall not result in a renewal or reinstatement of this Lease.

12.4 The foregoing provisions of this Article 12 are in addition to and do not affect Landlord's right to re-entry or any other rights of Landlord under Article 24 or elsewhere in this Lease or as otherwise provided by law.

13.1 Tenant shall pay not less than ten (10) days before delinquency taxes levied against any personal property or trade fixtures placed by Tenant in or about the Premises. Tenant shall not be responsible for taxes levied against any personal property or trade fixtures of other tenants.

13.2 If any such taxes on Tenant's personal property or trade fixtures are levied against Landlord or Landlord's property or, if the assessed valuation of the Project is increased by the inclusion therein of a value attributable to Tenant's personal property or trade fixtures, and if Landlord after written notice to Tenant pays the taxes based upon such increase in the assessed value, then Tenant shall, within thirty (30) days of receipt of satisfactory evidence of such tax increase, repay to Landlord the taxes so levied against Landlord.

13.3 If any improvements in or alterations to the Premises, whether owned by Landlord or Tenant and whether or not affixed to the real property so as to become a part thereof, are assessed for real property tax purposes at a valuation higher than the valuation at which improvements in other spaces in the Project are assessed, then the real property taxes and assessments levied against Landlord or the Project by reason of such excess assessed valuation shall be deemed to be taxes levied against personal property to Tenant and shall be governed by the provisions of Section 13.2 above. Any such excess assessed valuation due to improvements in or alterations to space in the Project leased by other tenants of Landlord shall not be included in the Operating Expenses defined in Section 7, but shall be treated, as to such other tenants, as provided in this Section 13.3, and shall be allocated to such other tenants. If the records of the county assessor are available and sufficiently detailed to serve as a basis for determining whether said tenant improvements or alterations are assessed at a higher valuation than improvements in other spaces in the Project, such records shall be binding on both Landlord and Tenant.

13.4 To the extent Tenant fails to make any payment required by this Article 13 and Landlord does so on Tenant's behalf, after notice to Tenant and opportunity for Tenant to make such payment, Tenant shall reimburse Landlord for the cost thereof pursuant to the provisions of Sections 7.1 and 24.3.

14.1 Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty, express or implied, with respect to the condition of the Premises or to the Project, except as set forth herein, or with respect to their suitability for the conduct of Tenant's business.

14.2 Landlord warrants to Tenant that the Tenant Improvements were built in a good and workmanlike manner and in compliance with EXHIBIT E and EXHIBIT F, and all applicable building code requirements, laws, rules, orders, ordinances, directions, regulations, permits, approvals, and requirements of all governmental agencies, offices, departments, bureaus and boards having jurisdiction, and with the rules, orders, directions, regulations, and requirements of any applicable fire rating bureau; that the mechanical, electrical, plumbing and other building systems will be in good working order at the commencement of the term; and that the Project and the Tenant Improvements are free of patent and latent defects in design, materials and construction. Promptly after notice from Tenant, Landlord shall correct any defect in the Project or the Tenant Improvements in violation of the foregoing warranty which interferes with Tenant's use or occupancy of the Premises.

14.3 Landlord warrants to Tenant that the Project and the Tenant Improvements, at the time of initial completion, will be in compliance with ADA and the regulations promulgated thereunder; provided, however, nothing in this Lease shall be construed to require Landlord to make improvements, alterations, repairs or replacements to comply with ADA unless and until required to do so by order of any government entity or court of law exercising proper jurisdiction with regard thereto, subject to any right to appeal or otherwise contest any such order.

15.1 Tenant shall have the nonexclusive right, in common with others, to use the Common Areas, subject to the rules and regulations adopted by Landlord and attached hereto as EXHIBIT G together with such other reasonable and nondiscriminatory rules and regulations as are hereafter promulgated by Landlord (the "RULES AND REGULATIONS"); provided, however, that such rules and regulations do not unreasonably interfere with Tenant's use and enjoyment of the Premises and Common Areas. Without limiting the generality of the foregoing, Tenant may allow its employees the nonexclusive right, in common with employees of other tenants in the Building, to use the fitness facilities and equipment, provided that Tenant ensures that each employee before using the fitness facilities and equipment has executed and delivered to Landlord a waiver of liability (the "FITNESS CENTER WAIVER OF LIABILITY") in the form attached hereto as EXHIBIT I.

15.2 Tenant shall not place any storage facilities or water systems, mechanical equipment, emergency generators or other facilities or property on the surface parking area or otherwise outside of the Premises without the express written consent of Landlord, and any space used for such facilities shall be deducted from Tenant's Pro Rata Share of parking described below.

15.3 As an appurtenance to the Premises, Tenant, and its employees and invitees, shall be entitled to use without charge three (3) parking spaces (which includes a pro rata share of visitor and handicap parking spaces) for each 1,000 square feet of usable area of the Premises in common with

other tenants of the Project. The Project shall have at least three (3) parking spaces for each 1,000 square feet of usable area of the entire Project. The term "usable area" as used herein refers not to the Rentable Area of the Premises, but to the area actually occupied by Tenant.

16.1 Tenant shall pay for all water, gas, electricity, telephone, cable, and other utilities which may be furnished to the Premises during the term of this Lease, together with any taxes thereon. If any such utility is not separately metered to Tenant, Tenant shall pay Tenant's Pro Rata Share of the costs thereof as an Operating Expense unless Landlord has installed separate meters or measuring devices for the determination of Tenant's actual use of such utility service. Utilities and services provided to the Premises which are separately metered shall be paid by Tenant directly to the supplier of such utility or service, and Tenant shall pay for such utilities and services prior to delinquency during the term of this Lease. In the event one tenant of the Project is using a disproportionate amount of any utility that is not separately metered, Landlord shall allocate an equitable portion of such utility cost directly to such tenant. The primary measurement for metering usage will be based upon the cubic feet per minute of air supplied to the premises.

16.2 Landlord shall not be liable for, nor shall any eviction of Tenant result from, any failure of any such utility or service, and in the event of such failure Tenant shall not be entitled to any abatement or reduction of Rent, nor be relieved from the operation of any covenant or agreement of this Lease, and Tenant waives any right to terminate this Lease on account thereof. Notwithstanding the foregoing:

(i) in the event that Landlord is unable to supply any of the Building's sanitary, electrical, heating, air conditioning, water, elevator, life safety or other essential systems serving the Premises (collectively, the "ESSENTIAL SERVICES") from a cause within Landlord's reasonable control, and such inability of Landlord materially impairs Tenant's ability to carry on its business in the Premises for a period of ten (10) consecutive calendar days, Basic Annual Rent and Additional Rent shall be abated commencing with the eleventh (11th ) day of such material interference with Tenant's business, based upon the extent to which such inability to supply Essential Services materially impairs Tenant's ability to carry on its business in the Premises. Such abatement shall continue until the Essential Services have been restored to such extent that the lack of any remaining services no longer materially impairs Tenant's ability to carry on its business in the Premises. Tenant shall not be entitled to such an abatement to the extent that Landlord's inability to supply Essential Services to Tenant is caused by Tenant or its employees, contractors, agents, licensees or invitees; and

(ii) in the event that Landlord is unable to supply any Essential Services by reason of acts of God, accidents, breakage, repairs, strikes, lockouts, labor disputes, inability to obtain utilities or materials or by any other reason beyond Landlord's reasonable control, and (i) such inability of Landlord prevents Tenant from carrying on its business in the Premises for a period of thirty (30) consecutive calendar days or (ii) such inability of Landlord materially impairs Tenant's ability to carry on its business in the Premises for a period of sixty (60) consecutive calendar days, then Basic Annual Rent and Additional Rent shall be abated commencing with the day after such thirty (30) or sixty (60) day period, as the case may be, based upon the extent

to which such inability to supply Essential Services materially impairs Tenant's ability to carry on its business in the Premises. Such abatement shall continue until the Essential Services have been restored to the extent that the lack of any remaining services no longer materially impairs Tenant's ability to carry on its business in the Premises. Tenant shall not be entitled to such an abatement to the extent that Landlord's inability to supply Essential Services to Tenant is caused by Tenant or its employees, contractors, agents, licensees or invitees; and

(iii) in the event of any stoppage or interruption of Essential Services to the Premises, Landlord shall use commercially reasonable efforts to restore Essential Services to the Premises as soon as possible; provided, that Tenant shall have the right, at its option, to terminate this Lease by written notice to Landlord if such failure to provide Essential Services by Landlord continues for any reason (other than the actions of Tenant or its employees, contractors, agents, licensees or invitees) for more than one hundred eighty (180) consecutive calendar days and such failure materially impairs Tenant's ability to carry on its business in the Premises.

16.3 Tenant shall provide and pay for janitors, maintenance personnel, and other persons who perform duties connected with the operation and maintenance of the interior of the Premises.

17.1 Tenant shall make no alterations, additions or improvements (hereinafter in this article, "IMPROVEMENTS") in or to the Premises without Landlord's prior written consent, which shall not be unreasonably withheld; provided, however, it shall not be unreasonable for Landlord to withhold consent if the proposed Improvements would in the opinion of Landlord adversely affect the use of the Premises for generic laboratory-based research and development space as part of an integrated Building plan after the expiration or earlier termination of this Lease. Tenant shall deliver to Landlord final plans and specifications and working drawings for the Improvements to Landlord, and Landlord shall have ten (10) days thereafter to grant or withhold its consent. If Landlord does not notify Tenant of its decision within the ten (10) days, Landlord shall be deemed to have given its approval.

17.2 If a permit is required to construct the Improvements, Tenant shall deliver a completed, signed-off inspection card to Landlord within ten (10) days of completion of the Improvements, and shall promptly thereafter obtain and record a notice of completion and deliver a copy thereof to Landlord.

17.3 The Improvements shall be constructed only by licensed contractors or mechanics. Tenant shall use only those contractors listed on EXHIBIT H for the trades listed thereon; all other contractors shall be approved by Landlord, which approval shall not be unreasonably withheld or delayed. Any such contractor must have in force a general liability insurance policy of not less than $2,000,000 or such higher limits as Landlord may reasonably require, which policy of insurance shall name Landlord as an additional insured. Tenant shall provide Landlord with a copy of the contract with the contractor or mechanic prior to the commencement of any construction requiring Landlord's consent.

17.4 Tenant agrees that any work by Tenant shall be accomplished in such a manner as to permit any fire sprinkler system and fire water supply lines to remain fully operable at all times except when minimally necessary for building reconfiguration work.

17.5 Tenant covenants and agrees that all work done by Tenant shall be performed in full compliance with all laws, rules, orders, ordinances, directions, regulations, permits, approvals, and requirements of all governmental agencies, offices, departments, bureaus and boards having jurisdiction, and in full compliance with the rules, orders, directions, regulations, and requirements of any applicable fire rating bureau. Tenant shall provide Landlord with "as-built" plans showing any material change in the Premises within thirty (30) days after completion.

17.6 Before commencing any work, Tenant shall give Landlord at least five (5) days' prior written notice of the proposed commencement of such work.

17.7 At the time Landlord consents to the Improvements pursuant to Section 17.1, Landlord shall identify those Improvements which Tenant shall be required to remove upon the expiration or earlier termination of the Lease, and Landlord and Tenant shall mutually identify those Improvements which Tenant may remove upon the expiration or earlier termination of this Lease. Landlord and Tenant shall list any such Improvements on SCHEDULE 1 attached hereto, designating those which Tenant shall be required to remove and those which Tenant may remove. With respect to those Improvements not so identified, Landlord and Tenant acknowledge and agree that Landlord's approval of the final plans and specifications and working drawings for the Improvements pursuant to Section 17.1 shall be deemed Landlord's and Tenant's agreement that those Improvements not so identified shall become the property of Landlord upon the expiration or earlier termination of this Lease, and shall remain upon and be surrendered with the Premises as a part thereof. Those Improvements identified as Improvements which Tenant may remove are included within the term "Tenant's Removable Property" defined in Section 30.3. Notwithstanding the provisions of Section 30.3, Tenant shall, at Landlord's election, upon the expiration or earlier termination of this Lease, remove the Improvements which are identified as Improvements which Tenant shall be required to remove, and restore and return the Premises to the condition they were in when first occupied by Tenant.

18.1 Landlord shall repair, replace and maintain the structural and exterior portions of the Building and Project, including foundations, exterior walls, load bearing walls, windows, plate glass, and roofing, and the mechanical, electrical, plumbing, fire sprinkler, and elevator systems of the Project, subject to reimbursement by Tenant as its Pro Rata Share of Operating Expenses to the extent provided by Section 7.1. However, if such maintenance or repairs are required because of any act, neglect, fault of or omissions of any duty by Tenant, its agents, servants, employees or invitees, Tenant shall pay to Landlord the entire cost of such maintenance and repairs attributable to Tenant's act, neglect, fault or omission, unless such maintenance and repairs are covered by insurance carried by Landlord.

18.2 Except as otherwise set forth in Section 18.1, Tenant shall, throughout the term of this Lease, at Tenant's sole cost and expense, keep the Premises and every part thereof in good condition and repair. Tenant shall upon the expiration or earlier termination of the term hereof surrender the Premises to Landlord in substantially the same condition as when received, ordinary wear and tear and damage from casualty and causes beyond the reasonable control of Tenant excepted.

18.3 Tenant hereby waives Civil Code Sections 1941 and 1942 relating to a landlord's duty to maintain the Premises in a tenantable condition, and the under said sections or under any law, statute or ordinance now or hereafter in effect to make repairs at Landlord's expense.

18.4 There shall be no abatement of Rent and no liability of Landlord by reason of any injury to or interference with Tenant's business arising from the making of any repairs, alterations or improvements in or to any portion of the Premises, or in or to improvements, fixtures, equipment and personal property therein, unless such injury or interference is unreasonable or is the result of Landlord's grossly negligent or willful act or omission. If repairs or replacements become necessary which by the terms of this Lease are the responsibility of Tenant and Tenant fails to make the repairs or replacements, after notice from Landlord and opportunity for Tenant to make such repairs or replacements, Landlord may do so pursuant to the provisions of
Section 24.3.

18.5 Notwithstanding any of the foregoing, in the event of a fire, earthquake, flood, war or other similar cause of damage or destruction, this Article shall not be applicable and the provisions of Article 22, entitled "Damage or Destruction," shall apply and control.

19.1 Tenant shall keep the Premises, the Building and the property upon which the Building is situated free from any liens arising out of work performed, materials furnished or obligations incurred by Tenant. Tenant further covenants and agrees that any mechanic's lien filed against the Project or the Premises for work claimed to have been done for, or materials claimed to have been furnished to, Tenant will be discharged by Tenant, by bond or otherwise, within thirty (30) days after receiving written notice thereof (or within ten (10) business days after the filing thereof if requested by Landlord as necessary to facilitate a pending sale or refinancing), at the cost and expense of Tenant.

19.2 Should Tenant fail to discharge any lien of the nature described in Section 19.1, Landlord may at Landlord's election pay such claim or post a bond or otherwise provide security to eliminate the lien as a claim against title and the cost thereof shall be immediately due from Tenant as Additional Rent.

19.3 In the event Tenant shall lease or finance the acquisition of equipment, furnishings, or other personal property utilized by Tenant in the operation of Tenant's business, Tenant warrants that any Uniform Commercial Code financing statement executed by Tenant will upon its face or by exhibit thereto indicate that such financing statement is applicable only to personal property of Tenant specifically described in the financing statement. In no event shall the address of the Building be furnished on the financing statement without qualifying language as to applicability of the lien only to removable property of Tenant described in the financing statement. Should any

holder of a security agreement executed by Tenant record or place of record a financing statement which appears to constitute a lien against any interest of Landlord, Tenant shall within ten (10) days after the filing of such financing statement cause (i) copies of the security agreement or other documents to which the financing statement pertains to be furnished to Landlord to facilitate Landlord's being in a position to show such lien is not applicable to any interest of Landlord, and (ii) the holder of the security interest to amend documents of record so as to clarify that such lien is not applicable to any interest of Landlord in the Premises. Landlord shall execute such documents as are reasonably required by Tenant or Tenant's lenders or equipment lessors provided the same do not in any way alter the rights of Landlord under this Lease.

20.1 Except to the extent of the responsibility of Landlord pursuant to Section 20.2 hereof, Tenant agrees to indemnify Landlord and its members and affiliates, and their respective shareholders, directors, managers, members, partners, lenders, officers, agents, and employees (collectively, "LANDLORD'S AGENTS"), against, and to protect, defend, and save them harmless from, all demands, claims, causes of action, liabilities, losses and judgments, and all reasonable expenses incurred in investigating or resisting the same (including reasonable attorneys' fees), for death of or injury to person or damage to property arising out of (i) any occurrence in, upon or about the Premises during the term of this Lease, (ii) Tenant's use, occupancy, repairs, maintenance, and improvements of the Premises and all improvements, fixtures, equipment and personal property thereon, and (iii) any act or omission of Tenant, its shareholders, directors, officers, agents, employees, servants, contractors, invitees and subtenants, except to the extent caused by the negligence or willful misconduct of Landlord or Landlord's Agents. Tenant's obligation under this Section 20.1 shall survive the expiration or earlier termination of the term of this Lease.

20.2 Landlord agrees to indemnify Tenant and Tenant's shareholders, directors, managers, members, partners, lenders, affiliates, officers, agents, and employees (collectively "TENANT'S AGENTS") against and save them harmless from all demands, claims, causes of action and judgments, and all reasonable expenses incurred in investigating or resisting the same (including reasonable attorneys' fees), for death of, or injury to, any person or damage to property arising from or out of any occurrence in, upon, or about the Premises during the term of this Lease to the extent caused by the negligence or willful misconduct of Landlord or Landlord's Agents. Landlord's obligations under this Section 20.2 shall survive the expiration or earlier termination of the term of this Lease.

20.3 Notwithstanding any provision of this Article 20 to the contrary, Landlord shall not be liable to Tenant and Tenant assumes all risk of damage to and loss of any fixtures, goods, inventory, merchandise, equipment, records, research, experiments, animals and other living organisms, computer hardware and software, leasehold improvements, and other personal property of any nature whatsoever, and Landlord shall not be liable for injury to Tenant's business or any loss of income therefrom relative to such damage, other than to the extent Landlord receives proceeds of insurance specifically allocated to such damage or loss. Tenant acknowledges that it is Tenant's obligation to procure insurance against any such damages or loss pursuant to Section 21.4, and that it would be impractical for Landlord to procure any such insurance in that

the nature of Tenant's business makes the risks uncertain and difficult to underwrite and the potential risks are greater than Landlord is willing to assume. Therefore, regardless of the fault of Landlord, Landlord shall not be liable for any such damage or loss, other than to the extent Landlord receives proceeds of insurance specifically allocated to such damage or loss.

20.4 The indemnity obligations of both Landlord and Tenant under this Section 20 shall be satisfied to the extent of proceeds of applicable insurance maintained by the indemnifying party to the extent thereof, and thereafter to proceeds of any applicable insurance maintained by the other party; Landlord and Tenant shall be required to satisfy any such obligation only to the extent it is not satisfied by proceeds of applicable insurance as set forth above.

20.5 Security devices and services, if any, while intended to deter crime may not in given instances prevent theft or other criminal acts of third parties and it is agreed that Landlord shall not be liable for injuries or losses caused by criminal acts of third parties and the risk that any security device or service may malfunction or otherwise be circumvented by a criminal is assumed by Tenant, other than such injuries caused by the gross negligence or intentional conduct of the Landlord. Tenant shall at Tenant's cost obtain insurance coverage to the extent Tenant desires protection against such criminal acts.

20.6 Neither Landlord nor Tenant shall be liable to the other for any damages arising from any act or neglect of any other tenant or occupant of the Building or Project.

21.1 Commencing prior to Tenant's first entry onto the Premises for purposes of installing any improvements, fixtures or personal property, but no later than the Term Commencement Date, and continuing at all times during the term of this Lease, Tenant shall maintain, at Tenant's expense, commercial general liability insurance, on an occurrence basis, insuring Tenant and Tenant's agents, employees and independent contractors against all bodily injury, property damage, personal injury and other covered loss arising out of the use, occupancy, improvement and maintenance of the Premises and the business operated by Tenant, or any other occupant, on the Premises. Such insurance shall have a minimum combined single limit of liability per occurrence of not less than $2,000,000 and a general aggregate limit of $4,000,000. Such insurance shall: (i) name Landlord, and Landlord's lenders if required by such lenders, and any management company retained to manage the Project if requested by Landlord, as additional insureds; (ii) include a broad form contractual liability endorsement insuring Tenant's indemnity obligations under Section 20.1; (iii) provide that it is primary coverage and noncontributing with any insurance maintained by Landlord or Landlord's lenders, which shall be excess insurance with respect only to losses arising out of Tenant's negligence; and
(iv) provide for severability of interests or include a cross-liability endorsement, such that an act or omission of an insured shall not reduce or avoid coverage of other insureds.

21.2 At all times during the term of this Lease, Landlord shall maintain, subject to reimbursement by Tenant as an Operating Expense under
Section 7.1(b), "all risk" insurance, including, but not limited to, coverage against loss or damage by fire, vandalism, and malicious mischief covering the Project (exclusive of excavations, foundations and footings, and including the

Tenant Improvements), in an amount equal to one hundred percent (100%) of the full replacement value thereof. If any boilers or other pressure vessels or systems are installed on the Premises, Landlord shall maintain, subject to reimbursement by Tenant as an Operating Expense under Section 7.1(b), boiler and machinery insurance in an amount equal to one hundred percent (100%) of the full replacement value thereof. The insurance described in this Section 21.2 shall:
(i) insure Landlord, and Landlord's lenders if required by such lenders, as their interests may appear; (ii) contain a Lender's Loss Payable Form (Form 438 BFU or equivalent) in favor of Landlord's lenders and name Landlord, or Landlord's lender if required by such lender, as the loss payee; (iii) provide for severability of interests or include a cross-liability endorsement, such that an act or omission of an insured shall not reduce or avoid coverage of other insureds; and (iv) provide that it is primary coverage and non-contributing with any insurance maintained by Landlord or Landlord's lenders, which shall be excess insurance. The full replacement value of the Project, including the Tenant Improvements and other improvements and fixtures insured thereunder, shall, for the purpose of establishing insurance limits and premiums only, be determined by the company issuing the insurance policy and shall be redetermined by said company within six (6) months after completion of any material alterations or improvements to the Premises and otherwise at intervals of not more than three (3) years. Landlord shall promptly increase the amount of the insurance carried pursuant to this Section 21.2 to the amount so redetermined. The proceeds of the insurance described in this Section shall be used for the repair, replacement and restoration of the Project, including the Tenant Improvements and other improvements and fixtures insured thereunder, as further provided in Article 22; provided, however, if this Lease is terminated after damage or destruction, the insurance policy or policies, all rights thereunder and all insurance proceeds shall be assigned to Landlord

21.3 At all times during this Lease, Landlord shall maintain, pursuant to requirements of its mortgage lender, subject to reimbursement by Tenant as an Operating Expense under Section 7.1(b), commercial general liability insurance, including coverage for death, bodily injury and broad form property damage, with a combined single limit in an amount of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate; umbrella excess liability coverage with a limit of not less than $20,000,000 over primary insurance, which policy shall include coverage for water damage, assumed and contractual liability coverage, premises medical payment, and automobile liability; and rental and/or business interruption insurance to cover loss of income in an amount not less than eighteen (18) months' projected receipts from the entire Project.

21.4 At all times during the term of this Lease, Tenant shall maintain, at Tenant's expense, "all risk" insurance against all damage and loss to Tenant's Removable Property, including but not limited to fixtures, goods, inventory, merchandise, equipment, records, research, experiments, animals and other living organisms, computer hardware and software, leasehold improvements, and other personal property of any nature whatsoever of Tenant or any subtenant of Tenant that may be occupying the Premises, or any portion thereof, from time to time, in an amount equal to the full replacement value thereof. Notwithstanding anything to the contrary contained here, Tenant shall be entitled to all proceeds from the insurance carried pursuant to this Section 21.4.

21.5 At all times during the term of this Lease, Tenant shall maintain workers' compensation insurance in accordance with California law, and employers' liability insurance with limits typical for companies similar to Tenant.

21.6 All of the policies of insurance referred to in this Article 21 shall be written by companies authorized to do business in California and having a policyholder rating of not less than AA (or its equivalent), or a lesser rating reasonably acceptable to Landlord, by a generally accepted insurance rating agency. Each insurer referred to in this Article 21 shall agree, by endorsement on the applicable policy or by independent instrument furnished to Landlord, that it will give Landlord, and Landlord's lenders if required by such lenders, at least ten (10) days' prior written notice by registered mail before the applicable policy shall be canceled for non-payment of premium, and thirty (30) days' prior written notice by registered mail before the applicable policy shall be canceled or altered in coverage, scope, amount or other material term for any other reason (although any failure of an insurer to give notice as provided herein shall not be a breach of this Lease by Tenant). No policy shall provide for a deductible amount in excess of $100,000, unless approved in advance in writing by Landlord, which approval shall not be unreasonably withheld or delayed. Tenant shall deliver to Landlord, and to Landlord's lenders if required by such lenders, copies of the insurance policies required to be carried by Tenant, certified by the insurer, or certificates evidencing such insurance policies, issued by the insurer, together with evidence of payment of the required premiums, prior to the required date for commencement of such coverage. At least thirty (30) days prior to expiration of any such policy, Tenant shall deliver to Landlord, and Landlord's lenders if required by such lenders, a certificate evidencing renewal, or a certified copy of a new policy or certificate evidencing the same, together with evidence of payment of the required premiums. If Tenant fails to provide to Landlord any such policy or certificate by the required date for commencement of coverage, or within fifteen (15) days prior to expiration of any policy, or to pay the premiums therefor when required, Landlord shall have the right, but not the obligation, to procure said insurance and pay the premiums therefor. Any premiums so paid by Landlord shall be repaid by Tenant to Landlord with the next due installment of rent, and failure to repay the same shall have the same consequences as failure to pay any installment of Rent.

21.7 Landlord may provide the property insurance required under this Article 21 pursuant to a so-called blanket policy or policies of property insurance maintained by Landlord.

21.8 Landlord and Tenant each hereby waive any and all rights of recovery against the other or against the officers, directors, members, managers, partners, employees, agents, and representatives of the other, on account of loss or damage to such waiving party or such waiving party's property or the property of others under its control, to the extent that such loss or damage is caused by or results from risks insured against under any insurance policy which insures such waiving party's property at the time of such loss or damage, which waiver shall continue in effect as long as the parties' respective insurers so permit. Any termination of such waiver shall be by written notice as hereinafter set forth. Prior to obtaining policies of insurance required or permitted under this Lease, Landlord and Tenant shall give notice to the insurers that the foregoing mutual waiver is contained in this Lease, and each party shall use its best efforts to cause such insurer to approve such waiver in writing and to cause each insurance policy obtained by it to provide that the insurer waives all right of recovery by way of subrogation against the other

party. If such written approval of such waiver of subrogation cannot be obtained from any insurer or is obtainable only upon payment of an additional premium which the party seeking to obtain the policy reasonably determines to be commercially unreasonable, the party seeking to obtain such policy shall notify the other thereof, and the latter shall have twenty (20) days thereafter to either: (i) identify other insurance companies reasonably satisfactory to the other party that will provide the written approval and waiver of subrogation; or
(ii) agree to pay such additional premium. If neither (i) nor (ii) are done, the mutual waiver set forth above shall not be operative, and the party seeking to obtain the policy shall be relieved of the obligation to obtain the insurer's written approval and waiver of subrogation with respect to such policy during such time as such policy is not obtainable or is obtainable only upon payment of a commercially unreasonable additional premium as described above. If such policies shall at any subsequent time be obtainable or obtainable upon payment of a commercially reasonable additional premium, neither party shall be subsequently liable for failure to obtain such insurance until a reasonable time after notification thereof by the other party. If the release of either Landlord or Tenant, as set forth in the first sentence of this Section 21.8, shall contravene any law with respect to exculpatory agreements, the liability of the party in question shall be deemed not released but shall be secondary to the other's insurer.

22.1 In the event of damage to or destruction of all or any portion of the Project or the Premises or the improvements and fixtures thereon (collectively, "IMPROVEMENTS") arising from a risk covered by the insurance described in Section 21.2, Landlord shall within a reasonable time commence and proceed diligently to repair, reconstruct and restore (collectively, "RESTORE") the improvements to substantially the same condition as they were in immediately prior to the casualty. Tenant shall be responsible for its Pro Rata Share of insurance deductibles and for all costs of restoration in excess of insurance proceeds as Operating Expenses pursuant to the provisions of Article 7, provided, however, that any such costs which would be deemed of a "capital" nature under generally accepted accounting principles shall be amortized over the useful life of the repair or replacement as determined under Internal Revenue Service guidelines, and Tenant shall pay only that portion of the costs which are amortized over the balance of the term, payable at the time the costs are incurred to the extent Tenant's share of the costs are less than $1.75 per square foot of Rentable Area of the Premises, with the balance payable on a monthly basis during the balance of the term. In no event shall Tenant be liable for costs of restoration to the extent the inadequacy of insurance proceeds is due to Landlord's failure to carry the insurance required to be carried by Landlord pursuant to the terms of this Lease.

22.2 In the event of any damage to or destruction of all or any portion of the improvements arising from a risk which is not covered by the insurance required to be carried by Landlord pursuant to Section 21.2, Landlord may elect at its cost to restore the improvements, in which event Landlord shall, within a reasonable time, commence and proceed diligently to restore the improvements to substantially the same condition as they were in immediately prior to the casualty. In the event Landlord elects not to restore the improvements, this Lease shall terminate as of the date of the damage or destruction unless Tenant elects to pay the full cost of restoration.

22.3 In the event the improvements are restored pursuant to
Section 22.1 or Section 22.2, this Lease shall continue in full force and effect, notwithstanding such damage or destruction; provided, however, that if the damage or destruction (i) occurs during the last year of the term and the expense of restoration exceeds $500,000, or (ii) occurs at any other time and the expense of restoration (after application of insurance proceeds) exceeds $1,000,000, Landlord may at its election terminate the Lease unless Tenant elects to pay the full cost of restoration.

22.4 In satisfying its obligations under this Article 22, Landlord shall be not be required to fulfill its restoration responsibilities with improvements identical to those which were damaged or destroyed; rather, with the consent of Tenant, which consent will not be unreasonably withheld or delayed, Landlord may restore the damage or destruction with improvements reasonably equivalent or of reasonably equivalent value to those damaged or destroyed. Provided, however, that such restoration complies with all the then existing applicable building codes.

22.5 In the event of damage, destruction and/or restoration as herein provided, Tenant shall not be entitled to any compensation or damages occasioned by any such damage, destruction or restoration, but Tenant shall be entitled to an equitable abatement of rent in proportion to the extent the Premises are not usable by Tenant. Notwithstanding the foregoing, in the event restoration cannot reasonably be completed within six (6) months following the damage or destruction as estimated by Landlord's architect, Landlord will give notice thereof to Tenant within fifteen (15) days following such damage or destruction, and Tenant at its election may by written notice to Landlord terminate this Lease. In the event of such termination, Tenant shall have no responsibility for contributing to the expense of restoration.

22.6 Notwithstanding anything to the contrary contained in this Article, should Landlord be delayed or prevented from completing the restoration of the improvements after the occurrence of such damage or destruction by reason of acts of God, war, terrorism, government restrictions, inability to procure the necessary labor or materials, strikes, or other causes beyond the control of Landlord (but excluding economic conditions or financial inability to perform), the time for Landlord to commence or complete restoration shall be extended for the time reasonably required as a result of such event.

22.7 If an insured casualty occurs, Landlord shall make the loss adjustment with the insurance company for the insurance carried by Landlord.

22.8 Tenant waives the provisions of Civil Code Section 1932(2) and 1933(4) or any similar statute now existing or hereafter adopted governing destruction of the Premises, so that the parties' rights and obligations in the event of damage or destruction shall be governed by the provisions of this Lease.

23.1 In the event the whole of the Project shall be taken for any public or quasi-public purpose by any lawful power or authority by exercise of the right of appropriation, condemnation or eminent domain, or sold to prevent such taking, Tenant or Landlord may terminate this Lease effective as of the date possession is required to be surrendered to said authority.

23.2 In the event of a partial taking of the Project for any public or quasi-public purpose by any lawful power or authority by exercise of right of appropriation, condemnation, or eminent domain, or sold to prevent such taking, then Landlord may elect to terminate this Lease if such taking is of a material nature such as to make it uneconomical to continue use of the unappropriated portions for the purposes for which they were intended, and Tenant may elect to terminate this Lease if such taking is of material detriment to, and substantially interferes with, Tenant's use and occupancy of the Premises. In no event shall this Lease be terminated when such a partial taking does not have a material adverse effect upon Landlord or Tenant or both. Termination by either party pursuant to this section shall be effective as of the date possession is required to be surrendered to said authority.

23.3 If upon any taking of the nature described in this Article 23 this Lease continues in effect, then Landlord shall promptly proceed to restore the remaining portion of the Project, including all improvements and fixtures located in the Premises, to substantially their same condition prior to such partial taking; provided, however, Landlord's obligation hereunder shall be limited to the amount of the condemnation proceeds. Basic Annual Rent shall be abated proportionately on the basis of the square feet of the Rentable Area of the Project or Premises taken.

24.1 Late payment by Tenant to Landlord of Rent and other sums due will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult and impracticable to ascertain. Such costs include, but are not limited to, processing and accounting charges and late charges which may be imposed on Landlord by the terms of any mortgage or trust deed covering the Premises. Therefore, if any installment of Rent due from Tenant is not received by Landlord within ten (10) days of the date such payment is due, Tenant shall pay to Landlord an additional sum of five percent (5%) of the overdue rent as a late charge. The parties agree that this late charge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of late payment by Tenant. In addition to the late charge, Rent not paid within thirty (30) days of the date such payment is due shall bear interest from thirty (30) days after the date due until paid at the rate of ten percent (10%) per annum.

24.2 No payment by Tenant or receipt by Landlord of a lesser amount than the rent payment herein stipulated shall be deemed to be other than on account of the rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy provided. If at any time a dispute shall arise as to any amount or sum of money to be paid by Tenant to Landlord, Tenant shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment, and there shall survive the right on the part of Tenant to institute suit for recovery of the payment paid under protest.

24.3 If Tenant fails to pay any sum of money (other than Basic Annual Rent) required to be paid by it hereunder, or shall fail to perform any other act on its part to be performed hereunder, Landlord may, without waiving or releasing Tenant from any obligations of Tenant, but shall not be obligated to, make such payment or perform such act; provided, that such failure by Tenant continued for ten (10) days after written notice from Landlord demanding performance by Tenant was delivered to Tenant, or resulted or could have resulted in a violation of law or the cancellation of an insurance policy maintained by Landlord. All sums so paid or incurred by Landlord, together with interest thereon, from the date such sums were paid or incurred, at the annual rate equal to ten percent (10%) per annum shall be payable to Landlord on demand as Additional Rent.

24.4 The occurrence of any one or more of the following events shall constitute a default hereunder by Tenant:

(a) The failure by Tenant to make any payment of Rent, as and when due, where such failure shall continue for a period of five
(5) days, without the necessity of notice thereof from Landlord to Tenant;

(b) The failure by Tenant to observe or perform any obligation other than described in Section 24.4(a) to be performed by Tenant, where such failure shall continue for a period of thirty (30) days after written notice thereof from Landlord to Tenant; provided, however, that if the nature of Tenant's default is such that more than thirty (30) days are reasonably required to cure the default, then Tenant shall not be deemed to be in default if Tenant shall commence such cure within said thirty (30) day period and thereafter diligently prosecute the same to completion. Such notice shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section 1161;

(c) Tenant makes an assignment for the benefit of creditors;

(d) A receiver, trustee or custodian is appointed to, or does, take title, possession or control of all, or substantially all, of Tenant's assets;

(e) An order for relief is entered against Tenant pursuant to a voluntary or involuntary proceeding commenced under any chapter of the Bankruptcy Code;

(f) Any involuntary petition is filed against the Tenant under any chapter of the Bankruptcy Code and is not dismissed within ninety (90) days; or

(g) Tenant's interest in this Lease is attached, executed upon, or otherwise judicially seized and such action is not released within ninety (90) days of the action.

Notices given under this Section shall specify the alleged default and shall demand that Tenant perform the provisions of this Lease or pay the Rent that is in arrears, as the case may be, within the applicable period of time, or quit the Premises. No such notice shall be deemed a forfeiture or a termination of this Lease unless Landlord elects otherwise in such notice, and in no event shall a forfeiture or termination occur without such written notice.

24.5 In the event of a default by Tenant, and at any time thereafter, and without limiting Landlord in the exercise of any right or remedy which Landlord may have, Landlord shall be entitled to terminate Tenant's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Tenant shall immediately surrender possession of the Premises to Landlord. In such event Landlord shall have the immediate right to re-enter and remove all persons and property, and such property may be removed and stored in a public warehouse or elsewhere at the cost of, and for the account of Tenant, all without service of notice and without being deemed guilty of trespass, or becoming liable for any loss or damage which may be occasioned thereby. In the event that Landlord shall elect to so terminate this Lease, then Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant's default, including:

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

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

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

(d) Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligation under this Lease or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, the cost of restoring the Premises to the condition required under the terms of this Lease; plus

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

As used in Subsections (a), (b) and (c), the "time of award" shall mean the date upon which the judgment in any action brought by Landlord against Tenant by reason of such default is entered or such earlier date as the court may determine . As used in Subsections (a) and (b), the "worth at the time of award" shall be computed by allowing interest at the rate specified in Section 24.1. As used in Subsection (c) above, the "worth at the time of award" shall be computed by taking the present value of such amount using the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percentage point.

24.6 In the event of a default by Tenant, and if Landlord does not elect to terminate this Lease as provided in Section 24.5 or otherwise terminate Tenant's right to possession of the Premises, Landlord shall have the remedy described in Section 1951.4 of the Civil Code. Landlord may continue this Lease in effect, as lessee has the right to sublet or assign, subject only to reasonable limitations, pursuant to Section 25.1 and 25.2 for so long as Landlord does not terminate Tenant's right to possession of the Premises, and may enforce all of its rights and remedies under the Lease, including the right from time to time to recover Rent as it becomes due under the Lease. At any time thereafter, Landlord may elect to terminate this Lease and to recover damages to which Landlord is entitled.

24.7 Notwithstanding anything herein to the contrary, Landlord's reentry to perform acts of maintenance or preservation of, or in connection with efforts to relet, the Premises, or any portion thereof, or the appointment of a receiver upon Landlord's initiative to protect Landlord's interest under this Lease, shall not terminate Tenant's right to possession of the Premises or any portion thereof and, until Landlord does elect to terminate this Lease, this Lease shall continue in full force and Landlord may pursue all its remedies hereunder, including, without limitation, the right to recover from Tenant as they become due hereunder all Rent and other charges required to be paid by Tenant under the terms of this Lease.

24.8 All rights, options, and remedies of Landlord contained in this Lease shall be construed and held to be nonexclusive and cumulative. Landlord shall have the right to pursue any one or all of such remedies or any other remedy or relief which may be provided by law, whether or not stated in this Lease. No waiver of any default of Tenant hereunder shall be implied from any acceptance by Landlord of any rent or other payments due hereunder or by any omission by Landlord to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect defaults other than as specified in said waiver.

24.9 Termination of this Lease or Tenant's right to possession by Landlord shall not relieve Tenant from any liability to Landlord which has theretofore accrued or shall arise based upon events which occurred prior to the last to occur of
(i) the date of Lease termination or (ii) the date possession of Premises is surrendered.

24.10 Landlord shall not be in default unless Landlord fails to perform obligations required of Landlord within a reasonable time, but in no event later than thirty (30) days after written notice by Tenant specifying wherein Landlord has failed to perform such obligation; provided, however, that if the nature of Landlord's obligation is such that more than thirty (30) days are required for performance, then Landlord shall not be in default if Landlord advises Tenant in writing of the need for more than thirty (30) days to perform such obligation, commences performance within ten (10) days after Tenant serves the written notice of Landlord's failure to perform and thereafter diligently prosecutes the same to completion.

24.11 In the event of any default on the part of Landlord, Tenant will give notice by registered or certified mail to any beneficiary of a deed of trust or mortgagee of a mortgage covering the Premises whose address shall have been furnished to Tenant, and shall offer such beneficiary and/or mortgagee a reasonable opportunity to cure the default, but in no event less than thirty (30) days after the notice is given or thirty (30) days beyond any applicable cure period given to Landlord in this Article 24, whichever is later.

25.1 Except as hereinafter provided, Tenant shall not, either voluntarily or by operation of law, sell, assign, hypothecate or transfer this Lease, or sublet the Premises or any part thereof, or permit or suffer the Premises or any part thereof to be used or occupied as work space, storage space, concession or otherwise by anyone other than Tenant or Tenant's employees, without the prior written consent of Landlord in each instance, which consent shall not be unreasonably withheld or delayed.

25.2 If Tenant desires to assign this Lease to an entity into which Tenant is merged, with which Tenant is consolidated, or which acquires all or substantially all of the assets of Tenant, provided that the successor entity's net worth and liquid assets are equal or greater than Tenant's immediately prior to the assignment, and further provided that the assignee first executes, acknowledges and delivers to Landlord an agreement whereby the assignee agrees to be bound by all of the covenants and agreements in this Lease arising after the effective date of the transfer, then Landlord upon receipt of proof of foregoing, will consent to the assignment; provided however, Landlord's consent shall not be required if such transfers occur in a public stock exchange.

25.3 In the event Tenant desires to assign, hypothecate or otherwise transfer this Lease or sublet the Premises or any part thereof to a transferee other than one set forth in Section 25.2, then at least ten (10) days, but not more than forty-five (45) days, prior to the date when Tenant desires the assignment or sublease to be effective (the "ASSIGNMENT DATE"), Tenant shall give Landlord a notice (the "ASSIGNMENT NOTICE") which shall set forth the name, address and business of the proposed assignee or sublessee, information (including references and financial statements) concerning the reputation and financial ability of the proposed assignee or sublessee, the Assignment Date, any ownership or commercial relationship between Tenant and the proposed assignee or sublessee, and the consideration and all other material terms and conditions of the proposed assignment or sublease, all in such detail as Landlord shall reasonably require.

25.4 Landlord in making its determination as to whether consent should be given to a proposed assignment or sublease, may give consideration to (i) the financial strength of such successor (but may not withhold consent on this ground if the successor's net worth and liquid assets are equal to or greater than Tenant's immediately prior to the assignment), notwithstanding the assignor remaining liable for Tenant's performance, (ii) any use which such successor proposes to make of the Premises, and (iii) whether the proposed assignee or sublessee represents a potential risk of compromise of trade secrets of another tenant of the Project. If Landlord fails to deliver written notice of its determination to Tenant within fifteen (15) days following receipt of the Assignment Notice and the information required under Section 25.4, Landlord shall be deemed to have approved the request. As a condition to any assignment or sublease to which Landlord has given consent, any such assignee or sublessee must execute, acknowledge and deliver to Landlord an agreement whereby the assignee or sublessee agrees to be bound by all of the covenants and agreements in this Lease.

25.5 Any sale, assignment, hypothecation or transfer of this Lease or subletting of Premises that is not in compliance with the provisions of this Article 25 shall be void.

25.6 The consent by Landlord to an assignment or subletting shall not relieve Tenant or any assignee of this Lease or sublessee of the Premises from obtaining the consent of Landlord to any further assignment or subletting or as releasing Tenant or any assignee or sublessee of Tenant from full and primary liability.

25.7 If Tenant shall sublet the Premises or any part thereof, Tenant hereby immediately and irrevocably assigns to Landlord, as security for Tenant's obligations under this Lease, all rent from any subletting of all or a part of the Premises, and Landlord as assignee of Tenant, or a receiver for Tenant appointed on Landlord's application, may collect such rent and apply it toward Tenant's obligations under this Lease; except that, until the occurrence of an act of default by Tenant, Tenant shall have the right to collect such rent. Furthermore, Tenant hereby immediately and irrevocably assigns to Landlord, as security for Tenant's obligations under this Lease, any security deposit received from the subtenant, which Landlord shall hold pursuant to the terms of the sublease. The security deposit shall be transferable by Landlord to a successor Landlord and to Landlord's mortgage lender which is the beneficiary of a deed of trust encumbering the Premises, provided such lender agrees to hold the security deposit pursuant to the terms of the sublease and this Lease.

25.8 Notwithstanding any subletting or assignment Tenant shall remain fully and primarily liable for the payment of all Rent and other sums due, or to become due hereunder, and for the full performance of all other terms, conditions, and covenants to be kept and performed by Tenant. The acceptance of rent or any other sum due hereunder, or the acceptance of performance of any other term, covenant, or condition hereof, from any other person or entity shall not be deemed to be a waiver of any of the provisions of this Lease or a consent to any subletting or assignment of the Premises. Landlord shall not withhold consent to an assignment back to the original Tenant hereunder from a subsequent assignee.

25.9 Any sublease of the Premises shall be subject and subordinate to the provisions of this Lease, shall not extend beyond the term of this Lease, and shall provide that the sublessee shall attorn to Landlord, at Landlord's sole option, in the event of the termination of this Lease. Landlord and any lender shall upon Tenant's request provide any sublessee of the entirety of the Premises with a recognition and nondisturbance agreement in the form described in Article 35 on the condition that the sublessee agrees to attorn to Landlord on exactly the same terms and conditions as this Lease. Any assignment of the Lease or sublease of the Premises shall provide that the assignee or sublessee shall provide financial statements to Landlord as reasonably required by present and prospective lenders and purchasers of the Project.

25.10 In the event Tenant assigns, hypothecates or otherwise transfer this Lease or sublets the Premises Tenant shall pay to Landlord, as Additional Rent, fifty percent (50%) of the rent and other consideration received from the transferee during the term of this Lease in excess of Rent payable to Landlord under this Lease, after tenant has recouped any reasonable commissions and legal expenses occasioned by such transfer and payable to third parties.

25.11 Notwithstanding any of the foregoing provisions to the contrary, in the event Tenant desires to assign this Sublease or sublet the entire Premises to a transferee other than to a transferee describe in Section 25.2, Landlord may elect to terminate this Lease by written notice given by Landlord to Tenant within fifteen (15) days following receipt of the Assignment Notice and the information required under Section 25.3.

26.1 Any and all disputes in any way arising out of or relating to this Lease shall be submitted to binding arbitration before the American Arbitration Association. The arbitration shall be presided over by one arbitrator. The appointment of the arbitrator shall be in accordance with California Code of Civil Procedure Section 1281.6. Prior to the arbitration hearing, the Landlord and Tenant shall exchange all documents they intend to rely on at the hearing. If approved by the arbitrator, the Landlord and Tenant may also take depositions or engage in other forms of written discovery.

26.2 Notwithstanding the foregoing, Landlord may prosecute a court action for unlawful detainer in order to effect an eviction of tenant to the extent permitted by this Lease.

26.3 If either party commences an arbitration proceeding or court action, the prevailing party shall be entitled to have and recover from the other party reasonable attorneys' fees, expert witness fees and costs of suit.

27.1 In the event a debtor, trustee, or debtor-in-possession under the Bankruptcy Code, or other person with similar rights, duties and powers under any other law, proposes to cure any default under this Lease or to assume or assign this Lease, and is obliged to provide adequate assurance to Landlord that (i) a default will be cured, (ii) Landlord will be compensated for its damages arising from any breach of this Lease, or (iii) future performance under this Lease will occur, then adequate assurance shall include any or all of the following, as determined by the Bankruptcy Court: (a) those acts specified in the Bankruptcy Code or other law as included within the meaning of adequate assurance; (b) a cash payment to compensate Landlord for any monetary defaults or damages arising from a breach of this Lease; (c) the credit worthiness and desirability, as a tenant, of the person assuming this Lease or receiving an assignment of this Lease, at least equal to Landlord's customary and usual credit worthiness requirements and desirability standards in effect at the time of the assumption or assignment, as determined by the Bankruptcy Court; and (d) the assumption or assignment of all of Tenant's interest and obligations under this Lease.

28.1 The term "LANDLORD" as used in this Lease, so far as covenants or obligations on the part of Landlord are concerned, shall be limited to mean and include only Landlord or the successor-in-interest of Landlord under this Lease at the time in question. In the event of any transfer, assignment or conveyance of Landlord's title or leasehold, the Landlord herein named (and in case of any subsequent transfers or conveyances, the then grantor and any prior grantors) shall be automatically freed and relieved from and after the date of such transfer, assignment or conveyance of all liability for the performance of any covenants or obligations contained in this Lease thereafter to be performed by Landlord and, without further agreement, the transferee of such title or leasehold shall be deemed to have assumed and agreed to observe and perform any

and all obligations of Landlord hereunder, during its ownership of the Premises. Landlord may transfer its interest in the Premises or this Lease without the consent of Tenant and such transfer or subsequent transfer shall not be deemed a violation on the part of Landlord or the then grantor of any of the terms or conditions of this Lease.

29.1 Each party shall, within fifteen (15) days of written notice from the other party, execute, acknowledge and deliver to the other party a statement in writing on a form reasonably requested by a proposed lender, purchaser, assignee or subtenant (i) certifying that 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) and the dates to which the rental and other charges are paid in advance, if any, (ii) acknowledging that there are not, to each party's knowledge, any uncured defaults on the part of Landlord or Tenant hereunder (or specifying such defaults if any are claimed) and (iii) setting forth such further information with respect to this Lease or the Premises as may be reasonably requested thereon. Any such statement may be relied upon by any prospective lender, purchaser, assignee or subtenant of all or any portion of the Premises.

30.1 Except as provided in Section 10.5 and in this Article 30, all fixtures and personal property owned by Tenant ("TENANT'S REMOVABLE PROPERTY") shall be and remain the property of Tenant, and may be removed by Tenant at any time. Landlord waives any and all rights, title and interest Landlord now has, or hereafter may have, whether statutory or otherwise, in Tenant's Removable Property. At the expiration or earlier termination of this Lease, Tenant shall remove all Tenant's Removable Property in accordance with this Lease, unless Landlord shall have otherwise agreed in writing.

30.2 The Project, Building and Tenant Improvements, and all fixtures and personal property owned by Landlord, shall be and remain the property of Landlord, and shall, upon the expiration or earlier termination of this Lease, remain upon and be surrendered with the Premises as a part thereof.

30.3 Notwithstanding Section 30.1, Tenant may not remove any property if such removal would cause material damage to the Premises, unless such damage can be and is repaired by Tenant. Furthermore, Tenant shall repair any damage to the Premises caused by Tenant's removal of any such property, and shall, prior to the expiration or earlier termination of this Lease, restore and return the Premises to substantially the same condition they were in when first occupied by Tenant, reasonable wear and tear excepted. At a minimum, even if they are determined to be fixtures or personal property owned by Tenant, and notwithstanding the provisions of Section 30.1, Tenant shall leave in place and repair any damage to the interior floors, walls, doors and ceilings of the Premises, all cabling and wiring in the Premises, and the heating, ventilation, air conditioning, plumbing, and electrical systems in the Premises; all such property shall become the property of Landlord upon the expiration or earlier termination of this Lease, and shall remain upon and be surrendered with the Premises as a part thereof. The provisions of Article 17 shall apply to any restoration work under this Article as if the restoration was an alteration,

addition or improvement thereunder. Should Tenant require any period beyond the expiration or earlier termination of the Lease to complete such restoration, Tenant shall be a tenant at sufferance subject to the provisions of Section 12.2 hereof, unless tenant obtains Landlord's consent pursuant to Section 12.1 prior to the termination or earlier termination of the Lease.

30.4 If Tenant shall fail to remove any fixtures or personal property which it is entitled to remove under this Article 30 from the Premises prior to termination of this Lease, then Landlord may dispose of the property under the provisions of Section 1980 et seq. of the California Civil Code, as such provisions may be modified from time to time, or under any other applicable provisions of California law.

31.1 If Landlord is in default of this Lease, and as a consequence, Tenant recovers a money judgment against Landlord, the judgment shall be satisfied only out of the proceeds of sale received on execution of the judgment and levy against the right, title, and interest of Landlord in the Project of which the Premises are a part, or, in the sole discretion of the Tenant, out of rent or other income from the Project receivable by Landlord or out of the consideration received by Landlord from the sale or other disposition of all or any part of Landlord's right, title, and interest in the Building and Project of which the Premises are a part.

31.2 Neither Landlord nor Landlord's Agents shall be personally liable for any deficiency except to the extent liability is based upon willful and intentional misconduct and except to the extent a court determines the existence of an alter ego relationship. If Landlord is a partnership or joint venture, the partners of such partnership shall not be personally liable and no partner of Landlord shall be sued or named as a party in any suit or action, or service of process be made against any partner of Landlord, except as may be necessary to secure jurisdiction of the partnership or joint venture or to the extent liability is caused by gross negligence, willful and intentional misconduct. If Landlord is a corporation, other than as provided above, the shareholders, directors, officers, employees, and/or agents of such corporation shall not be personally liable and no shareholder, director, officer, employee, or agent of Landlord shall be sued or named as a party in any suit or action, or service of process be made against any shareholder, director, officer, employee, or agent of Landlord, except as may be necessary to secure jurisdiction of the corporation. If Landlord is a limited liability company, other than as provided above, the members, managers, officers, employees, and/or agents of such limited liability company shall not be personally liable and no member, manager, officer, employee, or agent of Landlord shall be sued or named as a party in any suit or action, or service of process be made against any member, manager, officer, employee, or agent of Landlord, except as may be necessary to secure jurisdiction of the corporation. No partner, shareholder, director, member, manager, employee, or agent of Landlord shall be required to answer or otherwise plead to any service of process and no judgment will be taken or writ of execution levied against any partner, shareholder, director, member, manager, employee, or agent of Landlord.

31.3 Each of the covenants and agreements of this Article 31 shall be applicable to any covenant or agreement either expressly contained in this Lease or imposed by statute or by common law.

32.1 Landlord reserves full control over the Project to the extent not inconsistent with Tenant's quiet enjoyment and use of Premises. This reservation includes the right to establish ownership of the Building separate from fee title to the real property underlying the Building, to divide the Project into more than one lot, and to construct other buildings or improvements on the real property, provided Tenant's quiet enjoyment of the Premises is not affected. Tenant shall, should Landlord so request, promptly join with Landlord in execution of such documents as may be appropriate to assist Landlord to implement any such action provided Tenant need not execute any document which is of a nature wherein liability is created in Tenant or if by reason of the terms of such document Tenant will be deprived of the quiet enjoyment and use of the Premises as granted by this Lease.

32.2 Landlord reserves the right to enter the Premises, and to cause its contractors to enter the Premises, upon reasonable prior written notice to Tenant, to maintain, repair or replace mechanical (HVAC), electrical, plumbing, sprinkler and other systems and equipment, and to install improvements, within the Premises or within adjoining premises (including access through the Premises to areas of the Building above and below the Premises). Tenant acknowledges that because of the design and configuration of the Building, and the nature of the Building as a multi-tenant biotech facility, that temporary access through the Premises to other areas of the Building will be reasonably necessary from time to time, and that such access may interfere with Tenant's quiet enjoyment of the Premises; provided, however, that such interference shall not materially interfere with Tenant's use and occupancy of the Premises. There shall be no abatement of Rent and no liability of Landlord by reason of any injury to or interference with Tenant's business arising from the making of any repairs, alterations or improvements to adjoining premises unless such injury or interference is unreasonable and is the result of Landlord's grossly negligent or willful act or omission.

33.1 So long as Tenant is not in default, Landlord covenants that Landlord or anyone acting through or under Landlord will not disturb Tenant's occupancy of the Premises except as permitted by the provisions of this Lease and that Landlord shall use reasonable efforts to enforce the lease obligations of tenants of the balance of the Building and Project to the extent they might otherwise disturb Tenant's occupancy.

34.1 Tenant shall execute and deliver to Landlord on the expiration or termination of this Lease, immediately on Landlord's request, a quitclaim deed to the Premises and Project or other document in recordable form suitable to evidence of record termination of this Lease.

35.1 This lease shall be subject to and subordinate to the lien of any mortgage or deed of trust now or hereafter in force against the Project and Building of which the Premises are a part, and to all advances made or hereafter to be made upon the security thereof without the necessity of the execution and delivery of any further instruments on the part of Tenant to effectuate such subordination. However, if any such mortgagee or beneficiary so elects at any time prior to or following a default by Tenant, this Lease shall be deemed prior in lien to any such mortgage or deed of trust regardless of date and Tenant will execute a statement in writing to such effect at Landlord's request in a form reasonably satisfactory to Tenant

35.2 Notwithstanding the foregoing, Tenant shall execute and deliver upon demand such further instrument or instruments evidencing such subordination of this Lease to the lien of any such mortgage or deed of trust as may be required by Landlord, provided that the lienholder, beneficiary, or mortgagee concurrently therewith executes and delivers to Tenant a non-disturbance agreement in recordable form.

35.3 In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Landlord covering the Premises, the Tenant shall at the election of the purchaser at such foreclosure or sale attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Landlord under this Lease in accordance with the terms of the non-disturbance Agreement.

36.1 No surrender of possession of any part of the Premises shall release Tenant from any of its obligations hereunder unless accepted by Landlord.

36.2 The voluntary or other surrender of this Lease by Tenant shall not work a merger, unless Landlord consents, and shall, at the option of Landlord, operate as an assignment to it of any or all subleases or subtenancies.

37.1 No provision of this Lease may be modified, amended or added to except by an agreement in writing executed by Landlord and Tenant. The waiver by Landlord or Tenant of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition herein contained.

38.1 During the term, Tenant, at its sole cost, shall comply with all federal, state and local laws, statutes, ordinances, codes, regulations and orders relating to the receiving, handling, use, storage, accumulation, transportation, generation, spillage, migration, discharge, release and disposal of Hazardous Material (as defined below) in or about the Premises. Tenant shall

not cause or permit any Hazardous Material to be brought upon, kept or used in or about the Premises by Tenant, its agents, employees, contractors, invitees or subtenants, in a manner or for a purpose prohibited by any federal, state or local agency or authority. The accumulation of Hazardous Material shall be in approved containers and removed from the Premises by duly licensed carriers.

38.2 Tenant shall immediately provide Landlord with telephonic notice, which shall promptly be confirmed by written notice, of any and all spillage, discharge, release and disposal of Hazardous Material onto or within the Premises, including the soils and subsurface waters thereof, which by law must be reported to any federal, state or local agency, and any injuries or damages resulting directly or indirectly therefrom. Further, Tenant shall deliver to Landlord each and every notice or order, when said order or notice identifies a violation which may have the potential to adversely impact the Premises, received from any federal, state or local agency concerning Hazardous Material and the possession, use and/or accumulation thereof promptly upon receipt of each such notice or order by Tenant. Landlord shall have the right, upon reasonable notice, to inspect and copy each and every notice or order received from any federal, state or local agency concerning Hazardous Material and the possession, use and/or accumulation thereof.

38.3 Tenant shall be responsible for and shall indemnify, protect, defend and hold harmless Landlord and Landlord's Agents from any and all liability, damages, injuries, causes of action, claims, judgments, costs, penalties, fines, losses, and expenses which arise during or after the term of this Lease and which result from Tenant's (or from Tenant's Agents, assignees, subtenants, employees, agents, contractors, licensees, or invitees) receiving, handling, use, storage, accumulation, transportation, generation, spillage, migration, discharge, release or disposal of Hazardous Material in, upon or about the Premises, including without limitation (i) diminution in value of the Premises or any portion of the Project, (ii) damages for the loss or restriction on use of any portion or amenity of the Premises or Project, (iii) damages arising from any adverse impact on marketing of space in the Premises or the Project, (iv) damages and the costs of remedial work to other property in the vicinity of the Project owned by Landlord or an affiliate of Landlord, and (v) reasonable consultant fees, expert fees, and attorneys' fees. Landlord shall be responsible for and shall indemnify, protect, defend and hold harmless Tenant on the same basis as above for any claims which result from Landlord's or from Landlord's Agents receiving, handling, use, storage, accumulation, transportation, generation, spillage, migration, discharge, release or disposal of Hazardous Material in, upon or about the Premises or any Hazardous Material at the Project existing prior to the Term Commencement Date.

38.4 The indemnification of Landlord and Landlord's Agents by Tenant pursuant to the preceding Section 39.3 includes, without limiting the generality of Section 39.3, reasonable costs incurred in connection with any investigation of site conditions or any cleanup, remedial, removal or restoration work required by any federal, state or local governmental agency or political subdivision because of Hazardous Material present in the soil, subsoil, ground water, or elsewhere on, under or about the Premises, or on, under or about any other property in the vicinity of the Project owned by Landlord or an affiliate of Landlord, to the extent caused by Tenant. Without limiting the foregoing, if the presence of any Hazardous Material on the Premises caused or permitted by Tenant results in any contamination of the Premises, or underlying soil or groundwater, Tenant shall promptly take all actions at its sole expense as are necessary to return the Premises to that

condition required by applicable law as applied by any government entity with proper jurisdiction with regard thereto, provided that Landlord's approval of such action shall first be obtained, which approval shall not be unreasonably withheld, except that Tenant shall not be required to obtain Landlord's prior approval of any action of an emergency nature reasonably required or any action mandated by a governmental authority, but Tenant shall give Landlord prompt notice thereof.

38.5 Landlord acknowledges that it is not the intent of this Article 39 to prohibit Tenant from operating its business as described in Article 10 or to unreasonably interfere with the operation of Tenant's business. Tenant may operate its business according to the custom of the industry so long as the use or presence of Hazardous Material is strictly and properly monitored according to all applicable governmental requirements. Any approval or consent required by this Section 39.5 shall not be unreasonably withheld, conditioned or delayed.

38.6 As a material inducement to Landlord to allow Tenant to use Hazardous Material in connection with its business, Tenant agrees to provide to Landlord a list identifying each type of Hazardous Material to be present in or about the Premises and setting forth all governmental approvals or permits required in connection with the presence of Hazardous Material in or about the Premises ("HAZARDOUS MATERIAL INVENTORY"). Tenant shall deliver a Hazardous Material Inventory to Landlord no later than twenty (20) days (i) prior to the occupancy of any portion of the Premises or the placement of equipment anywhere on the Project, (ii) prior to any increase in the types or amounts of Hazardous Material, (iii) after a request of Landlord reasonably required for purposes of monitoring the Project, and (iv) prior to the initiation by Tenant of any changes in the Premises or elsewhere on the Project which involve any increase in the types or amounts of Hazardous Material, and shall deliver a Hazardous Material Inventory to Landlord in any event annually no later than December 31 of each year. For each type of Hazardous Material listed, the Hazardous Material Inventory shall include the (i) chemical name; (ii) material state (solid, liquid, gas, cryogen); (iii) concentration; (iv) storage amount and storage condition (cabinets or no cabinets); (v) use amount and use condition (open use or closed use); (vi) location (room number/identification); and (vii) chemical abstract service (CAS) number, if known. In the event that Tenant's Hazardous Material Inventory indicates non-compliance with this Lease or applicable building and fire code requirements, Tenant shall at its expense diligently take steps to bring its storage and use of Hazardous Material into compliance.

38.7 Tenant further agrees to make available to Landlord, upon Landlord's reasonable request, true and correct copies of the following documents ("HAZARDOUS MATERIAL DOCUMENTS"): governmental approvals or permits required in connection with the presence of Hazardous Material on the Premises; a copy of the Hazardous Material business plan prepared pursuant to Health and Safety Code Section 25500 et seq.; documents relating to the handling, storage, disposal and emission of Hazardous Material, including: permits; approvals; reports and correspondence; notice of violations of any laws; plans relating to the installation of any storage tanks to be installed in or under the Premises (provided said installation of tanks shall be permitted only after Landlord has given Tenant its written consent to do so, which consent may not be unreasonably withheld); and all closure plans or any other documents required by any and all federal, state and local governmental agencies and authorities for any storage tanks installed in, on or about the Premises for the closure of any such tanks. Tenant shall not be required, however, to provide Landlord with that portion of any document which contains information of a proprietary nature and which, in

and of itself, does not contain a reference to any Hazardous Material which is not otherwise identified to Landlord in such documentation, unless any such Hazardous Material Document names Landlord as an "owner" or "operator" of the facility in which Tenant is conducting its business. It is not the intent of this subsection to provide Landlord with information which could be detrimental to Tenant's business should such information become possessed by Tenant's competitors. Landlord shall treat all information furnished by Tenant to Landlord pursuant to this Article 39 as confidential and shall not disclose such information to any person or entity, except as provided in this Article 39, without Tenant's prior written consent, which consent shall not be unreasonably withheld or delayed, except as required by law.

38.8 Notwithstanding other provisions of this Article 39, it shall be a default under this Lease, and Landlord shall have the right to terminate the Lease and/or pursue its other remedies under Article 24, in the event that (i) Tenant's use of the Premises for the generation, storage, use, treatment or disposal of Hazardous Material is in a manner or for a purpose prohibited by applicable law unless Tenant is diligently pursuing compliance with such law, (ii) Tenant has been required by any governmental authority to take remedial action in connection with Hazardous Material contaminating the Premises if the contamination resulted from Tenant's action or use of the Premises, unless Tenant is diligently pursuing compliance with such requirement, or (iii) Tenant is subject to an enforcement order issued by any governmental authority in connection with Tenant's use, disposal or storage of a Hazardous Material on the Premises, unless Tenant is diligently seeking compliance with such enforcement order.

38.9 Notwithstanding the provisions of Article 25, if any anticipated use of the Premises by a proposed assignee or subtenant involves the generation or storage, use, treatment or disposal of Hazardous Material and (i) the proposed assignee or sublessee has been required by any governmental authority to take remedial action in connection with Hazardous Material contaminating a property if the contamination resulted from such party's action or use of the property in question and has failed to take such action, or (ii) the proposed assignee or sublessee is subject to a final, unappealable enforcement order issued by any governmental authority in connection with such party's use, disposal or storage of Hazardous Material of a type such proposed assignee or sublessee intends to use in the Premises and shall have failed to comply with such order, it shall not be unreasonable for Landlord to withhold its consent to an assignment or subletting to such proposed assignee or sublessee.

38.10 Landlord represents that, to the best of its knowledge, as of the date of this Lease, there is no Hazardous Material on the Premises. Landlord shall provide Tenant with a current Phase I Environmental Site Assessment, and any current Phase II Environmental Site Assessment recommended therein, at the time of the completion of the current renovation of the Project to a biotech facility. Should the environmental site assessment(s) disclose the presence of Hazardous Material beyond legally permissible levels, Landlord shall correct the deficiencies to Tenant's reasonable satisfaction and shall cause updates to the environmental site assessment(s) to be issued reflecting the remedy. The environmental site assessment(s) and all updates thereto are hereinafter referred to as the "BASE LINE REPORT," and shall be deemed conclusive as to the condition of the Premises, unless, within ninety (90) days of receipt, Tenant causes an inspection of its own to be conducted, which inspection discloses the presence of Hazardous Material materially different from that disclosed in the Base Line Report.

38.11 At any time prior to the expiration or earlier termination of the term of the Lease, Landlord shall have the right to enter upon the Premises, upon reasonable prior notice to Tenant, at all reasonable times and at reasonable intervals in order to conduct appropriate tests regarding the presence, use and storage of Hazardous Material, and to inspect Tenant's records with regard thereto. Tenant will pay the reasonable costs of any such test which demonstrates that contamination in excess of permissible levels has occurred and such contamination was caused by Tenant's use of the Premises during the term of the Lease. Tenant shall correct any deficiencies identified in any such tests in accordance with its obligations under this Article 39 to the extent the result of Tenant's use of the Premises during the term of this Lease.

38.12 Tenant shall at its own expense cause an environmental site assessment of the Premises to be conducted and a report thereof delivered to Landlord upon the expiration or earlier termination of the Lease, such report to be as complete and broad in scope as is necessary to identify any impact on the Premises Tenant's operations might have had (hereinafter referred to as the "EXIT REPORT"). Tenant shall correct any deficiencies identified in the Exit Report in accordance with its obligations under this Article 39 prior to the expiration or earlier termination of this Lease. This Article 39 is the exclusive provision in this Lease regarding clean-up, repairs or maintenance arising from receiving, handling, use, storage, accumulation, transportation, generation, spillage, migration, discharge, release or disposal of Hazardous Material in, upon or about the Premises, and the provisions of Articles 7, 10, 18, and 20 shall not apply thereto.

38.13 Tenant's obligations under this Article 39 shall survive the termination of the Lease.

38.14 As used herein, the term "HAZARDOUS MATERIAL" means any hazardous or toxic substance, material or waste which is or becomes regulated by any local governmental authority, the State of California or the United States Government. The term "Hazardous Material" includes, without limitation, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste" or "restricted hazardous waste" under Sections 25515, 25117 or 25122.7, or listed pursuant to Section 25140, of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 2, Chapter 6.8 (Carpenter-Presly-Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," hazardous substance" or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Substances), (v) petroleum,
(vi) asbestos, (vii) listed under Article 9 and defined as hazardous or extremely hazardous pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (viii) designated as a "hazardous substance" pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. Section 1317), (ix) defined as a "hazardous waste" pursuant to
Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et. seq. (42 U.S.C. Section 6903), or (x) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. Section 9601 et. seq. (42 U.S.C.
Section 9601).

39.1 TERMS AND HEADINGS. Where applicable in this Lease, the singular includes the plural and the masculine or neuter includes the masculine, feminine and neuter. The section headings of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part hereof.

39.2 EXAMINATION OF LEASE. Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option for lease, and it is not effective as a lease or otherwise until execution by and delivery to both Landlord and Tenant.

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

39.4 COVENANTS AND CONDITIONS. Each provision of this Lease performable by Tenant shall be deemed both a covenant and a condition.

39.5 CONSENTS. Whenever consent or approval of either party is required, that party shall not unreasonably withhold or delay such consent or approval, except as may be expressly set forth to the contrary.

39.6 ENTIRE AGREEMENT. The terms of this Lease are intended by the parties as a final expression of their agreement with respect to the terms as are included herein, and may not be contradicted by evidence of any prior or contemporaneous agreement.

39.7 SEVERABILITY. Any provision of this Lease which shall prove to be invalid, void, or illegal in no way affects, impairs or invalidates any other provision hereof, and such other provisions shall remain in full force and effect; provided, however, if the provisions of this Lease relating to Tenant's stated use of the Premises shall be determined by any government agency having jurisdiction to be invalid or unenforceable, this Lease, effective as of the date of such determination, shall be deemed to be void and of no further force and effect.

39.8 RECORDING. Either Landlord or Tenant may record a short form memorandum hereof, subject to the requirement to execute and deliver a quitclaim deed pursuant to the provisions of Section 34.1 hereof.

39.9 IMPARTIAL CONSTRUCTION. The language in all parts of this Lease shall be in all cases construed as a whole according to its fair meaning and not strictly for or against either Landlord or Tenant.

39.10 INUREMENT. Each of the covenants, conditions, and agreements herein contained shall inure to the benefit of and shall apply to and be binding upon the parties hereto and their respective heirs, legatees, devisees, executors, administrators, successors, assigns, sublessees, or any person who may come into possession of said Premises or any part thereof in any manner whatsoever. Nothing in this Section 40.10 contained shall in any way alter the provisions against assignment or subletting in this Lease provided.

39.11 FORCE MAJEURE. If either party cannot perform any of its obligations (other than Tenant's obligation to pay Rent), or is delayed in such performance (other than Tenant's obligation to pay Rent), due to events beyond such party's control, the time provided for performing such obligations shall be extended by a period of time equal to the delay attributable to such events. Events beyond a party's control include, but are not limited to, acts of terrorism, acts of God (including earthquake), war, civil commotion, labor disputes, strikes, fire, flood or other casualty, shortage of labor or material, government regulation or restriction and weather conditions, but do not include financial inability to perform.

39.12 NOTICES. Any notice, consent, demand, bill, statement, or other communication required or permitted to be given hereunder must be in writing and may be given by personal delivery, by facsimile transmission, or by mail, certified and return receipt requested, and if given by personal delivery or facsimile transmission shall be deemed given on the date of delivery or transmission, and if given by mail shall be deemed sufficiently given three (3) days after time when deposited in United States Mail if sent by registered or certified mail, addressed to Tenant at the Premises, or to Tenant or Landlord at the addresses shown in Section 2.1.10 hereof. Either party may, by notice to the other given pursuant to this Section, specify additional or different addresses for notice purposes.

39.13 AUTHORITY TO EXECUTE LEASE. Landlord and Tenant each acknowledge that it has all necessary right, title and authority to enter into and perform its obligations under this Lease, that this Lease is a binding obligation of such party and has been authorized by all requisite action under the party's governing instruments, that the individuals executing this Lease on behalf of such party are duly authorized and designated to do so, and that no other signatories are required to bind such party.

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

LANDLORD:

Dated: July 1, 2004

SAN DIEGO SCIENCE CENTER LLC
A California limited liability company

By: SD Science Center, Inc.
A California corporation
Its Manager

By: ______________________________ John P. Bonanno
President

(Signatures continued on following page.)

TENANT:

Dated: July ____, 2004

AETHLON MEDICAL, INC.
A Nevada corporation

By: ______________________________
Name: James A. Joyce
Title: Chairman and Chief Executive Officer

EXHIBIT A

THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF SAN DIEGO, AND IS DESCRIBED AS FOLLOWS:

PARCEL A:

LOT 1 OF HANSEN'S TRACT, IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 4515, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, APRIL 20, 1960.

PARCEL B:

LOT 1 OF HARRISON TRACT, IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 4786, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 2, 1961.

TOGETHER WITH THAT PORTION OF THE NORTHWESTERLY HALF OF BUNKER HILL STREET ADJOINING A PORTON OF SAID LOT 1 ON THE SOUTHEAST AS VACATED AND CLOSED TO PUBLIC USE BY RESOLUTION NO. 215408, RECORDED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY MARCH 2, 1976 AS FILE NO. 76-061804 OF OFFICIAL RECORDS.

EXCEPTING THEREFROM THAT PORTION OF VACATED BUNKER HILL STREET LYING WITHIN THE FOLLOWING DESCRIBED PARCEL:

THAT PORTION OF LOT 4 OF EUREKA LEMON TRACT, IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 753, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 19, 1893, TOGETHER WITH A PORTION OF THE NORTHWESTERLY 15.00 FEET OF THAT 30.00 FOOT WIDE UNNAMED ROAD (NOW KNOWN AS BUNKER HILL STREET), LYING SOUTHEASTERLY OF AND ADJACENT TO SAID LOT 4 AS VACATED AND CLOSED ON FEBRUARY 25, 1976 BY RESOLUTION NO. 215408 OF THE COUNCIL OF THE CITY OF SAN DIEGO, RECORDED MARCH 2, 1976 AS FILE NO. 76-061804 OF OFFICIAL RECORDS AND BEING MORE PARTICULARLY DESCRIBED AS A WHOLE AS FOLLOWS:

COMMENCING AT THE MOST SOUTHERLY CORNER OF LOT 1 OF HARRISON TRACT, ACCORDING TO MAP THEREOF NO. 4786, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 2, 1961, BEING ALSO A POINT ON THE NORTHWESTERLY LINE OF THE SOUTHEASTERLY 10.00 FEET OF SAID LOT 4 OF MAP NO. 753; THENCE ALONG THE SOUTHEASTERLY LINE OF SAID MAP NO. 4786, NORTH 63(Degree)14'32" EAST (RECORD - NORTH 62(Degree)40'35" EAST), 431.46 FEET TO THE BEGINNING OF A TANGENT 125.00

FOOT RADIUS CURVE, CONCAVE NORTHWESTERLY, BEING AN ANGLE POINT IN THE BOUNDARY OF LAND DESCRIBED IN DIRECTOR'S DEED TO PACIFIC BEACH MEDICAL ASSOCIATES, LTD., RECORDED FEBRUARY 8, 1972 AS FILE NO. 31151 OF OFFICIAL RECORDS AND BEING THE TRUE POINT OF BEGINNING; THENCE ALONG THE BOUNDARY OF SAID DIRECTOR'S DEED AS FOLLOWS: NORTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 40(Degree)31'54" A DISTANCE OF 88.43 FEET; AND NON-TANGENT TO SAID CURVE, NORTH 04(Degree)17'58" EAST, 46.82 FEET TO THE MOST NORTHERLY CORNER OF SAID LAND BEING ALSO AN ANGLE POINT IN THE SOUTHWESTERLY BOUNDARY OF CALIFORNIA STATE HIGHWAY II-SD-5, AS CREATED BY SAID DIRECTOR'S DEED; THENCE ALONG SAID SOUTHWESTERLY BOUNDARY, SOUTH 39(Degree)36'43" EAST TO THE CENTER LINE OF THE ORIGINAL 30.00 FOOT WIDE UNNAMED LYING SOUTHEASTERLY OF AND ADJACENT TO SAID LOT 4 AS SHOWN ON SAID MAP NO. 753; THENCE ALONG SAID CENTER LINE, SOUTH 63(Degree)14'32" WEST TO A POINT ON THE ARC OF THAT 70.00 FOOT RADIUS CURVE, CONCAVE SOUTHWESTERLY IN THE NORTHEASTERLY LINE OF RELINQUISHMENT PARCEL 3 AS SHOWN ON STATE HIGHWAY MAP NO. 100, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 8, 1969 AS FILE NO. 81182 OF OFFICIAL RECORDS; THENCE ALONG SAID NORTHEASTERLY LINE, NORTHWESTERLY ALONG THE ARC OF SAID CURVE TO A LINE WHICH BEARS AT RIGHT ANGLES, SOUTH 26(Degree)45'28" EAST FROM THE TRUE POINT OF BEGINNING, BEING ALSO A POINT ON THE SOUTHWESTERLY LINE OF THAT PORTION OF CALIFORNIA STATE HIGHWAY XI-SD-2 (NOW INTERSTATE 5), AS DESCRIBED IN DEED TO THE STATE OF CALIFORNIA, RECORDED MAY 18, 1953 AS DOCUMENT NO. 67093 IN BOOK 4857, PAGE 559 OF OFFICIAL RECORDS, AND BEING ALSO AN ANGLE POINT IN THE BOUNDARY OF SAID DIRECTOR'S DEED, A RADIAL LINE OF SAID CURVE BEARS NORTH 10(Degree)30'29" WEST TO SAID ANGLE POINT; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID LAND DESCRIBED IN SAID DIRECTOR'S DEED, NORTH 26(Degree)45'28" WEST TO THE TRUE POINT OF BEGINNING.

EXHIBIT B

EXHIBIT C

EXHIBIT D

Pursuant to Section 3.3 of that certain Lease dated ____________________, 20___, by and between ____________________, a ____________________, Landlord, and ____________________, a ____________________, Tenant, for the Premises described in the Lease in the Building at ____________________, we hereby acknowledge that the Term Commencement Date of the Lease, as defined therein, is _______________, 20___, and the Term Expiration Date of the Lease, as defined therein, is _______________, 20___.

IN WITNESS WHEREOF, the parties hereto have executed this Acknowledgment of Term Commencement Date as of __________, 20___.

LANDLORD:

SAN DIEGO SCIENCE CENTER LLC
A California limited liability company

By: SD Science Center, Inc.
A California corporation
Its Manager

By: ______________________________ W. Neil Fox, III
Chief Executive Officer

TENANT:

By: ______________________________
Name: ________________________
Title: _________________________

EXHIBIT E

EXHIBIT F

A1.1 SITE PLAN

A3.3 EXITING PLAN - LEVEL 3

A4.3 DIMENSION FLOOR PLAN - LEVEL 3

A5.3 DOOR / WALL PLAN - LEVEL 3

A6.3 REFLECTED CEILING PLAN - LEVEL 3

A7.1 SCHEDULES - LEVELS 1, 2, 3

A8.1 WALL TYPES / DETAILS

A8.2 DETAILS

A9.1 RESTROOM PLANS / DETAILS / NOTES

EXHIBIT G

NOTHING IN THESE RULES AND REGULATIONS SHALL SUPPLANT ANY PROVISION OF THE LEASE. IN THE EVENT OF A CONFLICT OR INCONSISTENCY BETWEEN THESE RULES AND REGULATIONS AND THE LEASE, THE LEASE SHALL PREVAIL.

1. Except as specifically provided in the Lease to which these Rules and Regulations are attached, no sign, placard, picture, advertisement, name or notice shall be installed or displayed on any part of the outside of the Premises or the Building without the prior written consent of Landlord. Landlord shall have the right to remove, at Tenant's expense and without notice, any sign installed or displayed in violation of this rule.

2. If Landlord objects in writing to any curtains, blinds, shades, screens or hanging plants or other similar objects attached to or used in connection with any window or door of the Premises, or placed on any windowsill, which is visible from the exterior of the Premises, and which is not included in plans approved by Landlord, Tenant shall remove said object.

3. Tenant shall not obstruct any sidewalks or entrances to the Building, or any halls, passages, exits, entrances, or stairways within the Premises, which are required to be kept clear for health and safety reasons.

4. No deliveries shall be made which impede or interfere with other tenants or the operation of the Project.

5. Tenant shall not place a load upon any floor of the Premises which exceeds the load per square foot which such floor was designed to carry and which is allowed by law. Fixtures and equipment which cause noise or vibration that may be transmitted to the structure of the Building to such a degree as to be objectionable to other tenants shall be placed and maintained by Tenant, at Tenant's expense, on vibration eliminators or other devices sufficient to eliminate such noise or vibration or reduce such noise and vibration to acceptable levels.

6. Tenant shall not use any method of heating or air-conditioning other than that shown in Tenant Improvement plans.

7. Tenant shall not install any radio, television or other antenna,, cell or other communications equipment or other devices on the roof or exterior walls of the Premises except to the extent shown on approved Tenant Improvement plans. Tenant shall not interfere with radio, television or other communications from or in the Premises or elsewhere.

8. Canvassing, peddling, soliciting and distribution of handbills or any other written material in the Project outside of the Premises are prohibited, and Tenant shall cooperate to prevent such activities.

9. Tenant shall store all its trash, garbage and Hazardous Material within its Premises or in designated receptacles outside of the Premises. Tenant shall not place in any such receptacle any material which cannot be disposed of in the ordinary and customary manner of trash, garbage and Hazardous Material disposal.

10. The Premises shall not be used for any improper, immoral or objectionable purpose. No cooking shall be done or permitted on the Premises, except that use by Tenant of Underwriter's Laboratory approved equipment for brewing coffee, tea, hot chocolate and similar beverages or use of microwave ovens for employees use shall be permitted, or equipment shown on approved Tenant Improvement plans, provided that such equipment and use is in accordance with all applicable federal, state, county and city laws, codes, ordinances, rules and regulations.

11. Without the written consent of the Landlord, Tenant shall not use the name of the Project, if any, in connection with or in promoting or advertising the business of Tenant except as Tenant's address.

12. Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency.

13. Tenant assumes any and all responsibility for protecting its Premises from theft, robbery and pilferage, which includes keeping doors locked and other means of entry to the Premises closed.

14. Landlord may waive any one or more of these Rules and Regulations for the benefit of Tenant or any other tenant, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of Tenant or any other Tenant, nor prevent Landlord from thereafter enforcing any such Rules and Regulations against any or all of the tenants of the Project.

15. These Rules and Regulations are in addition to, and shall not be construed to in any way modify or amend, in whole or in part, the terms, covenants, agreements and conditions of the Lease.

16. Landlord reserves the right to make such other and reasonable rules and regulations as, in its judgment, may from time to time be needed for safety and security, for care and cleanliness of the Project, and for the preservation of good order therein, subject to prior notice to Tenant and Tenant's consent, which will not be unreasonably withheld, conditioned or delayed. Tenant agrees to abide by all such Rules and Regulations hereinabove stated and any additional rules and regulations which are adopted.

17. Tenant shall be responsible for the observance of all of the foregoing rules by Tenant's employees, agents, clients, customers, invitees and guests.

EXHIBIT H

Landlord shall maintain, repair, and replace the following systems and equipment, and shall provide the following services and utilities, in accordance with the standards referenced below or, if no such standards are referenced, then consistent with the standards of comparable buildings in San Diego, California; provided, however, (i) Landlord reserves the right to adopt nondiscriminatory modifications and additions hereto, (ii) the cost of all such maintenance, repairs, replacements, services and utilities are subject to reimbursement by Tenant as Operating Expenses to the extent set forth in Article 7 of the Lease, and (iii) such maintenance, repairs, replacements, services and utilities are subject to any other applicable provisions of the Lease:

1. Heating, ventilation, and air conditioning systems, including chillers, boilers, air handlers, ventilation and exhaust fans, cooling towers, filtration, controls and control components required to provide climate control to all usable areas of the building, with cooled and heated air appropriate to the seasons in the San Diego metropolitan area. Heating, ventilation and air conditioning services shall be provided twenty-four (24) hours per day each day of the year.

2. Plumbing to include hot and cold water supply pipes, valves, and regulators, sanitary and waste piping, sump pumps and associated holding reservoirs. Drain cleaning shall be limited to normal maintenance and will not include cleaning required by excessive use or abuse of plumbing by Tenant.

3. Emergency eyewashes and showers.

4. Electrical supply circuits to include main switches, transformers and panels in mechanical spaces, local circuit breaker panels and associated wiring, cables, switches, and receptacles.

5. Emergency back-up power generators to include peripherals as described in 4 (above), batteries, relays and other items necessary to supply unit power when utility company fails to do so.

6. Light bulbs, ballasts, wiring and fixtures.

7. Elevators, with service to be provided twenty-four (24) hours per day each day of the year.

8. Steam boilers. Steam lines, valves, regulators and reheating units supplying and located within the building.

9. Fire alarm system. Main panel in first floor lobby area, wiring and local smoke, particle and heat detectors and pull stations.

10. Fire hoses, valves, etc., affixed permanently to building and sprinkler system.

11. Fire extinguishers including annual checks and recharging as necessary.

12. Doors, knobs and hinges.

13. Floor tiles, carpeting and kick plates.

14. Repair of windows and annual exterior window cleaning.

15. Fume hoods, ducts, stacks, motors and fans.

16. Vacuum pumps, lines and valves located within the building.

17. Positive pressure air supply lines, compressors bleed valves, regulators, and air supply condensing units.

18. Rest rooms. Toilets, urinals, showers and stalls, including rest room facilities and necessary lavatory supplies, and including hot and cold running water.

19. Sinks.

20. Gas lines, valves and regulators.

21. Basic security services, including periodic perimeter checks of the Project, but excluding any internal readings or checks.

22. Site landscaping, including maintaining the planting areas, walkways, ramps, gates, fences and parking areas.

23. Trash pick-up, limited to designated trash area(s).

24. Janitorial services in the Common Areas (Tenant is responsible for janitorial services in the Premises).

25. Access to the Building will be provide twenty-four (24) hours per day each day of the year (except in the case of emergencies).

26. Bulk mail and express pickup services at a central receiving area located on the lower level of the Building or such other floor as Landlord designates.

EXHIBIT I

SAN DIEGO SCIENCE CENTER LLC, a California limited liability company (the "OWNER"), the owner of the building (the "BUILDING") at 3030 Bunker Hill Street, San Diego, California, grants to employees of tenants of the Building the right to use and enjoy the fitness facilities and equipment located in the Building on the terms and conditions of this waiver (this "WAIVER") and otherwise in accordance with such other rules and regulations which Owner may from time to time adopt.

1. ASSUMPTION OF RISK. The undersigned understands that fitness activities, especially strength and aerobic training, involve a potential risk for physical injury and related damages. The undersigned understands that Owner does not manufacture the fitness and other equipment used in the fitness center, but purchases and/or leases the equipment from third parties. The undersigned acknowledges that Owner will provide no supervision of his/her use of the fitness facilities and equipment and other fitness activities in the fitness center, and that he/she will be solely responsible for his/her safe and appropriate use of the facility and equipment. The undersigned therefore expressly agrees to assume the risk that he/she may suffer injury or damage as a result of his/her use of the fitness facilities and equipment, and agrees for himself/herself and on behalf of his/her personal representatives, successors and assigns, that the Owner (including its members, managers, officers, employees and agents) will not be liable for any damages nor injuries the undersigned may suffer in or about the fitness center.

2. WAIVER OF LIABILITY. The undersigned further agrees to hold the Owner and its members, managers, officers, employees and agents harmless from any injuries or damages sustained by the undersigned or the property of the undersigned and to indemnify the Owner and its members, managers, officers, employees and agents from any claims, demands, actions, injuries, liabilities or damages whatsoever, including attorneys' fees, which result, directly or indirectly, from the use of the fitness facilities and equipment by the undersigned. The undersigned agrees to release and discharge the Owner and its members, managers, officers, employees, and agents from all such claims, demands, actions, injuries, liabilities, and damages. The failure or refusal of the undersigned to inspect the fitness facilities and equipment constitutes a waiver of any objection, contention or claim that might have been based on such an inspection.

3. LOSS, THEFT, DAMAGE. The undersigned agrees that neither the Owner nor its members, managers, officers, employees or agents are responsible or liable to the undersigned for articles damaged, lost or stolen in or about the fitness facilities. The undersigned agrees not to store any valuable items in lockers and to use the lockers solely for temporary clothing storage. The Owner and its members, managers, employees and agents are not bailees and are not responsible for protecting the valuables of the undersigned.

4. PHYSICAL CONDITION. The undersigned warrants that he/she is in good physical condition and to the best of his/her knowledge has no physical impairment which would prevent him/her from engaging in any physical conditioning available in the fitness center and that he/she has no condition which might be aggravated by the use of the fitness facilities or equipment. The undersigned acknowledges that a complete physical examination by a medical doctor prior to beginning any work out program or strenuous new activity is recommended.

5. NO GUESTS. The undersigned acknowledges and agrees that guests, including family members, are not permitted in the fitness center and may not use the fitness facilities or equipment under any circumstances. Use of the fitness facilities and equipment is limited to employees of tenants of the Building.

6. ATTIRE AND EQUIPMENT. The undersigned agrees to wear proper attire when using the fitness facilities, and to wear a shirt and shoes in the fitness facilities and all common areas of the Building. Attire must conform to reasonable standards of decency and safety. Only equipment provided by Owner may be used in the fitness center.

7. LOCKERS. Lockers are available for day use only on a first come, first served basis. Locks, though recommended, are not provided by Owner.

8. DAMAGES. The undersigned agrees to pay for any damages to the fitness facilities or equipment caused by the undersigned.

9. SEVERABILITY. If any provision of this Waiver is ruled invalid or unenforceable as applied to any person or circumstance, all other provisions of this Waiver shall remain valid and enforceable as applied to all other persons and circumstances.

The undersigned acknowledges that he/she has read and understands the terms and conditions of this Waiver and agrees to be bound by such terms and conditions. The undersigned also agrees to read and comply with any other rules and regulations governing use of the fitness facilities and equipment which may be adopted or amended from time to time by the Owner and posted or otherwise made available in the fitness facility or to the undersigned.

Dated: ____________________

Sign: ______________________________________

Print Name: _________________________________

Employer: ___________________________________

Casework:                  Doug Wessinger
                           Wesinco
                           P.O. Box 256
                           Irmo, SC   29063
                           803/749-0163
                           803/749-1703 (Facsimile)

Electrical:                Ron Wood
                           Berg Electric
                           650 Opper Street
                           Escondido, CA   92029
                           760/746-1003
                           760/741-918__ (Facsimile)

Mechanical/Plumbing:       Joe Mucher
                           Encompass Mechanical Services
                           7655 Convoy Street
                           San Diego, CA   92111
                           858/974-6500
                           858/941-6501 (Facsimile)

Phone/Data:                Rob Coulter
                           River Networks
                           5845 Avenida Encinas, Suite 130
                           Carlsbad, CA   92008
                           760/535-4837
                           619/449-1609

Janitorial Service:        Linsey A. Miller
                           Merchants Building Maintenance LLC
                           8380 Miramar Mall, Suite 125
                           San Diego, CA 92121
                           858/455-0163
                           858/455-0596 (Facsimile)

Environmental, Health

and Safety:

SCHEDULE 1

A. PROPERTY TENANT IS REQUIRED TO REMOVE

B. PROPERTY TENANT MAY REMOVE

EXHIBIT 10.14

AETHLON MEDICAL, INC.

CONSULTING AGREEMENT

This Consulting Agreement (the "Agreement") is entered into effective as of October 1, 2003 by and between AETHLON MEDICAL, INC. located at 7825 Fay Avenue, La Jolla, California 92037 USA, ("Aethlon") and Jean-Claude CHERMANN, PhD (the "Consultant") located at Centre de Vie Agora, Batiment C, B.P. 1055, Z.I. de Paluds, 13781 Aubange Cedex, France.

1. CONSULTING RELATIONSHIP. During the terms of this agreement, the Consultant will act as a science advisor in connection with advancing the development of Aethlon's HIV-Hemopurifier Technology. The Consultant shall use reasonable efforts to provide these services in a manner that provides benefit to Aethlon. If the services provided by the Consultant under this agreement exceed more than 20 hours per month, the Consultant shall request and negotiate additional compensation from Aethlon. The Consultant has also agreed to participate as a member of Aethlon's Science Advisory Board. In this regard, the Consultant shall also receive the compensation that is rewarded to each Aethlon Science Advisory Board Member. The Consultant also agrees that this relationship provides no rights or interest in Aethlon's HIV-Hemopurifier technology.

2. CONSIDERATION. As consideration of Services to be provided by Consultant, Aethlon shall compensate the Consultant at a rate of Three Thousand Five Hundred U.S. Dollars ($3,500.00) per month. At the discretion of the Aethlon Medical management, the Consultant may also be eligible for bonus consideration.

3. EXPENSES. Consultant shall not be authorized to incur on behalf of Aethlon any expenses, without the prior written consent of Aethlon Medical

4. TERMS AND TERMINATION. Consultant shall provide the Services to Aethlon on a month-to-month basis until terminated by either party with thirty
(30) days advance notice.

5. INDEPENDENT CONTRACTOR. Consultant's relationship with Aethlon will be that of independent contractor and not that of an employee. Consultant will not be eligible for any employee benefits, nor will Aethlon make deductions from payment made to Consultant for taxes, which will be the Consultant's responsibility Consultant will have no authority to enter into contracts that bind Aethlon or create obligations on the part of Aethlon without the prior written authorization of Aethlon.

6. MISCELLANEOUS.

A. AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended or waived only with the written consent of the parties.

B. DISPUTES. The initial attempt to resolve any disputes or claim arising in connection with this Agreement shall first be negotiated between the parties over a glass of wine at the Restaurant Nino in the port of Cassis, France.

The parties have executed this Agreement as of the date first set forth above.

AETHLON MEDICAL, INC.

By: /s/ James A. Joyce
    ---------------------------
    Name:  James A Joyce
    Title: Chairman, CEO

CONSULTANT

Jean-Claude CHERMANN, PhD

/s/ Jean-Claude Chermann, PhD

EXHIBIT 10.15

This AGREEMENT. dated as of June 1, 2001, is by and between FRANKLYN S. BARRY, JR. ("Consultant") residing at 1141 Delaware Avenue, Unit 3N, Buffalo, New York, 14209 and AETHLON MEDICAL. INC., formerly Bishop Equities, Inc. d/b/a Aethlon Medical ("Company"), a Nevada corporation with its principal office at 7825 Fay Avenue, Suite 200, La Jolla, California 92037.

WHEREAS, Consultant and the Company are parties to an Employment Agreement dated as of April 1, 1999 (the "Employment Agreement") pursuant to which Consultant has served as the Chief Executive Officer and President of the Company and its subsidiary Hemex, Inc.: and

WHEREAS, as part of the Company's decision to consolidate all scientific and administrative functions in San Diego and to close its facilities in Buffalo, the Consultant's employment as Chief Executive Officer and President of' the Company and its subsidiary Hemex, Inc. was terminated effective June 1, 2001 by the Company "Without Cause," as that term is used in the Employment Agreement; and

WHEREAS. as a result of the termination of Consultant's employment he is entitled to the payments and benefits set forth in Section 4.3 of the Employment Agreement; and

WHEREAS, the Company desires to engage Consultant as an adviser on strategic and business issues, and Consultant is willing to accept that role; and

WHEREAS, the Company and Consultant mutually desire that the Consulting Fees and Benefits" (as defined in Section 4 below) payable to Consultant under this Agreement shall be in lieu of any payments to which Consultant is otherwise entitled under Section 4.3(f) and (g) of the Employment Agreement, provided that the Company timely complies with its obligations under this Agreement; and

WHEREAS, the Company and Consultant desire to make it clear that Consultant's status as an officer and employee of the Company and Hemex, Inc. under the Employment Agreement has been terminated, and in that regard to terminate those sections of the Employment Agreement that no longer are applicable due to the termination of Consultant's employment.

NOW, THEREFORE, the parties hereto for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, hereby agree as follows:

1. ENGAGEMENT AS CONSULTANT.

Effective June 1, 2001, the Company engages Consultant as an adviser and consultant to the Company President and Chief Executive Officer, and Consultant hereby accepts such engagement, subject to the terms and conditions set forth below.

2. TERM OF ENGAGEMENT.

The term of Consultant's engagement under this Agreement shall be the 24-month period from June 1, 2001 through May 31, 2003 ("Term").

3. SCOPE OF ENGAGEMENT.

The Consultant shall advise the Company's President and Chief Executive Officer on strategic and business issues, as requested by the Company from time-to-time during the Term. Consultant shall not be required to travel from the Buffalo, New York area for these consulting activities, nor shall he be required to spend more than 8 hours per month fulfilling his consulting duties under this Agreement.

4. CONSULTING FEES AND BENEFITS.

(a) The Company shall pay Consultant a total of $120,000 ("Consulting Fees"), plus reimbursement of any Federal and State self-employment, FICA, Medicare and unemployment taxes owed by Consultant as a result of his engagement under this Agreement, (collectively the "Self-Employment Taxes").

(b) The Consulting Fees shall be paid in 24 equal monthly installments of $5,000 payable on the last day of each month throughout the Term, commencing June 30, 2001.

(c) The Consultant shall notify the Company on or prior to December 31. 2001, December 31, 2002 and May 31, 2003 of the amount of Self-Employment Taxes owed for the years 2001, 2002 and 2003, respectively. The Company shall reimburse the Consultant for these Self-Employment Taxes within 30 days after receiving such notice from Consultant.

(d) In addition to the Consulting Fees and Self-Employment Taxes, the Company shall maintain in full force and effect, for Consultant's and his eligible beneficiaries' continued benefit, until the first to occur of (x) his attainment of alternative employment that provides benefits comparable to the Benefits defined below or (y) May 31, 2003, the employee benefits provided pursuant to Company-sponsored benefit plans, programs of other arrangements in which Consultant was entitled to participate as a full-time employee immediately prior to June 1, 2001, subject to the terms and conditions of such plans and programs (the "Benefits"). If Consultant's continued participation is not permitted under the general terms and provisions of such plans, programs and arrangements, the Company shall arrange to provide Consultant with Benefits substantially similar to those which Consultant would have been entitled to receive under such plans, programs and arrangements.

(e) In the event that Consultant dies or becomes disabled during the Term, the Company shall continue making all payments required under this Agreement to Consultant's heirs. legatees or estate in the event of his death, or to him or his legal representative in the event of his disability; such payments shall be made in the same amounts and at the same times as they would have been made but for such death or disability.

5. PAYMENT ON DEFAULT BY COMPANY.

In the event that the Company fails to make any payment of Consulting Fees, Self-Employment Taxes or Benefits required by Section 4 of this Agreement within 30 days after such payment is due, it shall pay to Consultant the sum of $120,000 less the total of all monthly Consulting Fees actually paid to Consultant under Section 4(b) above, plus an amount equal to the Self-Employment Taxes owed on the payment required under this Section 5, plus the amount necessary to compensate Consultant for the loss of any Benefits for the balance of the Term. Payment of these amounts shall not relieve the Company of any other obligations owed to Consultant.

6. INTERESTED DIRECTOR TRANSACTION.

Because Consultant is a member of the Company's Board of Directors, this Agreement constitutes an "interest director transaction" under the Nevada General Corporation Law. The Company hereby represents that this Agreement has been presented to, and approved by, the Company's Board of Directors.

7. TERMINATION OF EMPLOYMENT AGREEMENT.

(a) Subject to Consultant's receipt of written acknowledgement from the Company that it owed Consultant $224,150 as of June 1, 2001 for amounts owed by Hemex, Inc. unpaid salary, unpaid medical benefits, and loans, advances and business expenses, the Company and Consultant agree that the Employment Agreement is hereby terminated and is null and void, except as otherwise provided in Section 7(b) below.

(b) The Company and Consultant agree that Article V (Restrictive Covenants). Sections 6.3(b) [DISPUTE RESOLUTION], 6.4 [SUCCESSORS;
BINDING AGREEMENT], 6.6 [SEVERABILITY]. 6.7 [NOTICES]. 6.12 [GOVERNING LAW], and Exhibit "A" (Dispute Resolution Procedures) in the Employment Agreement shall survive the termination of the Employment Agreement and shall apply in accordance with their respective terms

8. MITIGATION OF DAMAGES; NO SET-OFF; DISPUTE RESOLUTION.

(a) Consultant shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Agreement be reduced by any compensation earned by Consultant as the result of employment by another employer. The Company's obligation to make the payments provided for in this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim or action which the Company may have against Consultant.

(b) If there shall be any dispute between the Company and Consultant, the dispute shall be resolved in accordance with the dispute resolution procedures set forth in Exhibit "A" hereto, the provisions of which are incorporated as a part hereof and the parties hereto hereby agree that such dispute resolution procedures shall be the exclusive method for resolution of disputes under this Agreement. In the event of a dispute hereunder, until there is a resolution and award as provided in Exhibit the Company shall pay all amounts, and provide all benefits, to Consultant and/or Consultant's family or other beneficiaries, as the case may be, that the Company would be required to pay or provide hereunder and shall pay the reasonable legal fees and expenses of counsel for Consultant in connection with such. dispute resolution; provided, however, that the Company shall not be required to pay any disputed amounts or any legal fees and expenses pursuant to this Subparagraph (b) except upon receipt of a written undertaking by or on behalf of Consultant (and/or Consultant's family or other beneficiaries, as the case may be) to repay, without interest or penalty, as soon as practicable after completion of the dispute resolution (A) all such amounts to which Consultant (or Consultant's family or other beneficiaries, as the case may be) is ultimately adjudged to not be entitle with respect to the payment of such disputed amount(s) and (B) in addition, in the case of legal fees and expenses, a proportionate amount of legal fees and expenses attributable to any of Consultant's claim(s) or any of Consultant's defenses or counter-claim(s), if any, which shall have been found by the dispute resolver to have been frivolous or without merit.

9. SUCCESSORS; BINDING AGREEMENT. This Agreement shall be binding upon any successor to the Company and shall inure to the benefit of and be enforceable by Consultant's personal or legal representatives, beneficiaries. designees, executors, administrators, heirs, distributees, devisees and legatees.

10. MODIFICATION; NO WAIVER. This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument by the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any other term or condition.

11. SEVERABILITY. The covenants and agreements contained herein are separate and severable and the invalidity or unenforceability of any one or more of such covenants or agreements, if not material to the arrangement that is the basis for this Agreement, shall not affect the validity or enforceability of any other covenant or agreement contained herein.

12. NOTICES. All the notices and other communications required or permitted hereunder shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, to the parties hereto at the following addresses:

If to the Company, to it at:

Aethlon Medical. Inc.
7825 Fay Avenue
Suite 200
La Jolla, California 92037

If Consultant, to him at:
Mr. Franklyn S. Barry, Jr.
1141 Delaware Avenue
Unit 3N
Buffalo, New York 14209

13 ASSIGNMENT. This Agreement and any rights hereunder shall not be assignable by either party without the prior written consent of the other party except as otherwise specifically provided for herein.

14. ENTIRE UNDERSTANDING. This Agreement (together with the Exhibit incorporated as a part hereof constitutes the entire understanding between the parties hereto with respect to the subject matter hereof, and no agreement, representation, warranty or covenant has been made by either party except as expressly set forth herein with respect to the subject matter hereof.

15. CONSULTANT'S REPRESENTATIONS. Consultant represents and warrants that neither the execution and delivery of this Agreement nor the performance of his duties hereunder violates the provisions of any other agreement to which he is a party or by which he is bound.

16. INDEPENDENT CONTRACTOR. This Agreement calls for the performance of Consultant's services as an independent contractor and he will not be considered an employee of the Company for any purposes.

17. GOVERNING LAW. This Agreement shall be construed in accordance with and governed for all purposes by the laws of the State of New York applicable to contracts executed and wholly performed within such state.

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

COMPANY

Aethlon Medical, Inc. a Nevada Corporation

By:  /s/ James A Joyce President and CEO

CONSULTANT

FRANKLYN S BARRY, JR.

By: /s/ Franklyn S Barry, Jr.

EXHIBIT "A"
DISPUTE RESOLUTION PROCEDURES

A. If a controversy should arise which is covered by Section 8(b) of this Agreement, then not later than twelve (12) months from the date of the event which is the subject of dispute either party may serve on the other a written notice specifying the existence of such controversy and setting forth in reasonably specific detail the grounds thereof ("Notice of Controversy"); PROVIDED that, in any event, the other party shall have at least thirty (30) days from and after the date of the Notice of Controversy to serve a written notice of any counterclaim ("Notice of Counterclaim"). The Notice of Counterclaim shall specify the claim or claims in reasonably specific detail. If the Notice of Controversy or the Notice of Counterclaim, as the case may be, is not served within the applicable period, the claim set forth therein will be deemed to have been waived, abandoned and rendered unenforceable.

B. Following receipt of the Notice of Controversy (or the Notice of Counterclaim, as the case may be), there shall be a three (3) week period during which the parties will make a good faith effort to resolve the dispute through negotiation ("Period of Negotiation"). Neither party shall take any action during the Period of Negotiation to initiate arbitration proceedings.

C. If the parties should agree during the Period of Negotiation to mediate the dispute, then the Period of Negotiation shall be extended by an amount of time to be agreed upon by the parties to permit such mediation. In no event, however, may the Period of Negotiation be extended by more than five (5) weeks or, stated differently, in no event may the Period of Negotiation be extended to encompass more than a total of eight (8) weeks.

D. If the parties agree to mediate the dispute but are thereafter unable to agree within one (1) week on the format and procedures for the mediation, then the effort to mediate shall cease, and the Period of Negotiation shall terminate four (4) weeks from the Notice of Controversy (or the Notice of Counterclaim, as the case may be).

E. Following the termination of the Period of Negotiation, the dispute (including the main claim and counterclaim, if any) shall be settled by arbitration, and judgment upon the award may be entered in any court having jurisdiction thereof. The format and procedures of the arbitration are set forth below (referred to below as the "Arbitration Agreement").

F. A notice of intention to arbitrate ("Notice of Arbitration") shall be served within forty-five (45) days of the termination of the Period of Negotiation. If the Notice of Arbitration is not served within this period, the claim set forth in the Notice of Controversy (or the Notice of Counterclaim, as the case may be) will be deemed to have been waived, abandoned and rendered unenforceable.

G. The arbitration, including the Notice of Arbitration, will be governed by the Commercial Rules of the American Arbitration Association except that the terms of this Arbitration Agreement shall control in the event of any difference or conflict between such Rules and the terms of this Arbitration Agreement. The arbitration shall be scheduled to take place in Buffalo, New York.

H. The dispute resolver shall reach a decision on the merits on the basis of applicable legal principles as embodied in the law of the State of New York.

I. There shall be one dispute resolver, regardless of the amount in controversy. The dispute resolver will be empowered to render an award and interim decisions and shall be a member of the bar of any of the fifty States of the United States or of the District of Columbia. The dispute resolver shall be promptly appointed pursuant to Rule 13 of the Commercial Rules of the American Arbitration Association ("AAA"). If the dispute resolver has not been appointed

within forty-five (45) days of the AAA's initial transmission of lists of potential arbitrators, then the AAA shall unilaterally designate the dispute resolver.

J. At the time of appointment and as a condition thereto, the dispute resolver will be apprised of the time limitations and other provisions of this Arbitration Agreement and shall indicate such dispute resolver's agreement to the Tribunal Administrator to comply with such provisions and time limitations.

K. During the 30-day period following appointment of the dispute resolver, either party may serve on the other a request for limited numbers of documents directly related to the dispute. Such documents will be produced within seven (7) days of the request.

L. Following the 30-day period of document production, there will be a forty-five (45) day period during which limited depositions will be permissible. Neither party will take more than five (5) depositions, and no deposition will exceed three (3) hours of direct testimony.

M. Disputes as to discovery or prehearing matters of a procedural nature shall be promptly submitted to the dispute resolver pursuant to telephone conference call or otherwise. The dispute resolver shall make every effort to render a ruling on such interim matters at the time of the hearing (or conference call) or within five (5) business days thereafter.

N. Following the period of depositions, the arbitration hearing shall promptly commence. The dispute resolver will make every effort to commence the hearing within thirty (30) days of the conclusion of the deposition period and, in addition, will make every effort to conduct the hearing on consecutive business days to conclusion.

O. An award will be rendered, at the latest, within nine (9) months of the date of the Notice of Arbitration and within thirty (30) days of the close of the arbitration hearing. The award shall set forth the grounds for the decision in reasonably specific detail and shall also specify whether any claim (or defense or counterclaim) of Executive is found to be frivolous or without merit and what proportion, if any, of his legal fees and expenses which have been paid by the Company Executive shall be required to repay to the Company in accordance with Section 8(b). The award shall be final and nonappealable.

         P. THE PARTIES HEREBY ACKNOWLEDGE AND AGREE THAT THEY ARE WAIVING THEIR
RIGHTS TO A TRIAL IN A STATE OR FEDERAL COURT AND ARE ALSO WAIVING THEIR RIGHT
TO A JURY TRIAL.

          COMPANY                                  CONSULTANT

          AETHLON MEDICAL, INC.                    FRANKLYN S.  BARRY, JR.
          a Nevada corporation



          By: /s/ James A Joyce, President         By: /s/ Franklyn S Barry, Jr.

                  Its' Chairman of the Board

EXHIBIT 10.16

AGREEMENT

THIS AGREEMENT, effective January 1, 2000, is made and entered into by and among AETHLON MEDICAL, INC. (hereinafter "AETHLON"), HEMEX, Inc. (hereinafter "HEMEX"), and Dr. Julian L. Ambrus, Jr., M.D. (hereinafter "Dr. Ambrus") and Dr. David O. Scamurra, M.D. (hereinafter "Dr. Scamurra").

RECITALS

WHEREAS, INVENTORS have invented and are the sole owners of an INVENTION relating to an apparatus and method for removing HIV and other viruses from the blood; and

WHEREAS, an application for a provisional patent was filed by INVENTORS on August 31, 1998 with the United States Patent and Trademark Office under serial number 60/098,477 with respect to such INVENTION, and US utility application Serial No. 09/385166 and International Application No. PCT/US 99-19448 were filed by INVENTORS with respect to such INVENTION; and

WHEREAS, HEMEX is engaged in the business of development, manufacture and sale of medical devices; and

WHEREAS, AETHLON plans to sell its common stock in a private placement in order to fund its operations and its performance under this Agreement and in partial consideration of the assignment and grant herein; and

WHEREAS, HEMEX desires to obtain an assignment of all of the INVENTORS' right, title and interest in arid to the INVENTION without reservation or contingency, except as otherwise provided herein, and to have the exclusive right to make, use and sell PATENTED PRODUCTS, as hereinafter defined, and INVENTORS are willing to grant such rights, under and subject to the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1.1 "AETHLON" shall mean Bishop Equities, Inc. a Nevada corporation, with its principal place of business located at 7825 Fay Avenue, Suite 200, La Jolla, California 92307 doing business under the assumed name Aethlon Medical, Inc.

1.2 "EFFECTIVE DATE" shall mean January 1, 2000.

1.3 "EQUITY OFFERING" shall mean a private placement of Aethlon Medical, Inc. common stock or equivalent financial instrument.

1.4 "FIELD OF USE" shall mean devices and methods for removing HIV and other viruses from the blood employing a filtration device having antibodies and/or DNA fragments immobilized on a material and retained by a membrane that allows serum containing virus to interact with the antibodies and/or DNA, including but not limited to such devices and methods as described in SUBJECT PATENTS.

1.5 "HEMEX" shall mean Hemex, Inc., a Delaware corporation authorized to do business in New York, with its principal place of business located at 143 Windsor Avenue, Buffalo, New York 14209, a wholly--owned subsidiary of AETHLON.

1.6 "INVENTION(S)" shall mean all devices and methods described in the PROVISIONAL PATENT APPLICATION and in the UTILITY PATENT APPLICATION and in the PCT INTERNATIONAL APPLICATION. INVENTION(S) shall further include any patentable improvements in the FIELD OF USE both conceived and reduced to practice by INVENTORS or HEMEX during the period extending through the EFFECTIVE DATE until August 1, 2004. Any devices, methods or patentable improvements in the FIELD OF USE which are either conceived or reduced to practice after August 1, 2004 are specifically excluded as an INVENTION and therefore not includable under the scope of this Agreement.

1.7 "INVENTORS" shall mean, collectively, Julian L. Ambrus, Jr., M.D. and David 0.Scamurra, M.D., individuals residing at 541 West Ferry Street, Buffalo, New York 14222 and 66 Four Seasons West, Eggertsville, New York 14226, respectively.

1.8 "NET SALES PRICE" shall mean the price actually invoiced by HEMEX (or by a licensee of HEMEX) for devices sold, leased or otherwise disposed of by HEMEX (or a licensee of HEMEX) after deduction of customary trade and quantity discounts but excluding broker or agent commissions as a deductible cost or discount.

1.9 "PATENTED PRODUCT" shall mean any medical device covered by a claim of a non-expired, granted patent under SUBJECT PATENTS that has not been held invalid or unenforceable by a court or administrative agency of competent authority.

1.10 "PCT INTERNATIONAL APPLICATION" shall mean PCT International Application No. PCT/US 99-19448 filed under the Patent Cooperation Treaty on August 30, 1999 by INVENTORS and entitled "Method For Removal of HIV and Other Viruses For Blood".

1.11 "PROVISIONAL PATENT APPLICATION" shall mean the Provisional Patent Application filed on August 31, 1998 by INVENTORS with the United States Patent and Trademark Office with respect to the INVENTIONS, under serial number 60/098,477 and entitled "Use of Immobilized DNA Fragments and Antibodies to Remove HIV and Other Viruses For Blood".

1.12 "SUBJECT PATENTS" shall mean all patent applications that may be filed on INVENTIONS anywhere in the world, including any and all divisionals, reissues, continuations and extensions thereof, and in and to any Letters Patent, Inventors' Certificates, Design Registrations, Industrial Models, Utility Models and all other forms of protection that may be granted thereon worldwide. SUBJECT PATENTS specifically include the PROVISIONAL PATENT APPLICATION, the UTILITY PATENT APPLICATION, and the PCT INTERNATIONAL APPLICATION, and US and foreign patent applications that claim priority thereon, and all divisions, continuations, reissues, substitutes and extensions thereof, and all provisional patent application and patent applications and patents claiming priority thereon, and any Letters Patent, Inventors' Certificates, Design Registrations, Industrial Models, Utility Models and all other forms of protection that may be granted thereon worldwide.

1.13 "TERM" shall mean the time period from the EFFECTIVE DATE through the later of (i) the expiration date of the last to expire of SUBJECT PATENTS or
(ii) the abandonment date of the last to be abandoned of any patent applications under SUBJECT PATENTS, unless this Agreement is sooner terminated as provided in Article 6 hereof.

1.14 "UTILITY PATENT APPLICATION" shall mean the US Utility Patent Application filed on August 30, 1999 by INVENTORS with the United States Patent and Trademark Office with respect to the INVENTIONS, under serial number 09/385166 and entitled "Method For Removal of HIV and Other Viruses For Blood".

2.1 INVENTORS hereby assign and grant to HEMEX for the TERM and subject to the provisions of this Agreement, with right to grant licenses to third parties consistent with the terms of this Agreement, all of the INVENTORS' right, title and interest worldwide in and to

(a) the INVENTIONS, and

(b) the SUBJECT PATENTS.

2.2 INVENTORS agree to execute one or more assignments and such other documents as may be reasonably requested by HEMEX from lime to time, at no cost to INVENTORS, to evidence or effect the assignment and grant of rights provided herein.

2.3 HEMEX accepts the assignment and grant of Article 2.1, and AETHLON consents to the assignment and grant to HEMEX.

3.1 In consideration of the assignment to HEMEX and other covenants and agreements contained in this Agreement, HEMEX or AETHLON, as the case may be, shall pay and deliver to INVENTORS:

(a) within thirty (30) days of the date of signature of this Agreement by authorized representatives of all parties, the greater of (i) twelve thousand five hundred (12,500) shares of AETHLON common stock ($.00l Par Value) issued and fully paid and non-assessable on the EFFECTIVE DATE, which shares shall be deemed fully earned or (ii) such number of shares of AETHLON common stock ($.001 Par Value) issued and fully paid and non-assessable on the EFFECTIVE DATE, as will equal one hundred thousand dollars ($100,000) based upon the per share trading price on the EFFECTIVE DATE, which shares shall be deemed fully earned; and

(b) within thirty (30) days of the date of issuance of the first US letters patent relating to an INVENTION, the greater of (i) twelve thousand five hundred (12,500) shares of AETHLON common stock ($.001 Par Value) issued and fully paid and non-assessable on said US letters patent issuance date, which shares shall be deemed fully earned or (ii) such number of AETHLON common stock ($.001 Par Value) issued and fully paid and non-assessable on said US letters patent issuance date as will equal one hundred thousand dollars ($100,000.00) based upon the per share trading price on said US letters patent issuance date, which shares shall be deemed fully earned; and

(c) a royalty equal to eight and three quarter percent (8.75%) of the NET SALES PRICE of all PATENTED PRODUCTS sold, leased or otherwise disposed of for resale to end users whether or not affiliated with HEMEX or AETHLON. For purposes of payment under this Article 3.1(c), within thirty (30) days after the last day of March, June, September and December in each relevant year during the TERM and after the first commercial sale of a PATENTED PRODUCT, Hemex shall furnish to INVENTORS a written statement in such detail as INVENTORS may reasonably require of all amounts due pursuant to this Article 3.1(c) for the preceding quarter, and shall pay to INVENTORS all amounts due to INVENTORS thereunder.

3.2 HEMEX and its licensees shall at all times keep an accurate account of all sales, leases or other dispositions for resale to end users of PATENTED PRODUCTS which are the subject of this Agreement, shall render written statements thereof to INVENTORS as required under Article 3.1(d) and shall pay to the INVENTORS with each such statement, the amount of all royalties earned during such quarter. HEMEX shall keep accurate records containing all data reasonably required for the computation and verification of the amounts to be paid and the information to be reported to INVENTORS under this Agreement. HEMEX shall permit an independent accounting firm designated by INVENTORS to audit such records at HEMEX's principal place of business (or such other site as HEMEX may reasonably designate) at any time and from time to time during normal business hours upon reasonable advance notice to HEMEX. The auditor must sign a nondisclosure agreement in a form reasonably acceptable to HEMEX. In no event shall audits be conducted under this Article 3.2 more than one time in any calendar year. If INVENTORS elect not to have an independent accounting firm audit such records in any year, the right to audit the records for such year shall carry forward. All costs and expenses incurred by INVENTORS for audit of HEMEX's records shall be borne by INVENTORS unless the audit discovers errors or omissions more than ten percent (10%) in HEMEX's favor, in which case the costs and expenses shall be borne by HEMEX but not to exceed the amount of the error or omission in HEMEX's favor. If such an audit discloses a discrepancy between the amounts reported and paid by HEMEX and what should have been reported and paid, HEMEX shall have the right to its own audit, at HEMEX's expense, within sixty (60) days after notice from INVENTORS of the discrepancy. If the auditors agree on the amount of the discrepancy, HEMEX shall pay the shortfall in full within thirty (30) days if INVENTORS have been underpaid and INVENTORS shall repay the overpayment in full within Thirty (30) days if INVENTORS have been overpaid. lithe auditors do not agree on the amount of the discrepancy, the dispute shall be submitted to binding arbitration in accordance with the arbitration provisions of Section 6.4 of this Agreement.

HEMEX may from time to time grant one or more licenses with respect to the SUBJECT PATENTS within its discretion, provided, however, that such licenses shall be consistent with the terms of this Agreement, require periodic reporting of all revenues derived by any licensees from the SUBJECT PATENTS and shall automatically terminate upon expiration or sooner termination of this Agreement. INVENTORS shall be entitled to inspect all such license agreements upon reasonable prior notice to HEMEX and to make extracts and copies thereof, from time to time and at any lime during the TERM. To the extent that such license agreements or the terms of the agreements are confidential to HEMEX or to the sublicensee, INVENTORS shall sign a nondisclosure agreement in a form reasonably acceptable to HEMEX prior to inspection, or to making extracts and copies thereof.

5.1 Upon signature of this Agreement, INVENTORS will promptly disclose to HEMEX all information (collectively, the "INFORMATION") in its possession pertaining to the filed patent applications under SUBJECT PATENTS which may be necessary or useful for prosecuting such patent applications for the protection of INVENTIONS. HEMEX will, upon receipt of the INFORMATION: accept liaison and

financial responsibility for prosecution by a patent attorney nominated by HEMEX and approved by INVENTORS of the application to allowance or through necessary appeal from a final rejection by an examiner of the United States Patent and Trademark Office; and reimburse INVENTORS for the costs involved in filing the UTILITY PATENT APPLICATION and PCT INTERNATIONAL APPLICATION, the costs not to exceed seven thousand dollars ($7000). INVENTORS will thereafter from time to time supply HEMEX with additional information as may be necessary or desirable to facilitate prosecution and preparation of patent applications on INVENTIONS.

5.2 In. addition to the patent applications identified in Article 5.1, HEMEX shall have the right to identify INVENTIONS that may be the subject of additional US Patent applications. HEMEX shall also have the right to identify INVENTIONS that may be the subject of foreign patent applications. HEMEX shall have liaison and financial responsibility during the TERM for preparation, filing and prosecution of any such patent applications, and maintenance of any patent granted thereon, using a patent attorney nominated by HEMEX and approved by INVENTORS.

5.3 HEMEX will provide INVENTORS with copies of applications filed in the United States or foreign patent offices, any papers received from the United States or foreign patent offices pertaining to such applications, and any papers filed in the United States or foreign patent offices pertaining to such applications. Any written comments on prosecution of such applications received from INVENTORS shall be provided to the patent attorney referenced in Articles 5.1 and 5.2.

5.4 HEMEX shall not abandon any patent application under SUBJECT PATENTS, nor permit any granted patent under SUBJECT PATENTS to lapse prior to its full patent term, without first providing INVENTORS with the opportunity to assume financial and patent liaison responsibility for such application or patent. Any such application or patent under SUBJECT PATENTS for which INVENTORS assume responsibility under this Section 5.4 shall revert to INVENTORS and HEMEX shall execute and deliver to INVENTORS any and all assignments and other documents necessary to effect such reversion and transfer, except as otherwise provided in Article 6 Agreement upon a termination hereof.

6.1 INVENTORS may terminate this Agreement upon the occurrence of any of the following events (individually, "Event of Default" and collectively, "Events of Default"):

(a) The default by HEMEX or AETHLON in observing any provision of this Agreement and failure to cure such default within sixty (60) days receipt of written notice from the INVENTORS specifying the nature of such default, or (i) if by reason of its nature the failure or default can be remedied, but not within such sixty (60) day period, HEMEX or AETI-ILON fails to proceed with reasonable diligence after receipt of such notice to cure the default, or (ii) if HEMEX or AETHLON fails to continue with reasonable diligence its efforts to cure the default; provided, however, that in no event shall HEMEX or AETHLON have more than one (1) additional sixty (60) day period to cure such default.

(b) HEMEX or AETHLON (i) applies for or consents to the appointment of or the taking of possession by a receiver, custodian, trustee or liquidator of itself or of any of its assets, (ii) commences a voluntary case under the Federal Bankruptcy Code (as now or hereafter in effect), or (iii) files a petition or other request seeking to take advantage of any other law relating to bankruptcy or insolvency.

(c) A proceeding or case is commenced without the application or consent of HEMEX or AETHLON or an affiliated party of HEMEX or AETHLON in any court of competent jurisdiction, seeking (i) liquidation, reorganization, adjudication as a bankrupt, dissolution, or winding-up, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of HEMEX or AETHLON, or
(iii) similar relief under any law relating to bankruptcy, insolvency, reorganization, or winding-up, and such proceeding or case continues undismissed, or an order, judgment or decree approving or ordering any of the foregoing is entered and continues unstayed and in effect, for a period of sixty
(60) days.

(d) INVENTORS have not received payment of at least fifteen thousand dollars ($15,000) in any year during the TERM beginning in the second full year after both the issuance of any US letters patent and FDA approval of a PATENTED PRODUCT (if required for marketing the product in the USA) and HEMEX fails to make a payment to ENVENTORS during that year equivalent to the fifteen thousand dollar ($15,000) royalty payment;

(e) The EQUITY OFFERING is not completed within twenty-four
(24) months after the EFFECTIVE DATE.

6.2 HEMEX may terminate this Agreement upon the default by INVENTORS in observing any provision of this Agreement and failure to cure such default within sixty (60) days receipt of written notice from the HEMEX or AETHLON specifying the nature of such default, or (i) if by reason of its nature the failure or default can be remedied, but not within such sixty (60) day period, INVENTORS fail to proceed with reasonable diligence after receipt of such notice to cure the default, or (ii) if INVENTORS fails to continue with reasonable diligence its efforts to cure the default; provided, however, that in no event shall INVENTORS have more than one (1) additional sixty (60) day period to cure such default.

6.3 Upon termination of this Agreement as provided above in Article 6.1, all rights assigned and granted to HEMEX hereunder and all licenses granted to third parties shall thereupon cease and ownership of the SUBJECT PATENTS, the INVENTIONS and the INFORMATION shall immediately revert to and revest in the INVENTORS. HEMEX shall promptly execute and deliver one or more assignments as may reasonably be requested by INVENTORS to transfer ownership in the SUBJECT PATENTS, INVENTIONS and shall promptly deliver a copy of the INFORMATION previously received to INVENTORS. HEMEX shall notify INVENTORS of the inventory of PATENTED PRODUCTS that it has on hand for which a royalty would be payable upon the sale, lease or other disposition thereof under the provisions of this Agreement, and HEMEX shall then have a twelve (12) month license to sell that inventory, provided that HEMEX pays royalties for those PATENTED PRODUCTS and renders reports to INVENTORS for those PATENTED PRODUCTS as provided for in this Agreement. The terms of this Agreement that by their context are meant to survive expiration or termination of this Agreement shall so survive. HEMEX shall be required to destroy any PATENTED PRODUCTS that remain after the expiration of this post-termination license, if the sale of such remaining inventory would be unlawful without a license from INVENTORS. HEMEX shall retain all books and records that would be used to account for the royalty payments due to INVENTORS until such books and records are at least six (6) years old.

6.4 Any dispute arising out of or related to this Agreement (other than the validity or scope of any patents referred to herein), whether sounding in tort or contract or otherwise (including but not limited to any claim of misrepresentation, concealment, negligence, fraud, breach of implied duty, etc.), which is not settled by amicable agreement of the parties shall be determined by binding arbitration. The arbitration shall be held in the state of New York in accordance with the Commercial Arbitration Rules of the American Arbitration Association, to the extent those rules are not inconsistent with anything in this Agreement. The decision of the arbitrator or arbitrators shall be final and binding, and judgment on the award may be entered in any court having jurisdiction. Nothing in this Agreement to arbitrate shall prohibit either party from seeking injunctive relief, including a temporary restraining order or a preliminary injunction, in a court of competent jurisdiction. The parties agree to both personal jurisdiction and venue in the County of Erie before any Court of competent subject matter jurisdiction therein. Venue for any arbitration proceeding hereunder shall also be in the County of Erie.

7.1 HEMEX shall defend, at its own expense, all infringement suits that may be brought against it or its licensees based on or related to the manufacture, use, or sale of PATENTED PRODUCTS.

7.2 HEMEX shall, at its own expense, have the right to bring suit for infringement under SUBJECT PATENTS. The INVENTORS shall, at the expense and at the request of HEMEX, join the suit as a party plaintiff and give evidence and execute such documents as HEMEX may reasonably require. HEMEX shall be entitled to any recovery of damages from any such infringement action, but shall account therefor to the INVENTORS and promptly pay a royalty at the rate set forth in
Section 3.1(d) of this Agreement on any recovery for infringement after deduction of HEMEX's costs incurred in any such action.

7.3 If INVENTORS provide HEMEX with written notice of an infringement under SUBJECT PATENTS, the parties shall cooperate in obtaining an opinion of patent counsel confirming infringement. If the opinion confirms infringement, HEMEX shall have six months from the date of the opinion to bring suit, as provided under Article 7.2, or to obtain an undertaking from the infringing party for a sublicense under SUBJECT PATENTS. If HEMEX does not bring suit or obtain the undertaking for a sublicense from the infringing party, then INVENTORS shall have the right to bring suit for infringement under SUBJECT PATENTS, and HEMEX shall, at the expense and at the request of INVENTORS, join the suit as a party plaintiff and give evidence and execute such documents as INVENTORS may reasonably require. HEMEX shall not be entitled to any recovery of damages from any such infringement action brought by INVENTORS under this Article 7.3.

7.4 HEMEX agrees that before it begins to make, market and sell any products covered by the SUBJECT PATENTS or INVENTIONS, it will carry products liability insurance in amounts and coverages as are appropriate for such products and naming INVENTORS as additional insureds. HEMEX agrees to indemnify, defend and hold INVENTORS harmless from any products liability claim made against INVENTORS for a product sold by HEMEX unless such claim results or arises from a willful or negligent act or omission of INVENTORS.

7.5 HEMEX agrees to mark all products made or sold in the United States pursuant to this Agreement with the word "Patent" together with the number(s) of the applicable SUBJECT PATENT in the manner prescribed in 35 U.S.C. ss.287 unless impractical.

8.1 INVENTORS represent and warrant to HEMEX and its successors and assigns that:

(a) They have sole and exclusive ownership of INVENTIONS and SUBJECT PATENTS, and the sole and exclusive right to grant the assignment and rights under this Agreement, and they have not granted licenses or conveyed other rights, nor will they grant licenses or convey other rights in the future, to any person or entity that would conflict with the assignment and rights granted to HEMEX in this Agreement;

(b) They have the full power to enter into and fully perform this Agreement, and that the execution, delivery and performance of this Agreement will not violate any terms or obligations of INVENTORS in contracts with third parties (including the State University of New York of Buffalo); and

(c) To the best of their knowledge and belief, practice of INVENTIONS will not infringe any patents or proprietary rights of third parties.

8.2 HEMEX and AETHLON jointly and severally represent and warrant to INVENTORS that:

(a) Each of HEMEX and AETHLON is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and HEMEX is qualified to do business and in good standing under the laws of the State of New York. Each .of AETHLON and HEMEX has all corporate power and authority to own, lease or operate its property and to carry on its business as it is now and has since its incorporation been conducted by it.

(b) The execution and delivery of this Agreement and the instruments to be executed and delivered pursuant hereto arid the consummation of the transactions contemplated hereby by AETHLON and HEMEX have been approved by all necessary corporation action. Upon execution and delivery, this Agreement, and each document of transfer contemplated by this Agreement when executed and delivered by each of AETHLON and HEMEX in accordance with the provisions hereof, will constitute a legal, valid and binding agreement of AETHLON and HEMEX, as applicable, enforceable against each in accordance with its respective terms, except to the extent that a court may choose to award monetary damages rather than specific performance, or that enforceability may be limited by applicable bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally or by general equitable principles.

(c) On the EFFECTIVE DATE, the authorized capital of AETHLON consists of 25,000,000 shares ($.001 par value) of one class of common stock with 2,595,000 shares issued and outstanding. There are no outstanding warrants, options or agreements to issue shares or restrictions on the transfer of shares except for a certain stock option agreement with Franklyn S. Barry, Jr. dated April 1, 1999 and certain warrants to be issued as described in the Offering Summary of AETHLON dated June 28, 1999.

(d) On the EFFECTIVE DATE, AETHLON owns one hundred percent (100%) of the issued and outstanding shares of HEMEX.

8.3 HEMEX shall indemnify and hold harmless INVENTORS against all liabilities, demands, damages, expenses, or losses resulting from or arising out of HEMEX's material misrepresentation contained in any representation or warranty in this Agreement as of the date hereof. INVENTORS shall indemnify and hold harmless HEMEX against all liabilities, demands, damages, expenses, or losses resulting from or arising out of INVENTORS' material misrepresentation contained in any representation or warranty in this Agreement as of the date hereof.

9.1 This Agreement may be amended or modified only by a written instrument duly executed by and authorized representative of each party.

9.2 This Agreement shall be binding upon and inure to the benefit and burden of the respective successors and permitted assigns of the parties. During the period from the EFFECTIVE DATE through August 1, 2004, HEMEX may not assign this Agreement without the prior written consent of INVENTORS which consent may not be unreasonably withheld.

9.3 This Agreement shall be deemed to have been made in and shall be construed in accordance with the laws of the State of New York without reference to its choice of law provisions.

9.4 This Agreements may execute in several counterparts, provided that each party receives a copy fully signed by the other parties.

9.5 The headings and titles to the articles and paragraphs in this Agreement are intended solely for convenience and shall be given no effect in the construction or interpretation of this Agreement.

9.6 Each party shall at the request of the other party, execute any document reasonably necessary to implement the provisions of this Agreement.

9.7 Nothing in this Agreement is intended or shall be deemed to constitute a partnership, agency, employer-employee or a joint venture relationship between HEMEX and INVENTORS, INVENTORS shall not incur any debts or make any commitments for HEMEX, except to the extent, if at all, specifically provided herein.

9.8 This written Agreement embodies the entire understanding between the parties with respect to the subject matter hereof and supersedes and replaces any and all other prior understandings, arrangements, and/or agreements, whether written or oral, relating to the SUBJECT PATENTS and INVENTIONS.

9.9 This Agreement is divisible and separable. If any provision of this Agreement is held to be or becomes invalid, illegal or unenforceable, such provision shall be reformed to approximate as nearly as possible the intent of the parties and shall remain valid and enforceable to the greatest extent permitted by law.

9.10 The terms of this Agreement may be waived only by a written instrument expressly waiving such term or terms and executed by the party waiving compliance. The waiver of any term or condition of this Agreement by either party hereto shall not constitute a modification of this Agreement, nor prevent a party hereto from enforcing such term or condition in the future with respect to any subsequent event, any other right accruing to such party hereunder.

9.11 All notices and other communications regarding this Agreement sent to HEMEX shall be addressed to:

Hemex, Inc.
143 Windsor Avenue
Buffalo, New York 14209 Attention: Mr. Franklyn Barry Fax: 716-884-5930

All notices and other communications regarding this Agreement sent to Dr. Ambrus shall be addressed to:

Julian L. Ambrus, Jr., M.D.

541 West Ferry Street
Buffalo, New York 14222
Fax: 716-859-2999

with a copy to:

Magavern & Rich, LLP 71 Main Street
P.O. Box 206
Hamburg, New York 14075-0206 Fax: 716-648-6187

All notices and other communications regarding this Agreement sent to Dr. Scamurra shall be addressed to:

David O. Scamurra, M.D.

66 Four Seasons West
Eggertsville, New York 14226
Fax: 716-447-6253

with a copy to:

Magavem & Rich , LLP 71 Main Street
P.O. Box 206
Hamburg, New York 14075-0206 Fax: 617-648-6187

Unless provided to the contrary in this Agreement, all written notices required or permitted to be given under the terms of this Agreement shall be deemed duly delivered upon receipt if (1) delivered in person, (2) sent by facsimile using a machine that confirms delivery and confirmed by sending the original via certified mail, return receipt requested, or (3) sent certified mail, return receipt requested to the above address.

IN WITNESS WHEREOF, the parties hereto caused this Agreement to be duly executed.

HEMEX, INC.                                  JULIAN L. AMBRUS, JR., M.D.

By: /s/ signature                            /s/ Julian L. Ambrus
Title: President                             Date: 12/30/99
Date: 1/10/2000
                                             DAVID O. SCAMURRA, M.D.

                                             /s/ David O. Scamurra
                                             Date: 12 30 99

EXHIBIT 10.17

EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is made and entered into as of January 10, 2000, by and between BISHOP EQUITIES, INC., dba AETHLON MEDICAL, a Nevada corporation (the "Company") and RICHARD H. TULLIS ("Executive").

ARTICLE I

DUTIES AND TERM

1.1 EMPLOYMENT. In consideration of their mutual covenants and other good and valuable consideration, the receipt, adequacy and sufficiency of which is hereby acknowledged, the Company agrees to hire Executive, and Executive agrees to remain in the employ of the Company, upon the terms and conditions herein provided.

1 .2 POSITION AND RESPONSIBILITIES.

1.2.1 Executive shall serve as the Vice President--Business Development of the Company and President of Aethlon, Inc., a wholly-owned subsidiary of the Company (or in a capacity and with a title of at least substantially equivalent quality) reporting directly to Chief Executive Officer of the Company. Executive agrees to perform services not inconsistent with his position as shall from time to time be assigned to him by the Chief Executive Officer of the Company. Such services to be performed by Executive shall include, but not be limited to, the following:

1.2.1.1 Management and supervision of government grant proposals;

1.2.1.2 Technical due diligence for potential acquisitions by the Company;

1.2.1.3 Liaison with the Company's scientific staff and advisory board;

1.2.1.4 Scientific representation of the Company to the financial community;

1.2.1.5 Identification of new business opportunities; and

1.2.1.6 Management of the anticipated Cell Activation subsidiary.

1.2.2 Executive further agrees to serve, if elected, as a director of the Company and as an officer or director of any subsidiary or affiliate of the Company.

1.2.3 During the period of his employment hereunder, Executive shall devote substantially all of his business time, attention, skill and efforts to the faithful performance of his duties hereunder.

1.3 TERM. The term of Executive's employment under this Agreement shall commence on the date first above written and shall continue, unless sooner terminated, until January 9, 2002, and it will continue thereafter for successive One (1) year periods unless and until either party gives the other party written notice of termination at least Sixty (60) days prior to the end of a term.

ARTICLE II

COMPENSATION

For all services rendered by Executive in any capacity during his employment under this Agreement, including, without limitation, services as a director, officer or member of any committee of the Board of the Company or of the Board of Directors of any subsidiary or affiliate of the Company, the Company shall compensate Executive as follows:

2.1 BASE SALARY. The Company shall pay to Executive an annual base salary commencing January 10, 2000 of not less than $80,000.00 (the "Base Salary"). The Base Salary shall be reviewed annually by the Board or a committee designated by the Board and the Board or such committee may, in its discretion, increase the Base Salary.

2.2 INCENTIVE PAYMENT. During the period of Executive's employment under this Agreement, the Executive shall be eligible to participate in an incentive compensation program implemented by the Board (the "Annual Incentive Bonus") whereby Executive have the potential to earn an additional $30,000 per annum.

2.3 ADDITIONAL BENEFITS. Executive shall be entitled to participate in all employee benefit and welfare programs, plans and arrangements (including, without limitation, pension, profit-sharing, supplemental pension and other retirement plans, insurance, hospitalization, medical and group disability benefits, travel or accident insurance plans) and to receive fringe benefits, such as dues and fees of professional organizations and associations, which are from time to time available to the Company's executive personnel; PROVIDED, HOWEVER, there shall be no duplication of termination or severance benefits, and to the extent that such benefits are specifically provided by the Company to Executive under other provisions of this Agreement, the benefits available under the foregoing plans and programs shall be reduced by any benefit amounts paid under such other provisions. Executive shall during the period of his employment

hereunder continue to be provided with benefits at a level which shall in no event be less in any material respect than the benefits made available to Executive by the Company as of the date of this Agreement. Notwithstanding the foregoing, the Company may terminate or reduce benefits under any benefit plans and programs to the extent such reductions apply uniformly to all Senior Executives entitled to participate therein, and Executive's benefits shall be reduced or terminated accordingly. Specifically, without limitation, Executive shall receive the following benefits:

2.3.1 HEALTH INSURANCE. The Company shall provide Executive a monthly cash allowance for payment of health insurance premiums obtained by and for Executive (and Executive's spouse and/or dependents) up to a maximum of Four Hundred Dollars ($400.00) per month. Executive must submit to the Company statements showing the actual amount of the health insurance premiums, and the Company shall have the option to either pay the health insurance premiums directly or to reimburse Executive for the health insurance premiums. The Company shall have the option to obtain a group medical insurance plan which covers Executive in place and stead of providing this monthly cash allowance. However, in no event shall Executive be entitled to a cash payment for any unused portion of the monthly allowance (i.e., if Executive's health insurance premiums are $300.00 per month, Executive is not entitled to receive cash for the unused $100.00 portion of the allowance).

2.3.2 DISABILITY BENEFITS. In the event of Executive's failure substantially to perform his duties hereunder on a full-time basis for a period not exceeding 180 consecutive days or for periods aggregating not more than 180 days during any twelve-month period as a result of incapacity due to physical or mental illness, the Company shall continue to pay the Base Salary to Executive during the period of such incapacity, but only in the amounts and to the extent that disability benefits payable to Executive under Company-sponsored insurance policies are less than Executive's Base Salary. Additionally, during the term of this Agreement, including any renewals hereof, the Company shall procure and maintain, at its own expense, a long-term disability insurance policy for the benefit of Executive in the event of Executive's total disability (as defined in
Section 6.1).

2.3.3 REIMBURSEMENT OF BUSINESS EXPENSES. The Company shall, in accordance with standard Company policies, pay, or reimburse Executive for all reasonable travel and other expenses incurred by Executive in performing his obligations under this Agreement.

2.3.4 VACATIONS. Executive shall be entitled to twenty (20) business days excluding Company holidays, of paid vacation during each year of employment hereunder. Executive may accrue and carry forward no more than ten
(10) unused vacation days from any particular year of his employment under this Agreement to the next.

ARTICLE III
TERMINATION OF EMPLOYMENT

3.1 DEATH OR RETIREMENT OF EXECUTIVE. Executive's employment under this Agreement shall automatically terminate upon the death or retirement (as defined in Section 6.1) of Executive.

3.2 BY EXECUTIVE. Executive shall be entitled to terminate his employment under this Agreement by giving Notice of Termination (as defined in
Section 6.1) to the Company:

3.2.1 For good reason (as defined in Section 6.1);

3.2.2 At any time commencing with the date six (6) months following the date of a change in control (as defined in Section 6.1) and ending with the date twelve (12) months after the date of such change in control (a "Change in Control Resignation"); and

3.2.3 At any time without good reason.

3.3 BY COMPANY. The Company shall be entitled to terminate Executive's employment under this Agreement by giving Notice of Termination (as defined in
Section 6.1) to Executive:

3.3.1 In the event of Executive's total disability (as defined in Section 6.1);

3.3.2 For cause (as defined in Section 6.1); and

3.3.3 At any time without cause.

ARTICLE IV

COMPENSATION UPON TERMINATION OF EMPLOYMENT

If Executive's employment hereunder is terminated in accordance with the provisions of Article III hereof except for any other rights or benefits specifically provided for herein following his period of employment, the Company shall be obligated to provide compensation and benefits to Executive only as follows, subject to the provisions of Section 5.4 hereof:

4.1 UPON TERMINATION FOR DEATH OR DISABILITY. If Executive's employment hereunder is terminated by reason of his death or total disability, the Company shall:

4.1.1 Pay Executive (or his estate) or beneficiaries any Base Salary Which has accrued but not been paid as of the termination date (the "Accrued Base Salary");

4.1.2 Pay Executive (or his estate) or beneficiaries for unused vacation days accrued as of the termination date in an amount equal to his Base Salary multiplied by a fraction the numerator of which is the number of accrued unused vacation days and the denominator of which is 360 (the "Accrued Vacation Payment");

4.1.3 Reimburse Executive (or his estate) or beneficiaries for expenses incurred by him prior to the date of termination which are subject to reimbursement pursuant to this Agreement (the "Accrued Reimbursable Expenses");

4.1.4 Provide to Executive (or his estate) or beneficiaries any accrued and vested benefit required to be provided by the terms of any Companysponsored benefit plans or programs (the "Accrued Benefits"), together with any benefits required to be paid or provided in the event of Executive's death or total disability under applicable law;

4.1.5 Pay Executive (or his estate) or beneficiaries any Annual Incentive Bonus with respect to a prior fiscal year which has accrued but has not been paid, plus a portion of the Annual Incentive Bonus for the year in which Executive's employment is terminated hereunder computed at the end of the fiscal year and pro rated to reflect the portion of the fiscal year that Executive was employed by the Company (collectively, the "Accrued Annual Incentive Bonus"); and in addition,

4.1.6 Executive (or his estate) or beneficiaries shall have the right to exercise all vested unexercised stock options and warrants outstanding at the termination date in accordance with terms of the plans and agreements pursuant to which such options or warrants were issued.

4.2 UPON TERMINATION BY COMPANY FOR CAUSE OR BY EXECUTIVE OTHER THAN FOR GOOD REASON. If Executive's employment is terminated by the Company for Cause, or if Executive terminates his employment with the Company other than (x) upon Executive's death or total disability, (y) for good reason, or (z) pursuant to a Change In Control Resignation (as defined in Section 3.2.2, the Company shall:

4.2.1 Pay Executive the Accrued Base Salary;

4.2.2 Pay Executive the Accrued Vacation Payment;

4.2.3 Pay Executive the Accrued Reimbursable Expenses;

4.2.4 Pay Executive the Accrued Benefits, together with any benefits required to be paid or provided under applicable law;

4.2.5 Pay Executive any Annual Incentive Bonus with respect to a prior fiscal year which has accrued but has not been paid; and in addition

4.2.6 Executive shall have the right to exercise vested options and warrants in accordance with Section 4.1.6.

4.3 UPON TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON OR PURSUANT TO A CHANGE IN CONTROL RESIGNATION. If Executive's employment is terminated (i) by the Company Without Cause, or (ii) by Executive for Good Reason, or (iii) pursuant to a Change in Control Resignation, the Company shall:

4.3.1 Pay Executive the Accrued Base Salary;

4.3.2 Pay Executive the Accrued Vacation Payment;

4.3.3 Pay Executive the Accrued Reimbursable Expenses;

4.3.4 Pay Executive the Accrued Benefits, together with any benefits required to be paid or provided under applicable law;

4.3.5 Pay Executive the Accrued Annual Incentive Bonus;

4.3.6 Pay Executive commencing on the thirtieth (30th) day following the termination date twelve (12) monthly payments equal to one-twelfth (1/12th) of Executive's Base Salary in effect immediately prior to the time such termination occurs;

4.3.7 Maintain in full force and effect, for Executive's and his eligible beneficiaries' continued benefit, until the first to occur of (x) his attainment of alternative employment or (y) twelve (12) months following the termination date of his employment hereunder the employee benefits provided pursuant to Company-sponsored benefit plans. programs or other arrangements in which Executive was entitled to participate as a full-time employee immediately prior to such termination in accordance with Section 2.4 hereof, subject to the terms and conditions of such plans and programs (the "Continued Benefits"). If Executive's continued participation is not permitted under the general terms and provisions of such plans, programs and arrangements, the Company shall arrange to provide Executive with Continued Benefits substantially similar to those which Executive would have been entitled to receive under such plans, programs and arrangements; and in addition

4.3.8 Executive shall have the right to exercise all vested unexercised stock options and warrants in accordance with Section 4.1.6.

ARTICLE V

RESTRICTIVE COVENANTS

5.1 CONFIDENTIALITY.

5.1.1 Executive covenants and agrees to hold in strictest confidence, and not disclose to any person without the express written consent of the Company, any and all of the Company's proprietary information, as defined in Subparagraph 5.1.3 below, except as such disclosure may be required in connection with his employment hereunder. This covenant and agreement shall survive this Agreement and continue to be binding upon Executive after the expiration or termination of this Agreement, whether by passage of time or otherwise, so long as such information and data shill remain proprietary information.

5.1.2 Upon expiration or termination of this Agreement for any reason, Executive shall immediately turnover to the Company any "Proprietary Information." Executive shall have no right to retain any copies of any material qualifying as Proprietary Information for any reason whatsoever after expiration or termination of his employment hereunder without the express written consent of the Company.

5.1.3 For purposes of this Agreement, "Proprietary Information" means and includes the following: the identity of clients or customers or potential clients or customers of the Company or its affiliates; any written, typed or printed lists, or other materia1s identifying the clients or customers of the Company or its affiliates; Research & Development programs, plans and discoveries; product development, marketing, and plans; any business plans or strategic contracts, partnerships or alliances; any financial or other information supplied by clients or customers of the Company or its affiliates; any and all data or information involving the Company, its affiliates, programs, methods or contacts employed by the Company or its affiliates in the conduct of their business; any lists, documents. manuals, records, forms or other materials used by the Company or its affiliates in the conduct of their business; any descriptive materials describing the methods and procedures employed by the Company or its affiliates in the conduct of their business; and any other secret or confidential information concerning the Company's or its affiliates' business or affairs. The terms "list," "document" or their equivalents, as used in this Subparagraph (c), are not limited to a physical writing or compilation but also

include any and all information whatsoever regarding the subject matter of the "list" or "documents," whether or not such compilation has been reduced to writing. "Proprietary Information" shall not include any information which: (i) is or becomes publicly available through no act or failure of Executive; (ii) was or is rightfully learned by Executive from a source other than the Company before being received from the Company; or (iii) becomes independently available to Executive as a matter of right from a third party. If only a portion of the Proprietary Information is or becomes publicly available, then only than portion shall not be Proprietary Information hereunder.

5.1.4 Executive acknowledges that he is the Vice President--Business Development of the Company and President of Aethlon, Inc. and in such capacity he will be a representative of the Company with respect to clients and potential clients of the Company. Executive also acknowledges that he has had and will continue to have access to confidential information about the Company, its affiliates, and their clients and that "Proprietary Information" acquired by him at the expense of the Company is for use in its business. Executive has substantial experience in the management of medical research and development and possesses special, unique, extraordinary skills and knowledge in this field. Executive's management and scientific services to the Company are special, unique and extraordinary and the success or failure of the Company is dependent upon his discharge of his duties and obligations. Accordingly, by execution of this Agreement, and subject to Subparagraph 5.1.3 hereof, Executive agrees that during his employment with the Company and for a period of Two (2) years immediately after termination of his employment with the Company (the "Non-Competition Period"), he shall not violate the provisions of
Section 5.2.

5.2 COMPETITION.

5.2.1 During the Non-Competition Period specified in Section 5.1.4, Executive shall not:

5.2.1.1 Except as a passive investor in publicly-held companies, and except for investments held as of the date hereof, directly or indirectly own, operate, mange, consult with, control, participate in the management or control of, be employed by, maintain or continue any interest whatsoever in any company that directly competes with the Company or any parent corporation, subsidiary corporations or affiliated entity or company (hereinafter referred to as an "Affiliate") in the United States; or

5.2.1.2 Directly or indirectly solicit any business of a nature that is directly competitive with the business of the Company or an Affiliate from any individual or entity that obtained such products or services from the Company or its Affiliates at any time during his employment with the Company; or

5.2.1.3 Directly or indirectly solicit any business of a nature that is directly competitive with the business of the Company or an Affiliate from any individual or entity solicited by him on behalf of the Company or its Affiliates; or

5.2.1.4 Employ, or directly or indirectly solicit, or cause the solicitation of, any employees of the Company or its Affiliates who are in the employ of the Company or its Affiliates on the termination date of his employment hereunder for employment by others.

5.2.2 Executive expressly agrees and acknowledges that:

5.2.2.1 The Company and its Affiliates have protected business interests throughout North America, Europe, and Asia and that competition with and against such business interests would be harmful to the Company and/or its Affiliates;

5.2.2.2 This covenant not to compete is reasonable as to time and geographical area and does not place any unreasonable burden upon him;

5.2.2.3 The general public will not be harmed as a result of enforcement of this covenant not to compete;

5.2.2.4 He has had the opportunity to review this covenant not to compete with his own independent legal counsel; and

5.2.2.5 He understands and hereby agrees to each and every term and condition of to this covenant not to compete (including, without limitation, the provisions of Section 5.4).

5.3 NON-DISPARAGEMENT. During the term of this Agreement and the Non-Competition Period, neither Executive nor the Company shall disparage the other, and neither shall disclose to any third party the conditions of Executive's employment with the Company except as may be required (1) pursuant to applicable law or regulations, including the rules and regulations of the Securities and Exchange Commission, (ii) to effectuate the provisions of employee plans or programs and insurance policies, or (iii) as may be otherwise contemplated herein or unless such information becomes publicly available without fault of the party making such disclosure.

5.4 REMEDIES. Executive expressly agrees and acknowledges that this covenant not to compete is necessary for the protection of the Company and its affiliates because of the nature and scope of their business and his position with the Company. Further, Executive acknowledges that any breach of this covenant not to compete would result in irreparable damage to the Company, and in the event of his breach of this covenant not to compete, money damages will not sufficiently compensate the Company for its injury caused thereby, and that the remedy at law for any breach or threatened breach of Sections 5.1, 5.2 and 5.3 will be inadequate and, accordingly agrees, that the Company shall, in addition to all other available remedies (including without limitation, seeking such damages as it can show it has sustained by reason of such breach), be entitled to injunctive relief or specific performance and that in addition to such money damages he may be restrained and enjoined from any continuing breach of this covenant not to compete without any bond or other security being required of any court. Executive further acknowledges and agrees that if the covenant not to compete herein is deemed to be unenforceable and/or the Executive fails to comply with this Article V, the Company has no obligation to provide any compensation or other benefits described in Article IV hereof.

5.5 OWNERSHIP OF INVENTIONS.

5.5.1 During the employment by the Company, Executive will have access to trade secrets, data, know-how, knowledge or other confidential information originated in the Company or disclosed to the Company by others under agreements to hold the same confidential (collectively referred to as "Confidential Information"). Executive acknowledges that Confidential Information includes any information not readily available to the public, and includes not only technical information but also business information. In addition, Executive may, during the period of employment, create, make, develop or conceive inventions, discoveries, concepts, ideas, designs, works of authorship, developments, information, improvements, or trade secrets, whether patentable or not, and whether solely or jointly with others, which may or may not also constitute Confidential Information (collectively referred to as "Inventions"). Executive agrees that all works of authorship to which Executive contributes shall be considered "works made for hire" and shall be the sole property of the Company.

5.5.2 Executive agrees that Executive will neither utilize any Confidential Information for Executive's own benefit or for the benefit of anyone except the Company, nor disclose, disseminate, lecture upon or publish articles about any Confidential Information to any one outside the Company, or to any officer or employee of the~ Company not also having access to Confidential Information, at any time either during or after employment by the Company.

5.5.3 Executive agrees to disclose promptly, in writing to Executive's Supervisor, Company's Counsel and Chief Executive Officer, any Inventions that Executive may make, develop or conceive, solely or jointly, during the period of employment by the Company, or by its predecessors, successors in business, subsidiaries, parents or affiliates. All such Inventions shall be and remain the property of the Company. Executive hereby assigns to the Company all Executive's rights, titles and interests in and to any such Inventions, whether or not such Inventions may be reduced to practice during the period of Executive's employment, and to execute all patent or copyright applications, assignments and other documents, and to take all other steps necessary, to vest in the Company the entire right, title and interest in and to those Inventions and in and to any patents or copyrights obtainable therefor in the United States and in foreign countries, all at the Company's expense, but for no consideration to Executive in addition to Executive's salary or wages. Executive agrees to keep adequate records of all Inventions and make such records available to the Company.

5.5.4 If the Company chooses to prosecute applications for patents or copyrights for any such Inventions, the Company shall assume the entire expense of preparing, filing and prosecuting such applications, through counsel appointed by the Company; provided, however, that the Company is under no obligation to prosecute such applications. Executive agrees to cooperate with the Company and do whatever is necessary or appropriate to obtain patents, copyrights or other legal protections for Inventions. If Executive is incapacitated or refuses to so cooperate for any reason, Executive hereby authorizes the Company to act as Executive's agent and to take whatever actions, or execute whatever documents, may be needed to carry out this Agreement.

5.5.5 All records and other material pertaining to Confidential Information, whether developed by Executive or others, shall be and remain the property of the Company. Upon termination of Executive's employment with the Company, all documents, records, notebooks and other material of any kind pertaining to or containing Confidential Information then in Executive's possession, or under Executive's control, whether prepared by Executive or others, will be returned to the Company unconditionally.

5.5.6 Executive shall not be obligated to assign any Invention which/relates to or would be useful in any business or activities in which the Company is engaged if such Invention was conceived and reduced to practice by Executive prior to Executive's employment with the Company, provided that all such Inventions are listed at the time of employment on the attached Exhibit "B." If no entry is made on Exhibit `B," then such entry shall be deemed to be "none," whether or not Exhibit "B" is signed by Executive. Except as listed on Exhibit "B," Executive will not assert any rights to any Inventions, as having been made or acquired by Executive prior to being employed by the Company.

5.5.7 Executive shall not be obligated to assign any Invention which may be wholly conceived by Executive after Executive leaves the employ of the Company, except that Executive is so obligated if such Invention shall involve the utilization of Confidential Information of the Company.

5.5.8 Notwithstanding anything in this Agreement to the contrary, Executive shall not be obligated to assign to the Company and of Executive's rights in an Invention that the Executive developed entirely on Executive's own time without using the Company's equipment, supplies, facilities or Confidential Information, except for those Inventions that either: (i) relate, at the time of conception or reduction to practice of Invention, to either the Company's business, or actual or demonstrably anticipated research or development of the Company, or (ii) result from any work performed by the Executive for the Company. THIS AGREEMENT DOES NOT APPLY TO ANY INVENTION WHICH
QUALIFIES FULLY UNDER THE PROVISIONS OF CALIFORNIA LABOR CODE SECTION 2870 OR ANY OTHER SUBSTANTIALLY EQUIVALENT LAW IN THE STATE IN WHICH THE EXECUTIVE IS EMPLOYED. With regard to those Inventions which Executive is not obligated to assign to the Company, Executive shall give the Company a right of first refusal on any and all such Inventions and the right to meet any firm offer of another for such Inventions. The Company must exercise such right of first refusal within thirty (30) days of receipt of written notice from Executive setting forth such offer.

ARTICLE VI

MISCELLANEOUS

6.1 DEFINITIONS. For purposes of this Agreement, the following terms shall have the following meanings:

6.1.1 "Accrued Annual Incentive Bonus" - as defined in Section 4.1.5;

6.1.2 "Accrued Base Salary" - as defined in Section 4.1.1;

6.1.3 "Accrued Benefits" - as defined in Section 4.1.4;

6.1.4 "Accrued Reimbursable Expenses" - as defined in Section 4.1.3; 6.1.5 "Annual Vacation Payment" - as defined in Section 4.1.2;

6.1.6 "Annual Incentive Bonus" - as defined in Section 2.2;

6.1.7 "Base Salary" - as defined in Section 2.1;

6.1.8 "Board" - shall mean the Board of Directors of the Company ;

6.1.9 "Cause" shall mean the occurrence of any of the following:

6.1.9.1 Executive's gross and willful misconduct which is injurious to the Company;

6.1.9.2 Executive's engaging in fraudulent conduct with respect to the Company's business or in conduct of a criminal nature that may have an adverse impact on the Company's standing and reputation;

6.1.9.3 The continued and unjustified failure or refusal by Executive to perform the duties required of him by this Agreement which failure or refusal shall not be cured within fifteen (15) days following
(a) receipt of Executive of written notice from the Board specifying the factors or events constituting such failure or refusal, and (b) a reasonable opportunity for Executive to correct such deficiencies;

6.1.9.4 Executive's use of drugs and/or alcohol in violation of then current Company policy; or

6.1.9.5 Executive's breach of his obligation under
Section 1.2.3 hereof which shall not be cured within fifteen (15) days after written notice thereof to Executive.

6.1.10 "Change In Control" shall mean and shall be deemed to have occurred if:

6.1.10.1 After the date of this Agreement, any "person" (as such term is used in Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any successor provision thereto) shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act or any successor provision thereof) directly or indirectly of securities of the Company representing fifteen percent (15%) or more of the combined voting power of the Company's then outstanding securities ordinarily having the right to vote at an election of directors; PROVIDED, HOWEVER, that, for purposes of this Subparagraph, "person" shall exclude the Company, its subsidiaries, any person acquiring such securities directly from the Company, any employee benefit plan sponsored by the Company or from Executive or any stockholder owning fifteen percent (15%) or more of the combined voting power of the Company's outstanding securities as of the date of this Agreement; or

6.1.10.2 Any stockholder of the Company owning fifteen percent or more of the combined voting power of the Company's outstanding securities as of the date of this Agreement shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) directly or indirectly of securities of the Company (other than through the acquisition of securities directly from the Company or from Executive) representing thirty-three and one-third percent (33 1/3%) or more of the combined voting power of the Company's then outstanding securities ordinarily having the right to vote at an election of directors; or

6.1.10.3 Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least eighty percent (80%) of the Board; provided, however, that any person becoming a member of the Board subsequent to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least eighty percent (80%) of the members then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act or any successor provision thereto) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board; or

6.1.10.4 Approval by the stockholders of the Company and consummation of (a) a reorganization, merger, consolidation, or sale or other disposition of all or substantially all of the assets of the Company, in each case, with or to a corporation or other person or entity of which persons who were the stockholders of the Company immediately prior to such transaction do not, immediately thereafter, own more than sixty percent (60%) of the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors of the reorganized, merged, consolidated or purchasing corporation (or, in the case of a noncorporate person or entity) were not members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger, consolidation or sale, or (b) a liquidation or dissolution of the Company.

6.1.11 "Change In Control Resignation" - as defined in Section 3.2.2;

6.1.12 "Continued Benefits" - as defined in Section 4.3.7;

6.1.13 "Expiration" shall mean the expiration of Executive's employment hereunder in accordance with Section 1.3;

6.1.14 "Good Reason" shall mean the occurrence of any of the following:

6.1.14.1 The Company's failure to elect or reelect or to appoint or reappoint Executive to offices, titles or positions carrying comparable authority, responsibilities, dignity and importance to that of Executive's offices and positions as of January 10, 2000;

6.1.14.2 Material change by the Company in Executive's function, duties or responsibilities (including reporting responsibilities) which would cause Executive's position with the Company to become of less dignity, responsibility and importance than those associated with his functions, duties or responsibilities as of January 10, 2000; or

6.1.14.3 Other material breach of this Agreement by the Company, which breach is not cured within fifteen (15) days after written notice thereof is, received by the Company.

6.1.15 "Non-Competition Period" - as defined in Section 5.1.4;

6.1.16 "Notice of Termination" shall mean a notice which shall indicate the specific termination provision of this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's employment under the provisions so indicated. Each Notice of Termination shall be delivered at least sixty (60) days prior to the effective date of termination;

6.1.17 "Proprietary Information" - as defined in Section 5.1.3;

6.1.18 "Retirement" shall mean normal retirement at age as determined by the Board;

6.1.19 "Senior Executives" shall mean the chief executive officer and the four (4) most highly compensated executive officers of the Company determined in accordance with the rules and regulations of the Securities and Exchange Commission under the Exchange Act;

6.1.20 "Termination" shall mean the termination of Executive's employment hereunder other than upon expiration of the term of such employment in accordance with Section 1.3;

6.1.21 "Total Disability" shall mean Executive's failure substantially to perform his duties hereunder on a full-time basis for a period exceeding one hundred eighty (180) consecutive days or for periods aggregating more than 180 days during any twelve-month period as a result of incapacity due to physical or mental illness. If there is a dispute as to whether Executive is or was physically or mentally unable to perform his duties under this Agreement, such dispute shall be submitted for resolution to a licensed physician agreed upon by the Board and Executive, or if an agreement cannot be promptly reached, the Board and Executive each shall promptly select a physician, and if these physicians cannot agree, the physicians shall promptly select a third physician whose decision shall be binding on all parties. If such a dispute arises, Executive shall submit to such examinations and shall provide such information as such physician(s) may request, and the determination of the physician(s) as to Executive's physical or mental condition shall be binding and conclusive. Notwithstanding the foregoing, if Executive participates in any group disability plan provided by the Company which offers long-term disability benefits, "Total Disability" shall mean total disability as defined therein.

6.2 KEY MAN INSURANCE. The Company shall have the right, in its sole discretion, to purchase "key man" insurance on the life of Executive. The Company shall be the owner and beneficiary of any such policy. If the Company elects to purchase a policy, Executive shall take such physical examinations and supply such information as may be reasonably requested by the insurer.

6.3 MITIGATION OF DAMAGES; NO SET-OFF; DISPUTE RESOLUTION.

6.3.1 Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Agreement be reduced by any compensation earned by Executive as the result of employment by another employer after the date of termination of his employment hereunder or otherwise. The Company's obligation to make the payments provided for in this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim or action which the Company may have against Executive.

6.3.2 If there shall be any dispute between the Company and Executive (i) in the event of any termination of Executive's employment by the Company, whether such termination was for Cause, or (ii) in the event of any termination of employment by Executive, whether Good Reason existed, or (iii) otherwise, the dispute shall be resolved in accordance with the dispute resolution procedures set forth in Exhibit "A" hereto, the provisions of which are incorporated as a part hereof, and the parties hereto hereby agree that such dispute resolution procedures shall be the exclusive method for resolution of disputes under this Agreement. In the event of a dispute hereunder as to whether a termination by the Company was for Cause or by the Executive for Good Reason, until there is a resolution and award as provided in Exhibit "A," the Company shall pay all amounts, and provide all benefits, to Executive and/or Executive's family or other beneficiaries, as the case may be, that the Company would be required to pay or provide hereunder as though such termination were by the Company without Cause or by Executive for Good Reason and shall pay the

reasonable legal fees and expenses of counsel for Executive in connection with such dispute resolution; provided, however, that the Company shall not be required to pay any disputed amounts or any legal fees and expenses pursuant to this Subparagraph (b) except upon receipt of a written undertaking by or on behalf of Executive (and/or Executive's family or other beneficiaries, as the case may be) to repay, without interest or penalty, as soon as practicable after completion of the dispute resolution (A) all such amounts to which Executive (or Executive's family or other beneficiaries, as the case may be) is ultimately adjudged to not be entitled with respect to the payment of such disputed amount(s) and (B) in addition, in the case of legal fees and expenses, a proportionate amount of legal fees and expenses attributable to any of Executive's claim(s) or any of Executive's defenses or counter-claim(s), if any, which shall have been found by the dispute resolver to have been frivolous or without merit.

6.4 SUCCESSORS; BINDING AGREEMENT. This Agreement shall be binding upon any successor to the Company and shall inure to the benefit of and be enforceable by Executive's personal or legal representatives, beneficiaries, designees, executors, administrators, heirs, distributees, devisees and legatees.

6.5 MODIFICATION; NO WAIVER. This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument by the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any other term or condition.

6.6 SEVERABILITY. The covenants and agreements contained herein are separate and severable and the invalidity or unenforceability of any one or more of such covenants or agreements, if not material to the employment arrangement that is the basis for this Agreement, shall not affect the validity or enforceability of any other covenant or agreement contained herein. If, in any judicial proceeding, a court shall refuse to enforce one or more of the covenants or agreements contained herein because the duration thereof is too long, or the scope thereof is too broad, it is deemed reduced to the extent necessary to permit the enforcement of such covenants or agreements.

6.7 NOTICES. All the notices and other communications required or permitted hereunder shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, to the parties hereto at the following addresses:

If to the Company, to it at:

Bishop Equities, Inc. dba Aethlon Medical
7825 Fay Avenue
Suite 200
La Jolla, California 92037

If Executive, to him at:

Mr. Richard H. Tullis
7825 Fay Avenue
Suite 200
La Jolla, California 92037

6.8 ASSIGNMENT. This Agreement and any rights hereunder shall not be assignable by either party without the prior written consent of the other party except as otherwise specifically provided for herein.

6.9 ENTIRE UNDERSTANDING. This Agreement (together with the Exhibit incorporated as a part hereof) constitutes the entire understanding between the parties hereto and no agreement, representation, warranty or covenant has been made by either party except as expressly set forth herein.

6.10 EXECUTIVE'S REPRESENTATIONS. Executive represents and warrants that neither the execution and delivery of this Agreement nor the performance of his duties hereunder violates the provisions of any other agreement to which he is a party or by which he is bound.

6.11 LIABILITY OF COMPANY WITH RESPECT TO INSURANCE POLICY. Executive has selected the insurer and policy referred to in Section 2.4(a) hereof, and the Company shall not have any liability to Executive (or his beneficiaries) should the insurance company which issues the policy referred to therein fail or refuse to pay (whether voluntarily or by reason of any order, injunction or otherwise) thereunder or if any rights or elections otherwise available to Executive thereunder are restricted or eliminated.

6.12 GOVERNING LAW. This Agreement shall be construed in accordance with and governed for all purposes by the laws of the State of California applicable to contracts executed and wholly performed within such state.

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

COMPANY

BISHOP EQUITIES, INC., a Nevada
corporation dba Aethlon Medical

By: /s/ Franklyn S. Barry, Jr.
    ----------------------------
    Franklyn S. Barry, Jr.
    Its President and C.E.O.

EXECUTIVE

/s/ Richard H. Tullis
--------------------------------
RICHARD H. TULLIS

EXHIBIT "A"

A. If a controversy should arise which is covered by Section 6.3 of Article VI, then not later than twelve (12) months from the date of the event which is the subject of dispute either party may serve on the other a written notice specifying the existence of such controversy and setting forth in reasonably specific detail the grounds thereof ("Notice of Controversy"); PROVIDED that, in any event, the other party shall have at least thirty (30) days from and after the date of the Notice of Controversy to serve a written notice of any counterclaim ("Notice of Counterclaim"). The Notice of Counterclaim shall specify the claim or claims in reasonably specific detail. If the Notice of Controversy or the Notice of Counterclaim, as the case may be, is not served within the applicable period, the claim set forth therein will be deemed to have been waived, abandoned and rendered unenforceable.

B. Following receipt of the Notice of Controversy (or the Notice of Counterclaim, as the case may be), there shall be a three (3) week period during which the parties will make a good faith effort to resolve the dispute through negotiation ("Period of Negotiation"). Neither party shall take any action during the Period of Negotiation to initiate arbitration proceedings.

C. If the parties should agree during the Period of Negotiation to mediate the dispute, then the Period of Negotiation shall be extended by an amount of time to be agreed upon by the parties to permit such mediation. In no event, however, may the Period of Negotiation be extended by more than five (5) weeks or, stated differently, in no event may the Period of Negotiation be extended to encompass more than a total of eight (8) weeks.

D. If the parties agree to mediate the dispute but are thereafter unable to agree within one (1) week on the format and procedures for the mediation, then the effort to mediate shall cease, and the Period of Negotiation shall terminate four (4) weeks from the Notice of Controversy (or the Notice of Counterclaim, as the case may be).

E. Following the termination of the Period of Negotiation, the dispute (including the main claim and counterclaim, if any) shall be settled by arbitration, and judgment upon the award may be entered in any court having jurisdiction thereof. The format and procedures of the arbitration are set forth below (referred to below as the "Arbitration Agreement").

F. A notice of intention to arbitrate ("Notice of Arbitration") shall be served within forty-five (45) days of the termination of the Period of Negotiation. If the Notice of Arbitration is not served within this period, the claim set forth in the Notice of Controversy (or the Notice of Counterclaim, as the case may be) will be deemed to have been waived, abandoned and rendered unenforceable.

G. The arbitration, including the Notice of Arbitration, will be governed by the Commercial Rules of the American Arbitration Association except that the terms of this Arbitration Agreement shall control in the event of any difference or conflict between such Rules and the terms of this Arbitration Agreement. The arbitration shall be scheduled to take place in San Diego, California.

H. The dispute resolver shall reach a decision on the merits on the basis of applicable legal principles as embodied in the law of the State of California.

I. There shall be one dispute resolver, regardless of the amount in controversy. The dispute resolver will be empowered to render an award and interim decisions and shall be a member of the bar of any of the fifty States of the United States or of the District of Columbia. The dispute resolver shall be promptly appointed pursuant to Rule 13 of the Commercial Rules of the American Arbitration Association ("AAA"). If the dispute resolver has not been appointed within forty-five (45) days of the AAA's initial transmission of lists of potential arbitrators, then the AAA shall unilaterally designate the dispute resolver.

J. At the time of appointment and as a condition thereto, the dispute resolver will be apprised of the time limitations and other provisions of this Arbitration Agreement and shall indicate such dispute resolver's agreement to the Tribunal Administrator to comply with such provisions and time limitations.

K. During the 30-day period following appointment of the dispute resolver, either party may serve on the other a request for limited numbers of documents directly related to the dispute. Such documents will be produced within seven (7) days of the request.

L. Following the 30-day period of document production, there will be a forty-five (45) day period during which limited depositions will be permissible. Neither party will take more than five (5) depositions, and no deposition will exceed three (3) hours of direct testimony.

M. Disputes as to discovery or prehearing matters of a procedural nature shall be promptly submitted to the dispute resolver pursuant to telephone conference call or otherwise. The dispute resolver shall make every effort to render a ruling on such interim matters at the time of the hearing (or conference call) or within five (5) business days thereafter.

N. Following the promptly commence. The dispute hearing within thirty
(30) days of the will make every effort to conduct the period of depositions, the arbitration hearing shall resolver will make every effort to commence the conclusion of the deposition period and, in addition, hearing on consecutive business days to conclusion.

O. An award will be rendered, at the latest, within nine (9) months of the date of the Notice of Arbitration and within thirty (30) days of the close of the arbitration hearing. The award shall set forth the grounds for the decision in reasonably specific detail and shall also specify whether any claim (or defense or counterclaim) of Executive is found to be frivolous or without merit and what proportion, if any, of his legal fees and expenses which have been paid by the Company Executive shall be required to repay to the Company in accordance with Section 6.3.2. The award shall be final and nonappealable.

P. THE PARTIES HEREBY ACKNOWLEDGE AND AGREE THAT THEY ARE WAIVING THEIR RIGHTS TO A TRIAL IN A STATE OR FEDERAL COURT AND ARE ALSO WAIVING THEIR RIGHT TO A JURY TRIAL.

COMPANY EXECUTIVE

BISHOP EQUITIES, INC.,

a Nevada corporation dba
Aethlon Medical

By: /s/ Franklyn S. Barry, Jr.               /s/ Richard H. Tullis
    ----------------------------             ------------------------------
    Franklyn S. Barry, Jr.                   RICHARD H. TULLIS
     Its: President and C.E.O.

EXHIBIT 10.18

Edward C. Hall
AETHLON MEDICAL, INC.
7825 FAY AVENUE, SUITE 200
LA JOLLA, CA 92037
TEL. 858/456-5777
FAX 858/456-4690

James A. Joyce
Chairman, President and CEO

EMPLOYMENT AGREEMENT

August 12, 2002

Mr. Edward C. Hall 4645 Vereda Luz Del So! San Diego, CA 92130

Dear Ned:

This letter will serve as the entire agreement between Aethlon Medical, Inc (the "Company") and you, Edward C. (Ned) Hall (the "Employee"), with respect to your employment with the Company.

TERM
The Employee will work one (1) day per week, beginning on the week of August 12, 2002 (the `Beginning Date"). As an employee of the Company you will serve as its Chief Financial Officer and perform such services as are customary for an individual having such title and holding such position.

SALARY
The Employee will earn a weekly salary (the "Salary") of $1,000, paid $2,000 every two weeks. The salary rate for each additional day is $1,000. However, if the Company agrees to increase Employee's work to three (3) days per week, the Employee will earn a weekly salary of $2,500, paid $5,000 every two weeks. The Salary rate for each additional day beyond three days per week is $1,000, The Salary will be subject to increase by the Company from time to time. The Salary will be processed through payroll and paid at the same time as other employees.

INCENTIVE BONUS AND EQUITY PARTICIPATION
The Employee will be entitled to receive incentive cash bonuses and/or warrants or options for the purchase of the Company's stock as may be specified and agreed to by the Aethlon Medical board of directors.

Edward C. Hall Page two
August 12, 2002
Employment Agreement - Edward C. Hall

TATUM RESOURCES
The Company acknowledges and agrees that the Employee is and will remain a partner of, and has and will retain an interest in, Tatum CFO Partners, LLP ("Tatum"), which will benefit the Company in that the Employee will have access to certain Tatum resources. The Company further acknowledges and agrees that the Employee has requested that a portion of his or her Salary and bonuses be allocated to Tatum as compensation for Tatum's provision of resources to the Employee as provided in the Resources Agreement between the Company and Tatum, dated on or about the date of this agreement (the "Resources Agreement"). After allocation of a portion of the Salary to Tatum, the Employee will be paid $1,666.67 every two weeks, based on one (1) day per week. The Company and the Employee agree that any payments made to Tatum will reduce the Employee's compensation for purposes of determining taxable income and should not be reflected as compensation in the Employee's W-2 report.

EMPLOYEE BENEFITS
The Employee will be eligible for vacation and holidays consistent with the Company's policy as it applies to senior management.

The Company will reimburse the Employee for all reasonable out-of-pocket business expenses promptly after they are incurred.

The Employee may elect to participate in the Company's employee retirement plan and/or 401(k) plan, and the Employee will be exempt from any delay periods required for eligibility. In lieu of the Employee participating in the Company-sponsored employee health benefit and disability plan(s) the Employee will participate in Tatum's group plan as a partner of Tatum, and the Company will pay the Employee a pro-rated amount based on time commitment equal to the costs that would normally be incurred by the Company for the Employee's participation in the Company's plan(s), if the Employee is eligible under such plan(s). Notwithstanding the preceding sentence, the Company may include the Employee as a participant in the Company's own health benefit and disability plan(s) if required to do so by law for plan qualification.

The Employee must receive written evidence that the Company maintains adequate director and officer insurance to cover the Employee at no additional cost to the Employee, and the Company will maintain such insurance at all times while this agreement remains in effect.

The Company agrees to indemnify the Employee to the full extent permitted by law for any losses, costs, damages, and expenses, including reasonable attorneys' fees, as they arc incurred, in connection with any cause of action, suit, or other proceeding arising in connection with employment with the Company including, but not limited to, indemnification for deductibles on insurance policies. This indemnity will not apply to employee gross negligence or willful misconduct or to actions taken by the employee in bad faith.

Edward C. Hall Page Three
August 12, 2002
Employment Agreement - Edward C. Hall

TERMINATION
The Company may terminate the Employee's employment for any reason upon at least 30 days' prior written notice to the Employee, such termination to be effective on the date specified in the notice, provided that such date is no earlier than 30 days from the date of delivery of the notice. Likewise, the Employee may terminate his or her employment for any reason upon at least 30 days' prior written notice to the Company, such termination to be effective on the date 30 days following the date of the notice.

The Employee will continue to render services and to be paid during such 30-day period, regardless of who gives such notice. The Employee may terminate this letter agreement immediately if the Company has not remained current in its obligations under this letter or if the Company engages in or asks the Employee to engage in or to ignore any illegal or unethical conduct.

This agreement will terminate immediately upon the death or permanent disability of the Employee. For purposes of this agreement, permanent disability will be as defined by the applicable policy of disability insurance or, in the absence of such insurance, by the Company's Board of Directors acting in good faith.

The Salary will be prorated for the final pay period based on the number of days in the final pay period up to the effective date of termination or expiration.

MISCELLANEOUS
This agreement contains the entire agreement between the parties, superseding any prior oral or written statements or agreements.

Neither the Employee nor the Company will be deemed to have waived any rights or remedies accruing under this agreement unless such waiver is in writing and signed by the party electing to waive the right or remedy. This agreement binds and benefits the successors of the parties.

The provisions in this agreement concerning the payment of Salary and Bonuses and confidentiality will survive any termination or expiration of this agreement.

The terms of this letter agreement are severable and may not be amended except in a writing signed by the parties. If any portion of this agreement is found to be unenforceable, the rest of this agreement will be enforceable except to the extent that the severed provision deprives either party of a substantial portion of its bargain.

This agreement will be governed by and construed in all respects in accordance with the laws of the State of California, without giving effect to conflicts-of-laws principles.

Each person signing below is authorized to sign on behalf of the party indicated, and in each case such signature is the only one necessary.

Edward C. Hall Page Four
August 12, 2002
Employment Agreement - Edward C. Hall

Please sign below and return a signed copy of this letter to indicate your agreement with its terms and conditions.

Sincerely yours,

AETHLON MEDICAL, INC.

By: /s/ James A. Joyce
    ----------------------------
    James A Joyce, CEO

Acknowledged and agreed by:

EMPLOYEE

/s/ Edward C. Hall
--------------------------
Edward C. Hall

Date: 8/14/02

Edward C. Hall

Incentive Cash Bonus, Stock, or Warrants/Options

TBD

Edward C. Hall

AETHLON MEDICAL, INC.

AGREEMENT RESTRICTING COMPETITION AND DISCLOSURE

THIS AGREEMENT is made this 14th day of August 2002 by and between AETHLON MEDICAL, INC., a Nevada corporation (hereinafter referred to as the "Company") and Edward C. Hall (hereinafter referred to as "Disclosee").

WHEREAS, the Company has expended considerable time, effort, resources, and capital in developing a proprietary platform technology known as the Hemopurifier(TM) to develop an extracorporeal therapeutic treatment system for the removal of certain viruses from blood (the "Technology") and is developing blood filtration products that address, among other things, the treatment of HIV/AIDS and Hepatitis-C (the "Products"); and

WHEREAS, Disclosee has desires to work with the Company in the further development and operations of the Technology, the Products, the Company's business or in connection with possible financing, merger, acquisition, consolidation or other business arrangements that may be beneficial to the Company's business; and

WHEREAS, in connection with Disclosee's discussions with senior officers of the Company, Disclosee will be provided with and have access to certain "Confidential Information," as defined below, and the Company desires to protect the Confidential Information;

NOW THEREFORE, the parties agree as follows:

1. DEFINITION OF CONFIDENTIAL INFORMATION. The term "Confidential Information," for purposes of this Agreement, shall mean all non-public confidential information, whether in oral, written, or other form, which the Company provides Disclosee with access to or discloses including but not limited to information of a technical, operational, administrative, economic, marketing, planning, business or financial nature or in the nature of intellectual property of any kind relating to the business of the Company. "Confidential Information" shall not include information that (i) is or becomes generally available to the public, other than as a result of a disclosure or other fault by you in violation of this Agreement; (ii) becomes rightfully available to you on a non-confidential basis, provided that the source of such information is not prohibited from disclosing such information, to you by legal, contractual, or fiduciary obligations; or (iii) is rightfully in the possession of Disclosee by or on behalf of the Company, provided that the source of such information is not prohibited from disclosing such information to you by legal, contractual or fiduciary obligations.

2. DISCLOSURE OF INFORMATION.

2.1 In consideration of Disclosee's promise to keep the Confidential Information confidential and its promise not to circumvent the Company in pursuing a business plan similar to the Company's, except to the extent that they already are, the Company agrees to make available to Disclosee such portion of the Confidential Information as the Company deems necessary, promptly upon its execution and delivery of this Agreement, to enable Disclosee to determine if it desires to work with the Company. Disclosee will hold the Confidential Information in strict confidence and will not disclose to anyone directly or indirectly at any time for a period of three years from the date of this Agreement any of the Confidential Information relating to the business of the Company that is confidential, without the prior written consent of the Company. Disclosee agrees that the Confidential Information will not be used for any purpose other than in connection with the evaluation of the Company. All documents that Disclosee prepares or Confidential Information that is given Disclosee in connection with this Agreement are the exclusive property of the Company and shall be promptly returned to the Company at its request.

2.2 Disclosee will within 15 days of receipt of a written demand from the Company:

(i) return to the Company all Confidential Information (and all and any copies thereof or of any part thereof);

(ii) remove and expunge all Confidential Information from any computer or any similar device into which it was programmed or installed;

(iii) destroy all notes, analyses or memoranda containing Confidential Information prepared by Disclosee or on Disclosee's behalf.

2.3 If any proceedings are commenced or action taken which could result in Disclosee becoming compelled to disclose Confidential Information, Disclosee will immediately notify the Company of such proceedings or action in writing and will take all available steps to resist or avoid such proceeding or actions, including all steps the Company may reasonably request and keep the Company fully and promptly informed of all matters and developments relating thereto. if Disclosee is required by law or otherwise obliged to disclose Confidential Information to any third Party, Disclosee will disclose such information only to such third Party, and only to the extent that required by law or otherwise is to be disclosed.

2.4 Disclosee will insure that Disclosee's officers and employees and advisors each act, or omit to act, as if he or she had agreed with the Company on the same terms as this Agreement. Disclosee shall also insure that each person to whom disclosure of Confidential Information is authorized to be made by Disclosee or on Disclosee's behalf or in the course of representing or advising Disclosee is made aware of and adheres to the terms of this Agreement.

3. NON-CIRCUMVENTION; PROHIBITION AGAINST COMPETITION. Neither Disclosee nor any affiliate (as that term is defined in Federal securities laws), officer, director, partner or agent of Disclosee, any principal represented by Disclosee, or any corporation affiliated with Disclosee, shall at any time for a period of three years from the date of this Agreement, participate or hold an interest in any business or enterprise that is engaged in a business that utilizes any of the Confidential Information whether as agent, principal, partner, stockholder, or in any other individual or representative capacity.

4. REMEDIES. Disclosee recognizes and acknowledges that the Company has made a substantial investment in developing the Confidential Information, the Technology, the Products, and the business of the Company, and that the restrictions on Disclosee's activities as contained in this Agreement are required for the Company's reasonable protection. Disclosee agrees that in the event of breach of this Agreement, the Company will be entitled, if it so elects, to institute proceedings at law or in equity to obtain damages or to enforce the specific performance of this Agreement by Disclosee or to enjoin Disclosee from engaging in any activity in violation thereof.

5. ATTORNEY'S FEES. In the event of any controversy, claim or dispute between the parties hereto involving the terms and conditions of this Agreement, or arising out of or relating to this Agreement or the breach thereof, the prevailing party in any arbitration (as provided for in Section 10 below) shall be entitled to recover reasonable expenses, attorney's fees and costs in such arbitration as determined by the arbitrator(s).

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

7. GOVERNING LAW. This Agreement will be governed by and construed in accordance with the laws of the State of California.

Edward C. Hall

8. WAIVER; AMENDMENT. No failure or delay by either party in exercising any right, power or privilege to which it is entitled hereunder shall operate as a waiver nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise. The terms of this Agreement and the obligations and acknowledgements hereunder may only be waived or modified by an agreement in writing between the parties.

9. ASSIGNMENT. Neither party shall not assign or transfer any of its rights or obligations under this Agreement to any third party without the prior written consent of the other Party.

10. DISPUTE RESOLUTION. All disputes, claims, controversies and differences ("Disputes") arising out of or relating to this Agreement shall, if they cannot be amicably settled within a period of 30 days from the date of notification of the Dispute to the other party, be referred to and finally settled by arbitration in accordance with the rules of the American Arbitration Association (the "Rules") in San Diego County, California, Disputes shall be referred to a single arbitrator nominated and agreed upon by parties to this Agreement. If the parties cannot agree upon the identity of a single arbitrator within one month's time after the first call for arbitration has been made, Disputes shall be finally settled by three arbitrators appointed in accordance with the Rules. The decision or decisions of the arbitrators shall be binding upon the parties to this Agreement and may be enforced in any court of competent jurisdiction.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first specified above.

THE COMPANY:                                AETHLON MEDICAL, INC.



                                            By: /s/ James A. Joyce
                                                --------------------------------
                                                James A Joyce, CEO
                                                Its Duly Authorized Agent



DISCLOSEE:                                      /s/ Edward C. Hall
                                                --------------------------------
                                                Edward C. Hall